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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A
Amendment No. 2
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by a Party other than the Registranto
Check the appropriate box:
o | Preliminary Proxy Statement | |
o | Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
x | Definitive Proxy Statement | |
o | Definitive Additional Materials | |
o | Soliciting Material Pursuant to Rule 14a-12 |
CUNO INCORPORATED
N/A
Payment of Filing Fee (Check the appropriate box):
o | No filing fee required. | |||||
x | Fee computed below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||||
(1 | ) | Title of each class of securities to which transaction applies: | ||||
Common stock, par value $.001 per share, of CUNO Incorporated | ||||||
(2 | ) | Aggregate number of securities to which transaction applies: 18,395,701, which includes 17,260,563 shares of Common Stock, options to purchase 1,105,938 shares of Common Stock and existing SARs representing the right to appreciation in 29,200 additional shares of Common Stock. | ||||
(3 | ) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the filing fee is calculated and state how it was determined): | ||||
The filing fee was determined based upon the sum of (a) 17,260,563 shares of Common Stock multiplied by $72.00 per share, (b) options to purchase 1,105,938 shares of Common Stock multiplied by $39.05 per share (which is the difference between $72.00 and $32.95, the weighted average exercise price per share of the options), and (c) existing SARs representing the right to appreciation in 29,200 additional shares of Common Stock multiplied by $19.57 per share (which is the difference between $72.00 and $52.43, the weighted average per share grant price of the SARs). In accordance with Rules 14a-6(a) and 0-11 of the Securities Exchange Act of 1934, as amended, the filing fee was determined by multiplying $0.0001177 by the sum of the preceding sentence. | ||||||
(4 | ) | Proposed maximum aggregate value of transaction: $1,286,518,859 | ||||
(5 | ) | Total fee paid: $151,423.27 | ||||
x | Fee paid previously with preliminary materials. | |
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
(1) | Amount Previously Paid: | |||
(2) | Form, Schedule or Registration Statement No.: | |||
(3) | Filing Party: | |||
(4) | Date Filed: |
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/s/ Mark G. Kachur | |
Mark G. Kachur | |
Chairman, President and Chief Executive Officer |
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1. to consider and vote upon a proposal to approve and adopt the Agreement and Plan of Merger, dated as of May 11, 2005, by and among 3M Company, Carrera Acquisition Corporation and CUNO Incorporated; | |
2. to consider and vote upon any proposal to adjourn the special meeting; and | |
3. to transact any other business that may properly come before the meeting of stockholders or any adjournment thereof. | |
By Order of the Board of Directors, | |
/s/ John A. Tomich | |
John A. Tomich | |
Secretary |
• | BY TELEPHONE: CALL THE TOLL-FREE NUMBER ON YOUR PROXY CARD TO VOTE BY PHONE. | |
• | VIA INTERNET: VISIT THE WEBSITE ON YOUR PROXY CARD TO VOTE VIA THE INTERNET. | |
• | BY MAIL: MARK, SIGN, DATE AND MAIL YOUR PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE. |
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Q: | Why are these proxy materials being sent to CUNO shareholders? |
A: | This document is being provided by, and the enclosed proxy is solicited by and on behalf of, the CUNO board of directors for use at the upcoming special meeting of CUNO shareholders. |
Q: | When and where is the special meeting? |
A: | The CUNO meeting is scheduled to be held at 9:00 a.m., local time, on August 2, 2005 at the headquarters of CUNO at 400 Research Parkway, Meriden, Connecticut, unless it is postponed or adjourned. |
Q: | What matters will be voted on at the special meeting? |
A: | You are being asked to vote on whether to approve and adopt the merger agreement by which CUNO will be acquired by 3M. |
Q: | What vote is required for the stockholders to approve the merger? |
A: | In order for the merger to be approved, holders of a majority of the outstanding shares of CUNO common stock must voteFORthe merger. Each share of CUNO common stock is entitled to one vote. |
Q: | Who is entitled to vote at the special meeting? |
A: | Holders of record of CUNO common stock as of the close of business on July 8, 2005 are entitled to vote at the special meeting. |
Q: | What do I need to do now? |
A: | After carefully reading and considering the information contained in this proxy statement, please vote your shares of CUNO common stock as soon as possible. You may vote your shares by returning the enclosed proxy by mail, or by voting by telephone or through the Internet. In addition, if you hold your shares through a broker or other nominee, you may be able to vote through the Internet or by telephone in accordance with instructions your broker or nominee provides. Your proxy materials include detailed information on how to vote. |
Q: | What is the proposed transaction? |
A: | 3M will acquire CUNO through a cash merger by merging a subsidiary of 3M into CUNO. |
Q: | If the merger is completed, what will I receive for my common stock? |
A: | You will receive $72.00 in cash, without interest, for each share of CUNO common stock you own. |
Q: | Why is the CUNO board of directors recommending the merger? |
A: | Our board believes that the merger is fair to and in the best interests of CUNO and its stockholders. To review our board’s reasons for recommending the merger, see pages 14 through 15. |
Q: | Will I have the right to have my shares appraised if I dissent from the merger? |
A: | Yes, you will have appraisal rights. If you wish to exercise your appraisal rights, you must not vote in favor of the merger, you must continuously hold your shares from the date of your demand for appraisal through the effective date of the merger and you must strictly follow the other requirements of Delaware law. A summary describing the requirements you must meet in order to exercise your appraisal rights is in the section entitled “Appraisal Rights” on pages 26 through 28 of this proxy statement. |
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Q: | When is the merger expected to be completed? |
A: | We are working towards completing the merger as quickly as possible. We currently expect to close the merger in the third calendar quarter of 2005. The merger cannot be completed until a number of conditions are satisfied. The most important conditions are approval by CUNO stockholders at the special meeting and obtaining all necessary regulatory approvals and clearances (including under United States and certain foreign antitrust laws). |
Q: | May we solicit alternative transactions? |
A: | No. We may not solicit alternative transactions but we may respond to an unsolicited third party acquisition proposal if we receive it before the special meeting as long as we comply with the merger agreement. See page 32. |
Q: | Should I send in my stock certificates now? |
A: | No. After the merger is completed, 3M will send you written instructions for exchanging your CUNO stock certificates. You must return your CUNO stock certificates as described in the instructions. You will receive your cash payment after 3M receives your stock certificates, together with the documents requested in the instructions. |
Q: | Will I owe taxes as a result of the merger? |
A: | The merger will be a taxable transaction for all holders of CUNO common stock. As a result, the cash you receive in the merger for your shares of CUNO common stock will be subject to United States federal income tax and also may be taxed under applicable state, local, and other tax laws. In general, you will recognize gain or loss equal to the difference between (1) the amount of cash you receive and (2) the adjusted tax basis of your shares of CUNO common stock. Refer to the section entitled “Material Federal Income Tax Consequences to United States Holders” on pages 21 through 22 of this proxy statement for a more detailed explanation of the tax consequences of the merger. You should consult your tax advisor on how specific tax consequences of the merger apply to you. |
Q: | I have stock options. If the merger is completed, what will I receive for my stock options? |
A: | You will receive the excess of $72.00 over the exercise price of each unexercised stock option you hold at the time the merger is completed, for each share of CUNO common stock subject to the stock option. |
Q: | Where can I find more information about CUNO and 3M? |
A: | We and 3M each file periodic reports and other information with the Securities and Exchange Commission. This information is available at the Securities and Exchange Commission’s public reference facilities, the Internet site maintained by the Securities and Exchange Commission at http://www.sec.gov, and the investor relations section of each of our company websites. For a more detailed description of the information available, please see the section entitled “Where You Can Obtain Additional Information” on page 38. |
Q: | Who can help answer my questions? |
A: | If you have questions about the special meeting or the merger after reading this proxy statement, you should call Morrow & Company, our proxy solicitation agent, toll-free at (800) 607-0088 or collect at (212)754-8000. |
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C-1 |
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• | risks that the merger will not be completed; | |
• | risks that regulatory or stockholder approval may not be obtained; | |
• | legislative or regulatory developments that could have the effect of delaying or preventing the merger; | |
• | uncertainty as to the timing of obtaining regulatory approvals and clearance; | |
• | volumes of shipments of CUNO’s products; | |
• | changes in product mix and product pricing; | |
• | costs of raw materials for CUNO’s products; | |
• | the rate of economic and industry growth in the U.S. and the other countries in which CUNO conducts business; | |
• | economic and political conditions in the foreign countries in which CUNO conducts a substantial part of its operations and other risks associated with international operations including exchange rate fluctuations; | |
• | CUNO’s ability to protect its technology, proprietary products and manufacturing techniques; changes in technology; | |
• | changes in legislative, regulatory or industrial requirements and risks generally associated with new product introductions and applications; | |
• | domestic and international competition in CUNO’s global markets; | |
• | the ability to successfully introduce and market new products; | |
• | the ability to successfully launch initiatives to increase sales and reduce costs; | |
• | costs and other effects associated with product liability litigation; | |
• | our relationships with our major customers; and | |
• | other political, economic and technological factors and other risks referred to in our filings with the Securities and Exchange Commission. |
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• | submitting to the Secretary of CUNO, prior to the voting of your proxy, a written notice of revocation which is dated a later date than your proxy; | |
• | sending a later-dated proxy; or | |
• | voting in person at the special meeting. |
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• | approval of the merger agreement by holders of a majority of the outstanding shares of CUNO common stock; | |
• | the receipt of required regulatory approvals, including the expiration or termination of applicable waiting periods under United States and certain foreign antitrust laws; | |
• | the absence of any legal prohibitions against the merger; and | |
• | for each party, specified levels of compliance by the other with its representations and agreements under the merger agreement. |
• | if the merger is not completed by October 31, 2005; | |
• | if any court or governmental agency issues a final order preventing the merger; | |
• | if the other party to the merger agreement breaches at specified levels its representations or agreements and fails to cure its breach, if curable, in 30 days; | |
• | by 3M, if our board of directors withdraws or changes its recommendation of the merger agreement in a manner adverse to 3M or approves or recommends, or if CUNO enters into an agreement relating to, another acquisition proposal; | |
• | if our stockholders fail to approve the merger at the special meeting; or | |
• | by us, if our board of directors determines that another acquisition proposal is a superior proposal and decides, subject to certain requirements, to enter into an agreement for the superior proposal. |
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• | we breach our obligation to call a special meeting before October 31, 2005 while there is an alternative public acquisition proposal, and we enter into an acquisition agreement for an alternative transaction, or an alternative transaction is completed, within 12 months after the date of termination; | |
• | we do not obtain stockholder approval at the special meeting (while there was an alternative public acquisition proposal), and we enter into an acquisition agreement within 12 months after the date of termination for an alternative transaction that later closes; | |
• | we withdraw or change our recommendation to shareholders in a manner adverse to 3M, or approve or recommend or enter into a competing acquisition proposal; or | |
• | we terminate the merger agreement to accept a superior proposal. |
• | vesting and cash-out of all outstanding stock options to acquire CUNO common stock, all performance and restricted shares of CUNO common stock and all SARs including those held by our executive officers and directors, based on the same $72.00 per share price being paid to all CUNO stockholders, which based on holdings as of May 26, 2005 would result in an aggregate cash payment of $37,522,500.80 for all directors and executive officers; | |
• | agreements with our executive officers that provide for change in control severance benefits, that provide for an estimated aggregate cash severance benefit of approximately $11,046,971 for all executive officers, assuming a termination date of July 15, 2005, together with tax gross-up payments to the extent applicable, if their employment is terminated under specified circumstances within specified periods in connection with the merger; | |
• | an increased supplemental retirement benefit for our chairman, president and chief executive officer; and | |
• | proposed employment agreements between four of our executives, CUNO and 3M which are still being negotiated and that are expected to have three-year terms commencing upon completion of the merger; and | |
• | retention incentive agreement between Mr. Kachur, CUNO and 3M that provides for the payment of $550,000 in bonus payments for continuing his employment with CUNO for a period of 6 months following completion of the merger and for the payment of $1,000,000 in consulting fees to Mr. Kachur in return for his rendering of consulting services to CUNO for a period of two years following the end of his employment. |
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1. to consider and vote upon a proposal to approve and adopt the Agreement and Plan of Merger, dated as of May 11, 2005, by and among 3M Company, Carrera Acquisition Corporation and CUNO Incorporated; | |
2. to consider and vote upon any proposal to adjourn the special meeting; and | |
3. to transact any other business that may properly come before the meeting of stockholders or any adjournment thereof, including to consider any procedural matters incident to the conduct of the special meeting, such as adjournment or postponement of the special meeting. | |
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Vote by telephone — call toll free (877) PRX-VOTE ((877) 779-8683) |
• | Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a week, until 11:59 p.m. on August 1, 2005. | |
• | Please have your proxy card and the last four digits of your Social Security Number or Tax Identification Number available. Follow the simple instructions the voice provides you. |
Vote through the Internet — http://www.eproxyvote.com/cuno |
• | Use the Internet to vote your proxy 24 hours a day, 7 days a week, until 11:59 p.m. on August 1, 2005. | |
• | Please have your proxy card and the last four digits of your Social Security Number of Tax Identification Number available. Follow the simple instructions to obtain your records and create an electronic ballot. |
• | submitting written notice of revocation to the Secretary of CUNO prior to the voting of the proxy, which is dated a later date than the proxy; | |
• | submitting a properly executed later-dated proxy by mail, telephone or the Internet; or | |
• | voting in person at the special meeting; however, simply attending the special meeting without voting will not revoke an earlier proxy. |
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CUNO Incorporated |
3M Company |
Carrera Acquisition Corporation. |
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• | CUNO board’s familiarity with, and presentations by CUNO’s management regarding, the business, operations, properties and assets, financial condition, business strategy, and prospects of CUNO (as well as the risks involved in achieving those prospects), and discussions with CUNO’s financial advisor regarding the nature of the filtration industry in which CUNO competes and general industry, economic and market conditions; | |
• | the fact that the merger consideration is all cash, not subject to a financing condition and provides certainty of value to CUNO’s stockholders; | |
• | the potential stockholder value from other alternatives available to us, including the alternative of remaining an independent company and conducting an auction process for the company, as well as the risks and uncertainties associated with those alternatives, including the risks that an auction process would divert the time and attention of management, would lack the speed and certainty provided by the 3M proposal and could have resulted in the loss of the 3M transaction; | |
• | the current and historical market prices of CUNO common stock relative to those of other industry participants and general market indices, and the fact that the $72.00 merger consideration represents a 31.3% premium over the closing price of CUNO common stock on the last trading day prior to the public announcement of the merger agreement, and a 7.4% premium over the highest trading price of CUNO common stock at any time during the three-year period preceding CUNO’s May 12th announcement; | |
• | the financial presentation of Citigroup, including its opinion, dated May 11, 2005, to the CUNO board as to the fairness, from a financial point of view and as of the date of the opinion, of the merger consideration to be received by holders of CUNO common stock, as more fully described below under the caption “Opinion of CUNO’s Financial Advisor”; | |
• | the terms of the merger agreement, as reviewed by the CUNO board with our legal advisors, including that the conditions to closing the merger are limited to our stockholder approval, antitrust clearance and other customary conditions (see “The Merger Agreement”); | |
• | the likelihood of the merger being approved by the appropriate regulatory authorities (see “Governmental and Regulatory Approvals”); | |
• | the terms of the merger agreement which provide that under certain circumstances, and subject to certain conditions, CUNO can furnish information to and conduct negotiations with a third party, terminate the merger agreement and enter into an agreement relating to a superior proposal (see “The |
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Merger Agreement — No Solicitation of Alternative Transactions,” “The Merger Agreement — Termination” and “The Merger Agreement — Termination Fee”); | ||
• | the belief that the $33 million termination fee that would be payable in connection with the termination of the 3M merger agreement to enter into a superior proposal (representing approximately 2.5% of the aggregate enterprise value of 3M’s proposal) was reasonable in the context of break-up fees that were payable in comparable transactions and would not preclude or deter another party from making a competing proposal; | |
• | the effects of the merger on CUNO’s employees, and the terms of the merger agreement relating to employee benefits matters; and | |
• | the belief that the combination will provide increased financial strength, greater resources to grow CUNO’s brands and new opportunities to build customer relationships and provide a broader range of quality products to our customers. |
• | the risks and costs to CUNO if the merger does not close, including the diversion of management and employee attention, employee attrition and the effect on business relationships; | |
• | the interests of CUNO’s officers and directors in the merger described under “— Interests of Certain Persons in the Merger”; | |
• | the fact that the all-cash price would not allow our stockholders to participate in the benefits of any synergies created by the merger or in any future growth of the combined entity; | |
• | the possibility that a U.S. or foreign regulatory authority may seek to impose conditions on or enjoin or otherwise prevent or delay the merger, or that the closing may not occur at all; | |
• | the fact that the all-cash price would be taxable to stockholders; and | |
• | the customary restrictions on the conduct of CUNO’s business prior to the consummation of the merger, requiring us to conduct our business in the ordinary course, subject to specific limitations, which may delay or prevent CUNO from undertaking extraordinary business opportunities that may arise over the next year so long as the merger agreement remains in effect. |
• | reviewed the merger agreement; |
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• | held discussions with senior officers, directors and other representatives and advisors of CUNO and senior officers and other representatives and advisors of 3M concerning CUNO’s business, operations and prospects; | |
• | examined publicly available business and financial information relating to CUNO; | |
• | examined financial forecasts and other information and data relating to CUNO which were provided to or otherwise discussed with Citigroup by CUNO’s management; | |
• | reviewed the financial terms of the merger as described in the merger agreement in relation to, among other things, current and historical market prices and trading volumes of CUNO common stock, and CUNO’s historical and projected earnings and other operating data, capitalization and financial condition; | |
• | considered, to the extent publicly available, the financial terms of other transactions effected which Citigroup considered relevant in evaluating the merger; | |
• | analyzed financial, stock market and other publicly available information relating to the businesses of other companies whose operations Citigroup considered relevant in evaluating those of CUNO; and | |
• | conducted other analyses and examinations and considered other financial, economic and market criteria as Citigroup deemed appropriate in arriving at its opinion. |
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Selected Companies Analysis |
• | Pentair, Inc. | |
• | Pall Corporation | |
• | Millipore Corporation | |
• | ESCO Technologies Inc. | |
• | BWT AG | |
• | Zenon Environmental Inc. | |
• | Calgon Carbon Corporation |
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Implied Per Share | ||
Equity Reference Range | Per Share | |
for CUNO | Merger Consideration | |
$42.00-$52.00 | $72.00 |
Precedent Transactions Analysis |
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Date Announced | Acquiror | Target | ||
• November 24, 2004 | • General Electric Company (GE Infrastructure) | • Ionics, Incorporated | ||
• September 20, 2004 | • Danaher Corporation | • Trojan Technologies Inc. | ||
• May 26, 2004 | • CUNO | • WTC Industries, Inc. | ||
• May 12, 2004 | • Siemens AG (Industrial Solutions and Services Group) | • United States Filter Corporation | ||
• February 4, 2004 | • Pentair, Inc. | • WICOR Industries, LLC | ||
• January 10, 2004 | • Clayton, Dubilier & Rice, Inc. | • Culligan International | ||
• November 18, 2003 | • Pentair, Inc. | • Everpure, Inc. | ||
• November 4, 2002 | • General Electric Company (GE Power Systems) | • Osmonics, Inc. | ||
• September 3, 2002 | • Pentair, Inc. | • Plymouth Products, Inc. (US Filter business) | ||
• February 14, 2002 | • Pall Corporation | • United States Filter Corporation (Filtration and Separations Group) | ||
• April 21, 1999 | • Danaher Corporation | • Hach Company | ||
• March 22, 1999 | • Vivendi Environnement SA | • United States Filter Corporation | ||
• February 9, 1998 | • United States Filter Corporation | • Culligan Water Technologies Inc. | ||
• September 17, 1997 | • United States Filter Corporation | • Memtec Ltd. | ||
• December 31, 1996 | • Calgon Carbon Corporation | • Advanced Separation Technologies, Inc. | ||
• May 15, 1996 | • United States Filter Corporation | • David Water & Waste Industries, Inc. |
Implied Per Share | ||
Equity Reference Range | Per Share | |
for CUNO | Merger Consideration | |
$44.00-$55.00 | $72.00 |
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Discounted Cash Flow Analysis |
Implied Per Share | ||
Equity Reference Range | Per Share | |
for CUNO | Merger Consideration | |
$61.00-$73.00 | $72.00 |
Other Factors |
• | the premium implied for CUNO based on the merger consideration relative to the closing price of CUNO common stock on May 9, 2005 as well as the premiums implied for CUNO based on the merger consideration relative to the high and low closing prices of CUNO common stock during the 52-week period preceding May 9, 2005; |
• | historical trading prices and trading volumes of CUNO common stock from January 1, 2004 to May 9, 2005; |
• | trading volumes of CUNO common stock at various price ranges during the three-month, six-month, nine-month and 12-month periods ended May 9, 2005; |
• | the relationship between movements in CUNO common stock, movements in the common stock of selected companies in the filtration products industry and movements in the Standard & Poor 500 index; and |
• | publicly available research analysts’ reports for CUNO, including EPS estimates for CUNO for fiscal year 2005 and the second quarter of fiscal year 2005. |
Miscellaneous |
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Equity Compensation Awards |
Change of Control Agreements |
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Supplemental Executive Retirement Benefit for Mr. Kachur |
Term Sheets with Messrs. Carney and Hamlin |
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• | The stockholder must not vote in favor of adoption of the merger agreement. Because a proxy that does not contain voting instructions will, unless revoked, be voted in favor of adoption of the merger agreement, a stockholder who votes by proxy and who wishes to exercise appraisal rights must vote against adoption of the merger agreement. | |
• | The stockholder must deliver to CUNO a written demand for appraisal before the vote on the adoption of the merger agreement at the special meeting. | |
• | The stockholder must continuously hold the shares from the date of making the demand through the effective time of the merger since appraisal rights will be lost if the shares are transferred before the effective time of the merger. | |
• | The stockholder must file a petition in the Delaware Court of Chancery demanding a determination of the fair value of the shares within 120 days after the effective time of the merger. |
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• | corporate matters, including due organization, power and qualification; | |
• | its certificate of incorporation and bylaws; | |
• | its capitalization; | |
• | requisite corporate power and authorization, execution, delivery and enforceability of the merger agreement; | |
• | absence of conflicts with, or violations of, organizational documents or other obligations as a result of the merger; | |
• | accuracy of information contained in reports and financial statements that we file with the SEC and the compliance of our filings with the SEC with applicable federal securities law requirements and, with respect to financial statements therein, generally accepted accounting principles, which we sometimes refer to as GAAP; | |
• | absence of undisclosed liabilities; | |
• | required governmental filings and consents; | |
• | absence of changes or events that would have a material adverse effect; | |
• | accuracy and compliance as to form with applicable securities law requirements of this proxy statement; | |
• | absence of undisclosed brokers’ fees; | |
• | employee benefits and labor matters; |
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• | litigation matters; | |
• | tax matters; | |
• | compliance with law; | |
• | environmental matters; | |
• | intellectual property matters; | |
• | real property; | |
• | material contracts; | |
• | insurance policies; | |
• | related party transactions; | |
• | receipt of an opinion from our financial advisor; | |
• | required vote of our stockholders; | |
• | inapplicability of state takeover statutes; and | |
• | actions with respect to the stockholder rights agreement. |
• | corporate matters, including due organization, power and qualification; | |
• | capitalization of Merger Sub; | |
• | requisite corporate power and authorization, execution, delivery and enforceability of the merger agreement; | |
• | conflicts with, or violations of, organizational documents or other obligations as a result of the merger; | |
• | accuracy of information supplied for inclusion in this proxy statement; | |
• | required governmental filings and consents; and | |
• | ownership of CUNO shares. |
• | issue, sell, grant options or rights to acquire any shares of our capital stock or the capital stock of our subsidiaries other than shares issuable upon exercise of existing stock options; | |
• | acquire, redeem or amend any shares of our capital stock or the capital stock of our subsidiaries; | |
• | split, combine or reclassify any shares of our capital stock or the capital stock of our subsidiaries; | |
• | declare, make or pay any dividend; | |
• | make or offer to make any acquisition for consideration in excess of $5 million, except for purchases or sales of inventory made in the ordinary course of business; |
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• | enter into a material contract or amend any material contract except in the ordinary course of business and consistent with past practice; | |
• | incur or assume any debt except for short-term debt under existing debt facilities; | |
• | become liable for the obligations of third parties; | |
• | make any loans, advances or capital contributions (other than to our subsidiaries); | |
• | make any investments (other than in our subsidiaries); | |
• | change any material financial accounting methods; | |
• | make any material tax election or settle or compromise any income tax liability; | |
• | propose or adopt any changes to our (or our subsidiaries’) certificate of incorporation or bylaws or other similar governing documents; | |
• | grant any stock-related, performance or similar awards or bonuses; | |
• | forgive any loans to employees, officers or directors; | |
• | enter into any new or change any existing employment, severance, consulting or salary continuation agreements; | |
• | grant any increases in the compensation or benefits to officers, directors or employees; | |
• | take specified employee benefits and collective bargaining actions; | |
• | settle or agree to settle any material litigation; and | |
• | convene any regular or special meeting of stockholders other than the special meeting. |
• | use our reasonable best efforts to take all appropriate action advisable under applicable law to consummate the merger in the most expeditious manner practicable; | |
• | make any required submissions under the HSR Act; | |
• | not engage in any transaction that would reasonably be expected to prevent or materially delay the obtaining of any regulatory approval that is a condition to the merger; and | |
• | cooperate with one another in efforts to obtain various governmental approvals. |
• | solicit, initiate, or intentionally encourage or participate in any way in any discussions or negotiations with respect to any competing acquisition proposal; or | |
• | provide information or access to information in furtherance of any acquisition proposal. |
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• | our board determines in good faith that such unsolicited bona fide acquisition proposal constitutes, or is reasonably likely to result in, a superior proposal; | |
• | our board determines in good faith, after receiving advice of outside counsel, that the failure to take such action would reasonably be considered to be inconsistent with its fiduciary duties to our stockholders under applicable law; and | |
• | we provide 3M with prior written notice of our intent to take any such action at least one business day prior to taking such action. |
• | notify and provide specified information to 3M within 24 hours if any information is requested or negotiations or discussions are sought to be initiated by a potential acquirer, and to keep 3M advised on a reasonably current basis of any material developments; | |
• | cease any existing activities, discussions or negotiations, other than with 3M, with respect to any acquisition proposal, and to notify any such person with whom we have had any such discussions during the prior 90 days that we are no longer seeking the making of any acquisition proposal and shall request the return or destruction of any nonpublic information provided to any such person in connection with any such activities, discussions or negotiations; and | |
• | not (i) withdraw or modify, or propose publicly to withdraw or modify, in a manner adverse to 3M or Merger Sub, our approval and recommendation of the merger, except as set forth in the following paragraph; (ii) approve or recommend, or propose publicly to approve or recommend, any acquisition proposal; (iii) release any third party from any confidentiality or standstill agreement to which we are a party or fail to reasonably enforce, at the request of 3M, or grant any material waiver, request or consent to any acquisition proposal under any such agreement, or (iv) enter into any letter of intent, agreement in principle, acquisition agreement or other agreement related to any acquisition proposal. |
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• | We, our subsidiaries, 3M and the surviving corporation will honor employment and severance agreements between us or our subsidiaries and our or our subsidiaries’ officers, directors and employees; | |
• | 3M shall provide, for not less than one year following the effective time of the merger, our and our subsidiaries’ employees with compensation and employee benefits that are substantially equivalent in the aggregate to those provided in the aggregate immediately before the effective time of the merger; | |
• | 3M shall, to the extent it determines to make our and our subsidiaries’ employees eligible to participate in 3M’s compensation and benefit plans, give credit for service rendered by our or our subsidiaries’ employees prior to the effective time of the merger for all purposes under 3M’s compensation and benefit plans (other than for purposes of benefit accrual under any defined benefit pension plans or retiree welfare benefits or as would result in a duplication of benefits) to the same extent such service was taken into account under the corresponding plans of CUNO and its subsidiaries; | |
• | For so long as CUNO or any of its subsidiaries maintains a 401(k) plan and 3M maintains a 401(k) plan with a loan feature for similarly situated employees, 3M will cause the CUNO 401(k) plan to retain its participant loan feature; and | |
• | 3M shall cause the surviving company to maintain our 2005 annual bonus plans for the 2005 fiscal year and to pay all bonus amounts due under the terms of the plans. Any participant in such plans whose employment is terminated without cause by the surviving company or its subsidiaries following the effective time of the merger but prior to the payment of bonuses for the 2005 fiscal year shall receive a prorated bonus based on the portion of such year worked prior to the termination date. |
• | our stockholders’ approval of the merger agreement; and | |
• | the absence of any applicable law, injunction or order that prohibits or makes illegal consummation of the merger. |
• | the representations and warranties of 3M and Merger Sub in the merger agreement being true and correct; |
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• | 3M and Merger Sub having performed in all material respects all obligations required to be performed under the merger agreement through the effective time of the merger; and | |
• | all specified regulatory filings being made and all required approvals being obtained. |
• | the representations and warranties that we made in the merger agreement being true and correct, subject to the materiality standards set forth in the merger agreement; | |
• | we having performed in all material respects all obligations required to be performed under the merger agreement through the effect time of the merger; and | |
• | all specified regulatory filings being made and all required approvals being obtained. |
• | by the mutual written consent of 3M and CUNO; | |
• | by 3M or CUNO if any court of competent jurisdiction or other governmental entity issues an order or takes any other action prohibiting the transactions contemplated by the merger agreement; | |
• | by 3M or CUNO if the merger has not occurred before October 31, 2005, provided that this right to terminate will not be available to any party whose breach of the merger agreement resulted in the failure of the merger to occur before October 31, 2005; | |
• | by 3M or CUNO if our stockholder approval was not obtained at a duly held meeting or at any adjournment or postponement of the meeting; | |
• | by 3M or CUNO if the other breaches its covenants, agreement, representations or warranties, and such breach is not cured within 30 days following written notice to the party committing such breach or if by its nature or timing such breach could not be cured; | |
• | by 3M if we (or our board) take or resolve to take specified actions relating to the recommendation and approval of this merger or with respect to an alternative acquisition proposal; and | |
• | by us if at any time prior to the adoption of the merger agreement by our stockholders and in connection with an acquisition proposal that we wish to accept, (i) we have complied with specified requirements with respect to such acquisition proposal, (ii) we give 3M three business days’ notice of our intent to terminate the merger agreement, (iii) our board determines, and has not changed its determination prior to the expiration of such three business day period, that the acquisition proposal is a superior proposal (as defined in the merger agreement), and (iv) we pay a $33 million termination fee to 3M. |
• | either party terminates the merger agreement after October 31, 2005 without the special meeting having been convened as a result of our willful and material violation of our obligations to call the |
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special meeting of our stockholders and (subject to certain fiduciary exceptions for our board) use reasonable best efforts to obtain stockholder approval, and an alternative transaction is consummated, or an acquisition agreement for an alternative transaction entered into, within 12 months after termination; | ||
• | either party terminates the merger agreement as a result of the failure of our stockholders to approve the merger, an acquisition proposal shall have been made public and not withdrawn prior to the taking of the vote at the special meeting and an alternative transaction is consummated, or an acquisition agreement for an alternative transaction entered into, within 12 months after termination (and in the case of an agreement being entered into, such alternative transaction is later consummated); | |
• | 3M terminates the merger agreement because we (or our board) take or resolve to take specified actions relating to the recommendation and approval of this merger or take or resolve to take specified actions with respect to an alternative acquisition proposal; and | |
• | we terminate the agreement in connection with an acquisition proposal that we wish to accept. |
• | each of those persons owning of record or known by CUNO to be the beneficial owner of more than 5% of outstanding CUNO common stock; | |
• | each of CUNO’s directors; | |
• | each of CUNO’s executive officers; and | |
• | all of CUNO’s directors and executive officers as a group. |
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No. of Options | |||||||||||||||||
and SARs | Total Number | ||||||||||||||||
Outstanding Shares | Exercisable | of Shares | Percent | ||||||||||||||
Name of Beneficial Owner | Beneficially Owned(1) | Within 60 Days | Beneficially Owned | of Class | |||||||||||||
Neuberger Berman, LLC | 1,277,761 | 0 | 1,277,761 | 7.43% | |||||||||||||
605 Third Avenue | |||||||||||||||||
New York, NY 10158 | |||||||||||||||||
Columbia Wanger Asset Management L.P. | 1,265,400 | 0 | 1,265,400 | 7.36% | |||||||||||||
227 West Monroe Street 3000 | |||||||||||||||||
Chicago, IL 60606 | |||||||||||||||||
Joel B. Alvord | 36,331 | 16,000 | 52,331 | 0.30% | |||||||||||||
Timothy B. Carney | 21,239 | 67,032 | 88,271 | 0.51% | |||||||||||||
Charles L. Cooney | 10,605 | 12,000 | 22,605 | 0.13% | |||||||||||||
William DeFrances | 3,791 | 10,750 | 14,541 | 0.08% | |||||||||||||
Anthony C. Doina | 10,632 | 50,922 | 61,554 | 0.35% | |||||||||||||
Frederick C. Flynn, Jr. | 76,263 | 131,026 | 207,289 | 1.20% | |||||||||||||
John M. Galvin | 25,235 | 16,000 | 41,235 | 0.24% | |||||||||||||
Thomas J. Hamlin | 15,540 | 58,033 | 73,573 | 0.42% | |||||||||||||
Mark G. Kachur | 156,218 | 122,038 | 278,256 | 1.61% | |||||||||||||
Colin John McLaren | 1,200 | 21,400 | 22,600 | 0.13% | |||||||||||||
C. Edward Midgley | 28,868 | 16,000 | 44,868 | 0.26% | |||||||||||||
David L. Swift. | 23,826 | 16,000 | 39,826 | 0.23% | |||||||||||||
John A. Tomich | 12,374 | 25,712 | 38,086 | 0.22% | |||||||||||||
All directors and executive officers as a group (13 persons) | 422,122 | 562,913 | 985,035 | 5.70% |
1 | Includes CUNO shares held through the CUNO 401(k) plan. |
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Page | ||||||
ARTICLE I The Merger | ||||||
SECTION 1.01. | The Merger | A-1 | ||||
SECTION 1.02. | Consummation of the Merger | A-1 | ||||
SECTION 1.03. | Effects of the Merger | A-1 | ||||
SECTION 1.04. | Certificate of Incorporation and Bylaws | A-1 | ||||
SECTION 1.05. | Directors and Officers | A-2 | ||||
SECTION 1.06. | Conversion of Shares | A-2 | ||||
SECTION 1.07. | Conversion of Common Stock of Merger Sub | A-2 | ||||
SECTION 1.08. | Withholding Taxes | A-2 | ||||
SECTION 1.09. | Subsequent Actions | A-2 | ||||
ARTICLE II Dissenting Shares; Payment for Shares; Options | ||||||
SECTION 2.01. | Dissenting Shares | A-2 | ||||
SECTION 2.02. | Payment for Shares | A-3 | ||||
SECTION 2.03. | Closing of the Company’s Transfer Books | A-4 | ||||
SECTION 2.04. | Existing Stock Options and Stock Appreciation Rights; Existing Restricted Shares and Performance Shares | A-4 | ||||
ARTICLE III Representations and Warranties of the Company | ||||||
SECTION 3.01. | Organization and Qualification | A-4 | ||||
SECTION 3.02. | Capitalization | A-5 | ||||
SECTION 3.03. | Authority for this Agreement; Board Action | A-6 | ||||
SECTION 3.04. | Consents and Approvals; No Violation | A-6 | ||||
SECTION 3.05. | Reports; Financial Statements | A-6 | ||||
SECTION 3.06. | Absence of Certain Changes | A-7 | ||||
SECTION 3.07. | Proxy Statement | A-8 | ||||
SECTION 3.08. | Brokers; Certain Expenses | A-8 | ||||
SECTION 3.09. | Employee Benefit Matters/ Employees | A-8 | ||||
SECTION 3.10. | Litigation | A-11 | ||||
SECTION 3.11. | Tax Matters | A-11 | ||||
SECTION 3.12. | Compliance with Law; No Default | A-12 | ||||
SECTION 3.13. | Environmental Matters | A-12 | ||||
SECTION 3.14. | Intellectual Property | A-14 | ||||
SECTION 3.15. | Real Property | A-15 | ||||
SECTION 3.16. | Material Contracts | A-16 | ||||
SECTION 3.17. | Insurance | A-16 | ||||
SECTION 3.18. | Related Party Transactions | A-16 | ||||
SECTION 3.19. | Opinion | A-16 | ||||
SECTION 3.20. | Required Vote of Company Stockholders | A-16 | ||||
SECTION 3.21. | State Takeover Statutes Inapplicable | A-17 | ||||
SECTION 3.22. | Rights Agreement | A-17 |
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ARTICLE IV Representations and Warranties of Parent and Merger Sub | ||||||
SECTION 4.01. | Organization and Qualification | A-17 | ||||
SECTION 4.02. | Authority for this Agreement | A-17 | ||||
SECTION 4.03. | Proxy Statement | A-17 | ||||
SECTION 4.04. | Consents and Approvals; No Violation | A-17 | ||||
SECTION 4.05. | Ownership of Shares | A-18 | ||||
ARTICLE V Covenants | ||||||
SECTION 5.01. | Conduct of Business of the Company | A-18 | ||||
SECTION 5.02. | No Solicitation | A-19 | ||||
SECTION 5.03. | Access to Information | A-21 | ||||
SECTION 5.04. | Stockholder Approval | A-21 | ||||
SECTION 5.05. | Reasonable Best Efforts | A-21 | ||||
SECTION 5.06. | Indemnification and Insurance | A-22 | ||||
SECTION 5.07. | Employee Matters | A-23 | ||||
SECTION 5.08. | Takeover Laws | A-24 | ||||
SECTION 5.09. | Proxy Statement | A-24 | ||||
SECTION 5.10. | Notification of Certain Matters | A-24 | ||||
SECTION 5.11. | Litigation | A-24 | ||||
SECTION 5.12. | Subsequent Filings | A-24 | ||||
SECTION 5.13. | Press Releases | A-24 | ||||
ARTICLE VI Conditions to Consummation of the Merger | ||||||
SECTION 6.01. | Conditions to Each Party’s Obligation To Effect the Merger | A-25 | ||||
SECTION 6.02. | Conditions to Obligations of Parent and Merger Sub | A-25 | ||||
SECTION 6.03. | Conditions to Obligations of the Company | A-25 | ||||
ARTICLE VII Termination; Amendment; Waiver | ||||||
SECTION 7.01. | Termination | A-26 | ||||
SECTION 7.02. | Effect of Termination | A-27 | ||||
SECTION 7.03. | Fees and Expenses | A-27 | ||||
SECTION 7.04. | Amendment | A-28 | ||||
SECTION 7.05. | Extension; Waiver; Remedies | A-28 |
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ARTICLE VIII Miscellaneous | ||||||
SECTION 8.01. | Representations and Warranties | A-28 | ||||
SECTION 8.02. | Entire Agreement; Assignment | A-29 | ||||
SECTION 8.03. | Enforcement of the Agreement; Jurisdiction | A-29 | ||||
SECTION 8.04. | Validity | A-29 | ||||
SECTION 8.05. | Notices | A-30 | ||||
SECTION 8.06. | Governing Law | A-30 | ||||
SECTION 8.07. | Descriptive Headings | A-30 | ||||
SECTION 8.08. | Parties in Interest | A-30 | ||||
SECTION 8.09. | Counterparts | A-30 | ||||
SECTION 8.10. | Certain Definitions | A-31 |
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Defined Terms | Defined in Section | |
Acquisition Proposal | Section 5.02(f) | |
Affiliate | Section 8.10(a) | |
Agreement | Opening Paragraph | |
Alternative Transaction | Section 7.03(b) | |
Associate | Section 8.10(a) | |
Beneficial Ownership | Section 8.10(b) | |
Bonus Plans | Section 5.07(e) | |
Business Day | Section 8.10(c) | |
Certificates | Section 2.02(b) | |
Closing | Section 1.02 | |
Code | Section 1.08 | |
Company | Opening Paragraph | |
Company 401(k) Plan | Section 5.07(d) | |
Company Acquisition Agreement | Section 7.03(b)(i) | |
Company Employees | Section 5.07(b) | |
Company Financial Advisor | Section 3.08 | |
Company IP | Section 3.14(a)(ii) | |
Company SEC Reports | Section 3.05(a) | |
Company Securities | Section 3.02(a) | |
Confidentiality Agreement | Section 3.03(b) | |
Copyrights | Section 3.14(a)(i) | |
Corporation Law | Recitals | |
Disclosure Letter | Article III | |
Dissenting Shares | Section 2.01 | |
DOJ | Section 5.05(b) | |
Effective Time | Section 1.02 | |
Environmental Laws | Section 3.13(d)(i) | |
Environmental Liabilities | Section 3.13(d)(ii) | |
Environmental Permits | Section 3.13(c) | |
ERISA | Section 3.09(a) | |
ERISA Affiliate | Section 3.09(c) | |
Exchange Act | Section 3.04 | |
Existing Performance Shares | Section 2.04(b) | |
Existing Restricted Shares | Section 2.04(b) | |
Existing SARs | Section 2.04(a) | |
Existing Stock Options | Section 2.04(a) | |
Fee | Section 7.03(b) | |
Foreign Antitrust Laws | Section 3.04 | |
Foreign Plans | Section 3.09(a) | |
FTC | Section 5.05(b) | |
Governmental Entity | Section 3.04 | |
Hazardous Materials | Section 3.13(d)(iii) |
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Defined Terms | Defined in Section | |
HSR Act | Section 3.04 | |
Intellectual Property | Section 3.14(a)(i) | |
Knowledge | Section 8.10(f) | |
Laws | Section 3.12 | |
Licensed Company IP | Section 3.14(a)(iv) | |
Material Adverse Effect | Section 8.10(g) | |
Merger Consideration | Section 1.06 | |
Material Contract | Section 3.16 | |
Merger | Section 1.01 | |
Merger Sub | Opening Paragraph | |
Owned Company IP | Section 3.14(a)(iii) | |
Owned Real Property | Section 3.15(a) | |
Parent | Opening Paragraph | |
Patents | Section 3.14(a)(i) | |
Paying Agent | Section 2.02(a) | |
Payment Fund | Section 2.02(a) | |
PBGC | Section 3.09(c) | |
Permits | Section 3.12 | |
Person | Section 8.10(h) | |
Plans | Section 3.09(a) | |
Potential Acquiror | Section 5.02(b) | |
Preferred Stock | Section 3.02(a) | |
Preliminary Proxy Statement | Section 5.09 | |
Proxy Statement | Section 3.07 | |
Real Property Leases | Section 3.15(b) | |
Release | Section 3.13(d)(iv) | |
Rights Agreement | Section 3.22 | |
Sarbanes-Oxley Act | Section 3.05(a) | |
SEC | Section 3.05(a) | |
Securities Act | Section 3.05(a) | |
Share | Section 1.06 | |
Software | Section 3.14(a)(i) | |
Special Meeting | Section 5.04 | |
Stock Option Plans | Section 2.04(a) | |
Subsidiary | Section 8.10(i) | |
Subsidiary Securities | Section 3.02(b) | |
Superior Proposal | Section 5.02(f) | |
Surviving Corporation | Section 1.01 | |
Trade Secrets | Section 3.14(a)(i) | |
Trademarks | Section 3.14(a)(i) | |
Takeover Laws | Section 3.03(b) | |
Tax | Section 3.11(l) |
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(i) the Equal Employment Opportunity Commission or any other state or local agency with authority to investigate claims or charges of employment discrimination in the workplace; | |
(ii) the United States Department of Labor or any other state or local agency with authority to investigate claims or charges in any way relating to hours of employment or wages; | |
(iii) the Occupational Safety and Health Administration or any other state of local agency with authority to investigate claims or charges in any way relating to the safety and health of employees; and | |
(iv) the Office of Federal Contract Compliance or any corresponding state agency. |
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(i) “Environmental Laws” means all Laws and state common law relating in any way to the environment, preservation or reclamation of natural resources, the presence, management or Release of, or exposure to, Hazardous Materials, or to human health and safety, including the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601et seq.), the Hazardous Materials Transportation Act (49 U.S.C. § 5101et seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901et seq.), the Clean Water Act (33 U.S.C. § 1251et seq.), the Clean Air Act (42 U.S.C. § 7401et seq.), the Safe Drinking Water Act (42 U.S.C. § 300fet seq.), the Toxic Substances Control Act (15 U.S.C. § 2601et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. § 136et seq.) and the Occupational Safety and Health Act (29 U.S.C. § 651et seq.), each of their state and local counterparts or equivalents, each of their foreign and international equivalents, and any transfer of ownership notification or approval statute relating to human health and safety or the environment, as each has been amended and the regulations promulgated pursuant thereto. | |
(ii) “Environmental Liabilities” means, with respect to any Person, all liabilities, obligations, responsibilities, remedial actions, losses, damages, punitive damages, consequential damages, treble damages, costs and expenses (including any amounts paid in settlement, all reasonable fees, disbursements and expenses of counsel, experts and consultants and costs of investigation and feasibility studies), fines, penalties, sanctions and interest incurred as a result of any claim or demand by any other Person or in response to any violation of Environmental Law, whether known or unknown, accrued or contingent, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute, to the extent based upon, related to, or arising under or pursuant to any Environmental Law, environmental permit, order or agreement with any Governmental Entity or other Person, which relates to any environmental condition, violation of Environmental Law or a Release or threatened Release of Hazardous Materials. | |
(iii) “Hazardous Materials” means any material, substance or waste that is regulated, classified, or otherwise characterized under or pursuant to any Environmental Law as “hazardous”, “toxic”, a “pollutant”, a “contaminant”, “radioactive” or words of similar meaning or effect, including any persistent organic pollutants referenced in the Stockholm Convention on Persistent Organic Pollutants. |
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(iv) “Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing of or migrating into or through the environment. |
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(a) issue, sell, grant options or rights to purchase, pledge, or authorize or propose the issuance, sale, grant of options or rights to purchase or pledge, any Company Securities or Subsidiary Securities, other than Shares issuable upon exercise of the Existing Stock Options; | |
(b) acquire or redeem, directly or indirectly, or amend any Company Securities or Subsidiary Securities; | |
(c) split, combine or reclassify its capital stock or declare, set aside, make or pay any dividend or distribution (whether in cash, stock or property) on any shares of its capital stock (other than cash dividends paid to the Company or one of its wholly owned Subsidiaries by wholly owned Subsidiaries of the Company with regard to their capital stock or other equity interests); | |
(d) (i) make or offer to make any acquisition, by means of a merger or otherwise, of any business, assets or securities (other than any acquisition of assets in the ordinary course of business consistent with past practice) or any sale, lease, encumbrance or other disposition of assets or securities, in each case involving the payment or receipt of consideration of $5 million or more, except for purchases or sales of inventory made in the ordinary course of business and consistent with past practice or (ii) enter into a Material Contract or amend any Material Contract or grant any release or relinquishment of any rights under any Material Contract except, in each case in this clause (ii), in the ordinary course of business and consistent with past practice; | |
(e) incur or assume any long-term debt or short-term debt, except for short-term debt or other borrowings for working capital purposes under the Company’s existing revolving credit facility incurred in the ordinary course of business consistent with past practice; | |
(f) assume, guarantee, endorse or otherwise take action to become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except Subsidiaries of the Company other than indemnities and similar provisions included in contracts in the ordinary course of business and consistent with past practice; | |
(g) make any loans, advances or capital contributions to, or investments in, any other Person (other than Subsidiaries of the Company); | |
(h) change any material financial accounting methods, principles or practices used by it, except as required by United States generally accepted accounting principles; |
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(i) except, in each case, as would not be reasonably likely to have a Material Adverse Effect with respect to the Company, make any Tax election or settle or compromise any federal, state or local income Tax liability (it being understood that no provision of thisSection 5.01 other than thisSection 5.01(i) shall apply to any Tax elections, settlements, compromises, filings or other Tax compliance matters); | |
(j) propose or adopt any amendments to its Certificate of Incorporation or Bylaws (or other similar governing documents); | |
(k) grant any stock-related, performance or similar awards or bonuses; | |
(l) other than as required by applicable Law or as required pursuant to the terms of an existing Plan, forgive any loans to employees, officers or directors or any of their respective Affiliates or Associates; | |
(m) other than as required by applicable Law or as required pursuant to the terms of an existing Plan, enter into any new, or amend any existing, employment, severance, consulting or salary continuation agreements with or for the benefit of any officers, directors or employees, or grant any increases in the compensation or benefits to officers, directors and employees (other than normal increases to Persons who are not officers or directors in the ordinary course of business consistent with past practices and that, in the aggregate, do not result in a material increase in benefits or compensation expense of the Company); | |
(n) make any deposits or contributions of cash or other property to or take any other action to fund or in any other way secure the payment of compensation or benefits under the Plans subject to the Plans or any other plan, agreement, contract or arrangement of the Company; | |
(o) enter into, amend in any material respect, or extend any collective bargaining or other labor agreement; | |
(p) other than as required by applicable Law or as required pursuant to the terms of an existing Plan, adopt, amend or terminate any Plan or any other bonus, severance, insurance, pension or other employee benefit plan or arrangement; | |
(q) settle or agree to settle any material suit, action, claim, proceeding or investigation (including any suit, action, claim, proceeding or investigation relating to this Agreement or the transactions contemplated hereby) or pay, discharge or satisfy or agree to pay, discharge or satisfy any material claim, liability or obligation (absolute or accrued, asserted or unasserted, contingent or otherwise) other than the payment, discharge or satisfaction of liabilities reflected or reserved against in full in the financial statements as at January 31, 2005 or incurred subsequent to that date in the ordinary course of business consistent with past practice; | |
(r) convene any regular or special meeting (or any adjournment thereof) of the stockholders of the Company other than the Special Meeting; or | |
(s) agree in writing or otherwise to take any of the foregoing actions;provided,however, that the foregoing covenants shall not prevent the Company and its Subsidiaries from undertaking transactions between or among themselves that do not result in value leaving the Company and its Subsidiaries taken as a whole. |
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(a) Stockholder Approval. The agreement of merger contained in this Agreement shall have been adopted by the requisite affirmative vote of the holders of Shares entitled to vote thereon. | |
(b) No Injunctions or Restraints; Illegality. No order, injunction or decree issued by any court or agency of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Merger contemplated by this Agreement shall be in effect. No statute, rule, regulation, order, Injunction or decree shall have been enacted, entered, promulgated or enforced by any Governmental Entity that prohibits or makes illegal consummation of the Merger. |
(a) Representations and Warranties. Subject to the standard set forth inSection 8.01(b), the representations and warranties of the Company set forth in this Agreement shall be true and correct as of the date of this Agreement and as of the Closing as though made on and as of the Closing (except that representations and warranties that by their terms speak specifically as of the date of this Agreement or another date shall be true and correct as of such date subject to the standard set forth inSection 8.01(b)) and Parent shall have received a certificate signed on behalf of the Company by the Chief Executive Officer or the Chief Financial Officer of the Company to the foregoing effect. | |
(b) Performance of Obligations of the Company. The Company shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Effective Time; and Parent shall have received a certificate signed on behalf of the Company by the Chief Executive Officer or the Chief Financial Officer of the Company to such effect. | |
(c) Regulatory Approvals. All regulatory filings set forth in Section 3.04(b)(i) of the Disclosure Letter shall have been made and, as applicable, all required approvals thereunder shall have been obtained and all required waiting periods thereunder shall have expired or been earlier terminated, and no such regulatory approval shall have resulted in the imposition of any condition that would require any of the actions, or impose any of the limitations, referred to inSection 5.05(c); provided, however, that in the event that at any time after August 1, 2005, any regulatory approval set forth in the Section 3.04(b)(i) of the Disclosure Letter (other than the expiration of the applicable waiting period under the HSR Act) has not been obtained and all other closing conditions have been satisfied, the parties shall exercise their commercially reasonable efforts to consummate the Merger with regard to all assets and Subsidiaries of the Company other than those subject to the regulatory approvals that have not been obtained. |
(a) Representations and Warranties. Subject to the standard set forth inSection 8.01(c), the representations and warranties of Parent and Merger Sub set forth in this Agreement shall be true and correct as of the date of this Agreement and as of the Closing as though made on and as of the Closing (except that representations and warranties that by their terms speak specifically as of the date of this Agreement or another date shall be true and correct as of such date subject to the standard set forth in |
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Section 8.01(c)) and the Company shall have received a certificate signed on behalf of Parent by a duly authorized executive officer of Parent to the foregoing effect. | |
(b) Performance of Obligations of Parent and Merger Sub. Parent and Merger Sub shall have performed in all material respects all obligations required to be performed by them under this Agreement at or prior to the Effective Time, and the Company shall have received a certificate signed on behalf of Parent by a duly authorized executive officer of Parent to such effect. | |
(c) Regulatory Approvals. All regulatory filings set forth in Section 3.04(b)(i) of the Disclosure Letter shall have been made and, as applicable, all required approvals thereunder shall have been obtained and all required waiting periods thereunder shall have expired or been earlier terminated;provided,however, that in the event that at any time after August 1, 2005, any regulatory approval set forth in the Section 3.04(b)(i) of the Disclosure Letter (other than the expiration of the applicable waiting period under the HSR Act) has not been obtained and all other closing conditions have been satisfied, the parties shall exercise their commercially reasonable efforts to consummate the Merger with regard to all assets and Subsidiaries of the Company other than those subject to the regulatory approvals that have not been obtained. |
(a) by mutual written consent of the Company and Parent; | |
(b) by either the Company or Parent if any court of competent jurisdiction or other Governmental Entity shall have issued an order, decree or ruling, or taken any other action restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement and such order, decree, ruling or other action shall have become final and non-appealable; provided, that the party seeking to terminate this Agreement pursuant to thisSection 7.01(b) shall have used its reasonable best efforts to contest, appeal and remove such order, decree, ruling or action and shall not be in material violation of this Agreement; | |
(c) by either the Company or Parent, if the Merger shall not have been consummated on or before October 31, 2005 unless the failure of the Closing to occur by such date shall be due to the failure of the party seeking to terminate this Agreement to perform or observe the covenants and agreements of such party set forth in this Agreement; | |
(d) by either the Company or Parent, if the requisite affirmative vote of the holders of Shares shall not have been obtained at the Special Meeting or at any adjournment or postponement thereof at which a vote on such approval was taken; | |
(e) by either Parent or the Company, if there shall have been a breach of any of the covenants or agreements or any of the representations or warranties set forth in this Agreement on the part of the Company, in the case of a termination by Parent, or on the part of Parent or Merger Sub, in the case of a termination by the Company, which breach, either individually or in the aggregate, would result in the failure of the conditions set forth inSection 6.02(a),6.02(b),6.03(a) or6.03(b), as the case may be, and which is not cured within 30 days following written notice to the party committing such breach or by its nature or timing cannot be cured; | |
(f) by Parent, if the Company or its Board of Directors shall have taken any of the actions set forth inSection 5.02(d) (i) through (iv) (or resolved to take any such action), whether or not permitted by the terms hereof, by written notice delivered to the Company within twenty Business Days after Parent becoming aware that the Company or its Board of Directors has taken such action; or |
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(g) by the Company at any time prior to the adoption of the Agreement by the requisite vote of the holders of Shares if, in connection with an Acquisition Proposal that the Company wishes to accept, (i) the Company has complied in all material respects withSection 5.02 with respect to such Acquisition Proposal, (ii) the Board of Directors of the Company determines, and has not changed its determination prior to the expiration of the three Business Day period specified in the next clause, that such Acquisition Proposal constitutes a Superior Proposal, (iii) the Company has provided Parent prior written notice of its intent to terminate this Agreement pursuant to thisSection 7.01(g) at least three Business Days prior to taking such action and (iv) the Company pays the Fee (as defined below) prior to or simultaneously with such termination. |
(i) if (A) either party shall terminate this Agreement pursuant toSection 7.01(c) without the Special Meeting having been convened as a result of the Company’s willful and material violation ofSection 5.04 and (B) an Acquisition Proposal shall have been made public and not withdrawn prior to the date specified inSection 7.01(c), then, if any Alternative Transaction is consummated, or an acquisition agreement or other similar agreement with respect to any Alternative Transaction (a “Company Acquisition Agreement”) is entered into, within 12 months after the date of such termination, the Company shall pay the Fee on the date of such consummation or the execution of such Company Acquisition Agreement, whichever is earlier; | |
(ii) if (A) this Agreement is terminated by Parent or the Company pursuant toSection 7.01(d) and (B) an Acquisition Proposal shall have been made public and not withdrawn prior to the taking of the vote at the Special Meeting, then, if any Alternative Transaction is consummated, or a Company Acquisition Agreement is entered into, within 12 months after the date of such termination which Alternative Transaction is later consummated, the Company shall pay the Fee on the date of such consummation; | |
(iii) if this Agreement is terminated by Parent pursuant toSection 7.01(f), then the Company shall pay the Fee on the Business Day following such termination; or | |
(iv) if this Agreement is terminated by the Company pursuant toSection 7.01(g), then the Company shall pay the Fee prior to or simultaneously with the termination. |
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(i) Any such representation and warranty (other than those referred to in clause (ii) or (iii) below) shall be deemed to be untrue or incorrect only if the fact, circumstance, change or event that resulted in such untruth or incorrectness, individually or when taken together with all other facts, circumstances, changes or events inconsistent with such representation or warranty, has had or would be reasonably likely to have a Material Adverse Effect with respect to the Company (disregarding for this purpose any reference to materiality or Material Adverse Effect contained in any such representation or warranty); | |
(ii) Any representation and warranty contained inSections 3.01 (Organization and Qualification),3.03 (Authority for this Agreement; Board Action),3.04 (Consents and Approvals; No Violation), |
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3.08 (Brokers; Certain Expenses), or3.22 (Rights Agreement) shall be deemed to be untrue and incorrect only if such representation and warranty is untrue or incorrect in any material respect; and | |
(iii) Any representation and warranty contained inSection 3.02 (Capitalization) or3.06(a) (Absence of a Material Adverse Effect) shall be deemed to be untrue and incorrect only if such representation and warranty is untrue or incorrect in any respect, except forde minimisfailures to be true and correct. |
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(a) “Affiliate” and “Associate” shall have the meanings given to such terms in Rule 12b-2 under the Exchange Act; | |
(b) “Beneficial Ownership” shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; | |
(c) “Business Day” shall have the meaning given to such term in Rule 14d-1(g) under the Exchange Act; | |
(d) “hereby” shall be deemed to refer to this Agreement in its entirety, rather than to any Article, Section, or other portion of this Agreement; | |
(e) “including” shall be deemed to be followed by the phrase “without limitation”; | |
(f) “knowledge” of the Company with respect to any matter means the actual knowledge of the Company’s senior executive officers of a particular fact or other matter after due inquiry with respect thereto; | |
(g) “Material Adverse Effect” shall mean, with respect to the Company, a material adverse effect on (i) the business, results of operations or financial condition of the Company and its Subsidiaries taken as a whole (provided,however, that, with respect to this clause (i), Material Adverse Effect shall not be deemed to include effects to the extent resulting from (A) changes, after the date hereof, in generally accepted accounting principles, (B) changes, after the date hereof, in Laws, rules or regulations of general applicability or interpretations thereof by courts or Governmental Entities, (C) public disclosure or pendency of the transactions contemplated hereby or actions or omissions of the Company taken with the prior written consent of Parent in contemplation of the transactions contemplated hereby, (D) changes in the market price or trading volume of the Shares (provided that this clause (D) shall not prevent Parent from asserting that the underlying cause of such change has resulted in a Material Adverse Effect), (E) general national, international or regional economic, financial, political or business conditions (except to the extent such conditions have a disproportionate effect on the Company and its Subsidiaries, taken as a whole) or (F) conditions, including changes in economic, financial market, regulatory or political conditions, affecting generally the industries in which the Company participates (except to the extent such conditions have a disproportionate effect on the Company and its Subsidiaries, taken as a whole); or (ii) the ability of the Company to timely consummate the transactions contemplated by this Agreement. | |
(h) “Person” shall mean any individual, corporation, limited liability company, partnership, association, trust, estate or other entity or organization; and | |
(i) “Subsidiary” shall mean, when used with reference to an entity, any 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, or a majority of the outstanding voting securities of which, are owned directly or indirectly by such entity. |
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3M COMPANY |
By: | /s/Harold J. Wiens |
Harold J. Wiens | |
Executive Vice President | |
CARRERA ACQUISITION CORPORATION |
By: | /s/Harold J. Wiens |
Harold J. Wiens | |
President, Secretary and Treasurer | |
CUNO INCORPORATED |
By: | /s/Frederick C. Flynn, Jr. |
Frederick C. Flynn, Jr. | |
Senior Vice President and Chief Financial Officer |
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Very truly yours, | |
/s/ Citigroup Global Markets Inc. | |
CITIGROUP GLOBAL MARKETS INC. |
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(1) Provided, however, that no appraisal rights under this section shall be available for the shares of any class or series of stock, which stock, or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of and to vote at the meeting of stockholders to act upon the agreement of merger or consolidation, were either (i) listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or (ii) held of record by more than 2,000 holders; and further provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation as provided in subsection (f) of § 251 of this title. | |
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights under this section shall be available for the shares of any class or series of stock of a constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation pursuant to § § 251, 252, 254, 257, 258, 263 and 264 of this title to accept for such stock anything except: |
a. Shares of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect thereof; | |
b. Shares of stock of any other corporation, or depository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or depository receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or held of record by more than 2,000 holders; | |
c. Cash in lieu of fractional shares or fractional depository receipts described in the foregoing subparagraphs a. and b. of this paragraph; or | |
d. Any combination of the shares of stock, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in the foregoing subparagraphs a., b. and c. of this paragraph. |
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(3) In the event all of the stock of a subsidiary Delaware corporation party to a merger effected under § 253 of this title is not owned by the parent corporation immediately prior to the merger, appraisal rights shall be available for the shares of the subsidiary Delaware corporation. |
(1) If a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for approval at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who was such on the record date for such meeting with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) hereof that appraisal rights are available for any or all of the shares of the constituent corporations, and shall include in such notice a copy of this section. Each stockholder electing to demand the appraisal of such stockholder’s shares shall deliver to the corporation, before the taking of the vote on the merger or consolidation, a written demand for appraisal of such stockholder’s shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholder’s shares. A proxy or vote against the merger or consolidation shall not constitute such a demand. A stockholder electing to take such action must do so by a separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the surviving or resulting corporation shall notify each stockholder of each constituent corporation who has complied with this subsection and has not voted in favor of or consented to the merger or consolidation of the date that the merger or consolidation has become effective; or | |
(2) If the merger or consolidation was approved pursuant to § 228 or § 253 of this title, then either a constituent corporation before the effective date of the merger or consolidation or the surviving or resulting corporation within 10 days thereafter shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of this section. Such notice may, and, if given on or after the effective date of the merger or consolidation, shall, also notify such stockholders of the effective date of the merger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of mailing of such notice, demand in writing from the surviving or resulting corporation the appraisal of such holder’s shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such holder’s shares. If such notice did not notify stockholders of the effective date of the merger or consolidation, either (i) each such constituent corporation shall send a second notice before the effective date of the merger or consolidation notifying each of the holders of any class or series of stock of such constituent corporation that are entitled to appraisal rights of the effective date of the merger or consolidation or (ii) the surviving or resulting corporation shall send such a second notice to all such holders on or within 10 days after such effective date; provided, however, that if such second notice is sent more than 20 days following the sending of the first notice, such second notice need only be sent to each stockholder who is entitled to appraisal rights and who has demanded appraisal of such holder’s shares in accordance with this subsection. An affidavit of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that such notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. For purposes of determining the stockholders entitled to receive either notice, each constituent corporation may fix, in advance, a record date that shall be not more than 10 days prior to the date the notice is given, provided, that if the notice is given on or after the effective date of the merger or consolidation, the record date shall |
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be such effective date. If no record date is fixed and the notice is given prior to the effective date, the record date shall be the close of business on the day next preceding the day on which the notice is given. |
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CUNO INCORPORATED
400 Research Parkway
Meriden, Connecticut 06450
This proxy is solicited on behalf of the Board of Directors of Cuno Incorporated
For the Special Meeting of Stockholders, August 2, 2005 at 9:00 a.m.
The undersigned hereby appoints Mark G. Kachur, Thomas J. Hamlin, and Timothy B. Carney, and each or any of them, attorneys and proxies with full power of substitution, and hereby authorizes them to represent the undersigned and to vote all shares of Common Stock of CUNO INCORPORATED (the “Company”) held of record by the undersigned on July 8, 2005 at the Special Meeting of Stockholders of the Company to be held on August 2, 2005, and any adjournments or postponements thereof, as follows and in accordance with their judgment upon any other matter properly presented:
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C/O EQUISERVE TRUST COMPANY, N.A.
P.O. BOX 8694
EDISON, NJ 08818-8694
Admission Ticket
You must present this ticket to gain entry into the Special Meeting.
Your vote is important. Please vote immediately.
Vote-by-lnternet Log on to the Internet and go to http://www.eproxyvote.com/cuno | OR | Vote-by-Telephone Call toll-free 1-877-PRX-VOTE (1-877-779-8683) |
If you vote over the Internet or by telephone, please do not mail your card.
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
The Board of Directors recommends a vote FOR Proposals 1, 2 and 3.
For | Against | Abstain | ||||||||
1. | Proposal to approve and adopt the Agreement and Plan of Merger, dated as of May 11, 2005, by and among 3M Company, Carrera Acquisition Corporation and CUNO Incorporated | [ ] | [ ] | [ ] | ||||||
2. | Any proposal to adjourn the special meeting | [ ] | [ ] | [ ] | ||||||
3. | In their discretion, the proxies are authorized to vote on such other matters as may properly come before the special meeting | [ ] | [ ] | [ ] | ||||||
(Continued, and to be dated and signed, on the other side)
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Detach Card
(Continued from the other side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED STOCKHOLDER OR, IF NO DIRECTION IS INDICATED, WILL BE VOTED “FOR” PROPOSALS 1, 2 AND 3.
Date: | , 2005 | |||||||||
Signature | ||||||||||
Signature (if held jointly) | ||||||||||
Important: Please sign as your name appears hereon. If shares are held jointly, all holders must sign. When signing as attorney, executor, administrator, trustee or guardian, please give your full title. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person. |