AGREEMENT AND PLAN OF MERGER
AMONG
COMMUNICATION CABLE, INC.,
PENTAIR ACQUISITION CORPORATION
AND
PENTAIR, INC.
AS OF JANUARY 18, 1996
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated
as of January 20, 1996 (the
"Agreement"), by and among Communication Cable,
Inc., a North Carolina corporation ("CCI"), Pentair
Acquisition Corporation, a North Carolina corporation
("Pentair Subsidiary"), which two corporations are
being merged as hereinafter provided and shall be
referred to as the "Constituent Corporations", and
Pentair, Inc., a Minnesota corporation ("Pentair").
As of January 16, 1996, the authorized capital stock of
CCI consisted of 10,000,000 shares of
Common Stock, $1.00 par value per share ("CCI
Common Stock"), of which 2,641,033 shares are
issued and outstanding as of the date hereof and of which
239,469 are reserved for issuance under various
options to purchase shares of CCI Common Stock;
The authorized capital stock of Pentair Subsidiary
consists of 1,000 shares of common stock, par
value $.01 per share, all of which shares are issued and
outstanding and are owned by Pentair;
The respective Boards of Directors of CCI, Pentair and
Pentair Subsidiary deem the merger provided
for herein (the "Merger") desirable and in the best
interests of their respective shareholders.
The respective Boards of Directors of CCI, Pentair and
Pentair Subsidiary have duly adopted
resolutions approving the Agreement, and the Board of
Directors of CCI has directed that the Agreement
be submitted for approval by CCI's shareholders.
In consideration of the premises and the respective
representations, warranties, covenants and
agreements set forth herein, the parties hereto agree as
follows:
ARTICLE I
THE MERGER
1.1 The Merger. In accordance with the provisions
of this Agreement and the North Carolina
Business Corporation Act ("NCBCA"), at the Effective
Time (as herein defined), Pentair Subsidiary shall
be merged with and into CCI and the separate
existence of Pentair Subsidiary shall thereupon cease,
and the name of CCI, as the surviving corporation in the Merger
(the "Surviving Corporation"), shall be
"Communication Cable, Inc."
1.2 Effective Time. The Merger shall become
effective when properly executed Articles of
Merger in the form attached as Exhibit A hereto, are
duly filed with the Secretary of State of North Carolina,
which filing shall be made as promptly as practicable
after the closing contemplated by this Agreement in
accordance with Article VI hereof. As used herein, the
term "Effective Time" shall mean the date and time
at which such Articles are so filed or such later time as
is specified in the Articles of Merger.
1.3 Effect of the Merger. At the Effective Time, title
to all property owned by the Constituent
Corporations shall be vested in the Surviving
Corporation without reversion or impairment. The
Surviving Corporation shall have all liabilities of the Constituent
Corporations. The shares of CCI Common Stock
shall be converted into cash in the manner and on the
basis described below and the former holders of such
shares shall be entitled only to the rights provided in this
Agreement or under the NCBCA.
1.4 Articles of Incorporation. The Articles of
Incorporation of Pentair Subsidiary in effect at
the time of the Merger shall be the Articles of
Incorporation of the Surviving Corporation. Such
Articles of Incorporation, separate and apart from this
Agreement, shall be, and may be separately certified
as, the Articles of Incorporation of the Surviving Corporation.
1.5 Bylaws. The Bylaws of Pentair Subsidiary in
effect at the time of the Merger shall be the
Bylaws of the Surviving Corporation until altered,
amended or repealed.
1.6 Directors and Officers. The directors and
officers of the Surviving Corporation at the
Effective Time shall be the following individuals:
President and Chief Executive Officer, Director
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President - Finance and Treasurer, Director
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Secretary, Director
▇▇▇ ▇. ▇▇▇▇
who shall serve, in each case, until their successors
shall have been elected and shall qualify. If at the
Effective Time a vacancy shall exist on the Board of
Directors or in any of the offices of the Surviving
Corporation, such vacancy may thereafter be filled in
the manner provided by the Bylaws of the Surviving
Corporation.
1.7 Conversion of Shares. The manner and basis
of converting and exchanging the shares of
CCI Common Stock and Pentair Subsidiary common
stock, and the manner and basis of making
distributions, if any, to shareholders of CCI and Pentair
Subsidiary, shall be as follows:
(a) Each share of CCI Common Stock which is
issued and outstanding immediately prior to the
Effective Time, other than Dissenting CCI Shares
(as defined below), shall by virtue of the Merger
and without any action on the part of the holder
thereof, at and after the Effective Time, be converted
into the right to receive $13.50 in cash (subject to
appropriate adjustment for any stock split, reverse
stock split, cash dividend, stock dividend or other
similar distribution or reclassification with respect
to the outstanding shares of CCI Common Stock
from the date hereof to the Effective Time) (the
"Merger Consideration").
(b) Each share of CCI Common Stock, if any,
which is issued and held in the treasury of CCI,
shall, by virtue of the Merger and without any action
on the part of Pentair Subsidiary or of CCI, at
the Effective Time, be retired and canceled, and no
cash or other consideration shall be issued with
respect thereto.
(c) All shares of common stock of Pentair Subsidiary
issued and outstanding at the Effective
Time shall be converted into and exchanged for an
equal number of shares of common stock of the
Surviving Corporation so that the Surviving
Corporation shall become a wholly-owned subsidiary
of Pentair. Pentair as sole holder of the shares of
Pentair Subsidiary common stock outstanding
immediately before the Effective Time shall, as
promptly as possible after the Effective Time,
surrender the certificate representing such shares of
Pentair Subsidiary common stock to the
Surviving Corporation in exchange for a certificate
representing an equal number of shares of
common stock of the Surviving Corporation, which
shall constitute all the outstanding shares of
capital stock of the Surviving Corporation.
1.8 Surrender of Shares. As promptly as
practicable after the Effective Time, each holder of
shares of CCI Common Stock shall, upon presentation
and surrender of the certificate or certificates therefor
to the Paying Agent (as defined below) for cancellation
in accordance with the transmittal materials
described below, be entitled to receive in exchange
therefor a check or checks payable to such person
representing payment of cash into which such holder's
shares of CCI Common Stock have been converted
at the Effective Time. Each certificate which
represented issued and outstanding shares of CCI
Common Stock immediately prior to the Effective Time shall be
deemed canceled at the Effective Time and shall
represent only the right to receive cash for each share
represented by such certificate. In no event shall the
holder of any such surrendered certificates be entitled
to receive interest on any of the funds to be received
in the Merger.
1.9 Designation of Paying Agent; Investment of
Funds. Pentair and Pentair Subsidiary shall
make available to First Citizens Bank to act as paying
agent (the "Paying Agent") at or prior to the Effective
Time an amount in cash equal to the product of the
Merger Consideration times the number of shares of
CCI Common Stock outstanding immediately prior to the
Effective Time, which shall not include (I) the number
of shares of CCI Common Stock held in CCI's treasury,
(ii) the number of Dissenting CCI Shares whose
holders have complied with the provisions of Article 13
of the NCBCA at or prior to the Effective Time and
(iii) any shares owned by Pentair, Pentair Subsidiary or
any other subsidiary or affiliate of Pentair. The cash
deposited with the Paying Agent shall be invested by
the Paying Agent as directed by Pentair.
1.10 Transmittal Materials. As promptly as
practicable following the Effective Time, Pentair
shall send or cause to be sent to each former holder of
record of shares of CCI Common Stock transmittal
materials for use in surrendering their certificate or
certificates in exchange for cash. The letter of
transmittal will contain instructions with respect to the
surrender of such certificates. Pentair shall instruct
record date holders of CCI Common Stock who hold
such shares for the account of others to provide the
respective beneficial holders of such shares instructions
with respect to the surrender of their shares.
1.11 Dissenting CCI Shares. Each outstanding
share of CCI Common Stock for which written
notice of intent to demand payment therefor is delivered
in accordance with Article 13 of the NCBCA and
is not voted in favor of the Merger shall not be
converted into or represent a right to receive cash
hereunder, unless and until the holder thereof shall have failed to
perfect his demand for payment under Article 13 of
the NCBCA, in which event that holder's shares shall
be converted into a right to receive cash in the same
manner and subject to the same conditions as provided
for other outstanding shares of CCI Common Stock
in this Article I. All such shares of CCI Common Stock
for which such a written notice of intent to demand
payment is so delivered and which are not voted in
favor of the Merger, except for such shares of CCI
Common Stock for which a demand for payment is not
perfected in accordance with the NCBCA, are herein
called "Dissenting CCI Shares." CCI shall give Pentair
and Pentair Subsidiary prompt notice upon receipt
by CCI of any such written notice of intent to demand
payment for shares of CCI Common Stock. CCI
agrees that prior to the Effective Time it will not, except
with the prior written consent of Pentair, voluntarily
make any payment with respect to, or settle or offer to
settle, any such demand for payment. Each holder
of Dissenting CCI Shares who becomes entitled,
pursuant to Article 13 of the NCBCA, to receive
payment for the fair value of his shares shall receive payment
therefor from CCI as the Surviving Corporation (but
only after the amount thereof shall have been agreed
upon or finally determined pursuant to such
provisions), and such shares shall be retired and
canceled.
1.12 Termination of Paying Agent's Duties.
Promptly following the date which is six months
after the Effective Time, the Paying Agent shall deliver
to CCI all cash and other documents in its
possession relating to the transactions described in this
Agreement, and the Paying Agent's duties shall
terminate. Thereafter, each holder of a certificate
formerly representing shares of CCI Common Stock
who has not previously surrendered such certificate may
surrender such certificate to the Surviving Corporation
and (subject to applicable abandoned property,
escheat and similar laws) receive in exchange therefore
the Merger Consideration.
1.13 Closing of CCI's Transfer Books. At the
Effective Time, the stock transfer records of CCI
shall be closed and no transfer of shares of CCI
Common Stock shall thereafter be made.
1.14 Stock Options. As of the Effective Time, each
stock option listed in Section 1.14 of the CCI
Schedule (as defined below) which is outstanding on
the day before the Effective Time shall be converted
into the right to receive cash equal to the difference
between (I) the product of (A) the number of shares of
CCI Common Stock into which such option would then
be exercisable in accordance with its terms and (B)
the Merger Consideration and (ii) the option exercise
price, subject to any required withholding of any
amount for purposes of federal, state, local or foreign
taxes. CCI shall thereupon immediately pay to the
holder of such option such cash amount. CCI shall
take all appropriate actions to obtain such consents as
may be necessary for the transactions contemplated by
this Article 1.14.
1.15 Grant of Stock Option. Upon execution hereof,
CCI shall execute and deliver to Pentair
the Stock Option Agreement attached hereto as Exhibit
B, pursuant to which CCI is granting to Pentair an
option to purchase from the Company up to 300,000
authorized but unissued shares of its common stock
at a price of $13.50 per share.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF
THE PARTIES
2.1 REPRESENTATIONS AND WARRANTIES
OF CCI. CCI represents and warrants to
Pentair and Pentair Subsidiary as follows:
(a) CCI Schedule. CCI has delivered in connection
with this Agreement and Plan of Merger
a schedule of information supplementing the
disclosures contained in this Agreement and has
included certain other information in its SEC Reports
(as hereinafter defined) (collectively the "CCI
Schedule"), which shall be made a part of and
incorporated into this Agreement as if fully set forth
herein.
(b) Organization and Standing of CCI. CCI is a
corporation duly organized and validly
existing under the laws of the State of North
Carolina and has the corporate power to own or lease
its properties and to carry on its business as now
being conducted. CCI is duly qualified or
otherwise authorized to transact business as a
foreign corporation and is in good standing in every
jurisdiction in which such qualification or
authorization is required by law carry on its business as
now being conducted.
(c) CCI Subsidiaries. CCI conducts its business
directly and not through any subsidiary,
association, joint venture, partnership or other
business entity.
(d) Authorized Stock. As of January 16, 1996, the
authorized capital stock of CCI consisted
of 10,000,000 shares of Common Stock, par value
$1.00 per share, of which 2,641,033 shares are
issued and outstanding as of the date hereof. All of
the issued and outstanding shares of CCI
Common Stock have been validly issued and are
fully paid and non-assessable (subject to statutory
obligations of holders, if any) and free of preemptive
rights. As of the date hereof:
(I) 134,780 shares of CCI Common Stock
were reserved for issuance upon exercise of
outstanding CCI stock options granted pursuant
to the Communication Cable, Inc. Employee
Stock Option Plan,
(ii) 79,969 shares of CCI Common Stock
were reserved for issuance upon exercise of
outstanding CCI stock options granted pursuant
to the Communication Cable, Inc. Director
Stock Option Plan and
(iii) 24,720 shares of CCI Common Stock were
reserved for issuance upon exercise of
outstanding stock options granted under the
Communication Cable, Inc. 1995 Outside
Directors Stock Option Plan.
Except for the options and shares specified above
and as reflected in Section 2.1(d) of the CCI
Schedule, there is no contract, understanding,
restriction or agreement, including any voting trust
or other agreement or understanding with respect to
the voting of any of the capital stock of CCI,
or any convertible, exchangeable or exercisable
security, option, warrant, call, or commitment on
the part of CCI of any character relating to issued or
unissued shares of the capital stock of CCI. All
transfers of ownership of shares of CCI Common
Stock have been appropriately recorded on the
stock transfer books of CCI.
(e) Authorization. The Board of Directors of CCI
has adopted resolutions approving the
Agreement and the transactions contemplated
hereby and has authorized the execution and delivery
of the Agreement and has adopted resolutions
approving this Agreement, recommending to the
shareholders of CCI approve this Agreement and
the Merger and submitting this Agreement to a vote
of the holders of shares of CCI Common Stock
taken at a meeting called for the purpose of
considering and acting upon this Agreement. CCI
has full power and authority to enter into this
Agreement and, upon appropriate consent of its
shareholders in accordance with the NCBCA,
subject to obtaining all required regulatory
approvals, to consummate the transactions
contemplated
hereby. This Agreement has been duly executed
and delivered by CCI and constitutes the valid and
legally binding obligation of CCI, enforceable against
it in accordance with its terms, subject to
bankruptcy, receivership, insolvency, reorganization,
moratorium or similar laws affecting or
relating to creditors rights generally and subject to
general principles of equity.
(f) Articles of Incorporation and Bylaws. CCI has
delivered to Pentair true and complete
copies of its Articles of Incorporation and Bylaws as
in effect as of the date hereof. All actions of
the shareholders and of the Board of Directors of
CCI to the date hereof have been properly and
completely recorded in the books and records of
CCI.
(g) Consents and Approvals. Except for the
consents and approvals listed on the Schedule
2.1(g) of the CCI Schedule, no filing with, and no
permit, authorization, consent or approval of, any
public body or authority is necessary for the
consummation by CCI of the transactions
contemplated
by this Agreement.
(h) Defaults and Conflicts. CCI is not currently nor
immediately prior to the Effective Time
will be in default under its Articles of Incorporation or
Bylaws, or in default under any indenture or
under any material agreement or other material
instrument to which it is a party or by which it or any
of its properties is bound or to which it is subject.
Subject to the receipt of all consents and approvals
contemplated by this Agreement, neither the
execution and delivery of this Agreement, the
consummation of the transactions contemplated
hereby or the fulfillment of and compliance with
the terms and provisions hereof, will (I) violate any
judicial, administrative or arbitral order, writ,
award, judgment, injunction or decree involving CCI,
(ii) conflict with the terms, conditions or
provisions of the Articles of Incorporation or Bylaws
of CCI, (iii) conflict with, result in a breach
of, constitute a default under or accelerate or permit
the acceleration of the performance required by,
any indenture or any material agreement or other
material instrument to which CCI is a party or by
which CCI is bound, (iv) result in the creation of any
lien, charge or encumbrance upon any of the
assets of CCI under any such agreement or
instrument, or (v) terminate or give any party thereto the
right to terminate any such indenture, agreement or
instrument. Except as disclosed in Section 2.1(h)
of the CCI Schedule, no consent of any third party
to any indenture or any material agreement or
other material instrument to which CCI is a party is
required in connection with the Merger.
(I) SEC Reports; Financial Statements. CCI has
filed all required forms, reports, registration
statements and documents with the Securities and
Exchange Commission (the "SEC"), since
December 31, 1991 (collectively, the "SEC
Reports"), each of which, as of its respective date,
complied in all material respects with all applicable
requirements of the Securities Act of 1933, as
amended (the "Securities Act") and the Securities
Exchange Act of 1934, as amended (the
"Exchange Act"). As of their respective dates, none
of the SEC Reports, including, without
limitation, any financial statements or schedules
included therein, contained any untrue statement
of a material fact or omitted to state a material fact
required to be stated therein or necessary in order
to make the statements therein, in light of the
circumstances under which they were made, not
misleading.
None of the information to be included in the proxy
statement to be mailed to the shareholders of
CCI in connection with the Merger or in any
amendments thereof or supplements thereto (the
"Proxy
Statement") will, at the time of (I) the first mailing
thereof and (ii) the meeting of shareholders to be
held in connection with the Merger, contain any
untrue statement of a material fact or omit to state
any material fact required to be stated therein or
necessary in order to make the statements therein,
in light of the circumstances under which they were
made, not misleading.
The audited consolidated financial statements of
CCI included in its Annual Report on Form 10-K
for the years ended October 31, 1992, 1993 and
1994, and the unaudited consolidated interim
financial statements included in its Quarterly Report
on Form 10-Q for its quarter ended July 31,
1995 (and the audited consolidated financial
statements of CCI included in its Annual Report on
Form 10-K for the years ended October 31, 1995,
when filed, will) fairly present in conformity with
generally accepted accounting principles applied on
a consistent basis (except as may be indicated
therein or in the notes thereto) the financial position
of CCI as of the dates thereof and their
consolidated statements of operations,
shareholders' equity, and cash flows for the periods
then
ended (in the case of any unaudited interim financial
statements, subject to (I) normal year-end
adjustments and (ii) standard limitations on the
application of generally accepted accounting
principles).
Except as and to the extent reflected in the interim
statement of financial position of CCI as of July
31, 1995, and notes thereto (the "CCI July 31, 1995
Balance Sheet") or in Section 2.1(I) of the CCI
Schedule, CCI has not had as of July 31, 1995, any
liability or obligation (absolute, contingent or
otherwise) except for contractual liabilities arising in
the ordinary course which are not required to
be reflected in a balance sheet prepared in
accordance with generally accepted accounting
principles.
(j) Changes Since July 31, 1995. Except as
disclosed in Section 2.1(j) of the CCI Schedule,
since July 31, 1995 there has been no material
adverse change in the assets, properties, business,
financial condition or results of operations of CCI;
and CCI has not, since July 31, 1995 (I) made
any change in its authorized capital stock, (ii) issued
any stock options, warrants or other rights
calling for the issue, transfer, sale or delivery of its
capital stock or other securities, (iii) paid any
stock dividend or made any reclassification in
respect of its outstanding shares of capital stock, (iv)
issued, transferred, sold or delivered any shares of
its capital stock (or securities convertible into or
exchangeable, with or without additional
consideration, for such capital stock), (v) purchased or
otherwise acquired for a consideration any
outstanding shares of its capital stock, (vi) disposed of
a material portion of CCI's assets, properties or
business other than in the ordinary course of
business, (vii) authorized or made any distribution to
CCI's stockholders of any assets of CCI by way
of cash dividends or otherwise; or (viii) amended its
Articles of Incorporation or Bylaws. Except
as and to the extent disclosed in Section 2.1(j) of the
CCI Schedule, CCI has not incurred any
liability or obligation (absolute, contingent or
otherwise) since July 31, 1995, other than in the
ordinary course of business. No material adverse
change in inventory balances (defined for this
purpose as a reduction in excess of $300,000.00 in
the stated amount of such inventories) shall exist
between the audited fiscal year end financial
statements when issued and the draft unaudited fiscal
year end financial statements attached to Section
2.1(j) of the CCI Schedule.
(k) Properties.
(I) Real Estate and Mortgages. Section 2.1(k)(I)
of the CCI Schedule sets forth a list and
summary description of (A) all real property
owned by CCI and all buildings and other
structures located on such real property, (B) all
leases, subleases or other agreements under
which CCI is the lessor or lessee of any real
property, (C) all unexpired options held by CCI
or contractual obligations on its part to purchase
or acquire any interest in real property, (D)
all unexpired options granted by CCI or
contractual obligations on its part to sell or dispose
of any interest in real property, and (E) all
mortgages held by CCI (other than as investment
securities), identifying all such mortgages, if any,
for which deficiency notices have been
issued or that are otherwise not current. Except
as disclosed in Section 2.1(k)(I) of the CCI
Schedule, as of the date hereof such leases,
subleases and other agreements are in full force
and effect and CCI has not received any notice of
any material default thereunder. Each of
the options disclosed in Section 2(k)(I) of the CCI
Schedule is in full force and effect.
(ii) Title to Property. Except as disclosed in
Section 2.1(k)(ii) of the CCI Schedule, CCI
has good and marketable title to all real
properties reflected in Section 2.1(k)(I) (the "Real
Property") and good and marketable title to all
other assets and properties shown as owned
by it on the CCI July 31, 1995 Balance Sheet or
acquired since that date (except properties
disposed of in the ordinary course of business
subsequent to said date), in each case free of
all mortgages, liens, charges and encumbrances
of any nature whatsoever, other than (A)
liens for Taxes not yet due and payable and (B)
such minor liens, charges and encumbrances
as, in the aggregate, do not and would not if
asserted have a material adverse effect on the
assets, properties, business, financial condition
or results of operations of CCI. There does
not exist (a) any claim of adverse possession or
prescriptive rights involving any of the Real
Property, (b) any structure located on any Real
Property which encroaches on or over the
boundaries of neighboring or adjacent properties
in any material respect or(c) any structure
of any other party which encroaches on or over
the boundaries of any of such Real Property
in any material respect. Except as set forth in the
CCI Schedule, none of the Real Property
is located in a flood plain, flood hazard area,
wetland or lakeshore erosion area within the
meaning of any Law, regulation or ordinance.
No public improvements have been
commenced which to CCI's best knowledge
none are planned which, in either case, may
result in special assessments against or
otherwise materially adversely affect any Real
Property. No portion of any of the Real Property
has been used as a landfill or for storage
of Waste by CCI. CCI has no notice or
knowledge of any (1) planned or proposed increase
in assessed valuations of any Real Property, (2)
Order requiring repair, alteration, or
correction of any existing condition affecting any
Real Property or the systems or
improvements thereon, (3) condition or defect
which could give rise to an order of the sort
referred to in "(2)" above, (4) aboveground or
underground storage tanks currently existing
or previously removed from the Real Property, (5)
▇▇▇▇▇ (except water ▇▇▇▇▇) located on the
Real Property, or (6) structural, mechanical, or
other defects of material significance
affecting any Real Property or the systems or
improvements thereon (including, but not
limited to, inadequacy for normal use of
mechanical systems or disposal or water systems
at or serving the Real Property).
(iii) Condition. All property and assets owned
or utilized by CCI which are material to
its operations are in good operating condition
and repair, free from any defects (except such
minor defects as do not interfere with the use
thereof in the conduct of the normal operations
of CCI) and have been maintained consistent
with prudent industry practice. No other assets
or property are needed to permit CCI to carry on
its business as conducted during the
preceding 12 months. All buildings, plants and
other structures owned or otherwise utilized
by CCI are suitable and adequate for the
purposes for which it is presently being used and
as it is proposed to be used.
(l) Compliance With Laws and Orders.
(I) Compliance. Except as set forth in the CCI
Schedule, to the knowledge of CCI, CCI
is in compliance with all applicable statutes, laws,
ordinances, rules or regulations
(collectively, "Laws") and all orders, writs,
injunctions, judgments, plans or decrees
(collectively, "Orders") of any court, arbitrator,
department, commission, board, bureau,
agency, authority, instrumentality or other body,
whether federal, state, municipal, foreign
or other (collectively, "Government Entities")
including, without limitation, those applicable
to discrimination in employment, public health,
occupational safety and health, trade
practices, competition and pricing, product
warranties, zoning, building and sanitation,
employment, retirement and labor relations,
product advertising and the Environmental Laws
as hereinafter defined, except where
noncompliance would not have a material adverse
effect
on CCI or its business operations. Except as set
forth in the CCI Schedule, CCI has not
received notice of any violation or alleged
violation of, and is subject to no liability for past
or continuing violation of, any Laws or Orders.
(ii) Licenses and Permits. CCI has all material
licenses, permits, approvals,
authorizations and consents of all Government
Entities and all certification organizations
required for the conduct of its business (as
presently conducted and as proposed to be
conducted) and operation of its facilities (other
than licenses, permits, registrations,
approvals, authorizations and consents which if
not obtained would not have a material
adverse effect on CCI or its business operations).
All such licenses, permits, approvals,
authorizations and consents are described in the
CCI Schedule, are in full force and effect,
are not subject to any pending or, to the best of
CCI's knowledge, threatened revocation or
modification, and will not be affected or made
subject to loss, limitation or any obligation
to reapply as a result of the transactions
contemplated hereby. Except as set forth in the CCI
Schedule, to the knowledge of CCI, CCI
(including its operations, properties and assets) is
and has been in compliance with all such permits
and licenses, approvals, authorizations and
consents, except to the extent that
noncompliance would not have a material adverse
effect
on CCI or its business operations.
(iii) Environmental Matters. For purposes of
this Agreement, applicable national, state,
regional, county and local (whether foreign or
domestic) Laws relating to pollution or
protection of the environment, including, without
limitation, Laws relating to emissions,
discharges, generation, storage, releases or
threatened releases of pollutants, contaminants,
chemicals or industrial, toxic, hazardous or
petroleum or petroleum-based substances or
wastes ("Waste") into the environment (including,
without limitation, ambient air, surface
water, ground water, land surface or subsurface
strata) or otherwise relating to the
manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling
of Waste including, without limitation, the Clean
Water Act, the Clean Air Act, the Resource
Conservation and Recovery Act, the Toxic
Substances Control Act and the Comprehensive
Environmental Response Compensation Liability
Act ("CERCLA"), as amended, are herein
collectively referred to as the "Environmental
Laws." Without limiting the generality of the
foregoing provisions of this Section 2.1(l), except
as set forth on the CCI Schedule:
(1) CCI is in full compliance with all
Environmental Laws or any Order, notice
or demand letter issued, entered, promulgated or
approved thereunder, except to the extent
that noncompliance would not have a material
adverse effect on CCI's business operations.
(2) There is no litigation nor any demand,
claim, hearing or notice of violation
pending or threatened against CCI relating in any
way to the Environmental Laws or any
Order issued, entered, promulgated or approved
thereunder.
(3) There are no events, conditions,
circumstances, activities, practices, incidents,
actions, omissions or plans which may
(A) interfere with or prevent compliance or
continued compliance with the
Environmental Laws or with any Order issued,
entered, promulgated or approved
thereunder, or
(B) give rise to any liability, including,
without limitation, liability under
CERCLA or similar state or local Laws, or
otherwise form the basis of any litigation,
hearing, notice of violation, study or
investigation, based on or related to the
manufacture, processing, distribution, use,
treatment, storage, disposal, transport or
handling, or the emission, discharge, release
or threatened release into the
environment, of any Waste,
except to the extent that noncompliance would
not have a material adverse effect on the CCI
or its business operations.
(4) CCI has made available to Pentair copies
of all environmental assessments
or studies within its possession related to the
Real Property audits, now or previously owned,
leased or operated by CCI.
(m) Proprietary Rights. Section 2.1(m) of the CCI
Schedule discloses all the trademarks, trade
names, service marks, patents and software (and all
registrations, applications, agreements and
arrangements with respect thereto) (collectively the
"Proprietary Rights") used in the business of
CCI. Except as otherwise disclosed in such
Schedule, CCI owns or is duly authorized to use all of
such Proprietary Rights. Such Proprietary Rights as
used by CCI in its business do not violate or
infringe upon the proprietary rights of any third party,
and there is no claim, action, proceeding or
investigation pending or, to the best of CCI's
knowledge, threatened against CCI with respect to any
Proprietary Rights.
(n) Receivables. The receivables shown on the
July 31, 1995 Balance Sheet of CCI, or those
which have been acquired since that date, have
been collected or are collectible in the ordinary
course of business in the amounts thereof (net of
applicable reserves) carried on the books of CCI.
(o) Agreements. Except as set forth in Section
2.1(o) of the CCI Schedule, CCI is not a party
to nor is CCI bound by any oral or written
(I) contract for the employment of any officer or
employee which pursuant to its terms
is not terminable without liability on 30 days (or
less) notice or which provides for any
further payments following such termination, or
contract with a former officer or employee
pursuant to which payments are required to be
made at any time following the date hereof,
or contract with any labor union or association
representing any employee,
(ii) stock ownership, profit-sharing, bonus,
deferred compensation, stock option,
severance pay, pension, retirement or similar
plan or agreement,
(iii) mortgage, indenture, note or installment
obligation the unpaid balance of which
exceeds $25,000, or other instrument relating to
any borrowing of money by CCI, the unpaid
balance of which exceeds $25,000,
(iv) guaranty of any obligation for borrowings
or otherwise which in the aggregate exceed
$25,000,
(v) agreement or arrangement for the sale or
lease of any material amount of its assets
or part of its business other than in the ordinary
course of business or for the grant of
preferential rights to purchase or lease any
material amount of its assets or part of its
business,
(vi) agreement or arrangement obligating it to
register any of its outstanding shares or
other securities with the SEC,
(vii) agreement or arrangement with any officer
or director of CCI or any affiliate of CCI,
or
(viii) contract, agreement or other instrument
which is material to the assets, properties,
business, financial condition or results of
operations of CCI.
All contracts, plans, mortgages, indentures,
guaranties and other agreements disclosed in Section
2.1(o) of the CCI Schedule have been provided to
Pentair and are in full force and effect as of the
date hereof, neither CCI, nor to the best of its
knowledge, any other party thereto is in default in any
material respect as to any provision thereof, and no
party thereto may terminate any of such
agreements by reason of the transactions
contemplated by this Agreement.
(p) Litigation. Section 2.1(p) of the CCI Schedule
sets forth a description of each lawsuit in
which CCI is a party. Except as disclosed in Section
2.1(p) of the CCI Schedule, there are no
actions, suits or proceedings pending, or to the
knowledge of CCI threatened, against or affecting
CCI or its properties or businesses, at law or in
equity, or before any governmental or administrative
body or agency or before any arbitrator which, alone
or in the aggregate, could materially and
adversely affect the assets, properties, business,
financial condition or results of operations of CCI
or the ability of CCI to carry out the transactions
contemplated in this Agreement. Except as may
be disclosed on such Schedule, there are no
unresolved disputes under any contract to which CCI
is a party or by which CCI is bound involving in the
aggregate an amount in excess of $50,000. CCI
is not in default with respect to any order, writ,
award, judgment, injunction or decree of any court,
governmental or administrative body or agency, or
arbitrator applicable to it which could have a
materially adverse effect on the assets, properties,
business, financial condition or results of
operations of CCI.
(q) Taxes.
(I) Except as disclosed in Section 2.1(q)(I) of the
CCI Schedule: (A) all Tax Returns (as
defined below) required to be filed with the
appropriate taxing authorities have been filed by
or on behalf of CCI and all Taxes (as defined
below) shown to be due on such Tax Returns
have been paid or provided for in full; (B) there
are no liens for Taxes upon the assets of CCI
except statutory liens for Taxes not yet due;(C)
there are no outstanding deficiencies in
respect of Taxes asserted or threatened or
assessments of Taxes made or threatened, nor any
administrative or judicial proceedings pending or
threatened concerning Taxes, with respect
to CCI and any deficiencies, assessments or
proceedings shown in the CCI Schedule are
being contested in good faith through
appropriate proceedings; (D) CCI has established on
the financial statements described in Section 2(I)
of this Agreement reserves and accruals
adequate for the payment of all Taxes accruing
with respect to or payable by CCI for all
periods reflected therein; (E) there are no
outstanding agreements or waivers extending the
statutory period of limitations for assessment or
collection applicable to any Taxes or Tax
Returns required to be filed with respect to CCI;
(F) no refund claims relating to Taxes have
been filed or are contemplated, and no refund
action relating to Taxes is pending or
contemplated; and (G) CCI has not requested
any extension of time within which to file any
Tax Return, which Tax Return has not been filed
within such extension.
(ii) The income Tax Returns of CCI (A) have
been examined by the Internal Revenue
Service or the statute of limitations for
assessment for federal income taxes has expired for
all taxable periods up to and including October
31, 1991 or both and (B) have been examined
by the taxing authorities of all of the states
disclosed in the CCI Schedule pursuant to Section
2.1(b) or the statute of limitations for assessment
of any state income taxes has expired for
all periods up to and including October 31, 1991,
or both, and there are no outstanding or
unresolved proposed adjustments. Complete
and accurate copies of all income Tax Returns
of CCI for all taxable periods ending after
October 31, 1991 have been provided to Pentair
by CCI.
(iii) Except as disclosed in Section 2.1(q)(iii) of
the CCI Schedule, no power of attorney
currently in force has been granted by CCI with
respect to any matter relating to Taxes.
(iv) The consummation of the transactions
contemplated by this Agreement will not give
rise to any payments by CCI which payments will
not be deductible (in whole or in part) by
reason of Section 280G of the Internal Revenue
Code (the "Code").
(v) CCI has made no elections under Section
341(f) (dealing with collapsible
corporations) of the Code.
(vi) CCI is not, nor has been within the last five
years, a United States real property
holding corporation within the meaning of
Section 897 of the Code.
(vii) Except as described in Section 2.1(q)(iii) of
the CCI Schedule, no action is required
within sixty (60) days of the Effective Time to
prevent the assessment or collection of Taxes,
or to preserve the right to a refund of Taxes,
except such action as is required or necessary
in the ordinary course of business.
For purposes of this Agreement, the term "Taxes"
shall mean all taxes, charges, fees, levies or other
assessments, including without limitation, all net
income, gross income, premium or privilege, gross
receipts, sales, use, ad valorem, transfer, franchise,
profits, license, withholding, payroll,
employment, excise, estimated, severance, stamp,
occupation, property or other taxes, customs
duties, fees, assessments, or charges of any kind
whatsoever, together with any interest and any
penalties, additions to tax or additional amounts
imposed by any governmental authority (domestic
or foreign) upon CCI, and the term "Tax Returns"
shall mean all returns, declarations, reports,
estimates, and statements, regarding Taxes,
required to be filed under United States federal, state,
local or any foreign laws.
(r) Related Party Transactions. Except as disclosed
in Section 2.1((r)) of the CCI Schedule,
CCI has not made any loan to any director, officer or
other affiliate of CCI which remains
outstanding nor has CCI entered into any
agreement, other than an agreement referred to in
Section
2.1(o) hereof, for the purchase or sale of any
property or services from or to any director, officer or
other affiliate of CCI.
(s) Employee Benefit Plans.
(I) Section 2.1(s)(I) of the CCI Schedule sets
forth a true and complete list of each
employee benefit plan, as defined in Section 3(3)
of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") and
each other plan, arrangement and
agreement providing employee benefits
(collectively the "Plans"), that covers current or
former employees of CCI or an affiliate thereof
and that is presently or was formerly
maintained by CCI or any affiliate thereof or by
any trade or business, whether or not
incorporated (an "ERISA Affiliate"), which
together with CCI would be deemed a "single
employer" within the meaning of Section 4001 of
ERISA. None of the Plans is a
"multiemployer plan," as defined in Section 3(37)
of ERISA. CCI has delivered or made
available to Pentair copies of all such Plans; any
related trust agreements, group annuity
contracts, insurance policies or other funding
agreements or arrangements relating thereto;
determination letters, if any, from the Internal
Revenue Service with respect to each of the
Plans which is intended to be tax-qualified under
the Code ("ERISA Plans"); actuarial
valuations, if applicable, for the most recent plan
year for which such valuations are
available; the current summary plan descriptions
and summary of material modifications
thereto; the annual return/report on Form 5500,
and all schedules thereto and summary
annual reports for each Plan for each of the last
three years; each audit report for a Plan
associated with such annual report; and a list and
description of the Plan's assets as of the
end of the year covered by such annual report.
(ii) Each of the ERISA Plans is and has been
maintained in substantial compliance with
all applicable provisions of law, including the
Code and ERISA. Neither CCI nor any
ERISA Affiliate currently maintains, sponsors,
contributes to or is obligated to contribute
to a defined benefit pension plan as defined in
Section 414(j) of the Code, nor has done so
in the past. Neither CCI nor any ERISA Affiliate
maintains, sponsors, contributes to or is
obligated to contribute to a plan subject to Part 3
of Title I of ERISA or Section 412 of the
Code.
(iii) The written terms of each of the Plans, and
any related trust agreement, group annuity
contract, insurance policy or other funding
arrangement are in substantial compliance with
all applicable laws including ERISA, the Code,
the Age Discrimination in Employment Act,
and the Medical and Family Leave Act, as
applicable, and each of such Plans has been
administered in substantial compliance with such
requirements.
(iv) Except with respect to income taxes on
benefits paid or provided, no income, excise
or other tax or penalty (federal or state) has been
waived or excused, has been paid or is
owed by any person (including, but not limited to,
any Plan, any Plan fiduciary, CCI and
ERISA Affiliates) with respect to the operations
of, or any transactions with respect to, any
Plan. No action has been taken, nor has there
been any failure to take any action, nor is any
action or failure to take action contemplated, that
would subject any person or entity to any
liability for any tax or penalty in connection with
any Plan. No reserve for any taxes or
penalties has been established with respect to
any Plan, nor has any advice been given to any
person with respect to the need to establish such
a reserve.
(v) There are no (A) actions, suits, arbitrations or
claims (other than routine claims for
benefits), (B) legal, administrative or other
proceedings or governmental investigations or
audits, or(C) complaints to or by any
governmental entity, which are pending, anticipated
or threatened, against a Plan or its assets or any
fiduciary with respect to any such Plan.
(vi) The present value of the future cost to CCI
and ERISA Affiliates of post-retirement
medical benefits that CCI or any ERISA Affiliate is
obligated to provide, calculated on the
basis of actuarial assumptions CCI considers
reasonable estimates of future experience and
which have been provided to Pentair, does not
exceed the amount specified in Section
2.1(s)(vi) of the CCI Schedule.
(vii) Neither CCI nor any ERISA Affiliate, nor
any of the ERISA Plans, nor any trust
created thereunder, nor any trustee,
administrator or other fiduciary thereof has engaged in
a transaction in connection with which CCI or
any ERISA Affiliate, any of the ERISA Plans,
any such trust, or any trustee, administrator or
other fiduciary thereof, or any party dealing
with the ERISA Plans or any such trust could be
subject to either a civil penalty assessed
pursuant to Sections 502(I) or (l) of ERISA or a
tax imposed pursuant to Section 4975 of the
Code.
(t) Finders and Investment Bankers. Except as set
forth on Schedule 2.1(t), CCI has not
retained any broker, finder or other agent or incurred
any liability for any brokerage fees,
commissions or finders' fees with respect to the
Merger.
(u) Disclosure. No representation or warranty of
CCI and no statement or information relating
to CCI or its business or properties contained in (I)
this Agreement, (ii) the CCI Schedule, or (iii)
in any certificate furnished or to be furnished to
Pentair or Pentair Subsidiary pursuant to this
Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to
state a material fact necessary to make the
statements made herein or therein, in light of the
circumstances in which they were made, not
misleading.
2.2 REPRESENTATIONS AND WARRANTIES
OF PENTAIR AND PENTAIR
SUBSIDIARY. Pentair and Pentair Subsidiary
represent and warrant to CCI as follows:
(a) Organization of Pentair and Pentair Subsidiary.
Pentair is a corporation duly organized,
validly existing and in good standing under the laws
of the state of Minnesota. Pentair Subsidiary
is a corporation duly organized and validly existing
under the laws of the State of North Carolina.
Pentair Subsidiary is a wholly-owned subsidiary of
Pentair.
(b) Authorization. The Board of Directors of each
of Pentair and Pentair Subsidiary has
adopted resolutions approving the transactions
contemplated by this Agreement and has authorized
the execution and delivery of this Agreement by
Pentair and Pentair Subsidiary, respectively.
Pentair and Pentair Subsidiary each has full power
and authority to enter into this Agreement and
subject to obtaining all required regulatory
approvals, to consummate the transactions
contemplated
hereby. This Agreement has been duly executed
and delivered by Pentair and Pentair Subsidiary and
constitutes the valid and legally binding obligation of
each of them, enforceable against them in
accordance with its terms, subject to bankruptcy,
receivership, insolvency, reorganization,
moratorium or similar laws affecting or relating to
creditors rights generally and subject to general
principles of equity.
(c) Consents and Approvals. Except for consents
and approvals listed on the Pentair Schedule,
no filing with, and no permit, authorization, consent
or approval of, any public body or authority is
necessary for the consummation by Pentair or
Pentair Subsidiary of the transactions contemplated
by this Agreement.
(d) Defaults and Conflicts. Subject to the receipt of
all consents and approvals contemplated
by this Agreement, the execution and delivery of this
Agreement, the consummation of the
transactions contemplated hereby or the fulfillment
of and compliance with the terms and provisions
hereof will not (I) violate any judicial or administrative
order, writ, award, judgment, injunction or
decree involving Pentair or Pentair Subsidiary, or (ii)
conflict with any of the terms, conditions or
provisions of the charter or bylaws of Pentair or
Pentair Subsidiary. No consent of any third party
to any indenture or any material agreement or other
material instrument to which Pentair or Pentair
Subsidiary is a party is required in connection with
the Merger.
(e) SEC Filings. None of the information supplied
or to be supplied by Pentair or Pentair
Subsidiary in writing expressly for inclusion in the
Proxy Statement will, at the time of (I) the first
mailing thereof and (ii) the meeting of shareholders
to be held in connection with the Merger,
contain any untrue statement of a material fact or
omit to state any material fact required to be stated
therein or necessary in order to make the
statements therein, in light of the circumstances under
which they were made, not misleading.
(f) Funds Available. Pentair and Pentair Subsidiary
have available to them sufficient funds
under Pentair's credit facility with Bank America to
perform all of their respective obligations
pursuant to the Merger and that no consent or
approval of the lenders thereunder is required for the
borrowing of such funds.
(g) Pentair Schedule. Pentair has delivered in
connection with this Agreement and Plan of
Merger a schedule of information supplementing the
disclosures contained in this Agreement (the
"Pentair Schedule"), which shall be made a part of
and incorporated into this Agreement as if fully
set forth herein.
ARTICLE III
RIGHT TO INVESTIGATE
CCI shall afford to the officers and authorized
representatives of Pentair free and full access to the
offices, properties, books and records of CCI in order
that Pentair may have full opportunity to make such
investigations as they shall desire of the affairs of CCI,
and the officers of CCI shall furnish Pentair with
such additional financial and operating data and other
information as to the assets, properties and business
of CCI as Pentair shall from time to time reasonably
request. CCI shall consent to the review by the officers
and authorized representatives of Pentair of the reports
and working papers of CCI's independent auditors
and to discussions by the officers and authorized
representatives of Pentair with parties with which CCI
has business relationships. All such information shall be
held confidential in accordance with the
Confidentiality Agreement delivered by Pentair to CCI
dated December 13, 1995. Notwithstanding the right
of Pentair to conduct such investigation, Pentair has
conducted an investigation of CCI and its business
operations and will perform its obligations under this
Agreement, subject to its right to terminate pursuant
to Section 10.1 hereof, regardless of the results of such
continuing investigation.
ARTICLE IV
COVENANTS OF CCI
CCI covenants that, with respect to the period
between the date hereof and the Effective Time of
Merger:
4.1 Conduct of Business. CCI shall conduct its
business operations only in the ordinary course
of business and consistent with past practices and,
without the prior written consent of Pentair, shall not:
(a) amend its Articles of Incorporation or Bylaws;
(b) dispose of any assets other than in the ordinary
course of business;
(c) permit the lapse of any insurance policy material
to the business;
(d) enter into any agreement of the type set forth in
Section 2.1(o), nor amend any such
agreement, whether or not currently in existence;
or
(e) discharge any liabilities other than in the normal
course of business or waive or settle any
material claim of CCI for less than the actual
value thereof.
4.2 Liabilities. Without the prior written consent of
Pentair, CCI will not agree to incur or to
become subject to any material liability or obligation
(absolute, contingent or otherwise) except liabilities
incurred or obligations under contracts entered into in
the ordinary course of business.
4.3 Changes in Stock. Unless the prior written
consent of Pentair is first obtained, CCI will not:
(I) make any change in its authorized capital
stock,
(ii) issue any stock options, nor issue any
warrants, or other rights calling for the issue,
transfer, sale or delivery of its capital stock or
other securities,
(iii) pay any stock dividend or make any
reclassification in respect of its outstanding
shares of capital stock,
(iv) issue, sell, exchange or deliver any shares
of its capital stock (or securities convertible
into or exchangeable, with or without additional
consideration, for such capital stock),
(v) purchase or otherwise acquire for a
consideration any outstanding shares of its capital
stock, or
(vi) declare, pay or set apart in respect of its
capital stock any dividends or other
distributions or payments.
4.4 Stock Options. CCI shall take all actions
necessary, if any, to comply with the terms of
Section 1.14 of this Agreement.
4.5 Consents. CCI shall, as soon as practicable,
prepare or cause to be prepared and made all
necessary filings with all governmental or regulatory
bodies or other entities and shall use its best efforts
to obtain all consents, waivers, approvals,
authorizations, rulings or orders from all governmental
or regulatory bodies or other entities listed on the CCI
Schedule and from all parties to any indenture,
agreement or other instrument material to the business
of CCI, and furnish true, correct and complete copies
of each thereof to Pentair.
4.6 Notice. CCI shall give prompt notice and
complete copies to Pentair of
(I) any notice of, or other communication relating
to, a default or event which with
notice or lapse of time or both would become a
default, received by CCI subsequent to the
date of this Agreement and prior to the Effective
Time, under its Articles of Incorporation
or Bylaws or any indenture, or material
instrument or agreement, to which CCI is a party,
by which it or any of its properties is bound or to
which it or any of its properties is subject,
except where such default would not have a
material adverse effect on the business
operations of CCI;
(ii) any notice or other communication from
any third party alleging that the consent of
such third party is or may be required in
connection with the transactions contemplated
hereby;
(iii) the occurrence of any event which results
in a material adverse change in the assets,
properties, business, financial condition or results
of operations of CCI;
(iv) all minutes of meetings of the Board of
Directors or any committee thereof and of the
shareholders of CCI from the date hereof to the
Effective Time, certified by the Secretary or
acting secretary of the Company;
(v) any matter which, if it had occurred prior to
the date hereof, would have been
required to be included on the CCI Schedule;
and
(vi) any assertion by a shareholder of his, her or
its dissenters' rights under Article 13 of
the NCBCA
In addition, CCI shall give prompt notice to Pentair of
any act, fact or circumstance of which it shall
become aware from the date hereof to the Effective
Time which would have been required to be
listed on the CCI Schedule pursuant to Section 2.1
hereof.
4.7 Shareholders' Meeting. CCI shall duly call a
meeting of its shareholders to be held during
the week of February 19, 1996 or as soon thereafter
as mutually agreeable to CCI and Pentair for the
purpose of voting on the Agreement and, in connection
therewith, CCI shall prepare and file with the SEC,
as soon as is reasonably practicable, the required proxy
materials with respect thereto, in form and substance
acceptable to Pentair, and shall use its best efforts to
obtain prompt clearance by the SEC for the mailing
of such material to the CCI shareholders. CCI shall
thereupon mail such proxy statements to its
shareholders. CCI agrees to use its best efforts to
obtain the necessary approval of the Agreement by the
stockholders of CCI.
4.8 Acquisition Proposals. Neither CCI nor its
directors, officers, employees, financial advisors,
legal counsel, accountants and other agents and
representatives shall (a) encourage, initiate or solicit,
directly or indirectly, any inquiries or the making of any
proposals by, or engage in discussions or negotiations
with, any third party (other than Pentair and Pentair
Subsidiary) concerning any merger, consolidation, sale
of assets, tender offer, sale of shares or similar transaction
involving CCI or any significant assets of CCI, other
than the Merger (each an "Acquisition Proposal"), or (b)
disclose directly or indirectly to any person
preparing to make an Acquisition Proposal any
confidential information regarding CCI, or(c) enter into
any understanding, agreement or commitment with any
third party providing for an acquisitive transaction,
equity investment or sale of any significant assets of
CCI. Notwithstanding the foregoing, the Board of
Directors or any committee thereof appointed for
purposes of the foregoing (a "Committee"), officers,
employees, representatives and agents of CCI may (I)
take action upon receipt of the advice of special legal
counsel that such action is advisable in order to fulfill
the fiduciary duties of the Board or the Committee,
and (ii) provide confidential information regarding CCI
to a potential purchaser upon the prior written
request of such purchaser whom the Board or
Committee reasonably believes (A) is qualified and
creditworthy, (B) will not use such information to the
competitive disadvantage of CCI and (C) intends to
make a serious offer which may result in a transaction
more favorable to the shareholders of CCI than the
consideration payable in connection with the Merger;
provided that such disclosure is made subject to an
appropriate confidentiality agreement, and the request
does not arise as a result of any solicitation for
expression of interest by CCI or any of its directors,
officers, employees, financial advisors, legal counsel,
accountants or other agents and representatives. CCI
will notify Pentair immediately if any Acquisition
Proposal or any request for confidential information is
received, shall inform Pentair if CCI's Board or
Committee has been advised by special legal counsel
to consider such Acquisition Proposal in order to fulfill
the fiduciary duties of the Board of Directors and shall
provide to Pentair such information regarding any
Acquisition Proposal or request for information as
Pentair may reasonably request. No action
contemplated or permitted by this Section 4.8 shall in any manner be
construed or deemed to diminish, relieve or release
any obligations of CCI or Pentair to pay a termination
fee or expense reimbursement pursuant to Sections
10.2, 10.3 or 10.4 below.
4.9 Reports. Promptly after filing with the applicable
authorities, CCI shall provide to Pentair
copies of any document filed with the Secretary of
State of North Carolina or the Securities and Exchange
Commission, including specifically, but without
limitation, its Annual Report on Form 10-K with respect
to the fiscal year ended October 31, 1995 and its
Annual Report to shareholders for the same period.
4.10 Cooperation. CCI shall execute such
documents and other papers, provide such information,
and take such further actions as may be reasonably
requested by Pentair to carry out the provisions hereof
and to consummate the transactions contemplated
hereby.
4.11 Conditions Precedent. CCI shall use its best
efforts to cause all of the conditions precedent
to the consummation of the Merger applicable to them
to be met.
ARTICLE V
COVENANTS OF PENTAIR
AND PENTAIR SUBSIDIARY
Pentair and Pentair Subsidiary covenant that, with
respect to the period between the date hereof and
the Effective Time of Merger:
5.1 Consents. Pentair and Pentair Subsidiary shall,
as soon as practicable, prepare and make all
necessary filings with all governmental or regulatory
bodies or other entities and shall use its best efforts
to obtain all consents, waivers, approvals,
authorizations, rulings or orders from all governmental
or regulatory bodies or other entities listed on the Pentair
Schedule and furnish true, correct and complete
copies of each to CCI.
5.2 Directors' and Officers' Insurance. After the
Effective Time, Pentair will cause CCI as
the Surviving Corporation, or another affiliate of Pentair,
to (I) maintain the current directors' and officers'
liability and corporate indemnification insurance policy
of CCI, or a substantially similar policy, subject to
terms and conditions no less advantageous than under
such current policy, for all officers and directors of
CCI on the date of this Merger Agreement, for twenty
four (24) months after the Effective Time to cover
acts and omissions of directors and officers of CCI
occurring prior to the Effective Time and (ii) maintain
in effect provisions of the Bylaws of the Surviving
Corporation, relating to the rights of officers and
directors with respect to indemnification for acts and
omissions occurring prior to the Effective Time on
terms no less advantageous to such officers and
directors as in effect prior to the Effective Time.
5.3 Cooperation. Pentair and Pentair Subsidiary
shall execute such documents and other papers,
provide such information, and take such further actions
as may be reasonably requested by CCI to carry out
the provisions hereof and to consummate the
transactions contemplated hereby.
5.4 Conditions Precedent. Pentair and Pentair
Subsidiary shall use its best efforts to cause all
of the conditions precedent to the consummation of the
Merger applicable to it to be met.
ARTICLE VI
CLOSING AND CLOSING DOCUMENTS
6.1 Closing. The closing ("Closing") under this
Agreement shall be held at the offices of Smith,
Anderson, Blount, Dorsett, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, L.L.P.,
in Raleigh, North Carolina at 10:00 a.m., Eastern
Time, as promptly as practicable after the fulfillment or
waiver of all the terms and conditions contained in
Articles VI, VII, VIII and IX of this Agreement, or at such
other place and time as shall be mutually
agreeable to the parties. The required number of fully
executed and verified copies of the Articles of Merger
shall be filed immediately after the Closing with the
Secretary of State of North Carolina.
6.2 CCI Closing Documents. At the Closing, CCI
shall deliver, or cause to be delivered, to
Pentair:
(a) Closing Certificate. A certificate of CCI, signed
by its President, which shall confirm the
compliance by CCI in all material respects with its
covenants and agreements contained in this
Agreement and the accuracy in all material respects
of the representations and warranties made by
CCI in this Agreement at and as of the Effective
Time as if made at such time and as contemplated
by this Agreement.
(b) Opinion of Counsel. The opinion of ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel to CCI, dated the
Effective Time, and in form and substance
satisfactory to Pentair, covering the matters set forth in
Exhibit C hereto.
(c) Certificate of Election. A certificate of CCI's
inspector of elections or secretary as to the
vote taken at the meeting of the holders of shares of
CCI Common Stock with respect to this
Agreement and as to the holders of shares of CCI
Common Stock that shall have demanded payment
of the fair value of their shares of CCI Common
Stock pursuant to the NCBCA.
(d) Resignations. Written resignations, effective the
Effective Time, of those directors and
officers of CCI specified on a schedule to be
delivered by Pentair to CCI prior to the Closing.
(e) Certified Articles. Articles of Incorporation of
CCI certified by the Secretary of State of
North Carolina within ten (10) days prior to the
Closing.
(f) Certificate of Existence. A Certificate of
Existence of CCI certified by the Secretary of
State of North Carolina within ten (10) days prior to
the Closing.
6.3 Pentair Closing Documents. At the Closing,
Pentair and Pentair Subsidiary shall deliver,
or cause to be delivered, to CCI:
(a) Pentair Closing Certificate. A Certificate of
Pentair, signed by its Chief Executive Officer
or any Vice President, which shall confirm the
compliance by Pentair in all material respects with
its covenants and agreements contained in this
Agreement and the accuracy in all material respects
of the representations and warranties made by it in
this Agreement at and as of the Effective Time
as if made at such time and as contemplated by this
Agreement.
(b) Pentair Subsidiary Closing Certificate. A
Certificate of Pentair Subsidiary, signed by its
President or any Vice President, which shall confirm
the compliance by Pentair Subsidiary in all
material respects with its covenants and agreements
contained in this Agreement and the accuracy
in all material respects of the representations and
warranties made by it in this Agreement at and as
of the Effective Time as if made at such time and as
contemplated by this Agreement.
(c) Opinion of Counsel. The opinion of ▇▇▇▇▇▇ &
Efron, counsel to Pentair and Pentair
Subsidiary, dated the Effective Time, and in form
and substance satisfactory to CCI, covering the
matters set forth in Exhibit D hereto.
(d) Certificate of Existence. A Certificate of
Existence of Pentair Subsidiary certified by the
Secretary of State of North Carolina within ten (10)
days prior to the Closing.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF
PENTAIR AND PENTAIR SUBSIDIARY
The obligations of Pentair and Pentair Subsidiary
under this Agreement to cause the Merger
contemplated hereby to be consummated are, at their
option, subject to the fulfillment of conditions that:
7.1 Validity of Representation and Warranties. The
representations and warranties of CCI
contained in Section 2.1(a) through Section 2.1(j)
hereof shall be true in all material respects when made
and, in addition, shall be true in all material respects on
and at the Effective Time with the same force and
effect as though made on and at the Effective Time,
and there shall be at the time of execution hereof, no
knowing breach of any representation and warranty of
CCI contained in Section 2.1(k) through Section
2.1(u) hereof.
7.2 Consents. All consents, waivers, approvals,
authorizations or orders listed on the CCI
Schedule shall have been obtained by CCI and copies
of the same shall have been delivered to Pentair.
7.3 Compliance with Covenants. CCI shall have
performed in all material respects all
obligations and agreements and complied with all
covenants and conditions contained in this Agreement
to be performed and complied with by it at or prior to
the Effective Time.
7.4 Opinion of Counsel. Pentair shall have received
the opinion of L. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, counsel
for CCI, specified in Section 6.2(b).
7.5 Resignations. The directors of CCI as specified
in the schedule to be delivered pursuant to
Section 6.2(d) shall have tendered their resignations in
writing, effective on the Effective Time.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF
CCI
The obligations of CCI under this Agreement to
cause the Merger contemplated hereby be to
consummated are, at its option, subject to fulfillment of
the conditions that:
8.1 Validity of Representations and Warranties.
The representations and warranties of Pentair
and Pentair Subsidiary herein contained shall have
been in all material respects true when made and, in
addition, shall be true in all material respects on and at
the Effective Time with the same force and effect
as though made on and at the Effective Time.
8.2 Consents. All consents, waivers, approvals,
authorizations or orders listed on the Pentair
Schedule shall have been obtained by Pentair and
copies of the same shall have been delivered to CCI.
8.3 Compliance with Covenants. Pentair and
Pentair Subsidiary shall have performed in all
material respects all obligations and agreements and
complied with all covenants and conditions contained
in this Agreement to be performed and complied with
by them at or prior to the Effective Time.
8.4 Opinion of Counsel. CCI shall have received
the opinion of ▇▇▇▇▇▇ & Efron, P. A., counsel
to Pentair, specified in Section 6.3(c).
8.5 Delivery of Merger Consideration. Pentair or
Pentair Subsidiary shall have delivered the
Merger Consideration to the Paying Agent pursuant to
Section 1.9 hereof.
ARTICLE IX
CONDITIONS APPLICABLE TO PENTAIR
AND CCI
The obligations of Pentair and CCI under this
Agreement to cause this Agreement to become
effective and have the transactions contemplated
hereby be consummated are subject to the following
terms and conditions:
9.1 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act. Any waiting period
applicable to the consummation of the Merger
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976 shall have expired or been terminated,
and no action shall have been instituted by the
Department of Justice or Federal Trade Commission
challenging or seeking to enjoin the consummation of
this transaction, which action shall have not been
withdrawn or terminated.
9.2 Injunction. The consummation of the Merger
shall not have been restrained, enjoined or
prohibited by any court or governmental authority of
competent jurisdiction. No material litigation or
administrative proceeding shall be pending or
threatened as of the Effective Time seeking to restrain,
enjoin or prohibit the consummation of this Agreement or the
Merger.
9.3 Approval of CCI Shareholders. This Agreement
shall have been approved and adopted
at a duly called meeting of the shareholders of CCI
Common Stock by at least eighty percent (80percent)
of the issued and outstanding shares of CCI Common Stock
entitled to vote thereon by no later than May 1, 1996.
9.4 Effective Time. The Effective Time shall be no
later than 5:00 P.M. Eastern Time on May 15, 1996.
ARTICLE X
TERMINATION AND TERMINATION FEE
10.1 Termination. This Agreement and the
transactions contemplated by this Agreement may
be terminated at any time prior to the filing of the
Articles of Merger with the Secretary of State of North
Carolina, whether before or after action by the
shareholders of CCI as contemplated by Section 4.8 of
this Agreement and without further approval by the
outstanding shareholders of CCI, effective upon receipt
of notice of termination to the non-terminating party:
(I) by mutual written consent of the Boards of
Directors of Pentair and CCI,
(ii) by action of the Board of Directors of
Pentair in the event of a failure of a condition
set forth in Article VII of this Agreement as of the
time such condition is required hereunder
to be fulfilled,
(iii) by action of the Board of Directors of CCI
in the event of failure of a condition set
forth in Article VIII of this Agreement as of the
time such condition is required hereunder
to be fulfilled,
(iv) by action of the Board of Directors of
either Pentair or CCI in the event of a failure
of a condition set forth in Article IX of this
Agreement as of the time such condition is
required hereunder to be fulfilled, or
(v) by action of the Board of Directors of CCI in
the event CCI enters into an Acquisition
Proposal with any third party, subject to its
payment of the termination fee set forth in
Section 10.2 and the expense reimbursement in
Section 10.3.
10.2 Termination Fee. If:
(1) this Agreement is terminated by Pentair as a
result of any knowing breach by CCI of
any representation, warranty or covenant contained
in this Agreement; or
(2) CCI enters into an Acquisition Proposal (other
than this Agreement), or any
Acquisition Proposal (other than the Merger) is
consummated, on or before January 14,
1997, unless Pentair has breached, terminated or
abandoned this Agreement for any reason
other than a breach by CCI of its obligations
hereunder; or
(3) any third party makes an Acquisition Proposal or
acquires CCI Common Stock and
thereafter holds 20 percent or more of the then
current issued and outstanding CCI Common Stock,
and thereafter (A) the Board of Directors of CCI
does not reject any Acquisition Proposal
of any third party, or (B) this Agreement is
terminated or abandoned as a result of the
shareholders' failure to approve the Merger and the
price per share of such Acquisition
Proposal is higher than the price per share of the
Merger Consideration at the time of the
shareholder vote,
then CCI shall pay to Pentair, immediately upon the
occurrence of the first event to occur set forth
above in subparagraphs (1), (2) or (3) of this
Section 10.2, a termination fee equal to $1,000,000.
10.3 Expense Reimbursement by CCI. If an event
occurs, as a result which a termination fee
becomes payable under Section 10.2 above, CCI shall
promptly pay to Pentair upon demand the amount of
Pentair's out-of-pocket expenses incurred in
connection with Pentair's investigation of CCI, the
preparation, negotiation and performance of this Agreement and
any other expenses relating to the Merger, including
fees and expenses of all consultants, counsel, accountants
and other third parties, subject to a maximum amount
of $250,000. Pentair shall provide to CCI in connection
with such demand a copy of all invoices and other
evidence of such costs claimed for reimbursement.
10.4 Expense Reimbursement by Pentair. If Pentair
breaches its obligations hereunder, Pentair
shall reimburse CCI for its out-of-pocket costs and
expenses incurred to that date in connection with the
Merger, including fees and expenses of all consultants,
counsel, accountants and other third parties, subject
to a maximum amount of $250,000. CCI shall provide
to Pentair in connection with such demand a copy
of all invoices and other evidence of such costs claimed
for reimbursement.
10.5 Survival of Rights. The provisions of this Article
X shall be binding and effective upon
execution hereof, notwithstanding any failure of
performance or satisfaction of any conditions set forth
in Articles VII, VIII or IX and notwithstanding any failure to
close the Merger pursuant to Article VI hereof.
ARTICLE XI
MISCELLANEOUS
11.1 Payment of Expenses. Except as provided in
Article X, whether or not the Merger shall be
consummated, each party hereto shall pay its own
expenses incident to preparing for, entering and
carrying out this Agreement and to the consummation of the
Merger.
11.2 Entire Agreement. This Agreement (together
with the Schedules and Exhibits hereto and
the documents referred to herein) contains, and is
intended as, a complete statement of all of the terms of
the arrangements between the parties with respect to
the matters provided for herein, and supersedes any
previous agreements and understandings between the
parties with respect to those matters.
11.3 Modifications, Amendments and Waivers. At
any time prior to the Effective Time, the
parties hereto may, by written agreement, (a) extend
the time for the performance of any of the obligations
or other acts of the parties hereto, (b) waive any
inaccuracies in the representations and warranties
contained in this Agreement or in any document delivered
pursuant hereto, (c) waive compliance with any of the
covenants or agreements contained in this Agreement,
or (d) make any other modification of this Agreement
approved by the respective Boards of Directors of the
parties hereto. This Agreement shall not be altered
or otherwise amended except pursuant to an
instrument in writing executed and delivered on behalf
of each of the parties hereto.
11.4 Assignment; Parties in Interest. Except as
expressly provided herein, the rights and
obligations of a party hereunder may not be assigned,
transferred or encumbered without the prior written
consent of the other parties. This Agreement shall be
binding upon, inure to the benefit of, and be
enforceable by the respective successors and
permitted assigns of the parties hereto. Nothing
contained herein shall be deemed to confer upon any other
person any right or remedy under or by reason of this
Agreement.
11.5 Schedules. All information set forth in the CCI
Schedule shall be deemed a representation
and warranty of CCI as to the accuracy of such
information. All information set forth in the Pentair
Schedule shall be deemed a representation and
warranty of Pentair as to the accuracy of such
information.
11.6 Press Releases. Except as may otherwise be
required by law, and upon execution or material
amendment hereof, no publicity release or
announcement concerning this Agreement or the
transactions contemplated hereby shall be made prior to the
Effective Time without advance approval thereof by CCI
and Pentair. CCI and Pentair will cooperate with each
other in the development and distribution of all news
releases and other public information disclosures with
respect to this Agreement or any of the transactions
contemplated hereby.
11.7 Knowledge. Where representations and
warranties are made herein "to the knowledge of"
any entity, no executive officer or director of any party
has any knowledge that such representation and
warranty is not true and correct to the same extent as
provided therein and that:
(I) each such person has exercised due
diligence and has made reasonable and
appropriate investigations and inquiries; and
(ii) nothing has come to the attention of such
person in the course of such investigations
and inquiries or otherwise which would
reasonably cause such person, in the exercise of his
individual due diligence, to believe that such
representation or warranty is not true and
correct.
11.8 Governing Law. This Agreement shall be
governed by and construed in accordance with
the domestic laws of the State of North Carolina
without giving effect to any choice or conflict of law
provision or rule (whether of the State of North Carolina
or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the
State of North Carolina.
11.9 Notices. Any notice, request, instruction or
other document to be given hereunder by any
party to the others shall be in writing and delivered
personally or sent by registered or certified mail,
postage prepaid, overnight express service or confirmed
facsimile transmission,
if to Pentair or Pentair Subsidiary,
Pentair
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to ▇▇▇▇▇▇ & Efron, P. A.
1200 Title Insurance Building
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to CCI Communication Cable, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
P. O. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
P. O. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: L. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other persons as may be designated in
writing by the parties.
If personally delivered, such communication shall be
deemed delivered upon actual receipt; if
electronically transmitted pursuant to this paragraph,
such communication shall be deemed delivered the
next business day after transmission (and sender shall
bear the burden of proof of delivery); if sent by
overnight courier pursuant to this paragraph, such
communication shall be deemed delivered upon
receipt; and if sent by U.S. mail pursuant to this paragraph,
such communication shall be deemed delivered as of
the date of delivery indicated on the receipt issued by the
relevant postal service, or, if the addressee fails or
refuses to accept delivery, as of the date of such failure
or refusal. Any party to this Agreement may change
its address for the purposes of this Agreement by giving
notice thereof in accordance with this Section.
11.10 Counterparts. For the convenience of the
parties hereto, this Agreement and any
amendment hereto may be executed in any number of
counterparts, and each such counterpart shall be
deemed to be an original instrument, and all such
counterparts shall together constitute the same
agreement.
11.11. Headings. The headings in this Agreement
are inserted for convenience only and shall not
constitute a part hereof.
11.12 Severability. Should any provision of this
Agreement be or become invalid in whole or in
part or be incapable of performance for whatever
reason, then the validity of the remaining provisions of
this Agreement shall not be affected thereby. In such
event, the parties hereby undertake to substitute for
any such invalid provision or for any provision incapable
of performance, a provision which corresponds
to the spirit and purpose of such invalid or
unperformable provision as far as permitted under
applicable law,
so as to provide to the parties to the fullest extent
possible the economic purpose and effect of this
Agreement.
In Witness Whereof, the parties have caused this
Agreement to be executed and delivered as of the
day and year first above written.
PENTAIR, INC.
By ____________________________
Its Executive Vice President
And By ____________________________
Its Secretary
COMMUNICATION CABLE, INC.
By ____________________________
Its ____________________________
And By ____________________________
Its ____________________________
PENTAIR ACQUISITION
CORPORATION
By ____________________________
Its President
And By ____________________________
Its Secretary
EXHIBIT A
ARTICLES OF MERGER
OF
PENTAIR ACQUISITION CORPORATION
INTO
COMMUNICATION CABLE, INC.
Pursuant to Section 55-11-05 of the North Carolina
Business Corporation Act, the
undersigned, Communication Cable, Inc. ("CCI"), a
corporation organized under the laws of the
State of North Carolina, hereby submits these Articles
of Merger for the purpose of merging Pentair
Acquisition Corporation ("PAC"), a corporation
organized under the laws of North Carolina, with
and into CCI.
The following plan of merger was duly approved in
the manner prescribed by law by the
shareholders of each of the corporations participating
in the merger.
ARTICLE 1
THE MERGER: EFFECTIVE TIME
1.1 The Merger. Pursuant to the terms and conditions
of these Articles of Merger and in
accordance with Article 11 of the North Carolina
Business Corporation Act (the "NCBCA"), (a)
PAC shall be merged with and into CCI (the "Merger")
and the separate corporate existence of PAC
shall thereupon cease, (b) CCI shall be the successor
or surviving corporation in the Merger and shall
continue to be governed by the laws of the State of
North Carolina, and (c) the separate corporate
existence of CCI with all its rights, privileges,
immunities, powers and franchises shall continue
unaffected by the Merger. PAC and CCI, as parties to
the Merger, are sometimes referred to herein
as the "Constituent Corporations." CCI as the
corporation surviving the Merger is sometimes
hereinafter referred to as the "Surviving Corporation."
1.2 Name. The name of the Surviving Corporation
shall be Communication Cable, Inc.
1.3 Effective Time. The Merger shall be effective (the
"Effective Time") at the time and on the
date that these Articles of Merger are filed with the
Secretary of State of North Carolina.
1.4 Effects of the Merger. The Merger shall have the
effects specified in Article 11 of the
NCBCA.
ARTICLE 2
ARTICLES OF INCORPORATION AND
BYLAWS OF THE SURVIVING
CORPORATION
2.1 Articles of Incorporation. The Articles of
Incorporation of PAC as in effect immediately
prior to the Effective Time shall be the Articles of
Incorporation of the Surviving Corporation (until
duly amended in accordance with the terms thereof
and of the NCBCA).
2.2 Bylaws. The Bylaws of PAC as in effect
immediately prior to the Effective Time shall be
the Bylaws of the Surviving Corporation (until duly
amended in accordance with the terms thereof,
the Articles of Incorporation of the Surviving
Corporation and the NCBCA).
ARTICLE 3
DIRECTORS AND OFFICERS OF
THE SURVIVING CORPORATION
3.1 Directors. The directors of PAC at the Effective
Time, shall, from and after the Effective
Time, be the directors of the Surviving Corporation until
their successors have been duly elected or
appointed and qualified or until their earlier death,
resignation or removal in accordance with the
Surviving Corporation's Articles of Incorporation and
Bylaws.
3.2 Officers. The officers of PAC at the Effective Time
shall, from and after the Effective Time,
be the officers of the Surviving Corporation until their
successors shall have been duly elected or
appointed and qualified or until their earlier death,
resignation or removal in accordance with the
Surviving Corporation's Articles of Incorporation and
Bylaws.
ARTICLE 4
MERGER CONSIDERATION; CONVERSION
OR
CANCELLATION OF SHARES IN THE
MERGER
4.1 Merger Consideration: Conversion of Shares and
Options. The manner of converting
shares of capital stock of the Constituent Corporations
in the Merger shall be as follows:
(a) At the Effective Time, except as otherwise provided
in Sections 4.3 and 4.4 hereof, each
share of common stock of CCI, par value $1.00 per
share, outstanding immediately prior to the
Effective Time (the "CCI Common Stock"), shall, by
virtue of the Merger and without any action
on the part of any holder thereof, be converted into the
right to receive $__.__ in cash (subject to
appropriate adjustment for any stock split, reverse
stock split, cash dividend, stock dividend or other
similar distribution or reclassification with respect to the
outstanding shares of CCI Common Stock
from the date hereof to the Effective Time) (the "Merger
Consideration").
(b) Each share of CCI Common Stock, if any, which is
issued and held in the treasury
of CCI, shall, by virtue of the Merger and without any
action on the part of PAC or of CCI, at the
Effective Time, be retired and canceled, and no cash or
other consideration shall be issued with
respect thereto.
(c) All shares of common stock of PAC issued and
outstanding at the Effective Time
shall be converted into and exchanged for an equal
number of shares of common stock of the
Surviving Corporation so that the Surviving Corporation
shall become a wholly-owned subsidiary
of Pentair, Inc., a Minnesota corporation ("Pentair").
(d) As of the Effective Time, each option to purchase
shares of common stock of CCI
which is outstanding on the date hereof and at the
Effective Time shall be converted into the right
to receive the Merger Consideration on the same basis
on which shares of Common Stock of CCI
will be converted into cash pursuant to the Merger.
4.2 Payment for Shares in the Merger. As promptly as
practicable after the Effective Time,
each holder of shares of common stock of CCI shall,
upon presentation and surrender of the
certificate or certificates therefor to the Paying Agent
(as defined in the Agreement and Plan of
Merger dated January __, 1996 among CCI, PAC and
Pentair (the "Merger Agreement")) for
cancellation in accordance with transmittal materials to
be delivered to the holders of the common
stock of CCI in accordance with the Merger
Agreement, be entitled to receive in exchange therefor
a check or checks payable to such person representing
payment of cash into which such holder's
shares of common stock of CCI have been converted
at the Effective Time. Each certificate which
represented issued and outstanding shares of common
stock of CCI immediately prior to the
Effective Time shall be deemed canceled at the
Effective Time and shall represent only the right to
receive cash for each share represented by such
certificate.
4.3 Dissenting Shares. Each outstanding share of
common stock of CCI for which written notice
of intent to demand payment therefor is delivered in
accordance with Article 13 of the NCBCA and
is not voted in favor of the Merger shall not be
converted into or represent a right to receive cash
hereunder, unless and until the holder thereof shall
have failed to perfect his demand for payment
under Article 13 of the NCBCA, in which event that
holder's shares shall be converted into a right
to receive cash in the same manner and subject to the
same conditions as provided for other
outstanding shares of common stock of CCI in this
Article I. All such shares of common stock of
CCI for which such a written notice of intent to demand
payment is so delivered and which are not
voted in favor of the Merger, except for such shares of
common stock of CCI for which a demand
for payment is not perfected in accordance with the
NCBCA, are herein called "Dissenting Shares."
CCI shall give Pentair and PAC prompt notice upon
receipt by CCI of any such written notice of
intent to demand payment for shares of common stock
of CCI. Prior to the Effective Time CCI will
not, except with the prior written consent of Pentair,
voluntarily make any payment with respect to,
or settle or offer to settle, any such demand for
payment. Each holder of Dissenting Shares who
becomes entitled, pursuant to Article 13 of the NCBCA,
to receive payment for the fair value of his
shares shall receive payment therefor from the
Surviving Corporation (but only after the amount
thereof shall have been agreed upon or finally
determined pursuant to such provisions), and such
shares shall be retired and canceled.
4.4 Transfer of Shares of CCI Common Stock After
the Effective Time. No transfers of
shares of common stock of CCI shall be made on the
stock transfer books of CCI at or after the Effective
Time.
This the ______ day of ______________, 1996.
COMMUNICATION CABLE, INC.
By
____________________________
Its
____________________________
EXHIBIT B
STOCK OPTION AGREEMENT
This AGREEMENT is made as of January __,
1996, between Communication Cable, Inc., a
North Carolina corporation (the "Company"), and
Pentair, Inc., a Minnesota corporation ("Pentair").
RECITALS
The Company and Pentair have entered into an
Agreement and Plan of Merger of even date
herewith (the "Agreement') pursuant to which Pentair
Acquisition Corporation, a North Carolina
corporation, will, upon satisfaction of the terms and
conditions of the Agreement, merge with and into
the Company, by which the shareholders of the
Company will receive cash for the value of their shares
in the amount of $_____ per share (the "Merger").
To induce Pentair to enter into the Agreement, the
Company has agreed to grant to Pentair the
Stock Option (as hereinafter defined).
NOW, THEREFORE, the parties hereto agree as
follows:
1. Grant of Stock Option. The Company hereby
irrevocably grants to Pentair an option
(the "Stock Option") to purchase up to 300,000 of the
Company's common shares, par value $1.00 per
share (the "Shares"), at a price of $_____ per Share
(the "Option Price").
2. Exercise of Stock Option. The Stock Option
may be exercised by Pentair, in one or
more tranches, in whole or in part, at any time, or from
time to time, by notice given on or before
February 22, 1996.
3. Notice of Exercise; Payment and Delivery of
Certificate(s).
(a) Notice of Exercise. In the event Pentair wishes to
exercise the Stock Option, Pentair
shall give written notice to the Company of its intention
to do so, specifying the number of Shares to be
purchased hereunder and the place and date for the
closing of the purchase, which date shall be not later
than five business days from the date such notice is
given, unless any law or regulation does not permit
the purchase to be consummated during such five-day
period, in which case the date for the closing of
the purchase shall be within two business days
following the cessation of such restriction on
consummation.
(b) Payment and Delivery of Certificate(s). At any
closing hereunder, Pentair shall pay the
aggregate purchase price for the Shares to be
purchased by delivery of a certified or bank cashier's
check
or wire transfer to the order of the Company in the
amount of the Option Price multiplied by the number
of Shares to be purchased. Upon receipt of payment,
the Company will deliver to Pentair a certificate or
certificates representing the Shares so purchased,
registered in the name of Pentair or its designee, in the
denominations designated by Pentair in its notice of
exercise.
4. Representations and Warranties of the
Company. The Company hereby
represents and warrants to Pentair as follows:
(a) Due Authorization. The Company has the requisite
corporate power and authority to
enter into and perform this Agreement. This
Agreement has been duly authorized by all necessary
corporate action on the part of the Company and has
been duly executed by a duly authorized officer of
the Company and is the valid and binding agreement of
the Company.
(b) Option Shares. Except for any filings required to be
made with any governmental
authorities, which filings shall be made as soon as
possible after the date hereof, 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 such time as the obligation to
deliver Shares upon the exercise of the Stock
Option terminates, will have reserved for issuance,
upon any exercise of the Stock Option, the aggregate
number of Shares issuable upon exercise of the Stock
Option (less the number of Shares previously
issued upon any prior exercise of the Stock Option),
which reserved Shares may be either authorized but
unissued Shares or Shares held by the Company as
treasury Shares, and all of which Shares, upon
issuance pursuant hereto, shall be duly and validly
issued, fully paid and nonassessable, and shall be
delivered free and clear of all claims, liens, charges,
encumbrances and security interests, including any
preemptive right of the shareholders of the Company.
(c) No Conflicts. Neither the execution and delivery of
this Agreement, the consummation
of the transactions contemplated hereby or the
fulfillment of and compliance with the terms and
provisions hereof, will (I) violate any judicial,
administrative or arbitral order, writ, award, judgment,
injunction or decree involving the Company, (ii) conflict
with the terms, conditions or provisions of the
charter or By-Laws of the Company, or (iii) conflict with,
result in a breach of, constitute a default under
or accelerate or permit the acceleration of the
performance required by, any indenture or any material
agreement or other material instrument to which the
Company is a party or by which the Company is
bound. Subject to compliance with the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act (the
"HSR Act"),
neither the execution and delivery of this Agreement
nor the performance by the Company of its
obligations hereunder will violate any provision of law
applicable to the Company or require any
consent or approval of, or filing with or notice to, any
public body or authority under any provision of
law applicable to the Company.
5. Representations and Warranties of Pentair.
Pentair hereby represents and warrants to
the Company as follows:
(a) Due Authorization. Pentair has the requisite
corporate power and authority to enter into
and perform this Agreement. This Agreement has
been duly authorized by all necessary corporate
action on the part of Pentair and has been duly
executed by a duly authorized officer of Pentair and is
the
valid and binding agreement of Pentair.
(b) Distribution. Any Shares to be acquired upon
exercise of the Stock Options will not be
acquired by Pentair with a view to the public distribution
thereof and will not be transferred except in a
transaction registered, or exempt from registration
under, the Securities Act of 1933, as amended (the
"Securities Act").
6. Adjustment Upon Changes in Capitalization. In
the event of any change in the
outstanding Shares by reason of stock dividends, stock
splits, mergers (other than the Merger),
recapitalizations, combinations, conversions,
exchanges of shares or the like, the number and kind
of
shares or securities subject to the Stock Option, the
number and kind of shares or securities reserved for
issuance upon exercise of the Stock Option, and the
Option Price shall be appropriately adjusted. If,
prior to the expiration or exercise of the Stock Option in
full, the Company shall consolidate or merge
into another corporation or liquidate, Pentair shall
thereafter receive upon exercise of the Stock Option
the securities or property to which a holder of the
number of Shares issuable upon the exercise thereof
would have been entitled upon such consolidation,
merger or liquidation, and the Company shall take
such steps in connection with such consolidation,
merger or liquidation as may be necessary to assure
that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be practicable, in
relation to any securities or property thereafter issuable
upon exercise of the Stock Option.
7. Registration Rights. Upon the request of
Pentair, the Company agrees that upon
exercise of the Stock Option (I) during a period of five
years from the first purchase of Shares to effect
up to three registrations under the Securities Act and
any applicable state securities laws covering any
part or all of such Shares acquired and (ii) to include
any part or all of such Shares in any registration
filed by the Company under the Securities Act and in
any related applicable state securities laws
registrations or applications in which such inclusion is
permitted under applicable rules and regulations
unless, in the written opinion of counsel to the
Company, addressed to Pentair, which opinion shall be
satisfactory to Pentair and its counsel, such action is
not required for the prompt sale and distribution of
such Shares to the public. The registrations and
applications effected under this paragraph 7 shall be
effected at the Company's expense except for
underwriting discounts relating to the Shares sold on
behalf of Pentair and except for fees of counsel to
Pentair. In connection with any registration under this
paragraph 7, the parties hereto agree to indemnify
each other in the customary manner, and, in the case
of an underwritten offering, the Company agrees to
enter into an underwriting agreement in customary
form and to indemnify Pentair and the underwriters,
and Pentair agrees to indemnify the Company and
the underwriters, in the manner and to the extent as is
customary in such underwritten offerings. In the
event of any demand for registration pursuant to clause
(I) above, the Company may delay the filing of a
registration statement for a period of up to 90 days if, in
the good faith judgment of the Board of
Directors of the Company, such delay is necessary in
order to avoid interference with a planned material
transaction involving the Company. With respect to
any registration pursuant to clause (ii) above, if
such registration relates to a firm commitment
underwriting of securities to be sold by the Company,
the
Company may decline to include all or any portion of
the Shares acquired by Pentair upon exercise of
the Stock Options if the inclusion of such Shares
would, in the judgment of the managing underwriter in
such underwriting, materially interfere therewith.
8. Extension of Option Period
(a) In the event that, on February 22, 1996, the
Stock Option has not been exercised in full, and
on such date the Stock Option may not be exercised by
reason of any judicial or regulatory judgment,
decree or order preventing or restraining such exercise,
then the time within which the Stock Option may
be exercised hereunder shall be extended until the first
date thereafter on which such prohibition does
not exist and has not existed for at least the three
preceding consecutive business days (or such other
time as the Company and Pentair agree upon).
(b) In the event that, on the date specified in a
notice of exercise, the purchase of the Shares may
not be consummated by reason of any judicial or
regulatory judgment, decree or order preventing or
restraining such purchase, then the time for such
purchase shall be extended until the first date thereafter
on which such prohibition does not exist and has not
existed for at least the three preceding consecutive
business days (or such other time as the Company and
Pentair agree upon).
(c) The parties hereto shall use their reasonable
best efforts to remove any prohibition of the
giving of notice of exercise or the purchase of Shares
upon exercise of the Stock Option, as the case may
be, as soon as practicable.
9. Remedies. The Company agrees that if for any
reason Pentair shall have exercised its
rights under the Stock Option and the Company shall
have failed to issue any of the Shares subject to the
Stock Option or to perform any of its other obligations
under this Agreement, then Pentair shall be
entitled to specific performance and injunctive and
other equitable relief, and the Company further
agrees to waive any requirement for the securing or
posting of any bond in connection with the obtaining
of any such injunctive or other equitable relief. This
provision is without prejudice to any other rights
that Pentair may have against the Company for any
failure to perform its obligations under this
Agreement.
10. HSR Filing. As soon as practicable after the
date hereof, each of the parties hereto shall
file with the Federal Trade Commission and the
Antitrust Division of the United States Department of
Justice all required pre-merger notification and report
forms and other documents and exhibits required
to be filed under the HSR Act and to permit the
purchase of the Shares subject to the Stock Options at
the earliest possible date.
11. Miscellaneous.
(a) Amendments. This Agreement may not be
modified, amended, altered or supplemented,
except upon the execution and delivery of a written
agreement executed by the parties hereto.
(b) Notices. All notices, requests, claims, demands
and other communications hereunder
shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by
delivery, by facsimile, or by registered or certified mail,
postage pre-paid, return receipt requested, to the
respective parties as follows:
To the Company:
Communication Cable, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
P. O. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
P. O. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: L. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
To Pentair:
Pentair, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇▇ & Efron, P. A.
1200 Title Insurance Building
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as either party may have
furnished to the other in writing in accordance herewith,
except that notices of change of address shall only be
effective upon actual receipt.
(c) Governing Law. This Agreement shall be governed
by and construed in accordance with
the substantive law of the State of North Carolina
without giving effect to the principles of conflicts of laws
thereof.
(d) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall
continue in full force and effect and shall in no way be
affected, impaired or invalidated.
(e) Counterparts. This Agreement may be executed in
several counterparts, each of which shall
be an original, but all of which together shall constitute
one and the same agreement.
(f) Effect of Headings. The paragraph headings herein
are for convenience only and shall not
affect the construction hereof.
(g) Assignment. This Agreement shall be binding
upon each party hereto and such party's
successors and assigns. This Agreement shall not be
assignable by the Company, except by operation of
law, but may be assigned by Pentair to a direct or
indirect wholly-owned subsidiary of Pentair.
(h) Waiver. The conditions to each of the parties'
obligations hereunder are for the sole benefit
of such party and may be waived by such party in
whole or in part to the extent permitted by applicable
law.
IN WITNESS WHEREOF, the Company and Pentair
have caused this Agreement to be duly
executed and attested as of the day and year first
above written.
PENTAIR, INC.
By ____________________________
Its Executive Vice President
And By ____________________________
Its Secretary
COMMUNICATION CABLE, INC.
By ____________________________
Its ____________________________
And By ____________________________
Its ____________________________