Exhibit (a)(5)(x)
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[CSM DRAFT -- 5/4/01]
AGREEMENT AND PLAN OF MERGER
Dated as of , 2001,
Among
WEYERHAEUSER COMPANY,
COMPANY HOLDINGS, INC.
And
WILLAMETTE INDUSTRIES, INC.
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TABLE OF CONTENTS
Page
ARTICLE I
The Offer and Merger
SECTION 1.01. The Offer...............................................1
SECTION 1.02. Company Actions.........................................3
SECTION 1.03. The Merger..............................................4
SECTION 1.04. Closing.................................................5
SECTION 1.05. Effective Time..........................................5
SECTION 1.06. Effects.................................................5
SECTION 1.07. Articles of Incorporation and By-laws...................5
SECTION 1.08. Directors...............................................5
SECTION 1.09. Officers................................................6
ARTICLE II
Effect on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock.................................6
SECTION 2.02. Exchange of Certificates................................7
ARTICLE III
Representations and Warranties of the Company
SECTION 3.01. Organization, Standing and Power.......................10
SECTION 3.02. Company Subsidiaries; Equity Interests.................10
SECTION 3.03. Capital Structure......................................11
SECTION 3.04. Authority; Execution and Delivery;
Enforceability....................................12
SECTION 3.05. No Conflicts; Consents.................................13
SECTION 3.06. SEC Documents; Undisclosed Liabilities.................14
SECTION 3.07. Information Supplied...................................15
SECTION 3.08. Absence of Certain Changes or Events...................16
SECTION 3.09. Taxes..................................................17
SECTION 3.10. Absence of Changes in Benefit Plans....................19
SECTION 3.11. ERISA Compliance; Excess Parachute
Payments..........................................19
SECTION 3.12. Litigation.............................................22
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SECTION 3.13. Compliance with Applicable Laws........................23
SECTION 3.14. Brokers; Schedule of Fees and Expenses.................25
SECTION 3.15. Opinion of Financial Advisor...........................25
SECTION 3.16. Labor Matters..........................................25
SECTION 3.17. Contracts; Debt Instruments............................26
SECTION 3.18. Intellectual Property..................................26
SECTION 3.19. Charitable Contributions...............................27
ARTICLE IV
Representations and Warranties of Parent and Sub
SECTION 4.01. Organization, Standing and Power.......................27
SECTION 4.02. Sub....................................................27
SECTION 4.03. Authority; Execution and Delivery;
Enforceability....................................27
SECTION 4.04. No Conflicts; Consents.................................28
SECTION 4.05. Information Supplied...................................28
SECTION 4.06. Brokers................................................29
SECTION 4.07. Financing..............................................29
SECTION 4.08. Stock Ownership; Interested Shareholder................29
ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.01. Conduct of Business....................................30
SECTION 5.02. Actions of Company Board; Company
Takeover Proposals................................33
ARTICLE VI
Additional Agreements
SECTION 6.01. Preparation of the Proxy Statement;
Shareholders Meeting...............................34
SECTION 6.02. Access to Information; Confidentiality.................35
SECTION 6.03. Reasonable Best Efforts; Notification..................35
SECTION 6.04. Company Stock Options..................................37
SECTION 6.05. Indemnification........................................40
SECTION 6.06. Fees and Expenses......................................41
SECTION 6.07. Public Announcements...................................42
SECTION 6.08. Transfer Taxes.........................................42
SECTION 6.09. Directors..............................................42
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SECTION 6.10. Rights Agreement; Consequences if Rights
Triggered.........................................43
SECTION 6.11. Shareholder Litigation.................................44
SECTION 6.12. Charitable Giving......................................44
SECTION 6.13. Annual Meeting.........................................44
ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to Each Party's Obligation to
Effect the Merger.................................44
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination............................................45
SECTION 8.02. Effect of Termination..................................47
SECTION 8.03. Amendment..............................................47
SECTION 8.04. Extension; Waiver......................................47
SECTION 8.05. Procedure for Termination, Amendment,
Extension or Waiver...............................47
ARTICLE IX
General Provisions
SECTION 9.01. Nonsurvival of Representations and
Warranties........................................48
SECTION 9.02. Notices................................................49
SECTION 9.03. Definitions............................................49
SECTION 9.04. Interpretation; Disclosure Letters.....................52
SECTION 9.05. Severability...........................................52
SECTION 9.06. Counterparts...........................................52
SECTION 9.07. Entire Agreement; No Third-Party
Beneficiaries.....................................52
SECTION 9.08. Governing Law..........................................53
SECTION 9.09. Assignment.............................................53
SECTION 9.10. Enforcement............................................53
EXHIBIT A - Conditions of the Offer
AGREEMENT AND PLAN OF MERGER dated as of /0/, 2001,
among WEYERHAEUSER COMPANY, a Washington corporation ("Parent"),
COMPANY HOLDINGS, INC., a Washington corporation ("Sub"), and a
direct wholly owned subsidiary of Parent, and WILLAMETTE INDUSTRIES,
INC., an Oregon corporation (the "Company").
WHEREAS Sub has outstanding an offer (the "Existing Offer", and, as
amended from time to time in accordance with this Agreement, the "Offer") to
purchase all the outstanding shares of common stock, par value $0.50 per share,
of the Company (the "Company Common Stock"), including the associated Company
Rights (as defined in Section 3.03), on the terms and subject to the conditions
set forth in the Offer to Purchase dated November 29, 2000, and in the related
letter of transmittal;
WHEREAS the board of directors of the Company (the "Company Board")
has approved the acquisition of the Company by Parent and resolved and agreed to
recommend that holders of Company Common Stock tender their shares of Company
Common Stock pursuant to the Offer;
WHEREAS, in furtherance of such transaction, the respective Boards
of Directors of Parent, Sub and the Company have approved the merger (the
"Merger") of Sub into the Company on the terms and subject to the conditions set
forth in this Agreement, whereby each issued share of Company Common Stock not
owned directly by Parent, Sub or the Company (other than Dissent Shares (as
defined in Section 2.01(d))) shall be converted into the right to receive the
per share consideration paid pursuant to the Offer; and
WHEREAS Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various conditions to the Offer and
the Merger.
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NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
The Offer and Merger
SECTION 1.01. The Offer. (a) Subject to the conditions of this
Agreement, as promptly as practicable after the date of this Agreement, Sub
shall, and Parent shall cause Sub to, amend the Existing Offer to reflect the
terms and conditions of this Agreement, including the purchase price of
$50.00 per share of Company Common Stock (and associated Right), net to the
seller in cash, without interest thereon (the "Offer Price"), and to set
[insert date that is 10 business days from day following date of agreement]
(the "Initial Expiration Date"), as the expiration date for the Offer. The
obligations of Sub to, and of Parent to cause Sub to, accept for payment, and
pay for, any shares of Company Common Stock tendered pursuant to the Offer
are subject to the conditions set forth in Exhibit A. Sub expressly reserves
the right to waive any condition to the Offer or modify the terms of the
Offer, except that, without the consent of the Company, Sub shall not (i)
reduce the number of shares of Company Common Stock subject to the Offer,
(ii) reduce the Offer Price, (iii) waive the Minimum Tender Condition (as
defined in Exhibit A), (iv) add to the conditions set forth in Exhibit A or
modify any condition set forth in Exhibit A in any manner adverse to the
holders of Company Common Stock, (v) extend the Offer or (vi) change the form
of consideration payable in the Offer. Notwithstanding the foregoing, Sub
may, without the consent of the Company, (i) extend the Offer, if at the
scheduled expiration date of the Offer any of the conditions to Sub's
obligation to purchase shares of Company Common Stock are not satisfied,
until such time as such conditions are satisfied or waived and (ii) extend
the Offer for any period required by any rule, regulation, interpretation or
position of the Securities and Exchange Commission (the "SEC") or the staff
thereof applicable to the Offer. In addition, if, at the scheduled or
extended expiration date of the Offer, all the conditions to the Offer have
been satisfied or waived but the Company Common Stock tendered and not
withdrawn pursuant to the Offer constitutes less than 90 percent of the
outstanding Company Common Stock, without the consent of the Company, Sub
shall (subject to applicable law) have the right to provide for a "subsequent
offering period" (as contemplated by Rule 14d-11 of the SEC) for up to 20
business days after Sub's acceptance for payment of the
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shares of Company Common Stock then tendered and not withdrawn pursuant to the
Offer. On the terms and subject to the conditions of the Offer and this
Agreement, Sub shall, and Parent shall cause Sub to, pay for all shares of
Company Common Stock validly tendered and not withdrawn pursuant to the Offer
that Sub becomes obligated to purchase pursuant to the Offer as soon as
practicable after the expiration of the Offer or (in the case of shares tendered
during any subsequent offering period) as soon as practicable following the
valid tender thereof.
(b) As promptly as practicable after the date of this Agreement,
Parent and Sub shall amend the Tender Offer Statement on Schedule TO (the
"Schedule TO") with respect to the Offer that was originally filed on November
29, 2000, and file such amendment (the "Schedule TO Amendment") with the SEC.
The Schedule TO Amendment shall contain a supplement to the Offer to Purchase
dated November 29, 2000, and a revised form of the letter of transmittal and
summary advertisement (such Schedule TO and the documents included therein
pursuant to which the Offer will be made, together with any supplements or
amendments thereto, the "Offer Documents"). Parent and Sub shall mail the
supplement to the Offer to Purchase and revised letter of transmittal to holders
of shares of Company Common Stock. Each of Parent, Sub and the Company shall
promptly correct any information provided by it for use in the Offer Documents
if and to the extent that such information shall have become false or misleading
in any material respect, and each of Parent and Sub shall take all steps
necessary to amend or supplement the Offer Documents and to cause the Offer
Documents as so amended or supplemented to be filed with the SEC and to be
disseminated to the Company's shareholders, in each case as and to the extent
required by applicable Federal securities laws. Parent and Sub shall provide the
Company and its counsel in writing with any comments Parent, Sub or their
counsel may receive after the date of this Agreement from the SEC or its staff
with respect to the Offer Documents promptly after the receipt of such comments.
(c) Parent shall provide or cause to be provided to Sub on a timely
basis the funds necessary to purchase any shares of Company Common Stock that
Sub becomes obligated to purchase pursuant to the Offer.
SECTION 1.02. Company Actions. (a) The Company hereby approves of
and consents to the Offer, the Merger and the other transactions contemplated by
this Agreement (collectively, the "Transactions").
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(b) On the date the Schedule TO Amendment is filed with the SEC, the
Company shall file with the SEC an amendment (the "Schedule 14D-9 Amendment") to
its Solicitation/Recommendation Statement on Schedule 14D-9 originally filed on
December 5, 2000 with respect to the Offer, including an Information Statement
(as defined in Section 3.05(b)) (such Schedule 14D-9, as amended from time to
time, the "Schedule 14D-9"), and shall mail the Schedule 14D-9 Amendment
(including the Information Statement) to the holders of Company Common Stock.
Each of the Company, Parent and Sub shall promptly correct any information
provided by it for use in the Schedule 14D-9 (including the Information
Statement) if and to the extent that such information shall have become false or
misleading in any material respect, and the Company shall take all steps
necessary to amend or supplement the Schedule 14D-9 (including the Information
Statement) and to cause the Schedule 14D-9 (including the Information Statement)
as so amended or supplemented to be filed with the SEC and disseminated to the
Company's shareholders, in each case as and to the extent required by applicable
Federal securities laws. The Company shall provide Parent and its counsel in
writing with any comments the Company or its counsel may receive after the date
of this Agreement from the SEC or its staff with respect to the Schedule 14D-9
or the Information Statement promptly after the receipt of such comments.
(c) In connection with the Offer, the Company shall cause its
transfer agent to furnish Sub promptly with mailing labels containing the names
and addresses of the record holders of Company Common Stock as of a recent date
and of those persons becoming record holders subsequent to such date, together
with copies of all lists of shareholders, security position listings and
computer files and all other information in the Company's possession or control
regarding the beneficial owners of Company Common Stock, and shall furnish to
Sub such information and assistance (including updated lists of shareholders,
security position listings and computer files) as Parent may reasonably request
in communicating the Offer to the Company's shareholders.
SECTION 1.03. The Merger. On the terms and subject to the conditions
set forth in this Agreement, and in accordance with the Oregon Revised Statutes
(the "ORS"), Sub shall be merged with and into the Company at the Effective Time
(as defined in Section 1.05). At the Effective Time, the separate corporate
existence of Sub shall cease and the Company shall continue as the surviving
corporation (the "Surviving Corporation"). At the election of Parent, any direct
wholly owned subsidiary of Parent may
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be substituted for Sub as a constituent corporation in the Merger. In such
event, the parties shall execute an appropriate amendment to this Agreement in
order to reflect the foregoing.
SECTION 1.04. Closing. The closing (the "Closing") of the Merger
shall take place at the offices of Cravath, Swaine & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m. on the second business day following the
satisfaction (or, to the extent permitted by applicable Law (as defined in
Section 3.05), waiver by all parties) of the conditions set forth in Section
7.01, or at such other place, time and date as shall be agreed in writing
between Parent and the Company. The date on which the Closing occurs is referred
to in this Agreement as the "Closing Date".
SECTION 1.05. Effective Time. Subject to the provisions of this
Agreement, the parties shall file with the Secretary of State of the State of
Oregon, articles of merger or other appropriate documents (in any such case, the
"Articles of Merger") executed in accordance with the relevant provisions of the
ORS and shall make all other filings or recordings required under the ORS. The
Merger shall become effective at such time as the Articles of Merger are duly
filed with such Secretary of State, or at such other time as Parent and the
Company shall agree and specify in the Articles of Merger (the time the Merger
becomes effective being the "Effective Time").
SECTION 1.06. Effects. The Merger shall have the effects set forth
in Section 60.497 of the ORS.
SECTION 1.07. Articles of Incorporation and By- laws. (a) The
Articles of Incorporation of the Company at the Effective Time shall be the
Articles of Incorporation of the Surviving Corporation until thereafter changed
or amended as provided therein or by applicable Law.
(b) The By-laws of the Company as in effect immediately prior to the
Effective Time shall be the By-laws of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable Law.
SECTION 1.08. Directors. The directors of Sub immediately prior to
the Effective Time shall be the directors of the Surviving Corporation, until
the earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
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SECTION 1.09. Officers. The officers of the Company immediately
prior to the Effective Time shall be the officers of the Surviving Corporation,
until the earlier of their resignation or removal or until their respective
successors are duly elected or appointed and qualified, as the case may be.
ARTICLE II
Effect on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
shares of Company Common Stock or any shares of capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of
capital stock of Sub shall be converted into and become one fully paid and
nonassessable share of common stock, par value $0.50 per share, of the Surviving
Corporation.
(b) Cancelation of Company-Owned Stock and Parent-Owned Stock. Each
share of Company Common Stock that is owned by the Company, Parent or Sub shall
no longer be outstanding and shall automatically be canceled and retired and
shall cease to exist, and no consideration shall be delivered or deliverable in
exchange therefor.
(c) Conversion of Company Common Stock. Subject to Sections 2.01(b)
and 2.01(d), each issued share of Company Common Stock shall be converted into
the right to receive the Offer Price in cash. The cash payable upon the
conversion of shares of Company Common Stock pursuant to this Section 2.01(c) is
referred to collectively as the "Merger Consideration". As of the Effective
Time, all such shares of Company Common Stock shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist, and each
holder of a certificate representing any such shares of Company Common Stock
shall cease to have any rights with respect thereto, except the right to receive
Merger Consideration upon surrender of such certificate in accordance with
Section 2.02, without interest.
(d) Dissent Rights. Notwithstanding anything in this Agreement to
the contrary, shares ("Dissent Shares") of Company Common Stock that are
outstanding immediately prior to the Effective Time and that are held by any
person who is
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entitled to demand and properly demands payment of the fair value of such
Dissent Shares pursuant to, and who complies in all respects with, Section
60.554 of the ORS ("Section 60.554") shall not be converted into Merger
Consideration as provided in Section 2.01(c), but rather the holders of Dissent
Shares shall be entitled to payment of the fair value of such Dissent Shares in
accordance with Section 60.554; provided, however, that if any such holder shall
fail to perfect or otherwise shall waive, withdraw or lose the right to receive
payment of fair value under Section 60.554, then the right of such holder to be
paid the fair value of such holder's Dissent Shares shall cease and such Dissent
Shares shall be deemed to have been converted as of the Effective Time into, and
to have become exchangeable solely for the right to receive, Merger
Consideration as provided in Section 2.01(c). The Company shall serve prompt
notice to Parent of any demands received by the Company for payment of fair
value in respect of any shares of Company Common Stock, and Parent shall have
the right to participate in and direct all negotiations and proceedings with
respect to such demands. Prior to the Effective Time, the Company shall not,
without the prior written consent of Parent, make any payment with respect to,
or settle or offer to settle, any such demands, or agree to do any of the
foregoing.
SECTION 2.02. Exchange of Certificates. (a) Paying Agent. [NAME OF
PAYING AGENT] shall act as paying agent (the "Paying Agent") for the payment of
the Merger Consideration upon surrender of certificates representing Company
Common Stock. Parent shall take all steps necessary to enable and cause the
Surviving Corporation to provide to the Paying Agent on a timely basis, as and
when needed after the Effective Time, cash necessary to pay for the shares of
Company Common Stock converted into the right to receive cash pursuant to
Section 2.01(c) (such cash being hereinafter referred to as the "Exchange
Fund").
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, the Paying Agent shall mail to each holder of record of a
certificate or certificates (the "Certificates") that immediately prior to the
Effective Time represented outstanding shares of Company Common Stock whose
shares were converted into the right to receive Merger Consideration pursuant to
Section 2.01, (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Paying Agent and shall be in such
form and have such other provisions as Parent may reasonably specify) and (ii)
instructions for use in effecting the
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surrender of the Certificates in exchange for Merger Consideration. Upon
surrender of a Certificate for cancelation to the Paying Agent or to such other
agent or agents as may be appointed by Parent, together with such letter of
transmittal, duly executed, and such other documents as may reasonably be
required by the Paying Agent, the holder of such Certificate shall be entitled
to receive in exchange therefor the amount of cash into which the shares of
Company Common Stock theretofore represented by such Certificate shall have been
converted pursuant to Section 2.01, and the Certificate so surrendered shall
forthwith be canceled. In the event of a transfer of ownership of Company Common
Stock that is not registered in the transfer records of the Company, payment may
be made to a person other than the person in whose name the Certificate so
surrendered is registered if such Certificate shall be properly endorsed or
otherwise be in proper form for transfer and the person requesting such payment
shall pay any transfer or other taxes required by reason of the payment to a
person other than the registered holder of such Certificate or establish to the
satisfaction of Parent that such tax has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.02, each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive upon such surrender Merger Consideration as contemplated by this Section
2.02.
(c) No Further Ownership Rights in Company Common Stock. The Merger
Consideration paid in accordance with the terms of this Article II upon
conversion of any shares of Company Common Stock shall be deemed to have been
issued in full satisfaction of all rights pertaining to such shares of Company
Common Stock, subject, however, to the Surviving Corporation's obligation to pay
any dividends or make any other distributions with a record date prior to the
Effective Time that may have been declared or made by the Company on such shares
of Company Common Stock in accordance with the terms of this Agreement or prior
to the date of this Agreement and which remain unpaid at the Effective Time, and
after the Effective Time there shall be no further registration of transfers on
the stock transfer books of the Surviving Corporation of shares of Company
Common Stock that were outstanding immediately prior to the Effective Time. If,
after the Effective Time, any certificates formerly representing shares of
Company Common Stock are presented to the Surviving Corporation or the Paying
Agent for any reason, they shall be canceled and exchanged as provided in this
Article II.
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(d) Termination of Exchange Fund. Any portion of the Exchange Fund
that remains undistributed to the holders of Company Common Stock for six months
after the Effective Time shall be delivered to Parent, upon demand, and any
holder of Company Common Stock who has not theretofore complied with this
Article II shall thereafter look only to Parent for payment of its claim for
Merger Consideration.
(e) No Liability. None of Parent, Sub, the Company or the Paying
Agent shall be liable to any person in respect of any cash from the Exchange
Fund delivered to a public official pursuant to any applicable abandoned
property, escheat or similar Law. If any Certificate has not been surrendered
prior to five years after the Effective Time (or immediately prior to such
earlier date on which Merger Consideration in respect of such Certificate would
otherwise escheat to or become the property of any Governmental Entity (as
defined in Section 3.05(b)), any such shares, cash, dividends or distributions
in respect of such Certificate shall, to the extent permitted by applicable Law,
become the property of the Surviving Corporation, free and clear of all claims
or interest of any person previously entitled thereto.
(f) Investment of Exchange Fund. The Paying Agent shall invest any
cash included in the Exchange Fund, as directed by Parent, on a daily basis. Any
interest and other income resulting from such investments shall be paid to
Parent.
(g) Withholding Rights. Parent and the Surviving Corporation shall
be entitled to deduct and withhold from the consideration otherwise payable to
any holder of Company Common Stock pursuant to this Agreement such amounts as
may be required to be deducted and withheld with respect to the making of such
payment under the Code (as defined in Section 3.09), or under any provision of
state, local or foreign tax Law. To the extent that amounts are so withheld by
Parent or the Surviving Corporation and paid over to the appropriate taxing
authority, such withheld amounts will be treated for all purposes of this
Agreement as having been paid to the holder of Company Common Stock in respect
of which such deduction and withholding was paid by Parent or the Surviving
Corporation.
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ARTICLE III
Representations and Warranties of the Company
The Company represents and warrants to Parent and Sub as follows:
SECTION 3.01. Organization, Standing and Power. Each of the Company
and each of its subsidiaries (the "Company Subsidiaries") is duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it is organized and has full corporate power and authority and possesses
all governmental franchises, licenses, permits, authorizations and approvals
necessary to enable it to own, lease or otherwise hold its properties and assets
and to conduct its businesses as presently conducted, other than such
franchises, licenses, permits, authorizations and approvals the lack of which,
individually or in the aggregate, has not had and would not reasonably be
expected to have a material adverse effect on the Company or a material adverse
effect on the ability of the Company to consummate the Merger and the other
Transactions (a "Company Material Adverse Effect"). The Company and each Company
Subsidiary is duly qualified to do business in each jurisdiction where the
nature of its business or its ownership or leasing of its properties make such
qualification necessary or the failure to so qualify has had or would reasonably
be expected to have a Company Material Adverse Effect. The Company has delivered
to Parent true and complete copies of the articles of incorporation of the
Company, as amended to the date of this Agreement (as so amended, the "Company
Charter"), and the By-laws of the Company, as amended to the date of this
Agreement (as so amended, the "Company By-laws"), and the comparable charter and
organizational documents of each Company Subsidiary, in each case as amended
through the date of this Agreement.
SECTION 3.02. Company Subsidiaries; Equity Interests. (a) The
letter, dated as of the date of this Agreement, from the Company to Parent and
Sub (the "Company Disclosure Letter") lists each Company Subsidiary and its
jurisdiction of organization. All the outstanding shares of capital stock of
each Company Subsidiary have been validly issued and are fully paid and
nonassessable and, except as set forth in the Company Disclosure Letter, are
owned by the Company, by another Company Subsidiary or by the Company and
another Company Subsidiary, free and clear of all pledges, liens, charges,
mortgages, encumbrances and security interests of any kind or nature whatsoever
(collectively, "Liens"), except for such Liens as have not had and would
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not reasonably be expected to have a Company Material Adverse Effect.
(b) Except for its interests in the Company Subsidiaries and except
for the ownership interests set forth in the Company Disclosure Letter, the
Company does not own, directly or indirectly, any capital stock, membership
interest, partnership interest, joint venture interest or other equity interest
in any person.
SECTION 3.03. Capital Structure. The authorized capital stock of the
Company consists of 150,000,000 shares of Company Common Stock and 5,000,000
shares of preferred stock, par value $0.50 per share ("Company Preferred Stock"
and, together with the Company Common Stock, the "Company Capital Stock"). At
the close of business on /0/, 2001, (i) /0/ shares of Company Common Stock were
issued and outstanding (including /0/ shares of Company Restricted Stock (as
defined in Section 6.04(c))), (ii) /0/ shares of Company Common Stock were
subject to outstanding Company Employee Stock Options (as defined in Section
6.04(c)), (iii) /0/ additional shares of Company Common Stock were reserved for
issuance pursuant to the Company Stock Plans (as defined in Section 6.04(c)) and
(iv) /0/ shares of Company Preferred Stock were reserved for issuance in
connection with the rights (the "Company Rights") issued pursuant to the Rights
Agreement dated as of February 25, 2000 (as amended from time to time, the
"Company Rights Agreement"), between the Company and Mellon Investor Services
LLC (formerly known as ChaseMellon Shareholder Services, L.L.C.), as Rights
Agent. Except as set forth above, at the close of business on /0/, 2001, no
restricted shares or other shares of capital stock or other voting securities of
the Company were issued, reserved for issuance or outstanding. There are no
outstanding stock appreciation rights that were not granted in tandem with a
related Company Employee Stock Option. All outstanding shares of Company Capital
Stock are, and all such shares that may be issued prior to the Effective Time
will be when issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to or issued in violation of any purchase option,
call option, right of first refusal, preemptive right, subscription right or any
similar right under any provision of the ORS, the Company Charter, the Company
By- laws or any Contract (as defined in Section 3.05(a)) to which the Company is
a party or otherwise bound. There are not any bonds, debentures, notes or other
indebtedness of the Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
holders of Company Common Stock may vote ("Voting Company Debt"). Except as set
forth above, as
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of the date of this Agreement, there are not any options, warrants, rights,
convertible or exchangeable securities, "phantom" stock rights, stock
appreciation rights, stock- based performance units, commitments, Contracts,
arrangements or undertakings of any kind to which the Company or any Company
Subsidiary is a party or by which any of them is bound (i) obligating the
Company or any Company Subsidiary to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other equity
interests in, or any security convertible or exercisable for or exchangeable
into any capital stock of or other equity interest in, the Company or of any
Company Subsidiary or any Voting Company Debt (or to make any payment based on
the value of any equity interest in the Company or in any Company Subsidiary) or
(ii) obligating the Company or any Company Subsidiary to issue, grant, extend or
enter into any such option, warrant, call, right, security, commitment,
Contract, arrangement or undertaking. As of the date of this Agreement, there
are not any outstanding contractual obligations of the Company or any Company
Subsidiary to repurchase, redeem or otherwise acquire any shares of capital
stock of the Company or any Company Subsidiary. The Company has delivered to
Parent a complete and correct copy of the Company Rights Agreement, as amended
to the date of this Agreement.
SECTION 3.04. Authority; Execution and Delivery; Enforceability. (a)
The Company has all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the Transactions. The execution and
delivery by the Company of this Agreement and the consummation by the Company of
the Transactions have been duly authorized by all necessary corporate action on
the part of the Company, subject, in the case of the Merger, to receipt of the
Company Shareholder Approval (as defined in Section 3.04(c)). The Company has
duly executed and delivered this Agreement, and this Agreement constitutes its
legal, valid and binding obligation, enforceable against it in accordance with
its terms.
(b) The Company Board, at a meeting duly called and held duly and
unanimously adopted resolutions (i) approving this Agreement, the Offer, the
Merger and the other Transactions, (ii) determining that the terms of the Offer,
the Merger and the other Transactions are fair to and in the best interests of
the Company and its shareholders, (iii) recommending that the holders of Company
Common Stock accept the Offer and tender their shares of Company Common Stock
pursuant to the Offer, (iv) recommending that the Company's shareholders approve
this Agreement, (v) adopting a plan of merger relating to the Merger as required
by the
13
ORS and (vi) directing that such plan of merger be submitted for approval by the
Company's shareholders. In addition, the Company Board has taken all action
necessary to render (i) Sections 60.801 to 60.816 of the ORS, (ii) Sections
60.825 to 60.845 of the ORS and (iii) Article VI of the Company Charter
inapplicable (A) to Parent and Sub and (B) to the Offer, the Merger and the
other Transactions. To the Company's knowledge, no other state takeover statute
or similar statute or regulation applies or purports to apply to the Company
with respect to this Agreement, the Offer, the Merger or any other Transaction.
(c) The only vote of holders of any class or series of Company
Capital Stock necessary to approve and adopt this Agreement and the Merger is
the approval of this Agreement by the holders of shares of Company Common Stock
representing a majority of all the votes entitled to be cast thereon (the
"Company Shareholder Approval"). The affirmative vote of the holders of Company
Capital Stock, or any of them, is not necessary to consummate any Transaction
(including the Offer) other than the Merger.
SECTION 3.05. No Conflicts; Consents. (a) The execution and delivery
by the Company of this Agreement do not, and the consummation of the Offer, the
Merger and the other Transactions and compliance with the terms hereof will not,
conflict with, or result in any violation of or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancelation or acceleration of any obligation or to loss of a material benefit
under, or result in the creation of any Lien upon any of the properties or
assets of the Company or any Company Subsidiary under, any provision of (i) the
Company Charter, the Company By-laws or the comparable charter or organizational
documents of any Company Subsidiary, (ii) any contract, lease, license,
indenture, note, bond, agreement, permit, concession, franchise or other
instrument (a "Contract") to which the Company or any Company Subsidiary is a
party or by which any of their respective properties or assets is bound or (iii)
subject to the filings and other matters referred to in Section 3.05(b), any
judgment, order or decree ("Judgment") or statute, law, ordinance, rule or
regulation ("Law") applicable to the Company or any Company Subsidiary or their
respective properties or assets, other than, in the case of clauses (ii) and
(iii) above, any such items that, individually or in the aggregate, have not had
and would not reasonably be expected to have a Company Material Adverse Effect.
(b) No consent, approval, license, permit, order or authorization
("Consent") of, or registration,
14
declaration or filing with, or permit from, any Federal, state, local or foreign
government or any court of competent jurisdiction, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign (a "Governmental Entity"), is required to be obtained or made by or with
respect to the Company or any Company Subsidiary in connection with the
execution, delivery and performance of this Agreement or the consummation of the
Transactions, other than (i) the filing with the SEC of (A) the Schedule 14D-9
Amendment, (B) a proxy or information statement relating to the approval of this
Agreement by the Company's shareholders (the "Proxy Statement"), (C) any
information statement (the "Information Statement") required to be filed in
connection with the Offer pursuant to Rule 14f-1 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and (D) such reports under Section
13(a) of the Exchange Act as may be required in connection with this Agreement,
the Offer, the Merger and the other Transactions, (ii) the filing of the
Articles of Merger with the Secretary of State of the State of Oregon and
appropriate documents with the relevant authorities of the other jurisdictions
in which the Company is qualified to do business, (iii) compliance with and such
filings as may be required under applicable Environmental Laws (as defined in
Section 3.13(d)), (iv) such filings as may be required in connection with the
taxes described in Section 6.08 and (v) such other items (A) that may be
required under the applicable Law of any foreign country, (B) required solely by
reason of the participation of Parent or Sub (as opposed to any third party) in
the Transactions, (C) that, individually or in the aggregate, have not had and
would not reasonably be expected to have a Company Material Adverse Effect or
(D) as are set forth in the Company Disclosure Letter.
(c) The Company and the Company Board have taken all action
necessary to (i) render the Company Rights inapplicable to this Agreement, the
Offer, the Merger and the other Transactions and (ii) ensure that (A) neither
Parent nor any of its affiliates or associates is or will become an "Acquiring
Person" (as defined in the Company Rights Agreement) by reason of this
Agreement, the Offer, the Merger or any other Transaction), (B) a "Distribution
Date" or a "Shares Acquisition Date" (each as defined in the Company Rights
Agreement) shall not occur by reason of this Agreement, the Offer, the Merger or
any other Transaction and (C) the Company Rights shall expire immediately prior
to the Effective Time.
SECTION 3.06. SEC Documents; Undisclosed Liabilities. The Company
has filed all reports, schedules,
15
forms, statements and other documents required to be filed by the Company with
the SEC since January 1, 2000 (the "Company SEC Documents"). As of its
respective date, each Company SEC Document complied in all material respects
with the requirements of the Exchange Act or the Securities Act of 1933, as
amended (the "Securities Act"), as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such Company SEC
Document, and did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Except to the extent that information contained in any
Company SEC Document has been revised or superseded by a later filed Company SEC
Document, none of the Company SEC Documents contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of the Company included in the Company SEC Documents comply
as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles ("GAAP")
(except, in the case of unaudited statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated financial
position of the Company and its consolidated subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). Except as set forth in the Filed Company SEC
Documents (as defined in Section 3.08), neither the Company nor any Company
Subsidiary has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) required by GAAP to be set forth on a
consolidated balance sheet of the Company and its consolidated subsidiaries or
in the notes thereto and that, individually or in the aggregate, would
reasonably be expected to have a Company Material Adverse Effect.
SECTION 3.07. Information Supplied. None of the information supplied
or to be supplied by the Company for inclusion or incorporation by reference in
(i) the Offer Documents, the Schedule 14D-9 or the Information Statement will,
at the time such document is filed with the SEC, at any time it is amended or
supplemented or at the time it is first published, sent or given to the
Company's
16
shareholders, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading, or (ii) the Proxy Statement will, at the date
it is first mailed to the Company's shareholders or at the time of the Company
Shareholders Meeting (as defined in Section 6.01(b)), contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The Schedule 14D-9,
the Information Statement and the Proxy Statement will comply as to form in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder, except that no representation is made by the Company
with respect to statements made or incorporated by reference therein based on
information supplied by Parent or Sub for inclusion or incorporation by
reference therein.
SECTION 3.08. Absence of Certain Changes or Events. Except as
disclosed in the Company SEC Documents filed pursuant to Section 13(a) of the
Exchange Act and publicly available prior to the date of this Agreement (the
"Filed Company SEC Documents") or in the Company Disclosure Letter, from the
date of the most recent audited financial statements included in the Filed
Company SEC Documents to the date of this Agreement, the Company has conducted
its business only in the ordinary course, and during such period there has not
been:
(i) any event, change, effect or development that, individually or
in the aggregate, has had or would reasonably be expected to have a
Company Material Adverse Effect;
(ii) any declaration, setting aside or payment of any dividend or
other distribution (whether in cash, stock or property) with respect to
any Company Capital Stock, other than regular quarterly cash dividends not
in excess of $0.23 per share on Company Common Stock, with usual
declaration, record and payment dates and in accordance with the Company's
past dividend policy;
(iii) any repurchase for value by the Company of any Company Capital
Stock;
(iv) any split, combination or reclassification of any Company
Capital Stock or any issuance or the authorization of any issuance of any
other securities in respect of, in lieu of or in substitution for shares
of Company Capital Stock, except for issuances of
17
Company Common Stock (and associated Company Rights) upon the exercise of
Company Employee Stock Options awarded prior to the date hereof in
accordance with their present terms or issued in compliance with Section
5.01(a);
(v) (A) any granting by the Company or any Company Subsidiary to any
director or executive officer of the Company or any Company Subsidiary of
any increase in compensation, except in the ordinary course of business
consistent with prior practice or as was required under employment
agreements in effect as of the date of the most recent audited financial
statements included in the Filed Company SEC Documents, (B) any granting
by the Company or any Company Subsidiary to any such director or executive
officer of any increase in severance or termination pay, except as was
required under any employment, severance or termination agreements in
effect as of the date of the most recent audited financial statements
included in the Filed Company SEC Documents or (C) any entry by the
Company or any Company Subsidiary into, or any amendment of, any
employment, severance or termination agreement with any such director or
executive officer;
(vi) any change in accounting methods, principles or practices by
the Company or any Company Subsidiary materially affecting the
consolidated assets, liabilities or results of operations of the Company,
except insofar as may have been required by a change in GAAP; or
(vii) any material elections with respect to Taxes (as defined in
Section 3.09(g)) by the Company or any Company Subsidiary or settlement or
compromise by the Company or any Company Subsidiary of any material Tax
liability or refund.
SECTION 3.09. Taxes. (a) Each of the Company and each Company
Subsidiary has timely filed, or has caused to be timely filed on its behalf, all
Tax Returns required to be filed by it, and all such Tax Returns are true,
complete and accurate, except to the extent any failure to file or any
inaccuracies in any filed Tax Returns, individually or in the aggregate, have
not had and would not reasonably be expected to have a Company Material Adverse
Effect. All Taxes shown to be due on such Tax Returns, or otherwise owed, have
been timely paid.
(b) The most recent financial statements contained in the Filed
Company SEC Documents reflect an
18
adequate reserve for all Taxes payable by the Company and the Company
Subsidiaries (in addition to any reserve for deferred Taxes established to
reflect timing differences between book and Tax items) for all Taxable periods
and portions thereof through the date of such financial statements. No
deficiency with respect to any Taxes has been proposed, asserted or assessed
against the Company or any Company Subsidiary, and no requests for waivers of
the time to assess any such Taxes are pending, except to the extent any such
deficiency or request for waiver, individually or in the aggregate, have not had
and would not reasonably be expected to have a Company Material Adverse Effect.
(c) The Federal income Tax Returns of the Company and each Company
Subsidiary consolidated in such Tax Returns have been examined by and settled
with the United States Internal Revenue Service or have closed by virtue of the
applicable statute of limitations for all years through /0/. All material
assessments for Taxes due with respect to such completed and settled
examinations or any concluded litigation have been fully paid.
(d) There are no material Liens for Taxes (other than for current
Taxes not yet due and payable) on the assets of the Company or any Company
Subsidiary. Neither the Company nor any Company Subsidiary is bound by any
agreement with respect to Taxes.
(e) Neither the Company nor any Company Subsidiary has constituted
either a "distributing corporation" or a "controlled corporation" in a
distribution of stock qualifying for tax-free treatment under Section 355 of the
Code (x) in the two years prior to the date of this Agreement or (y) in a
distribution which could otherwise constitute part of a "plan" or "series of
related transactions" (within the meaning of Section 355(e) of the Internal
Revenue Code of 1986, as amended (the "Code")) in conjunction with the Merger.
(f) Neither the Company nor any Company Subsidiary is a "United
States real property holding company" within the meaning of Section 897(c)(2) of
the Code.
(g) For purposes of this Agreement:
"Taxes" includes all (x) forms of taxation, whenever created or
imposed, and whether of the United States or elsewhere, and whether imposed by a
local, municipal, governmental, state, foreign, Federal or other
19
Governmental Entity, or in connection with any agreement with respect to Taxes,
including all interest, penalties and additions imposed with respect to such
amounts, (y) liability for the payment of any amounts of the type described in
clause (x) as a result of being a member of an affiliated, consolidated,
combined or unitary group and (z) liability for any Tax sharing agreement or as
a result of any express or implied obligation to indemnify any other person with
respect to the payment of any amounts of the type described in clause (x) or
(y).
"Tax Return" means all Federal, state, local, provincial and foreign
Tax returns, declarations, statements, reports, schedules, forms and information
returns and any amended Tax return relating to Taxes.
SECTION 3.10. Absence of Changes in Benefit Plans. Except as
disclosed in the Filed Company SEC Documents or in the Company Disclosure
Letter, from the date of the most recent audited financial statements included
in the Filed Company SEC Documents to the date of this Agreement, there has not
been any adoption or amendment in any material respect by the Company or any
Company Subsidiary of any collective bargaining agreement or any bonus, pension,
profit sharing, deferred compensation, incentive compensation, stock ownership,
stock purchase, stock option, phantom stock, retirement, vacation, severance,
disability, death benefit, hospitalization, employment, medical or other
employee benefit, perquisite or compensation plan, agreement, arrangement or
understanding providing rights, payments or other benefits to any current or
former employee, officer or director of, or independent contractor with respect
to, the Company or any Company Subsidiary (collectively, "Company Benefit
Plans"). Except as disclosed in the Filed Company SEC Documents or in the
Company Disclosure Letter, as of the date of this Agreement there are not any
employment, consulting, indemnification, personal service, change in control,
severance or termination agreements or arrangements between the Company or any
Company Subsidiary and any current or former employee, officer or director of,
or independent contractor with respect to, the Company or any Company
Subsidiary, nor does the Company or any Company Subsidiary have any general
severance plan or policy.
SECTION 3.11. ERISA Compliance; Excess Parachute Payments. (a) The
Company Disclosure Letter contains a list and brief description of all "employee
pension benefit plans" (as defined in Section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) (sometimes referred to herein
as "Company Pension
20
Plans"), all "employee welfare benefit plans" (as defined in Section 3(1) of
ERISA) and all other Company Benefit Plans maintained, or contributed to, by the
Company or any Company Subsidiary for the benefit of any current or former
employees, officers or directors of, or independent contractor with respect to,
the Company or any Company Subsidiary (or under which the Company or any Company
Subsidiary has any current potential liabilities or obligations). The Company
has delivered to Parent true, complete and correct copies of (i) each Company
Benefit Plan (or, in the case of any unwritten Company Benefit Plan, a
description thereof), (ii) the most recent annual report on Form 5500 filed with
the Internal Revenue Service with respect to each Company Benefit Plan (if any
such report was required), (iii) the most recent summary plan description for
each Company Benefit Plan for which such summary plan description is required
and (iv) each trust agreement and group annuity contract relating to any Company
Benefit Plan. The Company, each Company Subsidiary, and each Company Benefit
Plan is in substantial compliance in all material respects with all applicable
provisions of any applicable collective bargaining or other labor agreement, and
ERISA, the Code and all other applicable U.S. and non-U.S. laws, rules and
regulations.
(b) Each U.S. Company Pension Plan is qualified and exempt from
Federal income taxes under Sections 401(a) and 501(a), respectively, of the
Code, and is in compliance with all terms of such plan and all applicable
provisions of ERISA and the Code. The Company has delivered to Parent a true,
complete and correct copy of each determination letter from the Internal Revenue
Service to the effect that each such Company Pension Plan is qualified and no
such determination letter has been revoked nor, to the knowledge of the Company,
has revocation been threatened, nor has any such Company Pension Plan been
amended since the date of its most recent determination letter or application
therefor in any respect that would adversely affect its qualification or
materially increase its costs. Each non-U.S. Company Pension Plan that is
capable of formal approval or qualification by the appropriate local tax
authorities has obtained such approval or qualification and, to the knowledge of
the Company and the Company Subsidiaries, nothing has been done or omitted to be
done, and there are no circumstances, which would reasonably be expected to
result in the loss of such approval or qualification.
(c) Except as disclosed in the Company Disclosure Letter, no Company
Pension Plan, other than any Company Pension Plan that is a "multiemployer plan"
within the meaning of Section 4001(a)(3) of ERISA (a "Company
21
Multiemployer Pension Plan"), had, as of the respective last annual valuation
date for each such Company Pension Plan, an "unfunded benefit liability" (as
such term is defined in Section 4001(a)(18) of ERISA), based on actuarial
assumptions that have been furnished to Parent. None of the Company Pension
Plans has an "accumulated funding deficiency" (as such term is defined in
Section 302 of ERISA or Section 412 of the Code), whether or not waived. None of
the Company, any Company Subsidiary, any officer of the Company or any Company
Subsidiary or any of the Company Benefit Plans which are subject to ERISA,
including the Company Pension Plans, any trusts created thereunder or any
trustee or administrator thereof, has engaged in a "prohibited transaction" (as
such term is defined in Section 406 of ERISA or Section 4975 of the Code) or any
other breach of fiduciary responsibility that could subject the Company, any
Company Subsidiary or any officer of the Company or any Company Subsidiary to
the tax or penalty on prohibited transactions imposed by such Section 4975 or to
any liability under Section 502(i) or 502(1) of ERISA. None of such Company
Benefit Plans and trusts has been terminated, nor has there been any "reportable
event" (as that term is defined in Section 4043 of ERISA) with respect to any
Company Benefit Plan during the last five years. Neither the Company nor any
Company Subsidiary has incurred a "complete withdrawal" or a "partial
withdrawal" (as such terms are defined in Sections 4203 and 4205, respectively,
of ERISA) since the effective date of such Sections 4203 and 4205 with respect
to any Company Multiemployer Pension Plan.
(d) With respect to any Company Benefit Plan that is an employee
welfare benefit plan, except as disclosed in the Company Disclosure Letter, (i)
no such Company Benefit Plan is unfunded or funded through a "welfare benefit
fund" (as such term is defined in Section 419(e) of the Code), (ii) each such
Company Benefit Plan that is a "group health plan" (as such term is defined in
Section 5000(b)(1) of the Code) complies with the applicable requirements of
Section 4980B(f) of the Code and (iii) each such Company Benefit Plan (including
any such Plan covering retirees or other former employees) may be amended or
terminated without liability to the Company and the Company Subsidiaries on or
at any time after the Effective Time.
(e) Other than payments that may be made to the persons listed in
the Company Disclosure Letter (the "Primary Company Executives"), any amount
that could be received (whether in cash or property or the vesting of rights or
property) as a result of the Offer, the Merger or any other Transaction by any
employee, officer or director of the Company or any of its affiliates who is a
22
"disqualified individual" (as such term is defined in proposed Treasury
Regulation Section 1.280G-1) under any employment, severance or termination
agreement, other compensation arrangement or Company Benefit Plan currently in
effect would not be characterized as an "excess parachute payment" (as defined
in Section 280G(b)(1) of the Code). Set forth in the Company Disclosure Letter
is (i) the estimated maximum amount that could be paid to each Primary Company
Executive as a result of the Merger and the other Transactions under all
employment, severance and termination agreements, other compensation
arrangements and Company Benefit Plans currently in effect and (ii) the "base
amount" (as defined in Section 280G(b)(3) of the Code) for each Primary Company
Executive calculated as of the date of this Agreement.
(f) With respect to each Company Benefit Plan that is maintained or
contributed to or required to be maintained or contributed to by the Company or
any Company Subsidiary, for the benefit of any employees or independent
contractors who perform services outside the United States (collectively,
"Foreign Benefit Plans"): (i) such Foreign Benefit Plan may be terminated
without material liability to the Company or any Company Subsidiary; (ii) the
fair market value of the assets of each Foreign Benefit Plan required to be
funded, the liability of each insurer for any Foreign Benefit Plan required to
be funded through insurance, or the book reserve established for any Foreign
Benefit Plan, together with any accrued contributions, is sufficient to procure
or provide for the accrued benefit obligations, as of the date of the most
recent valuation of such Foreign Benefit Plan, and no transaction contemplated
by this Agreement shall cause such assets or insurance obligations to be less
than such benefit obligations; (iii) all employer and employee contributions
required to be made under the terms of such Foreign Benefit Plan or any contract
or labor or collective bargaining agreement or applicable law have been made or,
if applicable, accrued in accordance with normal accounting practices (and, to
the extent unpaid, are reflected in the Company's balance sheet), and there are
no unfunded liabilities thereunder; and (iv) to the knowledge of the Company and
each Company Subsidiary any such Foreign Benefit Plan required to be registered
under applicable law has been registered and has been maintained in good
standing with applicable regulatory authorities.
SECTION 3.12. Litigation. Except as disclosed in the Filed Company
SEC Documents or in the Company Disclosure Letter, there is no suit, action or
proceeding pending or, to the knowledge of the Company, threatened against the
Company or any Company Subsidiary that, individually or in
23
the aggregate, has had or would reasonably be expected to have a Company
Material Adverse Effect, nor is there any Judgment outstanding against the
Company or any Company Subsidiary that has had or would reasonably be expected
to have a Company Material Adverse Effect.
SECTION 3.13. Compliance with Applicable Laws. (a) Except as
disclosed in the Filed Company SEC Documents or in the Company Disclosure
Letter, the Company and Company Subsidiaries are in compliance with all
applicable Laws, except for instances of noncompliance that, individually and in
the aggregate, have not had and would not reasonably be expected to have a
Company Material Adverse Effect. As of the date of this Agreement, except as set
forth in the Filed Company SEC Documents or in the Company Disclosure Letter,
neither the Company nor any Company Subsidiary has received any written
communication during the past two years from a Governmental Entity that alleges
that the Company or a Company Subsidiary is not in compliance in any material
respect with any applicable Law, except for such instances of noncompliance that
have not had and would not reasonably be expected to have a Company Material
Adverse Effect. This Section 3.13(a) does not relate to matters with respect to
Taxes, which are the subject of Section 3.09, or to matters involving
Environmental Laws, which are the subject of Sections 3.13(b) through 3.13(d).
(b) Except as set forth in the Company Disclosure Letter,
(i) the Company and each of the Company Subsidiaries are in
compliance with all applicable Environmental Laws, except for instances of
noncompliance that, individually or in the aggregate, have not had and
would not reasonably be expected to have a Company Material Adverse
Effect, and the Company and each of the Company Subsidiaries hold, and are
in compliance with, all permits, licenses and other authorizations
required to conduct their respective businesses under Environmental Laws,
except for the failure to hold such permits that, individually or in the
aggregate, have not had and would not reasonably be expected to have a
Company Material Adverse Effect;
(ii) neither the Company nor any of the Company Subsidiaries has (A)
placed, held, located, released, transported or disposed of any Hazardous
Substances on, under, from or at any of the Company's or any of the
Company Subsidiaries' currently or formerly owned, leased or operated
properties or any other properties, other than in a manner that has not
had and would not
24
reasonably be expected to have, in all such cases taken individually or in
the aggregate, a Company Material Adverse Effect, or (B) any knowledge or
reason to know of the presence of any Hazardous Substances on, under or at
any of the Company's or any of the Company Subsidiaries' currently or
formerly owned, leased or operated properties or any other property
arising from the Company's or any of the Company Subsidiaries' currently
or formerly owned, leased or operated properties, other than in a manner
that has not had and would not reasonably be expected to have, in all such
cases taken individually or in the aggregate, a Company Material Adverse
Effect;
(iii) there are no notices of violation or any other enforcement
proceedings, investigations, actions, suits or claims under Environmental
Laws that have been asserted, or are pending or threatened, that would
reasonably be expected to result in (A) fines or penalties, (B) any
obligation on the part of the Company to undertake supplemental
environmental projects or comparable mitigative environmental measures,
(C) any obligation on the part of the Company to install emission or
pollution control devices, (D) any restrictions on operations or
production at any of the facilities owned, leased or operated by the
Company or any of the Company Subsidiaries, including the temporary or
permanent shutdown of any such facility, in any such case that would
reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect or (E) the placement of a Lien upon any of
the Company's or the Company Subsidiaries' properties; and
(iv) there are no restrictions, limitations or controls in effect,
pending, threatened or contemplated under Environmental Laws on the
Company's or any Company Subsidiary's operations relating to harvesting
forest products, whether such restrictions, limitations or controls are
voluntary or have been imposed by any Governmental Entity, that would
reasonably be expected to result in materially lower levels of production
than those achieved or projected as of the Effective Time.
(c) Except as set forth in the Company Disclosure Letter, no
Environmental Law imposes any obligation upon the Company or the Company
Subsidiaries arising out of or as a condition to any Transaction, including any
requirement to modify or to transfer any permit or license, any requirement to
file any notice or other submission with any Governmental Entity, the placement
of any notice, acknowledgment or
25
covenant in any land records, or the modification or provision of notice under
any agreement, consent order or consent decree.
(d) For purposes of this Agreement, (i) "Environmental Laws" means
any Federal, state, local or foreign law, regulation, order, decree, permit,
authorization, common law or enforceable requirement of any Governmental Entity
in effect as of the Closing Date relating to: (A) protection or restoration of
the environment, human health or protection of or damage to natural resources
and endangered species, (B) the handling, use, presence, disposal, release or
threatened release of any Hazardous Substance or (C) noise, odor, indoor air,
employee exposure, pollution, contamination or any injury or threat of injury to
persons or property relating to any Hazardous Substance; and (ii) "Hazardous
Substance" means (A) any hazardous, toxic, noxious, radioactive, explosive or
flammable material, chemical, waste or substance or (B) any petroleum product or
by-product, asbestos containing material or any other material, chemical, waste
or substance harmful to human health or the environment.
SECTION 3.14. Brokers; Schedule of Fees and Expenses. No broker,
investment banker, financial advisor or other person, other than ▇▇▇▇▇▇▇, ▇▇▇▇▇
& Co., the fees and expenses of which will be paid by the Company, is entitled
to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the Offer, the Merger and the other Transactions
based upon arrangements made by or on behalf of the Company. The estimated fees
and expenses incurred and to be incurred by the Company in connection with the
Offer, the Merger and the other Transactions (including the fees of ▇▇▇▇▇▇▇,
Sachs & Co. and the fees of the Company's legal counsel) are set forth in the
Company Disclosure Letter. The Company has furnished to Parent a true and
complete copy of all agreements between the Company and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
relating to the Offer, the Merger and the other Transactions.
SECTION 3.15. Opinion of Financial Advisor. The Company has received
the opinion of ▇▇▇▇▇▇▇, Sachs & Co., dated the date of this Agreement, to the
effect that, as of such date, the consideration to be received in the Offer and
the Merger by the holders of Company Common Stock is fair to such holders from a
financial point of view, a signed copy of which opinion has been delivered to
Parent.
SECTION 3.16. Labor Matters. The Company Disclosure Letter sets
forth each collective bargaining or
26
other labor union contract to which the Company or any of its subsidiaries is a
party applicable to persons employed by the Company or any Company Subsidiary
and no collective bargaining agreement is currently being negotiated by the
Company or any Company Subsidiary. As of the date of this Agreement, there is no
labor dispute, strike or work stoppage against the Company or any of the Company
Subsidiaries pending or, to the knowledge of the Company, threatened, which may
interfere with the respective business activities of the Company or any of the
Company Subsidiaries, except where such dispute, strike or work stoppage,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect. As of the date of this Agreement, there is no
charge or complaint against the Company or any of the Company Subsidiaries by
the National Labor Relations Board or any comparable governmental agency pending
or, to the knowledge of the Company, threatened.
SECTION 3.17. Contracts; Debt Instruments. As of the date of this
Agreement, there are no Contracts that are required to be filed as part of the
Company SEC Documents and are not so filed. Neither the Company nor any of the
Company Subsidiaries is in violation of or in default under (nor does there
exist any condition which upon the passage of time or the giving of notice would
cause such a violation of or default under) any Contract to which it is a part
or by which it or any of its properties or assets is bound that, individually or
in the aggregate, has had or would reasonably be expected to have a Company
Material Adverse Effect.
SECTION 3.18. Intellectual Property. The Company and the Company
Subsidiaries own, or are validly licensed or otherwise have the right to use,
all patents, patent rights, trademarks, trademark rights, trade names, trade
name rights, service marks, service ▇▇▇▇ rights, copyrights and other
proprietary intellectual property rights and computer programs (collectively,
"Intellectual Property Rights") that are material to the conduct of the business
of the Company and the Company Subsidiaries taken as a whole. No claims are
pending or, to the knowledge of the Company, threatened, that the Company or any
of the Company Subsidiaries is infringing or otherwise adversely affecting the
rights of any person with regard to any Intellectual Property Right, except for
such claims that would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect. To the knowledge of the
Company, no person is infringing the rights of the Company or any of the Company
Subsidiaries with respect to any Intellectual Property Rights, except for such
infringements that,
27
individually or in the aggregate, have not had and would not reasonably be
expected to have a Company Material Adverse Effect.
SECTION 3.19. Charitable Contributions. The Company Disclosure
Letter sets forth (i) the individual and aggregate monetary contributions made
by the Company to charitable organizations in Oregon during each of the years in
the three-year period ended December 31, 2000, and (ii) all outstanding pledges
to charitable organizations (wherever located) as of the date of this Agreement.
ARTICLE IV
Representations and Warranties of Parent and Sub
Parent and Sub, jointly and severally, represent and warrant to the
Company as follows:
SECTION 4.01. Organization, Standing and Power. Each of Parent and
Sub is duly organized, validly existing and in good standing under the laws of
the jurisdiction in which it is organized and has full corporate power and
authority and possesses all governmental franchises, licenses, permits,
authorizations and approvals necessary to enable it to own, lease or otherwise
hold its properties and assets and to conduct its businesses as presently
conducted, other than such franchises, licenses, permits, authorizations and
approvals the lack of which, individually or in the aggregate, has not had and
would not reasonably be expected to have a material adverse effect on Parent or
on the ability of Parent or Sub to consummate the Offer, the Merger and the
other Transactions (a "Parent Material Adverse Effect").
SECTION 4.02. Sub. (a) Since the date of its incorporation, Sub has
not carried on any business or conducted any operations other than the execution
of this Agreement, the performance of its obligations hereunder and matters
ancillary thereto (including, matters ancillary to the Existing Offer prior to
the date of this Agreement).
(b) The authorized capital stock of Sub consists of 1,000 shares of
common stock, par value $1.00 per share, all of which have been validly issued,
are fully paid and nonassessable and are owned by Parent free and clear of any
Lien.
SECTION 4.03. Authority; Execution and Delivery; Enforceability.
Each of Parent and Sub has all requisite
28
corporate power and authority to execute and deliver this Agreement and to
consummate the Transactions. The execution and delivery by each of Parent and
Sub of this Agreement and the consummation by it of the Transactions have been
duly authorized by all necessary corporate action on the part of Parent and Sub.
Parent, as sole shareholder of Sub, has approved the Offer, the Merger, this
Agreement and the Transactions. Each of Parent and Sub has duly executed and
delivered this Agreement, and this Agreement constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.
SECTION 4.04. No Conflicts; Consents. (a) The execution and delivery
by each of Parent and Sub of this Agreement, do not, and the consummation of the
Offer, the Merger and the other Transactions and compliance with the terms
hereof will not, conflict with, or result in any violation of or default (with
or without notice or lapse of time, or both) under, or give rise to a right of
termination, cancelation or acceleration of any obligation or to loss of a
material benefit under, or result in the creation of any Lien upon any of the
properties or assets of Parent or Sub under, any provision of (i) the charter or
organizational documents of Parent or Sub, (ii) any Contract to which Parent or
Sub is a party or by which any of their respective properties or assets is bound
or (iii) subject to the filings and other matters referred to in Section
4.04(b), any Judgment or Law applicable to Parent or Sub or their respective
properties or assets, other than, in the case of clauses (ii) and (iii) above,
any such items that, individually or in the aggregate, have not had and would
not reasonably be expected to have a Parent Material Adverse Effect.
(b) No Consent of, or registration, declaration or filing with, or
permit from, any Governmental Entity is required to be obtained or made by or
with respect to Parent or Sub in connection with the execution, delivery and
performance of this Agreement or the consummation of the Transactions, other
than (i) the filing with the SEC of (A) the Offer Documents and (B) such reports
under Section 13 and 16 of the Exchange Act as may be required in connection
with this Agreement, the Offer, the Merger and the other Transactions, (ii) the
filing of the Articles of Merger with the Secretary of State of the State of
Oregon, (iii) compliance with and such filings as may be required under
applicable Environmental Laws, (iv) such filings as may be required in
connection with the taxes described in Section 6.08 and (v) such other items (A)
that may be required under the applicable Law of any foreign country, (B)
required solely by reason of the participation of the
29
Company (as opposed to any third party) in the Transactions, (C) that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Parent Material Adverse Effect or (D) as are set forth in the
letter, dated as of the date of this Agreement, from Parent to the Company (the
"Parent Disclosure Letter").
SECTION 4.05. Information Supplied. None of the information supplied
or to be supplied by Parent or Sub for inclusion or incorporation by reference
in (i) the Offer Documents, the Schedule 14D-9 Amendment or the Information
Statement will, at the time such document is filed with the SEC, at any time it
is amended or supplemented or at the time it is first published, sent or given
to the Company's shareholders, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, or (ii) the Proxy Statement will, at
the date it is first mailed to the Company's shareholders or at the time of the
Company Shareholders Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. The Offer Documents will comply as to form in all
material respects with the requirements of the Securities Act and the rules and
regulations thereunder, except that no representation is made by Parent or Sub
with respect to statements made or incorporated by reference therein based on
information supplied by the Company for inclusion or incorporation by reference
therein.
SECTION 4.06. Brokers. No broker, investment banker, financial
advisor or other person, other than ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, the fees
and expenses of which will be paid by Parent, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the Offer, the Merger and the other Transactions based upon arrangements
made by or on behalf of Parent or Sub.
SECTION 4.07. Financing. At the expiration of the Offer and the
Effective Time, Parent and Sub will have available all of the funds necessary
for the acquisition of shares of Company Common Stock to be purchased pursuant
to the Offer, to perform their respective obligations under this Agreement and
to pay all fees and expenses related to the Transactions payable by them.
SECTION 4.08. Stock Ownership; Interested Shareholder. As of the
date hereof, except as set forth in
30
the Parent Disclosure Letter, neither Parent nor Sub beneficially owns any
Company Capital Stock and neither Parent nor Sub is an "Interested Shareholder",
as such term is defined in Section 60.825 of the ORS.
ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.01. Conduct of Business. (a) Conduct of Business by the
Company. Except for matters set forth in the Company Disclosure Letter or
otherwise expressly permitted by this Agreement, from the date of this Agreement
to the Effective Time the Company shall, and shall cause each Company Subsidiary
to, conduct its business in the usual, regular and ordinary course in
substantially the same manner as previously conducted and, to the extent
consistent therewith, use all reasonable efforts to preserve intact its current
business organization, keep available the services of its current officers and
employees and keep its relation ships with customers, suppliers, licensors,
licensees, distributors and others having business dealings with them to the end
that its goodwill and ongoing business shall be unimpaired at the Effective
Time. In addition, and without limiting the generality of the foregoing, except
for matters set forth in the Company Disclosure Letter or otherwise expressly
permitted by this Agreement, from the date of this Agreement to the Effective
Time, the Company shall not, and shall not permit any Company Subsidiary to, do
any of the following without the prior written consent of Parent:
(i) (A) declare, set aside or pay any dividends on, or make any
other distributions in respect of, any of its capital stock, other than
(1) dividends and distributions by a direct or indirect wholly owned
subsidiary of the Company to its parent and (2) regular quarterly cash
dividends with respect to the Company Common Stock, not in excess of $0.23
per share, with usual declaration, record and payment dates and in
accordance with the Company's past dividend policy, (B) split, combine or
reclassify any of its capital stock or issue or authorize the issuance of
any other securities in respect of, in lieu of or in substitution for
shares of its capital stock, or (C) purchase, redeem or otherwise acquire
any shares of capital stock of the Company or any Company Subsidiary or
any other securities thereof or any rights, warrants or options to acquire
any such shares or other securities;
31
(ii) issue, deliver, sell or grant (A) any shares of its capital
stock, (B) any Voting Company Debt or other voting securities, (C) any
securities convertible into or exchangeable for, or any options, warrants
or rights to acquire, any such shares, Voting Company Debt, voting
securities or convertible or exchangeable securities or (D) any "phantom"
stock, "phantom" stock rights, stock appreciation rights or stock-based
performance units, or any similar stock, rights or units, other than the
issuance of Company Common Stock (and associated Company Rights) upon the
exercise of Company Employee Stock Options outstanding on the date of this
Agreement and in accordance with their present terms;
(iii) amend its articles of incorporation, by-laws or other
comparable charter or organizational documents;
(iv) acquire or agree to acquire (A) by merging or consolidating
with, or by purchasing a substantial portion of the assets of, or by any
other manner, any equity interest in or business or any corporation,
partnership, joint venture, association or other business organization or
division thereof or (B) any assets that are material, individually or in
the aggregate, to the Company and the Company Subsidiaries, taken as a
whole, except purchases of inventory in the ordinary course of business
consistent with past practice;
(v) (A) grant to any officer or director of the Company or any
Company Subsidiary any increase in compensation, except in the ordinary
course of business consistent with prior practice or to the extent
required under employment agreements in effect as of the date of the most
recent audited financial statements included in the Filed Company SEC
Documents, (B) grant to any employee, officer or director of the Company
or any Company Subsidiary any increase in severance or termination pay,
except to the extent required under any agreement in effect as of the date
of the most recent audited financial statements included in the Filed
Company SEC Documents, (C) enter into, amend or terminate any employment,
consulting, indemnification, severance or termination agreement with any
such employee, officer or director, (D) establish, adopt, enter into or
amend in any material respect any collective bargaining agreement or
Company Benefit Plan or (E) take any action to accelerate any rights or
benefits, or make any material
32
determinations not in the ordinary course of business consistent with
prior practice, under any collective bargaining agreement or Company
Benefit Plan;
(vi) make any change in accounting methods, principles or practices
materially affecting the reported consolidated assets, liabilities or
results of operations of the Company, except insofar as may have been
required by a change in GAAP;
(vii) sell, lease (as lessor), license or otherwise dispose of or
subject to any Lien any properties or assets that are material,
individually or in the aggregate, to the Company and the Company
Subsidiaries, taken as a whole, except sales of inventory and excess or
obsolete assets in the ordinary course of business consistent with past
practice;
(viii) (A) incur any indebtedness for borrowed money or guarantee
any such indebtedness of another person, issue or sell any debt securities
or warrants or other rights to acquire any debt securities of the Company
or any Company Subsidiary, guarantee any debt securities of another
person, enter into any "keep well" or other agreement to maintain any
financial statement condition of another person or enter into any
arrangement having the economic effect of any of the foregoing, except for
short-term borrowings incurred in the ordinary course of business
consistent with past practice, or (B) make any loans, advances or capital
contributions to, or investments in, any other person, other than to or in
the Company or any direct or indirect wholly owned subsidiary of the
Company;
(ix) make or agree to make any new capital expenditures that in the
aggregate are in excess of $/0/ over the amount budgeted for capital
expenditures on the date hereof (as reflected on the capital expenditure
budgets included in the Company Disclosure Letter), other than as required
by law;
(x) make any material Tax election or settle or compromise any
material Tax liability or refund;
(xi) (A) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business consistent with past practice or in accordance
with their terms, of liabilities reflected or reserved against in, or
contemplated by, the most
33
recent consolidated financial statements (or the notes thereto) of the
Company included in the Filed Company SEC Documents or incurred in the
ordinary course of business consistent with past practice, (B) cancel any
material indebtedness (individually or in the aggregate) or waive any
claims or rights of substantial value, (C) waive the benefits of, or agree
to modify in any manner, any confidentiality, standstill or similar
agreement to which the Company or any Company Subsidiary is a party or (D)
other than in the ordinary course of business consistent with past
practice, enter into any interest rate, currency or commodity swaps,
▇▇▇▇▇▇ or other similar financial instruments; or
(xii) authorize any of, or commit or agree to take any of, the
foregoing actions.
(b) Other Actions. The Company and Parent shall not, and shall not
permit any of their respective subsidiaries to, take any action that would, or
that would reason ably be expected to, result in (i) any of the representations
and warranties of such party set forth in this Agreement that is qualified as to
materiality becoming untrue, (ii) any of such representations and warranties
that is not so qualified becoming untrue in any material respect or (iii) any
condition to the Offer set forth in Exhibit A or any condition to the Merger set
forth in Article VII not being satisfied.
(c) Advice of Changes. The Company shall promptly advise Parent
orally and in writing of any change or event that has or would reasonably be
expected to have a Company Material Adverse Effect.
SECTION 5.02. Actions of Company Board; Company Takeover Proposals.
(a) Neither the Company Board nor any committee thereof shall (i) approve any
letter of intent, agreement in principle, acquisition agreement or similar
agreement relating to any Company Takeover Proposal, (ii) approve or recommend,
or propose to approve or recommend, any Company Takeover Proposal, (iii) take
any action that would result in the holders of the Company Capital Stock no
longer being legally capable under the ORS of validly approving the Merger or
this Agreement or (iv) adopt any amendment to the Company Charter or Company
By-Laws or any resolution or take any other action that would have the effect of
rescinding the actions taken to render (A) Sections 60.801 to 60.816 of the ORS,
(B) Sections 60.825 to 60.845 of the ORS and (C) Article VI of the Company
Charter inapplicable (1) to Parent and Sub and (2) to the Offer, the Merger and
the other Transactions.
34
(b) The Company promptly shall advise Parent orally and in writing
of any Company Takeover Proposal and the identity of the person making any such
Company Takeover Proposal. The Company shall keep Parent fully informed of the
status, including any change to the material terms of, any such Company Takeover
Proposal.
(c) For purposes of this Agreement:
"Company Takeover Proposal" means (i) any proposal or offer for a
merger, consolidation, dissolution, recapitalization or other business
combination involving the Company, (ii) any proposal for the issuance by
the Company of over 10% of its equity securities as consideration for the
assets or securities of another person or (iii) any proposal or offer to
acquire in any manner, directly or indirectly, over 10% of the equity
securities or consolidated total assets of the Company, in each case other
than the Transactions.
ARTICLE VI
Additional Agreements
SECTION 6.01. Preparation of the Proxy Statement; Shareholders
Meeting. (a) If the approval of this Agreement by the Company's shareholders is
required by Law, as soon as practicable following the expiration of the Offer,
the Company and Parent shall, at Parent's request, prepare and file with the SEC
the Proxy Statement in preliminary form, and each of the Company and Parent
shall use its reasonable best efforts to respond as promptly as practicable to
any comments of the SEC with respect thereto. The Company shall notify Parent
promptly of the receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff for amendments or supplements to the Proxy
Statement or for additional information and shall supply Parent with copies of
all correspondence between the Company or any of its representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the Proxy
Statement. If at any time prior to receipt of the Company Shareholder Approval
there shall occur any event that should be set forth in an amendment or
supplement to the Proxy Statement, the Company shall promptly prepare and mail
to its shareholders such an amendment or supplement. The Company shall not mail
any Proxy Statement, or any amendment or supplement thereto, to which Parent
reasonably objects. Subject to the foregoing, the Company shall use its
reasonable best efforts to cause the Proxy Statement to
35
be mailed to the Company's shareholders as promptly as practicable after filing
with the SEC.
(b) If the approval of this Agreement by the Company's shareholders
is required by Law, at Parent's request, as soon as practicable following the
expiration of the Offer, the Company shall duly call, give notice of, convene
and hold a meeting of its shareholders (the "Company Shareholders Meeting") for
the purpose of seeking the Company Shareholder Approval. Without limiting the
generality of the foregoing, the Company agrees that its obligations pursuant to
the first sentence of this Section 6.01(b) shall not be affected by (i) the
commencement, public proposal, public disclosure or communication to the Company
of any Company Takeover Proposal or (ii) the withdrawal or modification by the
Company Board of its approval or recommendation of this Agreement or the Merger.
Notwithstanding the foregoing, if Sub or any other subsidiary of Parent shall
acquire at least 90% of the outstanding shares of each series of Company Capital
Stock, the parties shall, at the request of Parent, take all necessary and
appropriate action to cause the Merger to become effective as soon as
practicable after the expiration of the Offer without a shareholders meeting in
accordance with Section 60.491 of the ORS.
(c) Parent shall cause all shares of Company Common Stock purchased
pursuant to the Offer and all other shares of Company Common Stock owned by
Parent, Sub or any other subsidiary of Parent to be voted in favor of this
Agreement and the transactions contemplated hereby.
SECTION 6.02. Access to Information; Confidentiality. The Company
shall, and shall cause each Company Subsidiary to, afford to Parent and to the
officers, employees, accountants, counsel, financial advisors and other
representatives of Parent, reasonable access during normal business hours during
the period prior to the Effective Time to all their respective properties,
books, contracts, commitments, personnel and records and, during such period,
the Company shall, and shall cause each Company Subsidiary to, furnish promptly
to the Parent (a) a copy of each report, schedule, registration statement and
other document filed by it during such period pursuant to the requirements of
Federal or state securities laws and (b) all other information concerning its
business, properties and personnel as Parent may reasonably request. Without
limiting the generality of the foregoing, the Company shall, within two business
days of request therefor, provide to Parent the information described in Rule
14a-7(a)(2)(ii) under the Exchange Act and any information to which a holder
36
of Company Common Stock would be entitled under Section 60.774 of the ORS
(assuming such holder met the requirements of such Section). All information
exchanged pursuant to this Section 6.02 shall be subject to the confidentiality
agreement dated /0/ between the Company and Parent (the "Confidentiality
Agreement").
SECTION 6.03. Reasonable Best Efforts; Notification. (a) Upon the
terms and subject to the conditions set forth in this Agreement, each of the
parties shall use its reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with the
other parties in doing, all things necessary, proper or advisable to consummate
and make effective, in the most expeditious manner practicable, the Offer, the
Merger and the other Transactions, including (i) the obtaining of all necessary
actions or nonactions, waivers, consents and approvals from Governmental
Entities and the making of all necessary registrations and filings (including
filings with Governmental Entities, if any) and the taking of all reasonable
steps as may be necessary to obtain an approval or waiver from, or to avoid an
action or proceeding by, any Governmental Entity, (ii) the obtaining of all
necessary consents, approvals or waivers from third parties, (iii) the defending
of any lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the Transactions, including
seeking to have any stay or temporary restraining order entered by any court or
other Governmental Entity vacated or reversed and (iv) the execution and
delivery of any additional instruments necessary to consummate the Transactions
and to fully carry out the purposes of this Agreement; provided, however, that
neither the Company nor Parent shall be required to consent to (i) any
prohibition or limitation on the ownership or operation by the Company, Parent
or any of their respective subsidiaries of any material portion of the business
or assets of the Company and its subsidiaries taken as a whole or Parent and its
subsidiaries taken as a whole, or any requirement that the Company, Parent or
any of their respective subsidiaries dispose of or hold separate any material
portion of the business or assets of the Company and the Company Subsidiaries
taken as a whole or Parent and its subsidiaries (the "Parent Subsidiaries")
taken as a whole as a result of the Offer, the Merger or any other Transaction,
(ii) any imposition of limitations on the ability of Parent or Sub to acquire or
hold, or exercise full rights of ownership of, any shares of Company Common
Stock, including the right to vote the Company Common Stock purchased by it on
all matters properly presented to the shareholders of the Company or (iii) any
prohibition on Parent or any of its subsidiaries
37
from effectively controlling in any material respect the business or operations
of the Company and the Company Subsidiaries. In connection with and without
limiting the foregoing, the Company and the Company Board shall (i) take all
action necessary to ensure that no state takeover statute or similar statute or
regulation is or becomes applicable to any Transaction or this Agreement and
(ii) if any state takeover statute or similar statute or regulation becomes
applicable to any Transaction or this Agreement, take all action necessary to
ensure that the Offer, the Merger and the other Transactions may be consummated
as promptly as practicable on the terms contemplated by this Agreement.
(b) The Company shall give prompt notice to Parent, and Parent or
Sub shall give prompt notice to the Company, of (i) any representation or
warranty made by it contained in this Agreement that is qualified as to
materiality becoming untrue or inaccurate in any respect or any such
representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect or (ii) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement; provided, however, that
no such notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
SECTION 6.04. Company Stock Options. (a) As soon as practicable
following the date of this Agreement, the Company Board shall, or shall cause
the relevant committee administering the Company Stock Plans to, adopt such
resolutions or take such other actions as may be required to effect the
following:
(i) adjust the terms of all outstanding Company Employee Stock
Options, whether vested or unvested, as necessary to provide that: each
Company Employee Stock Option (and any Company SAR related thereto)
outstanding immediately prior to acceptance for payment of shares pursuant
to the Offer may be surrendered at that time, with the holder thereof
becoming entitled to receive a cash payment from the Company of an amount
equal to (i) the excess, if any, of (x) the Offer Price over (y) the
exercise price per share of Company Common Stock subject to such Company
Employee Stock Option, multiplied by (ii) the number of shares of Company
Common Stock for which such Company Employee Stock Option shall not
theretofore have been exercised; and each Company Employee Stock Option
(and each Company
38
SAR related thereto) not surrendered for cash immediately prior to the
acceptance for payment of shares pursuant to the Offer shall be treated as
follows: the Company SAR shall be terminated at the Effective Time and the
Company Employee Stock Option shall be amended and converted at the
Effective Time into an option to acquire, on the same terms and conditions
as were applicable under such Company Employee Stock Option, including any
accelerated vesting, the number of shares of common stock of Parent, par
value $1.25 per share ("Parent Common Stock"), equal to the product
(rounded down to the nearest whole share) obtained by multiplying (A) the
number of shares of Company Common Stock the holder of such Company
Employee Stock Option would have been entitled to receive had such holder
exercised such Company Employee Stock Option in full immediately prior to
the Effective Time and (B) the quotient (rounded to the nearest
one-thousandth) obtained by dividing the Offer Price by the average
(rounded to the nearest one- thousandth) of the 4:00 p.m. closing prices
per share of Parent Common Stock on the NYSE Composite tape over the 20
consecutive trading days immediately preceding the date of the Effective
Time as reported in the Wall Street Journal, New York City edition, at an
exercise price per share of Parent Common Stock (rounded up to the nearest
cent) equal to (x) the aggregate exercise price for the shares of Company
Common Stock otherwise purchasable pursuant to such Company Employee Stock
Option divided by (y) the aggregate number of shares of Parent Common
Stock deemed purchasable pursuant to such Company Employee Stock Option
(each, as so adjusted, an "Adjusted Option"); provided, however, that any
Company Employee Stock Option which is intended to be an "incentive stock
option" (as defined in Section 422 of the Code), and which may not be
adjusted in the foregoing manner and remain an incentive stock option,
shall be adjusted in accordance with the requirements of Section 424 of
the Code (in a manner which most closely produces the economic results
obtained with respect to other Adjusted Options);
(ii) make such other changes to the Company Stock Plans as the
Company and Parent may agree are appropriate to give effect to the Merger;
(iii) ensure that a holder of an Adjusted Option may only exercise
such Adjusted Option in whole or in part in accordance with its terms by
delivering a properly executed notice of exercise to Parent, together with
the consideration therefor and the
39
Federal withholding tax information, if any, required in accordance with
the related Company Stock Plan; and
(iv) except as otherwise contemplated by this Section 6.04 and
except to the extent required under the respective terms of the Company
Employee Stock Options, ensure that all restrictions or limitations on
transfer and vesting with respect to Company Employee Stock Options
awarded under the Company Stock Plans or any other plan, program or
arrangement of the Company or any Company Subsidiary, to the extent that
such restrictions or limitations shall not have already lapsed, shall
remain in full force and effect with respect to such Company Employee
Stock Options after giving effect to the Offer and the Merger and any
assumption by Parent as set forth above.
(b) As soon as practicable after the Effective Time, Parent shall
deliver to the holders of Adjusted Options appropriate notices setting forth
such holders' rights pursuant to the respective Company Stock Plans and the
agreements evidencing the grants of such Adjusted Options and specifying that
such Adjusted Options and agreements shall be assumed by Parent and shall
continue in effect on the same terms and conditions (subject to the adjustments
required by Section 6.04(a)). Prior to the Effective Time, Parent shall take all
actions as may be reasonably required to cause the acquisition of equity
securities of Parent, as contemplated by this Section 6.04, by any person who is
or will become a director or officer of Parent to be eligible for exemption
under Rule 16b-3(d) of the SEC.
(c) All cash amounts payable pursuant to this Section 6.04 shall be
subject to any required withholding of Taxes and shall be paid without interest.
(d) In this Agreement:
"Company Employee Stock Option" means any option to purchase Company
Common Stock granted under any Company Stock Plan.
"Company SAR" means any stock appreciation right linked to the price
of Company Common Stock and granted under any Company Stock Plan in tandem
with a Company Employee Stock Option.
"Company Restricted Stock" means any share of Company Common Stock
which is not yet vested and is
40
subject to restriction granted under any Company Stock Plan.
"Company Stock Plans" means the Company's 1995 Long-Term
Compensation Incentive Program and the Company's 1986 Long-Term
Compensation Incentive Program.
SECTION 6.05. Indemnification. (a) Parent shall, to the fullest
extent permitted by applicable Law, cause the Surviving Corporation to honor all
the Company's obligations to indemnify (including any obligations to advance
funds for expenses) the present or former directors or officers of the Company
and the Company Subsidiaries for acts or omissions by such directors and
officers occurring at or prior to the Effective Time to the extent that such
obligations of the Company exist on the date of this Agreement, whether pursuant
to the Company Charter, the Company By-laws, individual indemnity agreements or
otherwise, and such obligations shall survive the Merger and shall continue in
full force and effect in accordance with the terms of the Company Charter, the
Company By-laws and such individual indemnity agreements from the Effective
Time.
(b) For a period of six years after the Effective Time, Parent shall
cause to be maintained in effect the current policies of directors' and
officers' liability insurance maintained by the Company (provided that Parent
may substitute therefor policies with reputable and financially sound carriers
of at least the same coverage and amounts containing terms and conditions which
are no less advantageous) with respect to claims arising from or related to
facts or events which occurred at or before the Effective Time; provided,
however, that Parent shall not be obligated to make annual premium payments for
such insurance to the extent such premiums exceed 300% of the annual premiums
paid as of the date hereof by the Company for such insurance (such 300% amount,
the "Maximum Premium"). If such insurance coverage cannot be obtained at all, or
can only be obtained at an annual premium in excess of the Maximum Premium,
Parent shall maintain the most advantageous policies of directors' and officers'
insurance obtainable for an annual premium equal to the Maximum Premium;
provided, however, if such insurance coverage cannot be obtained at all, Parent
shall purchase all available extended reporting periods with respect to
pre-existing insurance in an amount which, together with all other insurance
purchased pursuant to this Section 6.05(b), does not exceed the Maximum Premium.
The Company represents to Parent that the Maximum Premium is $/0/. Parent shall
not, and shall cause the Company not to, take any action that
41
would have the effect of limiting the aggregate amount of insurance coverage
required to be maintained for the individuals referred to in this Section
6.05(b).
(c) From and after the consummation of the Merger to the full extent
permitted by applicable Law, Parent shall indemnify, defend and hold harmless
the present officers and directors of the Company and the Company Subsidiaries
(each an "Indemnified Party") against all losses, claims, damages, liabilities,
fees and expenses (including attorneys' fees and disbursements), judgments,
fines and amounts paid in settlement (collectively, "Losses") arising out of
actions or omissions occurring at or prior to the Effective Time in connection
with this Agreement, the Offer, the Merger and the other Transactions; provided,
however, that an Indemnified Party shall not be entitled to indemnification
under this Section 6.05(c) for Losses arising out of actions or omissions by the
Indemnified Party constituting (i) a breach of this Agreement, (ii) criminal
conduct or (iii) any violation of Federal, state or foreign securities laws. In
order to be entitled to indemnification under this Section 6.05(c), an
Indemnified Party must give Parent and the Surviving Corporation written notice
of any third party claim which may give rise to any indemnity obligation under
this Section 6.05(c), and Parent and the Surviving Corporation shall have the
right to assume the defense of any such claim through counsel of their own
choosing, subject to such counsel's reasonable judgment that separate defenses
that would create a conflict of interest on the part of such counsel are not
available. If Parent and the Surviving Corporation do not assume any such
defense, they shall be liable for all reasonable costs and expenses of defending
such claim incurred by the Indemnified Party, including reasonable fees and
disbursements of counsel and shall advance such reasonable costs and expenses to
the Indemnified Party; provided, however, that such advance shall be made only
after receiving an undertaking from the Indemnified Party that such advance
shall be repaid if it is determined that such Indemnified Party is not entitled
to indemnification therefor. Neither Parent nor the Surviving Corporation shall
be liable under this Section 6.05(c) for any Losses resulting from any
settlement, compromise or offer to settle or compromise any such claim or
litigation or other action, without the prior written consent of Parent or the
Surviving Corporation.
SECTION 6.06. Fees and Expenses. All fees and expenses incurred in
connection with the Merger and the other Transactions shall be paid by the party
incurring such fees or expenses, whether or not the Merger is consummated.
42
SECTION 6.07. Public Announcements. Parent and Sub, on the one hand,
and the Company, on the other hand, shall consult with each other before
issuing, and provide each other the opportunity to review and comment upon, any
press release or other public statements with respect to the Offer, the Merger
and the other Transactions and shall not issue any such press release or make
any such public statement prior to such consultation, except as may be required
by applicable Law, court process or by obligations pursuant to any listing
agreement with any national securities exchange.
SECTION 6.08. Transfer Taxes. All stock transfer, real estate
transfer, documentary, stamp, recording and other similar Taxes (including
interest, penalties and additions to any such Taxes) ("Transfer Taxes") incurred
in connection with the Transactions shall be paid by either Sub or the Surviving
Corporation, and the Company shall cooperate with Sub and Parent in preparing,
executing and filing any Tax Returns with respect to such Transfer Taxes,
including supplying in a timely manner a complete list of all real property
interests held by the Company that are located in New York State and any
information with respect to such property that is reasonably necessary to
complete such Tax Returns. The portion of the consideration to be received by
holders of Company Common Stock in connection with the Merger that is allocable
to the real property of the Company and its subsidiaries in New York State shall
be determined by Sub in its reasonable discretion.
SECTION 6.09. Directors. Promptly upon the acceptance for payment
of, and payment by Sub for, any shares of Company Common Stock pursuant to the
Offer, Sub shall be entitled to designate such number of directors on the
Company Board as will give Sub, subject to compliance with Section 14(f) of the
Exchange Act, representation on the Company Board equal to at least that number
of directors, rounded up to the next whole number, which is the product of (a)
the total number of directors on the Company Board (giving effect to the
directors elected pursuant to this sentence) multiplied by (b) the percentage
that (i) such number of shares of Company Common Stock so accepted for payment
and paid for by Sub plus the number of shares of Company Common Stock otherwise
owned by Parent, Sub or any other subsidiary of Parent bears to (ii) the number
of such shares outstanding, and the Company shall, at such time, cause Sub's
designees to be so elected; provided, however, that in the event that Sub's
designees are appointed or elected to the Company Board, until the Effective
Time the Company Board shall have at least three
43
directors who are Directors on the date of this Agreement and who are not
officers of the Company (the "Independent Directors"); and provided further
that, in such event, if the number of Independent Directors shall be reduced
below three for any reason whatsoever, any remaining Independent Directors (or
Independent Director, if there shall be only one remaining) shall be entitled to
designate persons to fill such vacancies who shall be deemed to be Independent
Directors for purposes of this Agreement or, if no Independent Directors then
remain, the other directors shall designate three persons to fill such vacancies
who are not officers, shareholders or affiliates of the Company, Parent or Sub,
and such persons shall be deemed to be Independent Directors for purposes of
this Agreement. Sub's designees shall be elected to the classes of directors of
the Company Board as evenly as possible among the class of directors whose term
is expiring in 2001, the class of directors whose term is expiring in 2002 and
the class of directors whose term is expiring in 2003. Subject to applicable
Law, the Company shall take all action requested by Parent necessary to effect
any such election, including mailing to its shareholders the Information
Statement containing the information required by Section 14(f) of the Exchange
Act and Rule 14f-1 promulgated thereunder, and the Company shall make such
mailing with the mailing of the Schedule 14D-9 Amendment (provided that Sub
shall have provided to the Company on a timely basis all information required to
be included in the Information Statement with respect to Sub's designees). In
connection with the foregoing, the Company shall promptly, at the option of Sub,
either increase the size of the Company Board or obtain the resignation of such
number of its current directors as is necessary to enable Sub's designees to be
elected or appointed to the Company Board as provided above.
SECTION 6.10. Rights Agreement; Consequences if Rights Triggered.
The Company Board shall take all action requested in writing by Parent in order
to render the Company Rights inapplicable to the Offer, the Merger and the other
Transactions. Except as approved in writing by Parent, the Company Board shall
not (i) amend the Company Rights Agreement, (ii) redeem the Company Rights,
(iii) take any action with respect to, or make any determination under, the
Company Rights Agreement or (iv) enter into any other rights agreement or take
any other action that would discriminate against, or adversely effect, Parent or
Sub if it acquires shares of Company Common Stock. If any Distribution Date or
Shares Acquisition Date occurs under the Company Rights Agreement at any time
during the period from the date of this Agreement to the Effective Time, the
Company and Parent shall make such adjustment to the Offer
44
Price and/or Merger Consideration as the Company and Parent shall mutually agree
so as to preserve the economic benefits that the Company and Parent each
reasonably expected on the date of this Agreement to receive as a result of the
consummation of the Merger and the other Transactions.
SECTION 6.11. Shareholder Litigation. The Company shall give Parent
the opportunity to participate in the defense or settlement of any shareholder
litigation against the Company or its directors or officers relating to any of
the Transactions; provided, however, that no such settlement shall be agreed to
without Parent's consent, which shall not be unreasonably withheld.
SECTION 6.12. Charitable Giving. For a period of no fewer than three
years following the Effective Time, Parent intends to make annual aggregate
monetary contributions to charitable organizations in Oregon in an amount that
is no less than the average annual aggregate monetary contributions made by the
Company to charitable organizations in Oregon during the three-year period ended
December 31, 2000 and disclosed in the Company Disclosure Letter.
SECTION 6.13. Annual Meeting. The Company shall postpone its 2001
annual meeting of shareholders until June 29, 2001 and shall set June 19, 2001
as the record date for such postponed annual meeting.
ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger is subject
to the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Shareholder Approval. If required by law, the Company shall have
obtained the Company Shareholder Approval.
(b) Antitrust. Any consents, approvals and filings under any foreign
antitrust law, the absence of which would prohibit the consummation of Merger,
shall have been obtained or made.
(c) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or
45
other order issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the Merger shall be in
effect; provided, however, that prior to asserting this condition, subject to
Section 6.03, each of the parties shall have used its reasonable best efforts to
prevent the entry of any such injunction or other order and to appeal as
promptly as possible any such injunction or other order that may be entered.
(d) Offer. Parent, Sub or their affiliates shall have purchased, or
caused to be purchased, shares of Company Common Stock, pursuant to the Offer.
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after receipt of the Company
Shareholder Approval:
(a) by mutual written consent of Parent, Sub and the Company;
(b) by either Parent or the Company:
(i) if the Merger is not consummated on or before /0/ (the
"Outside Date"), unless the failure to consummate the Merger is the
result of a material breach of this Agreement by the party seeking
to terminate this Agreement; provided, however, that the passage of
such period shall be tolled for any part thereof during which any
party shall be subject to a nonfinal order, decree, ruling or action
restraining, enjoining or other wise prohibiting the consummation of
the Offer or the Merger;
(ii) if any Governmental Entity issues an order, decree or
ruling or takes any other action permanently enjoining, restraining
or otherwise prohibiting the Offer or the Merger and such order,
decree, ruling or other action shall have become final and
nonappealable;
(iii) if any condition to the obligation of Sub to consummate
the Offer set forth in Exhibit A becomes incapable of satisfaction
prior to the Outside Date; provided, however, that the
46
terminating party is not then in material breach of any
representation, warranty or covenant contained in this Agreement;
(iv) if the Offer has expired or has been terminated in
accordance with the terms set forth in this Agreement (including
Exhibit A) without Company Common Stock having been purchased
pursuant to the Offer; provided, however, that the terminating party
is not then in material breach of any representation, warranty or
covenant contained in this Agreement;
(c) by Parent prior to the acceptance of shares of Company Common
Stock for payment pursuant to the Offer, if the Company breaches or fails to
perform in any material respect any of its representations, warranties or
covenants contained in this Agreement, which breach or failure to perform (i)
would give rise to the failure of a condition set forth in Exhibit A, and (ii)
cannot be or has not been cured within 30 days after the giving of written
notice to the Company of such breach (provided that Parent is not then in
material breach of any representation, warranty or covenant contained in this
Agreement);
(d) by Parent if the Company Board or any committee thereof
withdraws or proposes to withdraw its approval or recommendation of this
Agreement or the Merger or approves or recommends, or proposes to approve or
recommend, any Company Takeover Proposal;
(e) by the Company prior to the acceptance of shares of Company
Common Stock for payment pursuant to the Offer, if Parent breaches or fails to
perform in any material respect any of its representations, warranties or
covenants contained in this Agreement, which breach or failure to perform cannot
be or has not been cured within 30 days after the giving of written notice to
Parent of such breach (provided that the Company is not then in material breach
of any representation, warranty or covenant in this Agreement); or
(f) by the Company prior to the acceptance of shares of Company
Common Stock for payment pursuant to the Offer in accordance with Section
8.05(b); provided, however, that the Company shall have complied with all
provisions thereof, including the notice provisions therein.
47
SECTION 8.02. Effect of Termination. In the event of termination of
this Agreement by either the Company or Parent as provided in Section 8.01, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Parent, Sub or the Company, other than Section
3.14, Section 4.06, the last sentence of Section 6.02, this Section 8.02 and
Article IX, which provisions shall survive such termination, and except to the
extent that such termination results from the wilful breach by a party of any
representation, warranty or covenant set forth in this Agreement.
SECTION 8.03. Amendment. This Agreement may be amended by the
parties at any time before or after receipt of the Company Shareholder Approval;
provided, however, that after receipt of the Company Shareholder Approval, there
shall be made no amendment that by law requires further approval by the
shareholders of the Company without the further approval of such shareholders.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties.
SECTION 8.04. Extension; Waiver. At any time prior to the Effective
Time, the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement or (c) subject to the proviso of
Section 8.03, waive compliance with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of such rights.
SECTION 8.05. Procedure for Termination, Amendment, Extension or
Waiver. (a) A termination of this Agreement pursuant to Section 8.01, an
amendment of this Agreement pursuant to Section 8.03 or an extension or waiver
pursuant to Section 8.04 shall, in order to be effective, require in the case of
Parent, Sub or the Company, action by its Board of Directors or the duly
authorized designee of its Board of Directors; provided, however, that after the
appointment of Sub's designees to the Company Board pursuant to Section 6.09,
the approval of a majority of the Independent Directors shall be required for
the Company to (i) terminate this Agreement, (ii) exercise or waive any right of
the Company under this Agreement, (iii) amend this Agreement in any manner
adverse to the holders of Company
48
Common Stock or (iv) extend the time for performance of any obligation of Parent
or Sub under this Agreement.
(b) The Company may terminate this Agreement pursuant to Section
8.01(f) only if (i) the Company Board has received a Company Takeover Proposal
that is a Superior Company Proposal, (ii) the Company has notified Parent in
writing of its determination that such Company Takeover Proposal is a Superior
Company Proposal, (iii) at least five business days following receipt by Parent
of the notice referred to in clause (ii) above, and taking into account any
revised proposal made by Parent since receipt of the notice referred to in
clause (ii) above, such Superior Company Proposal remains a Superior Company
Proposal, (iv) the Company is in compliance with Section 5.02, (v) the Company
Board concurrently approves, and the Company concurrently enters into, a
definitive agreement providing for the implementation of such Superior Company
Proposal and (vi) Parent is not at such time entitled to terminate this
Agreement pursuant to Section 8.01(c).
(c) for purposes of this Agreement:
"Superior Company Proposal" means any proposal made by a third
party to acquire substantially all the equity securities or assets
of the Company, pursuant to a tender or exchange offer, a merger, a
consolidation, a liquidation or dissolution, a recapitalization, a
sale of its assets or otherwise, (i) on terms which the Company
Board determines in good faith, after consultation with the
Company's independent financial advisor and outside counsel, to
provide greater present financial value to the holders of Company
Common Stock than the Transactions, taking into account all the
terms and conditions of such proposal and this Agreement (including
any proposal by Parent to amend the terms of the Transactions), and
(ii) that is reasonably capable of being completed, taking into
account all financial, regulatory, legal and other aspects of such
proposal.
ARTICLE IX
General Provisions
SECTION 9.01. Nonsurvival of Representations and Warranties. None of
the representations and warranties in
49
this Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time. This Section 9.01 shall not limit any covenant or
agreement of the parties which by its terms contemplates performance after the
Effective Time.
SECTION 9.02. Notices. All notices, requests, claims, demands and
other communications under this Agree ment shall be in writing and shall be
deemed given upon receipt by the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
(a) if to Parent or Sub, to
Attention:
with a copy to:
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
(b) if to the Company, to
Attention:
with a copy to:
Attention:
SECTION 9.03. Definitions. (a) For purposes of this Agreement:
An "affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person.
A "material adverse effect" on a party means a material adverse
effect on the business, assets, condition (financial or otherwise), prospects or
results of operations of such party and its subsidiaries, taken as a whole.
50
A "person" means any individual, firm, corporation, partnership,
company, limited liability company, trust, joint venture, association,
Governmental Entity or other entity.
A "subsidiary" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its board of directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
person.
(b) The following terms have the meanings give such terms in the
Sections set forth below:
Term Section
---- -------
Adjusted Option 6.04(a)(i)
affiliate 9.03(a)
Articles of Merger 1.05
Certificates 2.02(b)
Closing 1.04
Closing Date 1.04
Code 3.09(e)
Company Preamble
Company Benefit Plans 3.10
Company Board Preamble
Company By-laws 3.01
Company Capital Stock 3.03
Company Charter 3.01
Company Common Stock Preamble
Company Disclosure Letter 3.02(a)
Company Employee Stock Option 6.04(d)
Company Material Adverse Effect 3.01
Company Multiemployer Pension Plan 3.11(c)
Company Pension Plans 3.11(a)
Company Preferred Stock 3.03
Company Restricted Stock 6.04(d)
Company Rights 3.03
Company Rights Agreement 3.03
Company SAR 6.04(d)
Company SEC Documents 3.06
Company Shareholder Approval 3.04(c)
Company Shareholders Meeting 6.01(b)
Company Stock Plans 6.04(d)
Company Subsidiaries 3.01
Company Takeover Proposal 5.02(c)
Confidentiality Agreement 6.02
Consent 3.05(b)
Contract 3.05(a)
51
Dissent Shares 2.01(d)
Effective Time 1.05
Environmental Laws 3.13(d)
ERISA 3.11(a)
Exchange Act 3.05(b)
Exchange Fund 2.02(a)
Existing Offer Preamble
Filed Company SEC Documents 3.08
Foreign Benefit Plans 3.11(f)
GAAP 3.06
Governmental Entity 3.05(b)
Hazardous Substance 3.13(d)
Indemnified Party 6.05(c)
Independent Directors 6.09
Information Statement 3.05(b)
Initial Expiration Date 1.01(a)
Intellectual Property Rights 3.18
Judgment 3.05(a)
Law 3.05(a)
Liens 3.02(a)
Losses 6.05(c)
material adverse effect 9.03(a)
Maximum Premium 6.05(b)
Merger Preamble
Merger Consideration 2.01(c)
Offer Preamble
Offer Documents 1.01(b)
Offer Price 1.01(a)
Outside Date 8.01(b)(i)
ORS 1.03
Parent Preamble
Parent Common Stock 6.04(a)(i)
Parent Disclosure Letter 4.04(b)
Parent Material Adverse Effect 4.01
Parent Subsidiaries 6.03(a)
Paying Agent 2.02(a)
person 9.03(a)
Primary Company Executives 3.11(e)
Proxy Statement 3.05(b)
Schedule 14D-9 1.02(b)
Schedule 14D-9 Amendment 1.02(b)
Schedule TO 1.01(b)
Schedule TO Amendment 1.01(b)
Section 60.554 2.01(d)
SEC 1.01(a)
Securities Act 3.06
Sub Preamble
subsidiary 9.03(a)
Superior Company Proposal 8.05(c)
Surviving Corporation 1.03
Tax Return 3.09(g)
52
Taxes 3.09(g)
Transfer Taxes 6.08
Transactions 1.02(a)
Voting Company Debt 3.03
SECTION 9.04. Interpretation; Disclosure Letters. When a reference
is made in this Agreement to a Section, such reference shall be to a Section of
this Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation". Any matter disclosed in
any section of either the Company Disclosure Letter or the Parent Disclosure
Letter shall be deemed disclosed for all purposes and all sections of the
Company Disclosure Letter or Parent Disclosure Letter, as applicable, to which
such disclosure is clearly relevant.
SECTION 9.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or 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 9.06. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
SECTION 9.07. Entire Agreement; No Third-Party Beneficiaries. This
Agreement, taken together with the Company Disclosure Letter, the Parent
Disclosure Letter and the Confidentiality Agreement, (a) constitute the entire
agreement, and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the Transactions and (b) except for
the provisions of Article II, Section 6.04 and Section 6.05, are
53
not intended to confer upon any person other than the parties any rights or
remedies.
SECTION 9.08. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Oregon, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
SECTION 9.09. Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties
without the prior written consent of the other parties, except that Sub may
assign, in its sole discretion, any of or all its rights, interests and
obligations under this Agreement to Parent or to any direct wholly owned
subsidiary of Parent, but no such assignment shall relieve Sub of any of its
obligations under this Agreement. Any purported assignment without such consent
shall be void. Subject to the preceding sentences, this Agreement will be
binding upon, inure to the benefit of, and be enforceable by, the parties and
their respective successors and assigns.
SECTION 9.10. Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any Federal court located in the
State of Oregon, this being in addition to any other remedy to which they are
entitled at law or in equity. In addition, each of the parties hereto (a)
consents to submit itself to the personal jurisdiction of any Federal court
located in the State of Oregon in the event any dispute arises out of this
Agreement or any Transaction, (b) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court, (c) agrees that it will not bring any action relating to this
Agreement or any Transaction in any court other than any Federal court sitting
in the State of Oregon and (d) waives any right to trial by jury with respect to
any action related to or arising out of this Agreement or any Transaction.
54
IN WITNESS WHEREOF, Parent, Sub and the Company have duly executed
this Agreement, all as of the date first written above.
WEYERHAEUSER COMPANY,
by __________________________
Name:
Title:
COMPANY HOLDINGS, INC.,
by __________________________
Name:
Title:
WILLAMETTE INDUSTRIES, INC.,
by __________________________
Name:
Title:
EXHIBIT A
Conditions of the Offer
Notwithstanding any other term of the Offer or this Agreement, Sub
shall not be required to accept for payment or, subject to any applicable rules
and regulations of the SEC, including Rule 14e-l(c) under the Exchange Act
(relating to Sub's obligation to pay for or return tendered shares of Company
Common Stock promptly after the termination or withdrawal of the Offer), to pay
for any shares of Company Common Stock tendered pursuant to the Offer unless
there shall have been validly tendered and not withdrawn prior to the expiration
of the Offer that number of shares of Company Common Stock which would represent
at least a majority of the Fully Diluted Shares (the "Minimum Tender
Condition"). The term "Fully Diluted Shares" means all outstanding securities
entitled generally to vote in the election of directors of the Company on a
fully diluted basis, after giving effect to the exercise or conversion of all
options, rights and securities exercisable or convertible into such voting
securities, other than potential dilution attributable to the Company Rights.
Furthermore, notwithstanding any other term of the Offer or this Agreement, Sub
shall not be required to accept for payment or, subject as aforesaid, to pay for
any shares of Company Common Stock not theretofore accepted for payment or paid
for, and may terminate or amend the Offer, with the consent of the Company or
if, at the time of the acceptance of such shares for payment or the payment
therefor, any of the following conditions exists:
(a) there shall be pending any suit, action or proceeding by any
Governmental Entity that has a reasonable likelihood of success, (i)
challenging the acquisition by Parent or Sub of any Company Common Stock,
seeking to restrain or prohibit the making or consummation of the Offer or
the Merger or any other Transaction, or seeking to obtain from the
Company, Parent or Sub any damages that are material in relation to the
Company and the Company Subsidiaries taken as whole, (ii) seeking to
prohibit or limit the ownership or operation by the Company, Parent or any
of their respective subsidiaries of any material portion of the business
or assets of the Company and the Company Subsidiaries taken as a whole or
Parent and the Parent Subsidiaries taken as a whole, or to compel the
Company, Parent or any of their respective subsidiaries to dispose of or
hold separate any material portion of the business or assets of the
Company and the Company Subsidiaries taken as a whole or Parent and the
Parent Subsidiaries taken as a whole as a result of the Offer, the Merger
or any other Transaction, (iii) seeking to
2
impose limitations on the ability of Parent or Sub to acquire or hold, or
exercise full rights of ownership of, any shares of Company Common Stock,
including the right to vote the Company Common Stock purchased by it on
all matters properly presented to the shareholders of the Company or (iv)
seeking to prohibit Parent or any of its subsidiaries from effectively
controlling in any material respect the business or operations of the
Company and the Company Subsidiaries;
(b) any statute, rule, regulation, legislation, interpretation,
judgment, order or injunction shall be threatened, proposed, sought,
enacted, entered, enforced, promulgated, amended or issued with respect
to, or deemed applicable to, or any consent or approval withheld with
respect to, (i) Parent, the Company or any of their respective
subsidiaries or (ii) the Offer, the Merger or any other Transaction, by
any Governmental Entity that is reasonably likely to result, directly or
indirectly, in any of the consequences referred to in paragraph (a) above;
(c) except as disclosed in the Filed Company SEC Documents or the
Company Disclosure Letter, since the date of the most recent audited
financial statements included in the Filed Company SEC Documents, there
shall have occurred any event, change, effect or development that,
individually or in the aggregate, has had or is reasonably likely to have,
a Company Material Adverse Effect;
(d) the Company Board of Directors or any committee thereof shall
have withdrawn or proposed to withdraw its approval or recommendation of
this Agreement or the Merger or approved or recommended, or proposed to
approve or recommend, any Company Takeover Proposal;
(e) any representation and warranty of the Company in this Agreement
that is qualified as to materiality shall not be true and correct or any
such representation and warranty that is not so qualified shall not be
true and correct in any material respect, as of such time, except to the
extent such representation and warranty expressly relates to an earlier
date (in which case on and as of such earlier date);
(f) the Company shall have failed to perform in any material respect
any obligation or to comply in any material respect with any agreement or
covenant of the
3
Company to be performed or complied with by it under this Agreement; or
(g) this Agreement shall have been terminated in accordance with its
terms;
which, in the sole judgment of Sub or Parent, in any such case, and regardless
of the circumstances giving rise to any such condition (including any action or
inaction by Parent or any of its affiliates), makes it inadvisable to proceed
with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Sub and Parent
and may be asserted by Sub or Parent regardless of the circumstances giving rise
to such condition or may (subject to Section 1.01) be waived by Sub and Parent
in whole or in part at any time and from time to time in their sole discretion.
The failure by Parent, Sub or any other affiliate of Parent at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.