1
Exhibit (c)(1)
[CONFORMED COPY]
AGREEMENT AND PLAN OF MERGER
DATED AS OF DECEMBER 5, ▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ INCORPORATED,
GKN NORTH AMERICA MANUFACTURING INC.
AND
THE INTERLAKE CORPORATION
2
TABLE OF CONTENTS
PAGE
ARTICLE I
THE OFFER
1.01 The Offer............................................................................................2
1.02 Company Actions......................................................................................3
1.03 Directors............................................................................................5
ARTICLE II
THE MERGER
2.01 The Merger...........................................................................................6
2.02 Effective Time; Closing..............................................................................6
2.03 Effects of the Merger................................................................................7
2.04 Certificate of Incorporation and By-Laws of the Surviving Corporation................................7
2.05 Directors............................................................................................7
2.06 Officers.............................................................................................7
2.07 Conversion of Shares.................................................................................7
2.08 Conversion of the Purchaser Common Stock.............................................................8
2.09 Company Option Plans; Discharge of Certain Severance Obligations.....................................9
2.10 Stockholders' Meeting................................................................................9
2.11 Merger Without Meeting of Stockholders..............................................................10
ARTICLE III
DISSENTING SHARES; PAYMENT FOR SHARES
3.01 Dissenting Shares...................................................................................10
3.02 Payment for Shares..................................................................................11
ARTICLE IV
3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
4.01 Organization and Qualification; Subsidiaries........................................................13
4.02 Certificate of Incorporation and ByLaws.............................................................14
4.03 Capitalization......................................................................................14
4.04 Authority Relative to This Agreement................................................................15
4.05 No Conflict; Required Filings and Consents..........................................................15
4.06 SEC Reports and Financial Statements................................................................16
4.07 Information.........................................................................................17
4.08 Litigation..........................................................................................18
4.09 Compliance with Applicable Laws.....................................................................18
4.10 Employee Benefit Plans..............................................................................18
4.11 Labor Matters.......................................................................................20
4.12 Intellectual Property...............................................................................20
4.13 Environmental Matters...............................................................................21
4.14 Absence of Certain Changes or Events................................................................22
4.15 Real Property.......................................................................................22
4.16 Tax Matters.........................................................................................22
4.17 Certain Approvals...................................................................................23
4.18 Required Vote of Company Stockholders...............................................................23
4.19 Opinion of Financial Advisor........................................................................23
4.20 Rights Agreement....................................................................................23
4.21 Brokers.............................................................................................24
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND THE PURCHASER
5.01 Organization and Qualification......................................................................24
5.02 Authority Relative to This Agreement................................................................24
5.03 No Conflict; Required Filings and Consents..........................................................24
5.04 Information.........................................................................................25
5.05 Financing...........................................................................................25
5.06 Ownership of Company Common Stock...................................................................26
5.07 Brokers.............................................................................................26
ARTICLE VI
COVENANTS
(ii)
4
6.01 Conduct of Business of the Company..................................................................26
6.02 Access to Information...............................................................................28
6.03 Reasonable Best Efforts.............................................................................29
6.04 Consents............................................................................................30
6.05 Public Announcements................................................................................30
6.06 Employee Benefit Arrangements.......................................................................31
6.07 Indemnification.....................................................................................31
6.08 No Solicitation.....................................................................................32
6.09 Notification of Certain Matters.....................................................................32
6.10 Redemption of Rights................................................................................33
6.11 State Takeover Laws.................................................................................33
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
7.01 Conditions..........................................................................................33
ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
8.01 Termination.........................................................................................34
8.02 Effect of Termination...............................................................................35
8.03 Fees and Expenses...................................................................................36
8.04 Amendment...........................................................................................36
8.05 Extension; Waiver...................................................................................36
ARTICLE IX
MISCELLANEOUS
9.01 NonSurvival of Representations and Warranties.......................................................37
9.02 Entire Agreement; Assignment........................................................................37
9.03 Validity............................................................................................37
9.04 Notices.............................................................................................37
9.05 Governing Law.......................................................................................38
9.06 Jurisdiction........................................................................................39
9.07 Descriptive Headings................................................................................39
9.08 Counterparties......................................................................................39
(iii)
5
9.09 Parties in Interest.................................................................................39
9.10 Certain Definitions.................................................................................39
9.11 Specific Performance................................................................................40
9.12 Severability........................................................................................40
9.13 Waiver of Jury Trial................................................................................40
ANNEX I Conditions to the Offer
(iv)
6
Index to Defined Terms
Page
1998 Balance Sheet...............................................................................................17
Acquiring Person.................................................................................................23
Acquisition Transaction..........................................................................................32
affiliate ....................................................................................................39
Agreement .....................................................................................................1
Alternative Proposal.............................................................................................32
Antitrust Authority..............................................................................................30
Blue Sky Laws....................................................................................................16
Board .....................................................................................................1
Certificates ....................................................................................................11
Code ....................................................................................................19
Collective Bargaining Agreements.................................................................................20
Commitment Amount................................................................................................36
Common Share Merger Price.........................................................................................8
Common Share Offer Price..........................................................................................1
Common Shares.....................................................................................................1
Company .....................................................................................................1
Company Disclosure Statement.....................................................................................13
Company Representatives..........................................................................................29
Condition .....................................................................................................1
Confidentiality Agreement........................................................................................37
Consent ....................................................................................................16
control ....................................................................................................39
controlled by....................................................................................................39
controlling ....................................................................................................39
Dissenting Shares................................................................................................10
Distribution Date................................................................................................24
Effective Time....................................................................................................6
Employee Benefit Arrangement.....................................................................................28
Environmental Law................................................................................................21
ERISA ....................................................................................................18
Exchange Act .....................................................................................................2
Exon-▇▇▇▇▇▇ Provision............................................................................................16
Fairness Opinion..................................................................................................4
GAAP ....................................................................................................16
GCL .....................................................................................................1
Governmental Entity..............................................................................................16
group ....................................................................................................39
Hazardous Substance..............................................................................................22
(v)
7
HB .....................................................................................................5
HC 2000 Project..................................................................................................22
Hoeganaes .....................................................................................................5
HSR Act ....................................................................................................16
Indemnified Parties..............................................................................................31
Initial Expiration Date...........................................................................................2
Intellectual Property............................................................................................21
International Traffic in Arms Regulations........................................................................16
IRS..............................................................................................................19
Laws ....................................................................................................18
Licensed Intellectual Property...................................................................................20
Lien ....................................................................................................15
Material Adverse Effect on the Company...........................................................................13
Merger .....................................................................................................1
Merger Consideration..............................................................................................8
Minimum Condition.................................................................................................1
▇▇▇▇▇▇ ▇▇▇▇▇▇▇....................................................................................................4
Nonvoting Common Shares...........................................................................................8
Nonvoting Merger Price............................................................................................8
Offer .....................................................................................................1
Offer Documents...................................................................................................2
Offer Prices .....................................................................................................1
Offer to Purchase.................................................................................................2
Option .....................................................................................................9
Option Plans .....................................................................................................9
Other Filings....................................................................................................17
Owned Intellectual Property......................................................................................20
Parent .....................................................................................................1
Parent Representatives...........................................................................................29
Paying Agent ....................................................................................................11
person ....................................................................................................39
Phase II Budget..................................................................................................22
Plans ....................................................................................................18
Proportionate Percentage..........................................................................................5
Proxy Statement..................................................................................................10
Purchaser .....................................................................................................1
Qualified Plans..................................................................................................19
Quarterly Financial Statements...................................................................................17
Research Agreement...............................................................................................21
Rights .....................................................................................................1
Rights Agreement..................................................................................................1
Schedule 14D-9....................................................................................................3
SEC .....................................................................................................2
(vi)
8
SEC Reports ....................................................................................................16
Series A Merger Price.............................................................................................8
Series A Share Offer Price........................................................................................1
Series A Shares...................................................................................................1
Share Acquisition Date...........................................................................................23
Shares .....................................................................................................1
Significant Subsidiary...........................................................................................13
Special Meeting...................................................................................................9
subsidiaries ....................................................................................................39
Subsidiary ................................................................................................13, 39
Surviving Corporation.............................................................................................6
Tax Return ....................................................................................................23
Taxes ....................................................................................................23
Transactions .....................................................................................................1
under common control with........................................................................................39
Violation ....................................................................................................15
Voting Debt ....................................................................................................14
(vii)
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of December 5, 1998
(this "Agreement"), by and among GKN NORTH AMERICA INCORPORATED, a Delaware
corporation ("Parent"), GKN NORTH AMERICA MANUFACTURING INC., a Delaware
corporation and wholly-owned subsidiary of Parent (the "Purchaser"), and THE
INTERLAKE CORPORATION, a Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, the
Purchaser and the Company have each determined that it is in the best interests
of their respective stockholders for Parent to acquire the Company upon the
terms and subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition, Parent proposes
to cause the Purchaser to commence a cash tender offer (as it may be amended
from time to time as permitted under this Agreement, the "Offer") to purchase
(i) all of the issued and outstanding shares of Common Stock, par value $1.00
per share, of the Company (the "Common Shares") (including the associated Common
Share purchase rights (the "Rights") issued pursuant to that certain Rights
Agreement dated as of January 26, 1989 between the Company and The First
National Bank of Chicago, as Rights Agent (the "Rights Agreement")) at a price
per Common Share of $7.25 (such price, as it may hereafter be increased, the
"Common Share Offer Price"), net to the seller in cash, and (ii) all of the
outstanding shares of Series A Convertible Exchangeable Preferred Stock, par
value $1.00 per share, of the Company (the "Series A Shares" and, together with
the Common Shares, the "Shares"), at a price per Series A Share of $1,980.87
(such price, as it may hereafter be increased, the "Series A Share Offer Price"
and, together with the Common Share Offer Price, the "Offer Prices"), net to the
seller in cash, in each case, upon the terms and subject to the conditions set
forth in this Agreement and the Offer;
WHEREAS, the Board of Directors of the Company (hereinafter
sometimes referred to as the "Board") has unanimously approved the Offer and the
Merger (as hereinafter defined) and resolved and agreed to recommend that the
Company's stockholders tender their Shares pursuant to the Offer;
WHEREAS, the respective Boards of Directors of Parent, the
Purchaser and the Company have approved the merger of the Purchaser with and
into the Company, as set forth below (the "Merger") and, together with the
Offer, the "Transactions", in accordance with the General Corporation Law of the
State of Delaware (the "GCL") following the consummation of the Offer and upon
the terms and subject to the conditions set forth in this Agreement, whereby
each issued and outstanding Share and Nonvoting Common Share (as hereinafter
defined), if any, not owned directly or indirectly by Parent or the Company will
be converted into the right to receive the Merger Consideration (as hereinafter
defined) applicable thereto; and
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WHEREAS, Parent, the Purchaser and the Company desire to make
certain representations, warranties, covenants and agreements in connection with
the Offer and the Merger and also to prescribe various conditions to the Offer
and the Merger.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, Parent, the Purchaser and the Company agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01 The Offer.
(a) Provided that this Agreement shall not have been terminated
in accordance with Section 8.01 and none of the events set forth in clauses (a)
through (i) of Annex I hereto (as hereinafter provided) shall have occurred or
be existing, the Purchaser shall, and Parent shall cause the Purchaser to,
commence (within the meaning of Rule 14d-2(a) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) as promptly as reasonably practicable
after the date hereof, but in any event not later than five business days after
the initial public announcement of the Purchaser's intent to commence the Offer,
the Offer for all outstanding Shares at the Offer Price applicable to such
Shares. The Offer Prices shall, subject to applicable withholding taxes, be net
to the seller in cash upon the terms and subject to the conditions of the Offer.
The initial expiration date for the Offer shall be the twentieth business day
from and after the date the Offer is commenced, including the date of
commencement as the first business day in accordance with Rule 14d-2 under the
Exchange Act (the "Initial Expiration Date"). As soon as reasonably practicable,
the Purchaser shall file with the Securities and Exchange Commission (the "SEC")
the Purchaser's Tender Offer Statement on Schedule 14D-1 (together with any
supplements or amendments thereto, the "Offer Documents"), which shall contain
(as an exhibit thereto) the Purchaser's Offer to Purchase (the "Offer to
Purchase"), which shall be mailed to the holders of Shares with respect to the
Offer. The obligation of Parent to accept for payment or pay for any Shares
tendered pursuant to the Offer will be subject only to the satisfaction of the
conditions set forth in Annex I hereto. The Purchaser expressly reserves the
right to waive any such condition, to increase the price per Share payable in
the Offer, and to make any other changes in the terms and conditions of the
Offer; provided, however, that without the prior written consent of the Company,
the Purchaser shall not decrease the price per Share or change the form of
consideration payable in the Offer, decrease the number of Shares sought to be
purchased in the Offer, change the conditions set forth in Annex I (or broaden
the scope thereof) or waive the Minimum Condition (as defined in Annex I).
Subject to the terms of the Offer and this Agreement and the satisfaction or
waiver (to the extent permitted by this Agreement) of all the conditions of the
Offer set forth in Annex I hereto as of any expiration date, the Purchaser will
accept for payment and pay for all Shares validly tendered and not
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withdrawn pursuant to the Offer as soon as practicable after such expiration
date of the Offer. Subject to Section 8.01, if the conditions set forth in Annex
I hereto are not satisfied or, to the extent permitted by this Agreement, waived
by Parent, as of the Initial Expiration Date (or any subsequently scheduled
expiration date), the Purchaser shall be permitted to extend the Offer from time
to time for the shortest time periods which Parent reasonably believes are
necessary until the consummation of the Offer. In addition, the Purchaser shall
be permitted to extend the Offer on one or more occasions for an aggregate
period of not more than ten business days beyond the latest expiration date if,
as of such date, all of the conditions set forth in Annex I are satisfied or
waived by Parent, but the number of Common Shares and Series A Shares validly
tendered and not withdrawn pursuant to the Offer (after giving effect to the
conversion of all such Series A Shares to Common Shares) equals 80% or more but
less than 90% of the then outstanding Common Shares on a fully diluted basis
(not taking into account the Rights). The Purchaser agrees that if the
conditions set forth in clauses (a) and (b) of Annex I are not satisfied on any
scheduled expiration date of the Offer, the Purchaser shall extend the Offer
from time to time until such condition is satisfied or waived; provided,
however, that the Purchaser shall not be required to extend the Offer beyond the
date five months following the commencement of the Offer.
(b) The Offer Documents will comply in all material respects with
the provisions of applicable federal securities laws and, on the date filed with
the SEC and on the date first published, sent or given to the Company's
stockholders, shall not 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 made therein, in light of the circumstances under which
they were made, not misleading, except that no representation is made by Parent
or the Purchaser with respect to information supplied by the Company for
inclusion in the Offer Documents. Each of Parent and the Purchaser, on the one
hand, and the Company, on the other hand, agrees promptly to correct any
information provided by it for use in the Offer Documents if and to the extent
that it shall have become false or misleading in any material respect, and the
Purchaser further agrees to take all steps necessary to cause the Offer
Documents as so corrected to be filed with the SEC and to be disseminated to
stockholders of the Company, in each case as and to the extent required by
applicable federal securities laws. The Company and its counsel shall be given
the opportunity to review and comment on the Offer Documents and any amendments
thereto prior to the filing thereof with the SEC.
SECTION 1.02 Company Actions.
(a) As soon as reasonably practicable on the date of commencement
of the Offer, the Company shall file with the SEC and mail to the holders of
Shares a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to
the Offer (together with any amendments or supplements thereto, the "Schedule
14D-9"). The Company hereby approves of and consents to the Offer and
represents, and the Schedule 14D-9 will set forth, that (i) the Board, at a
meeting duly called and held on December 4, 1998, has unanimously adopted
resolutions (A) determining that this Agreement and the transactions
contemplated hereby,
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including each of the Offer and the Merger, are fair to and in the best
interests of the Company and its stockholders, (B) approving and adopting this
Agreement and the transactions contemplated hereby, the Offer and the Merger in
accordance with Section 203 of the GCL, and (C) recommending acceptance of the
Offer and approval and adoption of the Merger and this Agreement and the
transactions contemplated hereby by the Company's stockholders (in accordance
with the requirements of the Company's Restated Certificate of Incorporation and
of applicable law), and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ("▇▇▇▇▇▇
▇▇▇▇▇▇▇") has delivered to the Board of Directors of the Company its written
opinion that the Common Share Offer Price and the Common Share Merger Price are
fair, from a financial point of view, to the holders of Common Shares (the
"Fairness Opinion"); provided, however, that such recommendation and approval of
the Board of Directors of the Company may be withdrawn, modified or amended to
the extent that the Board deems it necessary to do so in the exercise of its
fiduciary obligations after being advised with respect thereto by outside
counsel. The Company hereby consents to the inclusion in the Offer Documents of
the recommendation of the Board described in the immediately preceding sentence.
The Company hereby represents and warrants that it has been authorized by ▇▇▇▇▇▇
▇▇▇▇▇▇▇ to permit the inclusion of the Fairness Opinion and references thereto,
subject to prior review by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, in the Offer Documents, the Schedule
14D-9 and the Proxy Statement (as hereinafter defined). The Company has been
advised by each of W. ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and its
directors that they intend to tender all Shares beneficially owned by them to
the Purchaser pursuant to the Offer or to vote such Shares in favor of the
approval and adoption by the stockholders of the Company of this Agreement and
the Merger.
(b) Each of the Company, on the one hand, and Parent and the
Purchaser, on the other hand, agrees promptly to correct any information
provided by any of them for use in the Schedule 14D-9 that shall have become
false or misleading, and the Company further agrees to take all steps necessary
to cause the Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to the stockholders of the Company, in each case as and to the
extent required by applicable federal securities laws. Parent, the Purchaser and
their counsel shall be given an opportunity to review the Schedule 14D-9 and any
amendments thereto prior to the filing thereof with the SEC.
(c) The Company shall promptly furnish the Purchaser with mailing
labels containing the names and addresses of all record holders of Shares and
with security position listings of Shares held in stock depositories, each as of
a recent date, together with all other available listings and computer files
containing names, addresses and security position listings of record holders and
beneficial owners of Shares. The Company shall furnish the Purchaser with such
additional information, including, without limitation, updated listings and
computer files of stockholders, mailing labels and security position listings,
and such other assistance as Parent, the Purchaser or their agents may
reasonably request. Subject to the requirements of applicable law, and except
for such steps as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Offer or the Merger, Parent and the
Purchaser shall hold in confidence the information contained in such labels,
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listings and files, shall use such information only in connection with the Offer
and the Merger, and, if this Agreement shall be terminated in accordance with
Section 8.01, shall deliver to the Company all copies of such information then
in their possession.
SECTION 1.03 Directors.
(a) Subject to compliance with applicable law, promptly upon the
payment by the Purchaser for Shares pursuant to the Offer which fulfills the
Minimum Condition, and from time to time thereafter, Purchaser shall be entitled
to designate such number of directors, rounded up to the next whole number, on
the Board of Directors of the Company as is equal to the product of the total
number of directors on the Board (determined after giving effect to the
directors elected pursuant to this sentence) multiplied by the percentage that
the aggregate number of Common Shares and Series A Shares (after giving effect
to the conversion of all such Series A Shares to Common Shares) beneficially
owned by the Purchaser or its affiliates following such purchase bears to the
total number of fully diluted Common Shares (not taking into account the Rights)
then outstanding (the "Proportionate Percentage"), and the Company shall, upon
request of Parent, promptly take all actions necessary to cause the Purchaser's
designees to be so elected, including increasing the size of the Board or
securing the resignations of incumbent directors or both. At such times, the
Company shall use its reasonable best efforts to cause persons designated by the
Purchaser to constitute the Proportionate Percentage of (i) each committee of
the Board, (ii) each board of directors of each domestic Subsidiary (other than
Hoeganaes (as defined below)), (iii) each committee of each such board, in each
case to the extent permitted by applicable law, and (iv) the directors that the
Company is entitled to nominate to the board of directors of Hoeganaes
Corporation, a Delaware corporation and an 80% subsidiary of the Company
("Hoeganaes"), pursuant to the Amended and Restated Stockholders Agreement,
dated as of September 28, 1994, among The Interlake Companies, Inc., a Delaware
corporation, Hoganas AB, a Swedish corporation ("HB") and Hoeganaes.
Notwithstanding the foregoing, until the earlier of (i) the time the Purchaser
acquires that number of Common Shares and Series A Shares that (after giving
effect to the conversion of all such Series A Shares to Common Shares)
represents at least two-thirds (662/3%) of the outstanding Common Shares on a
fully diluted basis (not taking into account the Rights) and (ii) the Effective
Time, the Company shall use its reasonable best efforts to ensure that all the
members of the Board and each committee of the Board and such boards and
committees of the domestic Subsidiaries as of the date hereof who are not
employees of the Company shall remain members of the Board and of such boards
and committees.
(b) The Company's obligations to appoint the Purchaser's
designees to the Board shall be subject to Section 14(f) of the Exchange Act and
Rule 14f-1 thereunder. The Company shall promptly take all actions required
pursuant to such Section and Rule in order to fulfill its obligations under this
Section 1.03 and shall include in the Schedule 14D-9 such information with
respect to the Company and its officers and directors as is required under such
Section and Rule in order to fulfill its obligations under this Section 1.03.
Parent or the
5
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Purchaser will supply to the Company any information with respect to itself and
its nominees, officers, directors and affiliates required by such Section and
Rule.
(c) From and after the election or appointment of the Purchaser's
designees pursuant to this Section 1.03 and prior to the Effective Time, any
amendment or termination of this Agreement by the Company, any extension by the
Company of the time for the performance of any of the obligations or other acts
of Parent or the Purchaser or waiver of any of the Company's rights hereunder,
or any other action taken by the Board in connection with this Agreement, will
require the concurrence of a majority of the directors of the Company then in
office who neither were designated by the Purchaser nor are employees of the
Company.
ARTICLE II
THE MERGER
SECTION 2.01 The Merger. Upon the terms and subject to the
conditions set forth in Article VII, and in accordance with the applicable
provisions of this Agreement and the GCL, at the Effective Time (as defined in
Section 2.02), the Purchaser shall be merged with and into the Company. As a
result of the Merger, the separate corporate existence of the Purchaser shall
cease and the Company shall continue as the surviving corporation (the
"Surviving Corporation") and a wholly-owned subsidiary of Parent. At the option
of Parent and provided that such amendment does not delay the Effective Time,
the Merger may be structured so that, and this Agreement shall thereupon be
amended to provide that, the Company shall be merged with and into the Purchaser
or another direct or indirect wholly-owned subsidiary of Parent, with the
Purchaser or such other subsidiary of Parent continuing as the Surviving
Corporation; provided, however, that the Company shall be deemed not to have
breached any of its representations and warranties herein if and to the extent
such breach would have been attributable to such election. In such event, the
parties agree to execute an appropriate amendment to this Agreement in order to
reflect the foregoing and to provide that the Purchaser or another wholly-owned
subsidiary of Parent shall be the Surviving Corporation.
SECTION 2.02 Effective Time; Closing. As soon as practicable
after the satisfaction or, if permissible, waiver of the conditions set forth in
Article VII, the Company shall execute in the manner required by the GCL and
deliver to the Secretary of State of the State of Delaware a duly executed and
verified certificate of merger, or, if permitted, a certificate of ownership and
merger, and the parties shall take such other and further actions as may be
required by law to make the Merger effective. The time the Merger becomes
effective in accordance with applicable law is referred to as the "Effective
Time". Prior to such filing, a closing shall be held at the offices of Shearman
& Sterling, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other place
as the parties shall agree, for the purpose of confirming the satisfaction or
waiver, as the case may be, of the conditions set forth in Article VII.
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SECTION 2.03 Effects of the Merger. At the Effective Time, the
Merger shall have the effects set forth in Section 259 of the GCL. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time all the property, rights, privileges, powers and franchises of the Company
and the Purchaser shall vest in the Surviving Corporation, and all debts,
liabilities, obligations, restrictions, disabilities and duties of the Company
and the Purchaser shall become the debts, liabilities, obligations,
restrictions, disabilities and duties of the Surviving Corporation.
SECTION 2.04 Certificate of Incorporation and By-Laws of the
Surviving Corporation.
(a) Unless otherwise determined by Parent prior to the
Effective Time, at the Effective Time the Restated Certificate of Incorporation
of the Company, as in effect immediately prior to the Effective Time, shall be
the certificate of incorporation of the Surviving Corporation, until thereafter
amended as provided by law and such certificate of incorporation; provided,
however, that, at the Effective Time, the Restated Certificate of Incorporation
of the Company shall be amended in its entirety to be substantially identical to
the certificate of incorporation of the Purchaser.
(b) Subject to the provisions of Section 6.07 of this
Agreement, the by-laws of the Purchaser in effect at the Effective Time shall be
the by-laws of the Surviving Corporation, until thereafter amended as provided
by law, the certificate of incorporation of the Surviving Corporation and such
by-laws.
SECTION 2.05 Directors. Subject to applicable law, the
directors of the Purchaser immediately prior to the Effective Time shall be the
initial directors of the Surviving Corporation, each to hold office in
accordance with the certificate of incorporation and by-laws of the Surviving
Corporation.
SECTION 2.06 Officers. The officers of the Company immediately
prior to the Effective Time shall be the initial officers of the Surviving
Corporation, in each case until their respective successors are duly elected or
appointed and qualified.
SECTION 2.07 Conversion of Shares. At the Effective Time, by
virtue of the Merger and without any action on the part of the Purchaser, the
Company or the holders thereof, (a) each Common Share issued and outstanding
immediately prior to the Effective Time (other than any Common Shares held by
Parent, the Purchaser, any wholly-owned subsidiary of Parent or the Purchaser,
in the treasury of the Company or by any wholly-owned subsidiary of the Company,
which Common Shares, by virtue of the Merger and without any action on the part
of the holder thereof, shall be cancelled and retired and shall cease to exist
with no payment being made with respect thereto, and other than Dissenting
Shares (as defined in Section 3.01)) shall be cancelled and shall be converted
automatically into the right to receive in cash the Common Share Offer Price,
payable to the holder thereof, without any interest thereon, less any required
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withholding taxes (the "Common Share Merger Price"), upon surrender and exchange
of the Certificates (as defined in Section 3.02(a)), (b) each Series A Share
issued and outstanding immediately prior to the Effective Time (other than any
Series A Shares held by Parent, the Purchaser, any wholly-owned subsidiary of
Parent or the Purchaser, in the treasury of the Company or by any wholly-owned
subsidiary of the Company, which Series A Shares, by virtue of the Merger and
without any action on the part of the holder thereof, shall be cancelled and
retired and shall cease to exist with no payment being made with respect
thereto, and other than Dissenting Shares) shall be cancelled and shall be
converted automatically into the right to receive in cash the Series A Share
Offer Price payable to the holder thereof, without any interest thereon, less
any required withholding taxes (the "Series A Merger Price"), upon surrender and
exchange of Certificates, and (c) each share of Nonvoting Common Stock, par
value $1.00 per share, of the Company (the "Nonvoting Common Shares") issued and
outstanding immediately prior to the Effective Time (other than any Nonvoting
Common Shares held by Parent, the Purchaser, any wholly-owned subsidiary of
Parent or the Purchaser, in the treasury of the Company or by any wholly-owned
subsidiary of the Company, which Nonvoting Common Shares, by virtue of the
Merger and without any action on the part of the holder thereof, shall be
cancelled and retired and shall cease to exist with no payment being made with
respect thereto, and other than Dissenting Shares) shall be cancelled and shall
be converted automatically into the right to receive in cash the Common Share
Offer Price, payable to the holder thereof, without any interest thereon, less
any required withholding taxes (the "Nonvoting Merger Price" and, together with
the Common Share Merger Price and the Series A Merger Price, the "Merger
Consideration"), upon surrender and exchange of the Certificates. The holders of
such Certificates previously evidencing Shares or Nonvoting Common Shares, as
the case may be, outstanding immediately prior to the Effective Time shall cease
to have any rights with respect to the Common Shares, the Series A Shares or the
Nonvoting Common Shares, except as otherwise provided herein or by law and, upon
the surrender of such Certificates in accordance with the provisions of Section
3.02(b), shall only represent the right to receive for such Shares or Nonvoting
Common Shares, the aggregate Merger Consideration relating thereto without any
interest thereon.
SECTION 2.08 Conversion of the Purchaser Common Stock. At the
Effective Time, each share of common stock, par value $.01 per share, of the
Purchaser issued and outstanding immediately prior to the Effective Time shall,
by virtue of the Merger and without any action on the part of the holder
thereof, be converted into and become one validly issued, fully paid and
nonassessable share of common stock, par value $.01 per share, of the Surviving
Corporation.
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SECTION 2.09 Company Option Plans; Discharge of Certain
Severance Obligations.
(a) Parent and the Company shall take all actions
necessary so that, immediately prior to the acceptance for payment and purchase
of Shares by the Purchaser pursuant to the Offer, (i) each outstanding option to
purchase Common Shares (an "Option") granted under the Company's 1986, 1989,
1997 and 1998 Stock Incentive Programs (collectively, the "Option Plans"),
whether or not then exercisable or vested, shall become fully exercisable and
vested, (ii) each Option that is then outstanding shall be cancelled and (iii)
in consideration of such cancellation, and except to the extent that Parent or
the Purchaser and the holder of any such Option otherwise agree, immediately
following consummation of the Offer, the Company shall pay to such holders of
Options an amount in respect thereof equal to the product of (A) the excess of
the Common Share Offer Price over the exercise price thereof and (B) the number
of Common Shares subject thereto (such payment to be net of taxes required by
law to be withheld with respect thereto); provided that the foregoing shall be
subject to the obtaining of any necessary consents of holders of Options, it
being agreed that the Company and Parent will use their reasonable best efforts
to obtain any such consents.
(b) Parent and the Company shall take all actions
necessary so that, at the Effective Time of the Merger, (i) the employment of
each of Messrs. W. ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ is deemed
to be terminated following a change in control, and (ii) all obligations to each
of said Company officers upon a termination following a change in control that
are dischargeable in cash, as set forth in those certain Severance Pay
Agreements dated as of March 1, 1994 between the Company and each of said
officers and in that certain Trust Agreement dated as of February 17, 1988
between the Company and U.S. Trust Company of California, N.A., as amended to
date, shall have been so discharged.
SECTION 2.10 Stockholders' Meeting.
(a) If required by the Company's Restated Certificate of
Incorporation and/or applicable law in order to consummate the Merger, the
Company, acting through the Board, shall, in accordance with applicable law and
the Company's Restated Certificate of Incorporation and by-laws:
(i) duly call, give notice of, convene and hold a
special meeting of its stockholders (the "Special Meeting") as soon as
practicable following consummation of the Offer for the purpose of
considering and taking action upon this Agreement and the Merger;
(ii) prepare and file, in cooperation with Parent
and the Purchaser, with the SEC a preliminary proxy statement relating
to the Merger and this Agreement and use its reasonable best efforts
(x) to obtain and furnish the information
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required to be included by the SEC in the Proxy Statement (as
hereinafter defined) and, after consultation with Parent, to respond
promptly to any comments made by the SEC with respect to the
preliminary proxy statement and cause a definitive proxy statement (the
"Proxy Statement") to be mailed to its stockholders and (y) to obtain
the necessary approvals of the Merger and this Agreement by its
stockholders; and
(iii) subject to the fiduciary obligations of the Board under
applicable law as advised by outside counsel, include in the Proxy
Statement the recommendation of the Board that stockholders of the
Company vote in favor of the approval of the Merger and the adoption of
this Agreement and the Merger.
(b) Parent agrees that it will vote, or cause to be
voted, all of the Common Shares then owned by it, the Purchaser or any of its
other subsidiaries in favor of the approval of the Merger and the adoption of
this Agreement.
SECTION 2.11 Merger Without Meeting of Stockholders.
Notwithstanding Section 2.10, in the event that Parent, the Purchaser or any
other subsidiary of Parent shall acquire at least 90% of the outstanding shares
of each class of stock of the Company pursuant to the Offer or otherwise, the
parties hereto agree, subject to Article VII, to take all necessary and
appropriate action to cause the Merger to become effective as soon as reasonably
practicable after such acquisition without a meeting of stockholders of the
Company, in accordance with Section 253 of the GCL.
ARTICLE III
DISSENTING SHARES; PAYMENT FOR SHARES
SECTION 3.01 Dissenting Shares. Notwithstanding anything in
this Agreement to the contrary, Shares or Nonvoting Common Shares outstanding
immediately prior to the Effective Time and held by a holder who has not voted
in favor of the Merger or consented thereto in writing and who has demanded
properly in writing appraisal for such Shares or Nonvoting Common Shares in
accordance with Section 262 of the GCL, if such Section 262 provides for
appraisal rights for such Shares or Nonvoting Common Shares in the Merger
("Dissenting Shares"), shall not be converted into or represent the right to
receive the applicable Merger Consideration as provided in Section 2.07, unless
and until such holder fails to perfect or withdraws or otherwise loses his right
to appraisal and payment under the GCL. If, after the Effective Time, any such
holder fails to perfect or withdraws or loses his right to appraisal, such
Dissenting Shares shall thereupon be treated as if they had been converted as of
the Effective Time into the right to receive the applicable Merger Consideration
to which such holder is entitled, without any interest or dividends thereon. The
Company shall give Parent prompt notice of any demands received by the Company
for appraisal of Shares or Nonvoting Common Shares, withdrawals of such demands,
and any other instruments served pursuant to the GCL
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and, prior to the Effective Time, Parent shall have the opportunity to direct
all negotiations and proceedings with respect to such demands for appraisal
under the GCL. Prior to the Effective Time, the Company shall not, except with
the prior written consent of Parent, make any payment with respect to, or settle
or offer to settle, any such demands.
SECTION 3.02 Payment for Shares.
(a) From and after the Effective Time, a bank or
trust company designated by Parent or the Purchaser shall act as paying agent
(the "Paying Agent") in effecting the payment of the applicable Merger
Consideration in respect of certificates (the "Certificates") that, prior to the
Effective Time, represented Shares or Nonvoting Common Shares entitled to
payment of the applicable Merger Consideration pursuant to Section 2.07. Parent
or the Purchaser shall cause the Surviving Corporation to provide the Paying
Agent with cash in amounts necessary to pay for all the Shares and Nonvoting
Common Shares pursuant to Section 2.07, as and when such amounts are needed by
the Paying Agent. Such funds shall be invested by the Paying Agent as directed
by the Surviving Corporation, provided that such investments shall be in
obligations of or guaranteed by the United States of America or of any agency
thereof and backed by the full faith and credit of the United States of America,
in commercial paper obligations rated A-1 or P-1 or better by ▇▇▇▇▇'▇ Investors
Services, Inc. or Standard & Poor's Corporation, respectively, or in deposit
accounts, certificates of deposit or banker's acceptances of, repurchase or
reverse repurchase agreements with, or Eurodollar time deposits purchased from,
commercial banks with capital, surplus and undivided profits aggregating in
excess of $50 million (based on the most recent financial statements of such
bank which are then publicly available at the SEC or otherwise).
(b) Promptly after the Effective Time, the Paying
Agent shall mail to each record holder of Certificates that immediately prior to
the Effective Time represented Shares or Nonvoting Common Shares (other than
Certificates representing Dissenting Shares and Certificates representing Shares
or Nonvoting Common Shares held by Parent or the Purchaser, any wholly-owned
subsidiary of Parent or the Purchaser, in the treasury of the Company or by any
wholly-owned subsidiary of the Company), (i) a form of letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon proper delivery of the Certificates to
the Paying Agent) and (ii) instructions for use in surrendering such
Certificates in exchange for payment therefor. Upon the surrender of each such
Certificate, together with such letter of transmittal, duly completed and
validly executed in accordance with the instructions thereto, and such other
documents as may be required pursuant to such instructions, the Paying Agent
shall pay the holder of such Certificate the applicable Merger Consideration
multiplied by the number of Shares or Nonvoting Common Shares formerly
represented by such Certificate, in consideration therefor, and such Certificate
shall forthwith be cancelled. Until so surrendered, each such Certificate (other
than Certificates representing Dissenting Shares and Certificates representing
Shares or Nonvoting Common Shares held by Parent or the Purchaser, any
wholly-owned subsidiary of Parent or the Purchaser, in the treasury of the
Company or by any wholly-owned subsidiary of the Company) shall
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represent solely the right to receive the aggregate Merger Consideration
relating thereto. No interest or dividends shall be paid or accrued on the
Merger Consideration. If the Merger Consideration (or any portion thereof) is to
be paid to any person other than the person in whose name the Certificate
formerly representing Shares or Nonvoting Common Shares surrendered therefor is
registered, it shall be a condition to such right to receive such payment that
the Certificate so surrendered shall be properly endorsed or otherwise be in
proper form for transfer and that the person surrendering such Certificate shall
pay to the Paying Agent any transfer or other taxes required by reason of the
payment of the Merger Consideration to a person other than the registered holder
of the Certificate surrendered, or shall establish to the satisfaction of the
Surviving Corporation that such tax has been paid or is not applicable.
(c) At any time following the sixth month after the
Effective Time, the Surviving Corporation shall be entitled to require the
Paying Agent to deliver any funds which had been made available to the Paying
Agent and not disbursed to holders of Shares or Nonvoting Common Shares
(including, without limitation, all interest and other income received by the
Paying Agent in respect of all funds made available to it), Certificates and
other documents in its possession relating to the Transactions, and the Paying
Agent's duties shall terminate. Thereafter, each holder of a Certificate
formerly representing Shares or Nonvoting Common Shares may surrender such
Certificate to the Surviving Corporation and receive in consideration therefor
the aggregate Merger Consideration relating thereto, without any interest or
dividends thereon. Notwithstanding the foregoing, neither the Surviving
Corporation nor the Paying Agent shall be liable to any holder of a Share or a
Nonvoting Common Share for any Merger Consideration delivered in respect of such
Share or Nonvoting Common Share to a public official pursuant to any abandoned
property, escheat or other similar law.
(d) At the close of business on the day of the
Effective Time, the stock transfer books of the Company shall be closed and
there shall be no further registration of transfers on the stock transfer books
of the Surviving Corporation of any Shares or Nonvoting Common Shares which were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates formerly representing Shares or Nonvoting Common Shares are
presented to the Surviving Corporation or the Paying Agent, they shall be
surrendered and cancelled in return for the payment of the aggregate Merger
Consideration relating thereto, as provided in this Article III, subject to
applicable law in the case of Dissenting Shares. From and after the Effective
Time, the holders of Shares or Nonvoting Common Shares outstanding immediately
prior to the Effective Time shall cease to have any rights with respect to such
Shares or Nonvoting Common Shares, except as otherwise provided herein or by
applicable law.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and the
Purchaser that, except as set forth in the Company Disclosure Statement
delivered to Parent and the Purchaser prior to the execution of this Agreement
(the "Company Disclosure Statement"):
SECTION 4.01 Organization and Qualification; Subsidiaries. (a)
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Each subsidiary of the Company
(a "Subsidiary") is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. The Company
and each Subsidiary has the requisite corporate power and authority and all
necessary governmental approvals to own, operate or lease its properties and to
carry on its business as it is now being conducted, and is duly qualified or
licensed as a foreign corporation to do business, and is in good standing, in
each jurisdiction in which the nature of its business or the character of the
properties owned, operated or leased by it makes such qualification, licensing
or good standing necessary, except where the failure to have such power or
authority, or the failure to be so qualified, licensed or in good standing,
would not have a Material Adverse Effect on the Company. The term "Material
Adverse Effect on the Company," as used in this Agreement, means any change or
effect that is or is reasonably likely to be materially adverse to the business,
operations, financial condition, assets or liabilities (including, without
limitation, contingent liabilities) of the Company and its Subsidiaries taken as
a whole, except for (i) any change or effect resulting from general economic,
financial or market conditions, (ii) any change or effect resulting from
conditions or circumstances generally affecting the automotive, aerospace and/or
storage rack industries, or (iii) any change or effect resulting from (x) legal
or market actions taken by any customer of the Company or any Subsidiary or any
minority stockholder of a Subsidiary or (y) the departure of any employee of the
Company or any Subsidiary, in either case, in response to the announcement of
the Transactions. A true and complete list of all the Subsidiaries, together
with the jurisdiction of incorporation of each Subsidiary and the percentage of
the outstanding capital stock of each Subsidiary owned by the Company and each
other Subsidiary, is set forth in Section 4.01 of the Company Disclosure
Statement. Except as disclosed in Section 4.01 of the Company Disclosure
Statement, the Company does not directly or indirectly own any equity or similar
interest in, or any interest convertible into or exchangeable or exercisable
for, any equity or similar interest in, any corporation, partnership, joint
venture or other business association or entity.
(b) Each Subsidiary that is material to the business,
operations, properties, condition (financial or otherwise), assets or
liabilities (including, without limitation, contingent liabilities) of the
Company and the Subsidiaries taken as a whole is so identified in Section 4.01
of the Disclosure Schedule and is referred to herein as a "Significant
Subsidiary".
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SECTION 4.02 Certificate of Incorporation and By-Laws. The
Company has heretofore furnished to Parent and the Purchaser a complete and
correct copy of the Certificate of Incorporation and the by-laws or equivalent
organizational documents, each as amended to date, of the Company and each
Significant Subsidiary. Such Certificates of Incorporation, by-laws and
equivalent organizational documents of the Company and of each Significant
Subsidiary are in full force and effect. Neither the Company nor any Significant
Subsidiary is in violation of any of the provisions of its Certificate of
Incorporation, by-laws or equivalent organizational documents in any material
respect.
SECTION 4.03 Capitalization. The authorized capital stock of
the Company consists of (i) 100,000,000 Common Shares, (ii) 15,000,000 Nonvoting
Common Shares and (iii) 2,000,000 shares of Serial Preferred Stock, par value
$1.00 per share. As of the date hereof, there are 23,175,142 Common Shares and
40,000 Series A Shares issued and outstanding, all of which are validly issued,
fully paid and nonassessable and free of preemptive rights, and the Company has
no other shares of capital stock issued or outstanding other than 355,313 Common
Shares held in the treasury of the Company. The Company has no shares of capital
stock reserved for issuance, except that, as of the date hereof, there are (i)
3,213,920 Common Shares reserved for issuance pursuant to the Option Plans, (ii)
10,471,204 Common Shares reserved for issuance upon conversion of the Series A
Shares and (iii) 23,530,455 Common Shares reserved for issuance pursuant to the
Rights Agreement. Since September 27, 1998, the Company (i) has not issued any
shares of capital stock except pursuant to the exercise of Options, (ii) has not
granted any options to purchase Common Shares under the Option Plans and (iii)
has not split, combined, converted or reclassified any of its shares of capital
stock. All Common Shares which may be issued pursuant to the exercise of
outstanding Options and the conversion of Series A Shares will be, when issued
in accordance with the respective terms thereof, duly authorized, validly
issued, fully paid and nonassessable and free of preemptive rights. There are no
bonds, debentures, notes or other indebtedness having general voting rights (or
convertible into Shares having such rights) ("Voting Debt") of the Company or
any Subsidiary issued and outstanding. Except as set forth in this Section 4.03,
there are no options, warrants, calls, subscriptions or other rights,
agreements, arrangements or commitments of any character, relating to the issued
or unissued capital stock of the Company or any Subsidiary or obligating the
Company or any Subsidiary to issue, transfer or sell or cause to be issued,
transferred or sold any shares of capital stock or Voting Debt of, or other
equity interest in, the Company or any Subsidiary or securities convertible into
or exchangeable for such shares or equity interests or obligations of the
Company or any Subsidiary to grant, extend or enter into any such option,
warrant, call, subscription or other right, agreement, arrangement or
commitment. Except (i) as contemplated by the Rights Agreement, (ii) the Series
A Shares, and (iii) the Company's obligations under the Option Plans, there are
no outstanding contractual obligations of the Company or any Subsidiary to
repurchase, redeem or otherwise acquire any Common Shares or the capital stock
of the Company or any Subsidiary or to provide funds to, or make any investment
(in the form of a loan, capital contribution or otherwise) in, any Subsidiary or
any other person. Each outstanding share of capital stock (or other ownership
interests having by their terms ordinary voting power to elect directors or
others performing similar functions with
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respect to such Subsidiary) of each Subsidiary is duly authorized, validly
issued, fully paid and nonassessable, and is owned, directly or indirectly, by
the Company free and clear of any lien, claim, pledge, option, charge, security
interest, right of first refusal, agreement, limitation, encumbrance and
restriction of any kind (any of the foregoing being a "Lien").
SECTION 4.04 Authority Relative to This Agreement. The Company
has all necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the Transactions. The
execution and delivery of this Agreement by the Company and the consummation by
the Company of the Transactions have been duly and validly authorized and
approved by the Board of Directors of the Company and no other corporate
proceedings on the part of the Company are necessary to authorize or approve
this Agreement or to consummate the Transactions (other than, with respect to
the Merger, the approval and adoption of the Merger and this Agreement by
holders of the Common Shares, to the extent required by the Company's Restated
Certificate of Incorporation and by applicable law). This Agreement has been
duly and validly executed and delivered by the Company and, assuming the due and
valid authorization, execution and delivery of this Agreement by Parent and the
Purchaser, constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.
SECTION 4.05 No Conflict; Required Filings and Consents.
(a) None of the execution and delivery of this
Agreement by the Company, the performance of this Agreement by the Company, the
consummation by the Company of the Transactions or compliance by the Company
with any of the provisions hereof will (i) conflict with or violate the Restated
Certificate of Incorporation or by-laws of the Company or the comparable
organizational documents of any Subsidiary, (ii) conflict with or violate any
laws, statute, ordinance, rule, regulation, order, judgment or decree applicable
to the Company or the Subsidiaries, or by which any of them or any of their
respective properties or assets is bound or affected, or (iii) result in a
violation or breach of or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
any loss of any material benefit, or the creation of any Lien on any of the
properties or assets of the Company or any Subsidiary (any of the foregoing
referred to in clause (ii) or this clause (iii) being a "Violation") pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries or any of their respective properties is bound or affected except
in the case of the foregoing clauses (ii) or (iii), for any such Violations
which, individually or in the aggregate, would not have a Material Adverse
Effect on the Company.
(b) None of the execution, delivery and performance
of this Agreement by the Company, the consummation by the Company of the
Transactions or compliance by the Company with any of the provisions hereof will
require any consent, waiver,
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approval, authorization or permit of, or registration or filing with or
notification to (any of the foregoing being a "Consent"), any government or
subdivision thereof, or any administrative, governmental or regulatory
authority, agency, legislative body, court, commission, tribunal or body,
domestic, foreign or supranational (a "Governmental Entity"), except for (i)
compliance with any applicable requirements of the Exchange Act or any state
securities or "blue sky" laws ("Blue Sky Laws"), (ii) the filing and recordation
of a certificate of merger, or, if permitted, a certificate of ownership and
merger, pursuant to the GCL, (iii) the pre-merger notification requirements of
the ▇▇▇▇-▇▇▇▇▇- ▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (iv) the requirements of Section 721 of Title VII of the Defense
Production Act of 1950, as amended, and the rules and regulations promulgated
thereunder (the "Exon-▇▇▇▇▇▇ Provision"), (v) the notification requirements of
the applicable International Traffic in Arms Regulations of the U.S. Department
of State (the "International Traffic in Arms Regulations") and (vi) Consents the
failure of which to obtain or make would not prevent or delay consummation of
the Offer or the Merger, or otherwise prevent the Company from performing its
obligations under this Agreement, and would not, individually or in the
aggregate, have a Material Adverse Effect on the Company.
SECTION 4.06 SEC Reports and Financial Statements.
(a) The Company has filed with the SEC all forms,
reports, schedules, registration statements, definitive proxy statements and
documents required to be filed by the Company with the SEC since December 24,
1995 (collectively, the "SEC Reports"), and the Company has heretofore delivered
to Parent such SEC Reports, in the form filed with the SEC. As of their
respective dates, the SEC Reports complied in all material respects with the
requirements of the Exchange Act or the Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder that are applicable,
as the case may be, to such SEC Reports, and none of the SEC Reports contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading. No
Subsidiary currently has, or since December 24, 1995 has had, an independent
obligation to file any form, report or other document with the SEC.
(b) Each of the audited consolidated balance sheets
and the related consolidated statements of operations, stockholders' equity and
cash flows (including the related notes and schedules thereto) of the Company
contained in the SEC Reports present fairly the consolidated financial position
and the consolidated results of operations and cash flows of the Company and the
consolidated Subsidiaries as at the respective dates thereof or for the
respective periods presented therein in accordance with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the periods indicated except as otherwise noted therein, including the related
notes.
(c) The consolidated balance sheets and the related
consolidated statements of operations and cash flows (including, in each case,
the related notes thereto) of the
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Company contained in the Forms 10-Q for the periods ended September 27, 1998,
June 28, 1998 and March 29, 1998 included in the SEC Reports (collectively, the
"Quarterly Financial Statements") have been prepared in accordance with the
requirements for interim financial statements contained in Regulation S-X. The
Quarterly Financial Statements present fairly the consolidated financial
position, results of operations and cash flows of the Company and its
consolidated Subsidiaries for all periods presented therein in accordance with
GAAP applied on a consistent basis throughout the periods indicated except (i)
for normal and recurring year-end audit adjustments and (ii) conformity of the
related notes to GAAP requirements.
(d) Except as and to the extent set forth on the consolidated
balance sheet of the Company and the Subsidiaries as at September 27, 1998,
including the notes thereto (the "1998 Balance Sheet"), neither the Company nor
any Subsidiary has any liability or obligation of any nature (whether accrued,
absolute, contingent or otherwise) which would be required to be reflected on a
balance sheet, or in the notes thereto, prepared in accordance with GAAP, except
for liabilities and obligations incurred in the ordinary course of business
consistent with past practice since September 27, 1998, which would not,
individually or in the aggregate, have a Material Adverse Effect on the Company.
(e) The Company has heretofore furnished to Parent complete
and correct copies of all amendments and modifications that have not been filed
by the Company with the SEC to all agreements, documents and other instruments
that previously had been filed by the Company with the SEC and are currently in
effect, to the extent that such amendment or modification materially modifies
the terms of such agreement, document or other instrument.
SECTION 4.07 Information. Neither the Schedule 14D-9 nor any
information supplied by the Company for inclusion or incorporation by reference
in (i) the Offer Documents, (ii) the Proxy Statement or (iii) any other document
to be filed with the SEC or any other Governmental Entity in connection with the
Transactions (the "Other Filings") or any amendments or supplements thereto
will, at the respective times filed with the SEC or other Governmental Entity or
when first published, sent or given to stockholders of the Company, 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 made therein,
in light of the circumstances under which they were made, not misleading. The
Proxy Statement to be sent to the stockholders of the Company in connection with
the Special Meeting, shall not, at the date the Proxy Statement (or any
amendment or supplement thereto) is first mailed to stockholders of the Company,
at the time of the Special Meeting and at the Effective Time, be false or
misleading with respect to any material fact, or omit to state any material fact
required to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they are made, not misleading
or necessary to correct any statement in any earlier communication with respect
to the solicitation of proxies for the Special Meeting which shall have become
false or misleading. The Schedule 14D-9 and the Proxy Statement will comply as
to form in all material respects with the requirements of the Exchange Act and
the rules and regulations thereunder, except that no representation is made by
the Company with
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respect to statements made therein based on information supplied by Parent or
the Purchaser for inclusion in the Proxy Statement.
SECTION 4.08 Litigation. Except as set forth in the SEC Reports, as
of the date hereof, there is no suit, action, claim, proceeding, investigation
or audit pending or, to the knowledge of the Company, threatened against or
affecting the Company or any Subsidiary or any property or asset of the Company
or any Subsidiary, before any court, arbitrator or Governmental Entity, that,
individually or in the aggregate, would have a Material Adverse Effect on the
Company. As of the date hereof, neither the Company nor any Subsidiary nor any
property or asset of the Company or any Subsidiary is subject to any judgment,
decree, injunction, order, writ, determination or award of any Governmental
Entity or arbitrator having, individually or in the aggregate, a Material
Adverse Effect on the Company. Except as set forth in the SEC Reports, no
Governmental Entity has provided notification to the Company or a Subsidiary of
its intention to conduct any audit, investigation or other review with respect
to the Company or such Subsidiary, which audit, investigation or review would,
if adversely determined, individually or in the aggregate, have a Material
Adverse Effect on the Company. Since January 1, 1995, there has not been any
product recall or post-sale warning by the Company or any Subsidiary or any of
their customers concerning any products manufactured, shipped, sold, marketed,
distributed, processed or merchandised by the Company or any Subsidiary.
SECTION 4.09 Compliance with Applicable Laws. Except as set forth in
the SEC Reports, neither the Company nor any Subsidiary is in violation of any
foreign, federal, state or local law, regulation, order, statute, ordinance,
rule, judgment, ruling or decree ("Laws") of any Governmental Entity applicable
to the Company or any Subsidiary or by which any property or asset of the
Company or any Subsidiary is bound or affected, except for violations which,
individually or in the aggregate, would not have a Material Adverse Effect on
the Company. Except as set forth in the SEC Reports, the business operations of
the Company and its Subsidiaries are not being conducted in violation of any
Laws, except for violations which, individually or in the aggregate, would not
have a Material Adverse Effect on the Company.
SECTION 4.10 Employee Benefit Plans.
(a) Section 4.10(a) of the Company Disclosure Statement
includes a complete list of all material employee benefit and compensation plans
and programs providing benefits to any employee or former employee of the
Company and its Subsidiaries sponsored or maintained by the Company or any of
its Subsidiaries or to which the Company or any of its Subsidiaries contributes
or is obligated to contribute (collectively, the "Plans"). Without limiting the
generality of the foregoing, the term "Plans" includes all employee welfare
benefit plans within the meaning of Section 3(l) of the Employee Retirement
Income Security Act of 1974, as amended, and the regulations thereunder
("ERISA"), and all employee pension benefit plans within the meaning of Section
3(2) of ERISA. Neither the Company nor any Subsidiary has any commitment to (i)
create, incur liability with respect to, or cause to exist any other employee
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benefit plans, (ii) enter into any contract or agreement to provide compensation
or benefits to any individual, or (iii) modify, change or terminate any Plan,
other than with respect to any modification, change or termination required by
ERISA or the Internal Revenue Code of 1986, as amended (the "Code").
(b) With respect to each Plan, the Company has made available
to Parent a true, correct and complete copy of: (i) all plan documents, benefit
schedules, trust agreements, and insurance contracts and other funding vehicles;
(ii) the most recent Annual Report (Form 5500 Series) and accompanying schedule,
if any; (iii) the current summary plan description, if any; (iv) the most recent
annual financial report, if any; (v) the most recent actuarial report, if any;
and (vi) the most recent determination letter from the Internal Revenue Service
(the "IRS"), if any.
(c) Each of the Company and each of its Subsidiaries has
complied, and is now in compliance, in all material respects with all provisions
of ERISA, the Code and all laws and regulations applicable to the Plans. With
respect to each Plan that is intended to be a "qualified plan" within the
meaning of Section 401 (a) of the Code ("Qualified Plans"), the IRS has issued a
favorable determination letter, and nothing has occurred since the date of such
determination letter to adversely affect the qualified status of any Qualified
Plan.
(d) All contributions required to be made to any Plan by
applicable law or regulation or by any plan document or other contractual
undertaking, and all premiums due or payable with respect to insurance policies
funding any Plan, for any period through the date hereof have been timely made
or paid in full or, to the extent not required to be made or paid on or before
the date hereof, have been fully reflected in the financial statements of the
Company included in the SEC Reports to the extent required under generally
accepted accounting principles.
(e) With respect to any Plan which is subject to Title IV or
Section 302 of ERISA or Section 412 or 4971 of the Code, there does not now
exist, nor do any circumstances exist that could result in, any liability under
(i) Title IV of ERISA, (ii) Section 302 of ERISA or (iii) Sections 412 and 4971
of the Code, and there is no circumstance that exists that otherwise could
reasonably be expected to result in liability to the Company or any Subsidiary
pursuant to Title IV of ERISA. The Company's group benefit Plans comply in all
material respects with the continuation coverage requirements of Section 601 et
seq. of ERISA and Section 4980B of the Code.
(f) Neither the Company nor any Subsidiary has maintained,
sponsored or been obligated to contribute, on behalf of any current or former
employees of the Company, to a multiemployer plan (as defined in Section 3(37)
of ERISA) or is liable for any withdrawal liability under Section 4201 of ERISA.
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(g) Except as set forth in the SEC Reports, no current or
former employee or director of the Company or any Subsidiary is entitled to any
benefit under any Plan by reason of the Transactions, including, but not limited
to, severance, stay-pay or retention bonuses, or to any acceleration, vesting,
distribution or increase in benefits or obligations to fund benefits.
SECTION 4.11 Labor Matters.
(a) Except as set forth in Section 4.11 of the Company
Disclosure Statement, neither the Company nor any Subsidiary is a party or
otherwise subject to any collective bargaining agreement or other labor union
contracts. The contracts and agreements listed in Section 4.11 of the Company
Disclosure Statement are hereinafter referred to as "Collective Bargaining
Agreements."
(b) Expect as set forth in the SEC Reports or as would not,
individually and in the aggregate, have a Material Adverse Effect on the
Company, (i) neither the Company nor any Subsidiary has breached or otherwise
failed to comply with any material provision of such Collective Bargaining
Agreements and there are no grievances outstanding against the Company or any
Subsidiary under any such Collective Bargaining Agreements; (ii) there are no
unfair labor practice complaints pending against the Company or any Subsidiary
before the National Labor Relations Board or any current union representation
questions involving employees of the Company or any Subsidiary; and (iii) there
is no strike, slowdown, work stoppage or lockout, or, to the best knowledge of
the Company, threat thereof, by or with respect to any employees of the Company
or any Subsidiary. The consent of any labor unions which are parties to such
Collective Bargaining Agreements listed in Section 4.11 of the Company
Disclosure Statement is not required to consummate the Transactions.
SECTION 4.12 Intellectual Property.
(a) Except as would not, individually and in the aggregate,
have a Material Adverse Effect on the Company, (i) the Company and each
Subsidiary owns, or is licensed or otherwise has the right to use (in each case,
clear of any liens or encumbrances of any kind), all Intellectual Property (as
defined below) used in or necessary for the conduct of its business as currently
conducted, (ii) no claims are pending or, to the best knowledge of the Company,
threatened that the Company or any Subsidiary is infringing on or otherwise
violating the rights of any person with regard to any Intellectual Property and
(iii) to the best knowledge of the Company, no person is infringing on or
otherwise violating any right of the Company or any Subsidiary with respect to
any Intellectual Property owned by and/or licensed to the Company or any
Subsidiary. Section 4.12 of the Company Disclosure Statement contains a list of
all material Intellectual Property owned by the Company or any Subsidiary
(collectively, the "Owned Intellectual Property") and a list of all material
Intellectual Property licensed to the Company or any Subsidiary or licensed by
the Company or any Subsidiary to any third party (the "Licensed Intellectual
Property").
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(b) For purposes of this Agreement, "Intellectual Property"
shall mean trademarks (registered or unregistered), service marks, brand names,
trade dress, trade names, the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any jurisdiction to
register, the foregoing; and trade secrets and rights in any jurisdiction to
limit the use or disclosure thereof by any person.
(c) Except as would not have a Material Adverse Effect on the
Company, the rights of the Company or any Subsidiary in or to the Owned
Intellectual Property do not conflict with, misappropriate, or infringe upon the
Intellectual Property right of any third party. Neither the Company nor any
Subsidiary has granted any license, sublicense or other right to any other
person with respect to the Owned Intellectual Property or the Licensed
Intellectual Property. Except as set forth in the SEC Reports, no claims have
been made or asserted or are pending, nor, to the best knowledge of the Company,
have any such claims been threatened, against the Company or any Subsidiary (i)
based upon or challenging or seeking to deny or restrict the use by the Company
or any Subsidiary of any of the Owned Intellectual Property or Licensed
Intellectual Property, or (ii) alleging that any Licensed Intellectual Property
is being licensed, or used in violation of any Intellectual Property right of
any third party.
(d) The Amended and Restated Research and Development
Agreement between Hoeganaes and HB dated September 28, 1994 (the "Research
Agreement") (i) is valid and binding on each party thereto, (ii) is in full
force and effect, (iii) has not been amended or modified and (iv) by its terms
will continue after, and be unaffected by, the consummation of the Offer and the
Merger. Neither Hoeganaes, nor, to the best knowledge of the Company, HB is, in
any material respect, in breach of or default under, the Research Agreement or
has granted to any other person any rights, adverse or otherwise, under the
Research Agreement.
(e) The statements of the Company made in the SEC Reports
regarding the Company's Year 2000 compliance and the cost related thereto are
true and complete in all material respects.
SECTION 4.13 Environmental Matters. Except as would not reasonably
be expected to have a Material Adverse Effect on the Company, (i) no real
property currently or formerly owned or operated by the Company or any
Subsidiary is contaminated with any Hazardous Substances to an extent or in a
manner or condition requiring remediation or other action under any
Environmental Law, (ii) no judicial or administrative proceeding is pending or,
to the knowledge of the Company, threatened relating to liability for any
off-site disposal or contamination, (iii) neither the Company nor any Subsidiary
has received in writing any claims or notices alleging liability under any
Environmental Law, and the Company has no knowledge of any circumstances that
would reasonably be expected to result in such claims, and (iv) the Company and
each Subsidiary are and have been in compliance with all applicable
Environmental Laws and all permits, approvals, licenses and other authorizations
issued pursuant thereto. "Environmental Law" means any applicable federal,
state, local or foreign law, regulation, order, decree or judicial opinion, or
other agency requirement having the force and
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effect of law, and relating to noise, odor, Hazardous Substances or the
protection of the environment, health, safety or natural resources. "Hazardous
Substance" means any waste or toxic or hazardous substance that is regulated by
or under authority of any Environmental Law, including any petroleum products,
asbestos or polychlorinated biphenyls.
SECTION 4.14 Absence of Certain Changes or Events.
(a) Since September 27, 1998 and prior to the date of this
Agreement, the Company and the Subsidiaries have conducted their businesses only
in the ordinary course and in a manner consistent with past practice and there
has not been any change or effect that is or is reasonably likely to be
materially adverse to the business, operations, financial condition, assets or
liabilities (including, without limitation, contingent liabilities) of the
Company or any Subsidiary having, or that could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(b) (i) Phase I of the HC 2000 Project is substantially
complete and largely operational; (ii) Phase I of the HC 2000 Project will be
fully operational by December 31, 1998 and will not require additional
expenditures of more than approximately $2,000,000 and (iii) Section 4.14(b) of
the Company Disclosure Statement sets forth the budget and the target dates for
completion of Phase II of the HC 2000 Project (the "Phase II Budget"). For
purposes of this Agreement, the "HC 2000 Project" means the currently planned
improvements at the Gallatin facility of Hoeganaes.
SECTION 4.15 Real Property. The Company or a Subsidiary either owns
in fee or holds a leasehold interest in all real property material to the
business and operations of the Company and the Subsidiaries, taken as a whole.
The Company or a Subsidiary, as applicable, has good fee title or leasehold
interest, as applicable, to such real property free and clear of all Liens
subject only to (a) mortgages or deeds of trust disclosed in Section 4.15 of the
Company Disclosure Statement, (b) liens for Taxes not yet due and payable and
(c) such other Liens as, individually or in the aggregate, do not materially
interfere with the business and operations of the Company and the Subsidiaries,
taken as a whole, as presently conducted. The Company has delivered to Parent
true and complete copies of the leases, including any amendments thereto, for
the Ridgway, Pennsylvania (River Road) and El Cajon, California (▇▇▇▇▇▇▇▇▇
Field) properties and each such lease is in full force and effect, and neither
the Company nor any Subsidiary is in material breach of either thereof or has
received any notice of termination or default thereunder, which default has not
been cured.
SECTION 4.16 Tax Matters.
(a) (i) The Company and each of the Subsidiaries has filed all
United States federal, and all material state, local and foreign Tax Returns
required to be filed by each of them; (ii) the Company and each of the
Subsidiaries have, within the time and in the manner prescribed by law, paid all
Taxes that are currently due and payable, except for those contested in
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good faith and for which adequate reserves have been taken; (iii) there are no
tax liens upon the assets of the Company or of any of the Subsidiaries except
for statutory liens for current Taxes not yet due or being contested in good
faith; and (iv) no deficiency for any income Taxes has been proposed, asserted
or assessed against the Company or any of the Subsidiaries which has not been
resolved and paid in full.
(b) For purposes of this Section 4.16 (i) "Tax Return" shall
mean any report, return, information statement, payee statement or other
information required to be provided to any federal, state, local or foreign
Governmental Authority, or otherwise retained, with respect to Taxes and (ii)
"Taxes" shall mean any and all taxes, levies, imposts, duties, assessments,
charges and withholdings imposed or required to be collected by or paid over to
any federal, state, local, supra-national or foreign Governmental Authority or
any political subdivision thereof, including without limitation income, gross
receipts, ad valorem, value added, minimum tax, franchise, sales, use, excise,
license, real or personal property, unemployment, disability, stock transfer,
mortgage recording, estimated, withholding or other tax, governmental fee or
other like assessment or charge of any kind whatsoever, and including any
interest, penalties, fines, assessments or additions to tax imposed in respect
of the foregoing, or in respect of any failure to comply with any requirement
regarding Tax Returns.
SECTION 4.17 Certain Approvals. Assuming the accuracy of Parent's
representation in Section 5.06 of this Agreement, the Company has taken all
action necessary such that the provisions of Section 203 of the GCL will not
apply to either of the Transactions.
SECTION 4.18 Required Vote of Company Stockholders. Unless the
Merger may be consummated in accordance with Section 253 of GCL, the only vote
of the stockholders of the Company required to adopt this Agreement and approve
the Merger is the affirmative vote of the holders of Common Shares representing
at least two-thirds (662/3%) of the total outstanding.
SECTION 4.19 Opinion of Financial Advisor. The Company has received
the written opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ that the Common Share Offer Price and the
Common Share Merger Price are fair, from a financial point of view, to the
holders of Common Shares.
SECTION 4.20 Rights Agreement.
(a) The Board has taken all necessary action to irrevocably
amend the Rights Agreement so that neither the execution or delivery of this
Agreement nor the making of the Offer or the acceptance for payment or payment
for Shares by the Purchaser pursuant to the Offer will cause (i) the Rights to
become exercisable under the Rights Agreement, (ii) Parent or Purchaser or any
of their affiliates to be deemed an "Acquiring Person" (as defined in the Rights
Agreement) or (iii) the "Share Acquisition Date" (as defined in the Rights
Agreement) to occur upon any such event.
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(b) The "Distribution Date" (as defined in the Rights
Agreement) has not occurred.
SECTION 4.21 Brokers. Except for the engagement of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
none of the Company, any Subsidiary, or any of their respective officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finder's fees in connection
with the Transactions. The Company has heretofore furnished to Parent a complete
and correct copy of all agreements between the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
pursuant to which such firm would be entitled to any payment relating to the
Transactions.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND THE PURCHASER
Parent and the Purchaser represent and warrant to the Company as
follows:
SECTION 5.01 Organization and Qualification. Parent is a corporation
duly organized, validly existing and in good standing under the laws of
Delaware. The Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.
SECTION 5.02 Authority Relative to This Agreement. Each of Parent
and the Purchaser has all necessary power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate the
Transactions. The execution and delivery of this Agreement by Parent and the
Purchaser and the consummation by Parent and the Purchaser of the Transactions
have been duly and validly authorized and approved by the Boards of Directors of
Parent and the Purchaser and by Parent as stockholder of the Purchaser and no
other corporate proceedings on the part of Parent or the Purchaser are necessary
to authorize or approve this Agreement or to consummate the Transactions. This
Agreement has been duly executed and delivered by each of Parent and the
Purchaser and, assuming the due and valid authorization, execution and delivery
of this Agreement by the Company, constitutes a legal, valid and binding
obligation of each of Parent and the Purchaser enforceable against each of them
in accordance with its terms.
SECTION 5.03 No Conflict; Required Filings and Consents.
(a) None of the execution, delivery and performance of this
Agreement by Parent or the Purchaser, the consummation by Parent or the
Purchaser of the Transactions or compliance by Parent or the Purchaser with any
of the provisions hereof will (i) conflict with or violate the organizational
documents of Parent or the Purchaser, (ii) conflict with or violate any laws,
statute, ordinance, rule, regulation, order, judgment or decree applicable to
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Parent or the Purchaser, or by which any property or asset of either of them is
bound or affected, or (iii) result in a Violation pursuant to any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Parent or the Purchaser is a party or by
which any property or asset of either of them is bound or affected, except in
the case of the foregoing clauses (ii) and (iii) for any such Violations which,
individually or in the aggregate, would not materially adversely affect the
ability of Parent or the Purchaser to consummate the Transactions.
(b) None of the execution and delivery of this Agreement by
Parent and the Purchaser, the performance of this Agreement by Parent or the
Purchaser, the consummation by Parent and the Purchaser of the Transactions or
compliance by Parent and the Purchaser with any of the provisions hereof will
require any Consent of any Governmental Entity, except for (i) compliance with
any applicable requirements of the Exchange Act, (ii) the filing and recordation
of a certificate of merger, or, if permitted, a certificate of ownership and
merger, pursuant to the GCL, (iii) the pre-merger notification requirements of
the HSR Act, (iv) the requirements of the Exon-▇▇▇▇▇▇ Provision, (v) the
notification requirements of the applicable International Traffic in Arms
Regulations and (vi) Consents the failure of which to obtain or make would not
materially adversely affect the ability of Parent or the Purchaser to consummate
the Transactions.
SECTION 5.04 Information. None of the information supplied or to be
supplied by Parent and the Purchaser for inclusion in the Offer Documents will,
at the time filed with the SEC or when first published, sent or given to
stockholders of the Company, as the case may be, 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 made therein, in light of the
circumstances under which they were made, not misleading. The information
supplied by Parent for inclusion in the Proxy Statement will not, on the date
the Proxy Statement (or any amendment or supplement thereto) is first mailed to
stockholders of the Company, at the time of the Special Meeting and at the
Effective Time, contain any statement which, at such time and in light of the
circumstances under which it is made, is false or misleading with respect to any
material fact, or omits to state any material fact required to be stated therein
or necessary in order to make the statements therein not false or misleading or
necessary to correct any statement in any earlier communication with respect to
the solicitation of proxies for the Special Meeting which shall have become
false or misleading. Notwithstanding the foregoing, Parent and Purchaser make no
representation or warranty with respect to any information supplied by the
Company or any of its representatives which is contained in any of the foregoing
documents or the Offer Documents. The Offer Documents shall comply in all
material respects as to form with the requirements of the Exchange Act and the
rules and regulations thereunder.
SECTION 5.05 Financing. Parent or the Purchaser has available to it
the funds necessary to consummate the Offer and the Merger on a timely basis.
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SECTION 5.06 Ownership of Company Common Stock. As of the date of
this Agreement, neither Parent nor the Purchaser beneficially owns any shares of
capital stock of the Company.
SECTION 5.07 Brokers. Except for the engagement of Warburg Dillon
Read LLC, none of Parent, the Purchaser, or any of their respective
Subsidiaries, officers, directors or employees, has employed any broker or
finder or incurred any liability for any brokerage fees, commissions or finder's
fees in connection with the Transactions.
ARTICLE VI
COVENANTS
SECTION 6.01 Conduct of Business of the Company. The Company
covenants and agrees that, during the period from the date of this Agreement to
the Effective Time, unless Parent shall otherwise agree in writing, the
businesses of the Company and the Subsidiaries shall be conducted only in the
ordinary course of business and in a manner consistent with past practice; and
the Company will use its reasonable best efforts to preserve intact the business
organization of the Company and the Subsidiaries, to keep available the services
of the current officers, employees and consultants of the Company and the
Subsidiaries and to preserve the current relationships of the Company and the
Subsidiaries with customers, suppliers and other persons with which the Company
or any Subsidiary has significant business relations. Without limiting the
generality of the foregoing, and except as otherwise contemplated by this
Agreement, neither the Company nor any Subsidiary shall, between the date of
this Agreement and the Effective Time, directly or indirectly do, or propose to
do, any of the following without the prior written consent of Parent:
(a) adopt any amendment to its Certificate of Incorporation or
by-laws or equivalent organizational documents or the Rights Agreement;
(b) issue, reissue, sell, pledge, dispose of, grant or
encumber or authorize the issuance, reissuance, or any sale, pledge,
disposition, grant or encumbrance of (i) any shares of capital stock of any
class of the Company or any Subsidiary, or any warrants, options, convertible
securities or other rights of any kind to acquire any shares of such capital
stock, or any other ownership interest (including, without limitation, any
phantom interest), of the Company or any Subsidiary (except for the issuance of
(x) Common Shares and Nonvoting Common Shares upon conversion of any Series A
Shares or Nonvoting Common Shares and (y) a maximum of 2,000,000 Common Shares
issuable pursuant to employee stock options outstanding on the date hereof) or
(ii) any assets of the Company or any Subsidiary, except for sales in the
ordinary course of business and in a manner consistent with past practice;
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(c) declare, set aside, make or pay any dividend or other
distribution payable in cash, securities, property or otherwise, with respect to
any of its capital stock, except for the declaration and payment in the ordinary
course of business and consistent with past practice of any dividend; provided,
however, in no event shall Hoeganaes pay any dividend that has previously been
deferred;
(d) split, combine, subdivide, reclassify or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock except
for (y) any special redemption of the Series A Shares at the Dividend Reference
Value to which the holders thereof may be entitled upon the occurrence of a
Change of Control (as such terms are defined in the Company's Restated
Certificate of Incorporation) and (z) the redemption of the Rights;
(e) except for (i) increases in salary, wages and benefits of,
and, after consultation with Parent, the establishing of annual incentive plans
for, officers or employees of the Company or its Subsidiaries in the ordinary
course of business and consistent with past practice (which incentive plans, in
the case of Messrs. ▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇ may be adopted at any time after
December 1, 1998), (ii) increases in salary, wages and benefits granted to
officers and employees of the Company or the Subsidiaries in the ordinary course
of business and consistent with past practice in conjunction with new hires,
promotions or other changes in job status, (iii) increases in salary, wages and
benefits to employees of the Company pursuant to collective bargaining
agreements entered into in the ordinary course of business, (iv) the payment in
calendar year 1998 with respect solely to Messrs. ▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇, of
(x) annual bonuses payable in respect of the fiscal year ending December 27,
1998 and (y) bonuses payable for the three-year period from 1996 through 1998
pursuant to the Long-Term Plan under the 1996 Senior Executive Incentive
Compensation Plan, it being understood that the bonuses to be paid in calendar
year 1998 shall not exceed the bonuses that would have otherwise been payable,
(v) with respect solely to Messrs. ▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇, the acceleration of
vesting into calendar year 1998 of any outstanding Options which vest by their
terms upon a change in control, (vi) to the extent set forth in the Company
Disclosure Statement, the funding or amendment of "rabbi trusts" with respect to
the Directors Post-Retirement Income Plan, the deferred compensation agreements
of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, and/or certain Key Executive
Severance Agreements, (vii) to the extent set forth in the Company Disclosure
Statement, the settlement of any outstanding non-qualified pension obligations,
and (viii) to the extent set forth in the Company Disclosure Statement, the
payment or transfer from The Interlake Corporation Retirement Savings Plan
and/or Employee Stock Ownership Plan of the account balances of Messrs. ▇▇▇▇,
▇▇▇▇▇▇▇ and ▇▇▇▇▇, increase the compensation or fringe benefits payable or to
become payable to its directors, officers or key employees (whether from the
Company or any of the Subsidiaries), or pay any benefit not required by any
existing plan or arrangement (including, without limitation, the granting of
stock options, stock appreciation rights, shares of restricted stock or
performance units) or grant any severance or termination pay to (except pursuant
to existing agreements, plans or policies), or enter into any employment or
severance agreement with, any director, officer or other key employee of the
Company or any of the Subsidiaries or establish, adopt, enter into, or amend any
collective bargaining, bonus, profit sharing, thrift,
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compensation, stock option, restricted stock, pension, retirement, savings,
welfare, deferred compensation, employment, termination, severance or other
employee benefit plan, agreement, trust, fund, policy or arrangement for the
benefit or welfare of any directors, officers or current or former employees
(any of the foregoing being an "Employee Benefit Arrangement"), except in each
case to the extent required by applicable law or regulation; provided, however,
that nothing herein will be deemed to prohibit the payment of benefits as they
become payable in accordance with the terms of an Employee Benefit Arrangement;
(f) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any corporation, partnership,
other business organization or any division thereof or any material amount of
assets; (ii) incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse, or otherwise as an accommodation
become responsible for, the obligations of any person, or make any loans or
advances, except in the ordinary course of business and consistent with past
practice; (iii) enter into any supply or purchase agreements that will take in
excess of 12 months to perform, or enter into any other contract or agreement
other than in the ordinary course of business, consistent with past practice;
(iv) authorize or commit to any capital expenditure, which is in excess of the
amounts allocated for any and all periods and/or any and all projects specified
in the Company's 1999 Strategic Plan heretofore furnished to Parent or, with
respect to the HC 2000 Project, the amount that is expressly contemplated by the
Phase II Budget for any and all periods and/or any and all projects specified in
the HC 2000 Project or (v) enter into or amend any contract, agreement,
commitment or arrangement with respect to any matter set forth in this Section
6.01(f);
(g) take any action, other than reasonable and usual actions
in the ordinary course of business and consistent with past practice, with
respect to accounting policies or procedures (including, without limitation,
procedures with respect to the payment of accounts payable and collection of
accounts receivable);
(h) make any tax election or settle or compromise any material
federal, state, local or foreign income tax liability;
(i) pay, discharge or satisfy any claim, liability or
obligation (absolute, accrued, asserted or unasserted, contingent or otherwise),
other than the payment, discharge or satisfaction, in the ordinary course of
business and consistent with past practice, of liabilities reflected or reserved
against in the 1998 Balance Sheet or subsequently incurred in the ordinary
course of business and consistent with past practice; or
(j) agree in writing or otherwise to take any of the foregoing
actions.
SECTION 6.02 Access to Information. From the date hereof until the
Effective Time, the Company will, and will cause the Subsidiaries, and each of
their respective officers, directors, employees, auditors, counsel, advisors and
representatives (collectively, the
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"Company Representatives") to, provide Parent and the Purchaser and their
respective officers, directors, employees, auditors, counsel, advisors and
representatives (collectively, the "Parent Representatives") reasonable access
(subject, however, to existing confidentiality and similar nondisclosure
obligations and the preservation of attorney client and work product
privileges), during normal business hours and upon reasonable notice, to the
officers, employees, agents, properties, offices, plants and other facilities
and to the books and records of the Company and the Subsidiaries, and will
permit Parent and the Purchaser to make inspections of such as either of them
may reasonably require, and will cause the Company Representatives and the
Subsidiaries to furnish Parent, the Purchaser and the Parent Representatives
with all financial, operating and other data and information with respect to the
business and operations of the Company and the Subsidiaries as Parent and the
Purchaser, through its officers, employees or agents, may from time to time
reasonably request; provided that nothing in this Section 6.02 shall be deemed
to require the Company to make available to Parent or the Purchaser any
facilities of, or information or materials with respect to, Hoeganaes to the
extent the Company and its advisors determine that to do so would be contrary to
its obligations to the minority stockholder of Hoeganaes. Unless otherwise
required by Law, Parent and the Purchaser will, and will cause the Parent
Representatives to, hold any such information in confidence until such time as
such information otherwise becomes publicly available through no wrongful act of
Parent, the Purchaser or the Parent Representatives. In the event of termination
of this Agreement for any reason in accordance with Section 8.01, Parent and the
Purchaser will, and will use their reasonable best efforts to cause the Parent
Representatives to, return to the Company all copies of written information
furnished by the Company or any of the Company Representatives to Parent or the
Purchaser or the Parent Representatives (other than such documents as may have
been filed with the SEC or otherwise be publicly available) and destroy all
memoranda, notes and other writings prepared by Parent, the Purchaser or the
Parent Representatives based upon or including the information furnished by the
Company or any of the Company Representatives to Parent or the Purchaser or the
Parent Representatives (and Parent will certify to the Company that such
destruction has occurred). In addition, Parent will comply with the terms of the
Confidentiality Agreement (as hereinafter defined). No investigation pursuant to
this Section 6.02 shall affect any representation or warranty in this Agreement
of any party hereto or any condition to the obligations of the parties hereto.
SECTION 6.03 Reasonable Best Efforts.
(a) Subject to the terms and conditions herein provided, each
of the parties hereto shall (i) make promptly its respective filings, and
thereafter make any other required submissions, under the HSR Act with respect
to the Transactions and (ii) use its reasonable best efforts to take, or cause
to be taken, all action, and to do, or cause to be done, in the case of the
Company, consistent with the fiduciary duties of the Board, and to assist and
cooperate with the other parties hereto in doing, as promptly as practicable,
all things necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the Transactions. The parties hereto shall
together give notice of the Transactions promptly to the Chairman of the
Committee on Foreign Investment in the United States pursuant to the
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Exon-▇▇▇▇▇▇ Provision, and each of the parties hereto shall make such additional
filings and submissions as may be reasonably necessary under the Exon-▇▇▇▇▇▇
Provision in respect of the Transactions. The Company shall promptly provide the
notification to the U.S. Department of State required by the International
Traffic in Arms Regulations and shall request a waiver of the waiting period
contemplated thereby. If, at any time after the Effective Time, any further
action is necessary or desirable to carry out the purposes of this Agreement,
including the execution of additional instruments, the proper officers and
directors of each party to this Agreement shall take all such action.
(b) In addition, if at any time prior to the Effective Time
any event or circumstance relating to either the Company or Parent or the
Purchaser or any of their respective Subsidiaries should be discovered by the
Company or Parent, as the case may be, and which should be set forth in an
amendment to the Offer Documents or the Schedule 14D-9, the discovering party
will promptly inform the other party of such event or circumstance.
SECTION 6.04 Consents.
(a) Each of the parties will use its reasonable best efforts
to obtain as promptly as practicable all Consents of any Governmental Entity or
any other person required in connection with, and waivers of any Violations that
may be caused by, the consummation of the transactions contemplated by the Offer
and this Agreement.
(b) Each party hereto shall promptly inform the others of any
material communication from the United States Federal Trade Commission, the
Department of Justice or any other domestic or foreign government or
governmental or multinational authority (collectively, an "Antitrust Authority")
regarding either of the Transactions. If any party or any affiliate thereof
receives a request for additional information or documentary material from any
such government or authority with respect to the Transactions, then such party
will endeavor in good faith to make, or cause to be made, as soon as reasonably
practicable and after consultation with the other party, an appropriate response
in compliance with such request. If any Antitrust Authority raises an objection
to either of the Transactions or proposes or seeks to impose any operating
restrictions in connection therewith, Parent and the Purchaser agree,
expeditiously and in good faith, to discuss such objections and restrictions and
all other possible resolutions with such Antitrust Authority. Parent will advise
the Company promptly in respect of any understandings, undertakings or
agreements (oral or written) which Parent proposes to make or enter into with
the Federal Trade Commission, the Department of Justice or any other domestic or
foreign government or governmental or multinational authority in connection with
the Transactions.
SECTION 6.05 Public Announcements. So long as this Agreement is in
effect, Parent, the Purchaser and the Company shall consult with each other
before issuing any press release or otherwise making any public statement with
respect to this Agreement or either Transaction and shall not issue any such
press release or make any such public statement prior to
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such consultation, except as may be required by law or any listing agreement
with a national securities exchange to which Parent, an affiliate of Parent or
the Company is subject.
SECTION 6.06 Employee Benefit Arrangements. Parent agrees that the
Company will honor and, from and after the Effective Time, Parent will cause the
Surviving Corporation to honor, all Employee Benefit Arrangements to which the
Company or any of its Subsidiaries is presently a party. Nothing herein shall be
construed to limit the Company or the Purchaser from amending or terminating an
Employee Benefit Arrangement to the extent permitted under the terms of the
applicable Employee Benefit Arrangement.
SECTION 6.07 Indemnification.
(a) Parent agrees that all rights to indemnification now
existing in favor of any employee, agent, director or officer of the Company and
its Subsidiaries (the "Indemnified Parties") as provided in their respective
charters or by-laws, in an agreement between an Indemnified Party and the
Company or one of its Subsidiaries, or otherwise in effect on the date hereof,
shall survive the Merger and shall continue in full force and effect for a
period of not less than six years from the Effective Time; provided that in the
event any claim or claims are asserted or made within such six-year period, all
rights to indemnification in respect of any such claim or claims shall continue
until final disposition of any and all such claims. The Company shall, and after
the Effective Time, the Surviving Corporation shall, indemnify all Indemnified
Parties to the fullest extent permitted by applicable law with respect to all
acts and omissions arising out of such individuals' services as officers,
directors, employees or agents of the Company or any Subsidiary or as trustees
or fiduciaries of any plan for the benefit of employees, or otherwise on behalf
of the Company or any Subsidiary, occurring prior to the Effective Time,
including, without limitation, the Transactions. Without limitation of the
foregoing, in the event any such Indemnified Party is or becomes involved in any
action, proceeding or investigation in connection with any matter, including,
without limitation, the Transactions, occurring prior to, and including, the
Effective Time, (i) the Company or the Surviving Corporation, as the case may
be, shall pay the reasonable fees and expenses incurred by any Indemnified
Party, including reasonable fees and expenses of counsel selected by the
Indemnified Parties, which counsel shall be reasonably satisfactory to the
Company or the Surviving Corporation, promptly after statements therefor are
received, and (ii) the Company and the Surviving Corporation shall cooperate in
the defense of any such matter; provided, however, that neither the Company nor
the Surviving Corporation shall be liable for any settlement effected without
its written consent (which consent shall not be unreasonably withheld); and
provided further that neither the Company nor the Surviving Corporation shall be
obligated pursuant to this Section 6.07(a) to pay the fees and expenses of more
than one counsel for all Indemnified Parties in any single action except to the
extent that two or more of such Indemnified Parties shall have conflicting
interests in the outcome of such action.
(b) The Surviving Corporation shall use its best efforts to
maintain in effect for six years from the Effective Time, if available, the
current policies of the directors' and
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officers' liability insurance maintained by the Company; provided that the
Surviving Corporation may substitute therefor policies issued by a similarly
rated insurance company of at least the same coverage containing terms and
conditions which are not less favorable (taken as a whole) and provided that
such substitution shall not result in any gaps or lapses in coverage with
respect to matters occurring prior to the Effective Time; and provided further
that the Surviving Corporation shall not be required to expend pursuant to this
Section 6.07(b) more than an amount per year equal to 200% of current annual
premiums paid by the Company for such insurance (which premiums the Company
represents and warrants to be approximately $300,000 in the aggregate for the
current year), and if the Surviving Corporation is unable to obtain the
insurance required by this Section 6.07(b), it shall obtain as much comparable
insurance as possible for an annual premium equal to such amount.
SECTION 6.08 No Solicitation. Neither the Company nor any Subsidiary
shall, directly or indirectly, through any directors, officers, employees,
agents, affiliates, representatives or otherwise, solicit or initiate any
inquiries or the submission of any proposal or offer from any person with
respect to any tender offer, merger, consolidation, liquidation,
recapitalization, business combination, sale of significant assets, sales of
shares of capital stock or similar transactions involving the Company or any
Subsidiary or any division of the Company or any Subsidiary (an "Acquisition
Transaction") or participate in any negotiations regarding, or furnish to any
other person any information with respect to, or otherwise cooperate in any way
with, or assist or participate in or facilitate, any effort or attempt by any
other person (other than Parent, the Purchaser or their respective directors,
officers, employees, agents and representatives) with respect to any Acquisition
Transaction or enter into any agreement, arrangement or understanding requiring
it to abandon, terminate or fail to consummate the Merger or any other
transactions contemplated by this Agreement; provided that the Company may, in
response to an unsolicited proposal with respect to an Acquisition Transaction
(an "Alternative Proposal") from a third party, furnish information to, and
negotiate, explore or otherwise engage in substantive discussions with such
third party, in each case only if the Company's Board, in good faith, deems it
necessary to do so in the exercise of its fiduciary obligations after
consultation with outside counsel and an independent nationally recognized
investment banking firm. The Company immediately shall cease and cause to be
terminated all existing discussions or negotiations with any parties conducted
heretofore with respect to any Acquisition Transaction. The Company shall notify
Parent promptly in writing if any such proposal or offer, or any inquiry or
contact with any person with respect thereto, is made or if any party makes any
Alternative Proposal and shall, in any such written notice to Parent, indicate
in reasonable detail the identity of the person making such proposal, offer,
inquiry, contact or Alternative Proposal and the terms and conditions of such
proposal, offer, inquiry, contact or Alternative Proposal and any subsequent
developments with respect thereto. The Company agrees not to release any third
party from, or waive any provision of, any confidentiality or standstill
agreement to which the Company is a party.
SECTION 6.09 Notification of Certain Matters. Parent and the Company
shall promptly notify each other of (a) the occurrence, or non-occurrence of any
fact or event the
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occurrence, or non-occurrence of which would be reasonably likely (i) to cause
(x) any representation or warranty contained in this Agreement that is qualified
as to materiality to be untrue or inaccurate in any respect or (y) any
representation or warranty contained in this Agreement that is not qualified by
materiality to be untrue or inaccurate in any material respect, or (ii) to cause
any covenant, condition or agreement hereunder not to be complied with or
satisfied and (b) any failure of the Company or Parent, as the case may be, to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder; provided, however, that no such notification shall
limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
SECTION 6.10 Redemption of Rights.
(a) The Board shall take such additional action as is
necessary under the Rights Agreement to ensure that the Distribution Date (as
defined therein) does not occur, and that the Rights do not become exercisable,
by virtue of this Agreement or either Transaction.
(b) The Company shall, upon the request of the Purchaser, take
such action, including, without limitation, redeeming all outstanding Rights
immediately prior to the time of acceptance for payment by the Purchaser of any
Shares pursuant to the Offer or thereafter at the applicable Redemption Price
(as defined in the Rights Agreement), in order to render the Rights inapplicable
to the Transactions.
SECTION 6.11 State Takeover Laws. The Company shall, upon the
request of the Purchaser, take all reasonable steps to assist in any challenge
by the Purchaser to the validity or applicability to the Transactions, including
the Offer and the Merger, of any state takeover law.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.01 Conditions. The respective obligations of Parent, the
Purchaser and the Company to effect the Merger are subject to the satisfaction,
at or before the Effective Time, of each of the following conditions:
(a) Stockholder Approval. The stockholders of the Company
shall, if required under the Company's Restated Certificate of Incorporation or
applicable law, have duly approved and adopted this Agreement and the Merger
pursuant to the requirements of the Company's Restated Certificate of
Incorporation and applicable law.
(b) Purchase of Securities. The Purchaser shall have purchased
all Shares validly tendered and not withdrawn pursuant to the Offer in
accordance with the terms
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thereof; provided that this condition shall be deemed to have been satisfied
with respect to Parent and the Purchaser if the Purchaser fails to purchase any
Shares validly tendered and not withdrawn pursuant to the Offer in breach of
this Agreement or the terms of the Offer.
(c) Injunctions; Illegality. No Governmental Entity or court
of competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any law, rule, regulation, executive order, decree, injunction or other
order (whether temporary, preliminary or permanent) which is then in effect and
has the effect of making the acquisition of Shares by Parent or the Purchaser or
any affiliate of either of them illegal or otherwise restricting, preventing or
prohibiting consummation of the Transactions.
ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
SECTION 8.01 Termination. This Agreement may be terminated and the
Transactions may be abandoned at any time prior to the Effective Time,
notwithstanding any requisite approval and adoption of this Agreement and the
Merger by the stockholders of the Company:
(a) by the mutual written consent duly authorized by the
boards of directors of Parent and the Company;
(b) by the Company, upon approval of the Board, if (i) the
Purchaser shall have failed to commence the Offer as provided in Section 1.01
hereof or (ii) the Purchaser shall not have accepted for payment and paid for
Shares pursuant to the Offer in accordance with the terms thereof within five
months following the commencement of the Offer, unless such failure to pay for
Shares shall have been caused by or resulted from the failure of the Company to
perform in any material respect any of its covenants or agreements contained in
this Agreement or the material breach by the Company of any of its
representations or warranties contained in this Agreement;
(c) by Parent at any time prior to the acceptance of Shares
for payment pursuant to the Offer if, due to an occurrence or circumstance that
would result in a failure to satisfy any condition set forth in Annex I hereto,
(i) the Purchaser shall have failed to commence the Offer as provided in Section
1.01 hereof or (ii) the Purchaser shall not have accepted for payment and paid
for shares pursuant to the Offer in accordance with the terms thereof within
five months following the commencement of the Offer, unless such failure to
accept for payment or pay for Shares shall have been caused by or resulted from
the failure of Parent or the Purchaser to perform in any material respect any
covenant or agreement of either of them contained in this Agreement or the
material breach by Parent or the Purchaser of any representation or warranty of
either of them contained in this Agreement;
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(d) by Parent or the Company upon approval by the Board if the
Offer shall have expired or been terminated pursuant to its terms on account of
the failure of any condition specified in Annex I without the Purchaser having
purchased any Shares thereunder; provided, however, that the right to terminate
this Agreement pursuant to this Section 8.01(d) shall not be available to any
party whose failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of any such condition;
(e) by Parent or the Company if the Effective Time shall not
have occurred on or before June 7, 1999; provided, however, that the right to
terminate this Agreement under this Section 8.01(e) shall not be available to
any party whose failure to fulfill any obligation under this Agreement has been
the cause of, or resulted in, the failure of the Effective Time to occur on or
before such date;
(f) by Parent or the Company if any U.S. District Court or
similar competition tribunal outside the United States shall have issued,
enacted, entered, promulgated or enforced any injunction (or other similar
order) prohibiting the Offer or the Merger and such injunction (or similar
order) shall have become final and nonappealable;
(g) by the Company at any time prior to the acceptance for
payment of Shares by the Purchaser pursuant to the Offer, if there shall be an
Alternative Proposal which the Board in good faith, in the exercise of its
fiduciary duties to the Company's stockholders, determines represents a superior
transaction for the stockholders of the Company as compared to the Offer and the
Merger after consultation with outside counsel and an independent nationally
recognized investment banking firm; provided, however, that the right to
terminate this Agreement pursuant to this Section 8.01(g) shall not be available
(i) if the Company shall have breached in any material respect its obligations
under Section 6.08, other than, in the case of an Alternative Proposal from HB,
a breach solely of the covenant contained in Section 6.08 not to solicit or
initiate any inquiries or the submission of any proposal or offer, or (ii) if,
prior to or concurrently with any purported termination pursuant to this Section
8.01(g), the Company shall not have paid the fees and expenses contemplated by
Section 8.03, or (iii) if the Company shall not have provided Parent and the
Purchaser with at least five business days' prior written notice of its intent
to so terminate this Agreement together with a summary of the material terms and
conditions of the Alternative Proposal; and
(h) by Parent, if the Board shall have failed to recommend, or
shall have withdrawn, modified or amended in a manner adverse to Parent or the
Purchaser, its approval or recommendation of the Offer or the Merger, or shall
have recommended acceptance of any Alternative Proposal, or shall have resolved
to do any of the foregoing.
SECTION 8.02 Effect of Termination. In the event of the termination
of this Agreement pursuant to Section 8.01, this Agreement shall forthwith
become void and have no effect, without any liability on the part of any party
or its directors, officers or stockholders, other than the provisions of this
Section 8.02, Section 8.03 and the second to the last and third to
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the last sentences of Section 6.02, which shall survive any such termination.
Nothing contained in this Section 8.02 shall relieve any party from its
liability for any breach of this Agreement or the Confidentiality Agreement.
SECTION 8.03 Fees and Expenses.
(a) Except as provided in Section 8.03(b), whether or not the
Offer or the Merger is consummated, all costs and expenses incurred in
connection with the Offer, this Agreement and the transactions contemplated by
this Agreement shall be paid by the party incurring such expenses.
(b) (i) To compensate Parent and its affiliates for entering
into this Agreement and taking action to consummate the Transactions and
incurring the costs and expenses related thereto and other losses and expenses,
including the forgoing by Parent of other opportunities, the Company and Parent
agree that the Company shall pay to Parent $10,000,000 (the "Commitment Amount")
if this Agreement is terminated (A) by the Company pursuant to Section 8.01(g)
or (B) by Parent pursuant to Section 8.01(h) (unless the event described therein
occurs solely as a result of Parent's breach in any material respect of its
representations, warranties, covenants or agreements set forth in this
Agreement).
The Commitment Amount shall be payable (1) at the time of
termination if such amount becomes payable pursuant to clause (A) above and (2)
on the next business day following termination if such amount becomes payable
pursuant to clause (B) above.
(ii) The Company shall reimburse Parent and its
affiliates for the reasonable out-of-pocket expenses of the Purchaser and its
affiliates, not to exceed $2,000,000 in the aggregate, specifically related to
the Offer, the Merger, this Agreement and the Transactions (including, without
limitation, amounts paid or payable to banks and investment bankers, fees and
expenses of counsel, accountants and consultants, and printing expenses),
regardless of when those expenses are incurred, if this Agreement is terminated
and the Purchaser is entitled to the Commitment Amount.
SECTION 8.04 Amendment. Subject to Section 1.03(c), this Agreement
may be amended by the parties hereto by action taken by or on behalf of their
respective Boards of Directors at any time prior to the Effective Time;
provided, however, that, after the approval and adoption of this Agreement and
the Merger by the stockholders of the Company, no amendment may be made which
decreases the Merger Consideration or which adversely affects the rights of the
Company's stockholders hereunder without the approval of such stockholders. This
Agreement may not be amended, except by an instrument in writing signed on
behalf of all of the parties.
SECTION 8.05 Extension; Waiver. Subject to Section 1.03(c), at any
time prior to the Effective Time, any party hereto, by action taken by or on
behalf of its boards of
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directors, may (a) extend the time for the performance of any of the obligations
or other acts of any other party hereto, (b) waive any inaccuracies in the
representations and warranties contained herein by any other party or in any
document, certificate or writing delivered pursuant hereto by any other
applicable party or (c) waive compliance with any of the agreements of any other
party or with any conditions to its own obligations. Any agreement on the part
of any party to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Non-Survival of Representations and Warranties. The
representations and warranties made in this Agreement shall not survive beyond
the Effective Time. Notwithstanding the foregoing, the agreements set forth in
Section 3.02, the last sentence of Section 6.03(a), Section 6.06 and Section
6.07 shall survive the Effective Time indefinitely (except to the extent that a
shorter period of time is explicitly specified therein).
SECTION 9.02 Entire Agreement; Assignment.
(a) This Agreement (including the documents and the
instruments referred to herein) and the letter agreement by and between the
Purchaser and the Company, dated August 26, 1998 (the "Confidentiality
Agreement"), constitute the entire agreement and supersede all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof and thereof.
(b) Neither this Agreement nor any of the rights, interests or
obligations hereunder will be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
party. Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties and their respective
successors and assigns.
SECTION 9.03 Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, each of which shall remain in full force
and effect.
SECTION 9.04 Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be deemed to have
been duly given when delivered in person, by overnight courier or facsimile to
the respective parties at the following addresses:
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If to Parent or the Purchaser:
GKN North America Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company:
The Interlake Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President, Secretary
and General Counsel
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Winston & ▇▇▇▇▇▇ ▇▇▇▇▇ Day ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq. Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
SECTION 9.05 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
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SECTION 9.06 Jurisdiction. Each of the parties hereto (a) consents
to submit itself to the personal jurisdiction of any federal court located in
the State of Delaware or any Delaware state court in the event any dispute
arises out of this Agreement or any of the actions contemplated by this
Agreement, (b) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court and (c)
agrees that it will not bring any action relating to this Agreement or the
Transactions in any court other than a federal or state court sitting in the
State of Delaware.
SECTION 9.07 Descriptive Headings. The descriptive headings herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
SECTION 9.08 Counterparties. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same agreement.
SECTION 9.09 Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and, except with
respect to the rights of the individuals directly or indirectly named or
referred to in Sections 1.03(c), 2.09 and 6.07 to enforce the provisions of such
Sections (for purposes of which provisions such individuals shall be deemed to
be third-party beneficiaries with privity to enforce such provisions), nothing
in this Agreement, express or implied, is intended to confer upon any other
person any rights or remedies of any nature whatsoever under or by reason of
this Agreement.
SECTION 9.10 Certain Definitions. As used in this Agreement:
(a) the term "affiliate," as applied to any person, shall mean
any other person directly or indirectly controlling, controlled by, or under
common control with, that person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that person, whether through the
ownership of voting securities, by contract or otherwise;
(b) the term "person" shall include individuals, corporations,
partnerships, trusts, other entities and groups (which term shall include a
"group" as such term is defined in Section 13(d)(3) of the Exchange Act); and
(c) the term "subsidiary" or "subsidiaries" means, with
respect to Parent, the Company or any other person, any corporation,
partnership, joint venture or other legal entity of which Parent, the Company or
such other person, as the case may be (either alone or through or together with
any other subsidiary), owns, directly or indirectly, stock or other equity
interests the holders of which are generally entitled to more than 50% of the
vote for the
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election of the board of directors or other governing body of such corporation
or other legal entity.
SECTION 9.11 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with the terms hereof and that the
parties shall be entitled to specific performance of the terms hereof, this
being in addition to any other remedy to which they are entitled at law or in
equity.
SECTION 9.12 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect as long as the economic or legal
substance of the Transactions is not affected in any manner adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
Transactions be consummated as originally contemplated to the fullest extent
possible.
SECTION 9.13 Waiver of Jury Trial. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.
[signature pages follow]
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf by its respective officer thereunto duly authorized,
all as of the day and year first above written.
GKN NORTH AMERICA
INCORPORATED
By: /s/ Grey ▇▇▇▇▇▇
----------------------------------
Name: Grey ▇▇▇▇▇▇
Title: President
GKN NORTH AMERICA
MANUFACTURING INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
THE INTERLAKE CORPORATION
By: /s/ W. ▇▇▇▇▇▇ ▇▇▇▇
----------------------------------
Name: W. ▇▇▇▇▇▇ ▇▇▇▇
Title: Chairman, President and
Chief Executive Officer
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GKN plc hereby unconditionally guarantees the obligations of Parent
and the Purchaser hereunder.
GKN plc
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Finance Director
51
ANNEX I
CONDITIONS TO THE OFFER
Notwithstanding any other provisions of the Offer, the Purchaser
shall not be required to accept for payment or pay for any tendered Shares, and
may, subject to the terms of the Merger Agreement, terminate or amend the Offer
or postpone the acceptance for payment of or payment for tendered Shares if (i)
there are not validly tendered and not withdrawn prior to the expiration of the
Offer that number of Common Shares and Series A Shares that (after giving effect
to the conversion all such Series A Shares to Common Shares) represents at least
two-thirds (66-2/3%) of the outstanding Common Shares on a fully diluted basis
on the date of purchase (not taking into account the Rights) (the "Minimum
Condition"), (ii) any applicable waiting period under the HSR Act shall not have
expired or been terminated prior to the expiration of the Offer, (iii) the
initial review period contemplated by the Exon-▇▇▇▇▇▇ Provision shall not have
expired prior to the expiration of the Offer, (iv) the waiting period under the
International Traffic in Arms Regulations shall not have expired or been waived
prior to the expiration of the Offer or (v) at any time on or after the date of
the Merger Agreement and prior to the acceptance for payment of Shares, any of
the following conditions (each, a "Condition") shall exist:
(a) there shall have been instituted or be pending any action
or proceeding by any Governmental Entity before any court or governmental,
administrative or regulatory authority or agency of competent
jurisdiction, (i) challenging or seeking to make illegal, materially delay
or otherwise directly or indirectly restrain or prohibit or make
materially more costly the making of the Offer, the acceptance for payment
of, or payment for, any Shares by Parent, the Purchaser or any other
affiliate of Parent, or the consummation of the Merger, or seeking to
obtain material damages in connection with either Transaction; (ii)
seeking to prohibit or limit materially the ownership or operation by the
Company, Parent or any of their Subsidiaries of all or any material
portion of the business or assets of the Company, Parent or any of their
Subsidiaries, or to compel the Company, Parent or any of their
Subsidiaries to dispose of or hold separate all or any material portion of
the business or assets of the Company, Parent or any of their
Subsidiaries, as a result of the Transactions; (iii) seeking to impose or
confirm limitations on the ability of Parent, the Purchaser or any other
affiliate of Parent to exercise effectively full rights of ownership of
any Shares, including, without limitation, the right to vote any Shares
acquired by the Purchaser pursuant to the Offer or otherwise on all
matters properly presented to the Company's stockholders, including,
without limitation, the approval and adoption of this Agreement and the
Transactions; (iv) seeking to require divestiture by Parent, the Purchaser
or any other affiliate of Parent of any Shares; or (v) which otherwise has
a Material Adverse Effect on the Company or which is reasonably likely to
materially adversely affect the business, operations, financial
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condition, assets or liabilities (including, without limitation,
contingent liabilities) of Parent;
(b) there shall have been any action taken or any statute,
rule, regulation, legislation, interpretation, judgment, order or
injunction (whether preliminary or permanent) enacted, entered, enforced,
promulgated, amended or issued or deemed applicable to (i) Parent, the
Company or any subsidiary or affiliate of Parent or the Company or (ii)
either Transaction, by any Governmental Entity other than the routine
application of the waiting period provisions of the HSR Act to the Offer
or the Merger, which is reasonably likely to result, directly or
indirectly, in any of the consequences referred to in clauses (i) through
(v) of paragraph (a) above; or
(c) there shall have occurred any change, condition, event or
development that, individually or in the aggregate, would have or has had
a Material Adverse Effect on the Company; or
(d) (i) it shall have been publicly disclosed or the Purchaser
shall have otherwise learned that beneficial ownership (determined for the
purposes of this paragraph as set forth in Rule 13d-3 promulgated under
the Exchange Act) of Common Shares representing 15% or more of the then
outstanding Common Shares, on a fully diluted basis (not taking into
account the Rights), has been acquired by any person, other than Parent,
any of its affiliates, First Chicago Equity Corporation and First Chicago
NBD Corporation, or (ii) the Board or any committee thereof shall have (A)
withdrawn or modified in a manner adverse to Parent or the Purchaser the
approval or recommendation of the Offer, the Merger or the Merger
Agreement, or approved or recommended any Alternative Proposal or any
other acquisition of Shares other than the Offer and the Merger or (B)
resolved to do any of the foregoing; or
(e) the Company, the Purchaser and Parent shall have agreed
that the Purchaser shall terminate the Offer or postpone the acceptance
for payment of or payment for Shares thereunder; or
(f) the Merger Agreement shall have been terminated in
accordance with its terms; or
(g) any representation or warranty of the Company in the
Merger Agreement which is qualified as to materiality shall not be true
and correct and any such representation or warranty that is not so
qualified shall not be true and correct in all material respects, in each
case as if such representation or warranty was made as of such time on or
after the date of this Agreement if any such failure to be true and
correct, individually or in the aggregate, would have a Material Adverse
Effect or would materially increase the amount paid to the Company's
stockholders in the Offer and the Merger; or
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(h) the Company shall have breached or failed to perform in
any material respect any of its material obligations, or to comply in any
material respect with any of its material covenants or agreements under
the Merger Agreement and, with respect to any such failure that could be
remedied, shall not have remedied such failure within seven business days
after the Purchaser shall have furnished the Company with written notice
of such breach or failure; or
(i) there shall have occurred, and continued to exist, (i) any
general suspension of, or limitation on prices for, trading in securities
on the New York Stock Exchange or in the London Stock Exchange for a
period in excess of ten consecutive trading hours or (ii) a declaration of
any banking moratorium by any United Kingdom or United States federal or
state authorities or any suspension of payments in respect of banks by any
such authorities;
which, in the reasonable judgment of the Purchaser in any such case, and
regardless of the circumstances (including any action or inaction by Parent or
any of its affiliates) giving rise to any such condition, makes it inadvisable
to proceed with such acceptance for payment or payment.
The foregoing conditions are for the benefit of Parent and the
Purchaser and may be asserted by Parent or the Purchaser regardless of the
circumstances giving rise to any such condition and, except for the Minimum
Condition, may be waived by Parent or the Purchaser in whole or in part at any
time and from time to time in their reasonable discretion, in each case, subject
to the terms of the Merger Agreement. The failure by Parent or the Purchaser at
any time to exercise any of the foregoing rights shall not be deemed a waiver of
any such right; the waiver of any such right with respect to particular facts
and circumstances shall not be deemed a waiver with respect to any other facts
and circumstances; and each such right shall be deemed an ongoing right which
may be asserted at any time and from time to time.
Should the Offer be terminated pursuant to the foregoing provisions,
all tendered Shares not theretofore accepted for payment shall forthwith be
returned by the depositary to the tendering stockholders.
The capitalized terms used in this Annex I shall have the meanings
set forth in the Merger Agreement to which it is annexed.
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