Exhibit (2)(a)
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
PROVIDENT COMPANIES, INC
PATRIOT ACQUISITION CORPORATION
and
THE ▇▇▇▇ ▇▇▇▇▇▇ CORPORATION
As of April 29, 1996
TABLE OF CONTENTS
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
THE MERGER; EFFECTIVE TIME; CLOSING
1.1 The Merger . . . . . . . . . . . . . . . . . . . . 2
1.2 Effective Time . . . . . . . . . . . . . . . . . . 2
1.3 Closing . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
SURVIVING CORPORATION
2.1 Articles of Organization . . . . . . . . . . . . . 3
2.2 By-Laws . . . . . . . . . . . . . . . . . . . . . 3
2.3 Directors . . . . . . . . . . . . . . . . . . . . 3
2.4 Officers . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III
MERGER CONSIDERATION; ELECTION; CONVERSION OR
CANCELLATION OF SHARES IN THE MERGER; OTHER PAYMENT
3.1 Merger Consideration; Election; Conversion or
Cancellation of Shares, SARs and Performance
Share Units in the Merger . . . . . . . . . . . 4
3.2 Election Procedures . . . . . . . . . . . . . . . . 8
3.3 Payment for Shares in the Merger . . . . . . . . . 9
3.4 Dividends . . . . . . . . . . . . . . . . . . . . 11
3.5 No Fractional Securities . . . . . . . . . . . . . 12
3.6 Transfer of Shares After the Effective Time . . . . 12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
4.1 Corporate Organization and Qualification . . . . . 12
4.2 Capitalization . . . . . . . . . . . . . . . . . . 14
4.3 Authority Relative to This Agreement . . . . . . . . 14
4.4 Consents and Approvals; No Violation . . . . . . . 15
4.5 SEC Reports; Financial Statements . . . . . . . . . 17
4.6 Statutory Statements . . . . . . . . . . . . . . . . 17
4.7 Absence of Certain Changes or Events . . . . . . . . 18
4.8 Litigation . . . . . . . . . . . . . . . . . . . . . 18
4.9 No Regulatory Disqualifications . . . . . . . . . . 19
4.10 Joint Proxy Statement-Prospectus . . . . . . . . . . 19
4.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . 20
4.12 Employee Benefit Plans; Labor Matters . . . . . . . 21
4.13 Environmental Laws and Regulations . . . . . . . . . 24
4.14 Company Intellectual Property . . . . . . . . . . . 25
4.15 Brokers and Finders . . . . . . . . . . . . . . . . 25
4.16 Opinion of Financial Advisors . . . . . . . . . . . 26
4.17 Title to Property . . . . . . . . . . . . . . . . . 26
4.18 Insurance . . . . . . . . . . . . . . . . . . . . . 27
4.19 No Default . . . . . . . . . . . . . . . . . . . . . 27
4.20 Noncompliance with Laws . . . . . . . . . . . . . . 28
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND NEWCO
5.1 Corporate Organization and Qualification . . . . . . 28
5.2 Capitalization . . . . . . . . . . . . . . . . . . . 30
5.3 Authority Relative to This Agreement . . . . . . . . 30
5.4 Consents and Approvals; No Violation . . . . . . . . 31
5.5 Financing . . . . . . . . . . . . . . . . . . . . . 32
5.6 SEC Reports; Financial Statements . . . . . . . . . 32
5.7 Statutory Statements . . . . . . . . . . . . . . . . 33
5.8 Absence of Certain Changes or Events . . . . . . . . 34
5.9 Interim Operations of Newco . . . . . . . . . . . . 34
5.10 Litigation . . . . . . . . . . . . . . . . . . . . . 34
5.11 No Regulatory Disqualifications . . . . . . . . . . 34
5.12 Joint Proxy Statement-Prospectus . . . . . . . . . . 34
5.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . 35
5.14 Employee Benefit Plans; Labor Matters . . . . . . . 36
5.15 Environmental Laws and Regulations . . . . . . . . . 38
5.16 Parent Intellectual Property . . . . . . . . . . . . 39
5.17 Title to Property . . . . . . . . . . . . . . . . . 40
5.18 Insurance . . . . . . . . . . . . . . . . . . . . . 41
5.19 Ownership of Shares . . . . . . . . . . . . . . . . 41
5.20 Brokers and Finders . . . . . . . . . . . . . . . . 41
5.21 No Default . . . . . . . . . . . . . . . . . . . . . 41
5.22 Noncompliance with Laws . . . . . . . . . . . . . . 42
ARTICLE VI
ADDITIONAL COVENANTS AND AGREEMENTS
6.1 Conduct of Business of the Company . . . . . . . . . 43
6.2 Conduct of Business of Parent . . . . . . . . . . . 48
6.3 Alternative Proposals . . . . . . . . . . . . . . 51
6.4 Joint Proxy Statement-Prospectus; Registration
Statement . . . . . . . . . . . . . . . . . . . . 52
6.5 Stock Exchange Listing . . . . . . . . . . . . . . . 53
6.6 [Intentionally Omitted] . . . . . . . . . . . . . . 53
6.7 Stockholders' Approvals . . . . . . . . . . . . . 53
6.8 Satisfaction of Conditions, Receipt of Necessary
Approvals . . . . . . . . . . . . . . . . . . . . 54
6.9 Access to Information . . . . . . . . . . . . . . . 55
6.10 Publicity . . . . . . . . . . . . . . . . . . . . 56
6.11 Indemnification of Directors and Officers . . . . . 56
6.12 Employees . . . . . . . . . . . . . . . . . . . . . 57
6.13 Conduct of Business of Newco . . . . . . . . . . . . 59
6.14 Rights Agreement . . . . . . . . . . . . . . . . . 59
6.15 Compliance with the Securities Act . . . . . . . . . 59
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
7.1 Conditions to Each Party's Obligations to Effect
the Merger . . . . . . . . . . . . . . . . . . . . 60
7.2 Additional Conditions to the Obligations of Parent
and Newco . . . . . . . . . . . . . . . . . . . 62
7.3 Additional Conditions to the Obligations of the
Company . . . . . . . . . . . . . . . . . . . . 63
ARTICLE VIII
TERMINATION
8.1 Termination by Mutual Consent . . . . . . . . . . 64
8.2 Termination by Either Parent or the Company . . . 64
8.3 Termination by Parent . . . . . . . . . . . . . . 65
8.4 Termination by the Company . . . . . . . . . . . . 65
8.5 Effect of Termination . . . . . . . . . . . . . . 67
ARTICLE IX
MISCELLANEOUS AND GENERAL
9.1 Payment of Expenses and Other Payments . . . . . . 68
9.2 Survival of Representations and Covenants;
Survival of Confidentiality Agreements . . . . 68
9.3 Modification or Amendment . . . . . . . . . . . . 68
9.4 Waiver and Extension . . . . . . . . . . . . . . . 69
9.5 Counterparts . . . . . . . . . . . . . . . . . . . 69
9.6 Governing Law . . . . . . . . . . . . . . . . . . 69
9.7 Notices . . . . . . . . . . . . . . . . . . . . . 69
9.8 Entire Agreement; Assignment . . . . . . . . . . . 71
9.9 Parties in Interest . . . . . . . . . . . . . . . 71
9.10 Certain Definitions . . . . . . . . . . . . . . . 71
9.11 Obligation of Parent . . . . . . . . . . . . . . . 75
9.12 Validity . . . . . . . . . . . . . . . . . . . . . 75
9.13 Captions . . . . . . . . . . . . . . . . . . . . . 75
EXHIBIT A -- Amended and Restated Textron Voting Agreement
EXHIBIT B -- Amended and Restated Separation Agreement
EXHIBIT C -- Standstill Agreement
EXHIBIT D -- Registration Rights Agreement
EXHIBIT E -- Amended and Restated Provident Voting Agreement
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
AMENDED AND RESTATED AGREEMENT AND PLAN OF
MERGER (this "Agreement"), dated as of April 29, 1996, by
and among Provident Companies, Inc., a Delaware
corporation ("Parent"), Patriot Acquisition Corporation,
a Massachusetts corporation and a wholly owned subsidiary
of Parent ("Newco"), and The ▇▇▇▇ ▇▇▇▇▇▇ Corporation, a
Massachusetts corporation (the "Company").
RECITALS
WHEREAS, the respective Boards of Directors of
Parent, Newco and the Company have, subject to the
conditions of this Agreement, determined that the Merger
(as defined in Section 1.1) is in the best interests of
their respective stockholders and approved this Agreement
and the transactions contemplated hereby; and
WHEREAS, in consideration of the transactions
contemplated hereby and in order to induce Parent and
Newco to enter into this Agreement, Textron Inc.
("Textron") has agreed to (i) execute and deliver to
Parent an Amended and Restated Voting Agreement (the
"Textron Voting Agreement") in the form attached hereto
as Exhibit A, (ii) execute and deliver to Parent and the
Company an Amended and Restated Separation Agreement (the
"Separation Agreement") in the form attached hereto as
Exhibit B and (iii) execute and deliver to Parent a
Standstill Agreement in the form attached hereto as
Exhibit C; and
WHEREAS, in connection with and in
consideration of the transactions contemplated hereby
Parent and Textron are entering into a Registration
Rights Agreement in the form attached hereto as Exhibit
D; and
WHEREAS, in consideration of the transactions
contemplated hereby and in order to induce the Company to
enter into this Agreement and Textron to enter into the
Textron Voting Agreement, certain stockholders of Parent
have agreed to execute and deliver to Textron and the
Company an Amended and Restated Voting Agreement in the
form attached hereto as Exhibit E; and
WHEREAS, Parent, Newco and the Company desire
to make certain representations, warranties, covenants
and agreements in connection with the Merger;
WHEREAS, on April 29, 1996 the parties hereto
signed the original Agreement and Plan of Merger and such
parties desire to amend and restate such Agreement as of
such date; and
WHEREAS, this Amended and Restated Agreement
and Plan of Merger is being executed on November 5, 1996
as of April 29, 1996;
NOW, THEREFORE, in consideration of the
foregoing and the mutual representations, warranties,
covenants and agreements set forth herein, Parent, Newco
and the Company hereby agree as follows:
ARTICLE I
THE MERGER; EFFECTIVE TIME; CLOSING
1.1 The Merger. Subject to the terms and
conditions of this Agreement, at the Effective Time (as
defined in Section 1.2), the Company and Newco shall
consummate a merger (the "Merger") pursuant to which (a)
Newco shall be merged with and into the Company and the
separate corporate existence of Newco shall thereupon
cease, (b) the Company shall be the successor or
surviving corporation in the Merger and shall continue to
be governed by the Laws (as defined in Section 9.10) of
the Commonwealth of Massachusetts and (c) the separate
corporate existence of the Company with all its rights,
privileges, immunities, powers and franchises shall
continue unaffected by the Merger. The corporation
surviving the Merger is sometimes hereinafter referred to
as the "Surviving Corporation." The Merger shall have
the effects set forth in the Massachusetts Business
Corporation Law (the "MBCL").
1.2 Effective Time. Parent, Newco and the
Company will cause appropriate Articles of Merger (the
"Articles of Merger") to be executed and filed on the
date of the Closing (as defined in Section 1.3) (or on
such other date as Parent and the Company may agree) with
the Secretary of State of the Commonwealth of
Massachusetts as provided in the MBCL. The Merger shall
become effective at the time at which the Articles of
Merger have been duly filed with the Secretary of State
of the Commonwealth of Massachusetts or such time as is
agreed upon by the parties and specified in the Articles
of Merger, and such time is hereinafter referred to as
the "Effective Time."
1.3 Closing. The Company shall as promptly as
practicable notify Parent, and Parent and Newco shall as
promptly as practicable notify the Company, when the
conditions to such party's or parties' obligation to
effect the Merger contained in Section 7.1 have been
satisfied or waived. The closing of the Merger (the
"Closing") shall take place (a) at the offices of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, at 10:00 a.m., Boston
time, on the sixth business day after the later of these
notices has been given (the "Closing Date") or (b) at
such other place, time and date as Parent and the Company
may agree.
ARTICLE II
SURVIVING CORPORATION
2.1 Articles of Organization. The Articles of
Organization of the Company, as in effect immediately
prior to the Effective Time, shall be the Articles of
Organization of the Surviving Corporation until
thereafter amended as provided by Law and such Articles
of Organization.
2.2 By-Laws. The By-Laws of the Company, as
in effect immediately prior to the Effective Time, shall
be the By-Laws of the Surviving Corporation until
thereafter amended as provided by Law, the Articles of
Organization of the Surviving Corporation and such By-
Laws.
2.3 Directors. The directors of Newco at the
Effective Time shall, from and after the Effective Time,
be the directors of the Surviving Corporation until their
successors have been duly elected or appointed and
qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's
Articles of Organization and By-Laws.
2.4 Officers. The officers of Newco at the
Effective Time shall, from and after the Effective Time,
be the initial officers of the Surviving Corporation
until their successors have been duly elected or
appointed and qualified or until their earlier death,
resignation or removal in accordance with the Surviving
Corporation's Articles of Organization and By-Laws.
ARTICLE III
MERGER CONSIDERATION; ELECTION; CONVERSION OR
CANCELLATION OF SHARES IN THE MERGER; OTHER PAYMENT
3.1 Merger Consideration; Election; Conversion
or Cancellation of Shares, SARs and Performance Share
Units in the Merger.
(a) (i) At the Effective Time, each share
of the Company's common stock, par value $1.00 per
share, issued and outstanding immediately prior to
the Effective Time (collectively, the "Shares"),
other than Dissenting Shares (as defined in Section
3.1(g)), any Shares owned by Textron and Shares to
be cancelled and retired pursuant to Section 3.1(b),
shall, by virtue of the Merger and without any
action on the part of Parent, Newco, the Company or
the holder thereof, be cancelled and extinguished
and converted into the right to receive, pursuant to
Section 3.2, any one of the following, payable to
the holder of such Share without interest thereon,
less any required withholding of taxes, upon
surrender of the certificate formerly representing
such Share (a "Certificate") in accordance with
Section 3.2(b), in each case as such holder shall
elect in accordance with Section 3.2(a):
(x) $26.00 in cash (the "Cash Price"),
without interest thereon (the "Cash
Consideration");
(y) a number of shares of common stock,
par value $1.00 per share, of Parent (the
"Parent Common Stock") equal to the product of
26 and the Exchange Ratio (as defined below)
(the "Stock Consideration"); or
(z) $20.00 in cash plus a number of
shares of Parent Common Stock equal to the
product of 6 and the Exchange Ratio (the "Mixed
Consideration").
(ii) At the Effective Time, each Share owned by
Textron shall, by virtue of the Merger and without
any action on the part of Parent, Newco, the Company
or Textron, be cancelled and extinguished and
converted into the right to receive $20.00 in cash
plus a number of shares of Parent Common Stock equal
to the product of 6 and the Textron Exchange Ratio
(as defined below) (the "Textron Consideration"),
payable to Textron without interest thereon, less
any required withholding of taxes, upon surrender of
the Certificate formerly representing such Share in
accordance with Section 3.2(b) (it being understood
that Textron shall not be entitled to make any
election otherwise available to holders of Shares
pursuant to Section 3.2(b)).
Each of any such form of consideration elected by a
holder of Shares and the Textron Consideration is
referred to herein as the "Merger Consideration," and the
aggregate of all Merger Consideration to be paid to
holders of Shares (including Textron) in connection with
the Merger is referred to hereinafter as the "Aggregate
Merger Consideration." The exchange ratio for
determining the number of shares of Parent Common Stock
to be issued in exchange for each Share held by a holder
of Shares who elects to receive the Stock Consideration
and/or the Mixed Consideration, as the case may be (the
"Exchange Ratio"), shall be determined by dividing $1.00
by the average of closing prices for the Parent Common
Stock as reported in the New York Stock Exchange, Inc.
("NYSE") Composite Transactions for the twenty Trading
Days (as defined herein) ending on the fifth Trading Day
prior to the Effective Time as reported in The Wall
Street Journal, except that the Exchange Ratio shall
under no circumstances be higher than 0.0343 or lower
than 0.0295. Notwithstanding the foregoing, the exchange
ratio for determining the number of shares of Parent
Common Stock to be issued in exchange for each Share
owned by Textron (the "Textron Exchange Ratio") shall be
determined by dividing $1.00 by the average of closing
prices for the Parent Common Stock as reported in the
NYSE Composite Transactions for the twenty Trading Days
ending on the fifth Trading Day prior to the Effective
Time as reported in The Wall Street Journal, except that
the Textron Exchange Ratio shall under no circumstances
be higher than 0.0343 or lower than 0.0263. As used in
this Agreement, "Trading Day" means a day on which the
NYSE is open for trading. All Shares converted or
exchanged into the Merger Consideration shall no longer
be outstanding and shall automatically be cancelled and
retired and shall cease to exist, and each Certificate
shall thereafter represent the right to receive, upon the
surrender of such Certificate in accordance with the
provisions of Sections 3.2(b) and 3.3, only the
applicable Merger Consideration. The holders of such
Certificates shall cease to have any rights with respect
to Shares except as otherwise provided herein or by law.
(b) At the Effective Time, each Share, if
any, issued and outstanding and owned by any of Parent,
Newco, any direct or indirect wholly owned subsidiary of
Parent or any direct or indirect wholly owned subsidiary
of the Company (except in a custodial or fiduciary
capacity) and any authorized but unissued shares of
common stock of the Company held by the Company
immediately prior to the Effective Time shall cease to be
outstanding, be cancelled and retired without payment of
any consideration therefor and cease to exist.
(c) At the Effective Time, each share of
common stock of Newco issued and outstanding immediately
prior to the Effective Time shall be converted into one
validly issued, fully paid and nonassessable share of
common stock of the Surviving Corporation.
(d) Each stock appreciation right ("SAR")
granted pursuant to the Company's 1993 Long-Term
Incentive Plan (the "Plan") which is outstanding
immediately prior to the Effective Time, whether or not
such SAR is then vested or exercisable, shall, by virtue
of the Merger and without any action on the part of the
holder thereof, be cancelled and converted into the right
to receive in cash an amount equal to (i) the difference
(if positive) between (A) the Cash Price and (B) the
exercise price of such SAR multiplied by (ii) the number
of Shares subject to such SAR. If the difference between
(A) the Cash Price and (B) the exercise price of a SAR is
zero or less, such SAR shall, by virtue of the Merger,
and without any action on the part of the holder thereof,
be canceled and no consideration shall be issued in
exchange therefor.
(e) Each performance share unit
("Performance Share Unit") granted pursuant to the Plan
for which the applicable Award Period (as defined in the
Plan) has not yet expired as of the time immediately
prior to the Effective Time, whether or not the
applicable Performance Targets or Performance Measures
(as such terms are defined in the Plan) are accomplished
as of such time, shall, by virtue of the Merger and
without any action on the part of the holder thereof, be
cancelled and converted into the right to receive in cash
an amount equal to the Cash Price.
(f) At the Effective Time, each SAR and
Performance Share Unit shall no longer represent the
right to acquire Shares, but in lieu thereof shall
represent only the nontransferable right to receive the
payments referred to in Sections 3.1(d) and (e). Prior
to the Effective Time, the Company shall (i) use its
reasonable efforts to obtain any Consents from holders of
SARs and Performance Share Units granted pursuant to the
Plan and (ii) make any amendments to the terms of the
Plan that, in the case of either clauses (i) or (ii), are
necessary to give effect to the conversions contemplated
by Section 3.1(d) and (e). Notwithstanding any other
provision of this Section 3.1, payment may be withheld in
respect of any SAR or Performance Share Unit until any
necessary Consents are obtained.
(g) Notwithstanding anything in this
Agreement to the contrary, any issued and outstanding
Shares held by a stockholder who objects to the Merger
(a "Dissenting Stockholder") and complies with the
provisions of the MBCL concerning the rights of holders
of Shares to dissent from the Merger and require
appraisal of such Shares ("Dissenting Shares") shall not
be converted as described in this Section 3.1 but shall
become the right to receive such consideration as may be
determined to be due to such Dissenting Stockholder
pursuant to the MBCL. If, after the Effective Time, such
Dissenting Stockholder withdraws his demand for appraisal
or fails to perfect or otherwise loses his right of
appraisal, in any case pursuant to the MBCL, or if Parent
otherwise consents thereto, each of such stockholder's
Dissenting Shares shall be treated as a Non-Election
Share (as defined in Section 3.2) for purposes of Section
3.2 and shall, accordingly, be deemed to be converted as
of the Effective Time into the right to receive the Cash
Consideration. The Company shall give Parent (i) prompt
notice of any demands received by the Company for
appraisals of Shares and (ii) the opportunity to
participate in and direct all negotiations and
proceedings with respect to any such demands. The
Company shall not, without the prior written consent of
Parent, make any payment with respect to, or settle,
offer to settle or otherwise negotiate, any such demands.
3.2 Election Procedures.
(a) Each record holder of Shares (other
than Dissenting Shares, if any, Shares owned by Textron
and shares to be cancelled in accordance with Section
3.1(b)) issued and outstanding immediately prior to the
Effective Time shall be entitled to submit a request
specifying the portion of such record holder's Shares
which such record holder desires to have converted into
(i) the Cash Consideration (a "Cash Election"), (ii) the
Stock Consideration (a "Stock Election") or (iii) the
Mixed Consideration (a "Mixed Election"), or to indicate
that such record holder has no preference as to the
receipt of Cash Consideration, Stock Consideration or
Mixed Consideration for such Shares (a "Non-Election").
Shares in respect of which a Non-Election is made
(including Shares in respect of which such an election is
deemed to have been made pursuant to this Section 3.2(a)
and Section 3.1(g)) (collectively, "Non-Election Shares")
shall be deemed to be Shares in respect of which a Cash
Election has been made.
(b) Elections pursuant to Section 3.2(a)
shall be made on the form of letter of transmittal and
form of election (the "Letter of Transmittal and Form of
Election") to be provided by the Paying Agent (as defined
in Section 3.3(a)) to holders of record of Shares,
together with instructions for use in effecting the
surrender of the Certificates for payment therefor, as
soon as practicable following the Effective Time. The
Letter of Transmittal and Form of Election shall specify
that delivery shall be effected, and risk of loss and
title to the Certificates transmitted therewith shall
pass, only upon proper delivery of the Certificates to
the Paying Agent. Elections shall be made by mailing to
the Paying Agent a duly completed Letter of Transmittal
and Form of Election in accordance with Section 3.3(b).
To be effective, a Letter of Transmittal and Form of
Election must be (i) properly completed, signed and
submitted to the Paying Agent at its designated office
and (ii) accompanied by the Certificates representing the
Shares as to which the election is being made (or by an
appropriate guarantee of delivery of such Certificates by
a commercial bank or trust company in the United States
or a member of a registered national security exchange or
of the National Association of Securities Dealers, Inc.,
provided such Certificates are in fact delivered to the
Paying Agent within eight Trading Days after the date of
execution of such guarantee of delivery). The Company
shall determine, in its sole and absolute discretion,
which authority it may delegate in whole or in part to
the Paying Agent, whether any Letter of Transmittal and
Form of Election has been properly completed, signed and
submitted or revoked. The decision of the Company (or
the Paying Agent, as the case may be) in such matters
shall be conclusive and binding. Neither the Company nor
the Paying Agent will be under any obligation to notify
any person of any defect in a Letter of Transmittal and
Form of Election submitted to the Paying Agent.
3.3 Payment for Shares in the Merger.
(a) At the Effective Time, Parent shall
deposit or cause to be deposited with First Chicago Trust
Company of New York or another bank or trust company
located in the United States with assets in excess of
$500,000,000 selected by Parent after consultation with
the Company (the "Paying Agent"), for the benefit of
holders of Shares the Aggregate Merger Consideration
plus cash in an amount sufficient to make cash payments
in lieu of fractional shares pursuant to Section 3.5 and
any applicable dividends or distributions pursuant to
Section 3.4. The cash amounts referred to in the
immediately preceding sentence shall consist of
immediately available funds (such funds hereinafter
referred to as the "Exchange Fund"). The Paying Agent
shall, pursuant to irrevocable instructions, (x) deliver
to each holder of Shares, in accordance with this Section
3.3, the cash portion of such holder's Merger
Consideration out of the Exchange Fund, and the Exchange
Fund, other than any interest thereon (which shall be
retained by Parent), shall not be used for any other
purpose, and (y) deliver the Parent Common Stock portion
of such holder's Merger Consideration (if any) out of the
shares of Parent Common Stock deposited with the Paying
Agent by Parent for the benefit of holders of Shares.
The Exchange Fund shall be invested by the Paying Agent,
as directed by Parent, provided that such investments
shall be limited to (i) direct obligations of the United
States of America, (ii) obligations for which the full
faith and credit of the United States of America is
pledged to provide for the payment of principal and
interest, (iii) commercial paper rated of the highest
quality by ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's") or
Standard & Poor's Ratings Group, a division of ▇▇▇▇▇▇-
▇▇▇▇ Inc. ("S&P"), and (iv) certificates of deposit
issued by a commercial bank whose long-term debt
obligations are rated at least A2 by Moody's or at least
A by S&P, in each case having a maturity not in excess of
one year; provided, that nothing herein shall affect the
obligation of Parent to pay the full cash portion of the
Merger Consideration and any other cash amounts due to a
holder hereunder.
(b) Upon surrender of Certificates for
cancellation to the Paying Agent, together with such
Letter of Transmittal and Form of Election duly completed
and executed and any other documents required by such
instructions, the holder of such Certificates shall be
entitled to receive for each of the Shares formerly
represented by such Certificates (x) the Merger
Consideration elected by such holder pursuant to Section
3.2(b) (or, in the case of Textron, the Textron
Consideration), (y) cash in lieu of any fractional shares
of Parent Common Stock to which such holder is entitled
pursuant to Section 3.5, and (z) any dividends or
distributions to which such holder may be entitled
pursuant to Section 3.4, in each such case without any
interest thereon and less any required withholding of
taxes, and the Certificates so surrendered shall
forthwith be cancelled. If payment is to be made to a
person other than the person in whose name a Certificate
so surrendered is registered on the stock transfer books
of the Company, it shall be a condition of payment that
the Certificate so surrendered shall be properly endorsed
and otherwise in proper form for transfer and that the
person requesting such payment shall pay to the Paying
Agent any transfer or other taxes required by reason of
the payment to a person other than the registered holder
of the Certificate surrendered, or shall establish to the
satisfaction of the Paying Agent that such tax has been
paid or is not applicable. Until surrendered in
accordance with the provisions of this Section 3.3(b),
each Certificate (other than Certificates representing
Shares held in the Company's treasury or by Parent,
Newco, any direct or indirect wholly owned subsidiary of
Parent or any direct or indirect wholly owned subsidiary
of the Company) shall represent for all purposes only the
right to receive for each Share represented thereby the
applicable Merger Consideration.
(c) At any time following the sixth month
after the Effective Time, Parent shall be entitled to
require the Paying Agent to deliver to it any portion of
the Exchange Fund and all shares of Parent Common Stock
deposited with the Paying Agent pursuant to Section
3.3(a) which had not been disbursed to holders of
Certificates (including, without limitation, all interest
and other income received by the Paying Agent in respect
of all funds made available to it), and thereafter such
holders shall be entitled to look only to Parent (subject
to abandoned property, escheat and other similar laws) as
general creditors thereof with respect to any Merger
Consideration that may be payable upon due surrender of
the Certificates held by them. Notwithstanding the
foregoing, neither Parent, the Surviving Corporation nor
the Paying Agent shall be liable to any holder of a
Certificate for any Merger Consideration delivered in
respect of such Certificate or the Shares formerly
represented thereby to a public official pursuant to any
abandoned property, escheat or other similar Law.
(d) Cash payments made pursuant to
Section 3.1 for SARs and Performance Share Units shall be
made by the Company at the Effective Time.
3.4 Dividends. No dividends or distributions
that are declared on shares of Parent Common Stock will
be paid to persons entitled to receive certificates
representing shares of Parent Common Stock until such
persons surrender their Certificates. Upon such
surrender, there shall be paid to the person in whose
name the certificates representing such shares of Parent
Common Stock shall be issued, any dividends or
distributions with respect to such shares of Parent
Common Stock which have a record date on or after the
Effective Time and shall have become payable between the
Effective Time and the time of such surrender. In no
event shall the person entitled to receive such dividends
or distributions be entitled to receive interest thereon.
3.5 No Fractional Securities. No certificates
or scrip representing fractional shares of Parent Common
Stock shall be issued upon the surrender for exchange of
Certificates, and such fractional interests shall not
entitle the owner thereof to vote or to any rights of a
security holder. In lieu of any such fractional
securities, each holder of Shares who would otherwise
have been entitled to a fraction of a share of Parent
Common Stock upon surrender of such holder's Certificates
will be entitled to receive a cash payment (without
interest) determined by multiplying (i) the fractional
interest to which such holder would otherwise be entitled
(after taking into account all Shares then held of record
by such holder) and (ii) the average of the per share
closing prices for the Parent Common Stock as reported in
the NYSE Composite Transactions for the ten Trading Days
immediately preceding the Effective Time as reported in
The Wall Street Journal.
3.6 Transfer of Shares After the Effective
Time. No transfers of Shares shall be made on the stock
transfer books of the Company after the close of business
on the day prior to the date of the Effective Time.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to Parent
and Newco that:
4.1 Corporate Organization and Qualification.
(a) Each of the Company and each
subsidiary of the Company (collectively, the "Company
Subsidiaries") is a corporation duly organized, validly
existing and in good standing under the Laws of its
jurisdiction of incorporation and is qualified and in
good standing as a foreign corporation in each
jurisdiction where the properties owned, leased or
operated, or the business conducted, by it require such
qualification, except where the failure to so qualify or
be in good standing is not reasonably likely to have a
Company Material Adverse Effect (as defined in Section
9.10). Each of the Company and each of the Company
Subsidiaries has all requisite corporate power and
authority and all necessary governmental Consents (as
defined in Section 9.10) to own, lease and operate its
properties and to carry on its business as it is now
being conducted, except where the failure to have such
power and authority is not reasonably likely to have a
Company Material Adverse Effect. The Company has
heretofore made available to Parent complete and correct
copies of the Articles of Organization or Articles of or
Certificate of Incorporation, as the case may be, and By-
Laws of it and each Company Subsidiary as in effect as of
the date hereof.
(b) The Company conducts its insurance
operations through The ▇▇▇▇ ▇▇▇▇▇▇ Life Insurance
Company, The ▇▇▇▇ ▇▇▇▇▇▇ Protective Life Insurance
Company and The ▇▇▇▇ ▇▇▇▇▇▇ Variable Annuity Insurance
Company (collectively, the "Company Insurance
Subsidiaries"). Except as disclosed in Section 4.1(b) of
the disclosure schedule being delivered to Parent by the
Company with this Agreement (as amended and restated as
of November 5, 1996, the "Company Disclosure Schedule"),
each of the Company Insurance Subsidiaries is (i) duly
licensed or authorized as an insurance company in its
jurisdiction of incorporation, (ii) duly licensed or
authorized as an insurance company in each other
jurisdiction where it is required to be so licensed or
authorized, and (iii) duly authorized in its jurisdiction
of incorporation and each other applicable jurisdiction
to write each line of business reported as being written
in the Company SAP Statements (as hereinafter defined),
except, in any such case, where the failure to be so
licensed or authorized is not reasonably likely to result
in a Company Material Adverse Effect.
(c) Except for the Company Subsidiaries
and as set forth in the Company 1995 SAP Statements (as
defined in Section 4.6) or in Section 4.1(c) of the
Company Disclosure Schedule, 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 that directly or indirectly
conducts any activity which is material to the Company.
4.2 Capitalization. The authorized capital
stock of the Company consists of: (i) 100,000,000 Shares,
of which, as of the date of the Agreement, 45,000,000
shares were issued and outstanding, of which 37,500,000
Shares were owned by Textron free and clear of all Liens
(as defined in Section 9.10), and (ii) 5,000,000 shares
of preferred stock, no par value per share, none of
which, as of the date of this Agreement, were issued and
outstanding. All of the outstanding Shares have been
duly authorized and validly issued and are fully paid and
nonassessable. Except as set forth on Section 4.2 of the
Company Disclosure Schedule, as of the date hereof all
outstanding shares of capital stock of the Company
Subsidiaries are owned by the Company or a direct or
indirect wholly owned subsidiary of the Company, free and
clear of all Liens. Except as set forth on Section 4.2
of the Company Disclosure Schedule, there are not as of
the date hereof any outstanding or authorized options,
warrants, calls, rights (including preemptive rights),
commitments or any other agreements of any character to
which the Company or any of the Company Subsidiaries is a
party or may be bound by, requiring it to issue,
transfer, sell, purchase, redeem or acquire any shares of
capital stock or any securities or rights convertible
into, exchangeable for, or evidencing the right to
subscribe for, any shares of capital stock of the Company
or any of the Company Subsidiaries.
4.3 Authority Relative to This Agreement. The
Company has the requisite corporate power and authority
to execute and deliver this Agreement and, subject to
approval of this Agreement by the holders of two-thirds
of the outstanding Shares in accordance with the MBCL, to
consummate the transactions contemplated hereby. This
Agreement and the consummation by the Company of the
transactions contemplated hereby have been duly and
validly authorized by the Board of Directors of the
Company and no other corporate proceedings on the part of
the Company are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby (other
than, with respect to the Merger, the approval of this
Agreement by the holders of two-thirds of the outstanding
Shares in accordance with the MBCL). This Agreement has
been duly and validly executed and delivered by the
Company and, assuming this Agreement constitutes the
valid and binding agreement of Parent and Newco,
constitutes the valid and binding agreement of the
Company, enforceable against the Company in accordance
with its terms, except that the enforcement hereof may be
limited by (a) bankruptcy, insolvency, reorganization,
moratorium or other similar Laws now or hereafter in
effect relating to creditors' rights generally and (b)
general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or
at law). The Company has taken, or will take in
accordance with Section 6.14, all action necessary to
ensure that, so long as this Agreement shall not have
been terminated pursuant to Article VIII hereof, no
"Rights" (as that term is defined in that certain Rights
Agreement dated as of September 23, 1993 (the "Rights
Agreement"), between the Company and First Chicago Trust
Company of New York, a New York corporation) are issued
or required to be issued to the stockholders of the
Company by virtue of the execution and delivery of this
Agreement or the Textron Voting Agreement. The Company
and each Company Subsidiary have taken all necessary
action to exempt the transactions contemplated by this
Agreement and the Textron Voting Agreement from, or if
necessary to challenge the validity or applicability of,
any applicable "moratorium," "fair price," "business
combination," "control share" or other state anti-
takeover Laws (collectively, "Takeover Laws"), including,
without limitation, Chapters 110C, 110D, 110E and 110F of
the Massachusetts General Laws. Each of the Company and
each Company Subsidiary has taken all action so that the
entering into of this Agreement and the Textron Voting
Agreement and the consummation of the Merger and the
other transactions contemplated by this Agreement and the
Textron Voting Agreement do not and will not result in
the grant of any rights to any person under the Articles
of Organization or Articles or Certificate of
Incorporation, By-Laws or other governing instruments of
the Company or any Company Subsidiary or restrict or
impair the ability of Parent or any of its subsidiaries
to vote, or otherwise to exercise the rights of a
shareholder with respect to, shares of the Company or any
Company Subsidiary that may be directly or indirectly
acquired or controlled by it or to otherwise engage in
transactions with the Company or any Company Subsidiary.
4.4 Consents and Approvals; No Violation.
Neither the execution, delivery or performance of this
Agreement by the Company nor the consummation by the
Company of the transactions contemplated hereby nor
compliance by the Company with any of the provisions
hereof will (a) conflict with or result in any breach of
any provision of the respective Articles of Organization
or Certificate of Incorporation, as the case may be, or
respective By-Laws of the Company or any of the Company
Subsidiaries; (b) except as set forth in Section 4.4 of
the Company Disclosure Schedule, require any Consent of
any governmental or regulatory authority, except (i) in
connection with the applicable requirements of the ▇▇▇▇-
▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), (ii) pursuant to the applicable
requirements of the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated
thereunder (the "Exchange Act"), (iii) the filing of the
Articles of Merger pursuant to the MBCL and appropriate
documents with the relevant authorities of other states
in which the Company or any of the Company Subsidiaries
is authorized to do business, (iv) as may be required by
any applicable state securities or "blue sky" laws or
state takeover laws, (v) the filing of appropriate
documents with, and approval of, the respective
Commissioners of Insurance of the Commonwealth of
Massachusetts and the States of Delaware and New York and
such Consents as may be required under the insurance laws
of any state in which the Company or any of the Company
Subsidiaries is domiciled or does business or in which
Parent or any of the Parent Subsidiaries is domiciled or
does business, (vi) such Consents as may be required
under the Laws of Canada or any of the provinces thereof
or (vii) where the failure to obtain such Consents is not
reasonably likely to have a Company Material Adverse
Effect; (c) except as set forth in Section 4.4 of the
Company Disclosure Schedule or except for any Default
relating to an investment advisory agreement with the
▇▇▇▇ ▇▇▇▇▇▇ Variable Annuity Contract Accumulation Fund,
result in a Default (as defined in Section 9.10) under
any of the terms, conditions or provisions of any
Contract (as defined in Section 9.10) or Permit (as
defined in Section 9.10) to which the Company or any of
the Company Subsidiaries or any of their respective
assets may be bound, except for such Defaults as to which
requisite waivers or consents have been obtained or which
are not reasonably likely to have a Company Material
Adverse Effect; or (d) assuming the Consents and Permits
referred to in this Section 4.4 are duly and timely
obtained or made and the approval of this Agreement by
the Company's stockholders has been obtained, violate any
Order (as defined in Section 9.10) or Law applicable to
the Company or any of the Company Subsidiaries or any of
their respective assets, except for violations which are
not reasonably likely to have a Company Material Adverse
Effect.
4.5 SEC Reports; Financial Statements.
(a) Except as disclosed in Section 4.5 of
the Company Disclosure Schedule, the Company has timely
filed all reports required to be filed by it with the
Securities and Exchange Commission (the "SEC") since
January 1, 1994 pursuant to the federal securities laws
and the SEC rules and regulations thereunder, all of
which as of their respective dates, complied in all
material respects with applicable requirements of the
Exchange Act (collectively, the "Company SEC Reports").
Except as disclosed in Section 4.5 of the Company
Disclosure Schedule, none of the Company SEC Reports,
including, without limitation, any financial statements
or schedules included therein, as of their respective
dates contained any untrue statement of a material fact
or omitted to state a material fact required to be stated
therein or necessary in order to make the statements
therein, in light of the circumstances under which they
were made, not misleading.
(b) Except as set forth in Section 4.5 of
the Company Disclosure Schedule, the consolidated
statements of financial position and the related
consolidated statements of operations, stockholders'
equity and cash flows (including the related notes
thereto) of the Company included in the Company SEC
Reports complied in all material respects with applicable
accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been
prepared in conformity with generally accepted accounting
principles ("GAAP") applied on a basis consistent with
prior periods (except as otherwise noted therein), and
present fairly the consolidated financial position of the
Company as of their respective dates, and the
consolidated results of its operations and its cash flows
for the periods presented therein (subject, in the case
of the unaudited interim financial statements, to normal
year-end adjustments).
4.6 Statutory Statements. Each of the Company
Insurance Subsidiaries has filed all annual or quarterly
statements, together with all exhibits and schedules
thereto, required to be filed with or submitted to the
appropriate regulatory authorities of the jurisdiction in
which it is domiciled on forms prescribed or permitted by
such authority (collectively, the "Company SAP
Statements"). Except as set forth in Section 4.6 of the
Company Disclosure Schedule, financial statements
included in the Company SAP Statements and prepared on a
statutory basis, including the notes thereto, have been
prepared in all material respects in accordance with
accounting practices prescribed or permitted by
applicable state regulatory authorities in effect as of
the date of the respective statements and such accounting
practices have been applied on a substantially consistent
basis throughout the periods involved, except as
expressly set forth in the notes or schedules thereto,
and such financial statements present fairly the
respective statutory financial positions and results of
operation of each of the Company Insurance Subsidiaries
as of their respective dates and for the respective
periods presented therein. The Company SAP Statements
for the year ended December 31, 1995 are referred to
herein as the "Company 1995 SAP Statements."
4.7 Absence of Certain Changes or Events.
Except as disclosed in the Company SEC Reports filed
prior to the date of this Agreement, or as set forth in
Section 4.7 of the Company Disclosure Schedule or as a
consequence of, or as contemplated by this Agreement,
since December 31, 1995, the business of the Company has
been carried on only in the ordinary and usual course,
and other than in the ordinary course of business, there
has not occurred any change which has resulted or is
reasonably likely to result in a Company Material Adverse
Effect. Since December 31, 1995, neither the Company nor
any of the Company Subsidiaries has, other than in the
ordinary course of business consistent with past
practice, incurred any material indebtedness for borrowed
money or guaranteed any such indebtedness or made any
material loans, advances or capital contributions to, or
material investments in, any other person other than the
Company or any Company Subsidiary.
4.8 Litigation. Except as set forth in
Section 4.8 of the Company Disclosure Schedule, the
Company SEC Reports filed prior to the date of this
Agreement accurately disclose in all material respects
all Litigation (as defined in Section 9.10) pending or,
to the knowledge of the Company, threatened, the outcome
of which is reasonably likely to have a Company Material
Adverse Effect.
4.9 No Regulatory Disqualifications. To the
knowledge of the Company, except as set forth in Section
4.9 of the Company Disclosure Schedule, no event has
occurred or condition exists or, to the extent it is
within the reasonable control of the Company, will occur
or exist with respect to the Company that, in connection
with obtaining any regulatory Consents required for the
Merger, would cause the Company to fail to satisfy on its
face any applicable statute or written regulation of any
applicable insurance regulatory authority, which is
reasonably likely to adversely affect the Company's
ability to consummate the transactions contemplated
hereby.
4.10 Joint Proxy Statement-Prospectus. Except
as set forth in Section 4.10 of the Company Disclosure
Schedule, none of the information to be supplied by and
relating to the Company for inclusion or incorporation by
reference in (i) the Registration Statement to be filed
with the SEC by Parent on Form S-4 under the Securities
Act of 1933, as amended (the "Securities Act"), for the
purpose of registering the shares of Parent Common Stock
to be issued in connection with the Merger (the
"Registration Statement") or (ii) the Joint Proxy
Statement-Prospectus (as defined in Section 6.4) will, in
the case of the Registration Statement, at the time it
becomes effective contain any untrue statement of a
material fact or omit to state any material fact required
to be stated therein or necessary in order to make the
statements therein not misleading, or, in the case of the
Joint Proxy Statement-Prospectus, at the time of the
mailing of the Joint Proxy Statement-Prospectus to the
Company's and Parent's respective stockholders (or, in
the case of any amendment or supplement thereto, at the
time of mailing of such amendment or supplement, as the
case may be) and at the time of the stockholder meeting
of the Company contemplated by Section 6.7(a) and at the
Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required
to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under
which they are made, not misleading. If at any time
prior to the Effective Time any event with respect to the
Company or any of its subsidiaries should occur which is
required to be described in a supplement to the Joint
Proxy Statement-Prospectus, such event shall be so
described, and such supplement shall be promptly filed
with the SEC and, as required by Law, disseminated to the
stockholders of the Company. With respect to the
information relating to the Company, the Joint Proxy
Statement-Prospectus will comply as to form in all
material respects with the requirements of the Exchange
Act.
4.11 Taxes. Except as set forth on Section
4.11 of the Company Disclosure Schedule, (a) the Company
and the Company Subsidiaries have filed on or before the
date hereof (i) all federal, state, local and foreign
income Tax Returns (as defined below) required to be
filed after January 1, 1992 except for such Tax Returns
the failure of which to file is not reasonably likely to
have a Company Material Adverse Effect, individually or
in the aggregate, and (ii) all other Tax Returns required
to be filed except for such Tax Returns the failure of
which to file is not reasonably likely to have a Company
Material Adverse Effect, individually or in the
aggregate; (b) all Taxes (as defined below) shown to be
due on the Tax Returns referred to in clause (a) have
been timely paid; (c) the Company and the Company
Subsidiaries have joined in the filing of a consolidated
United States federal income Tax Return of Textron and
its subsidiaries, and since 1986, neither the Company nor
the Company Subsidiaries have joined in a consolidated
income Tax Return with any other group of corporations,
except for a group consisting solely of the Company and
the Company Subsidiaries; (d) the Company and the Company
Subsidiaries have entered into a Tax sharing agreement
with Textron, dated January 1, 1993, as amended,
governing the allocation of Taxes between them, and no
other Tax sharing agreement exists among the parties; (e)
neither the Company nor any Company Subsidiary has waived
in writing any statute of limitations in respect of Taxes
of the Company or such Company Subsidiary, except for
waivers relating to Taxes which are not reasonably likely
to have a Company Material Adverse Effect, individually
or in the aggregate; (f) all deficiencies asserted or
assessments made as a result of examination of the Tax
Returns referred to in clause (a) by a taxing authority
have been paid in full; (g) no proposed assessments have
been raised in writing by the relevant taxing authority
in connection with the examination of Tax Returns
referred to in clause (a); (h) no taxing authority has
requested in writing that the Company or any Company
Subsidiary file a Tax Return in a jurisdiction where it
has not previously filed a Tax Return; and (i) as a
result of the transactions contemplated by this
Agreement, none of the Company or any Company Subsidiary
will be required to make a "parachute payment" to a
"disqualified individual" pursuant to section 280G of the
Internal Revenue Code of 1986, as amended (the "Code").
As of the date hereof, the Company has made available to
Parent true and complete copies of its separate "pro-
forma" United States federal income Tax Returns for each
of the four tax years ended December 31, 1991 through
1994. For purposes of this Agreement, "Tax" (and, with
correlative meaning, "Taxes") shall mean all federal,
state, local and foreign income, premium, payroll,
withholding, excise, sales, use, gain, transfer, real and
personal property, use and occupation, capital stock,
franchise and other taxes, including interest and
penalties thereon, imposed by a taxing authority. For
purposes of this Agreement, "Tax Return" shall mean all
reports, returns (including information returns and
similar returns or reports), statements, declarations, or
forms, including accompanying schedules, in each case
with respect to Taxes.
4.12 Employee Benefit Plans; Labor Matters.
(a) General Compliance with Law. Except
as disclosed in Section 4.12(a) of the Company Disclosure
Schedule, each Company Plan (as defined in Section 9.10)
has been operated in accordance with its terms and the
requirements of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), the Code, and all
other applicable Laws, except where the failure to have
been so operated is not reasonably likely to result in a
Company Material Adverse Effect. All reports and
disclosures relating to the Company Plans required to be
filed or furnished to any governmental entity,
participants or beneficiaries prior to the Closing have
been or will be filed in a timely manner and in
accordance in all material respects with applicable Law
except where the failure to be so filed or furnished is
not reasonably likely to have a Company Material Adverse
Effect.
(b) ERISA Title IV Liability; Defined
Benefit Plans. Except as set forth in Section 4.12(b) of
the Company Disclosure Schedule or as is not reasonably
likely to result in a Company Material Adverse Effect,
(i) neither the Company, nor any Company Subsidiary, nor
any ERISA Affiliate (as defined in Section 9.10) of the
Company has incurred any direct or indirect liability
under, arising out of, or by operation of Title IV of
ERISA that has not been satisfied in full, and no fact or
event exists that could reasonably be expected to give
rise to any such liability, other than liability for
premiums due the Pension Benefit Guaranty Corporation
("PBGC") (which premiums have been paid when due);
(ii) for each Company Plan which is subject to Title IV
of ERISA, the aggregate accumulated benefit obligation
(as determined under Statement of Financial Accounting
Services No. 87) of such Company Plan does not exceed the
fair market value of the assets of such Company Plan;
(iii) no Company Plan or any trust established thereunder
that is subject to Section 302 of ERISA and Section 412
of the Code has incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA and
Section 412 of the Code), whether or not waived; (iv) all
contributions required to be made with respect thereto
(whether pursuant to the terms of any Company Plan or
otherwise) have been timely made; (v) no Lien exists
under Section 412(n) of the Code or Section 4068 of ERISA
with respect to any assets of the Company or any Company
Subsidiary; (vi) no tax under Section 4971 of the Code
has been incurred with respect to any Company Plan; and
(vii) neither the Company nor any of the Company
Subsidiaries sponsors, maintains, contributes to, or is
required to contribute to a "multiemployer pension plan,"
as defined in Section 3(37) of ERISA, or a plan described
in Section 4063(a) of ERISA.
(c) Prohibited Transactions; Fiduciary
Duties. Except as set forth in Section 4.12(c) of the
Company Disclosure Schedule or as is not reasonably
likely to result in a Company Material Adverse Effect,
(i) neither the Company, nor any Company Subsidiary, nor
any Company Plan, nor any trust created thereunder and
any trustee or administrator thereof has engaged in a
transaction in connection with which the Company or any
ERISA Affiliate, any Company Plan, any such trust, or any
trustee or administrator thereof, or any party dealing
with any Company Plan or any such trust, which could
result in a civil penalty assessed pursuant to Section
409 or 502(i) of ERISA or a tax imposed pursuant to
Section 4975 of the Code; and (ii) the Company, the
Company Subsidiaries, and all fiduciaries (as defined in
Section 3(21) of ERISA) with respect to the Company
Plans, have complied in all respects with Section 404 of
ERISA.
(d) Determination Letters. Except as set
forth in Section 4.12(d) of the Company Disclosure
Schedule or as is not reasonably likely to result in a
Company Material Adverse Effect, (i) each Company Plan
intended to be qualified under Section 401(a) of the Code
has received a favorable determination letter from the
Internal Revenue Service with respect to the Tax Reform
Act of 1986 and other applicable Laws, or an application
was filed for such determination letter on a timely
basis, and (ii) nothing has occurred from the date of
such letter or such filing that could reasonably be
expected to affect the qualified status of such Company
Plan.
(e) No Acceleration of Liability. Except
as set forth in Section 4.12(e) of the Company Disclosure
Schedule or as is not reasonably likely to result in a
Company Material Adverse Effect, the consummation of the
transactions contemplated by this Agreement will not
(i) entitle any current or former employee, director or
officer of the Company or any Company Subsidiary to
severance pay, unemployment compensation or any other
payment, except as expressly provided in this Agreement
or (ii) accelerate the time of payment or vesting, or
increase the amount of compensation or benefit due any
such employee, director or officer.
(f) Ability to Terminate Plans. Except
as set forth in Section 4.12(f) of the Company Disclosure
Schedule or as is not reasonably likely to result in a
Company Material Adverse Effect, each Company Plan is
terminable in accordance with the terms expressly set
forth therein, except as may be limited by applicable
Law.
(g) The Company is not subject to any
collective bargaining or other labor union contracts
applicable to persons employed by the Company or the
Company Subsidiaries. There is no pending or threatened
in writing labor dispute, strike or work stoppage against
the Company or any of the Company Subsidiaries which may
interfere with the respective business activities of the
Company or the Company Subsidiaries, except where such
dispute, strike or work stoppage is not reasonably likely
to have a Company Material Adverse Effect.
4.13 Environmental Laws and Regulations.
Except as disclosed in Section 4.13 of the Company
Disclosure Schedule, or except as is not reasonably
likely to result in a Company Material Adverse Effect:
(a) the Company, each of the Company Subsidiaries and
each of the Company Properties (as defined in Section
9.10) is in compliance with all applicable Environmental
Laws (as defined in Section 9.10); (b) the Company and
each of the Company Subsidiaries has obtained all Permits
required for their operations and the Company Properties
by any applicable Environmental Law; (c) neither the
Company nor any Company Subsidiary has, and the Company
has no knowledge of any other person who has, caused any
release, threatened release or disposal of any Hazardous
Material (as defined in Section 9.10) at the Company
Properties; (d) the Company has no knowledge that the
Company Properties are adversely affected by any release,
threatened release or disposal of a Hazardous Material
originating or emanating from any other property; (e)
neither the Company nor any Company Subsidiary has
manufactured, used, generated, stored, treated,
transported, disposed of, released, or otherwise managed
any Hazardous Material at the Company Properties, (f)
neither the Company nor any Company Subsidiary: (i) has
any material liability for response or corrective action,
natural resources damage, or any other harm pursuant to
any Environmental Law at the Company Properties or at any
other property, (ii) is subject to, has notice or
knowledge of, or is required to give any notice of any
Environmental Claim (as defined in Section 9.10)
involving the Company, any of the Company Subsidiaries or
any of the Company Properties, or (iii) has knowledge of
any condition or occurrence at the Company, any of the
Company Subsidiaries or any of the Company Properties
which could form the basis of an Environmental Claim
against the Company, any of the Company Subsidiaries or
any of the Company Properties; (g) the Company Properties
are not subject to any, and the Company has no knowledge
of any imminent, restriction on the ownership, occupancy,
use or transferability of the Company Properties in
connection with any (i) Environmental Law or (ii)
release, threatened release or disposal of any Hazardous
Material; and (h) there are no conditions or
circumstances at the Company Properties that pose a risk
to the environment or the health and safety of any
person.
4.14 Company Intellectual Property. Except as
set forth in Section 4.14 of the Company Disclosure
Schedule, or except as is not reasonably likely to result
in a Company Material Adverse Effect: (a) either the
Company or one of the Company Subsidiaries is the owner
of, or a licensee under a valid license for, all items of
intellectual property which are material to the business
of the Company and the Company Subsidiaries as currently
conducted, including, without limitation, (i) copyrights,
patents, trademarks, logos, service marks, trade names,
service names, all applications therefor and all
registrations thereof, and (ii) technology rights and
licenses, computer software, trade secrets, know-how,
inventions, processes, formulae and other intellectual
property rights (collectively, the "Company Intellectual
Property"); (b) with respect to all Company Intellectual
Property owned by the Company or any Company Subsidiary,
the Company or such Company Subsidiary, as the case may
be, is the sole owner and has the exclusive right to use
such Company Intellectual Property, and such owned
Company Intellectual Property is not subject to any
Liens, including, without limitation, any rights retained
by Textron or any of its affiliates other than the
Company or the Company Subsidiaries; (c) there is no
infringement or other adverse claim against the rights of
the Company or any Company Subsidiary with respect to any
of the Company Intellectual Property; and (d) neither the
Company nor any Company Subsidiary has been charged with,
nor to the Company's knowledge is the Company or any
Company Subsidiary threatened to be charged with nor is
there any basis for any such charge of, infringement or
other violation of, nor has the Company or any Company
Subsidiary infringed, nor is it infringing, any unexpired
rights of any third party in any of the Company
Intellectual Property.
4.15 Brokers and Finders. Other than ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated which has been retained by the
independent committee of the Board of Directors, the
Company has not employed any investment banker, broker,
finder, consultant or intermediary in connection with the
transactions contemplated by this Agreement which would
be entitled to any investment banking, brokerage,
finder's or similar fee or commission in connection with
this Agreement or the transactions contemplated hereby.
4.16 Opinion of Financial Advisors. The
independent committee of the Board of Directors has
received the opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
dated April 28, 1996, to the effect that, as of such
date, the Merger Consideration to be received by the
stockholders of the Company in the Merger is fair to the
minority stockholders of the Company from a financial
point of view.
4.17 Title to Property.
(a) Except as set forth in Section
4.17(a) of the Company Disclosure Schedule, each of the
Company and the Company Subsidiaries (i) has good, valid
and marketable title to all of its properties, assets and
other rights that do not constitute real property, free
and clear of all Liens, except for such Liens that are
not reasonably likely to have a Company Material Adverse
Effect, and (ii) owns, or has valid leasehold interests
in or valid contractual rights to use, all of the assets,
tangible and intangible, used by, or necessary for the
conduct of, its business, except where the failure to
have such valid leasehold interests or such valid
contractual rights is not reasonably likely to have a
Company Material Adverse Effect.
(b) Except as set forth in Section
4.17(b) of the Company Disclosure Schedule or except as
is not reasonably likely to result in a Company Material
Adverse Effect, each of the Company and the Company
Subsidiaries:
(i) owns and has good, valid
and marketable title in fee simple to the real
property owned by such party, free and clear of
Liens, except for (A) minor imperfections of
title, easements and rights of way, none of
which, individually or in the aggregate,
materially detracts from the value of or
impairs the use of the affected property or
impairs the operations of the Company or any of
the Company Subsidiaries and (B) Liens for
current Taxes not yet due and payable ((A) and
(B) are collectively referred to as "Permitted
Company Liens");
(ii) is in peaceful and
undisturbed possession of the space and/or
estate under each lease under which it is a
tenant, and there are no material defaults by
it as tenant thereunder; and
(iii) has good and valid rights
of ingress and egress to and from all the real
property owned or leased by such party from and
to the public street systems for all usual
street, road and utility purposes.
4.18 Insurance. Except as set forth in
Section 4.18 of the Company Disclosure Schedule, each of
the Company and each of the Company Subsidiaries is, and
has been continuously since January 1, 1995, insured with
financially responsible insurers in such amounts and
against such risks and losses as are customary in all
material respects for companies conducting the business
as conducted by the Company and the Company Subsidiaries
during such time period. Except as set forth in Section
4.18 of the Company Disclosure Schedule, neither the
Company nor any of the Company Subsidiaries is in Default
under, or has received any notice of cancellation or
termination with respect to, any material insurance
policy of the Company or any of the Company Subsidiaries.
The insurance policies of the Company and each of the
Company Subsidiaries are valid and enforceable policies
in all material respects.
4.19 No Default. Except as set forth in
Section 4.19 of the Company Disclosure Schedule, neither
the Company nor any of the Company Subsidiaries is in
Default under any term, condition or provision of (a) its
Articles of Organization or Articles or Certificate of
Incorporation, as the case may be, or By-Laws, (b) any
Contract or other instrument or obligation to which the
Company or any of the Company Subsidiaries is a party or
by which they or any of their properties or assets may be
bound or affected, except for any such Defaults that are
not reasonably likely to have a Company Material Adverse
Effect; (c) any Order applicable to the Company or any of
the Company Subsidiaries or any of their properties or
assets, except for any such Defaults that are not
reasonably likely to have a Company Material Adverse
Effect; or (d) any Permit necessary for the Company or
any of the Company Subsidiaries to conduct their
respective businesses as currently conducted, except for
Defaults that are not reasonably likely to have a Company
Material Adverse Effect.
4.20 Noncompliance with Laws. The business of
the Company and each of the Company Subsidiaries is being
conducted in compliance with all applicable Laws except
for instances of noncompliance that are listed in Section
4.20 of the Company Disclosure Schedule or which are not
reasonably likely to have a Company Material Adverse
Effect. Except as set forth in Section 4.20 of the
Company Disclosure Schedule, since January 1, 1995,
neither the Company nor any of the Company Subsidiaries
has received any written notification or written
communication from any agency or department of federal,
state, or local government (a) asserting that the Company
or any Company Subsidiary is not in compliance with any
of the Laws, Orders or Permits of any governmental agency
or authority or that any such agency or authority
enforces, except such instances of noncompliance that are
not reasonably likely to have a Company Material Adverse
Effect, or (b) requiring the Company or any Company
Subsidiary to enter into or consent to the issuance of a
cease and desist order, formal agreement, directive or
commitment which restricts materially the conduct of its
business or which materially affects its capital, its
credit or reserve policies, its management, or the
payment of dividends.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT
AND NEWCO
Each of Parent and Newco represents and
warrants jointly and severally to the Company that:
5.1 Corporate Organization and Qualification.
(a) Each of Parent and each subsidiary of
Parent (including Newco) (collectively, the "Parent
Subsidiaries") is a corporation duly organized, validly
existing and in good standing under the Laws of its
jurisdiction of incorporation and is qualified and in
good standing as a foreign corporation in each
jurisdiction where the properties owned, leased or
operated, or the business conducted, by it require such
qualification, except where the failure to so qualify or
be in good standing is not reasonably likely to have a
Parent Material Adverse Effect (as defined in Section
9.10). Each of Parent and each of the Parent
Subsidiaries has all requisite corporate power and
authority and all necessary governmental Consents to own,
lease and operate its properties and to carry on its
business as it is now being conducted, except where the
failure to have such power and authority is not
reasonably likely to have a Parent Material Adverse
Effect. Parent has heretofore made available to the
Company complete and correct copies of the Certificate of
Incorporation or Articles of Organization or
Incorporation, as the case may be, and By-Laws of it and
each Parent Subsidiary as in effect as of the date
hereof.
(b) Parent conducts its insurance
operations through Provident Life and Accident Insurance
Company, Provident National Assurance Company and
Provident Life and Casualty Insurance Company
(collectively, the "Parent Insurance Subsidiaries").
Except as disclosed in Section 5.1(b) of the disclosure
schedule being delivered to the Company by Parent with
this Agreement (as amended and restated as of November 5,
1996, the "Parent Disclosure Schedule"), each of the
Parent Insurance Subsidiaries is (i) duly licensed or
authorized as an insurance company in its jurisdiction of
incorporation, (ii) duly licensed or authorized as an
insurance company in each other jurisdiction where it is
required to be so licensed or authorized, and (iii) duly
authorized in its jurisdiction of incorporation and each
other applicable jurisdiction to write each line of
business reported as being written in the Parent SAP
Statements (as hereinafter defined), except, in any such
case, where the failure to be so licensed or authorized
is not reasonably likely to result in a Parent Material
Adverse Effect.
(c) Except for the Parent Subsidiaries
and as set forth in the Parent 1995 SAP Statements (as
defined in Section 5.7) or in Section 5.1(c) of the
Parent Disclosure Schedule, Parent 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 that directly or indirectly conducts any
activity which is material to Parent.
5.2 Capitalization. The authorized capital
stock of Parent consists of: (i) 65,000,000 shares of
Parent Common Stock, of which, as of the date of the
Agreement, 45,465,135 shares were issued and outstanding,
and (ii) 25,000,000 shares of preferred stock, par value
$1.00 per share ("Parent Preferred Stock"), 1,041,667 of
which, as of the date of this Agreement, were issued and
outstanding. All of the outstanding shares of Parent
Common Stock have been duly authorized and validly issued
and are fully paid and nonassessable. Except as set
forth on Section 5.2 of the Parent Disclosure Schedule,
as of the date hereof all outstanding shares of capital
stock of the Parent Subsidiaries are owned by Parent or a
direct or indirect wholly owned subsidiary of Parent,
free and clear of all Liens. Except as set forth on
Section 5.2 of the Parent Disclosure Schedule, there are
not as of the date hereof any outstanding or authorized
options, warrants, calls, rights (including preemptive
rights), commitments or any other agreements of any
character to which Parent or any of the Parent
Subsidiaries is a party or may be bound by, requiring it
to issue, transfer, sell, purchase, redeem or acquire any
shares of capital stock or any securities or rights
convertible into, exchangeable for, or evidencing the
right to subscribe for, any shares of capital stock of
Parent or any of the Parent Subsidiaries.
5.3 Authority Relative to This Agreement.
Each of Parent and Newco has the requisite corporate
power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby.
This Agreement and the consummation by Parent and Newco
of the transactions contemplated hereby have been duly
and validly authorized by the respective Boards of
Directors of Parent and Newco and by Parent as the sole
stockholder of Newco, and, except for (i) the affirmative
vote of a majority of the votes represented by shares of
Parent Common Stock cast (whether in person or by proxy)
at the stockholders meeting of Parent contemplated by
Section 6.7(b) of this Agreement (provided that the total
vote cast on the proposal to approve the issuance of
shares of Parent Common Stock in the Merger and the other
transactions contemplated by this Agreement represents a
majority in interest of all securities of Parent entitled
to vote on such proposal) and (ii) the affirmative vote
of the holders of 66 2/3% of the shares of Parent Common
Stock outstanding with respect to a proposal to amend
Parent's Certificate of Incorporation to increase the
number of shares of Parent Common Stock which Parent is
authorized to issue to 150,000,000 (such amendment is
referred to hereinafter as the "Charter Amendment"), no
other corporate proceedings on the part of Parent and
Newco are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This
Agreement has been duly and validly executed and
delivered by each of Parent and Newco and, assuming this
Agreement constitutes the valid and binding agreement of
the Company, constitutes the valid and binding agreement
of each of Parent and Newco, enforceable against each of
them in accordance with its terms, except that the
enforcement hereof may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or other similar
Laws now or hereafter in effect relating to creditors'
rights generally and (b) general principles of equity
(regardless of whether enforceability is considered in a
proceeding at law or in equity).
5.4 Consents and Approvals; No Violation.
Neither the execution, delivery or performance of this
Agreement by Parent or Newco nor the consummation by
Parent and Newco of the transactions contemplated hereby
nor compliance by Parent or Newco with any of the
provisions hereof will (a) conflict with or result in any
breach of any provision of the respective Certificate of
Incorporation or Articles of Organization, as the case
may be, or respective By-Laws, of Parent or any of the
Parent Subsidiaries; (b) require any Consent of any
governmental or regulatory authority, except (i) in
connection with the applicable requirements of the HSR
Act, (ii) pursuant to the applicable requirements of the
Exchange Act, (iii) the filing of the Articles of Merger
pursuant to the MBCL and appropriate documents with the
relevant authorities of other states in which Parent or
any of the Parent Subsidiaries is authorized to do
business, (iv) as may be required by any applicable state
securities or "blue sky" laws or state takeover laws, (v)
the filing of appropriate documents with, and approval
of, the respective Commissioners of Insurance of the
Commonwealth of Massachusetts and the States of Delaware
and Tennessee and such filings and consents as may be
required under the insurance laws of any state in which
the Company or any of the Company Subsidiaries is
domiciled or does business or in which Parent or any of
the Parent Subsidiaries is domiciled or does business,
(vi) such Consents as may be required under the Laws of
Canada or any of the provinces thereof, or (vii) where
the failure to obtain such Consents is not reasonably
likely to have a Parent Material Adverse Effect; (c)
result in a Default under any of the terms, conditions or
provisions of any Contract to which Parent or any of the
Parent Subsidiaries or any of their respective assets may
be bound, except for such Defaults as to which requisite
waivers or consents have been obtained or which are not
reasonably likely to have a Parent Material Adverse
Effect; or (d) assuming the Consents referred to in this
Section 5.4 are duly and timely obtained or made, violate
any Order or Law applicable to Parent or any of the
Parent Subsidiaries or to any of their respective assets,
except for violations which are not reasonably likely to
have a Parent Material Adverse Effect.
5.5 Financing. Parent has or will have on the
date of the Closing sufficient funds available to pay the
aggregate Cash Consideration for all of the Shares
outstanding on a fully diluted basis other than Shares
held by Textron, to pay the aggregate cash component of
the Mixed Consideration to be paid for all Shares
outstanding held by Textron and to pay all fees and
expenses related to the transactions contemplated by this
Agreement. To the extent that Parent or Newco will be
required to finance any part of the Merger Consideration,
Parent has received commitment letters with respect
thereto, complete and correct copies of which have
heretofore been furnished to the Company and Textron.
5.6 SEC Reports; Financial Statements.
(a) Parent has timely filed all reports
required to be filed by it with the SEC since January 1,
1994 pursuant to the federal securities laws and the SEC
rules and regulations thereunder, all of which as of
their respective dates, complied in all material respects
with applicable requirements of the Exchange Act
(collectively, the "Parent SEC Reports"). None of the
Parent SEC Reports, including, without limitation, any
financial statements or schedules included therein, as of
their respective dates contained any untrue statement of
a material fact or omitted to state a material fact
required to be stated therein or necessary in order to
make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) The consolidated statements of
financial position and the related consolidated
statements of operations, stockholders' equity and cash
flows (including the related notes thereto) of Parent
included in the Parent SEC Reports complied in all
material respects with applicable accounting requirements
and the published rules and regulations of the SEC with
respect thereto, have been prepared in conformity with
GAAP applied on a basis consistent with prior periods
(except as otherwise noted therein), and present fairly
the consolidated financial position of Parent as of their
respective dates, and the consolidated results of its
operations and its cash flows for the periods presented
therein (subject, in the case of the unaudited interim
financial statements, to normal year-end adjustments).
5.7 Statutory Statements. Each of the Parent
Insurance Subsidiaries has filed all annual or quarterly
statements, together with all exhibits and schedules
thereto, required to be filed with or submitted to the
appropriate regulatory authorities of the jurisdiction in
which it is domiciled on forms prescribed or permitted by
such authority (collectively, the "Parent SAP
Statements"). Except as set forth in Section 5.7 of the
Parent Disclosure Schedule, financial statements included
in the Parent SAP Statements and prepared on a statutory
basis, including the notes thereto, have been prepared in
all material respects in accordance with accounting
practices prescribed or permitted by applicable state
regulatory authorities in effect as of the date of the
respective statements and such accounting practices have
been applied on a substantially consistent basis
throughout the periods involved, except as expressly set
forth in the notes or schedules thereto, and such
financial statements present fairly the respective
statutory financial positions and results of operation of
each of the Parent Insurance Subsidiaries as of their
respective dates and for the respective periods presented
therein. The Parent SAP Statements for the year ended
December 31, 1995 are referred to herein as the "Parent
1995 SAP Statements."
5.8 Absence of Certain Changes or Events.
Except as disclosed in the Parent SEC Reports filed
prior to the date of this Agreement, or as set forth in
Section 5.8 of the Parent Disclosure Schedule or as a
consequence of, or as contemplated by this Agreement,
since December 31, 1995, the business of Parent has been
carried on only in the ordinary and usual course, and
other than in the ordinary course of business, there has
not occurred any change which has resulted or is
reasonably likely to result in a Parent Material Adverse
Effect.
5.9 Interim Operations of Newco. Newco was
formed solely for the purpose of engaging in the
transactions contemplated hereby and has not engaged in
any business activities or conducted any operations other
than in connection with the transactions contemplated
hereby.
5.10 Litigation. There is no Litigation,
pending against Parent or Newco, or, to the knowledge of
Parent, threatened, the outcome of which is reasonably
likely to have a Parent Material Adverse Effect.
5.11 No Regulatory Disqualifications. To the
knowledge of Parent, no event has occurred or condition
exists or, to the extent it is within the reasonable
control of Parent, will occur or exist with respect to
Parent that, in connection with obtaining any regulatory
Consents required for the Merger, would cause Parent or
Newco to fail to satisfy on its face any applicable
statute or written regulation of any applicable insurance
regulatory authority, which is reasonably likely to
adversely affect Parent's or Newco's ability to
consummate the transactions contemplated hereby.
5.12 Joint Proxy Statement-Prospectus. None
of the information supplied by Parent, Newco or their
representatives for inclusion in (i) the Registration
Statement or (ii) the Joint Proxy Statement-Prospectus
will, in the case of the Registration Statement, at the
time it becomes effective contain any untrue statement of
a material fact or omit to state any material fact
required to be stated therein or necessary in order to
make the statements therein not misleading, or, in the
case of the Joint Proxy Statement-Prospectus, at the time
of the mailing of the Joint Proxy Statement-Prospectus to
the Company's and Parent's respective stockholders (or,
in the case of any amendment or supplement thereto, at
the time of mailing of such amendment or supplement, as
the case may be) and at the time of the stockholder
meeting of Parent contemplated by Section 6.7(b) and at
the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required
to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under
which they were made, not misleading. If at any time
prior to the Effective Time any event with respect to
Parent or any of the Parent Subsidiaries should occur
which is required to be described in a supplement to the
Joint Proxy Statement-Prospectus, such event shall be so
described, and such supplement shall be promptly filed
with the SEC and, as required by Law, disseminated to the
stockholders of Parent. With respect to the information
relating to Parent, the Joint Proxy Statement-Prospectus
will comply as to form in all material respects with the
requirements of the Exchange Act.
5.13 Taxes. Except as set forth in Section
5.13 of the Parent Disclosure Schedule, (a) Parent and
the Parent Subsidiaries have filed on or before the date
hereof (i) all federal, state, local and foreign income
Tax Returns required to be filed after January 1, 1992
except for such Tax Returns the failure of which to file
is not reasonably likely to have a Parent Material
Adverse Effect, individually or in the aggregate, and
(ii) all other Tax Returns required to be filed except
for such Tax Returns the failure of which to file is not
reasonably likely to have a Parent Material Adverse
Effect, individually or in the aggregate; (b) all Taxes
shown to be due on the Tax Returns referred to in clause
(a) have been timely paid; (c) neither Parent nor any
Parent Subsidiary has waived in writing any statute of
limitations in respect of Taxes of Parent or such Parent
Subsidiary, except for waivers relating to Taxes which
would are not reasonably likely to have a Parent Material
Adverse Effect, individually or in the aggregate; (d) all
deficiencies asserted or assessments made as a result of
examination of the Tax Returns referred to in clause (a)
by a taxing authority have been paid in full; (e) no
proposed assessments have been raised in writing by the
relevant taxing authority in connection with the
examination of Tax Returns referred to in clause (a); and
(f) no taxing authority has requested in writing that
Parent or any Parent Subsidiary file a Tax Return in a
jurisdiction where it has not previously filed a Tax
Return.
5.14 Employee Benefit Plans; Labor Matters.
(a) General Compliance with Law. Except
as disclosed in Section 5.14(a) of the Parent Disclosure
Schedule, each Parent Plan (as defined in Section 9.10)
has been operated in accordance with its terms and the
requirements of ERISA, the Code, and all other applicable
Laws, except where the failure to have been so operated
would not be reasonably likely to result in a Parent
Material Adverse Effect. All reports and disclosures
relating to Parent Plans required to be filed or
furnished to any governmental entity, participants or
beneficiaries prior to the Closing have been or will be
filed in a timely manner and in accordance in all
material respects with applicable Law except where the
failure to be so filed or furnished is not reasonably
likely to have a Parent Material Adverse Effect.
(b) ERISA Title IV Liability; Defined
Benefit Plans. Except as set forth in Section 5.14(b) of
the Parent Disclosure Schedule or as is not reasonably
likely to result in a Parent Material Adverse Effect,
(i) neither Parent, nor any Parent Subsidiary, nor any
ERISA Affiliate of Parent has incurred any direct or
indirect liability under, arising out of, or by operation
of Title IV of ERISA that has not been satisfied in full,
and no fact or event exists that could reasonably be
expected to give rise to any such liability, other than
liability for premiums due the PBGC (which premiums have
been paid when due); (ii) for each Parent Plan which is
subject to Title IV of ERISA, the aggregate accumulated
benefit obligation (as determined under Statement of
Financial Accounting Services No. 87) of such Parent Plan
does not exceed the fair market value of the assets of
such Parent Plan; (iii) no Parent Plan or any trust
established thereunder that is subject to Section 302 of
ERISA and Section 412 of the Code has incurred any
"accumulated funding deficiency" (as defined in Section
302 of ERISA and Section 412 of the Code), whether or not
waived; (iv) all contributions required to be made with
respect thereto (whether pursuant to the terms of any
Parent Plan or otherwise) have been timely made; (v) no
Lien exists under Section 412(n) of the Code or Section
4068 of ERISA with respect to any assets of Parent or any
Parent Subsidiary; (vi) no tax under Section 4971 of the
Code has been incurred with respect to any Parent Plan;
and (vii) neither Parent nor any of Parent Subsidiaries
sponsors, maintains, contributes to, or is required to
contribute to a "multiemployer pension plan," as defined
in Section 3(37) of ERISA, or a plan described in Section
4063(a) of ERISA.
(c) Prohibited Transactions; Fiduciary
Duties. Except as set forth in Section 5.14(c) of the
Parent Disclosure Schedule or as would not be reasonably
likely to result in a Parent Material Adverse Effect,
(i) neither Parent, nor any Parent Subsidiary, nor any
Parent Plan, nor any trust created thereunder and any
trustee or administrator thereof has engaged in a
transaction in connection with which Parent or any ERISA
Affiliate, any Parent Plan, any such trust, or any
trustee or administrator thereof, or any party dealing
with any Parent Plan or any such trust, which could
result in a civil penalty assessed pursuant to Section
409 or 502(i) of ERISA or a tax imposed pursuant to
Section 4975 of the Code; and (ii) Parent, Parent
Subsidiaries, and all fiduciaries (as defined in Section
3(21) of ERISA) with respect to Parent Plans, have
complied in all respects with Section 404 of ERISA.
(d) Determination Letters. Except as set
forth in Section 5.14(d) of the Parent Disclosure
Schedule or as would not be reasonably likely to result
in a Parent Material Adverse Effect, (i) each Parent Plan
intended to be qualified under Section 401(a) of the Code
has received a favorable determination letter from the
Internal Revenue Service with respect to the Tax Reform
Act of 1986 and other applicable Laws, or an application
was filed for such determination letter on a timely
basis, and (ii) nothing has occurred from the date of
such letter or such filing that could reasonably be
expected to affect the qualified status of such Parent
Plan.
(e) No Acceleration of Liability. Except
as set forth in Section 5.14(e) of the Parent Disclosure
Schedule or as would not be reasonably likely to result
in a Parent Material Adverse Effect, the consummation of
the transactions contemplated by this Agreement will not
(i) entitle any current or former employee, director or
officer of Parent or any Parent Subsidiary to severance
pay, unemployment compensation or any other payment,
except as expressly provided in this Agreement or
(ii) accelerate the time of payment or vesting, or
increase the amount of compensation or benefit due any
such employee, director or officer.
(f) Ability to Terminate Plans. Except
as set forth in Section 5.14(f) of the Parent Disclosure
Schedule or as would not be reasonably likely to result
in a Parent Material Adverse Effect, each Parent Plan is
terminable in accordance with the terms expressly set
forth therein, except as may be limited by applicable
Law.
(g) Parent is not subject to any
collective bargaining or other labor union contracts
applicable to persons employed by Parent or the Parent
Subsidiaries. There is no pending or threatened in
writing labor dispute, strike or work stoppage against
Parent or any of the Parent Subsidiaries which may
interfere with the respective business activities of
Parent or the Parent Subsidiaries, except where such
dispute, strike or work stoppage would not be reasonably
likely to have a Parent Material Adverse Effect.
5.15 Environmental Laws and Regulations.
Except as disclosed in Section 5.15 of the Parent
Disclosure Schedule, or except as is not reasonably
likely to result in a Parent Material Adverse Effect: (a)
Parent, each of the Parent Subsidiaries and each of the
Parent Properties (as defined in Section 9.10) is in
compliance with all applicable Environmental Laws; (b)
Parent and each of the Parent Subsidiaries has obtained
all Permits required for their operations and the Parent
Properties by any applicable Environmental Law; (c)
neither Parent nor any Parent Subsidiary has, and Parent
has no knowledge of any other person who has, caused any
release, threatened release or disposal of any Hazardous
Material at the Parent Properties; (d) Parent has no
knowledge that the Parent Properties are adversely
affected by any release, threatened release or disposal
of a Hazardous Material originating or emanating from any
other property; (e) neither Parent nor any Parent
Subsidiary has manufactured, used, generated, stored,
treated, transported, disposed of, released, or otherwise
managed any Hazardous Material at the Parent Properties;
(f) neither Parent nor any Parent Subsidiary: (i) has any
material liability for response or corrective action,
natural resources damage, or any other harm pursuant to
any Environmental Law at the Parent Properties or at any
other property, (ii) is subject to, has notice or
knowledge of, or is required to give any notice of any
Environmental Claim involving Parent, any of the Parent
Subsidiaries or any of the Parent Properties, or (iii)
has knowledge of any condition or occurrence at Parent,
any of the Parent Subsidiaries or any of the Parent
Properties which could form the basis of an Environmental
Claim against Parent, any of the Parent Subsidiaries or
any of the Parent Properties; (g) the Parent Properties
are not subject to any, and Parent has no knowledge of
any imminent, restriction on the ownership, occupancy,
use or transferability of the Parent Properties in
connection with any (i) Environmental Law or (ii)
release, threatened release or disposal of any Hazardous
Material; and (h) there are no conditions or
circumstances at the Parent Properties that pose a risk
to the environment or the health and safety of any
person.
5.16 Parent Intellectual Property. Except as
set forth in Section 5.16 of the Parent Disclosure
Schedule, or except as would not be reasonably likely to
result in a Parent Material Adverse Effect: (a) either
Parent or one of the Parent Subsidiaries is the owner of,
or a licensee under a valid license for, all items of
intellectual property which are material to the business
of Parent and the Parent Subsidiaries as currently
conducted, including, without limitation, (i) copyrights,
patents, trademarks, logos, service marks, trade names,
service names, all applications therefor and all
registrations thereof, and (ii) technology rights and
licenses, computer software, trade secrets, know-how,
inventions, processes, formulae and other intellectual
property rights (collectively, the "Parent Intellectual
Property"); (b) with respect to all Parent Intellectual
Property owned by Parent or any Parent Subsidiary, Parent
or such Parent Subsidiary, as the case may be, is the
sole owner and has the exclusive right to use such Parent
Intellectual Property, and such owned Parent Intellectual
Property is not subject to any Liens; (c) there is no
infringement or other adverse claim against the rights of
Parent or any Parent Subsidiary with respect to any of
the Parent Intellectual Property; and (d) neither Parent
nor any Parent Subsidiary has been charged with, nor to
Parent's knowledge is Parent or any Parent Subsidiary
threatened to be charged with nor is there any basis for
any such charge of, infringement or other violation of,
nor has Parent or any Parent Subsidiary infringed, nor is
it infringing, any unexpired rights of any third party in
any of the Parent Intellectual Property.
5.17 Title to Property.
(a) Except as set forth in Section
5.17(a) of the Parent Disclosure Schedule, each of Parent
and the Parent Subsidiaries (i) has good, valid and
marketable title to all of its properties, assets and
other rights that do not constitute real property, free
and clear of all Liens, except for such Liens that are
not reasonably likely to have a Parent Material Adverse
Effect, and (ii) owns, or has valid leasehold interests
in or valid contractual rights to use, all of the assets,
tangible and intangible, used by, or necessary for the
conduct of, its business, except where the failure to
have such valid leasehold interests or such valid
contractual rights is not reasonably likely to have a
Parent Material Adverse Effect.
(b) Except as set forth in Section
5.17(b) of the Parent Disclosure Schedule or except as is
not reasonably likely to result in a Parent Material
Adverse Effect, each of Parent and the Parent
Subsidiaries:
(i) owns and has good, valid
and marketable title in fee simple to the real
property owned by such party, free and clear of
Liens, except for (A) minor imperfections of
title, easements and rights of way, none of
which, individually or in the aggregate,
materially detracts from the value of or
impairs the use of the affected property or
impairs the operations of Parent or any of the
Parent Subsidiaries and (B) Liens for current
Taxes not yet due and payable ((A) and (B) are
collectively referred to as "Permitted Parent
Liens");
(ii) is in peaceful and
undisturbed possession of the space and/or
estate under each lease under which it is a
tenant, and there are no material defaults by
it as tenant thereunder; and
(iii) has good and valid rights
of ingress and egress to and from all the real
property owned or leased by such party from and
to the public street systems for all usual
street, road and utility purposes.
5.18 Insurance. Except as set forth in
Section 5.18 of the Parent Disclosure Schedule, Parent
and each of the Parent Subsidiaries is, and has been
continuously since January 1, 1995, insured with
financially responsible insurers in such amounts and
against such risks and losses as are customary in all
material respects for companies conducting the business
as conducted by Parent and the Parent Subsidiaries during
such time period. Except as set forth in Section 5.18 of
the Parent Disclosure Schedule, neither Parent nor any of
the Parent Subsidiaries is in Default under, or has
received any notice of cancellation or termination with
respect to, any material insurance policy of Parent or
any of the Parent Subsidiaries. The insurance policies
of Parent and each of the Parent Subsidiaries are valid
and enforceable policies in all material respects.
5.19 Ownership of Shares. As of the time
immediately prior to the Effective Time, neither Parent
nor any Parent Subsidiary will beneficially own any
Shares. Other than pursuant to the Textron Voting
Agreement, Parent does not "own" and has not within the
past three years "owned" (as such terms are defined in
Section 3 of Chapter 110F of the Massachusetts General
Laws) and does not "beneficially own" (as defined in the
Rights Agreement) ten percent or more of the outstanding
Shares.
5.20 Brokers and Finders. Other than ▇▇▇▇▇▇▇,
▇▇▇▇▇ & Co., Parent has not employed any investment
banker, broker, finder, or intermediary in connection
with the transactions contemplated by this Agreement
which would be entitled to any investment banking,
brokerage, finder's or similar fee or commission in
connection with this Agreement or the transactions
contemplated hereby.
5.21 No Default. Except as set forth in
Section 5.21 of the Parent Disclosure Schedule, neither
the Parent nor any of the Parent Subsidiaries is in
Default under any term, condition or provision of (a) its
Certificate of Incorporation or Articles of Organization
or Incorporation, as the case may be, or By-Laws, (b) any
Contract or other instrument or obligation to which
Parent or any of the Parent Subsidiaries is a party or by
which they or any of their properties or assets may be
bound or affected, except for any such Defaults that are
not reasonably likely to have a Parent Material Adverse
Effect; (c) any Order applicable to Parent or any of the
Parent Subsidiaries or any of their properties or assets,
except for any such Defaults that are not reasonably
likely to have a Parent Material Adverse Effect; or (d)
any Permit necessary for Parent or any of the Parent
Subsidiaries to conduct their respective businesses as
currently conducted, except for Defaults that are not
reasonably likely to have a Parent Material Adverse
Effect.
5.22 Noncompliance with Laws. The business of
Parent and each of the Parent Subsidiaries is being
conducted in compliance with all applicable Laws except
for instances of noncompliance that are not reasonably
likely to have a Parent Material Adverse Effect. Since
January 1, 1995, neither Parent nor any of the Parent
Subsidiaries has received any written notification or
communication from any agency or department of federal,
state, or local government (a) asserting that Parent or
any Parent Subsidiary is not in compliance with any of
the Laws, Orders or Permits of any governmental agency or
authority or that any such agency or authority enforces,
except such instances of noncompliance that are not
reasonably likely to have a Parent Material Adverse
Effect, or (b) requiring Parent or any Parent Subsidiary
to enter into or consent to the issuance of a cease and
desist order, formal agreement, directive or commitment
which restricts materially the conduct of its business or
which materially affects its capital, its credit or
reserve policies, its management, or the payment of
dividends.
ARTICLE VI
ADDITIONAL COVENANTS AND AGREEMENTS
6.1 Conduct of Business of the Company.
Except as set forth in Section 6.1 of the Company
Disclosure Schedule, during the period from the date of
this Agreement to the Effective Time (unless Parent shall
otherwise agree in writing and except as otherwise
contemplated by this Agreement), the Company will conduct
its operations according to its ordinary and usual course
of business consistent with past practice and shall use
all reasonable efforts to preserve intact its current
business organizations, keep available the service of its
current officers and employees, maintain its material
Permits and Contracts and preserve its relationships with
customers, suppliers and others having business dealings
with it. Without limiting the generality of the
foregoing, and except as otherwise contemplated by this
Agreement or as set forth in Section 6.1 of the Company
Disclosure Schedule, the Company will not, without the
prior written consent of Parent (which consent shall not
be unreasonably withheld):
(i) issue, sell, grant, dispose
of, pledge or otherwise encumber, or authorize
or propose the issuance, sale, disposition or
pledge or other encumbrance of (A) any
additional shares of capital stock of any class
(including the Shares), or any securities or
rights convertible into, exchangeable for, or
evidencing the right to subscribe for any
shares of capital stock, or any rights,
warrants, options, calls, commitments or any
other agreements of any character to purchase
or acquire any shares of capital stock or any
securities or rights convertible into,
exchangeable for, or evidencing the right to
subscribe for, any shares of capital stock or
(B) any other securities in respect of, in lieu
of, or in substitution for, Shares outstanding
on the date hereof;
(ii) redeem, purchase or
otherwise acquire, or propose to redeem,
purchase or otherwise acquire, any of its
outstanding Shares;
(iii) split, combine, subdivide
or reclassify any Shares or declare, set aside
for payment or pay any dividend, or make any
other actual, constructive or deemed
distribution in respect of any capital stock of
the Company or otherwise make any payments to
stockholders in their capacity as such, other
than the declaration and payment of regular
quarterly cash dividends on the Shares in an
amount no greater than $.06 per share and in
accordance with past dividend policy and except
for dividends by a direct or indirect wholly
owned subsidiary of the Company;
(iv) adopt a plan of complete
or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization
or other reorganization of the Company or any
of the Company Subsidiaries (other than the
Merger);
(v) adopt any amendments to its
Articles of Organization or By-Laws or to the
Articles or Certificate of Incorporation, as
the case may be, or By-Laws of any Company
Subsidiary or alter through merger,
liquidation, reorganization, restructuring or
in any other fashion the corporate structure or
ownership of any direct or indirect subsidiary
of the Company or, except in connection with
the transactions contemplated by this
Agreement, amend the Rights Agreement;
(vi) make, or permit any
Company Subsidiary to make, any material
acquisition, by means of merger, consolidation
or otherwise, or material disposition, of
assets or securities;
(vii) other than in the
ordinary course of business consistent with
past practice, incur, or permit any Company
Subsidiary to incur, any indebtedness for
borrowed money or guarantee any such
indebtedness or make any loans, advances or
capital contributions to, or investments in,
any other person other than the Company or any
Company Subsidiary;
(viii) grant, or permit any
Company Subsidiary to grant, any increases in
the compensation of any of its directors or,
except in the ordinary course of business and
in accordance with past practice, any increases
in the compensation of any of its officers,
employees or agents; provided, that no
individual's increase may exceed 8% of such
individual's compensation and, provided
further, that all increases in the aggregate
may not exceed 4% of the total compensation
paid to officers, employees and agents;
(ix) enter, or permit any
Company Subsidiary to enter, into any new or
amend any existing employment agreement or,
except as may be consistent with Company
policies in effect as of the date of this
Agreement, enter, or permit any Company
Subsidiary to enter, into any new or amend any
existing severance or termination agreement
with any officer or employee of the Company or
a Company Subsidiary;
(x) except as may be required
to comply with applicable Law, become obligated
under any new written pension plan, welfare
plan, multiemployer plan, employee benefit
plan, severance plan or similar plan, which was
not in existence on the date hereof, or amend
any Company Plan;
(xi) amend, or permit any
Company Subsidiary to take such action, to
increase, accelerate the payment or vesting of
the amount payable or to become payable under
or fail to make any required contribution to,
any benefit plan or materially increase any
non-salary benefits payable to any employee or
former employee, except in the ordinary course
of business consistent with past practice;
(xii) change any method of
accounting or accounting practice by the
Company or any Company Subsidiary, except for
any such required change in GAAP or applicable
statutory accounting principles;
(xiii) permit any Company
Insurance Subsidiary to change its investment
guidelines or policies or conduct transactions
in investments except in material compliance
with the investment guidelines and policies and
approved programs or transactions of such
Company Insurance Subsidiary and all applicable
insurance Laws;
(xiv) enter, or permit any
Company Subsidiary to enter, into any Contract
to purchase, or to lease for a term in excess
of one year, any real property, provided that
the Company or any Company Subsidiary, (x) may
as a tenant, or a landlord, renew any existing
lease for a term not to exceed two years and
(y) nothing herein shall prevent the Company,
in its capacity as landlord, from renewing any
lease pursuant to any option granted prior to
the date hereof;
(xv) enter, or permit any
Company Insurance Subsidiary to enter, into any
material reinsurance, coinsurance or similar
Contract, whether as reinsurer or reinsured,
except in the ordinary course of business
consistent with past practice;
(xvi) other than as
contemplated in the Company's current business
plan, enter, or permit any Company Subsidiary
to enter, into any Contract with any insurance
agent or broker that provides, by its terms,
for exclusivity (including, without limitation,
by territory, product, or distribution) or that
is not terminable by its terms within 180 days
by the Company or a Company Subsidiary, as the
case may be, without substantial premium or
penalty or, in the case of career agents,
without commission renewal liability, except to
the extent that the Contract provides for
vesting commissions;
(xvii) (x) take, or agree or
commit to take, or permit any Company
Subsidiary to take, or agree or commit to take,
any action that would make any representation
and warranty of the Company hereunder
inaccurate in any material respect at the
Effective Time (except for representations and
warranties which speak as of a particular date,
which need be accurate only as of such date),
(y) omit, or agree or commit to omit, or permit
any Company Subsidiary to omit, or agree or
commit to omit, to take any action necessary to
prevent any such representation or warranty
from being inaccurate in any material respect
at the Effective Time (except for
representations and warranties which speak as
of a particular date, which need be accurate
only as of such date), provided however that
the Company shall be permitted to take or omit
to take such action which can be cured, and in
fact is cured, at or prior to the Effective
Time or (z) take, or agree or commit to take,
or permit any Company Subsidiary to take, or
agree or commit to take, any action that would
result in, or is reasonably likely to result
in, any of the conditions of the Merger set
forth in Article VII not being satisfied;
(xviii) authorize, recommend,
propose or announce an intention to do any of
the foregoing, or enter into any contract,
agreement, commitment or arrangement to do any
of the foregoing;
(xix) settle, or permit any
Company Subsidiary to settle, any material tax
audit, or in either case to make or change any
material tax election or file amended Tax
Returns, but only, in each case, where such
audit is directed at, or such Tax Return is
filed by, the Company, other than as part of
any Textron consolidated group; or
(xx) file any Tax Return after
the date hereof and no later than the Effective
Time which relates to Taxes the nonpayment of
which would have a Company Material Adverse
Effect.
6.2 Conduct of Business of Parent. Except as
set forth in Section 6.2 of the Parent Disclosure
Schedule, during the period from the date of this
Agreement to the Effective Time (unless the Company shall
otherwise agree in writing and except as otherwise
contemplated by this Agreement), Parent will conduct its
operations according to its ordinary and usual course of
business consistent with past practice and shall use all
reasonable efforts to preserve intact its current
business organizations, keep available the service of its
current officers and employees, maintain its material
Permits and Contracts and preserve its relationships with
customers, suppliers and others having business dealings
with it. Without limiting the generality of the
foregoing, and except as otherwise contemplated by this
Agreement or as set forth in Section 6.2 of the Parent
Disclosure Schedule, Parent will not, without the prior
written consent of the Company (which consent shall not
be unreasonably withheld):
(i) issue, sell, grant, dispose
of, pledge or otherwise encumber, or authorize
or propose the issuance, sale, disposition or
pledge or other encumbrance of (A) any
additional shares of capital stock of any class
(including the shares of Parent Common Stock),
or any securities or rights convertible into,
exchangeable for, or evidencing the right to
subscribe for any shares of capital stock, or
any rights, warrants, options, calls,
commitments or any other agreements of any
character to purchase or acquire any shares of
capital stock or any securities or rights
convertible into, exchangeable for, or
evidencing the right to subscribe for, any
shares of capital stock or (B) any other
securities in respect of, in lieu of, or in
substitution for, shares of Parent Common Stock
outstanding on the date hereof;
(ii) redeem, purchase or
otherwise acquire, or propose to redeem,
purchase or otherwise acquire, any of its
outstanding shares of Parent Common Stock;
(iii) split, combine, subdivide
or reclassify any shares of Parent Common Stock
or declare, set aside for payment or pay any
dividend, or make any other actual,
constructive or deemed distribution in respect
of any capital stock of Parent or otherwise
make any payments to stockholders in their
capacity as such, other than the declaration
and payment of regular quarterly cash dividends
on the Parent Common Stock in an amount no
greater than $.72 per share per annum and in
accordance with past dividend policy and other
than the declaration and payment of dividends
on Parent Preferred Stock pursuant to Parent's
Certificate of Incorporation as in effect on
the date hereof and except for dividends by a
direct or indirect wholly owned subsidiary of
Parent;
(iv) adopt a plan of complete
or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization
or other reorganization of Parent or any of the
Parent Subsidiaries (other than the Merger),
except for Parent Subsidiaries which are not
material to the assets, liabilities, financial
condition or results of operations of Parent
and the Parent Subsidiaries taken as a whole;
(v) adopt any amendments to its
Certificate of Incorporation or By-Laws or
alter through merger, liquidation,
reorganization, restructuring or in any other
fashion the corporate structure or ownership of
any direct or indirect subsidiary of Parent,
except for Parent Subsidiaries which are not
material to the assets, liabilities, financial
condition or results of operations of Parent
and the Parent Subsidiaries taken as a whole;
(vi) make, or permit any Parent
Subsidiary to make, any material acquisition,
by means of merger, consolidation or otherwise,
or material disposition, of assets or
securities;
(vii) other than in the
ordinary course of business consistent with
past practice, incur, or permit any Parent
Subsidiary to incur, any material indebtedness
for borrowed money or guarantee any such
indebtedness or make any material loans,
advances or capital contributions to, or
material investments in, any other person other
than Parent or any Parent Subsidiary;
(viii) change any method of
accounting or accounting practice by Parent or
any Parent Subsidiary, except for any such
required change in GAAP or applicable statutory
accounting principles;
(ix) permit any Parent
Insurance Subsidiary to materially change its
investment guidelines or policies and approved
programs or transactions or conduct
transactions in investments except in material
compliance with the investment guidelines and
policies of such Parent Insurance Subsidiary
and all applicable insurance Laws;
(x) enter, or permit any Parent
Insurance Subsidiary to enter, into any
material reinsurance, coinsurance or similar
Contract, whether as reinsurer or reinsured,
except in the ordinary course of business
consistent with past practice;
(xi) (x) take, or agree or
commit to take, or permit any Parent Subsidiary
to take, or agree or commit to take, any action
that would make any representation and warranty
of Parent hereunder inaccurate in any material
respect at the Effective Time (except for
representations and warranties which speak as
of a particular date, which need be accurate
only as of such date), (y) omit, or agree or
commit to omit, or permit any Parent Subsidiary
to omit, or agree or commit to omit, to take
any action necessary to prevent any such
representation or warranty from being
inaccurate in any material respect at the
Effective Time (except for representations and
warranties which speak as of a particular date,
which need be accurate only as of such date),
provided however that Parent shall be permitted
to take or omit to take such action which can
be cured, and in fact is cured, at or prior to
the Effective Time or (z) take, or agree or
commit to take, or permit any Parent Subsidiary
to take, or agree or commit to take, any action
that would result in, or is reasonably likely
to result in, any of the conditions of the
Merger set forth in Article VII not being
satisfied; or
(xii) authorize, recommend,
propose or announce an intention to do any of
the foregoing, or enter into any contract,
agreement, commitment or arrangement to do any
of the foregoing.
6.3 Alternative Proposals. The Company will
not authorize, and will use its reasonable efforts to
cause its officers, directors, employees or agents not
to, directly or indirectly, solicit, initiate or
encourage any inquiries relating to, or the making of any
proposal which constitutes, an Alternative Proposal (as
defined in Section 9.10), or recommend or endorse any
Alternative Proposal, or participate in any discussions
or negotiations, or provide third parties with any
nonpublic information, relating to any such inquiry or
proposal or otherwise facilitate any effort or attempt to
make or implement an Alternative Proposal, provided,
however, that the Company may, and may authorize and
permit its officers, directors, employees or agents to,
provide third parties with nonpublic information,
otherwise facilitate any effort or attempt by any third
party to make or implement an Alternative Proposal,
recommend or endorse any Alternative Proposal with or by
any third party, and participate in discussions and
negotiations with any third party relating to any
Alternative Proposal with or by any third party, and
participate in discussions and negotiations with any
third party relating to any Alternative Proposal, if the
Company's Board of Directors, after having consulted with
and considered the advice of outside counsel, has
reasonably determined in good faith that the failure to
do so would be reasonably likely to cause the members of
such Board of Directors to breach their fiduciary duties
under applicable law. The Company will immediately cease
and cause to be terminated any activities, discussions or
negotiations conducted prior to the date of this
Agreement with any parties other than Parent with respect
to any of the foregoing. The Company shall immediately
advise Parent following the receipt by it of any
Alternative Proposal and the details thereof, and advise
Parent of any developments with respect to such
Alternative Proposal immediately upon the occurrence
thereof.
6.4 Joint Proxy Statement-Prospectus;
Registration Statement. As promptly as practicable
following the date of this Agreement, Parent and the
Company shall, in consultation with each other, prepare
and file with the SEC, a joint proxy statement and forms
of proxy in connection with the vote of the Company's
stockholders with respect to the Merger and this
Agreement and the votes of Parent's stockholders with
respect to the issuance of shares of Parent Common Stock
in the Merger and the other transactions contemplated by
this Agreement and the Charter Amendment (such joint
proxy statement (which shall constitute the prospectus
forming a part of the Registration Statement), together
with any supplements thereto, in the form mailed to the
Company's and Parent's respective stockholders, is herein
called the "Joint Proxy Statement-Prospectus") and
Parent, in consultation with the Company, shall prepare
and file with the SEC the Registration Statement. Each
of Parent and the Company shall use its reasonable
efforts to have the Registration Statement declared
effective as promptly as practicable. Parent shall also
use its reasonable best efforts to take any action
required to be taken under state securities or blue sky
laws in connection with the issuance of the shares of
Parent Common Stock pursuant to this Agreement in the
Merger. The Company shall furnish Parent with all
information concerning the Company and the holders of its
capital stock and shall take such other action as Parent
may reasonably request in connection with the
Registration Statement and the issuance of shares of
Parent Common Stock. If at any time prior to the
Effective Time any event or circumstance relating to
Parent, any Subsidiary of Parent, the Company, or their
respective officers or directors, should be discovered by
such party which should be set forth in an amendment or a
supplement to the Registration Statement or the Joint
Proxy Statement-Prospectus, such party shall promptly
inform the other thereof and take appropriate action in
respect thereof. Each of Parent and the Company will use
its reasonable efforts to cause the Joint Proxy
Statement-Prospectus to be mailed to its stockholders at
the earliest practicable date.
6.5 Stock Exchange Listing. Parent shall as
promptly as practicable prepare and submit to the NYSE a
listing application covering the shares of Parent Common
Stock issuable in connection with the Merger and this
Agreement, and shall use its reasonable best efforts to
obtain, prior to the Effective Time, approval for the
listing of such shares, subject to official notice of
issuance.
6.6 [Intentionally Omitted.]
6.7 Stockholders' Approvals.
(a) The Company shall duly call, give
notice of, convene and hold a special meeting of the
Company's stockholders (the "Company Stockholders
Meeting") as soon as practicable following the date on
which the Registration Statement becomes effective for
the purpose of obtaining the requisite stockholder
approval in connection with this Agreement and the
Merger. The Company shall use its reasonable efforts to
obtain stockholder approval of this Agreement, and the
Company shall, through its Board of Directors, recommend
to its stockholders approval of this Agreement, unless,
in each case, the members of the Board of Directors of
the Company, after having consulted with and considered
the advice of outside counsel, reasonably determine in
good faith that under the circumstances the foregoing
actions would be reasonably likely to result in a breach
of their fiduciary duties to the Company's stockholders
under applicable law. Notwithstanding the foregoing, the
Board of Directors of the Company may at any time prior
to the Effective Time withdraw, modify, or change any
recommendation and declaration regarding this Agreement,
or recommend and declare advisable any other offer or
proposal, if the Board of Directors, after consultation
with its outside counsel, has reasonably determined in
good faith that the making of such recommendation, or the
failure to withdraw, modify or change its recommendation
reasonably likely to result in a breach of fiduciary
duties of the members of such Board of Directors to the
Company's stockholders under applicable law.
(b) Parent shall duly call, give notice
of, convene and hold a special meeting of Parent's
stockholders (the "Parent Stockholders Meeting") as soon
as practicable following the date on which the
Registration Statement becomes effective for the purpose
of obtaining the requisite stockholder approvals for the
issuance of shares of Parent Common Stock in the Merger
and the other transactions contemplated by this
Agreement, as required by the rules of the NYSE, and the
Charter Amendment. Parent shall use its reasonable
efforts to obtain stockholder approval of such issuance
and such amendment and Parent shall, through its Board of
Directors, recommend to its stockholders approval of such
issuance and such amendment, unless, in each case, the
members of the Board of Directors of Parent, after having
consulted with and considered the advice of outside
counsel, reasonably determine in good faith that under
the circumstances the foregoing actions would be
reasonably likely to result in a breach of their
fiduciary duties to Parent's stockholders under
applicable law.
6.8 Satisfaction of Conditions, Receipt of
Necessary Approvals. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to (i)
promptly effect all necessary registrations, submissions
and filings, including, but not limited to, filings under
the HSR Act and submissions of information requested by
governmental authorities, which may be necessary or
required in connection with the consummation of the
transactions contemplated by this Agreement, (ii) to use
its reasonable efforts to secure federal and state
antitrust clearance (including taking steps to avoid or
set aside any preliminary or permanent injunction or
other order of any federal or state court of competent
jurisdiction or other governmental authority), (iii) use
its reasonable efforts to take all other action and to do
all other things necessary, proper or advisable to
consummate and make effective as promptly as practicable
the transactions contemplated by this Agreement (it being
understood that the actions contemplated by Section 6.8
of the Parent Disclosure Schedule are reasonable and that
Parent is obligated to take such actions) and (iv) use
its reasonable efforts to obtain all other necessary or
appropriate Consents (including but not limited to (a)
any required Consents of the Commissioners of Insurance
of the Commonwealth of Massachusetts and the State of
Delaware and any Consents which may be required under the
insurance Laws of any state in which the Company or any
of its Insurance Subsidiaries does business and (b) such
Consents, as may be required under the laws of any
foreign country in which the Company or any of the
Company Subsidiaries conducts any business or owns any
assets). Each of Parent and the Company acknowledge that
certain actions may be necessary with respect to the
foregoing in making notifications and obtaining Consents
which are material to the consummation of the
transactions contemplated hereby, and each of Parent and
the Company agree to take such action as is reasonably
necessary to complete such notifications and obtain such
Consents, provided, however, that, except as set forth in
Section 6.8 of the Parent Disclosure Schedule, nothing in
this Section 6.8 or elsewhere in this Agreement shall
require any party hereto to hold separate or make any
divestiture of any asset or otherwise agree to, and no
Consent shall be deemed to be obtained for purposes of
this Agreement if such Consent contains, any restriction
on their operations or other materially burdensome
condition which would in any such case be material to the
assets, liabilities or business of, (a) in the case of
the Company, the Company and the Company Subsidiaries,
taken as a whole, and, (b) in the case of Parent, Parent
and the Parent Subsidiaries (including the Surviving
Corporation), taken as a whole, in order to obtain any
Consent required by this Agreement.
6.9 Access to Information.
(a) Upon reasonable notice, each party
shall (and shall cause each of such party's Subsidiaries
to) afford to officers, employees, counsel, accountants
and other authorized representatives of the other party
("Representatives"), in order to evaluate the
transactions contemplated by this Agreement, reasonable
access, during normal business hours throughout the
period prior to the Effective Time, to its properties,
books and records and, during such period, shall (and
shall cause each of such party's Subsidiaries to) furnish
promptly to such Representatives all information
concerning its business, properties and personnel as may
reasonably be requested.
(b) Each party agrees that it will not,
and will cause its Representatives not to, use any
information obtained pursuant to this Section 6.9 for any
purpose unrelated to the consummation of the transactions
contemplated by this Agreement.
(c) The Confidentiality Agreements, dated
January 12, 1996 and April 24, 1996, by and between
Textron and Parent (collectively, as amended, the
"Confidentiality Agreements"), shall apply with respect
to information furnished by Parent, Textron, the Company,
any of their respective subsidiaries, and any of their
respective officers, employees, counsel, accountants and
other authorized representatives hereunder.
(d) Notwithstanding the provisions
hereof, during the period prior to the Effective Time,
the parties shall take appropriate precautions to ensure
that competitively sensitive information is not exchanged
in a manner which is inconsistent with applicable Law.
6.10 Publicity. Parent and the Company will
consult with each other and will mutually agree upon any
press releases or public announcements pertaining to the
Merger and shall not issue any such press releases or
make any such public announcements prior to such
consultation and agreement, except as may be required by
applicable Law or by obligations pursuant to any listing
agreement with any national securities exchange, in which
case the party proposing to issue such press release or
make such public announcement shall use its reasonable
efforts to consult in good faith with the other party
before issuing any such press releases or making any such
public announcements.
6.11 Indemnification of Directors and Officers.
(a) Parent agrees that all rights to
indemnification and exculpation existing in favor of the
directors and officers of the Company (the "Company
Indemnified Parties") under the provisions existing on
the date hereof of the Company's Articles of Organization
or By-Laws shall survive and continue in full force after
the Effective Time, and that from and after the Effective
Time, Parent shall assume all obligations of the Company
in respect thereof as to any claim or claims asserted
after the Effective Time.
(b) Parent shall cause to be maintained
in effect for the Indemnified Parties (as defined below)
for not less than six years after the Effective Time
policies of directors' and officers' liability insurance
with respect to matters occurring at or prior to the
Effective Time (including, without limitation, the
transactions contemplated by this Agreement) providing
substantially the same coverage and containing terms and
conditions which are no less advantageous, in any
material respect, to those currently maintained by
Textron for the benefit of the Company's present or
former directors, officers, employees or agents covered
by such insurance policies prior to the Effective Time
(the "Indemnified Parties"); provided, however, that
Parent may, in lieu of maintaining such existing
insurance as provided above, cause comparable coverage to
be provided under any policy maintained for the benefit
of Parent or any of the Parent Subsidiaries, so long as
the material terms thereof are no less advantageous than
such existing insurance.
(c) This Section 6.11 is intended to
benefit the Company Indemnified Parties and the
Indemnified Parties and shall be binding on all
successors and assigns of Parent, Newco, the Company and
the Surviving Corporation. Parent hereby guarantees the
performance by the Surviving Corporation of the
indemnification obligations pursuant to this Section
6.11.
(d) The Company shall use its reasonable
efforts to provide all required or appropriate notices
under such existing insurance with respect to potential
claims of which it is aware prior to the Effective Time.
6.12 Employees.
(a) Except as otherwise provided herein,
until December 31, 1997, Parent agrees to continue to
maintain for the benefit of all officers and employees of
the Company and the Company Subsidiaries ("Company
Employees") those employee benefit plans, programs,
arrangements and policies that are currently maintained
by the Company for the benefit of Company Employees.
Thereafter, and except as otherwise provided in this
paragraph (a), Parent shall provide generally to Company
Employees employee benefit plans, programs, arrangements
and policies that are no less favorable than those
provided by Parent to its similarly situated officers and
employees. Until December 31, 1997, Parent shall provide
generally to Company Employees severance benefits in
accordance with the policies of either (i) the Company as
disclosed in Section 6.12(a) of the Company Disclosure
Schedule, or (ii) Parent, whichever of (i) or (ii) will
provide the greater benefit to the officer or employee,
provided that (x) the officer or employee signs a release
similar to the release that must be signed by employees
of Parent in similar circumstances and (y) no severance
benefits will be paid solely because an officer or
employee is not offered employment with Parent or an
affiliate of Parent in the same geographic location. For
purposes of participation, vesting and benefit accrual
under such employee benefit plans, the service of Company
Employees prior to the Effective Time shall be treated as
service with Parent participating in such employee
benefit plans to the extent permitted by law; provided,
however, that in the case of any Company defined benefit
plan, Parent may provide for an adjustment or offset for
benefits accrued under such Company Plan. Notwithstanding
anything in this Section 6.12(a) to the contrary, (i) during
any period of time when any Company Plan requires continued
benefit accrual in the event of a change of control, then
Parent during such period of time shall continue to maintain
such Company Plan as an ongoing plan for such period of time,
(ii) during such period of time the participants in such Company
Plan shall not participate in Parent's comparable benefit
plan; and (iii) when participants become covered under
Parent's comparable benefit plan, then the provisions of
the immediately preceding sentence shall apply (including
an offset for benefits accrued under such Company Plan
following the Effective Time).
(b) Parent and the Surviving Corporation
hereby agree to honor without modification and assume the
employment agreements, executive termination agreements
and individual benefit arrangements set forth in Section
6.12(b) of the Company Disclosure Schedule, all as in
effect at the Effective Time.
(c) Parent shall advise the employees of
the Company, in a written communication issued to such
employees as soon as practicable following the date of
this Agreement, of Parent's undertakings set forth in
this Section 6.12.
6.13 Conduct of Business of Newco. During the
period of time from the date of this Agreement to the
Effective Time, Newco shall not engage in any activities
of any nature except as provided in or contemplated by
this Agreement.
6.14 Rights Agreement. The Company shall take
all action necessary to ensure that, so long as this
Agreement shall not have been terminated pursuant to
Article VIII hereof, no "Rights" (as that term is defined
in the Rights Agreement) are issued or required to be
issued to the stockholders of the Company prior to, or as
of, the Effective Time; provided, however, that if the
Company shall redeem the Rights in response to any
actions taken by any person other than Parent or Newco,
Parent shall deliver to the Company on or prior to the
time for the payment of the Redemption Price (as defined
in the Rights Agreement) as provided in the Rights
Agreement an amount equal to the aggregate Redemption
Price to be paid to the stockholders of the Company other
than Textron; provided, further, that in the event of any
such redemption, Parent and Newco agree that none of the
Company's representations, warranties, covenants or
agreements set forth in this Agreement shall be deemed to
be inaccurate, untrue or breached in any respect for any
purpose as a result of the redemption of the Rights.
6.15 Compliance with the Securities Act.
(a) At least 20 days prior to the
Effective Time, the Company shall cause to be delivered
to Parent a list identifying all persons who were, in the
Company's reasonable judgment, at the record date for the
Company Stockholders Meeting convened in accordance with
Section 6.7(a) hereof, "affiliates" of the Company as
that term is used in paragraphs (c) and (d) of Rule 145
under the Securities Act (the "Affiliates").
(b) The Company shall use its reasonable
efforts to cause each person who is identified as one of
its Affiliates in its list referred to in Section 6.15(a)
above to deliver to Parent (with a copy to the Company),
at or prior to the Effective Time, an executed letter
agreement, in a form customary for the type of
transaction contemplated by this Agreement, (the
"Affiliate Letters").
(c) If any Affiliate of the Company
refuses to provide an Affiliate Letter, Parent may place
appropriate legends on the certificates evidencing the
shares of Parent Common Stock to be received by such
Affiliate pursuant to the terms of this Agreement and to
issue appropriate stop transfer instructions to the
transfer agent for shares of Parent Common Stock to the
effect that the shares of Parent Common Stock received by
such Affiliate pursuant to this Agreement only may be
sold, transferred or otherwise conveyed (i) pursuant to
an effective registration statement under the Securities
Act, (ii) in compliance with Rule 145 promulgated under
the Securities Act, or (iii) pursuant to another
exemption under the Securities Act.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
7.1 Conditions to Each Party's Obligations to
Effect the Merger. The respective obligations of each
party to effect the Merger are subject to the
satisfaction at or prior to the Effective Time of the
following conditions:
(a) Stockholder Approvals.
(i) This Agreement shall have
been duly approved by the stockholders of the
Company entitled to vote with respect thereto
in accordance with applicable Law and the
Articles of Organization and By-Laws of the
Company; and
(ii) each of the issuance of
shares of Parent Common Stock in the Merger and
the Charter Amendment shall have been duly
approved by the stockholders of Parent entitled
to vote with respect thereto in accordance with
applicable Law and the Certificate of
Incorporation and By-Laws of Parent and, in the
case of the issuance of shares of Parent Common
Stock in the Merger, the rules of the NYSE.
(b) Injunction. There shall not be in
effect any Law or Order of a court or governmental or
regulatory agency of competent jurisdiction directing
that the transactions contemplated herein not be
consummated; provided, however, that, subject to the
terms and provisions herein provided (including but not
limited to Section 6.8 of this Agreement), prior to
invoking this condition each party shall use its
reasonable efforts to have any such Order vacated.
(c) Governmental Filings and Consents.
Subject to the terms and provisions herein provided
(including but not limited to Section 6.8 hereof), all
governmental Consents legally required for the
consummation of the Merger and the transactions
contemplated hereby shall have been obtained and be in
effect at the Effective Time (including but not limited
to the approval of the Commissioners of Insurance of the
Commonwealth of Massachusetts and the State of Delaware
and any Consents which may be required under the
insurance Laws of any state in which the Company or any
of the Company Subsidiaries conducts any business or owns
any assets), except where the failure to obtain any such
Consent would not reasonably be expected to have a Parent
Material Adverse Effect, and the waiting periods under
the HSR Act shall have expired or been terminated.
Parent shall have received all state securities or "blue
sky" permits and other authorizations necessary to issue
the shares of Parent Common Stock pursuant to this
Agreement in the Merger.
(d) NYSE Listing of Shares of Parent
Common Stock. The shares of Parent Common Stock issuable
to the holders of Shares pursuant to this Agreement in
the Merger shall have been authorized for listing on the
NYSE, upon official notice of issuance.
(e) Registration Statement. The
Registration Statement shall have become effective under
the Securities Act and shall not be the subject of any
stop order or proceeding by the SEC seeking a stop order.
7.2 Additional Conditions to the Obligations
of Parent and Newco. The respective obligations of
Parent and Newco to effect the Merger are subject to the
satisfaction at or prior to the Effective Time of the
following conditions, any or all of which may be waived
in whole or in part by Parent or Newco, as the case may
be, to the extent permitted by applicable law:
(a) Representations and Warranties. For
purposes of this Section 7.2(a), the accuracy of the
representations and warranties of the Company set forth
in Article IV of this Agreement shall be assessed as of
the date of this Agreement and as of the Effective Time
with the same effect as though all such representations
and warranties had been made on and as of the Effective
Time (provided that representations and warranties which
are confined to a specified date shall speak only as of
such date). The representations and warranties set forth
in Section 4.2 of this Agreement, including the
information set forth on the Company Disclosure Schedule
relating thereto, shall be true and correct (except for
inaccuracies which are de minimis in amount). All
representations and warranties set forth in Article IV
which are qualified by reference to materiality or a
Company Material Adverse Effect shall be true and correct
and all other representations and warranties set forth in
Article IV of this Agreement shall be true and correct in
all material respects.
(b) Performance. The Company shall have
performed in all material respects all of its respective
covenants and agreements under this Agreement theretofore
to be performed.
(c) Officer's Certificate. Parent shall
have received at the Effective Time a certificate dated
the Effective Time and executed by the Chief Executive
Officer or the Chief Financial Officer of the Company
certifying to the fulfillment of the conditions specified
in Sections 7.2(a) and (b) hereof.
(d) Capital Contribution. Textron shall
have made after November 1, 1996 a capital contribution
to the Company (which may, at the election of Textron, be
by means of a surplus note or other asset which may
properly be taken into account in determining risk-based
capital levels) in the amount of the statutory reserve
strengthening required by the Commissioner of Insurance
of the Commonwealth of Massachusetts as a condition to
granting any necessary Consents in connection with the
transactions contemplated hereby; provided, however, that
Textron's contribution after November 1, 1996 pursuant
hereto shall be at least $100 million but shall not under
any circumstances exceed $180 million in the aggregate
for such capital contribution. Textron shall have
further complied in all material respects with its
obligations under Section 4(a) and 4(b) of the Textron
Voting Agreement which are capable of being performed
prior to the Effective Time.
(e) The amount of the statutory reserve
strengthening required by the Commissioner of Insurance
of the Commonwealth of Massachusetts as a condition to
granting any necessary Consents in connection with
transactions contemplated hereby shall not exceed $180
million; provided that this condition shall be deemed to
be satisfied if Textron shall have increased the amount
of its capital contribution contemplated by Section
7.2(d) of this Agreement by an amount equal to such
excess (it being agreed that neither Textron nor Parent
shall be under any obligation to make any such additional
contribution).
7.3 Additional Conditions to the Obligations
of the Company. The obligation of the Company to effect
the Merger is subject to the satisfaction at or prior to
the Effective Time of the following conditions, any and
all of which may be waived in whole or in part by the
Company to the extent permitted by applicable law:
(a) Representations and Warranties. For
purposes of this Section 7.3(a), the accuracy of the
representations and warranties set forth in Article V of
this Agreement shall be assessed as of the date of this
Agreement and as of the Effective Time with the same
effect as though all such representations and warranties
had been made on and as of the Effective Time (provided
that representations and warranties which are confined to
a specified date shall speak only as of such date). The
representations and warranties set forth in Section 5.2
of this Agreement, including the information set forth on
the Parent Disclosure Schedule relating thereto, shall be
true and correct (except for inaccuracies which are de
minimis in amount). All representations and warranties
set forth in Article V of this Agreement which are
qualified by reference to materiality or a Parent
Material Adverse Effect shall be true and correct and all
other representations and warranties set forth in Article
V of this Agreement shall be true and correct in all
material respects.
(b) Performance. Parent and Newco shall
have performed in all material respects all of their
respective covenants and agreements under this Agreement
theretofore to be performed.
(c) Officer's Certificate. The Company
shall have received at the Effective Time a certificate
dated the Effective Time and executed by the Chief
Executive Officer or the Chief Financial Officer of
Parent certifying to the fulfillment of the conditions
specified in Sections 7.3(a) and (b) hereof.
ARTICLE VIII
TERMINATION
8.1 Termination by Mutual Consent. This
Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, before
or after the approval by stockholders of the Company, by
the mutual written consent of Parent and the Company.
8.2 Termination by Either Parent or the
Company. This Agreement may be terminated and the Merger
may be abandoned by Parent or the Company, before or
after the approval by stockholders of the Company, if (i)
any court of competent jurisdiction in the United States
or some other governmental body or regulatory authority
shall have issued an Order permanently restraining,
enjoining or otherwise prohibiting the Merger and such
Order shall have become final and nonappealable,
provided, that the party seeking to terminate this
Agreement pursuant to this clause (i) shall have used all
reasonable efforts to remove such Order, (ii) the Merger
shall not have been consummated by May 28, 1997; provided
that the right to terminate this Agreement pursuant to
this Section 8.2(ii) shall not be available to any party
whose failure to fulfill any of its material obligations
under this Agreement results in the failure of the Merger
to occur on or prior to such date; (iii) this Agreement
shall have been voted on by stockholders of the Company
and the vote shall not have been sufficient to satisfy
the condition set forth in Section 7.1(a)(i) or (iv) the
issuance of shares of Parent Common Stock in the Merger
and the other transactions contemplated by this Agreement
shall have been voted on by stockholders of Parent and
the vote shall not have been sufficient to satisfy the
condition set forth in Section 7.1(a)(ii).
8.3 Termination by Parent. This Agreement may
be terminated by Parent and the Merger may be abandoned
prior to the Effective Time, before or after the approval
by stockholders of the Company, (i) in the event of a
material breach by the Company of any covenant or
agreement contained in this Agreement which, by its
nature, cannot be cured prior to the Closing or which has
not been cured within 30 days after the giving of written
notice to the Company of such breach, (ii) in the event
of an inaccuracy of any representation or warranty of the
Company contained in this Agreement which, by its nature,
cannot be cured prior to the Closing or which has not
been cured within 30 days after the giving of written
notice to the Company of such inaccuracy and which
inaccuracy, in either case, would cause the conditions
set forth in Section 7.2(a) not to be satisfied, (iii) in
the event that any of the conditions precedent to the
obligations of Parent to consummate the Merger cannot be
satisfied or fulfilled by the date set forth in Section
8.2(ii) of this Agreement, provided that the failure of
such conditions to be so satisfied shall not be as a
result of Parent's failure to fulfill its material
obligations under this Agreement, or (iv) the Board of
Directors of the Company withdraws or materially modifies
or changes its recommendation or approval of this
Agreement in a manner adverse to Parent or Newco.
8.4 Termination by the Company. This
Agreement may be terminated by the Company and the Merger
may be abandoned at any time prior to the Effective Time,
before or after the approval by stockholders of the
Company, (i) in the event of a material breach by Parent
or Newco of any covenant or agreement contained in this
Agreement which, by its nature, cannot be cured prior to
the Closing or which has not been cured within 30 days
after the giving of written notice to Parent of such
breach, (ii) in the event of an inaccuracy of any
representation or warranty of Parent or Newco contained
in this Agreement which, by its nature, cannot be cured
prior to the Closing or which has not been cured within
30 days after the giving of written notice to the Company
of such inaccuracy and which inaccuracy, in either case,
would cause the conditions set forth in Section 7.3(a)
not to be satisfied, (iii) in the event that any of the
conditions precedent to the obligations of the Company to
consummate the Merger cannot be satisfied or fulfilled by
the date set forth in Section 8.2(ii) of this Agreement,
provided that the failure of such conditions to be so
satisfied shall not be as a result of the Company's
failure to fulfill its material obligations under this
Agreement, or (iv) prior to the Company Stockholders
Meeting, the Board of Directors of the Company has (y)
withdrawn or modified or changed its recommendation or
approval of this Agreement in a manner adverse to Parent
and Newco in order to approve and permit the Company to
execute a definitive agreement relating to an Alternative
Proposal and (z) determined, based on the advice of
outside legal counsel to the Company, that the failure to
take such action as set forth in the preceding clause (y)
would be reasonably likely to result in breach of the
Board of Director's fiduciary duties under applicable
law; provided, however, that the Board of Directors of
the Company shall have been advised by such outside
counsel that notwithstanding a binding commitment to
consummate an agreement of the nature of this Agreement
entered into in the proper exercise of their applicable
fiduciary duties, such fiduciary duties would also be
reasonably likely to require the directors to terminate
this Agreement as a result of such Alternative Proposal;
provided, further, that the Company shall immediately
advise Parent following the receipt by it of any
Alternative Proposal and the details thereof, and advise
Parent of any developments with respect to such
Alternative Proposal immediately upon the occurrence
thereof.
8.5 Effect of Termination.
(a) In the event of termination of this
Agreement and the abandonment of the Merger pursuant to
this Article VIII, written notice thereof shall as
promptly as practicable be given to the other parties to
this Agreement and this Agreement shall terminate and the
transactions contemplated hereby shall be abandoned,
without further action by any of the parties hereto. If
this Agreement is terminated as provided herein: (i)
except as provided in Section 8.5(b), there shall be no
liability or obligation on the part of Parent or Newco,
the Company or any of the Company Subsidiaries or their
respective officers and directors, and all obligations of
the parties shall terminate, except (A) for the
obligations of the parties pursuant to this Section 8.5,
(B) for the provisions of Sections 9.1 and 9.2, (C) for
the obligations of parties set forth in the
Confidentiality Agreements referred to in Section 6.9(c)
hereof and (D) that a party who is in willful breach of
any of its representations, warranties, covenants or
agreements set forth in this Agreement shall be liable
for damages occasioned by such breach, including without
limitation any expenses incurred by the other party in
connection with this Agreement, and (ii) all filings,
applications and other submissions made pursuant to the
transactions contemplated by this Agreement shall, to the
extent practicable, be withdrawn from the agency or
person to which made.
(b) Under the circumstances set forth in
this Section 8.5(b), and only under these circumstances,
the Company agrees to make certain termination payments
to Parent as follows: (i) if an Alternative Proposal
which provides that the Company's stockholders will
receive in excess of $26.00 per share is then outstanding
and (ii) the Board of Directors of the Company withdraws
or modifies or changes in a manner adverse to Parent or
Newco its approval or recommendation of this Agreement or
the Merger in order to permit the Company to execute a
definitive agreement relating to such Alternative
Proposal, then, provided Parent and Newco shall not be in
material breach of their obligations under this
Agreement, the Company shall pay Parent the sum of
$22,500,000 in cash (the "Termination Payment"). The
Termination Payment shall be made as promptly as
practicable but not later than three business days after
such termination, and such payment shall be made by wire
transfer of immediately available funds to an account
designated by Parent. Notwithstanding anything in this
Agreement to the contrary, the Termination Payment shall
be Parent's sole and exclusive remedy hereunder for the
withdrawal, modification or change in such approval or
recommendation of the Board of Directors of the Company
under the circumstances described in this Section 8.5(b)
and, upon such payment and delivery of the Termination
Payment to Parent, no person shall have any further claim
or rights against the Company under this Agreement.
ARTICLE IX
MISCELLANEOUS AND GENERAL
9.1 Payment of Expenses and Other Payments.
Whether or not the Merger shall be consummated and except
as otherwise provided in this Agreement, each party
hereto shall pay its own expenses incident to preparing
for, entering into and carrying out this Agreement and
the consummation of the transactions contemplated hereby.
9.2 Survival of Representations and Covenants;
Survival of Confidentiality Agreements. The respective
representations, warranties, covenants and agreements of
the parties made herein shall not survive beyond the
earlier of termination of this Agreement or the Effective
Time. This Section 9.2 shall not limit any covenant or
agreement of the parties hereto which by its terms
contemplates performance after the Effective Time. The
Confidentiality Agreements shall survive any termination
of this Agreement, and the provisions of such
Confidentiality Agreements shall apply to all information
and material delivered by any party hereunder.
9.3 Modification or Amendment. Subject to the
applicable provisions of the MBCL, at any time prior to
the Effective Time, the parties hereto may modify or
amend this Agreement, by written agreement executed and
delivered by duly authorized officers of the respective
parties; provided, however, that after approval of this
Agreement by the stockholders of the Company, no
amendment shall be made which changes the consideration
payable in the Merger or adversely affects the rights of
the Company's stockholders hereunder without the approval
of such stockholders.
9.4 Waiver and Extension. At any time prior
to the Effective Time, the parties hereto may (a) extend
the time for the performance of any of the obligations or
other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant
hereto or (c) except to the extent prohibited by Law,
waive compliance with any of the agreements or conditions
contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on
behalf of such party. The failure of any party at any
time or times to require performance of any provision
hereof shall in no manner affect the right of such party
at a later time to enforce the same or any other
provision of this Agreement. No waiver of any condition
or of the breach of any term contained in this Agreement
in one or more instances shall be deemed to be or
construed as a further or continuing waiver or such
condition or breach or a waiver of any condition or of
the breach of any other term of this Agreement.
9.5 Counterparts. For the convenience of the
parties hereto, this Agreement may be executed in any
number of counterparts, each such counterpart being
deemed to be an original instrument, and all such
counterparts shall together constitute the same
agreement.
9.6 Governing Law. This Agreement shall be
governed by, and construed in accordance with, the Laws
of the Commonwealth of Massachusetts without giving
effect to the principles of conflicts of law thereof.
9.7 Notices. Any notice, request, instruction
or other document to be given hereunder by any party to
the other parties shall be in writing and shall be deemed
given when delivered personally, upon receipt of a
transmission confirmation (with a confirming copy sent by
overnight courier) if sent by telecopy or like
transmission, and on the next business day when sent by
Federal Express, Express Mail, or other reputable
overnight courier, as follows:
(a) If to the Company, to
The ▇▇▇▇ ▇▇▇▇▇▇ Corporation
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Senior Vice President
and General Counsel
(▇▇▇) ▇▇▇-▇▇▇▇ (telephone)
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopier)
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
(▇▇▇) ▇▇▇-▇▇▇▇ (telephone)
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopier)
and a copy to:
Textron Inc.
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Executive Vice President
and General Counsel
(▇▇▇) ▇▇▇-▇▇▇▇ (telephone)
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopier)
(b) If to Parent or Newco, to
Provident Companies, Inc.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
(▇▇▇) ▇▇▇-▇▇▇▇ (telephone)
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopier)
with a copy to:
▇▇▇▇▇▇ & Bird
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
(▇▇▇) ▇▇▇-▇▇▇▇ (telephone)
(▇▇▇) ▇▇▇-▇▇▇▇ (telecopier)
or to such other persons or addresses as may be
designated in writing by the party to receive such
notice. Nothing in this Section 9.7 shall be deemed to
constitute consent to the manner and address for service
of process in connection with any legal proceeding
(including litigation arising out of or in connection
with this Agreement), which service shall be effected as
required by applicable law.
9.8 Entire Agreement; Assignment. This
Agreement, the Confidentiality Agreements and the
Separation Agreement (a) constitute the entire agreement
among the parties with respect to the subject matter
hereof and supersede all other prior agreements and
understandings, both written and oral, among the parties
or any of them with respect to the subject matter hereof
and (b) shall not be assigned by operation of law or
otherwise.
9.9 Parties in Interest. This Agreement shall
be binding upon and inure solely to the benefit of each
party hereto and their respective successors and assigns.
Nothing in this Agreement, express or implied, other than
the right to receive the consideration payable in the
Merger pursuant to Article III hereof, is intended to or
shall confer upon any other person any rights, benefits
or remedies of any nature whatsoever under or by reason
of this Agreement; provided, however, that the provisions
of Section 6.11 shall inure to the benefit of and be
enforceable by the Indemnified Parties or Company
Indemnified Parties, as the case may be.
9.10 Certain Definitions. As used herein:
(a) "Alternative Proposal" shall mean any
proposal or offer for a merger, asset acquisition or
other business combination involving the Company or any
Company Subsidiary or any proposal or offer to acquire a
significant equity interest in, or a significant portion
of the assets of, the Company or any Company Subsidiary
other than the transactions contemplated by this
Agreement.
(b) "Company Material Adverse Effect"
shall mean any adverse change in the assets, liabilities,
financial condition, or results of operations of the
Company or any of the Company Subsidiaries which,
individually or together with any other such adverse
change, is material to the Company and the Company
Subsidiaries taken as a whole (provided, that a matter or
matters taken together shall be deemed to have a material
adverse change in the assets, liabilities, financial
condition, or results of operations only if such matter
or matters has resulted or is reasonably anticipated to
have a quantifiable, after-tax adverse impact of at least
$40,000,000) or any material adverse effect on the
ability of the Company to perform its obligations under
this Agreement or to consummate the transactions
contemplated hereby.
(c) "Company Plans" shall mean the
employee benefit plans, programs and arrangements
maintained or contributed to by the Company or any
Company Subsidiary.
(d) "Company Properties" shall mean all
parcels of real property owned by the Company or any
Company Subsidiary.
(e) "Consent" shall mean any consent,
approval, authorization, clearance, exemption, waiver, or
similar affirmation by, or filing with or notification
to, a person pursuant to any Contract, Law, Order, or
Permit.
(f) "Contract" shall mean any written or
oral agreement, arrangement, commitment, contract,
indenture, instrument, lease or other obligation of any
kind or character, or other obligation that is binding on
any person or its capital stock, properties or business.
(g) "Default" shall mean (i) any breach
or violation of or default under any Contract, Order or
Permit, (ii) any occurrence of any event that with the
passage of time or the giving of notice or both would
constitute a breach or violation of or default under any
Contract, Order or Permit, or (iii) any occurrence of any
event that with or without the passage of time or the
giving of notice would give rise to a right to terminate
or revoke, change the current terms of, or renegotiate,
or to accelerate, increase, or impose any liability
under, or create any Lien in connection with, any
Contract, Order or Permit.
(h) "Environmental Claim" shall mean any
investigation, notice of violation, demand, allegation,
action, suit, Order, consent decree, penalty, fine, Lien,
proceeding or claim (whether administrative, judicial or
private in nature) arising: (i) pursuant to, or in
connection with, an actual or alleged violation of any
Environmental Law; (ii) in connection with any Hazardous
Material or actual or alleged activity associated with
any Hazardous Material; (iii) from any abatement,
removal, remedial, corrective or other response action in
connection with any Hazardous Material, Environmental Law
or Order, or (iv) from any actual or alleged damage,
injury, threat or harm to health, safety, natural
resources or the environment.
(i) "Environmental Law" shall mean any
Law pertaining to: (i) the protection of health, safety
and the indoor or outdoor environment; (ii) the
conservation, management or use of natural resources and
wildlife; (iii) the protection or use of surface water
and ground water; (iv) the management, manufacture,
possession, presence, use, generation, transportation,
treatment, storage, disposal, release, threatened
release, abatement, removal, remediation or handling of,
or exposure to, any Hazardous Material; or (v) pollution
(including any release to air, land, surface water and
ground water); and includes, without limitation, the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. SECTION 9601 et
seq., and the Solid Waste Disposal Act, as amended, 42
U.S.C. SECTION 6901 et seq.
(j) "ERISA Affiliate" shall mean any
corporation or trade or business, whether or not
incorporated, that together with an entity or any
Subsidiary of such entity would be deemed a "single
employer" within the meaning of Section 4001 of ERISA, or
considered as being members of a controlled group of
corporations, under common control, or members of an
affiliated service group within the meaning of
Subsections 414(b), (c), (m) or (o) of the Code or
Section 4001(a)(14) of ERISA.
(k) "Hazardous Material" shall mean any
substance, chemical, compound, product, solid, gas,
liquid, waste, by-product, pollutant, contaminant or
material which is hazardous or toxic, and includes
without limitation, asbestos or any substance containing
asbestos, polychlorinated biphenyls, petroleum (including
crude oil or any fraction thereof), and any hazardous or
toxic waste, material or substance regulated under any
Environmental Law.
(l) "Law" shall mean any law, ordinance,
regulation, rule, or statute or the U.S. Federal
Government or any state or subdivision thereof applicable
to a person or its properties, liabilities or business.
(m) "Lien" shall mean any conditional
sale agreement, default of title, easement, encroachment,
encumbrance, hypothecation, infringement, lien, mortgage,
option, pledge, reservation, restriction, security
interest, title retention or other security arrangement,
or any adverse right or interest, charge, or claim of any
nature whatsoever of, on, or with respect to any property
or property interest.
(n) "Litigation" shall mean any action,
arbitration, cause of action, claim, complaint, criminal
prosecution, demand letter, governmental or other
administrative or other proceeding, whether at law or at
equity, before or by any federal, state or foreign court,
tribunal, or agency or before any arbitrator.
(o) "Order" shall mean any administrative
decision or award, decree, injunction, judgment, order,
quasi-judicial decision or award, ruling, or writ of any
federal, state, local or foreign or other court,
arbitrator, mediator, tribunal, administrative agency or
authority.
(p) "Parent Material Adverse Effect"
shall mean any adverse change in the assets, liabilities,
financial condition, or results of operations of Parent
or any of the Parent Subsidiaries which is material to
Parent and the Parent Subsidiaries taken as a whole or
any material adverse effect on the ability of Parent or
Newco to perform its obligations under this Agreement or
to consummate the transactions contemplated hereby.
(q) "Parent Plans" shall mean the
employee benefit plans, programs and arrangements
maintained or contributed to by Parent or any Parent
Subsidiary.
(r) "Parent Properties" shall mean all
parcels of real property owned by Parent or any Parent
Subsidiary.
(s) "Permit" shall mean any federal,
state, local or foreign governmental approval,
authorization, certificate, declaration, easement,
filing, franchise, license, notice, permit, variance,
clearance, exemption, closure or right to which any
person is a party or that is or may be binding upon or
inure to the benefit of any person or its securities,
properties or business.
(t) "Subsidiary" shall mean, when used
with reference to any entity, any corporation a majority
of the outstanding voting securities of which are owned
directly or indirectly by such former entity.
(u) "Date of this Agreement" and words of
similar import (such as "date hereof") shall mean April
29, 1996.
9.11 Obligation of Parent. Whenever this
Agreement requires Newco to take any action, such
requirement shall be deemed to include an undertaking on
the part of Parent to cause Newco to take such action and
a guarantee of the performance thereof.
9.12 Validity. The invalidity or
unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other
provisions of this Agreement, each of which shall remain
in full force and effect.
9.13 Captions. The Article, Section and
paragraph captions herein are for convenience of
reference only, do not constitute part of this Agreement
and shall not be deemed to limit or otherwise affect any
of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be executed by their respective
duly authorized officers as of the date first above
written.
Attest: THE ▇▇▇▇ ▇▇▇▇▇▇ CORPORATION
[seal]
/s/ ▇▇▇▇ ▇. ▇▇▇▇ By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and Chief
Executive Officer
Attest: PROVIDENT COMPANIES, INC.
[seal]
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By:/s/ J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
Attest: PATRIOT ACQUISITION
CORPORATION
[seal]
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President