AGREEMENT AND PLAN OF MERGER
DATED AS OF
January 1, 2001
AMONG
IBP, INC.,
TYSON FOODS, INC.
AND
LASSO ACQUISITION CORPORATION
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TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS 2
Section 1.01. Definitions 2
ARTICLE 2 THE OFFER AND THE EXCHANGE OFFER 4
Section 2.01. The offer 4
Section 2.02. Company Action 8
Section 2.03. Company Board Representation; Section 14(f) 10
Section 2.04. Adjustment of the Exchange Offer Ratio 11
ARTICLE 3 THE MERGER 11
Section 3.01. The Merger 11
Section 3.02. Conversions of Shares 11
Section 3.03. Surrender and Payment 12
Section 3.04. Stock Options 13
Section 3.05. Withholding Rights 14
Section 3.06. Terminated Tender Offer 14
Section 3.07. Adjustment of Exchange Ratio 14
ARTICLE 4 THE SURVIVING CORPORTATION 15
Section 4.01. Certificate of Incorporation 15
Section 4.02. Bylaws 15
Section 4.03. Directors and Officers 15
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE COMPANY 15
Section 5.01. Corporate Existence and Power 15
Section 5.02. Corporate Authorization 15
Section 5.03. Governmental Authorization 16
Section 5.04. Non-Contravention 16
Section 5.05. Capitalization 16
Section 5.06. Subsidiaries 17
Section 5.07. SEC Filings 17
Section 5.08. Financial Statements 18
Section 5.09. Disclosure Documents 18
Section 5.10. Absence of Certain Changes 19
Section 5.11. No Undisclosed Material Liabilities 20
Section 5.12. Litigation 21
Section 5.13. Taxes 21
Section 5.14. ERISA 22
Section 5.15. Labor Matters 24
Section 5.16. Compliance with Laws 25
Section 5.17. Licenses and Permits 25
Section 5.18. Intellectual Property 25
Section 5.19. Environmental Matters 26
Section 5.20. Finders' Fees 27
Section 5.21. Inapplicability of Certain Restrictions 27
Section 5.22. Rights Plan 27
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ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF PARENT 27
Section 6.01. Corporate Existence And Power 27
Section 6.02. Corporate Authorization 28
Section 6.03. Governmental Authorization 28
Section 6.04. Non-Contravention 28
Section 6.05. Capitalization 28
Section 6.06. Parent Subsidiaries 29
Section 6.07. SEC Filings 30
Section 6.08. Parent Financial Statements 30
Section 6.09. Disclosure Documents 30
Section 6.10. Absence of Certain Changes 31
Section 6.11. No Undisclosed Material Liabilities 32
Section 6.12. Adequate Funds 32
Section 6.13. Ownership of Company Common Stock 32
Section 6.14. Finders' Fees 32
Section 6.15. Compliance of Laws 32
ARTICLE 7 COVENANTS OF THE COMPANY 33
Section 7.01. Conduct of the Company 33
Section 7.02. Stockholder Meeting 35
Section 7.03. Access to Information 35
Section 7.04. Other Offers 35
Section 7.05. Notices of Certain Events 37
Section 7.06. Tax Matters 38
Section 7.07. Affiliates 38
Section 7.08. Confidentiality 38
Section 7.09. Other Actions 38
ARTICLE 8 COVENANTS OF PARENT 39
Section 8.01. Parent Stockholder Meeting 39
Section 8.02. Confidentiality 39
Section 8.03. Voting of Shares 39
Section 8.04. Director and Officer Liability 39
Section 8.05. Employee Matters 39
Section 8.06. Obligations of Merger Co. 39
Section 8.07. NYSE Listing 40
Section 8.08. Acquisition of Shares 40
Section 8.09. Notices of Certain Events 40
Section 8.10. Reorganization Matters 40
Section 8.11. Information Relating to Offer 40
Section 8.12. Conduct of Parent 40
Section 8.13. Voting Agreement 41
Section 8.14. Other Actions 41
ARTICLE 9 COVENANTS OF PARENT AND THE COMPANY 41
Section 9.01. Company Proxy Statement and Merger Form S-4 41
Section 9.02. Certain Regulatory Issues 41
Section 9.03. Certain Filings 42
Section 9.04. Public Announcements 42
Section 9.05. Further Assurances 42
ARTICLE 10 CONDITIONS TO THE MERGER 43
Section 10.01. Conditions to the Obligations of Each Party 43
Section 10.02. Conditions to the Obligations of the Company 43
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ARTICLE 11 TERMINATION 43
Section 11.01. Termination 43
Section 11.02. Effect of Termination 45
Section 11.03. Parent Payment Event 45
ARTICLE 12 MISCELLANEOUS 45
Section 12.01. Notices 45
Section 12.02. Survival of Representations and Warranties 47
Section 12.03. Amendments; No Waivers; Direction of Merger 47
Section 12.04. Expenses 47
Section 12.05. Successors and Assigns; Benefit 47
Section 12.06. Governing Law 47
Section 12.07. Counterparts; Effectiveness 47
Exhibit A Form of Affiliate's Agreement
Exhibit B Form of Voting Agreement
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of January 1, 2001 (the
"Agreement") among IBP, inc., a Delaware corporation (the "Company"), Tyson
Foods, Inc., a Delaware corporation ("Parent"), and Lasso Acquisition
Corporation, a Delaware corporation and a wholly-owned subsidiary of Parent
("Merger Co.").
W I T N E S S E T H:
WHEREAS, (i) on December 12, 2000, Parent and Merger Co. commenced a
tender offer (such offer, including any amendments and changes thereto
(including those contemplated by this Agreement) the "Offer") to acquire
50.1% (the "Maximum Amount") of the issued and outstanding shares of Common
Stock, par value $0.05 per share, of the Company ("Company Common Stock")
for $26.00 per share (such amount, or any greater amount per share paid
pursuant to the Offer, the "Per Share of Company Common Stock Amount") net
to the seller in cash and (ii) on December 12, 2000 Parent and Merger Co.
filed with the Securities and Exchange Commission (the "SEC") a Tender
Offer Statement on Form TO, (together with all amendments and supplements
thereto, the "Form TO") promulgated under the Securities Exchange Act of
1934, as amended (such Act and the rules and regulations promulgated
thereunder being referred to herein as the "Exchange Act"), which Form TO
included an offer to purchase (the "Offer to Purchase");
WHEREAS, on December 22, 2000, the Company filed with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 promulgated under
the Exchange Act (together with all amendments and supplements thereto, the
"Schedule 14D-9") containing the recommendation of the Board of Directors
of the Company;
WHEREAS, Parent and Merger Co. (i) on December 28, 2000, announced
that they were increasing the Per Share of Company Common Stock Amount to
$27.00 net to the seller in cash and (ii) on December 29, 2000 filed with
the SEC an amendment to the Form TO which incorporated into the Offer,
among other things, the Per Share of Company Common Stock Amount of $27.00;
WHEREAS, Parent and Merger Co. propose to increase the Per Share of
Company Common Stock Amount to $30.00 net to the seller in cash on the
terms and subject to the conditions set forth in this Agreement;
WHEREAS, it is intended that the Offer, the Exchange Offer (as defined
below) and the Merger (as defined below), taken together, shall qualify as
a reorganization within the meaning of Section 368(a) of the Code (as
defined below) and that this Agreement shall constitute a plan of
reorganization for purposes of the Code;
WHEREAS, the Boards of Directors of Parent, Merger Co. and the Company
have each determined that it is advisable and in the best interests of
their respective stockholders to consummate, and have approved, the
business combination transaction provided for herein including (i) the
Offer, (ii) an offer to exchange (the "Exchange Offer") for each share of
Company Common Stock not tendered in the Offer the number of shares of
Class A Common Stock, par value $0.10 per share, of Parent ("Parent Common
Stock") equal to the Exchange Offer Ratio (as defined in Section 2.01(c)),
and (iii) the Merger (as defined in Section 3.01); and
WHEREAS, Parent and the Company desire to make certain
representations, warranties, covenants and agreements in connection with
the transactions contemplated by this Agreement and also to prescribe
certain conditions to the consummation of such transactions;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
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ARTICLE 1
DEFINITIONS
Section 1.01. Definitions
Each of the following terms is defined in the Section set forth
opposite such term:
TERM SECTION
Acquisition Proposal 7.04
Amended Offer to Purchase 2.01(a)
Average Exchange Offer Price 2.01(c)
Average Parent Common Stock Price 3.02
Balance Sheet 5.08
Balance Sheet Date 5.08
Board of Directors 2.02(a)
Class B Common Stock 6.05
Code 5.14(a)
Company first paragraph
Company Common Stock recitals
Company Disclosure Documents 5.09(a)
Company Option 3.04(a)
Company Proxy Statement 5.09(a)
Company Securities 5.05
Company Stockholder Meeting 7.02
Company 10-K 5.07(a)
Company 10-Qs 5.07(a)
Confidentiality Agreements 7.08
Control Date 2.03
Delaware Law 2.02(a)
Effective Time 3.01(b)
Employee Plans 5.14(a)
Environmental Laws 5.19(d)
Environmental Permits 5.19(d)
ERISA 5.14(a)
ERISA Affiliate 5.14(a)
Exchange Act recitals
Exchange Agent 3.03(a)
Exchange Form S-4 2.01(b)
Exchange Form TO 2.01(b)
Exchange Offer recitals
Exchange Offer Documents 2.01(b)
Exchange Offer Ratio 2.01(c)
Exchange Ratio 3.02(c)
Exchange Schedule 14D-9 2.02(c)
Failed Tender Offer 3.06
Final Expiration Date 2.01(d)
Form TO recitals
Form TO/A 2.01(a)
Hazardous Substances 5.19
HSR Act 5.03
Independent Directors 2.03(c)
Intellectual Property Right 5.18
International Plan 5.14(i)
Lien 5.04
Material Adverse Effect 5.01
Maximum Amount recitals
Merger 3.01(a)
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Merger Co. first paragraph
Merger Consideration 3.02(c)
Merger Form S-4 9.01
Minimum Condition 2.01(a)
Multiemployer Plan 5.14(b)
NYSE 3.02
Offer recitals
Offer Documents 2.01(a)
Offer to Exchange 2.01(b)
Offer to Purchase recitals
Parent first paragraph
Parent Balance Sheet 6.08
Parent Balance Sheet Date 6.08
Parent Common Stock recitals
Parent Disclosure Documents 6.09(a)
Parent Material Adverse Effect 6.01
Parent Option 3.04(a)
Parent Payment Event 11.03(b)
Parent Securities 6.05
Parent Stockholder Meeting 8.01
Parent Subsidiary 6.06(a)
Parent Subsidiary Securities 6.06(b)
Parent 10-K 6.07
Payment Date 2.01(a)
Payment Event 7.04(b)
Permits 5.17
Per Share of Company Common Stock Amount Recitals
Person 3.03(c) and 7.04(a)
Pre-Closing Tax Period 5.13(a)
Preferred Stock 5.05
Preliminary Prospectus 2.01(b)
Rawhide Merger Agreement 2.02(a)
Reimbursement Payment 7.04(b)
Representatives 7.03
Returns 5.13(a)
Schedule 14D-9 recitals
Schedule 14D-9/A 2.02(b)
SEC recitals
Securities Act 5.07(c)
Special Committee 2.02(a)
Straddle Period 5.13(a)
Stockholders recitals
Subsidiary 5.06(a)
Subsidiary Securities 5.06(b)
Superior Proposal 7.04
Surviving Corporation 3.01(a)
Tax 5.13(b)
Tax Asset 5.13(a)
368(a) Reorganization 7.06(c)
Title IV Plan 5.14(b)
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ARTICLE 2
THE OFFER AND THE EXCHANGE OFFER
Section 2.01 The Offer.
(a) Provided that this Agreement shall not have been terminated in
accordance with Section 11.01 and none of the events set forth in Annex I
hereto shall have occurred and be continuing, as promptly as practicable,
but in no event later than three business days, after the date hereof,
Parent shall cause Merger Co. to, and Merger Co. shall, file with the SEC,
to the extent required by the Exchange Act, an amended Form TO (the "Form
TO/A"), an amended Offer to Purchase (the "Amended Offer to Purchase") and,
if necessary, the related letter of transmittal and any related summary
advertisement (the Form TO/A, the Amended Offer to Purchase and such other
documents, together with all amendments and supplements thereto, the "Offer
Documents") to reflect, among other things, an increase in the per share
price to be paid in the Offer to $30.00 and, if necessary, an extension of
the currently scheduled expiration date to allow the Offer to remain open
for ten business days from the date of such increase. The obligation of
Merger Co. to consummate the Offer and to accept for payment and to pay for
shares of Company Common Stock tendered pursuant to the Offer shall be
subject only to (i) the condition that there shall be validly tendered in
accordance with the terms of the Offer, prior to the expiration date of the
Offer and not withdrawn, a number of shares that, together with the shares
of Company Common Stock then owned by Parent and/or Merger Co., represents
50.1% of the shares of Company Common Stock outstanding (the "Minimum
Condition") and (ii) the other conditions set forth in Annex I hereto.
Merger Co. expressly reserves the right to waive any such condition (other
than the Minimum Condition, which shall not be waived without the prior
written consent of the Company) or the condition relating to the expiration
of the HSR Act and to increase the Per Share of Company Common Stock
Amount. Notwithstanding the foregoing, no change may be made which (i)
decreases the Per Share of Company Common Stock Amount, (ii) changes the
form of consideration to be paid in the Offer, (iii) increases the Maximum
Amount or the Minimum Condition, (iv) reduces the number of shares of
Company Common Stock sought to be purchased in the Offer, (v) imposes
conditions to the Offer in addition to those set forth in Annex I hereto,
(vi) except as specifically provided for in this Section 2.01(a), extends
the expiration date of the Offer or (vii) otherwise alters or amends any
term of the Offer in any manner adverse to the holders of shares of Company
Common Stock; provided, however, that the Offer may be extended for any
period to the extent required by law or by any rule, regulation,
interpretation or position of the SEC or the staff thereof applicable to
the Offer. Parent and Merger Co. shall comply with the obligations
respecting prompt payment and announcement under the Exchange Act, and,
without limiting the generality of the foregoing, subject to the terms and
conditions of this Agreement, including but not limited to the conditions of
the Offer, Merger Co. shall and Parent shall cause Merger Co. to, accept for
payment and pay for shares of Company Common Stock tendered pursuant to the
Offer as soon as practicable after expiration thereof. Unless this
Agreement has been terminated pursuant to Section 11.01 and subject to
Section 2.01(d), Merger Co. shall extend the Offer from time to time in the
event that, at a then-scheduled expiration date, all of the conditions to
the Offer have not been satisfied or waived as permitted pursuant to this
Agreement, each such extension not to exceed (unless otherwise consented to
in writing by the Company) the lesser of 10 additional business days or such
fewer number of days that Merger Co. reasonably believes are necessary to
cause the conditions to the Offer to be satisfied. Except as provided
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in Section 2.01(d) or 2.01(f), Merger Co. shall not terminate the Offer
without purchasing shares of Company Common Stock pursuant to the Offer. If
at the expiration of the Offer a number of shares of Company Common Stock
has been validly tendered and not withdrawn that, together with the shares
of Company Common Stock then owned by Parent and/or Merger Co., exceeds the
Maximum Amount, the number of shares of Company Common Stock to be purchased
by Merger Co. pursuant to the Offer shall be prorated in
accordance with Rule 14d-8 promulgated under the Exchange Act, so that the
number of shares of Company Common Stock purchased by Merger Co. pursuant
to the Offer, together with the shares of Company Common Stock then owned
by Parent and Merger Co., will represent 50.1% of the shares of Company
Common Stock outstanding.
(b) Provided that this Agreement shall not have been terminated in
accordance with Section 11.01 and none of the events set forth in Annex II
hereto shall have occurred and be continuing, as promptly as practicable
after the date hereof, Parent shall cause Merger Co. to, and Merger Co.
shall (i) commence the Exchange Offer pursuant to which Merger Co. shall
offer to issue a number of duly authorized, validly issued, fully paid and
non-assessable shares of Parent Common Stock equal to the Exchange Offer
Ratio (as defined below) for each then issued and outstanding share of
Company Common Stock (other than shares of Company Common Stock then owned
by Parent or Merger Co.), (ii) file with the SEC, to the extent required by
the Exchange Act, a Form TO (the "Exchange Form TO"), an Offer to Exchange
(the "Offer to Exchange") and the related letter of transmittal and any
related summary advertisement (the Exchange Form TO, the Offer to Exchange
and such other documents, together with all amendments and supplements
thereto, the "Exchange Offer Documents") and (iii) file with the SEC a
Registration Statement on Form S-4 (the "Exchange Form S-4") to register
under the Securities Act the securities to be issued in the Exchange Offer.
The obligation of Merger Co. to consummate the Exchange Offer and to issue
shares of Parent Common Stock in exchange for shares of Company Common
Stock tendered pursuant to the Exchange Offer shall be subject only to the
conditions set forth in Annex II hereto. Merger Co. expressly reserves the
right to waive any such condition (other than the condition that at least
five business days have elapsed since the acceptance for payment and
payment for a number of shares of Company Common Stock pursuant to the
Offer representing, together with shares of Company Common Stock previously
owned by Parent, at least 50.1% of the issued and outstanding shares of
Company Common Stock and the subsequent delivery of shares of Company
Common Stock not purchased in the Offer to the Depositary under the
Exchange Offer, which condition shall not be waived without the prior
written consent of the Company) and to increase the Exchange Offer Ratio.
Notwithstanding the foregoing, no change may be made which (i) decreases,
or would have the effect of decreasing, the Exchange Offer Ratio, (ii)
changes the form of consideration to be paid in the Exchange Offer, (iii)
reduces the number of shares of Company Common Stock sought to be purchased
in the Exchange Offer, (iv) imposes conditions to the Exchange Offer in
addition to those set forth in Annex II hereto, (v) extends the expiration
date of the Exchange Offer or (vi) otherwise alters or amends any term of
the Exchange Offer in any manner adverse to the holders of shares of
Company Common Stock; provided, however, that the Exchange Offer may be
extended (x) for any period to the extent required by law or by any rule,
regulation, interpretation or position of the SEC or the staff thereof
applicable to the Exchange Offer or (y) if the number of shares of Company
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Common Stock validly tendered in accordance with the Exchange Offer,
together with shares of Company Common Stock owned by Parent as of such
date, is less than 90% of the outstanding shares of Company Common Stock,
as of the scheduled or extended expiration date. Parent and Merger Co.
shall comply with the obligations respecting prompt delivery of shares of
Parent Common Stock and announcement under the Exchange Act, and, without
limiting the generality of the foregoing, subject to the terms and
conditions of this Agreement, including but not limited to the conditions
of the Exchange Offer, Merger Co. shall and Parent shall cause Merger Co.
to, accept for exchange and issue shares of Parent Common Stock in exchange
for shares of Company Common Stock tendered pursuant to the Exchange Offer
as soon as practicable after expiration thereof. Unless this Agreement has
been terminated pursuant to Section 11.01 and subject to Section 2.01(d),
Merger Co. shall extend the Exchange Offer from time to time in the event
that, at a then-scheduled expiration date, all of the conditions to the
Exchange Offer have not been satisfied or waived as permitted pursuant to
this Agreement, each such extension not to exceed (unless otherwise
consented to in writing by the Company) the lesser of 10 additional
business days or such fewer number of days that Merger Co. reasonably
believes are necessary to cause the conditions to the Offer to be
satisfied. Except as provided in Section 2.01(d) or 2.01(f), Merger Co.
shall not terminate the Exchange Offer without accepting shares of Company
Common Stock and issuing shares of Parent Common Stock pursuant to the
Exchange Offer. Notwithstanding anything to the contrary set forth herein,
no certificates representing fractional shares of Parent Common Stock shall
be issued in connection with the Exchange Offer, and in lieu thereof each
tendering stockholder who would otherwise be entitled to a fractional share
of Parent Common Stock in the Exchange Offer will be paid an amount in cash
equal to the product obtained by multiplying (A) the fractional share
interest to which such holder would otherwise be entitled by (B) the
Average Exchange Offer Price (as defined below).
(c) For purposes of this Section 2.01, "Exchange Offer Ratio" means
the number of shares of Parent Common Stock determined as set forth below:
(i) If the Average Exchange Offer Price is equal to or greater than
$15.40, the Exchange Ratio shall be 1.948 shares of Parent Common
Stock;
(ii) If the Average Exchange Offer Price is less than $15.40 and
greater than $12.60, the Exchange Ratio shall be determined by
dividing $30.00 by the Average Price; and
(iii) If the Average Exchange Offer Price is equal to or less than
$12.60, the Exchange Ratio shall be 2.381 shares of Parent Common
Stock.
For purposes of this Section 2.01, "Average Exchange Offer Price" means the
average of the closing price per share of Parent Common Stock on the New
York Stock Exchange, Inc. (the "NYSE") at the end of the regular session as
reported on the Consolidated Tape, network A for the fifteen consecutive
trading days ending on the second trading day immediately preceding the
expiration date of the Exchange Offer.
(d) If, on February 28, 2001 (the "Final Expiration Date"), Merger
Co. has not consummated the Offer in accordance with its terms, Merger Co.
shall thereupon terminate the Offer and the Exchange Offer without the
acceptance of any shares of Company Common Stock previously tendered. If,
at the Final Expiration Date, the Minimum Condition has not been satisfied,
Merger Co. shall, unless Parent and the Company otherwise agree, terminate
the Offer and the Exchange Offer, and the parties shall, subject to the
terms and conditions hereof, seek to consummate the Merger.
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(e) As soon as practicable following the filing of the Form TO/A with
the SEC, Merger Co. shall take such steps as are reasonably necessary to
cause the Amended Offer to Purchase to be disseminated to the holders of
shares of Company Common Stock as and to the extent required by applicable
federal securities laws. Parent, Merger Co. and the Company shall correct
promptly any information provided by any of them for use in the Offer
Documents which shall have become false or misleading, and Parent and
Merger Co. shall take all reasonable steps necessary to cause the Form TO/A
as so corrected to be filed with the SEC and the other Offer Documents as
so corrected to be disseminated to holders of shares of Company Common
Stock, in each case as and to the extent required by applicable federal
securities laws. The Company and its counsel shall be given an opportunity
to review and comment on the Offer Documents prior to their being filed
with the SEC, and Parent and Merger Co. will provide the Company and its
counsel in writing with any comments that Parent or Merger Co. receives
from the SEC or its staff with respect to the Offer Documents promptly
after receipt of any such comments.
(f) In the event that this Agreement has been terminated pursuant to
Section 11.01, Merger Co. shall, and Parent shall cause Merger Co. to,
promptly terminate the Offer and the Exchange Offer without accepting any
shares of Company Common Stock for payment or exchange.
(g) Parent shall provide or cause to be provided to Merger Co. on a
timely basis the funds and shares of Parent Common Stock necessary to
accept for payment, and pay for, any shares of Company Common Stock that
Merger Co. becomes obligated to accept for payment, and pay for, pursuant
to the Offer and the Exchange Offer.
(h) Parent and Merger Co. shall promptly prepare and file with the SEC the
Exchange Form S-4 to register the offer and sale of shares of Parent Company
Stock in the Exchange Offer. The Exchange Form S-4 will include a
preliminary prospectus containing the information required under Rule 14d-
4(b) promulgated under the Exchange Act (the "Preliminary Prospectus"). As
soon as practicable on the date of commencement of the
Exchange Offer, Parent and Merger Co. shall (i) file with the SEC the
Exchange Form TO with respect to the Exchange Offer which will contain or
incorporate by reference all or part of the Preliminary Prospectus and (ii)
cause the Exchange Offer Documents to be disseminated to holders of shares
of Company Common Stock. Parent and Merger Co. agree that they shall cause
the Exchange Form S-4, the Exchange Form TO, the Offer to Exchange and all
amendments or supplements thereto to comply in all material respects with
the Exchange Act, the Securities Act and the rules and regulations
thereunder and other applicable laws. Each of Parent, Merger Co. and the
Company agrees to correct promptly any information provided by it for use
in the Offer Documents if and to the extent that such information shall
have become false or misleading in any material respect, and Parent and
Merger Co. further agree to take all steps necessary to cause the Exchange
Offer Documents as so corrected to be filed with the SEC and the other
Exchange Offer Documents as so corrected to be disseminated to holders of
Shares, in each case as and to the extent required by applicable federal
securities laws. The Company, Parent and Merger Co. shall cooperate with
each other in the preparation of the Exchange Form S-4, the Exchange Form
TO and any amendment or supplement thereto, and Parent shall notify the
Company of the receipt of any comments of the SEC with respect to the
Exchange Form S-4 and the Exchange Form TO and of any requests by the SEC
for any amendment or supplement thereto or for additional information, and
shall provide promptly copies of all correspondence between Parent or any
of its Representatives and the SEC with respect to the Exchange Form S-4
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and the Exchange Form TO. Parent shall give the Company and its counsel the
opportunity to review the Exchange Form S-4 and the Exchange Form TO and
all responses to requests for additional information by and replies to
comments of the SEC before their being filed with, or sent to, the SEC.
Each of Parent and Merger Co. agrees to use its best efforts, after
consultation with the Company, to respond promptly to all such comments of
and requests by the SEC. Each of Parent and Merger Co. shall use its
reasonable best efforts to cause the Exchange Form S-4 to be declared
effective by the SEC as promptly as practicable. Parent shall promptly take
any action (other than qualifying as a foreign corporation or taking any
action which would subject it to service of process in any jurisdiction
where Parent is not now so qualified or subject) required to be taken under
foreign or state securities or Blue Sky laws in connection with the
issuance of Parent Common Stock in the Exchange Offer. Parent will advise
Company, promptly after it receives notice thereof, of (i) the time when
the Exchange Form S-4 becomes effective, (ii) the issuance of any stop
order with respect to the Exchange Form S-4, (iii) the suspension of the
qualification of Parent Common Stock for offering or sale in any
jurisdiction, or (iv) any request by the SEC for an amendment of the
Exchange Form S-4 or comments thereon and responses thereto or requests by
the SEC for additional information.
Section 2.02 Company Actions
(a) The Company hereby approves and consents to the Offer and the
Exchange Offer and represents that (i) the Board of Directors of the
Company and acting on the unanimous recommendation of a special committee
of the Board of Directors of the Company comprised of all members of the
Board of Directors other than Messrs. Bond, Chalsty, Leman and Peterson
(the "Special Committee"), at a meeting duly called and held, has
unanimously (A) determined that this Agreement and the transactions
contemplated hereby, including the Offer, the Exchange Offer and the
Merger, taken together, are fair to and in the best
interests of the holders of shares of Company Common Stock, (B)
approved this Agreement and the transactions contemplated hereby, including
the Offer, the Exchange Offer and the Merger, which approval satisfies in
full the requirements of Section 203 of the General Corporation Law of the
State of Delaware (the "Delaware Law") with respect to the transactions
contemplated hereby, (C) resolved to recommend that the stockholders of the
Company accept the Offer and the Exchange Offer, tender their shares of
Company Common Stock thereunder to Merger Co. and, if required by
applicable law in order to consummate the Merger, approve and adopt this
Agreement and the transactions contemplated hereby, provided that, subject
to Section 7.04, such recommendation may be withdrawn, modified or amended
if such recommendation would be reasonably likely to be inconsistent with
its fiduciary duties under the applicable law as determined by the Board of
Directors of the Company in good faith after consultation with its legal
advisors and (ii) the Company has provided the applicable notice of
termination to Rawhide Holdings Corporation required by Section 10.01(e) of
the Agreement and Plan of Merger, dated as of October 1, 2000 among the
Company, Rawhide Holdings Corporation and Rawhide Acquisition Corporation
("Rawhide Merger Agreement"). The Company hereby consents to the inclusion
in the Offer Documents and the Exchange Offer Documents of the
recommendation of the Board described in the immediately preceding
sentence. The Company has been advised by each of its directors and
executive officers that they intend either to tender all shares of Company
Common Stock beneficially owned by them to Merger Co. pursuant to the Offer
and the Exchange Offer or to vote such shares of Company Common Stock in
favor of the approval and adoption of the transactions contemplated hereby.
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The Company further represents that J.P. Morgan Securities Inc. has
delivered to the Company's Board of Directors its written opinion that the
consideration to be paid in the Offer, the Exchange Offer and the Merger is
fair to the holders of shares of Company Common Stock, from a financial
point of view.
(b) On the date the Offer Documents are filed with the SEC in
accordance with Section 2.01(a), the Company shall file with the SEC an
amended Schedule 14D-9 (the "Schedule 14D-9/A") containing the
recommendation of the Board of Directors of the Company described in
Section 2.02(a)(i), and shall take such steps as are reasonably necessary
to cause the Schedule 14D-9/A to be disseminated to the holders of shares
of Company Common Stock as and to the extent required by applicable federal
securities laws. The Company, Parent and Merger Co. shall correct promptly
any information provided by any of them for use in the Schedule 14D-9/A
which shall have become false or misleading, and the Company shall take all
reasonable steps necessary to cause the Schedule 14D-9/A as so corrected to
be filed with the SEC and disseminated to holders of shares of Company
Common Stock, in each case as and to the extent required by applicable
federal securities laws. Parent and its counsel shall be given an
opportunity to review and comment on the Schedule 14D-9/A prior to its
being filed with the SEC, and the Company will provide Parent and its
counsel in writing with any comments that the Company receives from the SEC
or its staff with respect to the Schedule 14D-9/A promptly after receipt of
any such comments.
(c) On the date the Exchange Offer Documents are filed with the SEC,
the Company shall file with the SEC a Solicitation/Recommendation Statement
on Schedule 14D-9 promulgated under the Exchange Act (together with all
amendments and supplements thereto, the "Exchange Schedule 14D-9")
containing the recommendation of the Board of Directors of the Company
described in Section 2.02(a)(i), and shall take such steps as are
necessary to cause the Exchange Schedule 14D-9 to be disseminated to the
holders of shares of Company Common Stock as and to the extent required by
applicable federal securities laws. The Company, Parent and Merger Co.
shall correct promptly any information provided by any of them for use in
the Exchange Schedule 14D-9 which shall have become false or misleading,
and the Company shall take all reasonable steps necessary to cause the
Exchange Schedule 14D-9 as so corrected to be filed with the SEC and
disseminated to holders of shares of Company Common Stock, in each case as
and to the extent required by applicable federal securities laws. Parent
and its counsel shall be given an opportunity to review and comment on the
Exchange Schedule 14D-9 prior to its being filed with the SEC, and the
Company will provide Parent and its counsel in writing with any comments
that the Company receives from the SEC or its staff with respect to the
Exchange Schedule 14D-9 promptly after receipt of any such comments.
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(d) In connection with the Offer and the Exchange Offer, the Company
shall use its reasonable best efforts to cause its transfer agent to
furnish Merger Co. promptly with mailing labels containing the names and
addresses of all record holders of shares of Company Common Stock and with
security position listings of shares of Company Common Stock held in stock
depositories, each as of a recent date, together with all other available
listings and computer files containing names, addresses and security
position listings of record holders and beneficial owners of shares of
Company Common Stock. The Company shall furnish Merger Co. with such
additional information, including, without limitation, updated listings and
files of stockholders, mailing labels and security position listings and
such other assistance as Parent, Merger Co. or their Representatives may
reasonably request in communicating the Offer and the Exchange Offer to
record and beneficial holders of shares of Company Common Stock. Subject
to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents, the Exchange Offer Documents
and any other documents necessary to consummate the Offer, the Exchange
Offer or the Merger, Parent and Merger Co. shall hold in confidence the
information contained in such labels, listings and files, shall use such
information only in connection with the Offer, the Exchange Offer and the
Merger, and, if this Agreement shall be terminated in accordance with
Section 11.01, shall deliver to the Company all copies of, and any extracts
or summaries from, such information then in their possession or control.
(e) In connection with the Offer and the Exchange Offer, the Company
shall, and shall use its reasonable best efforts to cause its
Representatives to, cooperate with Parent and Merger Co. in connection with
the Offer and the Exchange Offer, including, without limitation, furnishing
Parent with such information (which will be treated and held in confidence
by Parent), documentation and assistance as Parent or its Representatives
may reasonably request in connection with the Offer and the Exchange Offer.
Section 2.03 Company Board Representation; Section 14(f).
(a) Subject to compliance with Delaware Law, the Company's Certificate of
Incorporation and other applicable law, promptly upon the payment by Merger
Co. for shares of Company Common Stock purchased pursuant to the Offer
representing, together with shares of Company Stock previously owned by
Parent, at least 50.1% of the shares of Company Common Stock outstanding,
and from time to time thereafter, the Company shall, upon request of
Parent, promptly use its reasonable best efforts to take all actions
necessary to cause a majority of the directors of the Company to consist of
Parent's designees, including by accepting the resignations of those
incumbent directors designated by the Company or increasing the size of the
Board of Directors and causing Parent's designees to be elected. The date
on which Parent's designees constitute at least a majority of the Company's
Board of Directors is herein referred to as the "Control Date."
(b) The Company's obligations to appoint Parent's designees to the
Board of Directors of the Company shall be subject to Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder, if applicable. The
Company shall promptly take all actions required pursuant to such Section
and Rule in order to fulfill its obligations under this Section, and shall
include in the Schedule 14D-9/A such information with respect to the
Company and its officers and directors as is required under such Section
and Rule to fulfill such obligations. Parent or Merger Co. shall supply to
the Company and be solely responsible for any information with respect to
either of them and their designees, officers, directors and affiliates
required by such Section 14(f) and Rule 14f-1.
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(c) Prior to the Effective Time, any amendment of this Agreement or
the Certificate of Incorporation or Bylaws of the Company, any termination
of this Agreement by the Company, any consent given by the Company
hereunder, any extension by the Company of the time for the performance of
any of the obligations or other acts of Parent or Merger Co., waiver of any
of the Company's rights hereunder or any other action by the Company in
connection with or relating to the transactions contemplated hereby shall
require the concurrence of a majority of the directors of the Company then
in office who (i) neither were designated by Parent nor are employees of
the Company or any of its Subsidiaries or, if there be just one such
director, the concurrence of such director or (ii) were members of the
Special Committee (the "Independent Directors"). If the number of
Independent Directors shall be reduced below two for any reason whatsoever,
the remaining Independent Director shall designate a person to fill such
vacancy who shall be deemed to be an Independent Director for purposes of
this Agreement or, if no Independent Directors then remain, the other
directors shall designate two persons to fill such vacancies who shall not
be officers or affiliates of the Company or any of its Subsidiaries, or
officers or affiliates of Parent or any of its Subsidiaries, and such
persons shall be deemed to be Independent Directors for purposes of this
Agreement. The Independent Directors shall have the authority to retain
such counsel and other advisors at the expense of the Company as are
reasonably appropriate to the exercise of their duties in connection with
this Agreement, subject to approval by the Company of the terms of such
retention, which approval shall not be unreasonably withheld. In addition,
the Independent Directors shall have the authority to institute any action,
on behalf of the Company, to enforce performance of this Agreement.
Section 2.04. Adjustment of the Exchange Offer Ratio.
In the event Parent changes or establishes a record date for changing the
number of shares of Parent Common Stock issued and outstanding during or
after the determination of the Exchange Offer Ratio pursuant to Section
2.01(c) and prior to the expiration date of the Exchange Offer, as a result
of a stock split, stock dividend, recapitalization, subdivision,
reclassification, combination or similar transaction with respect to the
outstanding shares of Parent Common Stock and the record date therefor shall
be prior to the expiration date of the Exchange Offer, the Exchange Offer
Ratio, and any other calculations based on or relating to shares of Parent
Common Stock shall be appropriately adjusted to reflect such stock split,
stock dividend, recapitalization, subdivision, reclassification, combination
or similar transaction.
ARTICLE 3
THE MERGER
Section 3.01. The Merger
(a) At the Effective Time (as defined below), the Company shall be
merged with (the "Merger") and into Merger Co. in accordance with Section
251 or Section 253 of Delaware Law, as applicable, whereupon the separate
existence of the Company shall cease, and Merger Co. shall be the surviving
corporation and wholly-owned subsidiary of Parent (the "Surviving
Corporation").
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(b) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger, the Company
and Merger Co. will file a certificate of merger with the Secretary of
State of the State of Delaware and make all other filings or recordings
required by Delaware Law in connection with the Merger. The Merger shall
become effective at such time as the certificate of merger is duly filed
with the Secretary of State of the State of Delaware or at such later date
or time as is specified in the certificate of merger (the "Effective
Time").
(c) From and after the Effective Time, the Surviving Corporation
shall possess all the property, rights, privileges, immunities, powers and
franchises and be subject to all of the debts, liabilities, obligations,
restrictions, disabilities and duties of the Company and Merger Co., all as
provided under Delaware Law.
Section 3.02. Conversion of Shares
At the Effective Time:
(a) each share of Company Common Stock held by the Company or any
Subsidiary as treasury stock or owned by Parent or any subsidiary of Parent
immediately prior to the Effective Time shall be canceled, and no payment
shall be made with respect thereto;
(b) each share of common stock, par value $0.05 per share, of Merger
Co. outstanding immediately prior to the Effective Time shall be converted
into and become one share of common stock, par value $0.05 per share, of
the Surviving Corporation with the same rights, powers and privileges as
the shares so converted; and
(c) each share of Company Common Stock outstanding immediately prior
to the Effective Time shall, except as otherwise provided in Section
3.02(a), be converted into the right to receive from Parent a number of
shares (the "Merger Consideration") of Parent Common Stock determined as
set forth below (the "Exchange Ratio"):
(i) If the Average Parent Common Stock Price is equal to or
greater than $15.40, the Exchange Ratio shall be 1.948
shares of Parent Common Stock;
(ii) If the Average Parent Common Stock Price is less than $15.40
and greater than $12.60, the Exchange Ratio shall be
determined by dividing $30.00 by the Average Parent Common
Stock Price; and
(iii)If the Average Parent Common Stock Price is equal to or
less than $12.60 the Exchange Ratio shall be 2.381 shares of
Parent Common Stock.
For purposes of this Section 3.02, "Average Parent Common Stock Price"
means the average of the closing price per share of Parent Common Stock on
the New York Stock Exchange, Inc. (the "NYSE") at the end of the regular
session as reported on the Consolidated Tape, Network A for the fifteen
consecutive trading days ending on the fifth trading day immediately
preceding the Effective Time.
Section 3.03. Surrender and Payment
(a) Prior to the Effective Time, Parent shall appoint an agent
reasonably acceptable to the Company (the "Exchange Agent") for the purpose
of exchanging certificates representing shares of Company Common Stock for
the Merger Consideration. Parent shall cause Merger Co. to make available
to the Exchange Agent, as soon as reasonably practicable as of or after the
Effective Time, the Merger Consideration to be delivered in respect of the
shares of Company Common Stock. Promptly after the Effective Time, the
Surviving Corporation will send, or will cause the Exchange Agent to send,
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to each holder of shares of Company Common Stock at the Effective Time a
letter of transmittal for use in such exchange (which shall specify that the
delivery shall be effected, and risk of loss and title shall pass, only upon
proper delivery of the certificates representing shares of Company Common
Stock to the Exchange Agent).
(f) Each holder of shares of Company Common Stock that have been
converted into a right to receive the Merger Consideration, upon surrender
to the Exchange Agent of a certificate or certificates representing such
shares of Company Common Stock, together with a duly executed and properly
completed letter of transmittal covering such shares of Company Common
Stock, will be entitled to receive the Merger Consideration in exchange for
such shares of Company Common Stock. Until so surrendered, each such
certificate shall, after the Effective Time, represent for all purposes,
only the right to receive such Merger Consideration.
(f) If any portion of the Merger Consideration is to be delivered to
a Person other than the registered holder of the shares of Company Common
Stock represented by the certificate or certificates surrendered in
exchange therefor, it shall be a condition to such delivery that the
certificate or certificates so surrendered shall be properly endorsed or
otherwise be in proper form for transfer and that the Person requesting
such delivery shall pay to the Exchange Agent any transfer or other taxes
required as a result of such delivery to a Person other than the registered
holder of such shares of Company Common Stock or establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
payable. For purposes of this Agreement, "Person" means an individual, a
corporation, a limited liability company, a partnership, an association, a
trust or any other entity or organization, including a government or
political subdivision or any agency or instrumentality thereof.
(f) After the Effective Time, there shall be no further registration
of transfers of shares of Company Common Stock. If, after the Effective
Time, certificates representing shares of Company Common Stock are
presented to the Surviving Corporation, they shall be canceled and
exchanged for the consideration provided for, and in accordance with the
procedures set forth, in this Article 3.
(f) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 3.03(a) that remains unclaimed by the
holders of shares of Company Common Stock six months after the Effective
Time shall be returned to the Surviving Corporation, upon demand, and any
such holder who has not exchanged his shares of Company Common Stock for
the Merger Consideration in accordance with this Section prior to that time
shall thereafter look only to the Surviving Corporation for delivery of the
Merger Consideration in respect of his shares of Company Common Stock.
Notwithstanding the foregoing, the Surviving Corporation shall not be
liable to any holder of shares of Company Common Stock for any amount paid
to a public official pursuant to applicable abandoned property laws.
(f) If any certificate representing shares of Company Common Stock
shall have been lost, stolen or destroyed, upon the making of an affidavit
of that fact by the person claiming such certificate to be lost, stolen or
destroyed and, if required by the Surviving Corporation, the posting by
such person of a bond in such reasonable amount as the Surviving
Corporation may direct as indemnity against any claim that may be made
against it with respect to such certificate, the Exchange Agent (or the
Surviving Corporation) shall exchange the shares of Company Common Stock
represented by such lost, stolen or destroyed certificate for the Merger
Consideration.
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Section 3.04. Stock Options
(a) At or immediately prior to the Effective Time, each employee
stock option or director stock option to purchase Shares outstanding under
any Company stock option plans, whether or not vested or exercisable (each,
a "Company Option") shall, by virtue of the Merger and without any further
action on the part of any holder thereof, be assumed by Parent and deemed
to constitute an option (each, a "Parent Option") to acquire, on the same
terms and conditions as were applicable under such Company Option (subject
to Section 3.04(b)), the same number of shares of Parent Common Stock as
the holder of such Company Option would have been entitled to receive
pursuant to Section 3.02(c) of
this Agreement had such holder exercised such Company Option in full
immediately prior to the Effective Time (rounded to the nearest whole
number), at a price per share (rounded down to the nearest whole cent)
equal to (x) the aggregate exercise price for the share of Company Common
Stock otherwise purchasable pursuant to such Company Option divided by (y)
the number of whole shares of Parent Common Stock purchasable pursuant to
the Parent Option in accordance with the foregoing. The other terms of
each such Company Option, and the plans under which they were issued, shall
continue to apply in accordance with their terms.
(b) Prior to the Effective Time, the Company shall use its reasonable
best efforts to (i) obtain any consents from holders of Company Options and
(ii) make any amendments to the terms of such Company Options or Company
stock option plans that, in the case of either clauses (i) or (ii), are
necessary or appropriate to give effect to the transactions contemplated by
Section 3.04(a); provided, however, that lack of consent of any holder of a
Company Option shall in no way affect the obligations of the parties to
consummate the Merger.
(c) At or prior to the Effective Time, Parent shall take all
corporate action necessary to reserve for issuance a sufficient number of
shares of Parent Common Stock for delivery upon exercise of the Parent
Options. At or prior to the Effective Time, Parent shall file a
registration statement on Form S-8, with respect to the shares of Parent
Common Stock subject to such Parent Options and shall use commercially
reasonable efforts to maintain the effectiveness of such registration
statement (and maintain the current status of the prospectus or
prospectuses contained therein) for so long as such Parent Options
remaining outstanding. With respect to those individuals who subsequent to
the Merger will be subject to the reporting requirements under Section
16(a) of the Exchange Act, Parent shall administer the Company stock option
plans in a manner consistent with the exemptions provided by Rule 16(b)(3)
promulgated under the Exchange Act.
Section 3.05. Withholding Rights
Each of the Surviving Corporation and Parent shall be entitled to
deduct and withhold from the consideration otherwise deliverable to any
Person pursuant to this Article 3 such amount as it is required to deduct
and withhold with respect to the making of such delivery under any
provision of federal, state, local or foreign tax law. If the Surviving
Corporation or Parent, as the case may be, so withholds amounts, such
amounts shall be treated for all purposes of this Agreement as having been
paid to the holder of the shares of Company Common Stock in respect of
which the Surviving Corporation or Parent made such deduction and
withholding.
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Section 3.06. Terminated Tender Offer
In the event the Offer is terminated pursuant to Section 2.01(d)
("Terminated Tender Offer") the parties hereto shall complete the Merger
consistent with the terms of this Agreement as amended by the terms and
provisions contained in Annex III, and this Agreement shall be amended to
incorporate the terms contained therein.
Section 3.07. Adjustment of Exchange Ratio.
In the event Parent changes or establishes a record date for
changing the number of shares of Parent Common Stock issued and outstanding
during or after the determination of the Exchange Ratio pursuant to Section
3.02(c) and prior to the Effective Time as a result of a stock split, stock
dividend, recapitalization, subdivision, reclassification, combination or
similar transaction with respect to the outstanding Parent Common Stock and
the record date therefor shall be prior to the Effective Time, the Exchange
Ratio, and any other calculation based on or relating to shares of Parent
Common Stock shall be appropriately adjusted to reflect such stock split,
stock dividend, recapitalization, subdivision, reclassification,
combination or similar transaction.
ARTICLE 4
THE SURVIVING CORPORATION
Section 4.01. Certificate of Incorporation
The certificate of incorporation of Merger Co. in effect at the
Effective Time shall be the certificate of incorporation of the Surviving
Corporation until amended in accordance with applicable law.
Section 4.02. Bylaws
The bylaws of Merger Co. in effect at the Effective Time shall be
the bylaws of the Surviving Corporation until amended in accordance with
applicable law.
Section 4.03. Directors and Officers
From and after the Effective Time, until successors are duly
elected or appointed and qualified in accordance with applicable law, (a)
the directors of Merger Co. at the Effective Time shall be the directors of
the Surviving Corporation, and (b) the officers of the Company at the
Effective Time shall be the officers of the Surviving Corporation.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent as of the date hereof
and as of the Effective Time that:
Section 5.01. Corporate Existence and Power
The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
The Company is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction where the character of the
property owned or leased by it or the nature of its activities makes such
qualification necessary, except for those jurisdictions where the failure
to be so qualified would not, individually or in the aggregate, reasonably
be expected to have a material adverse effect on the condition (financial
or otherwise), business, assets, liabilities or results of operations of
the Company and the Subsidiaries taken as a whole ("Material Adverse
Effect"). The Company has heretofore delivered or made available to Parent
true and complete copies of the Company's certificate of incorporation and
bylaws as currently in effect.
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Section 5.02. Corporate Authorization
The execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the transactions
contemplated hereby are within the Company's corporate powers and, except
for the approval by the Company's stockholders by a majority vote in
connection with the consummation of the Merger (which vote will not be
required if Merger Co. owns at least 90% of the issued and outstanding
shares of Company Common Stock), have been duly authorized by all necessary
corporate and stockholder action under the Company's constituent documents
and Delaware Law. This Agreement constitutes a valid and binding agreement
of the Company.
Section 5.03. Governmental Authorization
The execution, delivery and performance by the Company of this
Agreement and the consummation of the Merger by the Company require no
action by or in respect of, or filing with, any governmental body, agency,
official or authority other than (a) the filing of a certificate of merger
in accordance with Delaware Law; (b) compliance with any applicable
requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976
(the "HSR Act"); (c) compliance with any applicable non-United States laws
intended to prohibit, restrict or regulate actions having the purpose or
effect of monopolization or restraint of trade; and (d) compliance with any
applicable requirements of the Exchange Act.
Section 5.04. Non-Contravention
Except as set forth in Schedule 5.04, the execution, delivery and
performance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby do not and will not (a)
contravene or conflict with the certificate of incorporation or bylaws of
the Company, (b) assuming compliance with the matters referred to in
Section 5.03, contravene or conflict with or constitute a violation of any
provision of any law, regulation, judgment, writ, injunction, order or
decree of any court or governmental authority binding upon or applicable to
the Company or any Subsidiary or any of their properties or assets, (c)
constitute a default under or give rise to a right of termination,
cancellation or acceleration of any right or obligation of the Company or
any Subsidiary or to a loss of any benefit to which the Company or any
Subsidiary is entitled under any provision of any material agreement,
contract or other instrument binding upon the Company or any Subsidiary or
any license, franchise, permit or other similar authorization held by the
Company or any Subsidiary, or (d) result in the creation or imposition of
any Lien on any asset of the Company or any Subsidiary, except, in the case
of clauses (b), (c) and (d) of this Section 5.04, for any such violation,
failure to obtain any such consent or other action, default, right, loss or
Lien that would not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect. For purposes of this Agreement,
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset. The Rawhide Merger Agreement has been terminated in accordance with
its terms (subject to payment of the amount described in the following
clause), and the Company is obligated to pay, on Tuesday, January 2, 2001,
$66,500,000 to Rawhide Holdings Corporation which represents all amounts
required to be paid by the Company under the Rawhide Merger Agreement and
the Company has no other financial liabilities thereunder. Immediately
prior to the execution hereof, Rawhide Holdings Corporation has agreed to
waive the three day period to submit a new offer provided for in Section
10.01(e) of the Rawhide Merger Agreement.
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Section 5.05. Capitalization
The authorized capital stock of the Company consists of 200,000,000
shares of Company Common Stock and 25,000,000 shares of preferred stock,
par value $1.00 per share (the "Preferred Stock"). As of the close of
business on December 28, 2000, there were issued and outstanding
105,644,598 shares of Common Stock and no shares of Preferred Stock. As of
the close of business on December 28, 2000, there were outstanding stock
options to purchase an aggregate of 4,891,500 shares of Company Common
Stock (of which options to purchase an aggregate of 2,697,500 shares of
Company Common Stock were exercisable). All outstanding shares of capital
stock of the Company have been duly authorized and validly issued and are
fully paid and nonassessable. Except as set forth in Schedule 5.05 and this
Section and except for changes since December 28, 2000 resulting from the
exercise of employee stock options outstanding on such date, there are
outstanding (a) no shares of capital stock or other voting securities of
the Company, (b) no securities of the Company convertible into or
exchangeable for shares of capital stock or voting securities of the
Company, and (c) no options or other rights to acquire from the Company or
any Subsidiary, and no obligation of the Company or any Subsidiary to
issue, any capital stock, voting securities or securities convertible into
or exchangeable for capital stock or voting securities of the Company (the
items in clauses (a), (b) and (c) of this Section 5.05 being referred to
collectively as the "Company Securities"). There are no outstanding
obligations of the Company or any Subsidiary to repurchase, redeem or
otherwise acquire any Company Securities.
Section 5.06. Subsidiaries
(a) Each Subsidiary is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted and is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except for those
jurisdictions where failure to be so qualified would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
For purposes of this Agreement, "Subsidiary" means any corporation or other
entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are directly or indirectly owned by the
Company and/or one or more Subsidiaries. All Subsidiaries and their
respective jurisdictions of incorporation are identified in Schedule 5.06.
(b) Except as set forth in Schedule 5.06, all of the outstanding
capital stock of, or other ownership interests in, each Subsidiary, is
owned by the Company, directly or indirectly, free and clear of any Lien
and free of any other limitation or restriction (including any restriction
on the right to vote, sell or otherwise dispose of such capital stock or
other ownership interests). There are no outstanding (i) securities of the
Company or any Subsidiary convertible into or exchangeable for shares of
capital stock or other voting securities or ownership interests in any
Subsidiary, and (ii) options or other rights to acquire from the Company or
any Subsidiary, and no other obligation of the Company or any Subsidiary to
issue, any capital stock, voting securities or other ownership interests
in, or any securities convertible into or exchangeable for any capital
stock, voting securities or ownership interests in, any Subsidiary (the
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items in clauses (i) and (ii) of this Section 5.06(b) being referred to
collectively as the "Subsidiary Securities"). There are no outstanding
obligations of the Company or any Subsidiary to repurchase, redeem or
otherwise acquire any outstanding Subsidiary Securities.
Section 5.07. SEC Filings
(a) The Company has delivered or made available to Parent (i) the
Company's annual report on Form 10-K for the year ended December 25, 1999
(the "Company 10-K"), (ii) its quarterly report on Form 10-Q for its fiscal
quarter ended September 23, 2000, its quarterly report on Form 10-Q for its
fiscal quarter ended June 24, 2000 (as amended) and its quarterly report on
Form 10-Q for its fiscal quarter ended March 25, 2000 (together, the
"Company 10-Qs"), (iii) its proxy or information statements relating to
meetings of, or actions taken without a meeting by, the stockholders of the
Company held since January 1, 1998, and (iv) all of its other reports,
statements, schedules and registration statements filed with the SEC since
January 1, 1998.
(b) As of its filing date, each such report or statement filed
pursuant to the Exchange Act did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading.
(c) Each such registration statement, as amended or supplemented, if
applicable, filed pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), as of the date such statement or amendment became
effective did not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading.
Section 5.08. Financial Statements
The audited consolidated financial statements of the Company
included in the Company 10-K and the unaudited consolidated financial
statements of the Company included in the Company 10-Qs each fairly
present, in all material respects, in conformity with generally accepted
accounting principles applied on a consistent basis (except as may be
indicated in the notes thereto), the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates thereof and their
consolidated results of operations and changes in financial position for
the periods then ended (subject to normal year-end adjustments in the case
of any unaudited interim financial statements). For purposes of this
Agreement, "Balance Sheet" means the consolidated balance sheet of the
Company as of December 25, 1999 set forth in the Company 10-K and "Balance
Sheet Date" means December 25, 1999.
Section 5.09. Disclosure Documents
(a) Each document required to be filed by the Company with the SEC
in connection with the transactions contemplated by this Agreement (the
"Company Disclosure Documents"), including, without limitation, (i) the
Exchange Schedule 14D-9 (including information required by Rule 14f-1 under
the Exchange Act), the Schedule 14D-9/A (including information required by
Rule 14f-1 under the Exchange Act) and (iii) the proxy or information
statement of the Company containing information required by Regulation 14A
under the Exchange Act (the "Company Proxy Statement"), if any, to be filed
with the SEC in connection with the Offer or the Merger and any amendments
or supplements thereto will, when filed, comply as to form in all material
respects with the applicable requirements of the Exchange Act except that
no representation or warranty is made hereby with respect to any
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information furnished to the Company by Parent in writing specifically for
inclusion in the Company Disclosure Documents.
(b) At the time the Schedule 14D-9/A, the Exchange Schedule 14D-9 and
the Company Proxy Statement or any amendment or supplement thereto is first
mailed to stockholders of the Company, and, with respect to the Company
Proxy Statement only, at the time such stockholders vote on adoption of
this Agreement and at the Effective Time, the Schedule 14D-9/A, the
Exchange Schedule 14D-9 and the Company Proxy Statement, as supplemented or
amended, if applicable, will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading. At the time of the filing of any Company
Disclosure Document other than the Company Proxy Statement and at the time
of any distribution thereof, such Company Disclosure Document will not
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements made therein, in the light
of the circumstances under which they were made, not misleading. The
representations and warranties contained in this Section 5.09(b) will not
apply to statements or omissions included in the Company Disclosure
Documents based upon information furnished to the Company in writing by
Parent specifically for use therein.
(c) Neither the information with respect to the Company or any
Subsidiary that the Company furnishes in writing to Parent specifically for
use in the Parent Disclosure Documents (as defined in Section 6.09(a)) nor
the information incorporated by reference from documents filed by the
Company with the SEC will, at the time of the provision thereof to Parent
or at the time of the filing thereof by the Company with the SEC, as the
case may be, at the time of the meeting of the Company's stockholders, if
any, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading.
Section 5.10. Absence of Certain Changes
Except as set forth in Schedule 5.10 hereto, the Company 10-K or
the Company 10-Qs, since the Balance Sheet Date, the Company and the
Subsidiaries have conducted their business in the ordinary course
consistent with past practice and there has not been:
(a) any event, occurrence or development of a state of
circumstances or facts which has had or reasonably could be expected
to have a Material Adverse Effect;
(b) other than regular quarterly dividends in an amount not in
excess of $.025 per share per quarter, any declaration, setting aside
or payment of any dividend or other distribution with respect to any
shares of capital stock of the Company, or any repurchase, redemption
or other acquisition by the Company or any Subsidiary of any
outstanding shares of capital stock or other securities of, or other
ownership interests in, the Company or any Subsidiary;
(c) any amendment of any material term of any outstanding
security of the Company or any Subsidiary that could reasonably be
expected to be materially adverse to the Company;
(d) any incurrence, assumption or guarantee by the Company or
any Subsidiary of any indebtedness for borrowed money other than in
the ordinary course of business and in amounts and on terms consistent
with past practices;
(e) any creation or assumption by the Company or any Subsidiary
of any material Lien on any material asset other than in the ordinary
course of business consistent with past practices;
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(f) any making of any material loan, advance or capital
contributions to or investment in any Person other than loans,
advances or capital contributions to or investments in wholly-owned
Subsidiaries made in the ordinary course of business consistent with
past practices;
(g) any damage, destruction or other casualty loss (whether or
not covered by insurance) affecting the business or assets of the
Company or any Subsidiary which, individually or in the aggregate, has
had or would reasonably be expected to have a Material Adverse Effect;
(h) any transaction or commitment made, or any contract or
agreement entered into, by the Company or any Subsidiary relating to
its assets or business (including the acquisition or disposition of
any assets) or any relinquishment by the Company or any Subsidiary of
any contract or other right, in either case, that has had or would
reasonably be expected to have a Material Adverse Affect, other than
transactions and commitments in the ordinary course of business
consistent with past practice and those contemplated by this
Agreement;
(i) any change in any method of accounting or accounting
practice by the Company or any Subsidiary, except for any such change
required by reason of a concurrent change in generally accepted
accounting principles;
(j) any (i) grant of any severance or termination pay to any
director or executive officer of the Company or any Subsidiary, (ii)
entering into of any employment, deferred compensation or other
similar agreement (or any amendment to any such existing
agreement) with any director or executive officer of the Company
or any Subsidiary, (iii) material increase in benefits payable
under any existing severance or termination pay policies or
employment agreements or (iv) increase in compensation, bonus or
other benefits payable to directors, officers or employees of
the Company or any Subsidiary, other than in each case in the
ordinary course of business consistent with past practice;
(k) any labor dispute, other than routine individual
grievances, or any activity or proceeding by a labor union or
representative thereof to organize any employees of the Company or
any Subsidiary, which employees were not subject to a collective
bargaining agreement at the Balance Sheet Date, or any lockouts,
strikes, slowdowns, work stoppages or threats thereof by or with
respect to such employees which have had or could reasonably be
expected to have a Material Adverse Effect; or
(l) any cancellation of any licenses, sublicenses, franchises,
permits or agreements to which the Company or any Subsidiary is a
party, or any notification to the Company or any Subsidiary that any
party to any such arrangements intends to cancel or not renew such
arrangements beyond its expiration date as in effect on the date
hereof, which cancellation or notification, individually or in the
aggregate, has had or reasonably could be expected to have a Material
Adverse Effect.
Section 5.11. No Undisclosed Material Liabilities
Except as set forth in Schedule 5.11, the Company 10-K or the
Company 10-Qs, there are no liabilities of the Company or any Subsidiary of
any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, and there is no existing condition, situation or
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set of circumstances which could reasonably be expected to result in such a
liability, other than:
(a) liabilities disclosed or provided for in the Balance Sheet;
(b) liabilities incurred in the ordinary course of business
consistent with past practice since the Balance Sheet Date or as
otherwise specifically contemplated by this Agreement;
(c) liabilities under this Agreement; and
(d) other liabilities which individually or in the aggregate do
not and could not reasonably be expected to have a Material Adverse
Effect.
Section 5.12. Litigation
Except as set forth in Schedule 5.12, the Company 10-K or the
Company 10-Qs, there is no action, suit, investigation or proceeding (or
any basis therefor) pending against, or to the knowledge of the Company
threatened against or affecting, the Company or any Subsidiary or any of
their respective properties before any court or arbitrator or any
governmental body, agency or official which could reasonably be expected to
have a Material Adverse Effect, or which as of the date hereof in any
manner challenges or seeks to prevent enjoin, alter or materially delay the
Merger or any of the other transactions contemplated hereby.
Section 5.13. Taxes
(a) Except as set forth in Schedule 5.13 or as would not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect:
(i) all Tax returns, statements, reports and forms (including
estimated Tax returns and reports and information returns
and reports) required to be filed with any taxing authority
with respect to any Tax period (or portion thereof) ending
on or before the Effective Time (a "Pre-Closing Tax Period")
by or on behalf of the Company or any Subsidiary of the
Company (collectively, the "Returns"), were filed when due
(including any applicable extension periods) in accordance
with all applicable laws; as of the time of filing, the
Returns were true and complete in all material respects;
(ii) the Company and its Subsidiaries have timely paid, or
withheld and remitted to the appropriate Taxing authority,
all Taxes shown as due and payable on the Returns that have
or should have been filed;
(iii)the charges, accruals and reserves for Taxes with
respect to the Company and any Subsidiary for any Pre-
Closing Tax Period or Straddle Period (including any Pre-
Closing Tax Period or Straddle Period for which no Return
has yet been filed) reflected on the Balance Sheet (in
addition to any provision for deferred income Taxes) are
adequate to cover such Taxes as of the Balance Sheet Date. "
"Straddle Period" is any tax period beginning before the
Effective Time but ending after the Effective Time.
(iv) there is no claim (including under any indemnification or
Tax-sharing agreement), audit, action, suit, proceeding, or
investigation now pending or threatened in writing against
or in respect of any Tax or "Tax asset" of the Company or
any Subsidiary. For purposes of this Section 5.13 and
Section 6.13, the term "Tax Asset" shall include any net
operating loss, net capital loss, investment Tax credit,
foreign Tax credit, charitable deduction or any other credit
or Tax attribute which could be carried forward or back to
reduce Taxes;
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(v) there are no Liens for Taxes upon the assets of the Company
or its Subsidiaries except for Liens for current Taxes not
yet due; and
(vi) neither the Company nor any Subsidiary is currently under
any obligation to pay any amounts of the type described in
clause (ii) or (iii) of the definition of "Tax", regardless
of whether such Tax is imposed on the Company or any
Subsidiary.
(b) For purposes of this Section 5.13, "tax" or "Tax" means (i) any
tax, governmental fee or other like assessment or charge of any kind
whatsoever (including, but not limited to, withholding on amounts paid to
or by any Person), together with any interest, penalty, addition to tax or
additional amount imposed by any governmental authority responsible for the
imposition of any such tax (domestic or foreign), (ii) in the case of the
Company or any Subsidiary, liability for the payment of any amount of the
type described in clause (i) as a result of being or having been before the
Effective Time a member of an affiliated, consolidated, combined or unitary
group (other than such a group of which the Company or any of its
Subsidiaries is the common parent), or a party to any agreement or
arrangement, as a result of which liability of the Company or any
Subsidiary to a taxing authority is determined or taken into account with
reference to the liability of any other Person, and (iii) liability of the
Company or any Subsidiary for the payment of any amount as a result of
being party to any tax sharing agreement or with respect to the payment of
any amount of the type described in (i) or (ii) as a result of any existing
express obligation (including, but not limited to, an indemnification
obligation).
Section 5.14. ERISA
(a) Schedule 5.14 contains a correct and complete list identifying
each material "employee benefit plan", as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974 ("ERISA"), each employment,
severance or similar contract, plan, arrangement or policy and each other
plan or arrangement (written or oral) providing for compensation, bonuses,
profit-sharing, stock option or other stock related rights or other forms
of incentive or deferred compensation, vacation benefits, insurance
(including any self-insured arrangements), health or medical benefits,
employee assistance program, disability or sick leave benefits, workers'
compensation, supplemental unemployment benefits, severance benefits and
post-employment or retirement benefits (including compensation, pension,
health, medical or life insurance benefits) which is maintained,
administered or contributed to by the Company or any Subsidiary and covers
any employee or former employee of the Company or any Subsidiary, or with
respect to which the Company or any Subsidiary has any liability with
respect to any employee or former employee of the Company or any Subsidiary
(other than any such plan, contract, policy or arrangement that is an
International Plan, as defined below). Copies of such plans (and, if
applicable, related trust or funding agreements or insurance policies) and
all amendments thereto and written interpretations thereof have been made
available to Parent together with the most recent annual report (Form 5500
including, if applicable, Schedule B thereto) and tax return (Form 990)
prepared in connection with any such plan or trust. Such plans are referred
to collectively herein as the "Employee Plans". For purposes of this
Section 5.14, "ERISA Affiliate" of any Person means any other Person which,
together with such Person, would be treated as a single employer under
Section 414 of the Internal Revenue Code of 1986, as amended (the "Code").
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(b) Schedule 5.14 separately identifies each material Employee Plan
that is subject to Title IV of ERISA (other than a Multiemployer Plan, as
defined below) (a "Title IV Plan"). Schedule 5.14 separately identifies
each Employee Plan which is a multiemployer plan, as defined in Section
3(37) of ERISA (a "Multiemployer Plan"). Except as would not reasonably be
expected to have a Material Adverse Affect, if a "complete withdrawal" by
Seller and all of its ERISA Affiliates were to occur as of the Effective
Time with respect to all Multiemployer Plans, to the knowledge of the
Company, none of the Company, any Subsidiary or any of their ERISA
Affiliates would incur any withdrawal liability under Title IV of ERISA.
Neither the Company nor any ERISA Affiliate of the Company has incurred any
liability under Title IV of ERISA (other than for PBGC Premium not yet
due).
(c) A current favorable Internal Revenue Service determination letter
is in effect with respect to each Employee Plan which is intended to be
qualified under Section 401(a) of the Code (or the relevant remedial
amendment period has not expired with respect to such Employee Plan), and
the Company knows of no circumstance giving rise to a material likelihood
that such letter could be revoked by the Internal Revenue Service. The
Company has made available to Parent copies of the most recent Internal
Revenue Service determination letters with respect to each such Plan. Each
Employee Plan has been maintained in compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and
regulations, including but not limited to ERISA and the Code, which are
applicable to such Employee Plan, other than any non-compliance which would
not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. No events have occurred with respect to any
Employee Plan that would reasonably be expected to result in payment or
assessment of any material excise taxes under Sections 4972, 4975, 4976,
4977, 4979, 4980B, 4980D, 4980E or 5000 of the Code, other than any excise
taxes which would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
(d) Except as set forth in Schedule 5.14, the consummation of the
transactions contemplated by this Agreement will not (either alone or
together with any termination of employment) entitle any employee or
independent contractor of the Company or any Subsidiary to severance pay or
accelerate the time of payment or vesting or trigger any payment of funding
(through a grantor trust or otherwise) of material compensation or benefits
under, materially increase the amount payable or trigger any other material
obligation pursuant to, any Employee Plan.
(e) Neither the Company nor any Subsidiary has any liability in
respect of post-retirement health, medical or life insurance benefits for
retired, former or current employees of the Company or its Subsidiaries
except for coverage under Section 4980B of the Code or coverage the full
cost of which is paid for by the retired, former or current employee.
(f) There has been no amendment to, written interpretation or
announcement (whether or not written) by the Company or any of its
Affiliates relating to, or change in employee participation or coverage
under, an Employee Plan which would increase the expense of maintaining
such Employee Plan above the level of the expense incurred in respect
thereof for the fiscal year ended December 25, 1999, except for any such
increase which would not reasonably be expected to have a Material Adverse
Effect.
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(g) Except as previously disclosed to Parent, neither the Company nor
any Subsidiary is a party to or subject to, or is currently negotiating in
connection with entering into, any collective bargaining agreement or other
contract or understanding with a labor union or labor organization.
(h) Except for any failures which would not be reasonably expected to
have a Material Adverse Effect, all contributions and payments accrued
under each Employee Plan, determined in accordance with prior funding and
accrual practices, as adjusted to include proportional accruals for the
period ending as of the date hereof, have been discharged and paid on or
prior to the date hereof except to the extent reflected as a liability on
the Balance Sheet.
(i) Schedule 5.14(i) identifies each International Plan (as defined
below) covering 100 employees or more. The Company has furnished to Parent
copies of each International Plan. Each International Plan has been
maintained in compliance with its terms and with the requirements
prescribed by any and all applicable statutes, orders, rules and
regulations (including any special provisions relating to qualified plans
where such Plan was intended to so qualify) and has been maintained in good
standing with applicable regulatory authorities, other than any non-
compliance which would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect. There has been no amendment
to, written interpretation of or announcement (whether or not written) by
the Company or any Subsidiary relating to, or change in employee
participation or coverage under, any International Plan that would increase
the expense of maintaining such International Plan above the level of
expense incurred in respect thereof for the most recent fiscal year ended
prior to the date hereof, except for any such increase which would not
reasonably be expected to have a Material Adverse Effect. For purposes of
this Section 5.14, "International Plan" means any employment, severance or
similar contract or arrangement (whether or not written) or any plan,
policy, fund, program or arrangement or contract providing for severance,
insurance coverage (including any self-insured arrangements), workers'
compensation, disability benefits, supplemental unemployment benefits,
vacation benefits, pension or retirement benefits or for deferred
compensation, profit-sharing, bonuses, stock options, stock appreciation
rights or other forms of incentive compensation or post-retirement
insurance, compensation or benefits that (i) is intended primarily for the
benefit of employees or beneficiaries based outside the U.S., (ii) is
entered into, maintained, administered or contributed to by the Company or
any Subsidiary and (iii) covers any employee or former employee of the
Company or any Subsidiary.
Section 5.15. Labor Matters
Except as set forth in Schedule 5.15 and except for such matters as
would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect, there are no (i) labor strikes, disputes,
slowdowns, representation or certification campaigns or work stoppages or
other concerted activities with respect to employees of any of the Company
or any Subsidiary pending, or to the knowledge of the Company, threatened
against or affecting the Company or any Subsidiary, (ii) grievance or
arbitration proceedings, decisions, side letters, letter agreements,
letters of understanding or settlement agreements arising out of collective
bargaining agreements to which the Company or any Subsidiary is a party,
(iii) unfair labor practice complaints pending or, to the knowledge of the
Company, threatened against the Company or any Subsidiary, or (iv)
activities or proceedings of any labor union or employee association to
organize any such employees.
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(b) Except to the extent set forth in Schedule 5.15 and except for
such matters as would not, individually or in the aggregate, have a
Material Adverse Effect, the Company and its Subsidiaries are in compliance
with all applicable laws respecting employment and employment practices,
terms and conditions of employment and wages and hours.
(c) Except to the extent set forth in Schedule 5.15 and except for
such matters as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, there are no pending
administrative matters with any federal, provincial, state or local
agencies regarding (i) violations or alleged violations of any federal,
provincial, state or local wage and hour law or any federal, provincial,
state or local law with respect to discrimination on the basis of race,
color, creed, national origin, religion or any other basis under such
federal, provincial, state or local law, (ii) any claimed violation of
Title VII of the 1964 Civil Rights Act, as amended, (iii) any allegation or
claim arising out of Executive Order 11246 or any other applicable order
relating to governmental contractors or state contractors, or (iv) any
violation or alleged violation of the Age Discrimination and Employment
Act, as amended, or any other federal, provincial, state or local statute
or ordinance, or any other applicable laws with respect to wages, hours,
employment practices and terms and conditions of employment.
Section 5.16. Compliance with Laws
Except to the extent set forth in Schedules 5.11, 5.12 and 5.19,
neither the Company nor any Subsidiary is in violation of, or has since
January 1, 1999 violated, and to the knowledge of the Company none is under
investigation with respect to or has been threatened to be charged with or
given notice of any violation of, any applicable law, rule, regulation,
judgment, injunction, order or decree, except for violations that have not
had and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
Section 5.17. Licenses and Permits
Except as set forth on Schedule 5.17 and except where the failure
of the following to be true would not reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect, (i) the
Company or its Subsidiaries own, hold or possess adequate right to use all
material licenses, franchises, permits, certificates, approvals or other
similar authorizations affecting, or relating in any way to, the assets or
business of the Company and its Subsidiaries (the "Permits") required in
connection with the operation of the business of the Company and its
Subsidiaries, (ii) the Permits are valid and in full force and effect,
(iii) neither the Company nor any Subsidiary is in default under, and no
condition exists that with notice or lapse of time or both would constitute
a default under, the Permits and (iv) none of the Permits will be
terminated or impaired or become terminable, in whole or in part, as a
result of the transactions contemplated hereby.
Section 5.18. Intellectual Property
Except as set forth in Schedule 5.18, the Company and the
Subsidiaries own or possess adequate licenses or other rights to use all
Intellectual Property Rights necessary to conduct the business now operated
by them, except where the failure to own or possess such licenses or rights
has not had and would not be reasonably likely to have a Material Adverse
Effect and, to the knowledge of the Company, the Intellectual Property
Rights of the Company and the Subsidiaries do not conflict with or infringe
upon any Intellectual Property Rights of others to the extent that, if
sustained, such conflict or infringement has had and would be reasonably
likely to have a Material Adverse Effect. For purposes of this Agreement,
an "Intellectual Property Right' means any trademark, service mark, trade
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name, mask work, copyright, patent, software license, other data base,
invention, trade secret, know-how (including any registrations or
applications for registration of any of the foregoing) or any other similar
type of proprietary intellectual property right.
Section 5.19. Environmental Matters
(a) Except for such matters, individually or in the aggregate, as
would not be reasonably expected to have a Material Adverse Effect or as
set forth in Schedule 5.19, the Company 10-K or the Company 10-Qs:
(i) no notice, notification, demand, request for information,
citation, summons or order has been received, no complaint
has been filed, no penalty has been assessed, and no
investigation, action, claim, suit, proceeding or review (or
any basis therefor) is pending or, to the knowledge of the
Company or any Subsidiary, is threatened by any governmental
entity or other Person with respect to any matters relating
to the Company or any Subsidiary and relating to or arising
out of any Environmental Law;
(ii) there are no liabilities of or relating to the Company or
any Subsidiary of any kind whatsoever whether accrued,
contingent, absolute, determined, determinable or otherwise,
arising under or relating to any Environmental Law, and
there are no facts, conditions, situations or set of
circumstances that could reasonably be expected to result in
or be the basis for any such liability;
(iii)the Company and its Subsidiaries are and have been in
compliance with all Environmental Laws and have obtained and
are in compliance with all Environmental Permits; and
(iv) no Hazardous Substance has been discharged, disposed of,
dumped, injected, pumped, deposited, spilled, leaked,
emitted or released at any property now or previously owned,
leased or operated by the Company or any Subsidiary.
For purposes of this Section 5.19(a), the "Company" and "Subsidiary" shall
include any entity which is, in whole or in part, a predecessor of the
Company or any Subsidiary.
(b) Since January 1, 1997, except as set forth in Schedule 5.19,
there has been no written environmental investigation, study, audit, test,
review or other analysis conducted of which the Company has knowledge in
relation to the current or prior business of the Company or any Subsidiary
or any property or facility now or previously owned, leased or operated by
the Company or any Subsidiary which has not been delivered (to the extent
the Company has possession thereof) to Parent at least five days prior to
the date hereof.
(c) Except as set forth in Schedule 5.19, neither the Company nor any
Subsidiary owns, leases or operates or has owned, leased or operated any
real property, or conducts or has since January 1, 1997 conducted any
operations, in New Jersey or Connecticut.
(d) For purposes of this Section 5.19, the following terms shall have
the meanings set forth below:
"Environmental Laws" means any federal, state, provincial, local
and foreign law (including, without limitation, common law), treaty,
judicial decision, regulation, rule, judgment, order, decree,
injunction, permit or governmental restriction or requirement or any
agreement or contract with any governmental authority or other third
party, relating to human health and safety, the environment or to
pollutants, contaminants, wastes or chemicals or any toxic,
radioactive, ignitable, corrosive, reactive or otherwise hazardous
substances, wastes or materials.
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"Environmental Permits" means all permits, licenses, franchises,
certificates, approvals and other similar authorizations of
governmental authorities relating to or required by Environmental Laws
and affecting the business of the Company or any of its Subsidiaries
as currently conducted.
"Hazardous Substances" means any pollutant, contaminant, waste or
chemical or any toxic, radioactive, ignitable, corrosive, reactive or
otherwise hazardous substance, waste or material, or any substance,
waste or material having any constituent elements displaying of the
foregoing characteristics, including, without limitation, petroleum,
its derivatives, by-products and other hydrocarbons, which in any
event is regulated under Environmental Laws.
Section 5.20. Finders' Fees
Except for J.P. Morgan Securities Inc. and Peter J. Solomon Company
Limited, a copy of whose engagement agreements have been provided to
Parent, there is no investment banker, broker, finder or other intermediary
which has been retained by or is authorized to act on behalf of the Company
or any Subsidiary who might be entitled to any fee or commission from
Parent or any of its affiliates upon consummation of the transactions
contemplated by this Agreement.
Section 5.21. Inapplicability of Certain Restrictions
The Company has taken all action necessary to exempt the Offer, the
Exchange Offer, the Merger, this Agreement, and the transactions
contemplated hereby from Section 203 of the Delaware Law. Unless Merger
Co. owns at least 90% of the issued and outstanding shares of Company
Common Stock, the adoption of this Agreement by the affirmative vote of the
holders of shares of Company Common Stock entitling such holders to
exercise at least a majority of the voting power of the shares of Company
Common Stock is the only vote of holders of any class or series of the
capital stock of the Company required to adopt this Agreement, or to
approve the Merger or any of the other transactions contemplated hereby and
no higher or additional vote is required pursuant to the Company's
Certificate of Incorporation or otherwise.
Section 5.22. Rights Plan
The Company has not entered into, and its Board of Directors has
not adopted or authorized the adoption of, a shareholder rights or similar
agreement.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company as of the date hereof
and as of the Effective Time that:
Section 6.01. Corporate Existence And Power
Parent is a corporation duly incorporated, validly existing and in
good standing under the laws of Delaware and has all corporate powers and
all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted. Parent is duly
qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where the character of the property owned or leased by
it or the nature of its activities makes such qualification necessary,
except for those jurisdictions where the failure to be so qualified would
not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the condition (financial or otherwise),
business, assets, liabilities or results of operations of Parent and the
Parent Subsidiaries taken as a whole ("Parent Material Adverse Effect").
Parent has heretofore delivered to the Company true and complete copies of
Parent's certificate of incorporation and bylaws as currently in effect.
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Section 6.02. Corporate Authorization
The execution, delivery and performance by Parent and Merger Co. of
this Agreement and the consummation by Parent and Merger Co. of the
transactions contemplated hereby are within the corporate powers of Parent
and Merger Co. and have been duly authorized by all necessary corporate and
stockholder action. This Agreement constitutes a valid and binding
agreement of each of Parent and Merger Co.
Section 6.03. Governmental Authorization
The execution, delivery and performance by Parent and Merger Co. of
this Agreement and the consummation by Parent and Merger Co. of the
transactions contemplated by this Agreement require no action by or in
respect of, or filing with, any governmental body, agency, official or
authority other than (a) the filing of a certificate of merger in
accordance with Delaware Law; (b) compliance with any applicable
requirements of the HSR Act; (c) compliance with any applicable non-United
States laws intended to prohibit, restrict or regulate actions having the
purpose or effect of monopolization or restraint of trade; and (d)
compliance with any applicable requirements of the Securities Act and the
Exchange Act.
Section 6.04. Non-Contravention
Except as set forth in Schedule 6.04, the execution, delivery and
performance by Parent and Merger Co. of this Agreement and the consummation
by Parent and Merger Co. of the transactions contemplated hereby do not and
will not (a) contravene or conflict with the certificate of incorporation
or bylaws of Parent or Merger Co., (b) assuming compliance with the matters
referred to in Section 6.03, contravene or conflict with any provision of
law, regulation, judgment, writ, injunction, order or decree of any court
or governmental authority binding upon or applicable to Parent or Merger
Co. or any of their properties or assets, or (c) constitute a default under
or give rise to any right of termination, cancellation or acceleration of
any right or obligation of Parent or Merger Co. or to a loss of any benefit
to which Parent or Merger Co. is entitled under any provision of any
material agreement, contract or other instrument binding upon Parent or
Merger Co. or any license, franchise, permit or other similar authorization
held by the Parent or Merger Co., or (d) result in the creation or
imposition of any Lien on any asset of the Parent or Merger Co., except, in
the case of clauses (b), (c) and (d) of this Section 6.04, for any such
violation, failure to obtain any such consent or other action, default,
right, loss or Lien that would not, individually or in the aggregate, be
reasonably expected to have a Parent Material Adverse Effect.
Section 6.05. Capitalization
The authorized capital stock of Parent consists of 900,000,000
shares of Parent Common Stock and 900,000,000 shares of Class B common
stock, par value $0.10 per share (the "Class B Common Stock"). As of the
close of business on December 28, 2000, there were outstanding 120,429,640
shares of Parent Common Stock and 102,645,048 shares of Class B Common
Stock. As of the close of business on December 2, 2000, there were
outstanding stock options to purchase an aggregate of 6,739,160 shares of
Parent Common Stock (of which options to purchase an aggregate of 3,743,535
shares of Parent Common Stock were exercisable). All outstanding shares of
capital stock of Parent have been duly authorized and validly issued and
are fully paid and nonassessable. Except for changes since December 2,
2000 resulting from the exercise of employee stock options outstanding on
such date, there are outstanding (a) no shares of capital stock or other
voting securities of the Company, (b) no securities of the Company
convertible into or exchangeable for shares of capital stock or voting
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securities of the Company, and (c) no options or other rights to acquire
from the Company or any Subsidiary, and no obligation of the Company or any
Subsidiary to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of the Company (the items in clauses (a), (b) and (c) of this
Section 6.05 being referred to collectively as the "Parent Securities").
There are no outstanding obligations of the Parent or any Parent Subsidiary
to repurchase, redeem or otherwise acquire any Parent Securities.
Section 6.06. Parent Subsidiaries
(a) Each Parent Subsidiary is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted and is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except for those
jurisdictions where failure to be so qualified would not, individually or
in the aggregate, reasonably be expected to have a Parent Material Adverse
Effect. For purposes of this Agreement, "Parent Subsidiary" means any
corporation or other entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are directly or
indirectly owned by Parent and/or one or more Parent Subsidiaries. All
Parent Subsidiaries and their respective jurisdictions of incorporation are
identified in Schedule 6.06.
(b) All of the outstanding capital stock of, or other ownership
interests in, each Parent Subsidiary, is owned by Parent, directly or
indirectly, free and clear of any Lien and free of any other limitation or
restriction (including any restriction on the right to vote, sell or
otherwise dispose of such capital stock or other ownership interests).
There are no outstanding (i) securities of Parent or any Parent Subsidiary
convertible into or exchangeable for shares of capital stock or other
voting securities or ownership interests in any Parent Subsidiary, and (ii)
options or other rights to acquire from Parent or any Parent Subsidiary,
and no other obligation of the Parent or any Parent Subsidiary to issue,
any capital stock, voting securities or other ownership interests in, or
any securities convertible into or exchangeable for any capital stock,
voting securities or ownership interests in, any Parent Subsidiary (the
items in clauses (i) and (ii) of this Section 6.06(b) being referred to
collectively as the "Parent Subsidiary Securities"). There are no
outstanding obligations of Parent or any Parent Subsidiary to repurchase,
redeem or otherwise acquire any outstanding Parent Subsidiary Securities.
(c) Since the date of its incorporation, Merger Co. has not engaged
in any activities other than in connection with or as contemplated by this
Agreement.
Section 6.07. SEC Filings
(a) Parent has delivered or made available to the Company (i)
Parent's annual report on Form 10-K for the year ended September 30, 2000
(the "Parent 10-K"), (ii) its proxy or information statements relating to
meetings of, or actions taken without a meeting by, the stockholders of the
Company held since January 1, 1998, and (iii) all of its other reports,
statements, schedules and registration statements filed with the SEC since
January 1, 1998.
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(b) As of its filing date, each such report or statement filed
pursuant to the Exchange Act did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading.
(c) Each such registration statement, as amended or supplemented, if
applicable, filed pursuant to the Securities Act as of the date such
statement or amendment became effective did not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading.
Section 6.08. Parent Financial Statements
. The audited consolidated financial statements of Parent included in
the Parent 10-K fairly present, in all material respects, in conformity
with generally accepted accounting principles applied on a consistent basis
(except as may be indicated in the notes thereto), the consolidated
financial position of Parent and its consolidated subsidiaries as of the
dates thereof and their consolidated statements of income, stockholders'
equity and cash flows for the periods then ended (subject to normal year-
end adjustments in the case of any unaudited interim financial statements).
For purposes of this Agreement, "Parent Balance Sheet" means the
consolidated balance sheet of Parent as of September 30, 2000 as set forth
in the Company 10-K and "Parent Balance Sheet Date" means September 30,
2000.
Section 6.09. Disclosure Documents
(a) Each document required to be filed by Parent with the SEC in
connection with the transactions contemplated by this Agreement (the
"Parent Disclosure Documents"), including, without limitation, (i) the Form
TO/A, (ii) the Exchange Form TO, (iii) the Exchange Form S-4 and (iv) the
Merger Form S-4 (as defined in Section 9.01) to be filed with the SEC in
connection with the Offer, the Exchange Offer or the Merger and any
amendments or supplements thereto will, when filed, comply as to form in
all material respects with the applicable requirements of the Exchange Act
except that no representation or warranty is made hereby with respect to
any information furnished to Parent by the Company in writing specifically
for inclusion in the Company Disclosure Documents.
(b) At the time the Form TO/A, the Exchange Form TO, the Exchange
Form S-4 and the Merger Form S-4 or any amendment or supplement thereto is
first mailed to stockholders of the Company, and, with respect to the
Exchange Form S-4 and the Merger Form S-4 only, at the time such Form S-4
is declared effective by the SEC, the Form TO/A, the Exchange Form TO, the
Exchange Form S-4 and the Merger Form S-4, as supplemented or amended, if
applicable, will not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made,
not misleading. At the time of the filing of any Parent Disclosure Document
other than the Exchange Form S-4 or the Merger Form S-4 and at the time of
any distribution thereof, such Parent Disclosure Document will not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The
representations and warranties contained in this Section 6.09(b) will not
apply to statements or omissions included in the Parent Disclosure
Documents based upon information furnished to Parent in writing by the
Company specifically for use therein.
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(c) Neither the information with respect to Parent or any Parent
Subsidiary that Parent furnishes in writing to the Company specifically for
use in the Company Disclosure Documents nor the information incorporated by
reference from documents filed by Parent with the SEC will, at the time of
the provision thereof to Parent or at the time of the filing thereof by
Parent with the SEC, as the case may be, and at the time of the meeting of
the Company's stockholders, if any, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.
Section 6.10. Absence of Certain Changes
Except as set forth in Schedule 6.10 hereto or the Parent 10-K
since the Parent Balance Sheet Date, Parent and the Parent Subsidiaries
have conducted their business in the ordinary course consistent with past
practice and there has not been:
(a) any event, occurrence or development of a state of
circumstances or facts which has had or reasonably could be expected
to have a Parent Material Adverse Effect;
(b) any declaration (other than a quarterly dividend consistent
with past practices), setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of
Parent, or any repurchase, redemption or other acquisition by Parent
or any Parent Subsidiary of any outstanding shares of capital stock or
other securities of, or other ownership interests in, Parent or any
Parent Subsidiary (other than pursuant to Parent's previously
announced repurchase program);
(c) any amendment of any material term of any outstanding
security of Parent or any Parent Subsidiary that could reasonably be
expected to be materially adverse to Parent;
(d) any creation or assumption by the Parent or any Parent
Subsidiary of any material Lien on any material asset other than in
the ordinary course of business consistent with past practices;
(e) any damage, destruction or other casualty loss (whether or
not covered by insurance) affecting the business or assets of Parent
or any Parent Subsidiary which, individually or in the aggregate, has
had or would reasonably be expected to have a Parent Material Adverse
Effect;
(f) any change in any method of accounting or accounting
practice by Parent or any Parent Subsidiary, except for any such
change required by reason of a concurrent change in generally accepted
accounting principles;
(g) any labor dispute, other than routine individual grievances,
or any activity or pro