AGREEMENT AND PLAN OF MERGER
BY AND AMONG
NATIONAL SEMICONDUCTOR CORPORATION,
NOVA ACQUISITION CORP.
AND
CYRIX CORPORATION
DATED AS OF JULY 28, 1997
TABLE OF CONTENTS
ARTICLE I
THE MERGER
Section 1.1 The Merger 2
Section 1.2 Effective Date of the Merger 2
Section 1.3 Effects of the Merger 2
ARTICLE II
THE SURVIVING CORPORATION
Section 2.1 Certificate of Incorporation 3
Section 2.2 By-laws 3
Section 2.3 Board of Directors; Officers 3
ARTICLE III
CONVERSION OF SECURITIES
Section 3.1 Exchange Ratio 3
Section 3.2 Parent to Make Certificates Available 5
Section 3.3 Dividends; Transfer Taxes 5
Section 3.4 No Fractional Shares 6
Section 3.5 Company Shareholders' Meeting 6
Section 3.6 Closing of the Company's Transfer Books 7
Section 3.7 Assistance in Consummation of the Merger 7
Section 3.8 Closing 7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Section 4.1 Organization and Qualification 7
Section 4.2 Capitalization 8
Section 4.3 Subsidiaries 8
Section 4.4 Authority Relative to This Merger
Agreement 9
Section 4.5 Reports and Financial Statements 10
Section 4.6 Absence of Certain Changes or Events 11
Section 4.7 Litigation 11
Section 4.8 Information in Disclosure Documents,
Registration Statements, Etc. 11
Section 4.9 Parent Action 12
Section 4.10 Compliance With Applicable Laws 12
Section 4.11 Tax and Accounting Matters 12
Section 4.11 Intel License 13
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 5.1 Organization and Qualification 13
Section 5.2 Capitalization 13
Section 5.3 Subsidiaries 14
Section 5.4 Authority Relative to This Merger
Agreement 15
Section 5.5 Reports and Financial Statements 16
Section 5.6 Absence of Certain Changes or Events 16
Section 5.7 Litigation 17
Section 5.8 Information in Disclosure Documents 17
Section 5.9 Labor Matters 18
Section 5.10 Employee Benefit Plans; ERISA 18
Section 5.11 Takeover Provisions Inapplicable 21
Section 5.12 Company Action 21
Section 5.13 Fairness Opinion 21
Section 5.14 Financial Advisor 21
Section 5.15 Compliance With Applicable Laws 22
Section 5.16 Liabilities 22
Section 5.17 Taxes 22
Section 5.18 Certain Agreements 23
Section 5.19 Inventory 24
Section 5.20 Patents, Trademarks, Etc. 25
Section 5.21 Product Liability 26
Section 5.22 Environment 26
Section 5.23 Tax and Accounting Matters 27
Section 5.24 Authorized Stock 27
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
Section 6.1 Conduct of Business by the Company
Pending the Merger 28
Section 6.2 Conduct of Business by Parent and Sub
Pending the Merger 30
Section 6.3 Notice of Breach 31
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 Access and Information 31
Section 7.2 Registration Statement/Proxy Statement 32
Section 7.3 Affiliates; Publication of Combined
Financial Results 32
Section 7.4 Stock Exchange Listing 33
Section 7.5 Employment Arrangements 33
Section 7.6 Indemnification 34
Section 7.7 HSR Act 35
Section 7.8 Additional Agreements 35
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Section 7.9 No Solicitation 36
Section 7.10 Employee Agreements 39
Section 7.11 Company Stock Plans 39
Section 7.12 Independent Auditors 39
ARTICLE VIII
CONDITIONS PRECEDENT
Section 8.1 Conditions to Each Party's Obligation to
Effect the Merger 39
Section 8.2 Conditions to Obligation of the Company
to Effect the Merger 40
Section 8.3 Conditions to Obligations of Parent
and Sub to Effect the Merger 41
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
Section 9.1 Termination 42
Section 9.2 Effect of Termination; Fees 43
Section 9.3 Amendment 44
Section 9.4 Waiver 44
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Non-Survival of Representations,
Warranties and Agreements 45
Section 10.2 Notices 45
Section 10.3 Expenses 46
Section 10.4 Publicity 46
Section 10.5 Specific Performance 46
Section 10.6 Interpretation 47
Section 10.7 Miscellaneous 47
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "MERGER AGREEMENT"), dated as
of July 28, 1997, by and among National Semiconductor Corporation, a Delaware
corporation ("PARENT"), Nova Acquisition Corp., a Delaware corporation and a
wholly owned subsidiary of Parent ("SUB"), and Cyrix Corporation, a Delaware
corporation (the "COMPANY"):
W I T N E S S E T H:
WHEREAS, the Board of Directors of Parent has determined that a
combination with the Company is in the long-term strategic best interests of
its stockholders;
WHEREAS, the Board of Directors of the Company has determined that the
Merger Agreement is consistent with and in furtherance of the long-term
business strategy of the Company, and the Company desires to combine its
business of designing, developing and marketing microprocessors for the
personal computer industry with the semiconductor operations of Parent and
for the Company's stockholders to have a continuing equity interest in the
combined businesses;
WHEREAS, the Boards of Directors of Parent, Sub and the Company have
approved the merger of Sub into the Company (the "MERGER"), upon the terms
and subject to the conditions set forth herein;
WHEREAS, concurrently with the execution and delivery of this Merger
Agreement, as a condition and inducement to Parent's willingness to enter
into this Merger Agreement, Parent and the Company have entered into a Stock
Option Agreement dated as of the date hereof in the form of Exhibit A (the
"STOCK OPTION AGREEMENT"), pursuant to which the Company has granted to
Parent an option (the "OPTION") to purchase shares of Company Common Stock
(as defined below);
WHEREAS, immediately prior to the execution and delivery of this
Merger Agreement, as a condition and inducement to Parent's willingness to
enter into this Merger Agreement, certain stockholders of the Company have
executed and delivered to Parent a Support Agreement dated as of the date
hereof in the form of Exhibit B (the "SUPPORT AGREEMENT"), pursuant to which
such stockholders have agreed to vote in favor of the Merger;
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "CODE"); and
WHEREAS, for accounting purposes, it is intended that the Merger shall
be accounted for as a "pooling of interests";
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties and agreements contained herein, the parties
hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1 THE MERGER. Upon the terms and subject to the conditions
hereof, on the Effective Date (as defined below in Section 1.2), Sub shall be
merged into the Company and the separate existence of Sub shall thereupon
cease, and the name of the Company, as the surviving corporation in the
Merger (the "SURVIVING CORPORATION"), shall by virtue of the Merger remain
"Cyrix Corporation."
Section 1.2 EFFECTIVE DATE OF THE MERGER. The Merger shall become
effective when a properly executed Certificate of Merger is duly filed with
the Secretary of State of the State of Delaware, or at such later date and
time as may be specified therein, which filing shall be made as soon as
practicable after the closing of the transactions contemplated by this Merger
Agreement in accordance with Section 3.8. When used in this Merger Agreement,
the term "EFFECTIVE DATE" shall mean the date and time at which such filing
shall have been made or such later date and time as may be specified in such
filing.
Section 1.3 EFFECTS OF THE MERGER. The Merger shall have the effects set
forth in the applicable provisions of the Delaware General Corporation Law
(the "DGCL"). Without limiting the generality of the foregoing, and subject
thereto, at the Effective Date, except as otherwise provided herein, all of
the property, rights, privileges, powers and franchises of Sub and the
Company shall vest in the Surviving Corporation, and all debts, liabilities
and duties of Sub and the Company shall become the debts, liabilities and
duties of the Surviving Corporation.
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ARTICLE II
THE SURVIVING CORPORATION
Section 2.1 CERTIFICATE OF INCORPORATION. The Certificate of
Incorporation of Sub as in effect immediately prior to the Effective Date
shall be the Certificate of Incorporation of the Surviving Corporation after
the Effective Date except that Article I thereof shall be amended to read
"The name of the corporation is Cyrix Corporation," and subject to Section
7.6(c), thereafter may be amended in accordance with its terms and as
provided by law and this Merger Agreement.
Section 2.2 BY-LAWS. The By-laws of Sub as in effect on the Effective
Date shall be the By-laws of the Surviving Corporation.
Section 2.3 BOARD OF DIRECTORS; OFFICERS. The directors of Sub
immediately prior to the Effective Date shall be the directors of the
Surviving Corporation and the officers of the Company immediately prior to
the Effective Date shall be the officers of the Surviving Corporation, in
each case until their respective successors are duly elected and qualified.
ARTICLE III
CONVERSION OF SECURITIES
Section 3.1 EXCHANGE RATIO. As of the Effective Date, by virtue of the
Merger and without any action on the part of any holder of any capital stock
of the Company:
(a) All shares of capital stock of the Company which are held by the
Company or any subsidiary of the Company as treasury stock, and any shares of
capital stock of the Company owned by Parent, Sub or any other subsidiary of
Parent, shall be cancelled.
(b) Subject to Section 3.4, each remaining outstanding share of common
stock, $.004 par value, of the Company ("COMPANY COMMON STOCK") issued and
outstanding immediately prior to the Effective Date shall be converted into
0.825 (the "EXCHANGE RATIO") fully paid and nonassessable shares of the
common stock, $.50 par value, of Parent ("PARENT COMMON STOCK"). One
preferred share purchase right issuable pursuant to the Rights Agreement
dated as of August 8, 1988 between Parent and The First National Bank of
Boston, as amended, or any other purchase right issued in substitution
thereof (the "PARENT RIGHTS"), shall be issued together with and shall attach
to
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each share of Parent Common Stock issued pursuant to this Section 3.1(b),
unless the Parent Rights have been redeemed prior to the Effective Date.
(c) In the event of any stock dividend, stock split,
reclassification, recapitalization, combination or exchange of shares with
respect to, or rights issued in respect of, Parent Common Stock prior to the
Effective Date, the Exchange Ratio shall be adjusted accordingly.
(d) 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, $.01 par value, of the Surviving Corporation.
(e) Each option to purchase Company Common Stock ("COMPANY STOCK
OPTIONS") granted under the Company Plans (as defined herein) which is
outstanding and unexercised immediately prior to the Effective Date shall
cease to represent a right to acquire shares of Company Common Stock and
shall be converted into an option to purchase shares of Parent Common Stock
in an amount and at an exercise price determined as follows: (i) the number
of shares of Parent Common Stock to be subject to the new option shall be
equal to the product of the number of shares of Company Common Stock subject
to the original option multiplied by the Exchange Ratio and rounded to the
nearest whole share; and (ii) the exercise price per share of Parent Common
Stock under the new option shall be equal to the quotient of the exercise
price per share of Company Common Stock under the original option divided by
the Exchange Ratio and rounded to the nearest whole cent. The terms and
conditions of the new option, including vesting provisions, shall be the same
as the original option except that all references to the Company shall be
deemed to be references to Parent. The adjustment provided herein with
respect to any Company Stock Options which are "incentive stock options" (as
defined in Section 422 of the Code) shall be and is intended to be effected
in a manner which is consistent with Section 424(a) of the Code. Prior to the
Effective Date, Parent and the Company shall take all action necessary to
permit the adjustments set forth in this Section 3.1(e). Parent shall
reserve for issuance a sufficient number of shares of Parent Common Stock for
delivery with respect to the converted Company Stock Options. As soon as
practicable after the Effective Date, Parent shall file a registration
statement on Form S-8 (or any successor or other appropriate form) with
respect to the shares of Parent Common Stock subject to such options.
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(f) The Company's 5-1/2% Convertible Subordinated Notes due June 1,
2001 (the "COMPANY NOTES") outstanding im mediately prior to the Effective
Date shall be assumed by Parent and remain outstanding thereafter as an
obligation of Parent and the Surviving Corporation as co-obligors, and, from
and after the Effective Date, the holders of the Company Notes shall have the
right to convert such Company Notes into the number of shares of Parent
Common Stock receivable in the Merger by a holder of the number of shares of
Company Common Stock into which such Company Notes could have been converted
immediately prior to the Merger. Parent shall enter into a supplemental
indenture with respect to such obligations in accordance with the terms of
the indenture pursuant to which the Company Notes were issued.
Section 3.2 PARENT TO MAKE CERTIFICATES AVAILABLE. Prior to the
Effective Date, Parent shall select Boston Equiserve or such other person or
persons reasonably satisfactory to the Company to act as exchange agent for
the Merger (the "EXCHANGE AGENT"). As soon as practicable after the
Effective Date, Parent shall make available, and each holder of Company
Common Stock to be converted pursuant to Section 3.1 (each, a "COMPANY
HOLDER") will be entitled to receive, upon surrender to the Exchange Agent of
one or more certificates representing such stock ("CERTIFICATES") for
cancellation, certificates representing the number of shares of Parent Common
Stock into which such shares are converted in the Merger and cash in
consideration of fractional shares as provided in Section 3.4. Such shares of
Parent Common Stock issued in the Merger shall each be deemed to have been
issued at the Effective Date.
Section 3.3 DIVIDENDS; TRANSFER TAXES. No dividends or other
distributions that are declared or made on Parent Common Stock will be paid
to persons entitled to receive certificates representing Parent Common Stock
pursuant to this Merger Agreement until such persons surrender their
Certificates representing Company Common Stock. Upon such surrender, there
shall be paid to the person in whose name the certificates representing such
Parent Common Stock shall be issued any dividends or other distributions
which shall have become payable with respect to such Parent Common Stock in
respect of a record date after the Effective Date. In no event shall the
person entitled to receive such dividends be entitled to receive interest on
such dividends. In the event that any certificates for any shares of Parent
Common Stock are to be issued in a name other than that in which the
Certificates representing shares of Company Common Stock surrendered in
exchange therefor are registered, it shall be a condition of such exchange
that the person requesting such exchange shall pay to the Exchange Agent any
transfer or other taxes required by reason of the
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issuance of certificates for such shares of Parent Common Stock in a name
other than that of the registered holder of the Certificate surrendered, or
shall establish to the satisfaction of the Exchange Agent that such tax has
been paid or is not applicable. Notwithstanding the foregoing, neither the
Exchange Agent nor any party hereto shall be liable to a Company Holder for
any shares of Parent Common Stock or dividends thereon delivered to a public
official pursuant to any applicable escheat laws.
Section 3.4 NO FRACTIONAL SHARES. No certificates or scrip
representing less than one full share of Parent Common Stock shall be issued
upon the surrender for exchange of Certificates representing Company Common
Stock pursuant to Section 3.1(b). In lieu of any such fractional share, each
Company Holder who would otherwise have been entitled to a fraction of a
share of Parent Common Stock upon surrender of Certificates for exchange
pursuant to Section 3.1(b) shall be paid upon such surrender cash (without
interest) in an amount equal to the product of the closing price of Parent
Common Stock on the New York Stock Exchange ("NYSE") Composite Tape on the
Effective Date multiplied by the fractional interest such Company Holder
would otherwise be entitled to receive. For purposes of paying such cash in
lieu of fractional shares, all Certificates surrendered for exchange on the
same letter of transmittal shall be aggregated, with the holder thereof
receiving the aggregate whole number of shares of Parent Common Stock, and no
Company Holder shall receive cash in lieu of fractional shares in an amount
equal to or greater than the value of one full share of Parent Common Stock
with respect to such surrendered Certificates.
Section 3.5 COMPANY SHAREHOLDERS' MEETING. Unless this Merger
Agreement has been terminated pursuant to Section 9.1, the Company shall take
all action necessary, in accordance with applicable law and its Restated
Certificate of Incorporation and By-laws, to convene a special meeting of the
holders of capital stock of the Company entitled to vote thereat (the
"COMPANY MEETING") as promptly as practicable for the purpose of considering
and taking action upon this Merger Agreement. Subject to Section 7.9(c), the
Board of Directors of the Company will recommend that holders of any capital
stock of the Company entitled to vote thereon vote in favor of and approve
the Merger and the adoption of this Merger Agreement at the Company Meeting.
At the Company Meeting, all of the shares of Company Common Stock then owned
by Parent, Sub, or any other subsidiary of Parent, or with respect to which
Parent, Sub, or any other subsidiary of Parent holds the power to direct the
voting, will be voted in favor of approval of the Merger and adoption of this
Merger Agreement.
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Section 3.6 CLOSING OF THE COMPANY'S TRANSFER BOOKS. At the close of
business on the Effective Date, the stock transfer books of the Company shall
be closed and no transfer of any shares of capital stock of the Company shall
be made thereafter. In the event that, after the Effective Date,
Certificates are presented to the Surviving Corporation, they shall be
cancelled and exchanged for Parent Common Stock and/or cash as provided in
Sections 3.1(b) and 3.4.
Section 3.7 ASSISTANCE IN CONSUMMATION OF THE MERGER. Each of Parent,
Sub and the Company shall provide all reasonable assistance to, and shall
cooperate with, each other to bring about the consummation of the Merger as
soon as possible in accordance with the terms and conditions of this Merger
Agreement. Parent shall cause Sub to perform all of its obligations in
connection with this Merger Agreement.
Section 3.8 CLOSING. The closing of the transactions contemplated by
this Merger Agreement shall take place (i) at the offices of Wachtell,
Lipton, ▇▇▇▇▇ & ▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00
A.M. local time as soon as practicable (but in any event within three
business days) after the day on which the last of the conditions set forth in
Article VIII is fulfilled or waived or (ii) at such other time and place as
Parent and the Company shall agree in writing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub represent and warrant to the Company as follows:
Section 4.1 ORGANIZATION AND QUALIFICATION. Each of Parent and Sub is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the corporate power to carry on its
business as it is now being conducted or currently proposed to be conducted.
Parent is duly qualified as a foreign corporation to do business, and is in
good standing, in each jurisdiction where the character of its properties
owned or held under lease or the nature of its activities make such
qualification necessary, except where the failure to be so qualified will
not, individually or in the aggregate, have a Parent Material Adverse Effect.
As used in this Merger Agreement, "PARENT MATERIAL ADVERSE EFFECT" shall
mean a material adverse effect on the business, assets, liabilities,
financial condition or results of operations of Parent and its subsidiaries
taken as a whole, but
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excluding any such effect resulting directly and primarily from (i) general
economic or financial market conditions or (ii) the announcement or
consummation of the Merger.
Section 4.2 CAPITALIZATION. (a) PARENT. The authorized capital stock
of Parent consists of 300,000,000 shares of Parent Common Stock and 1,000,000
shares of preferred stock, $.50 par value. As of June 22, 1997, 145,674,568
shares of Parent Common Stock were validly issued and outstanding, fully paid
and nonassessable and no shares of Parent Common Stock were held in treasury.
As of May 25, 1997, Parent had reserved (x) 6,048,387 shares of Parent
Common Stock for future issuance upon conversion of Parent's 6.50%
Convertible Subordinated Notes and (y) 48,105,495 shares of Parent Common
Stock for issuance under Parent's stock option, benefit and stock purchase
plans, of which options representing the right to purchase an aggregate of
15,327,741 shares of Parent Common Stock were outstanding and 20,931,318
shares were issued (pursuant to option plans). As of June 22, 1997, there
were no bonds, debentures, notes or other indebtedness having the right to
vote on any matters on which the Parent's shareholders may vote issued or
outstanding. As of May 25, 1997, except for the aforementioned and the Parent
Rights, there are no options, warrants, calls or other rights, agreements or
commitments presently outstanding obligating Parent to issue, deliver or sell
shares of its capital stock or debt securities, or obligating Parent to
grant, extend or enter into any such option, warrant, call or other such
right, agreement or commitment. All of the shares of Parent Common Stock
issuable in accordance with this Merger Agreement in exchange for Company
Common Stock at the Effective Date in accordance with this Merger Agreement
will be, when so issued, duly authorized, validly issued, fully paid and
nonassessable.
(b) SUB. The authorized capital stock of Sub consists of 100 shares of
common stock, par value $0.01 per share, all of which are validly issued and
outstanding, fully paid and nonassessable and are owned by Parent free and
clear of all liens, claims and encumbrances.
Section 4.3 SUBSIDIARIES. The only "Significant Subsidiaries" (as
such term is defined in Rule 1-02 of Regulation S-X of the Securities and
Exchange Commission (the "COMMISSION")) ("SIGNIFICANT SUBSIDIARIES") of
Parent are those named in the Parent SEC Reports (as defined herein) filed
prior to the date of this Merger Agreement. Each Significant Subsidiary is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has the corporate power to
carry on its business as it is now being conducted or currently proposed to
be conducted.
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Each Significant Subsidiary is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character
of its properties owned or held under lease or the nature of its activities
makes such qualification necessary except where the failure to be so
qualified will not have a Parent Material Adverse Effect. All the outstanding
shares of capital stock of each Significant Subsidiary are validly issued,
fully paid and nonassessable and are owned by Parent or by a Significant
Subsidiary of Parent free and clear of any liens, claims or encumbrances.
There are no existing options, warrants, calls or other rights, agreements or
commitments of any character relating to the issued or unissued capital stock
or other securities of any Significant Subsidiaries of Parent.
Section 4.4 AUTHORITY RELATIVE TO THIS MERGER AGREEMENT. Parent and
Sub have the corporate power to enter into this Merger Agreement and to
carry out their respective obligations hereunder. The execution and
delivery of this Merger Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by the Board of Directors of
Parent and Sub. This Merger Agreement constitutes a valid and binding
obligation of Parent and Sub enforceable against such parties in accordance
with its terms. No other corporate proceedings on the part of Parent or Sub
are necessary to authorize this Merger Agreement and the transactions
contemplated hereby. Parent and Sub are not subject to or obligated under (i)
any charter or by-law provision or (ii) any contract, license, indenture or
other loan document, franchise, permit, order, decree, concession, lease,
instrument, judgment, statute, law, ordinance, rule or regulation applicable
to Parent or Sub or any of their respective subsidiaries or their respective
properties or assets, which would be breached or violated, or under which
there would be a default (with or without notice or lapse of time, or both),
or under which there would arise a right of termination, cancellation or
acceleration of any obligation or the loss of a material benefit, by its
executing and carrying out this Merger Agreement other than, in the case of
clause (ii) only, (A) any breaches, violations, defaults, terminations,
cancellations, accelerations or losses which, either individually or in the
aggregate, will not have a Parent Material Adverse Effect or prevent the
consummation of the transactions contemplated hereby and (B) the laws and
regulations referred to in the next sentence. Except as referred to herein or
in connection, or in compliance, with the provisions of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended (the "HSR ACT"), the
Securities Act of 1933, as amended (the "SECURITIES ACT"), the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and other governmental
approvals required under the applicable laws of any foreign jurisdiction
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("FOREIGN LAWS") and the environmental, corporation, securities or blue sky
laws or regulations of the various states, no filing or registration with, or
authorization, consent or approval of, any public body or authority is
necessary for the consummation by Parent and Sub of the Merger or the other
transactions contemplated by this Merger Agreement, other than filings,
registrations, authorizations, consents or approvals the failure of which to
make or obtain would not have a Parent Material Adverse Effect or prevent the
consummation of the transactions contemplated hereby.
Section 4.5 REPORTS AND FINANCIAL STATEMENTS. Parent has previously
furnished the Company with true and complete copies of (i) its Annual Report
on Form 10-K for the fiscal year ended May 26, 1996, as filed with the
Commission, (ii) its Quarterly Reports on Form 10-Q for the quarters ended
August 25, 1996, November 24, 1996 and February 23, 1997, as filed with the
Commission, (iii) its proxy statements related to all meetings of its
stockholders (whether annual or special) since December 31, 1995, and (iv)
all other reports or registration statements filed by Parent with the
Commission since December 31, 1995, except registration statements on Form
S-8 relating to employee benefit plans, which are all the documents (other
than preliminary material) that Parent was required to file with the
Commission since that date (clauses (i) through (iv) being referred to herein
collectively as the "PARENT SEC REPORTS"). As of their respective dates, the
Parent SEC Reports complied in all material respects with the requirements of
the Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the Commission thereunder applicable to such Parent SEC
Reports. As of their respective dates, the Parent SEC Reports did not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The audited consolidated financial statements and unaudited
interim financial statements of Parent included in the Parent SEC Reports
comply as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the Commission
with respect thereto, and the financial statements included in the Parent SEC
Reports have been prepared in accordance with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis (except
as may be indicated therein or in the notes thereto) and fairly present the
financial position of Parent and its subsidiaries as at the dates thereof
and the results of their operations and changes in financial position for the
periods then ended, subject, in the case of the unaudited interim financial
statements, to normal year-end audit adjustments and any other adjustments
described therein. The
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financial information set forth in the earnings release promulgated by Parent
on June 5, 1997, will not be materially different from the corresponding
financial information contained in the audited consolidated financial
statements of Parent included in its Annual Report on Form 10-K for the
fiscal year ended May 25, 1997, as filed with the Commission.
Section 4.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed
in the Parent SEC Reports filed prior to the date hereof, since December 31,
1996, there has not been (i) any transaction, commitment, dispute or other
event or condition (financial or otherwise) of any character (whether or not
in the ordinary course of business), individually or in the aggregate, having
a Parent Material Adverse Effect; or (ii) any damage, destruction or loss,
whether or not covered by insurance, which, insofar as reasonably can be
foreseen, in the future would be likely to have a Parent Material Adverse
Effect.
Section 4.7 LITIGATION. Except as disclosed in the Parent SEC Reports
filed prior to the date hereof, there is no suit, action or proceeding
pending or, to the knowledge of Parent, threatened against or affecting
Parent or any of its subsidiaries which, alone or in the aggregate, is likely
to have a Parent Material Adverse Effect, nor is there any judgment, decree,
injunction, rule or order of any court, governmental department, commission,
agency, instrumentality or arbitrator outstanding against Parent or any of
its subsidiaries having, or which in the future is likely to have, either
alone or in the aggregate, any Parent Material Adverse Effect.
Section 4.8 INFORMATION IN DISCLOSURE DOCUMENTS, REGISTRATION
STATEMENTS, ETC. None of the information supplied or to be supplied by
Parent or Sub for inclusion or incorporation by reference in (i) the
Registration Statement to be filed with the Commission by Parent on Form S-4
under the Securities Act for the purpose of registering the shares of Parent
Common Stock to be issued in the Merger (the "REGISTRATION STATEMENT") and
(ii) the proxy statement of the Company (the "PROXY STATEMENT") required to
be mailed to the shareholders of the Company in connection with the Merger
will, in the case of the Proxy Statement or any amendments or supplements
thereto, at the time of the mailing of the Proxy Statement and any amendments
or supplements thereto, and at the time of the Company Meeting to be held in
connection with the Merger, or, in the case of the Registration Statement, at
the time it becomes effective and at the Effective Date, 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
Registration Statement will comply as to form
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in all material respects with the provisions of the Securities Act, and the
rules and regulations promulgated thereunder.
Section 4.9 PARENT ACTION. The Board of Directors of Parent (at a
meeting duly called and held) has by the requisite vote of directors (a)
approved the Merger in accordance with the DGCL, (b) taken any necessary
steps to render Section 203 of the DGCL and the Parent Rights inapplicable to
the Merger and the transactions contemplated by this Merger Agreement, and
(c) adopted any necessary resolution having the effect of causing Parent not
to be subject, to the extent permitted by applicable law, to any state
takeover law that may purport to be applicable to the Merger and the
transactions contemplated by this Merger Agreement.
Section 4.10 COMPLIANCE WITH APPLICABLE LAWS. Parent and its
subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all courts, administrative agencies or commissions or other
governmental authorities or instrumentalities, domestic or foreign (each, a
"GOVERNMENTAL ENTITY"), except for such permits, licenses, variances,
exemptions, orders and approvals the failure of which, individually or in the
aggregate, to hold would not have a Parent Material Adverse Effect (the
"PARENT PERMITS"). Parent and its subsidiaries are in compliance with the
terms of the Parent Permits, except for such failures to comply which, singly
or in the aggregate, would not have a Parent Material Adverse Effect. Except
as disclosed in the Parent SEC Reports filed prior to the date of this Merger
Agreement, the businesses of Parent and its subsidiaries are not being
conducted in violation of any law, ordinance or regulation of any
Governmental Entity, except for possible violations which, individually or in
the aggregate, do not and would not have a Parent Material Adverse Effect.
Except as disclosed in the Parent SEC Reports, no investigation or review by
any Governmental Entity with respect to Parent or any of its subsidiaries is
pending or threatened, nor has any Governmental Entity indicated an intention
to conduct the same, other than those the outcome of which would not have a
Parent Material Adverse Effect.
Section 4.11 TAX AND ACCOUNTING MATTERS. Neither Parent nor, to its best
knowledge, any of its affiliates, has through the date hereof, taken or
agreed to take any action, nor are they aware of any circumstances relating
to Parent or its affiliates which currently exist, that would (i) prevent
Parent from accounting for the business combination to be effected by the
Merger as a "pooling of interests" or (ii) prevent the Merger from
constituting a reorganization within the meaning of Section 368(a) of the
Code.
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Section 4.12 INTEL LICENSE. To the knowledge of Parent, as of the date
of this Merger Agreement, the License Agreement dated June 1, 1976 between
Intel Corporation ("INTEL") and Parent, as amended on January 1, 1983,
constitutes a valid and binding agreement, remains in full force and effect
and does not conflict in any material respect with, or violate in any material
respect, the terms of this Merger Agreement or the transactions contemplated
hereby.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent, except as set forth in a
disclosure schedule delivered by the Company concurrently herewith (the
"COMPANY DISCLOSURE SCHEDULE"), as follows:
Section 5.1 ORGANIZATION AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the corporate power to carry on its
business as it is now being conducted or currently proposed to be conducted.
The Company is duly qualified as a foreign corporation to do business, and
is in good standing, in each jurisdiction where the character of its
properties owned or held under lease or the nature of its activities makes
such qualification necessary, except where the failure to be so qualified
will not, individually or in the aggregate, have a Company Material Adverse
Effect. As used in this Merger Agreement, "COMPANY MATERIAL ADVERSE EFFECT"
shall mean a material adverse effect on the business, assets, liabilities,
financial condition, or results of operations of the Company and its
subsidiaries, taken as a whole, but excluding any such effect resulting
directly and primarily from (i) general economic or financial market
conditions, (ii) the announcement or consummation of the Merger, including
any effect therefrom on the Company's silicon wafer manufacturing agreements,
or (iii) adverse developments in the pending litigation between the Company
and Intel or between the Company and Creative Labs, Inc. or new litigation
between the Company and Intel or between the Company and Creative Labs, Inc.
Complete and correct copies as of the date hereof of the Restated Certificate
of Incorporation and Bylaws of the Company and each of its Significant
Subsidiaries have, to the extent requested, been delivered to Parent as part of
the Company Disclosure Schedule.
Section 5.2 CAPITALIZATION. The authorized capital stock of the Company
consists of 60,000,000 shares of Company
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Common Stock, and 20,000,000 shares of preferred stock, par value $.004 per
share ("COMPANY PREFERRED STOCK"). As of June 29, 1997, 19,681,940 shares of
Company Common Stock were validly issued and outstanding, fully paid and
nonassessable, no shares of Company Preferred Stock were outstanding, and
545,938 shares of Company Common Stock were held in treasury. There have been
no material changes in such numbers of shares through the date hereof. As of
the date hereof, there are no bonds, debentures, notes or other indebtedness
having the right to vote on any matters on which the Company's shareholders
may vote issued or outstanding. As of June 29, 1997, except for (i) employee
and director stock options to acquire 3,483,104 shares of Company Common
Stock pursuant to the Cyrix Corporation 1988 Incentive Stock Plan, the Cyrix
Corporation Employee Stock Purchase Plan, and the Cyrix Corporation
Non-Employee Directors Stock Plan and (ii) 3,182,386 shares of Company Common
Stock issuable upon conversion of the Company's 5-1/2% Convertible
Subordinated Notes due June 1, 2001 (issued pursuant to an Indenture dated
May 28, 1996), there are no options, warrants, calls or other rights,
agreements or commitments presently outstanding obligating the Company to
issue, deliver or sell shares of its capital stock or debt securities, or
obligating the Company to grant, extend or enter into any such option,
warrant, call or other such right, agreement or commitment, and there have
been no material changes in such numbers through the date hereof. No options
will accelerate as a result of the execution of this Merger Agreement or
consummation of the transactions contemplated hereby.
Section 5.3 SUBSIDIARIES. The only direct or indirect subsidiaries of
the Company are those set forth in Schedule 5.3 of the Company Disclosure
Schedule. Each such subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has the corporate power to carry on its business as it is
now being conducted or currently proposed to be conducted. Each such
subsidiary is duly qualified as a foreign corporation to do business, and is
in good standing, in each jurisdiction where the character of its properties
owned or held under lease or the nature of its activities makes such
qualification necessary except where the failure to be so qualified will not
have a Company Material Adverse Effect. All the outstanding shares of capital
stock of each such subsidiary are validly issued, fully paid and nonassessable
and are owned by the Company or by a subsidiary of the Company free and clear
of any liens, claims or encumbrances. There are no existing options, warrants,
calls or other rights, agreements or commitments of any character relating to
the issued or unissued capital stock or other securities of any of the
subsidiaries of the Company. Except as set forth in the Company's Annual Report
on Form 10-K for
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the fiscal year ended December 29, 1996, the Company does not directly or
indirectly own any securities of or any other interest in any other corporation,
partnership, joint venture or other business association or entity.
Section 5.4 AUTHORITY RELATIVE TO THIS MERGER AGREEMENT. The Company
has the corporate power to enter into this Merger Agreement, subject to the
requisite approval of this Merger Agreement by the holders of a majority of
the Company Common Stock, and to enter into the Stock Option Agreement and to
carry out its obligations hereunder and thereunder. The execution and
delivery of this Merger Agreement and the Stock Option Agreement and the
consummation of the transactions contemplated hereby and thereby have been
duly authorized by the Board of Directors of the Company. Each of this Merger
Agreement and the Stock Option Agreement constitutes a valid and binding
obligation of the Company enforceable against the Company in accordance with
its terms. Except for the requisite approval by the holders of Company
Common Stock, no other corporate proceedings on the part of the Company are
necessary to authorize this Merger Agreement and the transactions
contemplated hereby. No other corporate proceedings are necessary to
authorize the Stock Option Agreement and the transactions contemplated
thereby. The Company is not subject to or obligated under (i) any charter or
by-law provision or (ii) except as set forth in Schedule 5.4 of the Company
Disclosure Schedule, any indenture or other loan document, contract, license,
franchise, permit, order, decree, concession, lease, instrument, judgment,
statute, law, ordinance, rule or regulation applicable to the Company or any
of its subsidiaries or their respective properties or assets which would be
breached or violated, or under which there would be a default (with or
without notice or lapse of time, or both), or under which there would arise a
right of termination, cancellation or acceleration of any obligation or the
loss of a material benefit, by its executing and carrying out this Merger
Agreement or the Stock Option Agreement, other than, in the case of clause
(ii) only, (A) any breaches, violations, defaults, terminations, cancellations,
accelerations or losses which, either individually or in the aggregate, will
not have a Company Material Adverse Effect or prevent the consummation of the
transactions contemplated hereby or thereby and (B) the laws and regulations
referred to in the next sentence. Except as referred to herein or, with
respect to the Merger or the transactions contemplated thereby, in connection,
or in compliance, with the provisions of the HSR Act, the Securities Act, the
Exchange Act, the Foreign Laws and the environmental, corporation, securities
or blue sky laws or regulations of the various states, no filing or
registration with, or authorization, consent or approval of, any public body
or authority is necessary for the consummation by the Company of the Merger or
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the other transactions contemplated by this Merger Agreement or by the Stock
Option Agreement, other than filings, registrations, authorizations, consents
or approvals the failure of which to make or obtain would not have a Company
Material Ad verse Effect or prevent the consummation of the transactions
contemplated hereby or thereby.
Section 5.5 REPORTS AND FINANCIAL STATEMENTS. The Company has
previously furnished Parent with true and complete copies of (i) its Annual
Report on Form 10-K for the year ended December 29, 1996, as filed with the
Commission, (ii) its Quarterly Report on Form 10-Q for the quarter ended
March 30, 1997, as filed with the Commission, (iii) its proxy statements
related to all meetings of its stockholders (whether annual or special) since
December 31, 1995, and (iv) all other reports or registration statements
filed by the Company with the Commission since December 31, 1995, except
registration statements on Form S-8 relating to employee benefit plans, which
are all the documents (other than preliminary material) that the Company was
required to file with the Commission since that date (the documents listed in
clauses (i) through (iv) being referred to herein collectively as the
"COMPANY SEC REPORTS"). As of their respective dates, the Company SEC Reports
complied in all material respects with the requirements of the Securities Act
or the Exchange Act, as the case may be, and the rules and regulations of the
Commission thereunder applicable to such Company SEC Reports. As of their
respective dates, the Company SEC Reports did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The audited
consolidated financial statements and unaudited interim financial statements
of the Company included in the Company SEC Reports comply as to form in all
material respects with applicable accounting requirements and with the
published rules and regulations of the Commission with respect thereto, and
the financial statements included in the Company SEC Reports have been
prepared in accordance with GAAP applied on a consistent basis (except as may
be indicated therein or in the notes thereto) and fairly present the
financial position of the Company and its subsidiaries as at the dates
thereof and the results of their operations and changes in financial position
for the periods then ended, subject, in the case of the unaudited interim
financial statements, to normal year-end audit adjustments and any other
adjustments described therein.
Section 5.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed
in the Company SEC Reports filed prior to the date hereof or in Schedule 5.6
of the Company Disclosure Schedule, since December 31, 1996, there has not
been (i) any
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transaction, commitment, dispute or other event or condition (financial or
oth erwise) of any character (whether or not in the ordinary course of
business), individually or in the aggregate, having a Company Material
Adverse Effect; (ii) any damage, destruction or loss, whether or not covered
by insurance, which, insofar as reasonably can be foreseen, in the future
would be likely to have a Company Material Adverse Effect; (iii) any
declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to the capital stock of the
Company; (iv) any material increase in the benefits under, or the
establishment or amendment of, any bonus, insurance, severance, deferred
compensation, pension, retirement, profit sharing, performance awards
(including, without limitation, the granting of stock appreciation rights or
restricted stock awards), stock purchase or other employee benefit plan, or
any increase in the compensation payable or to become payable to any of the
directors or officers of the Company or the employees of the Company or its
subsidiaries as a group, except for (A) increases in salaries or wages
payable or to become payable in the ordinary course of business and
consistent with past practice or (B) the granting of stock options in the
ordinary course of business to employees of the Company or its subsidiaries
who are not directors or executive officers of the Company; (v) any change by
the Company or its subsidiaries in their significant accounting policies; or
(vi) any entry into any commitment or transaction material to the Company and
its subsidiaries taken as a whole (including, without limitation, any
borrowing or sale of assets) except in the ordinary course of business
consistent with past practice.
Section 5.7 LITIGATION. Except as disclosed in the Company's SEC
Reports filed prior to the date hereof or in Schedule 5.7 of the Company
Disclosure Schedule, there is no suit, action or proceeding pending or, to
the knowledge of the Company, threatened against or affecting the Company or
any of its subsidiaries which, either alone or in the aggregate, is likely to
have a Company Material Adverse Effect, nor is there any judgment, decree,
injunction, rule or order of any court, governmental department, commission,
agency, instrumentality or arbitrator outstanding against the Company or any
of its subsidiaries having, or which, in the future is likely to have,
either alone or in the aggregate, any Company Material Adverse Effect.
Section 5.8 INFORMATION IN DISCLOSURE DOCUMENTS. None of the
information supplied or to be supplied by the Company or its subsidiaries
for inclusion or incorporation by reference in the Proxy Statement or the
Registration Statement will, in the case of the Proxy Statement or any
amendments or
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supplements thereto, at the time of the mailing of the Proxy Statement and
any amendments or supplements thereto, and at the time of the Company Meeting
to be held in connection with the Merger, or, in the case of the Registration
Statement, at the time it becomes effective and at the Effective Date,
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 Proxy Statement will comply as to form in all material
respects with the provisions of the Exchange Act and the rules and
regulations thereunder.
Section 5.9 LABOR MATTERS. No labor organization or group of employees
of the Company or any of its subsidiaries has made a pending demand for
recognition or certification, and there are no representation or
certification proceedings or petitions seeking a representation proceeding
presently pending or threatened to be brought or filed, with the National
Labor Relations Board or any other labor relations tribunal or authority.
There are no organizing activities, strikes, work stoppages, slowdowns,
lockouts, material arbitrations or material grievances, or other material
labor disputes pending or threatened against or involving the Company or any
of its subsidiaries which, individually or in the aggregate, have had or
would have a Company Material Adverse Effect.
Section 5.10 EMPLOYEE BENEFIT PLANS; ERISA. (a) Schedule 5.10 of the
Company Disclosure Schedule lists all employee benefit plans, programs,
policies, practices, and other arrangements providing benefits to any
employee or former employee, or director or former director (or beneficiary
or dependent thereof) sponsored or maintained by the Company or any of its
subsidiaries to which the Company or any of its subsidiaries contributes or
is obligated to contribute ("COMPANY PLANS"). Without limiting the generality
of the foregoing, the term "Company Plans" includes all employee welfare
benefit plans within the meaning of Section 3(1) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and all employee pension
benefit plans within the meaning of Section 3(2) of ERISA.
(b) With respect to each Company Plan, the Company has delivered to
Parent a true, correct and complete copy of: (i) each writing constituting a
part of such Company Plan, including without limitation all plan documents,
benefit schedules, trust agreements, and insurance contracts and other
funding vehicles; (ii) the most recent Annual Report (Form 5500 Series) and
accompanying schedule, if any; (iii) the current summary plan description, if
any; (iv) the most recent annual
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financial report, if any; (v) the most recent actuarial report, if any; and
(vi) the most recent determination letter from the Internal Revenue Service
("IRS"), if any. Except as specifically provided in the foregoing documents
delivered to Parent, there are no amendments to any Company Plan that have
been adopted or approved nor has the Company or any of its subsidiaries
undertaken to make any such amendments.
(c) The IRS has issued a favorable determination letter with respect to
each Company Plan that is intended to be a "qualified plan" within the
meaning of Section 401(a) of the Code (a "QUALIFIED COMPANY PLAN") that has
not been revoked, and there are no existing circumstances nor any events that
have occurred that could adversely affect the qualified status of any
Qualified Company Plan or the related trust. No Company Plan is intended to
meet the requirements of Code Section 501(c)(9).
(d) All contributions required to be made to any Company Plan by
applicable law or regulation or by any plan document or other contractual
undertaking, and all premiums due or payable with respect to insurance
policies funding any Company Plan, for any period through the date hereof
have been timely made or paid in full or, to the extent not required to be
made or paid on or before the date hereof, have been fully reflected on the
Company's Annual Report on Form 10-K for the year ended December 29, 1996, as
filed with the Commission.
(e) The Company and each of its subsidiaries has complied, and is now
in compliance, in all material respects with all provisions of ERISA, the
Code and all laws and regulations applicable to the Company Plans, other than
any noncompliance which does not have, or which in the future would not be
likely to have, either alone or in the aggregate, a Company Material Adverse
Effect. There is not now, nor do any circumstances exist that could give rise
to, any requirement for the posting of security with respect to a Company
Plan or the imposition of any lien on the assets of the Company or any of its
subsidiaries under ERISA or the Code. No prohibited transaction has occurred
with respect to any Company Plan.
(f) No Company Plan is subject to Title IV or Section 302 of ERISA or
Section 412 or 4971 of the Code.
(g) No Company Plan is a "multiemployer plan" within the meaning of
Section 4001(a)(3) of ERISA (a "MULTIEMPLOYER PLAN") or a plan that has two
or more contributing sponsors at least two of whom are not under common
control, within the meaning of Section 4063 of ERISA (a "MULTIPLE EMPLOYER
PLAN"), nor has the Company or any Company ERISA Affiliate (as defined
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below), at any time since September 2, 1974, contributed to or been obligated
to contribute to any Multiemployer Plan or Multiple Employer Plan.
(h) There does not now exist, nor do any circumstances exist that could
result in, any Controlled Group Liability (as defined below) that would be a
liability of Parent or any of its subsidiaries following the Effective Date,
having, or which in the future would be likely to have, either alone or in
the aggregate, a Company Material Adverse Effect.
(i) Neither the Company nor any of its subsidiaries has any liability
for life, health, medical or other welfare benefits to former employees or
beneficiaries or dependents thereof, except for health continuation coverage
as required by Section 4980B of the Code or Part 6 of Title I of ERISA.
(j) Neither the execution and delivery of this Merger Agreement nor the
consummation of the transactions contemplated hereby will (either alone or
in conjunction with any other event) result in, cause the accelerated vesting
or delivery of, or increase the amount or value of, any payment or benefit to
any employee of the Company or any of its subsidiaries. Without limiting the
generality of the foregoing, no amount paid or payable by the Company or any
of its subsidiaries in connection with the transactions contemplated hereby
(either solely as a result thereof or as a result of such transactions in
conjunction with any other event) will be an "excess parachute payment"
within the meaning of Section 280G of the Code.
(k) There are no pending or threatened claims (other than claims for
benefits in the ordinary course), lawsuits or arbitrations which have been
asserted or instituted against the Company Plans, any fiduciaries thereof
with respect to their duties to the Company Plans or the assets of any of the
trusts under any of the Company Plans which could reasonably be expected to
result in any liability of the Company or any of its subsidiaries, to the
Pension Benefit Guaranty Corporation, the Department of Treasury, the
Department of Labor or any Multiemployer Plan, having, or which in the
future would be likely to have, either alone or in the aggregate, a Company
Material Adverse Effect.
(l) For purposes of this Section 5.10, the following terms shall have
the following meanings: "CONTROLLED GROUP LIABILITY" means any and all
liabilities under (i) Title IV of ERISA, (ii) Section 302 of ERISA, (iii)
Sections 412 and 4971 of the Code, (iv) the continuation coverage requirements
of Section 601 et seq. of ERISA and Section 4980B of the Code, and
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(v) corresponding or similar provisions of foreign laws or regulations,
other than such liabilities that arise solely out of, or relate solely to,
the Company Plans; "COMPANY ERISA AFFILIATE" means any entity, trade or
business that is a member of a group described in Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b)(1) of ERISA that includes the Company or
any of its subsidiaries or that is a member of the same "controlled group" as
the Company or any of its subsidiaries, pursuant to Section 4001(a)(14) of
ERISA; and "EMPLOYEE" means any employee or officer of the Company or any of
its subsidiaries, and any individual providing services as an independent
contractor to the Company or any of its subsidiaries.
Section 5.11 TAKEOVER PROVISIONS INAPPLICABLE. As of the date hereof
and at all times on or prior to the Effective Date, Section 203 of the DGCL
is and shall be inapplicable to the Merger and the transactions contemplated
by this Merger Agreement and the Stock Option Agreement.
Section 5.12 COMPANY ACTION. The Board of Directors of the Company (at
a meeting duly called and held) has by the requisite vote of directors (i)
determined that the Merger is advisable and fair and in the best interests
of the Company and its shareholders, (ii) approved the Merger in accordance
with the provisions of Section 251 of the DGCL, (iii) recommended the
approval of this Merger Agreement and the Merger by the holders of the
Company Common Stock and directed that the Merger be submitted for
consideration by the Company's shareholders entitled to vote thereon at the
Company Meeting and (iv) adopted any necessary resolution having the effect
of causing the Company not to be subject, to the extent permitted by
applicable law, to any state takeover law that may purport to be applicable
to the Merger and the transactions contemplated by this Merger Agreement and
the Stock Option Agreement.
Section 5.13 FAIRNESS OPINION. The Company has received the opinion of
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., financial advisors to the Company, dated the date
hereof, to the effect that the consideration to be received by the Company's
shareholders in the Merger is fair to the shareholders of the Company.
Section 5.14 FINANCIAL ADVISOR. Except for ▇▇▇▇▇▇▇, Sachs & Co., no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the Merger or the transactions
contemplated by this Merger Agreement based upon arrangements made by or on
behalf of the Company, and the fees and commissions payable to ▇▇▇▇▇▇▇, Sachs
& Co. as contemplated by this Section 5.14 will be the amount set forth in
that certain letter, dated September
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13, 1996, from ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. to the Company, a copy of which has been
delivered to Parent.
Section 5.15 COMPLIANCE WITH APPLICABLE LAWS. The Company and its
subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities, except for such permits, licenses,
variances, exemptions, orders and approvals the failure of which,
individually or in the aggregate, to hold would not have a Company Material
Adverse Effect (the "COMPANY PERMITS"). The Company and its subsidiaries are
in compliance with the terms of the Company Permits, except for such failures
to comply which, singly or in the aggregate, would not have a Company
Material Adverse Effect. Except as disclosed in the Company SEC Reports
filed prior to the date of this Merger Agreement, the businesses of the
Company and its subsidiaries are not being, and have not been, conducted in
violation of any law, ordinance or regulation of any Governmental Entity,
except for possible violations which, individually or in the aggregate, do
not and would not have a Company Material Adverse Effect. No investigation or
review by any Governmental Entity with respect to the Company or any of its
subsidiaries is pending or threatened, nor has any Governmental Entity
indicated an intention to conduct the same, other than those the outcome of
which would not have a Company Material Adverse Effect.
Section 5.16 LIABILITIES. As of June 29, 1997, neither the Company nor
any of its subsidiaries had any liability or obligation (absolute, accrued,
contingent or otherwise, in contract, tort or otherwise and whether or not
required by GAAP to be reflected in such Person's balance sheet or other
books and records) (a "LIABILITY"), except as and to the extent disclosed or
provided for in the most recent Company SEC Reports filed prior to the date
of this Merger Agreement or as set forth in Schedule 5.6 of the Company
Disclosure Schedule, other than such Liabilities which, individually or in
the aggregate, would not have a Company Material Adverse Effect. From and
after June 29, 1997, neither the Company nor any of its subsidiaries has in
curred, suffered, permitted to exist or otherwise become subject to any
Liability, other than Liabilities incurred in the ordinary course of business
in accordance with past practice which, individually or in the aggregate,
would not have a Company Material Adverse Effect.
Section 5.17 TAXES. Each of the Company and its subsidiaries has filed
all material tax returns, declarations and reports required to be filed by
any of them (taking into account all valid extensions of filing dates) and
has paid (or the Company has paid on its behalf), or has set up an adequate
liability reserve in accordance with GAAP for the payment of,
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all material taxes required to be paid in respect of the periods covered by
such returns, declarations and reports. The information contained in such
tax returns, declarations and reports is true, complete and accurate in all
material respects. Neither the Company nor any subsidiary of the Company is
delinquent in the payment of any tax, assessment or governmental charge,
except where such delinquency has not had or would not reasonably be expected
to have, a Company Material Adverse Effect. No material deficiencies for any
taxes have been proposed, asserted or assessed against the Company or any of
its subsidiaries that have not been finally settled or paid in full and no
requests for waivers of the time to assess any such tax are pending. No
material tax return, declaration or report is currently under audit by any
taxing authority, and as of the date hereof no written notice of any such
audit has been received. For the purposes of this Merger Agreement, the term
"tax" shall include all federal, state, local and foreign income, profits,
franchise, gross receipts, payroll, sales, employment, use, property,
withholding, excise and other taxes, duties and assessments of any nature
whatsoever together with all interest, penalties and additions imposed with
respect to such amounts.
Section 5.18 CERTAIN AGREEMENTS. Except as disclosed in Schedule 5.18
of the Company Disclosure Schedule or in the Company SEC Reports filed prior
to the date of this Merger Agreement, neither the Company nor any of its
subsidiaries is a party or subject to any oral or written (i) agreement,
contract, indenture or other instrument relating to Indebtedness (as defined
below) in an amount exceeding $1,000,000; (ii) joint venture agreement or
arrangement or any other agreement which has involved or is expected to
involve a sharing of revenues of $1,000,000 per annum or more with other
persons; (iii) lease for real or personal property in which the amounts of
payments which the Company or any subsidiary is required to make on an annual
basis exceeds $250,000; (iv) agreement, contract, policy, license,
document, instrument, arrangement or commitment that limits in any material
respect the freedom of the Company or any subsidiary of the Company to
compete in any line of business or with any person or in any geographical
area or which would so limit the freedom of the Company or any subsidiary of
the Company after the Effective Date; (v) agreement, contract, policy,
license, document, instrument, arrangement or commitment which, after giving
effect to the transactions contemplated by this Merger Agreement, purports to
restrict or bind Parent or any of its subsidiaries other than the Surviving
Corporation and its subsidiaries in any respect; (vi) employment,
consulting, severance, termination, or indemnification agreement,
contract or arrangement providing for future payments with any current or
former officer, consultant, director
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or employee which (A) ex ceeds $100,000 per annum or (B) requires aggregate
annual payments or total payments over the life of such agreement, contract
or arrangement to such current or former officer, consultant, director or
employee in excess of $100,000 or $250,000, respectively, and is not
terminable before and after the Merger by it or its subsidiary on 30 days'
notice or less without penalty or obligation to make payments related to such
termination; or (vii) other agreement, contract, policy, license, document,
instrument, arrangement or commitment not made in the ordinary course of
business which is material to the Company and its subsidiaries taken as a
whole. "INDEBTEDNESS" means any liability in respect of (A) borrowed money,
(B) capitalized lease obligations, (C) the deferred purchase price of
property or services (other than trade payables in the ordinary course of
business) and (D) guarantees of any of the foregoing. Neither the Company
nor any of its subsidiaries is in default (or would be in default with notice
or lapse of time, or both) under any indenture, note, credit agreement, loan
document, lease, contract, policy, license, document, instrument,
arrangement or commitment (a "CONTRACT"), including, but not limited to, any
Company Plan, whether or not such default has been waived, which default,
alone or in the aggregate with other such defaults, would have a Company
Material Adverse Effect. Neither the Company nor any of its subsidiaries is
a party to or bound by any Contract which upon execution of this Merger
Agreement or consummation of the transactions contemplated hereby will
(either alone or upon the occurrence of additional acts or events) result in
the loss of any material benefit, the termination thereof or any payment
becoming accelerated or due from the Company or Parent or any of their
subsidiaries which loss, termination or acceleration would have a Company
Material Adverse Effect.
Section 5.19 INVENTORY. The inventories of the Company and its
subsidiaries as reflected in the most recent financial statements contained
in the Company SEC Reports, and the inventories reflected on the books of
the Company and its subsidiaries as of the date hereof, except for normal
year-end adjustments made in accordance with GAAP applied consistently with
prior periods, (i) are carried as provided in the Company SEC Reports not in
excess of the lower of cost or net realizable value and (ii) do not include
any inventory which, as of the date of such financial statements, is
obsolete, surplus or not usable or saleable in the lawful and ordinary course
of business of the Company and its subsidiaries as heretofore conducted, in
each case net of reserves provided therefor, except for such discrepancies
which, individually or in the aggregate, would not have a Company Material
Adverse Effect.
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Section 5.20 PATENTS, TRADEMARKS, ETC. (a) The Company and its
subsidiaries exclusively own, or are licensed or otherwise have the right to
use, all patents, trademarks, trade names, service marks, copyrights and any
applications therefor, maskworks, net lists, schematics, inventories,
technology, trade secrets, source codes, know-how, computer software programs
or applications and tangible or intangible proprietary information or
material that in any material respect are used or proposed by the Company to
be used in the business of the Company and any of its subsidiaries as
currently conducted or proposed by the Company to be conducted (the "COMPANY
INTELLECTUAL PROPERTY RIGHTS"), the lack of which, individually or in the
aggregate, would have a Company Material Adverse Effect. Schedule 5.20 of the
Company Disclosure Schedule lists, as of the date hereof, all material: (A)
patents, trademarks, trade names, service marks, registered and unregistered
copyrights included in the Company Intellectual Property Rights, the
Company's currently marketed software products and a list of which, if any,
of such products have been registered for copyright protection with the
United States Copyright Office and any foreign offices; and (B) licenses and
other agreements to which the Company or any of its subsidiaries is a party
and pursuant to which the Company or any of its subsidiaries is authorized to
use any Company Intellectual Property Right. Neither the Company nor any of
its subsidiaries is, or as a result of the execution, delivery or performance
of the Company's obligations hereunder will be, in violation of, or lose any
rights pursuant to, any material license or agreement described in Schedule
5.20 of the Company Disclosure Schedule, except for such violations or losses
which, individually or in the aggregate, would not have a Company Material
Adverse Effect. The Company has previously provided Parent with a list of any
applications for patents, trademarks, trade names, service marks and
registered and unregistered copyrights.
(b) As of the date hereof, except as set forth in Schedule 5.20(b) of
the Company Disclosure Schedule, no claims with respect to the Company
Intellectual Property Rights have been asserted or, to the knowledge of the
Company, are threatened by any person, nor does the Company or any subsidiary
of the Company know of any valid grounds for any bona fide claims against the
use by the Company or any subsidiary of the Company of any Company
Intellectual Property Rights which, insofar as reasonably can be foreseen,
could, individually or in the aggregate, have a Company Material Adverse
Effect. All granted and issued patents and all registered trademarks and
service marks listed in Schedule 5.20 of the Company Disclosure Schedule and
all copyrights held by the Company or any of its subsidiaries are valid,
enforceable and subsisting, other than
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those the invalidity of which, individually or in the aggregate, would not
have a Company Material Adverse Effect. To the Company's knowledge, as of the
date hereof, there has not been and there is not any material unauthorized
use, infringement or misappropriation of any of the Company Intellectual
Property Rights by any third party, employee or former employee which,
individually or in the aggregate, would result in a Company Material Adverse
Effect.
(c) No Company Intellectual Property Right is subject to any
outstanding order, judgment, decree, stipulation or agreement restricting in
any manner the licensing thereof by the Company or any of its subsidiaries,
except for such orders, judgments, decrees, stipulations or agreements which,
individually or in the aggregate, would not have a Company Material Adverse
Effect. Except as set forth in Schedule 5.20(c) of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries has entered into
any agreement to indemnify any other person against any charge of
infringement of any Company Intellectual Property Right, except infringement
indemnities agreed to in the ordinary course included as part of the
Company's license agreements or terms of sale. Neither the Company nor any of
its subsidiaries has entered into any agreement granting any third party the
right to bring infringement actions with respect to, or otherwise to enforce
rights with respect to, any Company Intellectual Property Rights owned by the
Company. The Company and its subsidiaries have the exclusive right to file,
prosecute and maintain all applications and registrations with respect to the
Company Intellectual Property Rights owned by the Company.
Section 5.21 PRODUCT LIABILITY. The Company is not aware of any
claim, or the basis of any claim, against the Company or any of its
subsidiaries for injury to person or property of employees or any third
parties suffered as a result of the sale of any product or performance of any
service by the Company or any of its subsidiaries, including claims arising
out of the defective or unsafe nature of its products or services, which
could, individually or in the aggregate, have a Company Material Adverse
Effect. The Company and its subsidiaries have, and on the Effective Date
will have, full and adequate insurance coverage for potential product
liability claims against it.
Section 5.22 ENVIRONMENT. (a) As used herein, the term "ENVIRONMENTAL
LAWS" means all federal, state, local or Foreign Laws relating to pollution
or protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface
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strata), including, without limitation, laws relating to emissions,
discharges, releases or threatened releases of chemicals, pollutants,
contaminants, or industrial, toxic or hazardous substances or wastes into the
environment, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
chemicals, pollutants, contaminants, or industrial, toxic or hazardous
substances or wastes, as well as all authorizations, codes, decrees, demands
or demand letters, injunctions, judgments, licenses, notices or notice
letters, orders, permits, plans or regulations issued, entered, promulgated
or approved thereunder.
(b) To the knowledge of the Company, there are, except as disclosed in
the Company SEC Reports, with respect to the Company or any of its
subsidiaries, no past or present violations of Environmental Laws, releases
of any material into the environment, actions, activities, circumstances,
conditions, events, incidents, or contractual obligations which may give rise
to any common law liability or any liability under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA") or
similar state or local laws, which liabilities, either individually or in the
aggregate, would have a Company Material Adverse Effect.
Section 5.23 TAX AND ACCOUNTING MATTERS. Neither the Company nor, to
its best knowledge, any of its affiliates, has through the date hereof, taken
or agreed to take any action, nor are they aware of any circumstances
relating to the Company or its affiliates which currently exist, that would
(i) prevent Parent from accounting for the business combination to be
effected by the Merger as a "pooling of interests" or (ii) prevent the Merger
from constituting a reorganization within the meaning of Section 368(a) of
the Code.
Section 5.24 AUTHORIZED STOCK. The Company has taken all necessary
corporate and other action to authorize and reserve and to permit it to
issue, and, at all times from the date hereof until the obligation to deliver
Company Common Stock upon the exercise of the Option terminates, will have
reserved for issuance, upon exercise of the Option, shares of Company Common
Stock necessary for Parent to exercise in full the Option, and the Company
will take all necessary corporate action to authorize and reserve for
issuance all additional shares of Company Common Stock or other securities
which may be issued pursuant to the Stock Option Agreement upon exercise of
the Option. The shares of Company Common Stock to be issued upon due exercise
of the Option, including all additional shares of Company Common Stock or
other securities which may be issuable pursuant to the Stock Option
Agreement, upon issuance
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pursuant thereto, shall be duly and validly issued, fully paid and
nonassessable, and shall be delivered free and clear of all liens, claims,
charges and encumbrances of any kind or nature whatsoever, including any
preemptive rights of any stockholder of the Company.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
Section 6.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER.
Prior to the Effective Date, unless Parent shall otherwise agree in writing:
(i) the Company shall, and shall cause its subsidiaries to, carry
on their respective businesses in the usual, regular and ordinary course
in substantially the same manner as heretofore conducted, and shall, and
shall cause its subsidiaries to, use their diligent efforts to preserve
intact their present business organizations, keep available the services
of their present officers and employees and preserve their relationships
with customers, suppliers and others having business dealings with them
to the end that their goodwill and ongoing businesses shall be
unimpaired at the Effective Date. The Company shall, and shall cause its
subsidiaries to, (A) maintain insurance coverages and its books,
accounts and records in the usual manner consistent with prior
practices; (B) comply in all material respects with all laws, ordinances
and regulations of Governmental Entities applicable to the Company and
its subsidiaries; (C) maintain and keep its properties and equipment in
good repair, working order and condition, ordinary wear and tear
excepted; and (D) perform in all material respects its obligations under
all contracts and commitments to which it is a party or by which it is
bound, in each case other than where the failure to so maintain, comply
or perform, either individually or in the aggregate, would not result in
a Company Material Adverse Effect;
(ii) except as required by this Merger Agreement, the Company
shall not and shall not propose to (A) sell or pledge or agree to sell
or pledge any capital stock owned by it in any of its subsidiaries; (B)
amend its Restated Certificate of Incorporation or Bylaws; (C) split,
combine or reclassify its outstanding capital stock or issue or
authorize or propose the issuance of any other securities in respect of,
in lieu of or in substitution for shares of capital stock of the
Company, or declare, set aside or pay
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any dividend or other distribution payable in cash, stock or property;
or (D) directly or indirectly redeem, purchase or otherwise acquire or
agree to redeem, purchase or otherwise acquire any shares of Company
capital stock;
(iii) the Company shall not, nor shall it permit any of its
subsidiaries to, (A) except as contemplated by this Merger Agreement,
issue, deliver or sell or agree to issue, deliver or sell any additional
shares of, or rights of any kind to acquire any shares of, its capital
stock of any class, any Indebtedness or any options, rights or warrants
to acquire, or securities convertible into, shares of capital stock
other than issuances of Company Common Stock pursuant to the exercise of
Company Stock Options or the conversion of Company Notes outstanding on
the date hereof (other than as set forth in Schedule 6.1 of the Company
Disclosure Schedule); (B) acquire, lease or dispose of, or agree to
acquire, lease or dispose of, any capital assets or any other assets
other than in the ordinary course of business; (C) incur additional
Indebtedness or encumber or grant a security interest in any asset or
enter into any other material transaction other than in each case in the
ordinary course of business (other than as set forth in Schedule 6.1 of
the Company Disclosure Schedule); (D) acquire or agree to acquire by
merging or consolidating with, or by purchasing a substantial equity
interest in, or by any other manner, any business or any corporation,
partnership, association or other business organization or division
thereof, in each case in this clause (D) which are material,
individually or in the aggregate, to the Company and its subsidiaries
taken as a whole; or (E) enter into any contract, agreement, commitment
or arrangement with respect to any of the foregoing;
(iv) the Company shall not, nor shall it permit any of its
subsidiaries to, except as required to comply with applicable law and
except as provided in Section 7.5 and Section 7.11, (A) adopt, enter
into, terminate or amend any bonus, profit sharing, compensation,
severance, termination, stock option, pension, retirement, deferred
compensation, employment or other Company Plan, agreement, trust, fund
or other arrangement for the benefit or welfare of any current or
former director, officer, employee or independent contractor; (B)
increase in any manner the compensation or fringe benefit of any
director, officer, employee or independent contractor (other than in
the ordinary course of business consistent with past practice but in no
event in excess of 3%); (C) other than as set forth in Schedule 6.1 of
the Company Disclosure Schedule, pay any benefit not provided under any
existing plan or
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arrangement; (D) other than as set forth in Schedule 6.1 of the Company
Disclosure Schedule, grant any awards under any bonus, incentive,
performance or other compensation plan or arrangement or Company Plan
(including, without limitation, the grant of stock options, stock
appreciation rights, stock based or stock related awards, performance
units or restricted stock, or the removal of existing restrictions or
the acceleration of exercisability in any Company Plan or agreements or
awards made thereunder) (other than payments of bonuses in the ordinary
course of business pursuant to the Company's Management-By-Objective
(MBO) bonus plan or arrangement); (E) take any action to fund or in any
other way secure the payment of compensation or benefits under any
employee plan, agreement, contract or arrangement or Company Plan; or
(F) adopt, enter into, amend or terminate any contract, agreement,
commitment or arrangement to do any of the foregoing;
(v) the Company shall not, nor shall it permit any of its
subsidiaries to, make any investments in non-investment grade
securities, PROVIDED, HOWEVER, that the Company will be permitted to
create new wholly owned subsidiaries in the ordinary course of business;
(vi) the Company shall not, nor shall it permit any of its
subsidiaries to, take or cause to be taken any action, whether before or
after the Effective Date, which would disqualify the Merger as a
"pooling of interests" for accounting purposes or as a "reorganization"
within the meaning of Section 368(a) of the Code; and
(vii) the Company shall not, nor shall it permit any of its
subsidiaries to, except as required by law or GAAP, change any of its
significant accounting policies or make or rescind any express or deemed
election relating to taxes, settle or compromise any claim, action,
suit, litigation, proceeding, arbitration, investigation, audit or
controversy relating to taxes, or change any of its methods of reporting
income or deductions for federal income tax purposes from those employed
in the preparation of the federal income tax returns for the last
taxable year.
Section 6.2 CONDUCT OF BUSINESS BY PARENT AND SUB PENDING THE MERGER.
(a) PARENT. Prior to the Effective Date, unless the Company shall otherwise
agree in writing or except as otherwise required by this Merger Agreement:
(i) Parent shall, and shall cause its subsidiaries to, carry on their
respective businesses in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted, and shall, and shall
cause its Significant Subsidiaries to, use
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their diligent efforts to preserve intact their present business
organizations, keep available the services of their present officers and
employees and preserve their relationships with customers, suppliers and
others having business dealings with them to the end that their goodwill and
ongoing businesses shall be unimpaired at the Effective Date, PROVIDED,
HOWEVER, that nothing contained herein shall prevent Parent from creating new
wholly owned subsidiaries in the ordinary course of business as long as the
creation of such subsidiaries (either alone or in the aggregate) will not
have a Parent Material Adverse Effect; and (ii) the Parent shall not, nor
shall it permit any of its subsidiaries to, take or cause to be taken any
action, whether before or after the Effective Date, which would disqualify
the Merger as a "pooling of interests" for accounting purposes or as a
"reorganization" within the meaning of Section 368(a) of the Code.
(b) SUB. During the period from the date of this Merger Agreement to
the Effective Date, Sub shall not engage in any activities of any nature
except as provided in or contemplated by this Merger Agreement.
Section 6.3 NOTICE OF BREACH. Each party shall promptly give written
notice to the other party upon becoming aware of the occurrence or, to its
knowledge, impending or threatened occurrence, of any event which would
cause or constitute a breach of any of its representations, warranties or
covenants contained or referenced in this Merger Agreement and will use its
best efforts to prevent or promptly remedy the same. Any such notification
shall not be deemed an amendment of the Company Disclosure Schedule.
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 ACCESS AND INFORMATION. Subject to the limitations
imposed by third party confidentiality agreements, each of the Company and
Parent and their respective subsidiaries shall afford to the other and to the
other's accountants, counsel and other representatives full access during
normal business hours (and at such other times as the parties may mutually
agree) throughout the period prior to the Effective Date to all of its
properties, books, contracts, commitments, records and personnel and, during
such period, each shall furnish promptly to the other (i) a copy of each
report, schedule and other document filed or received by it pursuant to the
requirements of federal or state securities laws, and (ii) all
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other information concerning its business, properties and personnel as the
other may reasonably request. Each of the Company and Parent shall hold, and
shall cause their respective employees and agents to hold, in confidence
all such information in accordance with the terms of the Confidentiality
Agreement, dated April 29, 1997, between Parent and the Company (the
"CONFIDENTIALITY AGREEMENT").
Section 7.2 REGISTRATION STATEMENT/PROXY STATEMENT. (a) As promptly as
practicable after the execution of this Merger Agreement, the Company and
Parent shall prepare and the Company shall file with the Commission
preliminary proxy materials which shall constitute the preliminary Proxy
Statement and a preliminary prospectus with respect to the Parent Common
Stock to be issued in connection with the Merger. As promptly as practicable
after comments are received from the Commission with respect to the
preliminary proxy materials and after the furnishing by the Company and
Parent of all information required to be contained therein, the Company shall
file with the Commission the definitive Proxy Statement and Parent shall file
with the Commission the Registration Statement and Parent and the Company
shall use all reasonable efforts to cause the Registration Statement to
become effective as soon thereafter as practicable.
(b) Parent and the Company shall make all necessary filings with
respect to the Merger under the Securities Act and the Exchange Act and the
rules and regulations thereunder and under applicable blue sky or similar
securities laws and shall use all reasonable efforts to obtain required
approvals and clearances with respect thereto.
Section 7.3 AFFILIATES; PUBLICATION OF COMBINED FINANCIAL RESULTS.
(a) Prior to the Effective Date the Company shall cause to be delivered to
Parent an opinion (satisfactory to counsel for Parent) of the general counsel
of the Company or such law firm as may be reasonably satisfactory to Parent,
identifying all persons who were, in his or its opinion, at the time of the
Company Meeting convened in accordance with Section 3.5, "affiliates" of
the Company as that term is used in paragraphs (c) and (d) of Rule 145 under
the Securities Act (the "AFFILIATES").
(b) The Company shall use its best efforts to obtain a written
agreement in the form set forth as Exhibit C to this Merger Agreement from
each person who is identified as a possible Affiliate in the opinion
referred to in clause (a) above, providing that such Affiliate will not (i)
offer to sell, sell
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or otherwise dispose of any of the capital stock of Parent issued to such
Affiliate pursuant to the Merger, except in compliance with Rule 145 or
another exemption from the registration requirements of the Securities Act
and (ii) except to the extent and under the conditions permitted therein,
during the period commencing 30 days prior to the Merger and ending at the
time of publication of financial results (including combined sales and net
income) covering at least 30 days of post-merger operations, sell or in any
other way reduce such Affiliate's risk relative to any Parent Common Stock
received in the Merger (within the meaning of the Commission's Financial
Reporting Release No. 1, "CODIFICATION OF FINANCING REPORTING POLICIES,"
Section 201.01 (47 F.R. 21030) (April 15, 1982)). The Company shall deliver
such written agreements to Parent on or prior to the earlier of (i) the
mailing of the Proxy Statement or (ii) the thirtieth day prior to the
Effective Date.
(c) If the Effective Date is less than 30 days prior to the end of
Parent's fiscal quarter, Parent shall use reasonable efforts to prepare and
publicly release as soon as practicable following the end of the first month
ending at least 30 days after the Effective Date, a report filed with the
Commission on Form 8-K or any other public filing, statement or announcement
which includes the combined financial results (including combined sales and
net income) of Parent and the Company for a period of at least 30 days of
combined operations of Parent and the Company following the Effective Date;
PROVIDED that Parent need not prepare and release such results if, in its
good faith judgment, it determines that such release would not be in the best
interests of Parent.
Section 7.4 STOCK EXCHANGE LISTING. Parent shall use its best efforts
to list on the NYSE, upon official notice of issuance, the shares of Parent
Common Stock to be issued pursuant to the Merger.
Section 7.5 EMPLOYMENT ARRANGEMENTS. (a) After the Effective Date,
Parent shall, or shall cause the Surviving Corporation to, honor in
accordance with their terms, all employment, severance, consulting and other
compensation contracts between the Company or any of its subsidiaries and any
current or former director, officer or employee thereof, and all provisions
for vested benefits or other vested amounts earned or accrued through the
Effective Date under any Company Plan, each as of the date hereof except for
changes thereto which are permitted by this Merger Agreement or otherwise
agreed to by the parties thereto.
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(b) For a period of 12 months after the Effective Date, Parent shall
provide, or shall cause the Surviving Corporation to provide, generally to
the officers and employees of the Surviving Corporation and its subsidiaries
employee benefits, including, without limitation, pension benefits, health
and welfare benefits, and severance arrangements, on terms and conditions in
the aggregate that are no less favorable than those provided under the
Company Plans as of the date hereof. Parent shall, or shall cause the
Surviving Corporation to, credit officers and employees of the Company and
its subsidiaries, with their service with the Company and its subsidiaries
for purposes of eligibility to participate and vesting with respect to
employee benefit plans of Parent and the Surviving Corporation. Individual
eligibility for participation in the medical plans of Parent or the Surviving
Corporation shall not be subject to any exclusions for preexisting conditions
other than any such exclusions provided in the medical plans of the Company
or its subsidiaries. Amounts paid before the Effective Date by directors,
officers and employees under medical plans of the Company and its
subsidiaries shall be taken into account after the Effective Date in applying
deductible and out-of-pocket limits applicable under the medical plans of
Parent and the Surviving Corporation to the same extent as if such amounts
had been paid under the medical plans of Parent and the Surviving Corporation.
(c) It is the intent of Parent, after the Effective Date, to permit
employees of the Company and its subsidiaries to participate in the incentive
and compensation plans of Parent on a basis equivalent to similarly situated
employees of Parent.
Section 7.6 INDEMNIFICATION. (a) From and after the Effective Date,
Parent shall indemnify, defend and hold harmless the officers, directors and
employees of the Company (the "INDEMNIFIED PARTIES") against all losses,
expenses, claims, damages or liabilities arising out of the transactions
contemplated by this Merger Agreement to the fullest extent permitted or
required under applicable law. Parent agrees that all rights to indemnification
existing in favor of the current or former directors, officers or employees
of the Company or any of its subsidiaries as provided in the Company's
Restated Certificate of Incorporation or By-laws, as in effect as of the date
hereof, with respect to matters occurring through the Effective Date, shall
survive the Merger and shall continue in full force and effect for a period
of not less than six years from the Effective Date. Parent agrees to maintain
or cause the Surviving Corporation to maintain in effect for not less than
six years after the Effective Date policies of directors'
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and officers' liability insurance equivalent to those maintained by the
Company with respect to matters occurring on or prior to the Effective Date;
PROVIDED, HOWEVER, that the Surviving Corporation shall not be required to
pay an aggregate premium for such insurance in excess of $1.2 million, but in
such case shall purchase as much coverage as possible for such amount.
(b) In the event that any action, suit, proceeding or investigation
relating hereto or to the transactions contem plated by this Merger Agreement
is commenced, whether before or after the Effective Date, the parties hereto
agree to cooperate and use their respective reasonable efforts to vigorously
defend against and respond thereto.
(c) The provisions of the Certificate of Incorporation and By-laws of
the Surviving Corporation pertaining to indemnification of current and former
directors, officers and employees shall not be amended, repealed or otherwise
modified for a period of six years after the Effective Date (or, in the case
of matters which are pending but which have not been resolved prior to the
sixth anniversary of the Effective Date, until such matters are finally
resolved), in any manner that would adversely affect the rights thereunder of
individuals who at any time on or prior to the Effective Date were directors,
officers or employees of the Company in respect of actions or omissions
occurring on or prior to the Effective Date (including, without limitation,
the transactions contemplated by this Merger Agreement).
(d) The provisions of this Section 7.6 are intended for the benefit of,
and shall be enforceable by, the respective Indemnified Parties.
Section 7.7 HSR ACT. The Company and Parent shall use their best
efforts to file as soon as practicable notifications under the HSR Act in
connection with the Merger and the transactions contemplated hereby,
including, but not limited to, the Stock Option Agreement and the
transactions contemplated thereby, and to respond as promptly as practicable
to any inquiries received from the Federal Trade Commission (the "FTC") and
the Antitrust Division of the Department of Justice (the "ANTITRUST
DIVISION") for additional information or documentation and to respond as
promptly as practicable to all inquiries and requests received from any State
Attorney General or other governmental authority in connection with antitrust
matters.
Section 7.8 ADDITIONAL AGREEMENTS. (a) Subject to the terms and
conditions herein provided, each of the parties
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hereto agrees to use all reasonable efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Merger Agreement, including
using all reasonable efforts to obtain all necessary waivers, consents and
approvals, to effect all necessary registrations and filings (including, but
not limited to, filings with all applicable Governmental Entities) and to
lift any injunction or other legal bar to the Merger or the Stock Option
Agreement, subject to the appropriate vote of the shareholders of the
Company. Not withstanding the foregoing, neither Parent nor any of its
subsidiaries shall be required to take any action, and without Parent's prior
written consent neither the Company nor any of its subsidiaries shall agree
to take any action, that would in any way restrict or limit the conduct of
business from and after the Effective Date by Parent, the Company or any
subsidiary of either (including, without limitation, any divestiture of any
business, product line or asset).
(b) In case at any time after the Effective Date any further action is
necessary or desirable to carry out the pur poses of this Merger Agreement,
the proper officers and/or directors of Parent, the Company and the
Surviving Corporation shall take all such necessary action.
(c) Following the Effective Date, Parent shall use its best efforts to
conduct the business, and shall cause the Surviving Corporation to use its
best efforts to conduct its business, except as otherwise contemplated by
this Merger Agreement, in a manner which would not jeopardize the
characterization of the Merger as a reorganization within the meaning of
Section 368(a) of the Code.
Section 7.9 NO SOLICITATION. (a) As used herein, the term "ACQUISITION
PROPOSAL" means any proposed (i) merger, consolidation or similar transaction
involving the Company, (ii) sale, lease or other disposition directly or
indirectly by merger, consolidation, share exchange or otherwise of assets of
the Company or its subsidiaries representing 30% or more of the consolidated
assets of the Company and its subsidiaries in one transaction or a series of
transactions, (iii) issue, sale, or other acquisition or disposition of
(including by way of merger, consolidation, share exchange or any similar
transaction) securities (or options, rights or warrants to purchase, or
securities convertible into, such securities) representing 20% or more of the
voting power of the Company or (iv) transaction in which any person shall or
would acquire beneficial ownership (as such term is defined in Rule 13d-3 under
the Exchange Act), or the right to acquire beneficial ownership, or any "group"
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(as such term is defined under the Exchange Act) shall have been formed which
beneficially owns or would own or has or would have the right to acquire
beneficial ownership of 20% or more of the outstanding Company Common Stock,
other than transactions contemplated by this Merger Agreement or the Stock
Option Agreement.
(b) Neither the Company nor any of its subsidiaries shall, nor shall
the Company authorize or permit its subsidiaries, officers, directors,
employees, representatives, investment bankers, attorneys, accountants or
other agents or affiliates to, take any action to (i) solicit, initiate or
encourage (including by way of furnishing information) the submission of any
Acquisition Proposal or (ii) participate in any discussions or negotiations
with, or furnish any information to, any person in connection with, or take
any other action to facilitate any inquiries or the making of any proposal
that constitutes, or may reasonably be expected to lead to, any Acquisition
Proposal; PROVIDED, HOWEVER, that if, at any time prior to the obtaining of
Company stockholder approval of the Merger, the Board of Directors of the
Company determines in good faith by a majority vote, based on the advice of
outside counsel, that it is necessary to do so to avoid a breach of its
fiduciary duties to stockholders under applicable law, the Company may, in
response to a written Acquisition Proposal which the Board of Directors of
the Company determines in good faith by a majority vote, based on the opinion
of a financial advisor of nationally recognized reputation, to be more
favorable from a financial point of view to the Company's stockholders than
this Merger Agreement, the Merger and the transactions contemplated hereby,
and which proposal was not solicited by the Company or otherwise result from
a breach of this Section 7.9(b), and subject to the Company's compliance with
Section 7.9(d), (A) furnish information with respect to it and its subsidiaries
to any person pursuant to a customary confidentiality agreement containing
terms at least as favorable to the Company as those contained in the
confidentiality agreements in place between the Company and Parent and (B)
participate in discussions or negotiations with respect to such Acquisition
Proposal.
(c) Except as expressly permitted by this Section 7.9, neither the
Board of Directors of the Company, nor any committee thereof, shall (i)
withdraw or modify, or propose publicly to withdraw or modify, in a manner
adverse to Parent, the approval or recommendation by such Board of Directors
or such committee of the adoption and approval of the matters to be
considered at the Company Meeting, (ii) approve or recommend, or propose
publicly to approve or recommend, any Acquisition Proposal, or (iii) cause
the Company to enter into any letter of intent, agreement in principle,
acquisition agreement
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or other similar agreement or understanding (written or otherwise) related to
any Acquisition Proposal (each, an "ACQUISITION AGREEMENT"). Notwithstanding
the foregoing, in the event that prior to the obtaining of Company
stockholder approval of the Merger, there exists a Superior Proposal (as
defined herein), the Board of Directors of the Company may, if it determines
in good faith by a majority vote, based on the advice of outside counsel,
that it is necessary to do so to avoid a breach of its fiduciary duties to
stockholders under applicable law, approve or recommend such Superior
Proposal and terminate this Merger Agreement, PROVIDED (i) the Company shall
have given Parent written notice (a "SUPERIOR PROPOSAL NOTICE") at least five
business days prior to such termination advising Parent that the Board of
Directors of the Company has received a Superior Proposal which the Board of
Directors has authorized and intends to effect, specifying the material terms
and conditions of such Superior Proposal and identifying the person making
such Superior Proposal, (ii) the Company shall otherwise be in compliance
with its obligations under this Merger Agreement and the Stock Option
Agreement and (iii) the Company pays, or causes to be paid, to Parent the
amounts contemplated by Section 9.2(b) prior to terminating this Merger
Agreement. For purposes of this Merger Agreement, a "SUPERIOR PROPOSAL" means
any written proposal made by a third party to acquire, directly or
indirectly, more than 50% of the equity securities of the Company entitled to
vote generally in the election of directors or all or substantially all of
the assets of the Company, and otherwise on terms which the Board of
Directors of the Company determines in its good faith judgment, based on the
opinion of a financial advisor of nationally recognized reputation, to be
more favorable from a financial point of view to the Company's stockholders
than this Merger Agreement, the Merger and the transactions contemplated
hereby and for which financing, to the extent required, is then committed.
(d) In addition to the obligations set forth in paragraphs (b) and (c)
of this Section 7.9, the Company will promptly communicate to Parent in
writing any solicitation received, directly or indirectly, by the Company and
will furnish to Parent a copy of any such solicitation or proposal, if it is
in writing, or a written summary of the terms of such proposal or inquiry if
it is not in writing, including the identity of the person and its affiliates
making the same, that it may receive in respect of any such transaction, or
of any such information requested from it or of any such negotiations or
discussions being sought to be initiated with it. The Company shall promptly
advise Parent of any development relating to such proposal, including the
results of any discussions or negotiations with respect thereto.
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(e) Nothing contained in this Section 7.9 shall prohibit the Company
from taking and disclosing to its stockholders a position contemplated by
Rule 14e-2(a) promulgated under the Exchange Act or from making any
disclosure to its stock holders if, in the good faith judgment of its Board
of Directors, based on the advice of outside counsel, failure so to disclose
would result in a violation of applicable law; PROVIDED, HOWEVER, that
neither the Company nor its Board of Directors nor any committee thereof
shall withdraw or modify, or propose publicly to withdraw or modify, its
position with respect to the matters to be considered at the Company Meeting
or approve or recommend, or propose publicly to approve or recommend, an
Acquisition Proposal, except as provided in Section 7.9(c).
Section 7.10 EMPLOYEE AGREEMENTS. The Company shall use all reasonable
efforts to cause the individuals listed on Annex A hereto (and such additional
persons as Parent and the Company shall agree upon) to execute, at or prior
to the Effective Date, the agreements set forth next to their respective
names on such Annex A.
Section 7.11 COMPANY STOCK PLANS. If the Effective Date occurs
subsequent to December 31, 1997, the Company shall terminate the Company
Employee Stock Purchase Plan ("COMPANY PURCHASE PLAN") by having its Board of
Directors amend the Company Purchase Plan to terminate at the earlier of (i)
the end of the current stock offering period under the Company Purchase Plan
or (ii) immediately prior to the Effective Date. If the Effective Date
occurs on or prior to December 31, 1997, the current stock offering period
shall continue through December 31, 1997, and any options issued under the
Company Purchase Plan which are outstanding and unexercised immediately prior
to the Effective Date shall be converted into options to purchase a number of
shares of Parent Common Stock pursuant to Section 3.1(e).
Section 7.12 INDEPENDENT AUDITORS. The Company shall provide to Parent a
letter from Ernst & Young LLP, the Company's independent auditors, dated a
date within two business days before the date on which the Registration
Statement shall become effective and addressed to Parent, in form and
substance reasonably satisfactory to Parent and customary in scope and
substance for letters delivered by independent public accountants in
connection with registration statements similar to the Registration Statement.
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ARTICLE VIII
CONDITIONS PRECEDENT
Section 8.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligations of each party to effect the Merger shall
be subject to the fulfillment at or prior to the Effective Date of the
following conditions:
(a) This Merger Agreement and the transactions contemplated hereby
shall have been approved and adopted by the requisite vote of the holders of
the Company Common Stock.
(b) The Parent Common Stock issuable in the Merger shall have been
authorized for listing on the NYSE upon official notice of issuance.
(c) The waiting period applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated.
(d) The Registration Statement shall have become effective in
accordance with the provisions of the Securities Act. No stop order
suspending the effectiveness of the Registration Statement shall have been
issued by the Commission and remain in effect.
(e) No temporary restraining order, preliminary or permanent injunction
or other order by any court or other judicial or administrative body of
competent jurisdiction (each, an "INJUNCTION") which prohibits or prevents
the consummation of the Merger shall have been issued and remain in effect
(each party agreeing to use its best efforts to have any such Injunction
lifted), and there shall not be any action taken, or any statute, rule,
regulation or order (whether temporary, preliminary or permanent) enacted,
entered or enforced which makes the consummation of the Merger illegal or
prevents or prohibits the Merger.
(f) The Company shall have received from Ernst & Young LLP, independent
auditors for the Company, a letter addressed to the Company dated within two
days prior to the Effective Date, in substance reasonably satisfactory to
Parent and the Company, to the effect that Ernst & Young LLP concurs with
Company management conclusions that no conditions exist related to the
Company that would preclude Parent from accounting for the Merger as a
pooling of interests and Parent shall have received from KPMG Peat Marwick
LLP, independent auditors for Parent, a letter addressed to Parent dated
within two days
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prior to the Effective Date, in substance reasonably satisfactory to Parent
and the Company, to the effect that KPMG Peat Marwick LLP concurs with Parent
management conclusions that no conditions exist that would preclude Parent
from accounting for the Merger as a pooling of interests.
Section 8.2 CONDITIONS TO OBLIGATION OF THE COMPANY TO EFFECT THE
MERGER. The obligation of the Company to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Date of the additional
following conditions, unless waived by the Company:
(a) Parent and Sub shall have performed in all material respects their
agreements contained in this Merger Agreement required to be performed on or
prior to the Effective Date and the representations and warranties of Parent
and Sub contained in this Merger Agreement shall be true in all material
respects (except for any such representations or warranties which are
qualified as to Parent Material Adverse Effect, which shall be true and
correct in all respects) when made and on and as of the Effective Date as if
made on and as of such date, except for representations and warranties which
are by their express provisions made as of a specific date or dates, which
were or will be true in all material respects (except for any such
representations or warranties which are qualified as to Parent Material
Adverse Effect, which were or will be true and correct in all respects) at
such time or times as stated therein, and the Company shall have received a
certificate of the President or Chief Executive Officer or a Vice President
of Parent to that effect.
(b) The Company shall have received a favorable opinion of ▇▇▇▇▇▇ &
▇▇▇▇▇▇ L.L.P., based upon certain factual representations of the Company,
Parent and Sub reasonably requested by such counsel, dated the Effective
Date, to the effect that the Merger will constitute a "reorganization" for
federal income tax purposes within the meaning of Section 368(a) of the Code.
Section 8.3 CONDITIONS TO OBLIGATIONS OF PARENT AND SUB TO EFFECT THE
MERGER. The obligations of Parent and Sub to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Date of the
additional following conditions, unless waived by Parent:
(a) The Company shall have performed in all material respects its
agreements contained in this Merger Agreement required to be performed on or
prior to the Effective Date and the representations and warranties of the
Company contained in this Merger Agreement shall be true in all material
respects
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(except for any such representations or warranties which are qualified as to
Company Material Adverse Effect, which shall be true and correct in all
respects) when made and on and as of the Effective Date as if made on and as
of such date, except for representations and warranties which are by their
express provisions made as of a specific date or dates which were or will be
true in all material respects (except for any such rep resentations or
warranties which are qualified as to Company Material Adverse Effect, which
were or will be true and correct in all respects) at such date or dates, and
Parent and Sub shall have received a certificate of the President or Chief
Executive Officer or a Vice President of the Company to that effect.
(b) Parent shall have received a favorable opinion of Wachtell, Lipton,
▇▇▇▇▇ & ▇▇▇▇, based upon certain factual representations of the Company,
Parent and Sub reasonably requested by such counsel, to the effect that the
Merger will be treated for federal income tax purposes as a "reorganization"
within the meaning of Section 368(a) of the Code.
(c) The Company shall have obtained all consents, appeals, releases or
authorizations from, and shall have made all filings and registrations to or
with, any person, including but not limited to any Governmental Entity,
necessary to be obtained or made in order to consummate the transactions
contemplated by this Merger Agreement.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
Section 9.1 TERMINATION. This Merger Agreement may be terminated at
any time prior to the Effective Date, whether before or after approval by the
shareholders of the Company:
(a) by mutual consent of the Board of Directors of Parent and the Board
of Directors of the Company;
(b) by either Parent or the Company, if the Merger shall not have been
consummated on or before April 30, 1998; provided that the right to terminate
this Agreement pursuant to this Section 9.1(b) shall not be available to any
party whose failure to perform in any material respect any covenant under
this Merger Agreement has been the cause of or resulted in whole or in part
in the failure of the Merger to be consummated before such date;
-42-
(c) by either Parent or the Company, if there shall be any Order which
is final and nonappealable preventing the consummation of the Merger;
(d) by either Parent or the Company, if this Merger Agreement and the
transactions contemplated hereby shall fail to receive the requisite vote for
approval and adoption by the stockholders of the Company at the Company
Meeting, or by Parent if this Merger Agreement and the transactions
contemplated hereby shall not have received the requisite vote for approval
and adoption by the stockholders of the Company at the Company Meeting prior
to February 28, 1998;
(e) by Parent, if the Board of Directors of the Company withdraws,
modifies in a manner adverse to Parent, or refrains from making its
recommendation concerning the Merger referred to in Section 3.5, or, other
than in connection with the Company's delivery of a Superior Proposal Notice,
discloses its intention to change such recommendation, or the Board of
Directors of the Company shall have recommended to the stockholders of the
Company any Acquisition Proposal or the Company shall have entered into an
Acquisition Agreement, or, other than in connection with the Company's
delivery of a Superior Proposal Notice, the Board of Directors of the Company
shall have resolved to do any of the foregoing; or
(f) by the Company, if, pursuant to Section 7.9(c), (A) the Board of
Directors of the Company has delivered to Parent a Superior Proposal Notice,
(B) the Company has paid the Termination Fee and Expenses (as defined in
Section 9.2), (C) the Company shall otherwise be in compliance with its
obligations under this Merger Agreement and the Stock Option Agreement and
(D) five business days have passed since Parent received the Superior
Proposal Notice.
Section 9.2 EFFECT OF TERMINATION; FEES. (a) In the event of
termination of this Merger Agreement by either Parent or the Company, as
provided above, this Merger Agreement shall forthwith become void and (except
for the willful breach of this Merger Agreement by any party hereto) there
shall be no liability on the part of either the Company, Parent or Sub or
their respective officers or directors; provided that Article V insofar as
such representations and warranties relate to the Stock Option Agreement, the
last sentence of Section 7.1, Section 7.7 (with respect to the Stock Option
Agreement and the transactions contemplated thereby) and Section 7.8 (with
respect to the Stock Option Agreement and the transactions contemplated
thereby) and Sections 9.2, 10.3 and 10.7 shall survive the termination.
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(b) The Company shall pay to Parent (by wire transfer to an account
designated by Parent) a Termination Fee (as defined below) and,
notwithstanding Section 10.3, the out-of-pocket expenses (including, without
limitation, all fees and expenses of counsel, accountants, printing and
mailing, investment bankers, experts and consultants) incurred in connection
with this Merger Agreement and the transactions contemplated hereby
("EXPENSES") of Parent and Sub up to $2 million, if: (i) Parent terminates
this Merger Agreement pursuant to Section 9.1(e); (ii) the Company terminates
this Merger Agreement pursuant to Section 9.1(f); or (iii) (A) the Company or
Parent terminates this Agreement pursuant to Section 9.1(d), and (B) within
twelve months after such termination (1) the Company enters into an
Acquisition Agreement or (2) any Acquisition Proposal is consummated with
respect to the Company.
(c) The Termination Fee shall be equal to $25 million, less the
Aggregate Spread (as defined in the Stock Option Agreement) (if greater than
zero) on the date of issuance of shares of Company Common Stock theretofore
issued to Parent pursuant to the Stock Option Agreement; provided, however,
that the Termination Fee shall not be reduced by the Aggregate Spread if
Parent has theretofore exercised its right under Section 7(a) of the Stock
Option Agreement to put all of the Company Shares (as defined in the Stock
Option Agreement) to the Company in exchange for a payment equal only to the
aggregate Exercise Price (as defined in the Stock Option Agreement). The
Termination Fee shall be paid as promptly as practicable and in no event
later than (A) in the event of termination by the Company as described in
clause (ii) of Section 9.2(b), immediately prior to such termination (and no
such termination shall be effective until such payment is made); (B) in the
event of termination by Parent as described in clause (i) of Section 9.2(b),
two business days after such termination; or (C) in the event of the
circumstances described in clause (iii) of Section 9.2(b), immediately prior
to the earlier of the entry into an Acquisition Agreement or the consummation
of any Acquisition Proposal. In the event that Expenses are payable pursuant
to this Section 9.2, such Expenses shall be reimbursed within two business
days following receipt by the Company from Parent of a statement of the
amount thereof.
Section 9.3 AMENDMENT. This Merger Agreement may be amended by the
parties hereto, by or pursuant to action taken by their respective Boards of
Directors, at any time before or after approval hereof by the shareholders of
the Company, but, after such approval, no amendment shall be made which
changes the ratio at which Company Common Stock is converted into Parent
Common Stock as provided in Section 3.1 or which in any way materially
adversely affects the rights of such stockholders,
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without the further approval of such stockholders. This Merger Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties hereto.
Section 9.4 WAIVER. At any time prior to the Effective Date, the parties
hereto, by or pursuant to action taken by their respective Boards of
Directors, may (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in
any documents delivered pursuant hereto, and (iii) waive compliance with any
of the agreements or conditions contained herein; PROVIDED, HOWEVER, that no
such waiver shall materially adversely affect the rights of stockholders of
the Company and Parent. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid if set forth in an instrument in
writing signed on behalf of such party.
ARTICLE X
GENERAL PROVISIONS
Section 10.1 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. No representations, warranties or agreements in this Merger
Agreement shall survive the Merger, except for the agreements contained in
Sections 3.1, 3.2, 3.3, 3.4 and 3.6 and the agreements referred to in
Sections 7.3(b), 7.3(c), 7.5, 7.6, 7.8, 10.1, 10.3 and 10.7.
Section 10.2 NOTICES. All notices or other communications under this
Merger Agreement shall be in writing and shall be given (and shall be deemed
to have been duly given upon receipt) by delivery in person, by cable,
telegram, telex, telecopy or other standard form of telecommunications, or by
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
If to the Company:
Cyrix Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, III
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Parent or Sub:
National Semiconductor Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇ III, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any party may have furnished to the other parties
in writing in accordance with this Section 10.2.
Section 10.3 EXPENSES. Except as provided in Section 9.2(b) and (c),
all costs and expenses incurred in connection with this Merger Agreement and
the transactions contemplated hereby (regardless of whether the Merger is
consummated) shall be paid by the party incurring such expenses, except that
the Parent and Company agree to each pay 50% of all printing expenses
incurred by the parties hereto.
Section 10.4 PUBLICITY. So long as this Merger Agreement is in effect,
Parent, Sub and the Company agree to consult with each other in issuing any
press release or otherwise making any public statement with respect to the
transactions contemplated by this Merger Agreement, and none of them shall
issue any press release or make any public statement prior to such
consultation, except as may be required by law or by obligations pursuant to
any listing agreement with any national securities exchange. The
commencement of litigation relating to this Merger Agreement or the
transactions contemplated hereby or any proceedings in connection therewith
shall not be deemed a violation of this Section 10.4.
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Section 10.5 SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of
this Merger 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
Merger Agreement and to enforce specifically the terms and provisions hereof
in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
Section 10.6 INTERPRETATION. When a reference is made in this Merger
Agreement to subsidiaries of Parent or the Company, the word "subsidiaries"
means corporations more than 50% of whose outstanding voting securities are
directly or indirectly owned by Parent or the Company, as the case may be.
The headings contained in this Merger Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of
this Merger Agreement.
Section 10.7 MISCELLANEOUS. This Merger Agreement and the Stock Option
Agreement (including the documents and instruments referred to herein and
therein) (a) constitute the entire agreement and supersede all other prior
agreements and understandings, both written and oral, among the parties, or
any of them, with respect to the subject matter hereof (other than as
provided in the Confidentiality Agreement, as the same may be amended,
PROVIDED, that the provisions set forth in the ninth paragraph of the
Confidentiality Agreement shall have no further force and effect); (b) except
as provided in Section 7.6 of this Merger Agreement, are not intended to
confer upon any other person any rights or remedies hereunder; (c) shall not
be as signed by operation of law or otherwise, except that Sub shall have the
right to assign to Parent or any direct wholly owned subsidiary of Parent any
and all rights and obligations of Sub under this Merger Agreement; and (d)
shall be governed in all respects, including validity, interpretation and
effect, by the laws of the State of Delaware (without giving effect to the
provisions thereof relating to conflicts of law). This Merger Agreement may
be executed in two or more counterparts which together shall constitute a
single agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Merger Agreement
to be signed by their respective officers thereunder duly authorized all as
of the date first written above.
NATIONAL SEMICONDUCTOR CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman, President, CEO
NOVA ACQUISITION CORP.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: CFO/VP
CYRIX CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ III
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ III
Title: Sr. V.P.
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