AGREEMENT AND PLAN OF MERGER
By and Among
Halliburton Company,
Halliburton Acq. Company
and
Landmark Graphics Corporation
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions....................................................1
-----------
SECTION 1.02 Rules of Construction..........................................1
---------------------
ARTICLE II
TERMS OF MERGER
SECTION 2.01 Statutory Merger...............................................2
----------------
SECTION 2.02 Effective Time.................................................2
--------------
SECTION 2.03 Effect of the Merger...........................................2
--------------------
SECTION 2.04 Certificate of Incorporation; Bylaws...........................2
------------------------------------
SECTION 2.05 Directors and Officers.........................................3
----------------------
ARTICLE III
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 3.01 Merger Consideration;
---------------------
Conversion and Cancellation of Securities....................3
-----------------------------------------
SECTION 3.02 Exchange of Certificates.......................................4
------------------------
SECTION 3.03 Closing........................................................6
-------
SECTION 3.04 Stock Transfer Books...........................................6
--------------------
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.01 Organization and Qualification; Subsidiaries...................6
--------------------------------------------
SECTION 4.02 Certificate of Incorporation and Bylaws........................7
---------------------------------------
SECTION 4.03 Capitalization.................................................7
--------------
SECTION 4.04 Authorization of Agreement.....................................9
--------------------------
SECTION 4.05 Approvals......................................................9
---------
SECTION 4.06 No Violation...................................................9
------------
SECTION 4.07 Reports.......................................................10
-------
SECTION 4.08 No Material Adverse Effect; Conduct...........................11
-----------------------------------
SECTION 4.09 Title to Properties...........................................11
-------------------
SECTION 4.10 Certain Obligations...........................................12
-------------------
SECTION 4.11 Permits; Compliance...........................................12
-------------------
SECTION 4.12 Litigation; Compliance with Laws..............................12
--------------------------------
SECTION 4.13 Employee Benefit Plans........................................13
----------------------
AGREEMENT AND PLAN OF MERGER
-ii-
SECTION 4.14 Taxes.........................................................15
-----
SECTION 4.15 Environmental Matters.........................................16
---------------------
SECTION 4.16 Intellectual Property.........................................16
---------------------
SECTION 4.17 Insurance.....................................................17
---------
SECTION 4.18 Pooling; Tax Matters..........................................17
--------------------
SECTION 4.19 Affiliates....................................................18
----------
SECTION 4.20 Certain Business Practices....................................18
--------------------------
SECTION 4.21 Opinion of Financial Advisor..................................18
----------------------------
SECTION 4.22 Brokers.......................................................19
-------
SECTION 4.23 Acquiring Person..............................................19
----------------
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
SECTION 5.01 Organization and Qualification; Subsidiaries...................19
--------------------------------------------
SECTION 5.02 Certificate of Incorporation and Bylaws........................19
---------------------------------------
SECTION 5.03 Capitalization.................................................20
--------------
SECTION 5.04 Authorization of Agreement.....................................21
--------------------------
SECTION 5.05 Approvals......................................................21
---------
SECTION 5.06 No Violation...................................................22
------------
SECTION 5.07 Reports........................................................22
-------
SECTION 5.08 No Material Adverse Effect; Conduct............................23
-----------------------------------
SECTION 5.09 Title to Properties............................................23
-------------------
SECTION 5.10 Certain Obligations............................................23
-------------------
SECTION 5.11 Permits; Compliance............................................24
-------------------
SECTION 5.12 Litigation; Compliance with Laws...............................24
--------------------------------
SECTION 5.13 Employee Benefit Plans.........................................24
----------------------
SECTION 5.14 Taxes..........................................................25
-----
SECTION 5.15 Environmental Matters..........................................26
---------------------
SECTION 5.16 Pooling; Tax Matters...........................................26
--------------------
SECTION 5.17 Affiliates.....................................................27
----------
SECTION 5.18 Brokers........................................................27
-------
SECTION 5.19 Acquiring Person...............................................27
----------------
SECTION 5.20 Proposal to Acquire the Acquiror...............................27
--------------------------------
SECTION 5.21 Certain Business Practices.....................................27
--------------------------
ARTICLE VI
COVENANTS
SECTION 6.01 Affirmative Covenants..........................................28
---------------------
SECTION 6.02 Negative Covenants.............................................28
------------------
SECTION 6.03 No Solicitation................................................33
---------------
AGREEMENT AND PLAN OF MERGER
-iii-
SECTION 6.04 Access and Information........................................34
----------------------
SECTION 6.05 Confidentiality Agreement.....................................35
-------------------------
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01 Meeting of Stockholders.......................................35
-----------------------
SECTION 7.02 Registration Statement; Proxy Statements......................35
----------------------------------------
SECTION 7.03 Appropriate Action; Consents; Filings.........................37
-------------------------------------
SECTION 7.04 Affiliates; Pooling; Tax Treatment............................39
----------------------------------
SECTION 7.05 Public Announcements..........................................39
--------------------
SECTION 7.06 NYSE Listing..................................................39
------------
SECTION 7.07 Rights Agreement; State Takeover Statutes.....................40
-----------------------------------------
SECTION 7.08 Comfort Letters...............................................40
---------------
SECTION 7.09 Assumption of Obligations to Issue Stock......................40
----------------------------------------
SECTION 7.10 Employee Benefit Plans........................................41
----------------------
SECTION 7.11 Indemnification of Directors and Officers.....................42
-----------------------------------------
SECTION 7.12 Newco.........................................................43
-----
SECTION 7.13 Event Notices.................................................43
-------------
SECTION 7.14 Stratworks Divestiture........................................44
----------------------
SECTION 7.15 Change in Control Agreements..................................44
----------------------------
ARTICLE VIII
CLOSING CONDITIONS
SECTION 8.01 Conditions to Obligations
-------------------------
of Each Party Under This Agreement..........................44
----------------------------------
SECTION 8.02 Additional Conditions to Obligations
------------------------------------
of the Acquiror Companies...................................45
-------------------------
SECTION 8.03 Additional Conditions to Obligations of the Company...........46
---------------------------------------------------
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01 Termination...................................................46
-----------
SECTION 9.02 Effect of Termination.........................................48
---------------------
SECTION 9.03 Amendment.....................................................48
---------
SECTION 9.04 Waiver........................................................48
------
SECTION 9.05 Fees, Expenses and Other Payments.............................48
---------------------------------
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01 Effectiveness of Representations,
---------------------------------
Warranties and Agreements..................................50
-------------------------
AGREEMENT AND PLAN OF MERGER
-iv-
SECTION 10.02 Notices.....................................................50
-------
SECTION 10.03 Headings....................................................52
--------
SECTION 10.04 Severability................................................52
------------
SECTION 10.05 Entire Agreement............................................52
----------------
SECTION 10.06 Assignment..................................................52
----------
SECTION 10.07 Parties in Interest.........................................52
-------------------
SECTION 10.08 Failure or Indulgence Not Waiver; Remedies Cumulative......52
------------------------------------------------------
SECTION 10.09 Governing Law...............................................52
-------------
SECTION 10.10 Counterparts................................................52
------------
AGREEMENT AND PLAN OF MERGER
-v-
ANNEXES
Annex A Schedule of Defined Terms
Annex B Affiliate's Agreement (Landmark Graphics Corporation Affiliates)
Annex C Affiliate's Agreement (Halliburton Company Affiliates)
AGREEMENT AND PLAN OF MERGER
-vi-
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of June 30, 1996 (this
"Agreement"), is by and among Halliburton Company, a Delaware corporation
("Acquiror"), Halliburton Acq. Company, a Delaware corporation and a
wholly-owned subsidiary of Acquiror ("Newco"), and Landmark Graphics
Corporation, a Delaware corporation (the "Company"). The Acquiror and Newco are
sometimes referred to herein as the "Acquiror Companies."
RECITALS:
The Board of Directors of the Company has determined that the business
combination to be effected by means of the Merger is consistent with and in
furtherance of the long-term business strategy of the Company and is fair to,
and in the best interests of, the Company and its stockholders and has approved
and adopted this Agreement and recommended approval and adoption of this
Agreement by the stockholders of the Company.
The Board of Directors of the Acquiror has determined that the business
combination to be effected by means of the Merger is consistent with and in
furtherance of the long-term business strategy of the Acquiror and is fair to,
and in the best interests of, the Acquiror and its stockholders and has approved
and adopted this Agreement.
Upon the terms and subject to the conditions of this Agreement and in
accordance with the GCL, the Company will merge with and into Newco and Newco
will be the Surviving Corporation.
For federal income tax purposes, it is intended that the Merger will
qualify as a reorganization within the meaning of the provisions of Section
368(a) of the Code.
The Merger is intended to be treated as a "pooling of interests" for
accounting purposes.
The parties hereto acknowledge the execution and delivery of the Stock
Option Agreement and the Voting Agreement concurrently with the execution and
delivery of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions. Certain capitalized and other terms used in
this Agreement are defined in Annex A hereto and are used herein with the
meanings ascribed to them therein.
SECTION 1.02 Rules of Construction. Unless the context otherwise
requires, as used in this Agreement: (a) a term has the meaning ascribed to
it; (b) an accounting term not otherwise
AGREEMENT AND PLAN OF MERGER
-1-
defined has the meaning ascribed to it in accordance with generally accepted
accounting principles as in effect from time to time: (c) "or" is not exclusive;
(d) "including" means "including, without limitation;" and (e) words in the
singular include the plural and words in the plural include the singular.
ARTICLE II
TERMS OF MERGER
SECTION 2.01 Statutory Merger. Subject to the terms and conditions and
in reliance upon the representations, warranties, covenants and agreements
contained herein, the Company shall merge with and into Newco at the Effective
Time. The terms and conditions of the Merger and the mode of carrying the same
into effect shall be as set forth in this Agreement. As a result of the Merger,
the separate corporate existence of each of the Constituent Corporations shall
cease and Newco shall continue as the Surviving Corporation.
SECTION 2.02 Effective Time. As soon as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in Article
VIII, the parties hereto shall cause the Merger to be consummated by filing a
Certificate of Merger with the Secretary of State of the State of Delaware, in
such form as required by, and executed in accordance with the relevant
provisions of, the GCL.
SECTION 2.03 Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of the GCL. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, except as otherwise provided herein, all the property, rights, privileges,
powers and franchises of Newco and the Company shall vest in the Surviving
Corporation, and all debts, liabilities and duties of Newco and the Company
shall become the debts, liabilities and duties of the Surviving Corporation.
SECTION 2.04 Certificate of Incorporation; Bylaws. At the Effective
Time, the certificate of incorporation and the bylaws of Newco, as in effect
immediately prior to the Effective Time, shall be the certificate of
incorporation and the bylaws of the Surviving Corporation, except that from and
after the Effective Time Article I of the certificate of incorporation shall be
and read in its entirety as follows:
ARTICLE I
The name of the corporation shall be "Landmark Graphics Corporation."
Prior to the Effective Time, the certificate of incorporation and bylaws of
Newco shall be amended so as to contain provisions substantially similar in form
and substance to the provisions contained in Article IX of the certificate of
incorporation and Section 6.10 of the bylaws of the Company, respectively.
AGREEMENT AND PLAN OF MERGER
-2-
SECTION 2.05 Directors and Officers. The directors of Newco immediately
prior to the Effective Time shall be the directors of the Surviving Corporation,
each to hold office in accordance with the certificate of incorporation and
bylaws of the Surviving Corporation, and the officers of the Company immediately
prior to the Effective Time shall be the officers of the Surviving Corporation,
in each case until their respective successors are duly elected or appointed and
qualified.
ARTICLE III
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 3.01 Merger Consideration; Conversion and Cancellation of
Securities. At the Effective Time, by virtue of the Merger and without any
action on the part of the Acquiror Companies, the Company or the holders of any
of the following securities:
(a) Subject to the other provisions of this Article III, each
share of Company Common Stock issued and outstanding immediately prior
to the Effective Time (excluding any Company Common Stock described in
Section 3.01(c)) shall be converted into 0.574 shares of Acquiror
Common Stock. Notwithstanding the foregoing, if between the date of
this Agreement and the Effective Time the outstanding shares of the
Acquiror Common Stock or the Company Common Stock shall have been
changed into a different number of shares or a different class, by
reason of any stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares, the Common
Stock Exchange Ratio shall be correspondingly adjusted to reflect such
stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares.
(b) All shares of Company Common Stock shall, upon conversion
thereof into shares of Acquiror Common Stock at the Effective Time,
cease to be outstanding and shall automatically be cancelled and
retired, and each certificate previously evidencing Company Common
Stock outstanding immediately prior to the Effective Time (other than
Company Common Stock described in Section 3.01(c)) shall thereafter be
deemed, for all purposes other than the payment of dividends or
distributions, to represent that number of shares of Acquiror Common
Stock determined pursuant to the Common Stock Exchange Ratio and, if
applicable, the right to receive cash pursuant to Section 3.02(e). The
holders of certificates previously evidencing Company Common Stock
shall cease to have any rights with respect to such Company Common
Stock except as otherwise provided herein or by law.
(c) Notwithstanding any provision of this Agreement to the
contrary, each share of Company Common Stock held in the treasury of
the Company and each share of Company Common Stock, if any, owned by
the Acquiror or any direct or indirect wholly-owned Subsidiary of the
Acquiror or of the Company immediately prior to the Effective Time
shall be cancelled and extinguished without conversion thereof.
AGREEMENT AND PLAN OF MERGER
-3-
(d) Each share of common stock, par value $1.00 per share, of
Newco issued and outstanding immediately prior to the Effective Time
shall continue to be issued and outstanding as one share of common
stock, par value $1.00 per share, of the Surviving Corporation.
SECTION 3.02 Exchange of Certificates.
(a) Exchange Fund. On the day of the Effective Time, the
Acquiror shall deposit, or cause to be deposited, with the Exchange
Agent, for the benefit of the former holders of Company Common Stock,
for exchange in accordance with this Article III, through the Exchange
Agent, certificates evidencing a number of shares of Acquiror Common
Stock equal to the product of the Common Stock Exchange Ratio
multiplied by the number of shares of Company Common Stock issued and
outstanding immediately prior to the Effective Time (exclusive of any
such shares to be cancelled pursuant to Section 3.01(c)). The Exchange
Agent shall, pursuant to irrevocable instructions from the Acquiror,
deliver Acquiror Common Stock, together with any cash to be paid in
lieu of fractional interests in shares of Acquiror Common Stock
pursuant to Section 3.02(e) and any dividends or distributions related
thereto, in exchange for certificates theretofore evidencing Company
Common Stock surrendered to the Exchange Agent pursuant to Section
3.02(c). Except as contemplated by Section 3.02(e), the Exchange Fund
shall not be used for any other purpose.
(b) Letter of Transmittal. Promptly after the Effective Time,
the Acquiror will cause the Exchange Agent to send to each record
holder of Company Common Stock immediately prior to the Effective Time
a letter of transmittal and other appropriate materials for use in
surrendering to the Exchange Agent certificates that prior to the
Effective Time evidenced shares of Company Common Stock.
(c) Exchange Procedures. Promptly after the Effective Time,
the Exchange Agent shall distribute to each former holder of Company
Common Stock, upon surrender to the Exchange Agent for cancellation of
one or more certificates that theretofore evidenced shares of Company
Common Stock, certificates evidencing the appropriate number of shares
of Acquiror Common Stock into which such shares of Company Common Stock
were converted pursuant to the Merger, together with any cash to be
paid in lieu of fractional interests in shares of Acquiror Common Stock
pursuant to Section 3.02(e) and any dividends or distributions related
thereto. If shares of Acquiror Common Stock are to be issued to a
Person other than the Person in whose name the surrendered certificate
or certificates are registered, it shall be a condition of issuance of
the Acquiror Common Stock that the surrendered certificate or
certificates shall be properly endorsed, with signatures guaranteed, or
otherwise in proper form for transfer and that the Person requesting
such payment shall pay any transfer or other taxes required by reason
of the issuance of Acquiror Common Stock to a Person other than the
registered holder of the surrendered certificate or certificates or
such Person shall establish to the satisfaction of the Acquiror that
such tax has been paid or is not applicable. Notwithstanding the
foregoing, neither the Exchange Agent nor any party
AGREEMENT AND PLAN OF MERGER
-4-
hereto shall be liable to any former holder of Company Common Stock for
any Acquiror Common Stock, cash in lieu of fractional share interests
or dividends or distributions thereon delivered to a public official
pursuant to any applicable escheat law.
(d) Distributions with Respect to Unexchanged Shares of
Company Common Stock. No dividends or other distributions declared or
made with respect to Acquiror Common Stock with a record date after the
Effective Time shall be paid to the holder of any certificate that
theretofore evidenced shares of Company Common Stock until the holder
of such certificate shall surrender such certificate. Subject to the
effect of any applicable escheat laws, following surrender of any such
certificate, there shall be paid (i) to the holder of the certificates
evidencing whole shares of Acquiror Common Stock issued in exchange
therefor, without interest, (A) promptly, the amount of dividends or
other distributions with a record date after the Effective Time
theretofore paid with respect to such whole shares of Acquiror Common
Stock, and (B) at the appropriate payment date, the amount of dividends
or other distributions, with a record date after the Effective Time but
prior to surrender and a payment date occurring after surrender,
payable with respect to such whole shares of Acquiror Common Stock and
(ii) to the holder of any certificate that theretofore evidenced shares
of Company Common Stock, without interest, promptly the amount of any
cash payable with respect to a fractional share of Acquiror Common
Stock to which such holder is entitled pursuant to Section 3.02(e).
(e) No Fractional Shares. Notwithstanding anything herein to
the contrary, no certificates or scrip evidencing fractional shares of
Acquiror Common Stock shall be issued in connection with the Merger,
and any such fractional share interests to which a holder of record of
Company Common Stock at the Effective Time would otherwise be entitled
will not entitle such holder to vote or to any rights of a stockholder
of the Acquiror. In lieu of any such fractional shares, each holder of
record of Company Common Stock at the Effective Time who but for the
provisions of this Section 3.02(e) would be entitled to receive a
fractional interest of a share of Acquiror Common Stock pursuant to the
Merger shall be paid cash, without any interest thereon, as hereinafter
provided. The Acquiror shall instruct the Exchange Agent to determine
the number of whole shares and fractional shares of Acquiror Common
Stock allocable to each holder of record of Company Common Stock at the
Effective Time, to aggregate all such fractional shares into whole
shares, to sell the whole shares obtained thereby in the open market at
then prevailing prices on behalf of holders who otherwise would be
entitled to receive fractional share interests and to distribute to
each such holder such holder's ratable share of the total proceeds of
such sale, after making appropriate deductions of the amount, if any,
required for Federal income tax withholding purposes and after
deducting any applicable transfer taxes. All brokers' fees and
commissions and fees of the Exchange Agent incurred in connection with
such sales shall be paid by the Acquiror.
(f) Termination of Exchange Fund. Any portion of the
Exchange Fund which remains unclaimed by the former holders of Company
Common Stock for twelve months after the Effective Time shall be
delivered to the Acquiror, upon demand, and any former
AGREEMENT AND PLAN OF MERGER
-5-
holders of Company Common Stock who have not theretofore complied with
this Article III shall thereafter look only to the Acquiror for the
Acquiror Common Stock and any cash to which they are entitled.
(g) Withholding of Tax. The Acquiror shall be entitled to
deduct and withhold from the consideration otherwise payable pursuant
to this Agreement to any former holder of Company Common Stock such
amounts as the Acquiror (or any affiliate thereof) is required to
deduct and withhold with respect to the making of such payment under
the Code, or any provision of state, local or foreign tax law. To the
extent that amounts are so withheld by the Acquiror, such withheld
amounts shall be treated for all purposes of this Agreement as having
been paid to the former holder of Company Common Stock in respect of
which such deduction and withholding was made by the Acquiror.
(h) Lost Certificates. If any certificate evidencing 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 Acquiror, the
posting by such Person of a bond, in such reasonable amount as the
Acquiror may direct, as indemnity against claims that may be made
against it with respect to such certificate, the Exchange Agent will
issue in exchange for such lost, stolen or destroyed certificate the
Acquiror Common Stock to which the holder may be entitled pursuant to
this Article III, any cash in lieu of fractional shares of Acquiror
Common Stock to which the holder thereof may be entitled pursuant to
Section 3.02(e) and any dividends or other distributions to which the
holder thereof may be entitled pursuant to Section 3.02(d).
SECTION 3.03 Closing. The Closing shall take place at the offices of
Vinson & Elkins L.L.P., 1001 Fannin, 3600 First City Tower, Houston, Texas
77002-6760, at 10:00 a.m. on the second Business Day following the date on which
the conditions to the Closing have been satisfied or waived or at such other
place, time and date as the parties hereto may agree. At the conclusion of the
Closing on the Closing Date, the parties hereto shall cause the Certificate of
Merger to be filed with the Secretary of State of the State of Delaware.
SECTION 3.04 Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed and there shall be no further
registration of transfers of shares of Company Common Stock thereafter on the
records of the Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Acquiror Companies
that:
SECTION 4.01 Organization and Qualification; Subsidiaries. The Company
and each Subsidiary of the Company are legal entities duly organized, validly
existing and in good standing
AGREEMENT AND PLAN OF MERGER
-6-
under the Laws of their respective jurisdictions of incorporation or
organization, have all requisite power and authority to own, lease and operate
their respective properties and to carry on their business as it is now being
conducted and are duly qualified and in good standing to do business in each
jurisdiction in which the nature of the business conducted by them or the
ownership or leasing of their respective properties makes such qualification
necessary, other than any matters, including the failure to be so duly qualified
and in good standing, that could not reasonably be expected to have a Material
Adverse Effect on the Company. Section 4.01 of the Company's Disclosure Letter
sets forth, as of the date of this Agreement, a true and complete list of all
the Company's directly or indirectly owned Subsidiaries, together with (A) the
jurisdiction of incorporation of each Subsidiary and the percentage of each
Subsidiary's outstanding capital stock or other equity interests owned by the
Company or another Subsidiary of the Company, and (B) an indication of whether
each such Subsidiary is a "Significant Subsidiary." Neither the Company nor any
of its Subsidiaries owns an equity interest in any partnership or joint venture
arrangement or other business entity that is Material to the Company.
SECTION 4.02 Certificate of Incorporation and Bylaws. The Company has
heretofore marked for identification and furnished to the Acquiror complete and
correct copies of the certificate of incorporation and the bylaws or the
equivalent organizational documents, in each case as amended or restated to the
date hereof, of the Company and each of its Subsidiaries. Neither the Company
nor any of its Subsidiaries is in violation of any of the provisions of its
certificate of incorporation or bylaws (or equivalent organizational documents).
SECTION 4.03 Capitalization.
(a) The authorized capital stock of the Company consists of
(i) 50,000,000 shares of Company Common Stock of which, as of March 29,
1996, 17,498,396 shares were issued and outstanding, all of which are
duly authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights created by statute, the Company's
certificate of incorporation or bylaws or any agreement to which the
Company is a party or is bound and (ii) 3,600,000 shares of Preferred
Stock, par value $1.00 per share, of which none is issued but of which
500,000 shares have been designated as Series A Junior Participating
Preferred Stock. As of June 30, 1996, 3,100,727 shares of Company
Common Stock were reserved for future issuance pursuant to outstanding
Company Stock Options granted pursuant to the Company Option Plans.
Except as set forth in Section 4.03(a) of the Company's Disclosure
Letter, between March 29, 1996 and the date of this Agreement, no
shares of Company Common Stock have been issued by the Company. Except
as set forth in Section 4.03(a) of the Company's Disclosure Letter,
since March 29, 1996, the Company has not granted any options for, or
other rights to purchase, shares of Company Common Stock.
(b) Except as set forth in Section 4.03(a), no shares of
Common Stock are reserved for issuance, and, except for the Company's
Rights Plan and Company Stock Options listed in Section 4.03(b) of the
Company's Disclosure Letter, there are no contracts,
AGREEMENT AND PLAN OF MERGER
-7-
agreements, commitments or arrangements obligating the Company (i) to
offer, sell, issue or grant any shares of, or any options, warrants or
rights of any kind to acquire any shares of, or any securities that are
convertible into or exchangeable for any shares of, capital stock of
the Company, (ii) to redeem, purchase or acquire, or offer to purchase
or acquire, any outstanding shares of, or any outstanding options,
warrants or rights of any kind to acquire any shares of, or any
outstanding securities that are convertible into or exchangeable for
any shares of, capital stock of the Company or (iii) to grant any Lien
on any shares of capital stock of the Company.
(c) The authorized, issued and outstanding capital stock of,
or other equity interests in, each of the Company's Subsidiaries and
the names and addresses of the holders of record of the capital stock
or other equity interests of each such Subsidiary are set forth in
Section 4.03(c) of the Company's Disclosure Letter. Except as set forth
in the Company's Disclosure Letter, (i) the issued and outstanding
shares of capital stock of, or other equity interests in, each of the
Subsidiaries of the Company that are owned by the Company or any of its
Subsidiaries have been duly authorized and are validly issued, and,
with respect to capital stock, are fully paid and nonassessable, and
were not issued in violation of any preemptive or similar rights of any
past or present equity holder of such Subsidiary; (ii) all such issued
and outstanding shares, or other equity interests, that are indicated
as owned by the Company or one of its Subsidiaries in Section 4.03(c)
of the Company's Disclosure Letter are owned (A) beneficially as set
forth therein and (B) free and clear of all Liens; (iii) no shares of
capital stock of, or other equity interests in, any Subsidiary of the
Company are reserved for issuance, and there are no contracts,
agreements, commitments or arrangements obligating the Company or any
of its Subsidiaries (A) to offer, sell, issue, grant, pledge, dispose
of or encumber any shares of capital stock of, or other equity
interests in, or any options, warrants or rights of any kind to acquire
any shares of capital stock of, or other equity interests in, or any
securities that are convertible into or exchangeable for any shares of
capital stock of, or other equity interests in, any of the Subsidiaries
of the Company or (B) to redeem, purchase or acquire, or offer to
purchase or acquire, any outstanding shares of capital stock of, or
other equity interests in, or any outstanding options, warrants or
rights of any kind to acquire any shares of capital stock of or other
equity interest in, or any outstanding securities that are convertible
into or exchangeable for, any shares of capital stock of, or other
equity interests in, any of the Subsidiaries of the Company or (C) to
grant any Lien on any outstanding shares of capital stock of, or other
equity interest in, any of the Subsidiaries of the Company; except for
any matter under clause (i), (ii) or (iii) of this Section 4.03(c) that
could not reasonably be expected to have a Material Adverse Effect on
the Company.
(d) Except as set forth in Section 4.03(d) of the Company's
Disclosure Letter and for the Company's Rights Agreement, the Company
Stock Options listed in Section 4.03(b) of the Company's Disclosure
Letter and the Stock Option Agreement, there are no voting trusts,
proxies or other agreements, commitments or understandings of any
character to which the Company or any of its Subsidiaries is a party or
by which the Company or any of
AGREEMENT AND PLAN OF MERGER
-8-
its Subsidiaries is bound with respect to the voting of any shares of
capital stock of the Company or any of its Subsidiaries or with respect
to the registration of the offering, sale or delivery of any shares of
capital stock of the Company or any of its Subsidiaries under the
Securities Act, except in the case of any Subsidiaries of the Company
that are not Significant Subsidiaries for any matters that could not
reasonably be expected to have a Material Adverse Effect on the
Company.
SECTION 4.04 Authorization of Agreement. The Company has all requisite
corporate power and authority to execute and deliver this Agreement and each
instrument required hereby to be executed and delivered by it at the Closing, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby. The execution and delivery by the Company of
this Agreement and each instrument required hereby to be executed and delivered
by it at the Closing and the performance of its obligations hereunder and
thereunder have been duly and validly authorized by all requisite corporate
action on the part of the Company (other than, with respect to the Merger, the
approval and adoption of this Agreement by the holders of a majority of the
outstanding shares of Company Common Stock in accordance with the GCL and the
Company's certificate of incorporation). This Agreement has been duly executed
and delivered by the Company and (assuming due authorization, execution and
delivery hereof by the other parties hereto) constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as the same may be limited by legal principles of general
applicability governing the application and availability of equitable remedies.
SECTION 4.05 Approvals. Except for the applicable requirements, if any,
of (a) the Securities Act, (b) the Exchange Act, (c) state securities or blue
sky laws, (d) the HSR Act, (e) the competition Laws, Regulations and Orders of
foreign Governmental Authorities as set forth in the Company's Disclosure
Letter, (f) the NASD, (g) the filing and recordation of appropriate merger
documents as required by the GCL and (h) those Laws, Regulations and Orders
noncompliance with which could not reasonably be expected to have a material
adverse effect on the ability of the Company to perform its obligations under
this Agreement or to have a Material Adverse Effect on the Company, no filing or
registration with, no waiting period imposed by and no Permit or Order of, any
Governmental Authority is required under any Law, Regulation or Order applicable
to the Company or any of its Subsidiaries to permit the Company to execute,
deliver or perform this Agreement or any instrument required hereby to be
executed and delivered by it at the Closing.
SECTION 4.06 No Violation. Assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting periods
imposed by and receipt of all Permits and Orders of, Governmental Authorities
indicated as required in Section 4.05 and receipt of the approval of the Merger
by the stockholders of the Company as required by the GCL and except as set
forth in Section 4.06 of the Company's Disclosure Letter, neither the execution
and delivery by the Company of this Agreement or any instrument required hereby
to be executed and delivered by it at the Closing nor the performance by the
Company of its obligations hereunder or thereunder will (a) violate or breach
the terms of or cause a default under (i) any Law, Regulation or Order
applicable to the Company, (ii) the certificate of incorporation or bylaws of
the Company
AGREEMENT AND PLAN OF MERGER
-9-
or (iii) any contract or agreement to which the Company or any of its
Subsidiaries is a party or by which it or any of its properties or assets is
bound, or (b) with the passage of time, the giving of notice or the taking of
any action by a third Person, have any of the effects set forth in clause (a) of
this Section, except in any such case for any matters described in this Section
that could not reasonably be expected to have a material adverse effect upon the
ability of the Company to perform its obligations under this Agreement or a
Material Adverse Effect on the Company. Prior to the execution of this
Agreement, the Board of Directors of the Company has taken all necessary action
to cause this Agreement and the transactions contemplated hereby to be exempt
from the provisions of Section 203 of the GCL and to ensure that the execution,
delivery and performance of this Agreement by the parties hereto will not cause
any rights to be distributed or to become exercisable under the Company's Rights
Plan.
SECTION 4.07 Reports.
(a) Since June 30, 1993, the Company and its Subsidiaries have
filed (i) all SEC Reports of the Company required to be filed with the
Commission and (ii) all other Reports of the Company required to be
filed with any other Governmental Authorities, including state
securities administrators, except where the failure to file any such
Reports of the Company could not reasonably be expected to have a
Material Adverse Effect on the Company. The Reports of the Company,
including all those filed after the date of this Agreement and prior to
the Effective Time, (i) were prepared in all material respects in
accordance with the requirements of applicable Law (including, with
respect to the SEC Reports of the Company, the Securities Act and the
Exchange Act, as the case may be, and the applicable Regulations of the
Commission thereunder) and (ii), in the case of the SEC Reports of the
Company, did not at the time they were filed contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(b) The Company Consolidated Financial Statements and any
consolidated financial statements of the Company (including any related
notes thereto) contained in any SEC Reports of the Company filed with
the Commission after the date of this Agreement (i) have been or will
have been prepared in accordance with the published Regulations of the
Commission and in accordance with GAAP (except (A) to the extent
required by changes in GAAP and (B), with respect to SEC Reports of the
Company filed prior to the date of this Agreement, as may be indicated
in the notes thereto) and (ii) fairly present the consolidated
financial position of the Company and its Subsidiaries as of the
respective dates thereof and the consolidated results of their
operations and cash flows for the periods indicated (including, in the
case of any unaudited interim financial statements, reasonable
estimates of normal and recurring year-end adjustments).
(c) Except as set forth in Section 4.07(c) of the Company's
Disclosure Letter, there exist no liabilities or obligations of the
Company and its Subsidiaries that are Material to the Company, whether
accrued, absolute, contingent or threatened, which would be
AGREEMENT AND PLAN OF MERGER
-10-
required to be reflected, reserved for or disclosed under GAAP in
consolidated financial statements of the Company (including the notes
thereto) as of and for the period ended on the date of this
representation and warranty, other than (i) liabilities or obligations
that are adequately reflected, reserved for or disclosed in the
Company's Consolidated Financial Statements, (ii) liabilities or
obligations incurred in the ordinary course of business of the Company
since March 31, 1996, and (iii) liabilities or obligations the
incurrence of which is not prohibited by Section 6.02(a).
SECTION 4.08 No Material Adverse Effect; Conduct.
(a) Since March 31, 1996, no event (other than any event that
is directly attributable to the prospect of consummation of the Merger
or is of general application to all or a substantial portion of the
Company's industry and other than any event that is expressly subject
to any other representation or warranty contained in Article IV) has,
to the Knowledge of the Company, occurred that, individually or
together with other similar events, could reasonably be expected to
constitute or cause a Material Adverse Effect on the Company.
(b) Except as disclosed in Section 4.08(b) of the Company's
Disclosure Letter, during the period from March 31, 1996 to the date of
this Agreement, neither the Company nor any of its Subsidiaries has
engaged in any conduct that is proscribed during the period from the
date of this Agreement to the Effective Time by subsections (i) through
(xi) of Section 6.02(a) or agreed in writing or otherwise during such
period prior to the date of this Agreement to engage in any such
conduct.
SECTION 4.09 Title to Properties. The Company or its Subsidiaries,
individually or together, have indefeasible title to all of the properties
reflected in the Company's Consolidated Balance Sheet, other than any properties
reflected in the Company's Consolidated Balance Sheet that (i) have been sold or
otherwise disposed of since the date of the Company's Consolidated Balance Sheet
in the ordinary course of business consistent with past practice or (ii) are
not, individually or in the aggregate, Material to the Company, free and clear
of Liens, other than (x) Liens the existence of which is reflected in the
Company's Consolidated Financial Statements, (y) Permitted Encumbrances and (z)
Liens that, individually or in the aggregate, are not Material to the Company.
The Company or its Subsidiaries, individually or together, hold under valid
lease agreements all real and personal properties reflected in the Company's
Consolidated Balance Sheet as being held under capitalized leases, and all real
and personal property that is subject to the operating leases to which reference
is made in the notes to the Company's Audited Consolidated Financial Statements,
and enjoy peaceful and undisturbed possession of such properties under such
leases, other than (i) any properties as to which such leases have expired in
accordance with their terms without any liability of any party thereto since the
date of the Company's Consolidated Balance Sheet and (ii) any properties that,
individually or in the aggregate, are not Material to the Company. Neither the
Company nor any of its Subsidiaries has received any written notice of any
adverse claim to the title to any properties owned by them or with respect to
any lease under which any properties are held
AGREEMENT AND PLAN OF MERGER
-11-
by them, other than any claims that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect on the Company.
SECTION 4.10 Certain Obligations. Section 4.10 of the Company's
Disclosure Letter contains a true and complete list of the Material Contracts of
the Company and its Subsidiaries. Except as set forth in Section 4.10 of the
Company's Disclosure Letter, neither the Company nor any of its Subsidiaries is
a party to or bound by any Material Contract. All Material Contracts to which
the Company or any of its Subsidiaries is a party are in full force and effect,
the Company or the Subsidiary of the Company that is a party to or bound by such
Material Contract has performed its obligations thereunder to date and, to the
Knowledge of the Company, each other party thereto has performed its obligations
thereunder to date, other than any failure of a Material Contract to be in full
force and effect or any nonperformance thereof that could not reasonably be
expected to have a Material Adverse Effect on the Company.
SECTION 4.11 Permits; Compliance. To the Knowledge of the Company, the
Company and its Subsidiaries have obtained all Permits that are necessary to
carry on their businesses as currently conducted, except for any such Permits as
to which, individually or in the aggregate, the failure to possess could not
reasonably be expected to have a Material Adverse Effect on the Company. Such
Permits are in full force and effect, have not been violated in any respect that
could reasonably be expected to have a Material Adverse Effect on the Company
and, to the Knowledge of the Company, no suspension, revocation or cancellation
thereof has been threatened and there is no action, proceeding or investigation
pending or threatened regarding suspension, revocation or cancellation of any of
such Permits, except where the suspension, revocation or cancellation of such
Permits could not reasonably be expected to have a Material Adverse Effect on
the Company.
SECTION 4.12 Litigation; Compliance with Laws. There are no actions,
suits, investigations or proceedings (including any proceedings in arbitration)
pending or, to the Knowledge of the Company, threatened against the Company or
any of its Subsidiaries, at law or in equity, in any Court or before or by any
Governmental Authority, except actions, suits or proceedings that (a) are set
forth in Section 4.12 or any other Section of the Company's Disclosure Letter or
(b), individually or, with respect to multiple actions, suits or proceedings
that allege similar theories of recovery based on similar facts, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect on
the Company. There are no claims pending or, to the Knowledge of the Company,
threatened by any Persons against the Company or any of its Subsidiaries for
indemnification pursuant to any statute, organizational document, contract or
otherwise with respect to any action, suit, investigation or proceeding pending
in any Court or before or by any Governmental Authority. Except as set forth in
Section 4.12 of the Company's Disclosure Letter, the Company and its
Subsidiaries are in substantial compliance with all applicable Laws and
Regulations and are not in default with respect to any Order applicable to the
Company or any of its Subsidiaries, except such events of noncompliance or
defaults that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect on the Company.
AGREEMENT AND PLAN OF MERGER
-12-
SECTION 4.13 Employee Benefit Plans.
(a) Each Benefit Plan of the Company and its Subsidiaries is
listed in Section 4.13(a) of the Company's Disclosure Letter,
including, with respect to Terminated Benefit Plans, the date of
termination. True and correct copies of each of the following have been
made available to the Acquiror: (i) the most recent annual report (Form
5500) relating to each such Current Benefit Plan filed with the IRS,
(ii) each such Current Benefit Plan, (iii) the trust agreement, if any,
relating to each such Current Benefit Plan, (iv) the most recent
summary plan description for each such Current Benefit Plan for which a
summary plan description is required by ERISA, (v) the most recent
actuarial report or valuation relating to each such Current Benefit
Plan subject to Title IV of ERISA and (vi) the most recent
determination letter, if any, issued by the IRS with respect to any
such Current Benefit Plan qualified under Section 401 of the Code.
(b) No event has occurred and, to the Knowledge of the
Company, there exists no condition or set of circumstances in
connection with which the Company or any of its Subsidiaries could be
subject to any liability under the terms of such Benefit Plans, or with
respect to any such Benefit Plans, under ERISA, the Code or any other
applicable Law, other than any condition or set of circumstances that
could not reasonably be expected to have a Material Adverse Effect on
the Company.
(c) As to any such Current Benefit Plan intended to be
qualified under Section 401 of the Code, such Benefit Plan has been
determined by the IRS to satisfy in form the requirements of such
Section and there has been no termination or partial termination of
such Benefit Plan within the meaning of Section 411(d)(3) of the Code.
(d) As to any such Terminated Benefit Plan intended to have
been qualified under Section 401 of the Code, such Terminated Benefit
Plan received a favorable determination letter from the IRS with
respect to its termination.
(e) There are no actions, suits or claims pending (other than
routine claims for benefits) or, to the Knowledge of the Company,
threatened against, or with respect to, any of such Benefit Plans or
their assets that could reasonably be expected to have a Material
Adverse Effect on the Company.
(f) To the Knowledge of the Company, there is no matter
pending (other than routine qualification determination filings) with
respect to any of such Benefit Plans before the IRS, the Department of
Labor or the PBGC.
(g) All contributions required to be made by the Company or
the Company's Subsidiaries to such Benefit Plans pursuant to their
terms and provisions have been made timely.
AGREEMENT AND PLAN OF MERGER
-13-
(h) As to any such Current Benefit Plan subject to Title IV of
ERISA, (i) there has been no event or condition which presents a
material risk of plan termination, (ii) no accumulated funding
deficiency, whether or not waived, within the meaning of Section 302 of
ERISA or Section 412 of the Code has been incurred within six years
prior to date of this Agreement, (iii) no reportable event within the
meaning of Section 4043 of ERISA (for which the disclosure requirements
of Regulation section 2615.3 promulgated by the PBGC have not been
waived) has occurred within six years prior to the date of this
Agreement, (iv) no notice of intent to terminate such Benefit Plan has
been given under Section 4041 of ERISA, (v) no proceeding has been
instituted under Section 4042 of ERISA to terminate such Benefit Plan,
(vi) no liability to the PBGC has been incurred (other than with
respect to required premium payments) and (vii) the assets of the
Benefit Plan equal or exceed the actuarial present value of the benefit
liabilities, within the meaning of Section 4041 of ERISA, under the
Benefit Plan, based upon reasonable actuarial assumptions and the asset
valuation principles established by the PBGC.
(i) Except as set forth in Section 4.13(i) of the Company's
Disclosure Letter, in connection with the consummation of the
transactions contemplated by this Agreement, no payments have been or
will be made under any such Current Benefit Plans or any of the
programs, agreements, policies or other arrangements described in
Section 4.13(k) of the Company's Disclosure Letter which, in the
aggregate, would be nondeductible under Section 280G of the Code.
(j) Except as set forth in Section 4.13(j) of the Company's
Disclosure Letter, the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not (i)
require the Company or any of its Subsidiaries to make a larger
contribution to, or pay greater benefits under, any Current Benefit
Plan or any of the programs, agreements, policies or other arrangements
described in Section 4.13(k) of the Company's Disclosure Letter than it
otherwise would or (ii) create or give rise to any additional vested
rights or service credits under any Current Benefit Plan or any of such
programs, agreements, policies or other arrangements.
(k) Except as set forth in Section 4.13(k) of the Company's
Disclosure Letter, neither the Company nor any of its Subsidiaries is a
party to or is bound by any severance agreement (involving $50,000 or
more), program or policy. True and correct copies of all employment
agreements with officers of the Company and its Subsidiaries, and all
vacation, overtime and other compensation policies of the Company and
its Subsidiaries relating to their employees have been made available
to the Acquiror.
(l) Except as set forth in Section 4.13(l) of the Company's
Disclosure Letter, no Benefit Plan provides retiree medical or retiree
life insurance benefits to any Person and neither the Company nor any
of its Subsidiaries is contractually or otherwise obligated (whether or
not in writing) to provide any Person with life insurance or medical
benefits upon retirement or termination of employment, other than as
required by the provisions of
AGREEMENT AND PLAN OF MERGER
-14-
Sections 601 through 608 of ERISA and Section 4980B of the Code. Each
Benefit Plan or other arrangement described in Section 4.13(l) of the
Company's Disclosure Letter may be unilaterally amended or terminated
in its entirety without liability except as to benefits accrued
thereunder prior to such amendment or termination.
(m) Neither the Company nor any of its Subsidiaries
contributes or has an obligation to contribute, and has not within six
years prior to the date of this Agreement contributed or had an
obligation to contribute, to a multiemployer plan within the meaning of
Section 3(37) of ERISA.
(n) Except as set forth in Section 4.13(n) of the Company's
Disclosure Letter, the vacation policies of the Company and its
Subsidiaries do not provide for carryover vacation from one calendar
year to the next.
(o) No collective bargaining agreement to which the Company or
any of its Subsidiaries is a party is currently in effect or is being
negotiated by the Company or any of its Subsidiaries. There is no
pending or, to the Knowledge of the Company, threatened labor dispute,
strike or work stoppage against the Company or any of its Subsidiaries
that could reasonably be expected to have a Material Adverse Effect on
the Company. To the Knowledge of the Company, neither the Company or
any of its Subsidiaries nor any representative or employee of the
Company or any of its Subsidiaries has in the United States committed
any unfair labor practices in connection with the operation of the
business of the Company and its Subsidiaries, and there is no pending
or, to the Knowledge of the Company, threatened charge or complaint
against the Company or any of its Subsidiaries by the National Labor
Relations Board or any comparable agency of any state of the United
States.
SECTION 4.14 Taxes.
(a) Except for such matters as could not reasonably be
expected to have a Material Adverse Effect on the Company, (i) all Tax
Returns that are required to be filed by or with respect to the Company
or any of its Subsidiaries on or before the Effective Time have been or
will be timely filed, (ii) all Taxes that are due on or before the
Effective Time have been or will be timely paid in full, (iii) all
withholding Tax requirements imposed on or with respect to the Company
or any of its Subsidiaries have been or will be satisfied in full in
all respects and (iv) no penalty, interest or other charge is or will
become due with respect to the late filing of any such Tax Return or
late payment of any such Tax.
(b) Except as set forth in Section 4.14(b) of the Company's
Disclosure Letter, all Tax Returns have been audited by the applicable
Governmental Authority or the applicable statute of limitations has
expired for the period covered by such Tax Returns.
(c) Except as set forth in Section 4.14(c) of the Company's
Disclosure Letter, there is not in force any extension of time with
respect to the due date for the filing of any
AGREEMENT AND PLAN OF MERGER
-15-
material Tax Return or any waiver or agreement for any extension of
time for the assessment or payment of any material Tax due with respect
to the period covered by any Tax Return.
(d) There is no claim against the Company or any of its
Subsidiaries for any Taxes, and no assessment, deficiency or adjustment
has been asserted or proposed with respect to any Tax Return, that, in
either case, could reasonably be expected to have a Material Adverse
Effect on the Company.
(e) Except as set forth in Section 4.14(e) of the Company's
Disclosure Letter, none of the Company and its Subsidiaries, during the
last ten years, has been a member of an affiliated group filing a
consolidated federal income Tax Return other than the affiliated group
of which the Company is the common parent corporation.
SECTION 4.15 Environmental Matters. Except for matters disclosed in
Section 4.15 of the Company's Disclosure Letter and except for matters that,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect on the Company, (a) the properties, operations and
activities of the Company and its Subsidiaries are in compliance with all
applicable Environmental Laws; (b) the Company and its Subsidiaries and the
properties and operations of the Company and its Subsidiaries are not subject to
any existing, pending or, to the Knowledge of the Company, threatened action,
suit, investigation, inquiry or proceeding by or before any Court or
Governmental Authority under any Environmental Law; (c) all Permits, if any,
required to be obtained or filed by the Company or any of its Subsidiaries under
any Environmental Law in connection with the business of the Company and its
Subsidiaries have been obtained or filed and are valid and currently in full
force and effect; (d) there has been no release of any hazardous substance,
pollutant or contaminant into the environment by the Company or its Subsidiaries
or in connection with their properties or operations; (e) to the Company's
knowledge, there has been no exposure (attributable to the action of the Company
or its Subsidiaries) of any Person or property to any hazardous substance,
pollutant or contaminant in connection with the properties, operations and
activities of the Company and its Subsidiaries; and (f) the Company and its
Subsidiaries have made available to the Acquiror all internal and external
environmental audits and studies and all correspondence on substantial
environmental matters (in each case relevant to the Company or any of its
Subsidiaries) in the possession of the Company or its Subsidiaries.
SECTION 4.16 Intellectual Property.
(a) The Company or one or more of its Subsidiaries own, or
hold licenses under or otherwise have the right to use or sublicense,
all foreign and domestic patents, trademarks (common law and
registered), trademark registration applications, service marks (common
law and registered), service mark registration applications, trade
names and copyrights, copyright applications, trade secrets, know-how
and other proprietary information (including the Software) as are
necessary for the conduct of the business of the Company and its
Subsidiaries as currently conducted except for any such intellectual
property as to which the failure to own or hold licenses could not
reasonably be expected to have a Material Adverse
AGREEMENT AND PLAN OF MERGER
-16-
Effect on the Company. Neither the Company nor any of its Subsidiaries
is currently in receipt of any notice of infringement or notice of
conflict with the asserted rights of others in any patents, trademarks,
service marks, trade names, trade secrets and copyrights owned or held
by other Persons, except, in each case, for matters that could not
reasonably be expected to have a Material Adverse Effect on the
Company. Neither the execution and delivery of this Agreement nor
consummation of the transactions contemplated hereby will violate or
breach the terms of or cause any cancellation of any material license
held by the Company or any of its Subsidiaries under, any patent,
trademark, service mark, trade name, trade secret or copyright.
(b) The list of components contained in the definition of
Software is, in all material respects, a true, accurate, and complete
list of the software applications with respect to which the Company has
an ownership interest. The Software, and its use, licensing, copying
and/or distribution, do not infringe or violate any copyrights, trade
secrets, patents, or other proprietary rights of any third party.
Except as set forth in Section 4.12 of the Company's Disclosure Letter,
no claim of infringement of any patent, copyright, trade secret, or
other proprietary right is pending against the Company. All security
devices, techniques, and applications used by the Company and its
Subsidiaries and contained within the Software can be identified and
disabled by the Company. Section 4.16(b) of the Company's Disclosure
Letter sets forth material third party software marketed by the Company
and/or embedded into the Software.
SECTION 4.17 Insurance. The Company and its Subsidiaries own and are
beneficiaries under all such insurance policies underwritten by reputable
insurers that, as to risks insured, coverages and related limits and
deductibles, are customary in the industries in which the Company and its
Subsidiaries operate. To the Knowledge of the Company, all such policies are in
full force and effect and all premiums due thereon have been paid. Section 4.17
of the Company's Disclosure Letter sets forth a list, including the name of the
underwriter, the risks insured, coverage and related limits and deductibles,
expiration dates and significant riders, of the principal insurance policies
currently maintained by the Company and its Subsidiaries.
SECTION 4.18 Pooling; Tax Matters. To the Knowledge of the Company,
neither the Company nor any of its Affiliates has taken or agreed to take any
action that would prevent (a) the Merger from being treated for financial
accounting purposes as a "pooling of interests" in accordance with generally
accepted accounting principles and the Regulations and interpretations of the
Commission or (b) the Merger from constituting a reorganization within the
meaning of section 368(a) of the Code. Specifically:
(i) To the Knowledge of the Company, there is no plan or
intention by any stockholder of the Company who owns 5 percent or more
of the Company Common Stock and there is no plan or intention on the
part of any of the remaining stockholders of the Company, to sell,
exchange or otherwise dispose of a number of shares of Acquiror Common
Stock to be received in the Merger that would reduce the ownership of
Acquiror Common
AGREEMENT AND PLAN OF MERGER
-17-
Stock by the stockholders of the Company to a number of shares having a
value, as of the Effective Time, of less than 50 percent of the value
of all Company Common Stock (including shares of Company Common Stock
sold for cash in lieu of fractional shares of Acquiror Common Stock)
outstanding immediately prior to the Effective Time.
(ii) The Company and the stockholders of the Company will each
pay their respective expenses, if any, incurred in connection with the
Merger.
(iii) There is no intercorporate indebtedness existing between
the Company and the Acquiror or between the Company and Newco that was
issued, acquired, or will be settled at a discount.
(iv) The Company is not an investment company as defined
in section 368(a)(2)(F)(iii) and (iv) of the Code.
(v) The Company is not under the jurisdiction of a court in a
title 11 or similar case within the meaning of section 368(a)(3)(A) of
the Code.
(vi) The liabilities of the Company that will be assumed by
the Surviving Corporation in the Merger and any liability to which the
assets to be transferred to the Surviving Corporation are subject were
incurred by the Company in the ordinary course of its business. The
total amount of such liabilities does not equal or exceed the aggregate
basis of the Company in the assets to be transferred to the Surviving
Corporation in the Merger.
SECTION 4.19 Affiliates. Section 4.19 of the Company's Disclosure
Letter contains a true and complete list of all Persons who, to the Knowledge of
the Company, may be deemed to be Affiliates of the Company, excluding all its
Subsidiaries but including all directors and executive officers of the Company.
SECTION 4.20 Certain Business Practices. As of the date of this
Agreement, neither the Company or any of its Subsidiaries nor any director,
officer, employee or agent of the Company or any of its Subsidiaries has (i)
used any funds for unlawful contributions, gifts, entertainment or other
unlawful payments relating to political activity, (ii) made any unlawful payment
to any foreign or domestic government official or employee or to any foreign or
domestic political party or campaign or violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended, (iii) consummated any transaction,
made any payment, entered into any agreement or arrangement or taken any other
action in violation of Section 1128B(b) of the Social Security Act, as amended,
or (iv) made any other unlawful payment, except for any such matters that could
not reasonably be expected to have a Material Adverse Effect on the Company.
SECTION 4.21 Opinion of Financial Advisor. The Company has received
the opinion of Morgan Stanley & Co. Incorporated on the date of this Agreement
to the effect that the Common
AGREEMENT AND PLAN OF MERGER
-18-
Stock Exchange Ratio is fair, from a financial point of view, to the holders of
Company Common Stock.
SECTION 4.22 Brokers. No broker, finder or investment banker (other
than Morgan Stanley & Co. Incorporated) is entitled to any brokerage, finder's
or other fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Company.
Prior to the date of this Agreement, the Company has made available to the
Acquiror a complete and correct copy of all agreements between the Company and
Morgan Stanley & Co. Incorporated pursuant to which such firm will be entitled
to any payment relating to the transactions contemplated by this Agreement.
SECTION 4.23 Acquiring Person. None of the Acquiror Companies is (a) an
"Acquiring Person" as defined in the Company Rights Plan or (b) will become an
"Acquiring Person" as a result of any of the transactions contemplated by this
Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
The Acquiror Companies hereby represent and warrant to the Company
that:
SECTION 5.01 Organization and Qualification; Subsidiaries. The
Acquiror, Newco and each other Subsidiary of the Acquiror are legal entities
duly organized, validly existing and in good standing under the laws of their
respective jurisdictions of incorporation or organization, have all requisite
power and authority to own, lease and operate their respective properties and to
carry on their business as it is now being conducted and are duly qualified and
in good standing to do business in each jurisdiction in which the nature of the
business conducted by them or the ownership or leasing of their respective
properties makes such qualification necessary, other than any matters, including
the failure to be so duly qualified and in good standing, that could not
reasonably be expected to have a Material Adverse Effect on the Acquiror.
Section 5.01 of the Acquiror's Disclosure Letter sets forth, as of the date of
this Agreement, a true and complete list of all Significant Subsidiaries of the
Acquiror, together with the jurisdiction of incorporation of each such
Subsidiary and the percentage of each such Subsidiary's outstanding capital
stock or other equity interests owned by the Acquiror or another Subsidiary of
the Acquiror.
SECTION 5.02 Certificate of Incorporation and Bylaws. The Acquiror has
heretofore marked for identification and furnished to the Company complete and
correct copies of the certificate of incorporation and the bylaws or the
equivalent organizational documents, in each case as amended or restated to the
date hereof, of the Acquiror and each of its Significant Subsidiaries. None of
the Acquiror, Newco or any of the Acquiror's Significant Subsidiaries is in
violation of any of the provisions of its certificate of incorporation or bylaws
(or equivalent organizational documents).
AGREEMENT AND PLAN OF MERGER
-19-
SECTION 5.03 Capitalization.
(a) The authorized capital stock of the Acquiror consists of
(i) 200,000,000 shares of Acquiror Common Stock of which as of March
31, 1996: 114,787,914 shares were issued and outstanding, all of which
are duly authorized, validly issued, fully paid and nonassessable and
not subject to preemptive rights created by statute, the Acquiror's
certificate of incorporation or bylaws or any agreement to which the
Acquiror is a party or is bound, and (ii) 5,000,000 shares of Preferred
Stock, par value $1.00 per share, of which none is issued but of which
2,000,000 shares have been designated as Series A Junior Participating
Preferred Stock. Between March 31, 1996 and the date of this Agreement,
no shares of Acquiror Common Stock have been issued by the Acquiror
except pursuant to the exercise of outstanding Acquiror Stock Options
and otherwise to the extent set forth in Section 5.03(a) of the
Acquiror's Disclosure Letter. Except as set forth in Section 5.03(a) of
the Acquiror's Disclosure Letter, from March 31, 1996 to the date of
this Agreement, the Acquiror has not granted any options for, or other
rights to purchase, shares of Acquiror Common Stock.
(b) Except as set forth in Section 5.03(b) of the Acquiror's
Disclosure Letter, no shares of Acquiror Common Stock are reserved for
issuance, and, except for the Acquiror's Rights Plan, the Acquiror
Stock Options listed in Section 5.03(b) of the Acquiror's Disclosure
Letter and the other agreements listed in Section 5.03(b) of the
Acquiror's Disclosure Letter, there are no contracts, agreements,
commitments or arrangements obligating the Acquiror (i) to offer, sell,
issue or grant any shares of, or any options, warrants or rights of any
kind to acquire any shares of, or any securities that are convertible
into or exchangeable for any shares of, capital stock of the Acquiror,
(ii) to redeem, purchase or acquire, or offer to purchase or acquire,
any outstanding shares of, or any outstanding options, warrants or
rights of any kind to acquire any shares of, or any outstanding
securities that are convertible into or exchangeable for any shares of,
capital stock of the Acquiror or (iii) to grant any Lien on any shares
of capital stock of the Acquiror.
(c) Except as set forth in the Acquiror's Disclosure Letter,
(i) all the issued and outstanding shares of capital stock of, or other
equity interests in, each Subsidiary of the Acquiror are owned by the
Acquiror or one of its Subsidiaries, have been duly authorized and are
validly issued, and, with respect to capital stock, are fully paid and
nonassessable, and were not issued in violation of any preemptive or
similar rights of any Person; (ii) all such issued and outstanding
shares, or other equity interests, that are owned by the Acquiror or
one of its Subsidiaries are owned free and clear of all Liens; (iii) no
shares of capital stock of, or other equity interests in, any
Subsidiary of the Acquiror are reserved for issuance, and there are no
contracts, agreements, commitments or arrangements obligating the
Acquiror or any of its Subsidiaries (A) to offer, sell, issue, grant,
pledge, dispose of or encumber any shares of capital stock of, or other
equity interests in, or any options, warrants or rights of any kind to
acquire any shares of capital stock of, or other equity interests in,
or any securities that are convertible into or exchangeable for any
shares of capital stock of, or other
AGREEMENT AND PLAN OF MERGER
-20-
equity interests in, any of the Subsidiaries of the Acquiror or (B) to
redeem, purchase or acquire, or offer to purchase or acquire, any
outstanding shares of capital stock of, or other equity interests in,
or any outstanding options, warrants or rights of any kind to acquire
any shares of capital stock of or other equity interest in, or any
outstanding securities that are convertible into or exchangeable for,
any shares of capital stock of, or other equity interests in, any of
the Subsidiaries of the Acquiror or (C) to grant any Lien on any
outstanding shares of capital stock of, or other equity interest in,
any of the Subsidiaries of the Acquiror; except for any matter under
clause (i), (ii) or (iii) of this Section 5.03(c) that could not
reasonably be expected to have a Material Adverse Effect on the
Acquiror.
(d) There are no voting trusts, proxies or other agreements,
commitments or understandings of any character to which the Acquiror or
any of its Significant Subsidiaries is a party or by which the Acquiror
or any of its Significant Subsidiaries is bound with respect to the
voting of any shares of capital stock of the Acquiror or any of its
Significant Subsidiaries.
SECTION 5.04 Authorization of Agreement. Each of the Acquiror and Newco
has all requisite corporate power and authority to execute and deliver this
Agreement and each instrument required hereby to be executed and delivered by it
at the Closing, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby. The execution and delivery by
the Acquiror and Newco of this Agreement and each instrument required hereby to
be executed and delivered by the Acquiror or Newco at the Closing and the
performance of their respective obligations hereunder and thereunder have been
duly and validly authorized by all requisite corporate action (including
stockholder action) on the part of the Acquiror and Newco, respectively. This
Agreement has been duly executed and delivered by the Acquiror and Newco and
(assuming due authorization, execution and delivery hereof by the other party
hereto) constitutes a legal, valid and binding obligation of the Acquiror and
Newco, enforceable against the Acquiror and Newco in accordance with its terms,
except as the same may be limited by legal principles of general applicability
governing the application and availability of equitable remedies.
SECTION 5.05 Approvals. Except for the applicable requirements, if any,
of (a) the Securities Act, (b) the Exchange Act, (c) state securities or blue
sky laws, (d) the HSR Act, (e) the competition Laws, Regulations and Orders of
foreign Governmental Authorities as set forth in the Acquiror's Disclosure
Letter, (f) the NYSE, (g) the filing and recordation of appropriate merger
documents as required by the GCL and (h) those Laws, Regulations and Orders
noncompliance with which could not reasonably be expected to have a material
adverse effect on the ability of the Acquiror or Newco to perform its
obligations under this Agreement or to have a Material Adverse Effect on the
Acquiror, no filing or registration with, no waiting period imposed by and no
Permit or Order of, any Governmental Authority is required under any Law,
Regulation or Order applicable to the Acquiror or Newco to permit the Acquiror
or Newco to execute, deliver or perform this Agreement or any instrument
required hereby to be executed and delivered by it at the Closing.
AGREEMENT AND PLAN OF MERGER
-21-
SECTION 5.06 No Violation. Except as set forth in Section 5.06 of the
Acquiror's Disclosure Letter, assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting periods
imposed by and receipt of all Permits and Orders of, Governmental Authorities
indicated as required in Section 5.05, neither the execution and delivery by the
Acquiror or Newco of this Agreement or any instrument required hereby to be
executed and delivered by the Acquiror or Newco at the Closing nor the
performance by the Acquiror or Newco of their respective obligations hereunder
or thereunder will (a) violate or breach the terms of or cause a default under
(i) any Law, Regulation or Order applicable to the Acquiror or Newco, (ii) the
certificate of incorporation or bylaws of the Acquiror or Newco or (iii) any
contract or agreement to which the Acquiror or any of its Subsidiaries is a
party or by which it or any of its properties or assets is bound, or (b) with
the passage of time, the giving of notice or the taking of any action by a third
Person, have any of the effects set forth in clause (a) of this Section, except
in any such case for any matters described in this Section that could not
reasonably be expected to have a material adverse effect upon the ability of the
Acquiror or Newco to perform its obligations under this Agreement or a Material
Adverse Effect on the Acquiror.
SECTION 5.07 Reports.
(a) Since December 31, 1993, the Acquiror has filed all SEC
Reports of the Acquiror required to be filed with the Commission. The
SEC Reports of the Acquiror, including those filed after the date of
this Agreement and prior to the Effective Time, (i) were prepared in
all material respects in accordance with the applicable requirements of
the Securities Act and the Exchange Act, as the case may be, and the
applicable Regulations of the Commission thereunder and (ii) did not at
the time they were filed contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) The Acquiror's Consolidated Financial Statements and any
consolidated financial statements of the Acquiror (including any
related notes thereto) contained in any SEC Reports of the Acquiror
filed with the Commission after the date of this Agreement (i) have
been or will have been prepared in accordance with the published
Regulations of the Commission and in accordance with GAAP (except (A)
to the extent required by changes in GAAP and (B), with respect to SEC
Reports of the Acquiror filed prior to the date of this Agreement, as
may be indicated in the notes thereto) and (ii) fairly present the
consolidated financial position of the Acquiror and its Subsidiaries as
of the respective dates thereof and the consolidated results of their
operations and cash flows for the periods indicated (including, in the
case of any unaudited interim financial statements, reasonable
estimates of normal and recurring year-end adjustments).
(c) Except as set forth in the Acquiror's Disclosure Letter,
there exist no liabilities or obligations of the Acquiror and its
Subsidiaries that are Material to the Acquiror, whether accrued,
absolute, contingent or threatened, that would be required to be
reflected,
AGREEMENT AND PLAN OF MERGER
-22-
reserved for or disclosed under GAAP in consolidated financial
statements of the Acquiror as of and for the period ended on the date
of this representation and warranty, other than (i) liabilities or
obligations that are adequately reflected, reserved for or disclosed in
the Acquiror's Consolidated Financial Statements, (ii) liabilities or
obligations incurred in the ordinary course of business of the Acquiror
and its Subsidiaries since March 31, 1996, (iii) liabilities or
obligations the incurrence of which is not prohibited by Section
6.02(b) and (iv) liabilities or obligations that are not Material to
the Acquiror.
SECTION 5.08 No Material Adverse Effect; Conduct.
(a) Since March 31, 1996, no event (other than any event that
is directly attributable to the prospect of consummation of the Merger
or is of general application to all or a substantial portion of the
Acquiror's industry and other than any event that is expressly subject
to any other representation or warranty contained in Article V) has, to
the Knowledge of the Acquiror, occurred that, individually or together
with other similar events, could reasonably be expected to constitute
or cause a Material Adverse Effect on the Acquiror.
(b) Except as disclosed in the Acquiror's Disclosure Letter,
during the period from March 31, 1996 to the date of this Agreement,
neither the Acquiror nor any of its Subsidiaries has engaged in any
conduct that is proscribed during the period from the date of this
Agreement to the Effective Time by subsections (i) through (vii) of
Section 6.02(b) or agreed in writing or otherwise during such period
prior to the date of this Agreement to engage in any such conduct.
SECTION 5.09 Title to Properties. The Acquiror or its Subsidiaries,
individually or together, have indefeasible title to all of the properties
reflected in the Acquiror's Consolidated Balance Sheet, other than any
properties reflected in the Acquiror's Consolidated Balance Sheet that (i) have
been sold or otherwise disposed of since the date of the Acquiror's Consolidated
Balance Sheet or (ii) are not, individually or in the aggregate, Material to the
Acquiror, free and clear of Liens, other than (x) Liens the existence of which
is reflected in the Acquiror's Consolidated Financial Statements, (y) Permitted
Encumbrances and (z) Liens that, individually or in the aggregate, are not
Material to the Acquiror. The Acquiror or its Subsidiaries, individually or
together, hold under valid lease agreements all real and personal properties
reflected in the Acquiror's Consolidated Balance Sheet as being held under
capitalized leases, and all real and personal property that is subject to the
operating leases to which reference is made in the notes to the Acquiror's
Audited Consolidated Financial Statements, and enjoy peaceful and undisturbed
possession of such properties under such leases, other than (i) any properties
as to which such leases have terminated in the ordinary course of business since
the date of the Acquiror's Consolidated Balance Sheet and (ii) any properties
that, individually or in the aggregate, are not Material to the Acquiror.
SECTION 5.10 Certain Obligations. Except as set forth in Section 5.10
of the Acquiror's Disclosure Letter, all Material Contracts to which the
Acquiror or any of its Subsidiaries
AGREEMENT AND PLAN OF MERGER
-23-
is a party are in full force and effect, the Acquiror or the Subsidiary of the
Acquiror that is a party to or bound by such Material Contract has performed its
obligations thereunder to date and, to the Knowledge of the Acquiror, each other
party thereto has performed its obligations thereunder to date, other than any
failure of any such Material Contract to be in full force and effect or any
nonperformance thereof that could not reasonably be expected to have a Material
Adverse Effect on the Acquiror.
SECTION 5.11 Permits; Compliance. To the Knowledge of the Acquiror, the
Acquiror and its Subsidiaries have obtained all Permits that are necessary to
carry on their businesses as currently conducted, except for any such Permits
that the failure to possess which, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect on the Acquiror. Such
Permits are in full force and effect, have not been violated in any respect that
could reasonably be expected to have a Material Adverse Effect on the Acquiror
and, to the Knowledge of the Acquiror, no suspension, revocation or cancellation
thereof has been threatened and there is no action, proceeding or investigation
pending or threatened regarding suspension, revocation or cancellation of any of
such Permits, except where the suspension, revocation or cancellation of such
Permits could not reasonably be expected to have a Material Adverse Effect on
the Acquiror.
SECTION 5.12 Litigation; Compliance with Laws. There are no actions,
suits, investigations or proceedings (including any proceedings in arbitration)
pending or, to the Knowledge of the Acquiror, threatened against the Acquiror or
any of its Subsidiaries, at law or in equity, in any Court or before or by any
Governmental Authority, except actions, suits or proceedings that (a) are set
forth in Section 5.12 or any other Section of the Acquiror's Disclosure Letter
or (b), individually or, with respect to multiple actions, suits or proceedings
that allege similar theories of recovery based on similar facts, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect on
the Acquiror. The Acquiror and its Subsidiaries are in substantial compliance
with all applicable Laws and Regulations and are not in default with respect to
any Order applicable to the Acquiror or any of its Subsidiaries, except such
events of noncompliance or defaults that, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect on the
Acquiror.
SECTION 5.13 Employee Benefit Plans.
(a) No event has occurred and, to the Knowledge of the
Acquiror, there exists no condition or set of circumstances in
connection with which the Acquiror or any of its Subsidiaries could be
subject to any liability under the terms of any Benefit Plans of the
Acquiror or any of its Subsidiaries or, with respect to any such
Benefit Plan, under ERISA, the Code or any other applicable Law, other
than any condition or set of circumstances that could not reasonably be
expected to have a Material Adverse Effect on the Acquiror.
(b) As to any Current Benefit Plan included in such Benefit
Plans that is intended to be qualified under Section 401 of the Code,
such Current Benefit Plan satisfies in form the
AGREEMENT AND PLAN OF MERGER
-24-
requirements of such Section and there has been no termination or
partial termination of such Current Benefit Plan within the meaning of
Section 411(d)(3) of the Code.
(c) As to any Terminated Benefit Plan included in such Benefit
Plans that is intended to have been qualified under Section 401 of the
Code, such Terminated Benefit Plan received a favorable determination
letter from the IRS with respect to its termination.
(d) There are no actions, suits or claims pending (other than
routine claims for benefits) or, to the Knowledge of the Acquiror,
threatened against, or with respect to, any of such Benefit Plans or
their assets that could reasonably be expected to have a Material
Adverse Effect on the Acquiror.
(e) As to any such Current Benefit Plan subject to Title IV of
ERISA, (i) there has been no event or condition which presents the
material risk of plan termination, (ii) no accumulated funding
deficiency, whether or not waived, within the meaning of Section 302 of
ERISA or Section 412 of the Code has been incurred, (iii), except as
set forth in Section 5.13(e) of the Acquiror's Disclosure Letter, no
reportable event within the meaning of Section 4043 of ERISA (for which
the disclosure requirements of Regulation section 2615.3 promulgated by
the PBGC have not been waived) has occurred within six years prior to
the date of this Agreement, (iv) no notice of intent to terminate such
Benefit Plan has been given under Section 4041 of ERISA, (v) no
proceeding has been instituted under Section 4042 of ERISA to terminate
such Benefit Plan, (vi) no liability to the PBGC has been incurred
(other than with respect to required premium payments) and (vii) the
assets of the Benefit Plan equal or exceed the actuarial present value
of the benefit liabilities, within the meaning of Section 4041 of
ERISA, under the Benefit Plan, based upon reasonable actuarial
assumptions and the asset valuation principles established by the PBGC.
(f) Neither the Acquiror nor any of its Subsidiaries
contributes or has an obligation to contribute, and has not within six
years prior to the date of this Agreement contributed or had an
obligation to contribute, to a multiemployer plan within the meaning of
Section 3(37) of ERISA.
SECTION 5.14 Taxes.
(a) Except for such matters as could not reasonably be
expected to have a Material Adverse Effect on the Acquiror, (i) all Tax
Returns that are required to be filed by or with respect to the
Acquiror or any of its Subsidiaries on or before the Effective Time
have been or will be timely filed, (ii) all Taxes that are due on or
before the Effective Time have been or will be timely paid in full,
(iii) all withholding Tax requirements imposed on or with respect to
the Acquiror or any of its Subsidiaries have been or will be satisfied
in full in all respects and (iv) no penalty, interest or other charge
is or will become due with respect to the late filing of any such Tax
Return or late payment of any such Tax.
AGREEMENT AND PLAN OF MERGER
-25-
(b) There is no claim against the Acquiror or any of its
Subsidiaries for any Taxes, and no assessment, deficiency or adjustment
has been asserted or proposed with respect to any Tax Return, that, in
either case, could reasonably be expected to have a Material Adverse
Effect on the Acquiror.
SECTION 5.15 Environmental Matters. Except for matters disclosed in
Section 5.15 of the Acquiror's Disclosure Letter and except for matters that,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect on the Acquiror, (a) the properties, operations and
activities of the Acquiror and its Subsidiaries are in compliance with all
applicable Environmental Laws; (b) the Acquiror and its Subsidiaries and the
properties and operations of the Acquiror and its Subsidiaries are not subject
to any existing, pending or, to the Knowledge of the Acquiror, threatened
action, suit, investigation, inquiry or proceeding by or before any Court or
Governmental Authority under any Environmental Law; (c) all Permits, if any,
required to be obtained or filed by the Acquiror or any of its Subsidiaries
under any Environmental Law in connection with the business of the Acquiror and
its Subsidiaries have been obtained or filed and are valid and currently in full
force and effect; (d) there has been no release of any hazardous substance,
pollutant or contaminant into the environment by the Acquiror or its
Subsidiaries or in connection with their properties or operations; and (e) there
has been no exposure of any Person or property to any hazardous substance,
pollutant or contaminant in connection with the properties, operations and
activities of the Acquiror and its Subsidiaries.
SECTION 5.16 Pooling; Tax Matters. To the Knowledge of the Acquiror,
neither the Acquiror nor any of its Affiliates has taken or agreed to take any
action that would prevent (a) the Merger from being treated for financial
accounting purposes as a "pooling of interests" in accordance with generally
accepted accounting principles and the Regulations and interpretations of the
Commission or (b) the Merger from constituting a reorganization within the
meaning of section 368(a) of the Code. Specifically:
(i) Following the Merger, the Surviving Corporation will hold
at least 90 percent of the fair market value of the Company's net
assets and at least 70 percent of the fair market value of the
Company's gross assets and at least 90 percent of Newco's net assets
and at least 70 percent of Newco's gross assets, held immediately prior
to the Merger, taking into account amounts used to pay Merger expenses
and any distributions other than regular dividends.
(ii) The Acquiror has no plan or intention to (A) liquidate
the Surviving Corporation, (B) merge the Surviving Corporation with or
into another corporation, (C) sell or otherwise dispose of the stock of
the Surviving Corporation, (D) cause or permit the Surviving
Corporation to issue additional shares of its capital stock that would
result in the Acquiror's losing control (within the meaning of section
368(c) of the Code) of the Surviving Corporation, (E) cause or permit
the Surviving Corporation to sell or otherwise dispose of any of its
assets or of any of the assets acquired from Newco except for
dispositions made in the ordinary course of business and dispositions
to a corporation controlled (within the
AGREEMENT AND PLAN OF MERGER
-26-
meaning of Section 368(c) of the Code) by the Surviving Corporation, or
(F) reacquire any of the Acquiror Common Stock issued to the holders of
Company Common Stock in the Merger.
(iii) Following the Merger, the Surviving Corporation will
continue the historic business of the Company or use a significant
portion of its assets in a business.
(iv) There is no intercorporate indebtedness existing between
the Company and the Acquiror or between the Company and Newco that was
issued, acquired, or will be settled at a discount.
(v) The Acquiror does not own, nor has it owned during the
past five years, any shares of capital stock of the Company.
SECTION 5.17 Affiliates. Section 5.17 of the Acquiror's Disclosure
Letter contains a true and complete list of all Persons who, to the Knowledge of
the Acquiror, may be deemed to be Affiliates of the Acquiror, excluding all its
Subsidiaries but including all directors and executive officers of the Acquiror.
SECTION 5.18 Brokers. Except as set forth in Section 5.18 of the
Acquiror's Disclosure Letter, no broker, finder or investment banker (other than
Dillon, Read & Co., Inc.) is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Acquiror.
SECTION 5.19 Acquiring Person. Based on the information set forth in
the Company's SEC Reports, no holder of 5 percent or more of the outstanding
Company Common Stock whose existence is disclosed therein will at the Effective
Time become an "Acquiring Person", as such term is defined in the Acquiror's
Rights Plan, as a result of any of the transactions contemplated by this
Agreement.
SECTION 5.20 Proposal to Acquire the Acquiror. There is not pending any
bona fide proposal received by the Acquiror regarding any merger, consolidation
or reorganization of the Acquiror with any other Person as a result of which
less than a majority of the combined voting power of the securities of the
Person surviving such transaction would be held immediately after such
transaction by all the holders of Acquiror Common Stock immediately prior to
such transaction and for which transaction financing, to the extent required, is
then committed.
SECTION 5.21 Certain Business Practices. As of the date of this
Agreement, neither the Acquiror or any of its Subsidiaries nor any director,
officer, employee or agent of the Acquiror or any of its Subsidiaries has (i)
used any funds for unlawful contributions, gifts, entertainment or other
unlawful payments relating to political activity, (ii) made any unlawful payment
to any foreign or domestic government official or employee or to any foreign or
domestic political party or campaign or violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended,
AGREEMENT AND PLAN OF MERGER
-27-
(iii) consummated any transaction, made any payment, entered into any agreement
or arrangement or taken any other action in violation of Section 1128B(b) of the
Social Security Act, as amended, or (iv) made any other unlawful payment, except
for any such matters that could not reasonably be expected to have a Material
Adverse Effect on the Acquiror.
ARTICLE VI
COVENANTS
SECTION 6.01 Affirmative Covenants. Each of the Company and the
Acquiror hereby covenants and agrees that, prior to the Effective Time, unless
otherwise expressly contem plated by this Agreement or consented to in writing
by the other, it will and will cause its Subsidiaries to:
(a) operate its business in the usual and ordinary course
consistent with past practices;
(b) use all reasonable efforts to preserve substantially
intact its business organization, maintain its rights and franchises,
retain the services of its respective key employees and maintain its
relationships with its respective customers and suppliers;
(c) maintain and keep its properties and assets in as good
repair and condition as at present, ordinary wear and tear excepted,
and maintain supplies and inventories in quantities consistent with its
customary business practice; and
(d) use all reasonable efforts to keep in full force and
effect insurance and bonds comparable in amount and scope of coverage
to that currently maintained;
except for any matters that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect on such party.
SECTION 6.02 Negative Covenants.
(a) Except as set forth in Schedule 6.02(a) of the Company's
Disclosure Letter, the Company covenants and agrees that, except as
expressly contemplated by this Agreement or otherwise consented to in
writing by the Acquiror, from the date of this Agreement until the
Effective Time, it will not do, and will not permit any of its
Subsidiaries to do, any of the following:
(i) (A) to increase the compensation payable to or to
become payable to any director or executive officer, except
for increases in salary or wages payable or to become payable
upon promotion to an office having greater operational
responsibilities or otherwise in the ordinary course of
business and consistent with
AGREEMENT AND PLAN OF MERGER
-28-
past practice; (B) to grant any severance or termination pay
(other than pursuant to the normal severance policy of the
Company or its Subsidiaries as in effect on the date of this
Agreement) to, or enter into or amend in any material respect
any employment or severance agreement, including any amendment
whatsoever to the Employment Agreement, with, any director,
officer or employee, either individually or as part of a class
of similarly situated persons; (C) to establish, adopt or
enter into any Benefit Plan or (D), except as may be required
by applicable law and actions that are not inconsistent with
the provisions of Section 7.09 of this Agreement, to amend, or
to take any other actions (including the acceleration of
vesting, waiving of performance criteria or the adjustment of
awards or any other actions permitted upon a change in control
of such party or a filing under Section 13(d) or 14(d) of the
Exchange Act with respect to such party) with respect to any
of the Benefit Plans of such party;
(ii) to declare or to pay any dividend on, or to make
any other distribution in respect of, outstanding shares of
capital stock, except for dividends by a wholly-owned
Subsidiary of the Company to the Company or another
wholly-owned Subsidiary of the Company;
(iii) (A) to redeem, purchase or acquire, or to offer
to purchase or acquire, any outstanding shares of capital
stock of, or other equity interests in, or any securities that
are convertible into or exchangeable for any shares of capital
stock of, or other equity interests in, or any outstanding
options, warrants or rights of any kind to acquire any shares
of capital stock of, or other equity interests in, the Company
or any of its Subsidiaries (other than (1) any such
acquisition by the Company or any of its wholly-owned
Subsidiaries directly from any wholly-owned Subsidiary of the
Company in exchange for capital contributions or loans to such
Subsidiary, (2) any repurchase, forfeiture or retirement of
shares of Company Common Stock or Company Stock Options
occurring pursuant to the terms (as in effect on the date of
this Agreement) of any existing Benefit Plan of the Company or
any of its Subsidiaries, (3) the repurchase of rights pursuant
to the terms (as in effect on the date of this Agreement) of
the Company Rights Agreement to the extent required by a court
of competent jurisdiction or (4) any periodic purchase of
Company Common Stock for allocation to employee's accounts
occurring pursuant to the terms (as in effect on the date of
this Agreement) of any existing employee stock purchase plan);
(B) to effect any reorganization or recapitalization; or (C)
to split, combine or reclassify any of the capital stock of,
or other equity interests in, the Company or any of its
Subsidiaries or to issue or to authorize or propose the
issuance of any other securities in respect of, in lieu of or
in substitution for, shares of such capital stock or such
equity interests, other than intercompany transfers among the
Company and its wholly-owned Subsidiaries or among such
wholly-owned Subsidiaries;
AGREEMENT AND PLAN OF MERGER
-29-
(iv) (A) to offer, sell, issue or grant, or authorize
the offering, sale, issuance or grant, of any shares of
capital stock of, or other equity interests in, any securities
convertible into or exchangeable for any shares of capital
stock of, or other equity interests in, or any options,
warrants or rights of any kind to acquire any shares of
capital stock of, or other equity interests in, the Company or
any of its Subsidiaries, other than issuances of Company
Common Stock (1) upon the exercise of Company Stock Options
outstanding at the date of this Agreement in accordance with
the terms thereof (as in effect on the date of this
Agreement), (2) upon the expiration of any restrictions upon
issuance of any grant existing at the date of this Agreement
of restricted stock or stock bonus pursuant to the terms (as
in effect on the date of this Agreement) of any Benefit Plans
of the Company or any of its Subsidiaries or (3) any periodic
issuance of shares of Company Common Stock occurring pursuant
to the terms (as in effect on the date of this Agreement) of
any Benefit Plans of the Company or any of its Subsidiaries,
(B), except as set forth in Section 4.08(b) of the Company's
Disclosure Letter, to amend or otherwise modify the terms (as
in effect on the date of this Agreement) of any outstanding
options, warrants or rights the effect of which shall be to
make such terms more favorable to the holders thereof (except
as may be required by ERISA or other applicable law); (C) to
take any action to accelerate the vesting of any outstanding
Company Stock Options or (D) to grant any Lien with respect to
any shares of capital stock of, or other equity interests in,
any Subsidiary of the Company;
(v) except as set forth in Section 4.08(b) of the
Company's Disclosure Letter, to acquire or agree to acquire,
by merging or consolidating with, by purchasing an equity
interest in or a portion of the assets of, or in any other
manner, any business or any corporation, partnership,
association or other business organization or division thereof
or otherwise to acquire any assets of any other Person (other
than the purchase of assets from suppliers or vendors in the
ordinary course of business and consistent with past practice
and acquisitions of equity interests, assets and businesses in
an amount not to exceed $250,000 in the aggregate);
(vi) except as set forth in Section 4.08(b) of the
Company's Disclosure Letter, to sell, lease, exchange or
otherwise dispose of, or to grant any Lien (other than a
Permitted Encumbrance) with respect to, any of the assets of
the Company or any of its Subsidiaries that are Material to
the Company, except for dispositions of assets and inventories
in the ordinary course of business and consistent with past
practice and dispositions of assets and purchase money Liens
incurred in connection with the original acquisition of assets
and secured by the assets acquired in an amount not to exceed
$250,000 in the aggregate;
(vii) to adopt any amendments to its charter or
bylaws or other organizational documents that would alter the
terms of its capital stock or other
AGREEMENT AND PLAN OF MERGER
-30-
equity interests or would have a material adverse effect on
the ability of the Company to perform its obligations under
this Agreement;
(viii) (A) to change any of its methods of accounting
in effect at June 30, 1995, except as may be required to
comply with GAAP, (B) to make or rescind any election relating
to Taxes (other than any election which must be made
periodically which is made consistent with past practice), (C)
to settle or compromise any claim, action, suit, litigation,
proceeding, arbitration, investigation, audit or controversy
relating to Taxes (except where the cost to the Company and
its Subsidiaries of such settlements or compromises,
individually or in the aggregate, does not exceed $250,000) or
(D) to change any of its methods of reporting income or
deductions for federal income tax purposes from those employed
in the preparation of the federal income tax returns for the
taxable year ending June 30, 1995, except, in each case, as
may be required by Law and for matters that could not
reasonably be expected to have a Material Adverse Effect on
the Company;
(ix) to incur any obligations for borrowed money or
purchase money indebtedness (other than purchase money
indebtedness as to which Liens may be granted as permitted by
Section 6.02(a)(vi)) that are Material to the Company, whether
or not evidenced by a note, bond, debenture or similar
instrument, except drawings under credit lines existing at the
date of this Agreement or otherwise in the ordinary course of
business consistent with past practice and in no event
(including purchase money indebtedness as to which Liens may
be granted pursuant to Section 6.02(a)(vi)) in excess of
$250,000;
(x) release any third Person from its obligations
under any existing standstill agreement relating to a
Competing Transaction or otherwise under any confidentiality
agreement or similar agreement;
(xi) enter into any Material Contract with any third
Person (other than customers and vendors in the ordinary
course of business) which provides for an exclusive
arrangement with that third Person or is substantially more
restrictive on the Company or any of its Subsidiaries or
substantially less advantageous to the Company or any of its
Subsidiaries than Material Contracts existing on the date
hereof; or
(xii) agree in writing or otherwise to do any of the
foregoing;
(b) The Acquiror covenants and agrees that, except as
expressly contemplated by this Agreement or otherwise consented to in
writing by the Company, from the date of this Agreement until the
Effective Time, it will not do, and will not permit any of its
Subsidiaries to do, any of the following:
AGREEMENT AND PLAN OF MERGER
-31-
(i) to declare or to pay any dividend on, or to make
any other distribution in respect of, outstanding shares of
capital stock, except for (A) dividends by a wholly-owned
Subsidiary of such party to such party or another wholly-owned
Subsidiary of such party, (B) regular quarterly dividends
payable to holders of Acquiror Common Stock in the amounts per
share and at the approximate times paid during calendar year
1995 and (C) dividends paid by partially owned subsidiaries
declared and paid in the ordinary course of business;
(ii) (A) to redeem, purchase or acquire, or to offer
to purchase or acquire, any outstanding shares of capital
stock of, or other equity interests in, or any securities that
are convertible into or exchangeable for any shares of capital
stock of, or other equity interests in, or any outstanding
options, warrants or rights of any kind to acquire any shares
of capital stock of, or other equity interests in, the
Acquiror or any of its Subsidiaries (other than (1) any such
acquisition by the Acquiror or any of its wholly-owned
Subsidiaries directly from any wholly-owned Subsidiary of the
Acquiror in exchange for capital contributions or loans to
such Subsidiary, (2) any repurchase, forfeiture or retirement
of shares of Acquiror Common Stock or Acquiror Stock Options
occurring pursuant to the terms (as in effect on the date of
this Agreement) of any existing Benefit Plan of the Acquiror
or any of its Subsidiaries, (3) any periodic purchase of
Acquiror Common Stock for allocation to employee's accounts
occurring pursuant to the terms (as in effect on the date of
this Agreement) of any existing Benefit Plan of the Acquiror
or any of its Subsidiaries and (4) any redemption, purchase or
acquisition by a Subsidiary that could not reasonably be
expected to have a Material Adverse Effect on the Acquiror) or
(B) to effect any reorganization or recapitalization other
than any reorganization or recapitalization that could not
reasonably be expected to have a material adverse effect on
the ability of the Acquiror to perform its obligations under
this Agreement;
(iii) to offer, sell, issue or grant, or authorize
the offering, sale, issuance or grant, of any shares of
capital stock of, or other equity interests in, any securities
convertible into or exchangeable for any shares of capital
stock of, or other equity interests in, or any options,
warrants or rights of any kind to acquire any shares of
capital stock of, or other equity interests in, the Acquiror
or any of its Subsidiaries, other than issuances of Acquiror
Common Stock (A) upon the exercise of Acquiror Stock Options
outstanding at the date of this Agreement in accordance with
the terms thereof (as in effect on the date of this
Agreement), (B) upon the expiration of any restrictions upon
issuance of any grant existing at the date of this Agreement
of restricted stock or stock bonus pursuant to the terms (as
in effect on the date of this Agreement) of any Benefit Plans
of the Acquiror or any of its Subsidiaries, or (C) any
periodic issuance of shares of Acquiror Common Stock or
Acquiror Stock Options pursuant to the terms (as in effect on
the date of this Agreement) of any Benefit Plan of the
Acquiror or any of its Subsidiaries or (D) any issuance of
shares of Acquiror Common Stock for cash or in connection with
any acquisition of equity
AGREEMENT AND PLAN OF MERGER
-32-
interests, assets or businesses and other than any such offer,
sale, issuance or grant that could not reasonably be expected
to have a Material Adverse Effect on the Acquiror or a
material adverse effect on the ability of the Acquiror to
perform its obligations under this Agreement;
(iv) to acquire or agree to acquire, by merging or
consolidating with, by purchasing an equity interest in or a
portion of the assets of, or in any other manner, any business
or any corporation, partnership, association or other business
organization or division thereof, or otherwise to acquire any
assets of any other Person (other than the purchase of assets
from suppliers or vendors in the ordinary course of business
and consistent with past practice and acquisitions of equity
interests, assets and businesses that could not reasonably be
expected to have a material adverse effect on the ability of
the Acquiror to perform its obligations under this Agreement);
(v) to sell, lease, exchange or otherwise dispose of,
or to grant any Lien (other than a Permitted Encumbrance) with
respect to, any of the assets of the Acquiror or any of its
Subsidiaries that are Material to the Acquiror, except for
dispositions of assets and inventories in the ordinary course
of business and consistent with past practice and dispositions
of assets and incurrences of Liens that could not reasonably
be expected to have a material adverse effect on the ability
of the Acquiror to perform its obligations under this
Agreement;
(vi) to adopt any amendments to its charter or bylaws
or other organizational documents that would alter the terms
of the Acquiror's Common Stock or could reasonably be expected
to have a material adverse effect on the ability of the
Acquiror or Newco to perform its obligations under this
Agreement;
(vii) to incur any obligations for borrowed money or
purchase money indebtedness (other than purchase money
indebtedness as to which Liens may be granted as permitted by
Section 6.02(b)(vi)) that are Material to the Acquiror,
whether or not evidenced by a note, bond, debenture or similar
instrument, except drawings under credit lines existing at the
date of this Agreement, obligations incurred in the ordinary
course of business consistent with past practice and
obligations that could not reasonably be expected to have a
material adverse effect on the ability of the Acquiror to
perform its obligations under this Agreement;
(viii) agree in writing or otherwise to do any of
the foregoing;
SECTION 6.03 No Solicitation. From the date of this Agreement until the
Effective Time or the termination of this Agreement pursuant to Section 9.01,
the Company agrees that it will not initiate, solicit or knowingly encourage
(including by way of furnishing nonpublic information or assistance), or take
any other action knowingly to facilitate, any inquiries or the making of any
AGREEMENT AND PLAN OF MERGER
-33-
proposal that constitutes, or may reasonably be expected to lead to, any
Competing Transaction, or enter into discussions or negotiate with any Person in
furtherance of such inquiries or to obtain a Competing Transaction, or agree to
or endorse any Competing Transaction, or authorize or permit any of the
officers, directors or employees of the Company or any of its Subsidiaries or
any investment banker, financial advisor, attorney, accountant or other
representative retained by the Company or any of the Company's Subsidiaries to
take any such action and, to the extent permitted by contracts existing at the
date of this Agreement, the Company shall promptly notify the Acquiror of any
such inquiries and proposals received by the Company or any of its Subsidiaries
or by any such officer, director, investment banker, financial advisor or
attorney, relating to any of such matters; provided, however, that (i) nothing
contained in this Section 6.03 shall prohibit the Board of Directors of the
Company from (A) furnishing information to, or entering into discussions or
negotiations with, any Persons in connection with an unsolicited bona fide
proposal in writing by such Person to acquire the Company pursuant to a merger,
consolidation, share exchange, business combination or other similar transaction
or to acquire a substantial portion of the assets of the Company or any of its
Significant Subsidiaries, if, and only to the extent that (1) the Board of
Directors of the Company, after considering the advice of outside legal counsel
to the Company, determines in good faith that such action is required for the
Board of Directors of the Company to comply with its fiduciary duties to
stockholders imposed by Law and (2) prior to furnishing such information to, or
entering into discussions or negotiations with, such Person the Company provides
written notice to the Acquiror to the effect that it is furnishing information
to, or entering into discussions or negotiations with, such Person; or (B)
complying with Rule 14e-2 promulgated under the Exchange Act with regard to a
Competing Transaction and (ii) taking the actions contemplated by (i) above
under the circumstances described therein will not be deemed to be a breach of
this Agreement.
SECTION 6.04 Access and Information.
(a) Each of the parties shall, and shall cause its
Subsidiaries to, (i) afford to the other party and its officers,
directors, employees, accountants, consultants, legal counsel, agents
and other representatives (collectively, the "Representatives")
reasonable access at reasonable times upon reasonable prior notice to
the officers, employees, agents, properties, offices and other
facilities of such party and its Subsidiaries and to their books and
records and (ii) furnish promptly to the other party and its
Representatives such information concerning the business, properties,
contracts, records and personnel of such party and its Subsidiaries
(including financial, operating and other data and information) as may
be reasonably requested, from time to time, by or on behalf of the
other party.
(b) If this Agreement is terminated for any reason pursuant to
Article IX hereof, a party that has received information in accordance
with Section 6.04(a), within ten days after request therefor from the
other party, shall return or destroy (and provide the other party
within such ten-day time period with a certificate of an executive
officer certifying such destruction) all of the information furnished
to it and its Representatives pursuant to the provisions of Section
6.04(a) and all internal memoranda, analyses, evaluations and other
AGREEMENT AND PLAN OF MERGER
-34-
similar material containing or reflecting any such information, in each
case other than information available to the general public without
restriction.
SECTION 6.05 Confidentiality Agreement. The parties shall comply with,
and shall cause their respective Representatives to comply with, all of their
respective obligations under the Confidentiality Agreement.
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01 Meeting of Stockholders. The Company shall, promptly after
the date of this Agreement, take all actions necessary in accordance with the
GCL and its certificate of incorporation and bylaws to convene a special meeting
of the Company's stockholders to consider approval and adoption of this
Agreement and the Merger (the "Company Stockholders' Meeting"), and the Company
shall consult with the Acquiror in connection therewith. The Company shall use
all reasonable efforts to solicit from stockholders of the Company proxies in
favor of the approval and adoption of this Agreement and the Merger and to
secure the vote or consent of stockholders required by the GCL and its
certificate of incorporation and bylaws to approve and adopt this Agreement and
the Merger.
SECTION 7.02 Registration Statement; Proxy Statements.
(a) As promptly as practicable after the execution of this
Agreement, the Acquiror Companies shall prepare and file with the
Commission a registration statement on Form S-4 (such registration
statement, together with any amendments thereof or supplements thereto,
being the "Registration Statement"), containing a proxy
statement/prospectus for stockholders of the Company (the "Company
Proxy Statement/Prospectus"), in connection with the registration under
the Securities Act of the offering, sale and delivery of Acquiror
Common Stock to be issued in the Merger pursuant to this Agreement. As
promptly as practicable after the execution of this Agreement, the
Company shall prepare and file with the Commission a proxy statement
that will be the same as the Company Proxy Statement/Prospectus, and a
form of proxy, in connection with the vote of the Company's
stockholders with respect to the Merger (such Company Proxy
Statement/Prospectus, together with any amendments thereof or
supplements thereto, in each case in the form or forms mailed to the
Company's stockholders, being the "Company Proxy Statement"). Each of
the Acquiror Companies and the Company will use all reasonable efforts
to have or cause the Registration Statement to become effective as
promptly as practicable, and shall take any action required to be taken
under any applicable federal or state securities Laws in connection
with the issuance of shares of Acquiror Common Stock in the Merger.
Each of the Acquiror Companies and the Company shall furnish all
information concerning it and the holders of its capital stock as the
other may reasonably request in connection with such actions. As
promptly as practicable after the Registration Statement shall have
become
AGREEMENT AND PLAN OF MERGER
-35-
effective, the Company shall mail the Company Proxy Statement to its
stockholders entitled to notice of and to vote at the Company
Stockholders' Meeting. The Company Proxy Statement shall, subject to
the exercise, in good faith and with due care, by the Company's Board
of Directors of its fiduciary duty to the stockholders of the Company,
include the recommendation of the Company's Board of Directors in favor
of the Merger.
(b) The information supplied by the Company for inclusion in
the Registration Statement shall not, at the time the Registration
Statement is declared effective, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading. The information supplied by the Company for inclusion in
(i) the Company Proxy Statement to be sent to the stockholders of the
Company in connection with the Company Stockholders' Meeting shall not,
at the date the Company Proxy Statement (or any supplement thereto) is
first mailed to stockholders, at the time of the Company Stockholders'
Meeting or at the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
If at any time prior to the Effective Time any event or circumstance
relating to the Company or any of its Affiliates, or its or their
respective officers or directors, should be discovered by the Company
that should be set forth in an amendment to the Registration Statement
or a supplement to the Company Proxy Statement, the Company shall
promptly inform the Acquiror, and the Company shall undertake to amend
or supplement the Company Proxy Statement accordingly. All documents
that the Company is responsible for filing with the Commission in
connection with the transactions contemplated herein shall comply as of
the time of filing as to form in all material respects with the
applicable requirements of the Securities Act and the Regulations
thereunder and the Exchange Act and the Regulations thereunder.
(c) The information supplied by the Acquiror Companies for
inclusion in the Registration Statement shall not, at the time the
Registration Statement is declared effective, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading. The information supplied by the
Acquiror Companies for inclusion in the Company Proxy Statement to be
sent to the stockholders of the Company in connection with the Company
Stockholders' Meeting shall not, at the date the Company Proxy
Statement (or any supplement thereto) is first mailed to stockholders,
at the time of the Company Stockholders' Meeting or at the Effective
Time, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under
which they are made, not misleading. If at any time prior to the
Effective Time any event or circumstance relating to the Acquiror or
any of its Affiliates, or to their respective officers or directors,
should be discovered by the Acquiror that should be set forth in an
amendment to the Registration Statement or a supplement to the Company
Proxy Statement, the Acquiror shall promptly inform the Company, and
the Acquiror shall undertake to amend or supplement the
AGREEMENT AND PLAN OF MERGER
-36-
Registration Statement or the prospectus contained therein accordingly.
All documents that the Acquiror Companies are responsible for filing
with the Commission in connection with the transactions contemplated
hereby shall as of the time of filing comply as to form in all material
respects with the applicable requirements of the Securities Act and the
Regulations thereunder and the Exchange Act and the Regulations
thereunder.
(d) No amendment or supplement to the Registration Statement
or the Company Proxy Statement will be made by the Acquiror or the
Company without the approval of the other party. The Acquiror and the
Company each will advise the other, promptly after it receives notice
thereof, of the time when the Registration Statement has become
effective or any supplement or amendment has been filed, the issuance
of any stop order suspending the effectiveness of the Registration
Statement or the solicitation of proxies pursuant to the Company Proxy
Statement, the suspension of the qualification of the Acquiror Common
Stock issuable in connection with the Merger for offering or sale in
any jurisdiction, any request by the staff of the Commission for
amendment of the Registration Statement or the Company Proxy Statement,
the receipt from the staff of the Commission of comments thereon or any
request by the staff of the Commission for additional information with
respect thereto.
SECTION 7.03 Appropriate Action; Consents; Filings.
(a) The Company and the Acquiror shall each use all reasonable
efforts (i) to take, or to cause to be taken, all appropriate action,
and to do, or to cause to be done, all things necessary, proper or
advisable under applicable Law or otherwise to consummate and make
effective the transactions contemplated by this Agreement, (ii) to
obtain from any Governmental Authorities any Permits or Orders required
to be obtained or made by the Acquiror or the Company or any of their
Subsidiaries in connection with the authorization, execution, delivery
and performance of this Agreement and the consummation of the
transactions contemplated hereby, including the Merger, (iii) to make
all necessary filings, and thereafter make any other required
submissions, with respect to this Agreement and the Merger required
under (A) the Securities Act (in the case of Acquiror) and the Exchange
Act and the Regulations thereunder, and any other applicable federal or
state securities Laws, (B) the HSR Act and (C) any other applicable
Law; provided that the Acquiror and the Company shall cooperate with
each other in connection with the making of all such filings, including
providing copies of all such documents to the nonfiling party and its
advisors prior to filings and, if requested, shall accept all
reasonable additions, deletions or changes suggested in connection
therewith. The Company and the Acquiror shall furnish all information
required for any application or other filing to be made pursuant to any
applicable Law or any applicable Regulations of any Governmental
Authority (including all information required to be included in the
Company Proxy Statement or the Registration Statement) in connection
with the transactions contemplated by this Agreement.
AGREEMENT AND PLAN OF MERGER
-37-
(b) Each of the Company and the Acquiror shall give prompt
notice to the other of (i) any notice or other communication from any
Person alleging that the consent of such Person is or may be required
in connection with the Merger, (ii) any notice or other communication
from any Governmental Authority in connection with the Merger, (iii)
any actions, suits, claims, investigations or proceedings commenced or
threatened in writing against, relating to or involving or otherwise
affecting the Company, the Acquiror or their Subsidiaries that relate
to the consummation of the Merger; (iv) the occurrence of a default or
event that, with notice or lapse of time or both, will become a default
under any Material Contract of the Acquiror or Material Contract of the
Company; and (v) any change that is reasonably likely to have a
Material Adverse Effect on the Company or the Acquiror or is likely to
delay or impede the ability of either the Acquiror or the Company to
consummate the transactions contemplated by this Agreement or to
fulfill their respective obligations set forth herein.
(c) The Acquiror Companies and the Company agree to cooperate
and use all reasonable efforts vigorously to contest and resist any
action, including legislative, administrative or judicial action, and
to have vacated, lifted, reversed or overturned any Order (whether
temporary, preliminary or permanent) of any Court or Governmental
Authority that is in effect and that restricts, prevents or prohibits
the consummation of the Merger or any other transactions contemplated
by this Agreement, including the vigorous pursuit of all available
avenues of administrative and judicial appeal and all available
legislative action. Each of the Acquiror Companies and the Company also
agree to take any and all actions, including the disposition of assets
or the withdrawal from doing business in particular jurisdictions,
required by any Court or Governmental Authority as a condition to the
granting of any Permit or Order necessary for the consummation of the
Merger or as may be required to avoid, lift, vacate or reverse any
legislative or judicial action which would otherwise cause any
condition to Closing not to be satisfied; provided, however, that in no
event shall either party take, or be required to take, any action that
could reasonably be expected to have an Material Adverse Effect on the
Acquiror or the Company.
(d) (i) Each of the Company and Acquiror shall give
(or shall cause their respective Subsidiaries to give) any
notices to third Persons, and use, and cause their respective
Subsidiaries to use, all reasonable efforts to obtain any
consents from third Persons (A) necessary, proper or advisable
to consummate the transactions contemplated by this Agreement,
(B) otherwise required under any contracts, licenses, leases
or other agreements in connection with the consummation of the
transactions contemplated hereby or (C) required to prevent a
Material Adverse Effect on the Company from occurring prior to
or after the Effective Time or a Material Adverse Effect on
the Acquiror from occurring after the Effective Time.
(ii) If any party shall fail to obtain any consent
from a third Person described in subsection (d)(i) above, such
party shall use all reasonable efforts, and shall take any
such actions reasonably requested by the other parties, to
limit the
AGREEMENT AND PLAN OF MERGER
-38-
adverse effect upon the Company and Acquiror, their respective
Subsidiaries, and their respective businesses resulting, or
which could reasonably be expected to result after the
Effective Time, from the failure to obtain such consent.
SECTION 7.04 Affiliates; Pooling; Tax Treatment.
(a) The Company shall use all reasonable efforts to obtain an
executed letter agreement substantially in the form of Annex B hereto
from (i) each Person identified in Section 4.19 of the Company's
Disclosure Letter within 15 days following the execution and delivery
of this Agreement and (ii) from any Person who may be deemed to have
become an Affiliate of the Company after the date of this Agreement and
prior to the Effective Time as soon as practicable after attaining such
status.
(b) The Acquiror shall use all reasonable efforts to obtain an
executed letter agreement substantially in the form of Annex C hereto
from (i) each Person identified in Section 5.17 of the Acquiror's
Disclosure Letter within 15 days following the execution and delivery
of this Agreement and (ii) from any Person who may be deemed to have
become an Affiliate of the Acquiror after the date of this Agreement
and prior to the Effective Time as soon as practicable after attaining
such status.
(c) The Acquiror Companies shall not be required to maintain
the effectiveness of the Registration Statement for the purpose of
resale by stockholders of the Company who may be Affiliates of the
Company pursuant to Rule 145 under the Securities Act.
(d) Each party hereto shall use all reasonable efforts to
cause the Merger to be treated for financial accounting purposes as a
Pooling Transaction, and shall not take, and shall use all reasonable
efforts to prevent any Affiliate of such party from taking, any actions
which could prevent the Merger from being treated for financial
accounting purposes as a Pooling Transaction.
(e) Each party hereto shall use all reasonable efforts to
cause the Merger to qualify, and shall not take, and shall use all
reasonable efforts to prevent any Affiliate of such party from taking,
any actions which could prevent the Merger from qualifying, as a
reorganization under the provisions of Section 368(a) of the Code.
SECTION 7.05 Public Announcements. The Acquiror and the Company shall
consult with each other before issuing any press release or otherwise making any
public statements with respect to the Merger and shall not issue any such press
release or make any such public statement prior to such consultation.
SECTION 7.06 NYSE Listing. The Acquiror shall use all reasonable
efforts to cause the shares of Acquiror Common Stock to be issued in the Merger
to be approved for listing (subject to official notice of issuance) on the NYSE
prior to the Effective Time. To the Knowledge of the
AGREEMENT AND PLAN OF MERGER
-39-
Acquiror, there are no facts and circumstances that could reasonably be expected
to preclude the Acquiror Common Stock to be issued in the Merger from being
approved for listing on the NYSE.
SECTION 7.07 Rights Agreement; State Takeover Statutes. The Company
shall take all action (including, if necessary, redeeming all of the outstanding
rights issued pursuant to the Company Rights Agreement or amending or
terminating the Rights Agreement) so that the execution, delivery and
performance of this Agreement and the consummation of the Merger and the other
transactions contemplated hereby do not and will not result in the grant of any
rights to any Person under the Rights Agreement or enable or require any
outstanding rights to be exercised, distributed or triggered. The Company will
take all steps necessary to exempt the transactions contemplated by this
Agreement from Section 203 of the GCL.
SECTION 7.08 Comfort Letters.
(a) The Company shall use all reasonable efforts to cause
Price Waterhouse LLP to deliver a letter dated as of the date of the
Company Proxy Statement, and addressed to the Company and the Acquiror,
in form and substance reasonably satisfactory to Acquiror and customary
in scope and substance for agreed upon procedures letters delivered by
independent public accountants in connection with registration
statements and proxy statements similar to the Registration Statement
and the Company Proxy Statement.
(b) The Acquiror shall use all reasonable efforts to cause
Arthur Andersen LLP to deliver a letter dated as of the date of the
Company Proxy Statement, and addressed to the Acquiror and the Company,
in form and substance reasonably satisfactory to the Company and
customary in scope and substance for agreed upon procedures letters
delivered by independent public accountants in connection with
registration statements and proxy statements similar to the
Registration Statement and the Company Proxy Statement.
SECTION 7.09 Assumption of Obligations to Issue Stock.
(a) At the Effective Time, automatically and without any
action on the part of the holder thereof, each outstanding Company
Stock Option shall be assumed by the Surviving Corporation and become
an option to purchase that number of shares of Acquiror Common Stock
obtained by multiplying the number of shares of Company Common Stock
issuable upon the exercise of such option by the Common Stock Exchange
Ratio at an exercise price per share equal to the per share exercise
price of such option divided by the Common Stock Exchange Ratio and
otherwise upon the same terms and conditions as such outstanding
options to purchase Company Common Stock; provided, however, that in
the case of any option to which Section 421 of the Internal Revenue
Code applies by reason of the qualifications under Section 422 or 423
of such Code, the exercise price, the number of shares purchasable
pursuant to such option and the terms and conditions of exercise of
such option shall be determined in a manner that complies with Section
424(a) of the Code.
AGREEMENT AND PLAN OF MERGER
-40-
(b) On or prior to the Effective Time, the Company shall take
or cause to be taken all such actions, reasonably satisfactory to the
Acquiror, as may be necessary or desirable in order to authorize the
transactions contemplated by subsection (a) of this Section.
(c) The Acquiror shall take all corporate actions necessary to
reserve for issuance a sufficient number of shares of Acquiror Common
Stock for delivery upon exercise of the Company Stock Options assumed
by Acquiror pursuant to Section 7.09(a) above.
(d) As promptly as practicable after the Effective Time, the
Acquiror shall file one or more Registration Statements on Form S-8 (or
any successor or other appropriate forms) with respect to the shares of
Acquiror Common Stock subject to the Company Stock Options and shall
use its reasonable efforts to maintain the effectiveness of such
registration statement or registration statements (and maintain the
current status of the prospectus or prospectuses contained therein) for
so long as such options remain outstanding and to comply with
applicable state securities and blue sky laws.
(e) Except as provided herein or as otherwise agreed to by the
parties, each of the Company Stock Option Plans providing for the
issuance or grant of Company Stock Options shall be assumed as of the
Effective Time by the Surviving Corporation with such amendments
thereto as may be required to reflect the Merger.
SECTION 7.10 Employee Benefit Plans. Provided that the Company shall
not be obligated with respect to any action taken by the Company or its
Subsidiaries with respect to the Employee Benefit Plans of the Company or its
Subsidiaries in violation of the provisions of Section 6.02(a), the Acquiror
hereby agrees to guarantee and to cause the Surviving Corporation and each
Subsidiary of the Surviving Corporation to honor and perform all obligations of
the Surviving Corporation and each Subsidiary of the Surviving Corporation under
all Benefit Plans of the Company and such Subsidiaries and all employment
contracts of the Company listed on Section 4.10 of the Company's Disclosure
Letter, including, except as amended by the Employment Agreement, the Change in
Control Agreements and the Restricted Stock Agreement, including the provisions
of the Change in Control Agreements and the Restricted Stock Agreement that
provide for the acceleration of vesting schedules applicable to stock options
and restricted stock awards granted thereunder upon the Effective Time (other
than the Company Option Plans, the Company Stock Options granted thereunder
(other than those granted and outstanding on the date of this Agreement) and
incentive compensation plans of the Company and its Subsidiaries). The Acquiror
shall cause the Surviving Corporation to maintain through December 31, 1997 (the
"Benefit Continuation Period"), the Benefit Plans of the Company and its
Subsidiaries set forth in Section 4.13(a) of the Company's Disclosure Letter,
substantially as in effect immediately prior to the Effective Time (other than
the Company Option Plans, the Company Stock Options granted thereunder (other
than those granted and outstanding on the date of this Agreement) and incentive
compensation plans of the Company and its Subsidiaries). From and after the
Effective Time, including after the Benefit Continuation Period, the Acquiror
shall grant all employees of the Company and its Subsidiaries on the Closing
Date credit for all service (to the same extent as service with the Acquiror or
any
AGREEMENT AND PLAN OF MERGER
-41-
Subsidiary of the Acquiror is taken into account with respect to similarly
situated employees of the Acquiror and the Subsidiaries of the Acquiror) with
the Company and any Subsidiary of the Company and their respective predecessors
prior to the Effective Time under all Benefit Plans of the Acquiror or its
Subsidiaries in which such employees shall become eligible to participate as if
such service with the Company or any Subsidiary of the Company was service with
the Acquiror or any Subsidiary of the Acquiror, and, with respect to any medical
or dental benefit plan in which such employees become eligible to participate,
the Acquiror shall waive any pre-existing condition exclusions and
actively-at-work requirements (provided, however, that no such waiver shall
apply to a pre-existing condition of any employee of the Company or any
Subsidiary of the Company who was, as of the Effective Time, excluded from
participation in a Benefit Plan by virtue of such pre-existing condition) and
provided that any covered expenses incurred on or before the Effective Time by
an employee or an employee's covered dependent shall be taken into account for
purposes of satisfying applicable deductible, coinsurance and maximum
out-of-pocket provisions after the Effective Time to the same extent as such
expenses are taken into account for the benefit of similarly situated employees
of the Acquiror and the Subsidiaries of the Acquiror.
SECTION 7.11 Indemnification of Directors and Officers.
(a) Until six years from the Effective Time, the certificate
of incorporation and bylaws of the Surviving Corporation as in effect
immediately after the Effective Time shall not be amended to reduce or
limit the rights of indemnity afforded to the present and former
directors and officers of the Company thereunder or as to the ability
of the Company to indemnify such Persons, or to hinder, delay or make
more difficult the exercise of such rights of indemnity or the ability
to indemnify. The Surviving Corporation will at all times exercise the
powers granted to it by its certificate of incorporation, its bylaws
and applicable law to indemnify to the fullest extent possible the
present and former directors, officers, employees and agents of the
Company against claims made against them arising from their service in
such capacities prior to the Effective Time.
(b) If any claim or claims shall, subsequent to the Effective
Time and within six years thereafter, be made against any present or
former director, officer, employee or agent of the Company based on or
arising out of the services of such Person prior to the Effective Time
in the capacity of such Person as a director, officer, employee or
agent of the Company, the provisions of this subsection (a) of this
Section respecting the certificate of incorporation and bylaws of the
Surviving Corporation shall continue in effect until the final
disposition of all such claims.
(c) The Acquiror hereby agrees after the Effective Time to
guarantee the payment of the Surviving Corporation's indemnification
obligations described in Section 7.11(a) up to an amount determined as
of the Effective Time equal to (i) the fair market value of any assets
of the Surviving Corporation or any of its Subsidiaries distributed to
the Acquiror or any of its Subsidiaries (other than the Surviving
Corporation and its Subsidiaries), minus (ii) any liabilities of the
Surviving Corporation or any of its Subsidiaries assumed by the
Acquiror or any of its Subsidiaries (other than the Surviving
Corporation and its Subsidiaries), minus (iii) the fair market value of
any assets of the Acquiror or any of its
AGREEMENT AND PLAN OF MERGER
-42-
Subsidiaries (other than the Surviving Corporation and its
Subsidiaries) contributed to the Surviving Corporation or any of its
Subsidiaries and plus (iv) any liabilities of the Acquiror or any of
its Subsidiaries (other than the Surviving Corporation and its
Subsidiaries) assumed by the Surviving Corporation or any of its
Subsidiaries.
(d) Notwithstanding subsection (a), (b) or (c) of this Section
7.11, the Acquiror and the Surviving Corporation shall be released from
the obligations imposed by such subsection if the Acquiror shall assume
the obligations of the Surviving Corporation thereunder by operation of
Law or otherwise. Notwithstanding anything to the contrary in this
Section 7.11, neither the Acquiror nor the Surviving Corporation shall
be liable for any settlement effected without its written consent,
which shall not be unreasonably withheld.
(e) The Acquiror shall cause to be maintained in effect until
six years from the Effective Time the current policies of directors'
and officers' liability insurance maintained by the Company (or
substitute policies providing at least the same coverage and limits and
containing terms and conditions that are not materially less
advantageous) with respect to claims arising from facts or events which
occurred before the Effective Time; provided, however, that in no event
shall the Acquiror or the Surviving Corporation be required to expend
more than 200 percent of the current annual premiums paid by the
Company for such insurance; provided, further, that, if the Acquiror or
the Surviving Corporation is unable to obtain insurance for any period
for 200 percent of the current annual premiums, then the obligation of
the Acquiror and the Surviving Corporation pursuant hereto shall be to
obtain the best coverage reasonably available under the circumstances
subject to the foregoing limitations on premiums.
(f) The provisions of this Section 7.11 are intended to be for
the benefit of, and shall be enforceable by, each Person entitled to
indemnification hereunder and the heirs and representatives of such
Person.
(g) The Acquiror shall not permit the Surviving Corporation to
merge or consolidate with any other Person unless the Surviving
Corporation shall ensure that the surviving or resulting entity assumes
the obligations imposed by subsections (a), (b), (c) and (e) of this
Section.
SECTION 7.12 Newco. Prior to the Effective Time, Newco shall not
conduct any business or make any investments other than as specifically
contemplated by this Agreement and will not have any assets (other than the
minimum amount of cash required to be paid to Newco for the valid issuance of
its stock to the Acquiror). The Acquiror shall take all action necessary to
cause Newco to perform its obligations under this Agreement and to consummate
the Merger on the terms and conditions set forth in this Agreement.
SECTION 7.13 Event Notices. From and after the date of this Agreement
until the Effective Time, each party hereto shall promptly notify the other
party hereto of (i) the occurrence or nonoccurrence of any event the occurrence
or nonoccurrence of which would be likely to cause any condition to the
obligations of such party to effect the Merger and the other transactions
AGREEMENT AND PLAN OF MERGER
-43-
contemplated by this Agreement not to be satisfied and (ii) the failure of such
party to comply with any covenant or agreement to be complied with by it
pursuant to this Agreement which would be likely to result in any condition to
the obligations of such party to effect the Merger and the other transactions
contemplated by this Agreement not to be satisfied. No delivery of any notice
pursuant to this Section 7.13 shall cure any breach of any representation or
warranty of such party contained in this Agreement or otherwise limit or affect
the remedies available hereunder to the party receiving such notice.
SECTION 7.14 Stratworks Divestiture. The Company shall divest itself on
or prior to the Closing Date of any ownership interest in the software
application called "Stratworks" through the sale thereof to a Person
unaffiliated with either the Company or the Acquiror on terms reasonably
satisfactory to the Acquiror.
SECTION 7.15 Change in Control Agreements. Prior to the Effective Time,
the Company shall agree, and shall use all reasonable efforts to cause each
Person who is a party to one of the Change in Control Agreements to agree, in
writing that (a) for all purposes of such Change in Control Agreements, Newco
shall be substituted for the Company as the successor to the Company, except
that, for purposes of each of the Change in Control Agreements, a "Change in
Control" shall be deemed to have occurred as a result of the Merger, (b) no
payments will be required pursuant to Section 5 of any of the Change in Control
Agreements solely as a result of the Merger and (c) Section 4(b)(ii)(A) of each
of the Change in Control Agreements will be amended and restated to read in its
entirety as follows: "Failure to elect or reelect the Executive to the office of
the Company which the Executive held immediately prior to a Change in Control;".
Such agreements shall be reasonably satisfactory in form and substance to the
Acquiror.
ARTICLE VIII
CLOSING CONDITIONS
SECTION 8.01 Conditions to Obligations of Each Party Under This
Agreement. The respective obligations of each party to effect the Merger and the
other transactions contemplated hereby shall be subject to the satisfaction at
or prior to the Effective Time of the following conditions, any or all of which
may be waived by the parties hereto, in whole or in part, to the extent
permitted by applicable Law:
(a) Effectiveness of the Registration Statement. The
Registration Statement shall have been declared effective by the
Commission under the Securities Act. No stop order suspending the
effectiveness of the Registration Statement shall have been issued by
the Commission and no proceedings for that purpose shall have been
initiated by the Commission.
(b) Stockholder Approval. This Agreement and the Merger
shall have been approved and adopted by the requisite vote of the
stockholders of the Company as required by the GCL.
AGREEMENT AND PLAN OF MERGER
-44-
(c) No Order. No Court or Governmental Authority shall have
enacted, issued, promulgated, enforced or entered any Law, Regulation
or Order (whether temporary, preliminary or permanent) which is in
effect and which has the effect of making the Merger illegal or
otherwise prohibiting consummation of the Merger.
(d) HSR Act. The applicable waiting period under the HSR Act
shall have expired or been terminated.
(e) Foreign Governmental Authorities. The applicable waiting
period under any competition Laws, Regulations and Orders of foreign
Governmental Authorities, as set forth in the Acquiror's Disclosure
Letter and the Company's Disclosure Letter, shall have expired or been
terminated.
(f) Pooling of Interests. The Acquiror and the Company shall
have been advised in writing by Arthur Andersen LLP as of the date upon
which the Effective Time is to occur to the effect that such firm knows
of no reason why the Merger cannot be treated for financial accounting
purposes as a pooling of interests.
SECTION 8.02 Additional Conditions to Obligations of the Acquiror
Companies. The obligations of the Acquiror Companies to effect the Merger and
the other transactions contemplated hereby shall be subject to the satisfaction
at or prior to the Effective Time of the following conditions, any or all of
which may be waived by the Acquiror Companies, in whole or in part, to the
extent permitted by applicable Law:
(a) Representations and Warranties. Each of the
representations and warranties of the Company contained in this
Agreement shall be true and correct in all material respects (without
duplication of any materiality exception contained in any individual
representation and warranty) as of the date of this Agreement and as of
the Effective Time as though made again on and as of the Effective
Time. The Acquiror Companies shall have received a certificate of the
President and the Chief Financial Officer of the Company, dated the
date of the Effective Time, to such effect.
(b) Agreements and Covenants. The Company shall have performed
or complied with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the
Effective Time. The Acquiror Companies shall have received a
certificate of the President and the Chief Financial Officer of the
Company, dated the date of the Effective Time, to such effect.
(c) Tax Opinion. The Acquiror shall have received the opinion
dated on or prior to the effective date of the Registration Statement
of Vinson & Elkins LLP to the effect that (i) the Merger will
constitute a reorganization under section 368(a) of the Code, (ii) the
Acquiror, the Company and Newco will each be a party to that
reorganization, and (iii) no gain or loss will be recognized by the
Acquiror, the Company or Newco by reason of the Merger.
AGREEMENT AND PLAN OF MERGER
-45-
SECTION 8.03 Additional Conditions to Obligations of the Company. The
obligations of the Company to effect the Merger and the other transactions
contemplated hereby shall be subject to the satisfaction at or prior to the
Effective Time of the following conditions, any or all of which may be waived by
the Company, in whole or in part, to the extent permitted by applicable Law:
(a) Representations and Warranties. Each of the
representations and warranties of the Acquiror Companies contained in
this Agreement shall be true and correct in all material respects
(without duplication of any materiality exception contained in any
individual representation and warranty) as of the date of this
Agreement and as of the Effective Time as though made again on and as
of the Effective Time. The Company shall have received a certificate of
the President and the Chief Financial Officer of each of the Acquiror
Companies, dated the date of the Effective Time, to such effect.
(b) Agreements and Covenants. The Acquiror Companies shall
have performed or complied with all agreements and covenants required
by this Agreement to be performed or complied with by them on or prior
to the Effective Time. The Company shall have received a certificate of
the President and the Chief Financial Officer of each of the Acquiror
Companies, dated the date of the Effective Time, to such effect.
(c) Tax Opinion. The Company shall have received the opinion
dated on or prior to the effective date of the Registration Statement
of Winstead Sechrest & Minick P.C. to the effect that (i) the Merger
will constitute a reorganization under section 368(a) of the Code, (ii)
the Acquiror, the Company and Newco will each be a party to that
reorganization, and (iii) no gain or loss will be recognized by the
stockholders of the Company upon the receipt of shares of Acquiror
Common Stock in exchange for shares of Company Common Stock pursuant to
the Merger except with respect to any cash received in lieu of
fractional share interests.
(d) Investment Banker's Opinion. The Company shall have
received, on the date of mailing of the Company Proxy Statement to the
holders of Company Common Stock, a written opinion from Morgan Stanley
& Co. Incorporated, dated the date of such mailing, confirming the
opinion to which reference is made in Section 4.21.
(e) NYSE Listing. The shares of Acquiror Common Stock to be
issued pursuant to the Merger shall have been approved for listing,
subject to official notice of issuance, on the NYSE.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01 Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval of this Agreement
and the Merger by the stockholders of the Company:
AGREEMENT AND PLAN OF MERGER
-46-
(a) by mutual consent of the Acquiror and the Company;
(b) by the Acquiror, upon a breach of any covenant or
agreement on the part of the Company set forth in this Agreement, or if
any representation or warranty of the Company shall have become untrue,
in either case such that the conditions set forth in Section 8.02(a) or
Section 8.02(b) would not be satisfied (a "Terminating Company
Breach"); provided that, if such Terminating Company Breach is curable
by the Company through the exercise of reasonable efforts and for so
long as the Company continues to exercise such reasonable efforts, the
Acquiror may not terminate this Agreement under this Section 9.01(b);
(c) by the Company, upon breach of any covenant or agreement
on the part of the Acquiror Companies set forth in this Agreement, or
if any representation or warranty of the Acquiror Companies shall have
become untrue, in either case such that the conditions set forth in
Section 8.03(a) or Section 8.03(b) would not be satisfied (a
"Terminating Acquiror Breach"); provided that, if such Terminating
Acquiror Breach is curable by the Acquiror Companies through the
exercise of their reasonable efforts and for so long as the Acquiror
Companies continue to exercise such reasonable efforts, the Company may
not terminate this Agreement under this Section 9.01(c);
(d) by either Acquiror or the Company, if there shall be any
Order which is final and nonappealable preventing the consummation of
the Merger, unless the party relying on such Order has not complied
with its obligations under Section 7.03;
(e) by either Acquiror or the Company, if the Merger shall not
have been consummated before December 31, 1996; provided, however, that
this Agreement may be extended by written notice of either Acquiror or
the Company to a date not later than February 28, 1997, if the Merger
shall not have been consummated as a result of the Company or the
Acquiror Companies having failed by December 31, 1996 to receive all
required Permits and Orders with respect to the Merger or as a result
of the entering of an Order by a Court or Governmental Authority;
(f) by either Acquiror or the Company, if this Agreement shall
fail to receive the requisite vote for approval and adoption by the
stockholders of the Company at the Company Stockholders' Meeting;
(g) by the Acquiror, if (i) the Board of Directors of the
Company withdraws, modifies or changes its recommendation of this
Agreement or the Merger in a manner materially adverse to the Acquiror
Companies or shall have resolved to do any of the foregoing or the
Board of Directors of the Company shall have recommended to the
stockholders of the Company any Competing Transaction or resolved to do
so; (ii) a tender offer or exchange offer for 50 percent or more of the
outstanding shares of Company Common Stock is commenced and the Board
of Directors of the Company, within 10 Business Days after such tender
offer or exchange offer is so commenced, either fails to recommend
against acceptance of such tender or exchange offer by its stockholders
or takes
AGREEMENT AND PLAN OF MERGER
-47-
no position with respect to the acceptance of such tender or exchange
offer by its stockholders; or (iii) any person shall have acquired
beneficial ownership or the right to acquire beneficial ownership of,
or any "group" (as such term is defined under Section 13(d) of the
Exchange Act and the Regulations promulgated thereunder), shall have
been formed which beneficially owns, or has the right to acquire
beneficial ownership of, 50 percent or more of the then outstanding
shares of capital stock of the Company; or
(h) by the Company, if the Company accepts a Superior Proposal
and makes the payment required pursuant to Section 9.05(c)(i) of this
Agreement and pays the expenses for which the Company is responsible
under Section 9.05(a) of this Agreement.
The right of any party hereto to terminate this Agreement pursuant to
this Section 9.01 shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any party hereto, any Person
controlling any such party or any of their respective officers, directors,
representatives or agents, whether prior to or after the execution of this
Agreement.
SECTION 9.02 Effect of Termination. Except as provided in Section 9.05
or Section 10.01 of this Agreement, in the event of the termination of this
Agreement pursuant to Section 9.01, this Agreement shall forthwith become void,
there shall be no liability on the part of the Acquiror Companies or the Company
or any of their respective officers or directors to the other and all rights and
obligations of any party hereto shall cease, except that nothing herein shall
relieve any party from liability for any breach of this Agreement.
SECTION 9.03 Amendment. This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective Boards of Directors
at any time prior to the Effective Time; provided, however, that, after approval
of the Merger by the stockholders of the Company, no amendment may be made which
would reduce the amount or change the type of consideration into which each
share of Company Common Stock shall be converted pursuant to this Agreement upon
consummation of the Merger. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
SECTION 9.04 Waiver. At any time prior to the Effective Time, any party
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other party hereto, (b) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document delivered pursuant hereto and (c) waive compliance by the other party
with any of the agreements or conditions contained herein. Any such extension or
waiver shall be valid only if set forth in an instrument in writing signed by
the party or parties to be bound thereby. For purposes of this Section 9.04, the
Acquiror Companies shall be deemed to be one party.
SECTION 9.05 Fees, Expenses and Other Payments.
(a) Except as provided in Section 9.05(c) of this Agreement,
all Expenses incurred by the parties hereto shall be borne solely and
entirely by the party which has incurred such Expenses; provided,
however, that the allocable share of the Acquiror Companies as a group
and the Company for all Expenses related to printing, filing and
AGREEMENT AND PLAN OF MERGER
-48-
mailing the Registration Statement and the Company Proxy Statement and
all Commission and other regulatory filing fees incurred in connection
with the Registration Statement and the Company Proxy Statement shall
be one-half each; and provided, further, that the Acquiror may, at its
option, pay any Expenses of the Company that are solely and directly
related to the Merger.
(b) (i) The Company agrees that, if (A) either (1)
this Agreement is terminated pursuant to Section 9.01(f) and,
after the date of this Agreement and prior to the Company
Stockholders' Meeting, the Company shall have furnished
information to, or entered into discussions or negotiations
with, any Person with respect to a Competing Transaction
involving the Company or any of its Subsidiaries and the Board
of Directors of the Company shall not have reaffirmed its
favorable recommendation to its stockholders with respect to
the transactions contemplated by this Agreement by the time of
the Company Stockholders' Meeting; (2) the Acquiror terminates
this Agreement pursuant to Section 9.01(g)(i) or 9.01(g)(ii);
(3) the Company terminates this Agreement pursuant to Section
9.01(h); or (4) within twelve months after the date of the
termination of this Agreement, any Person or "group" (as such
term is defined under Section 13(d) of the Exchange Act and
the Regulations promulgated thereunder), other than the
Acquiror, its Subsidiaries or Affiliates, shall have acquired
beneficial ownership, by tender offer or exchange offer or
otherwise, of 50 percent or more of the outstanding Company
Common Stock and (x) the value of the consideration per share
received by the stockholders of the Company in such
transaction shall have been higher on a per share basis than
the consideration payable to the stockholders of the Company
under this Agreement on a per share basis or (y) such
transaction shall be on more favorable terms to the
stockholders of the Company than the Merger; then (B) in each
such case the Company shall pay to the Acquiror $18 million.
(ii) The Company agrees that, if (A) the Acquiror
shall terminate this Agreement pursuant to Section 9.01(b) and
such termination is the result of an intentional or willful
breach by the Company of any agreement, covenant,
representation or warranty herein and (B) either (1) within
twelve months after such termination of this Agreement the
Company shall have entered into a definitive agreement
providing for a Business Combination with any Person or
"group" (as such term is defined under Section 13(d) of the
Exchange Act and the Regulations promulgated thereunder),
other than Acquiror, its Subsidiaries or Affiliates, to which
the Company shall have furnished information or with which the
Company shall have had any contacts or entered into any
discussions or negotiations relating to a Business Combination
at any time during the period commencing eighteen months prior
to the date of this Agreement through the date of termination
of this Agreement and contemplating the payment to the Company
or its stockholders, as the case may be, of consideration
having a higher value in the aggregate than the consideration
payable to the Company's stockholders under this Agreement or
such transaction shall be on more favorable terms to the
stockholders of the Company than the Merger and such Business
Combination is thereafter consummated or (2) within twelve
AGREEMENT AND PLAN OF MERGER
-49-
months after such termination of this Agreement, any such
Person or group shall have acquired beneficial ownership, by
tender offer or exchange offer or otherwise, of 50 percent or
more of the outstanding Company Common Stock and as a result
the Company's stockholders shall have received consideration
having a higher value per share than the consideration per
share payable to the Company's stockholders under this
Agreement or such transaction shall be on more favorable terms
to the stockholders of the Company than the Merger, then in
such case the Company shall pay to the Acquiror $18 million.
(iii) For purposes of this Section 9.05(b), the value
of the consideration received by the Company's stockholders in
connection with a transaction described in clause (b)(i)(A),
(b)(ii)(B)(1) or (b)(ii)(B)(2) of this Section 9.05 shall be
determined as of the date the consideration becomes payable to
such stockholders, and the value of the consideration payable
to such stockholders under this Agreement shall be $31.857 per
share.
(c) Any payment required to be made pursuant to Section
9.05(b) of this Agreement shall be made to the Acquiror not later than
two Business Days after delivery to the Company of notice of demand for
payment, and shall be made by wire transfer of immediately available
funds to an account designated by the Acquiror in the notice of demand
for payment delivered pursuant to this Section 9.05(c).
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01 Effectiveness of Representations,
Warranties and Agreements.
(a) Except as set forth in Section 10.01(b) of this Agreement,
the representations, warranties and agreements of each party hereto
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any other party hereto, any
Person controlling any such party or any of their officers, directors,
representatives or agents whether prior to or after the execution of
this Agreement.
(b) The representations, warranties and agreements in this
Agreement shall terminate at the Effective Time or upon the termination
of this Agreement pursuant to Article IX, except that the agreements
set forth in Articles II and III and Sections 7.09, 7.10 and 7.11 shall
survive the Effective Time and those set forth in Sections 6.05, 9.02
and 9.05 and Article X hereof shall survive termination.
SECTION 10.02 Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given upon receipt, if delivered personally, mailed by registered or certified
mail (postage prepaid, return receipt requested) to the parties at the following
addresses or sent by electronic transmission to the telecopier number specified
below:
AGREEMENT AND PLAN OF MERGER
-50-
(a) If to any of the Acquiror Companies, to:
Halliburton Company
3600 Lincoln Plaza
500 North Akard Street
Dallas, Texas 75201-3391
Attention: Lester L. Coleman, Executive
Vice President and General Counsel
Telecopier No.: (214) 978-2658
with a copy to:
Vinson & Elkins L.L.P.
First City Tower
1001 Fannin
Houston, Texas 77002-6760
Attention: William E. Joor III
Telecopier No.: (713) 758-2346
(b) If to the Company, to:
Landmark Graphics Corporation
15150 Memorial Drive
Houston, Texas 77079-4304
Attention: Patti Massaro, General Counsel
and Corporate Secretary
Telecopier No.: (713) 560-1383
with a copy to:
Winstead Sechrest & Minick P.C.
5400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
Attention: Robert E. Crawford, Jr.
Telecopier No.: (214) 745-5390
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Attention: David W. Heleniak
Telecopier No.: (212) 848-7179
or to such other address or telecopier number as any party may, from time to
time, designate in a written notice given in a like manner. Notice given by
telecopier shall be deemed delivered on the day the sender receives telecopier
confirmation that such notice was received at the telecopier number of the
addressee. Notice given by mail as set out above shall be deemed delivered three
days after the date the same is postmarked.
AGREEMENT AND PLAN OF MERGER
-51-
SECTION 10.03 Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 10.04 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the extent
possible.
SECTION 10.05 Entire Agreement. This Agreement (together with the
Annexes, the Company's Disclosure Letter, the Acquiror's Disclosure Letter and
the Confidentiality Agreement) constitutes the entire agreement of the parties,
and supersedes all prior agreements and undertakings, both written and oral,
among the parties, with respect to the subject matter hereof.
SECTION 10.06 Assignment. This Agreement shall not be assigned by
operation of Law or otherwise.
SECTION 10.07 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and, other than pursuant
to Sections 7.09, 7.10 and 7.11 hereof, nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
SECTION 10.08 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive to, and not exclusive
of, any rights or remedies otherwise available.
SECTION 10.09 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the Laws of the State of Texas, regardless of the
Laws that might otherwise govern under applicable principles of conflicts of
law; provided, however, that any matter involving the internal corporate affairs
of any party hereto shall be governed by the provisions of the GCL.
SECTION 10.10 Counterparts. This Agreement may be executed in multiple
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
AGREEMENT AND PLAN OF MERGER
-52-
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
HALLIBURTON COMPANY
By:___________________________
Lester L. Coleman
Executive Vice President
and General Counsel
HALLIBURTON ACQ. COMPANY
By:____________________________
Lester L. Coleman
President
LANDMARK GRAPHICS CORPORATION
By:____________________________
Robert P. Peebler
President and Chief Executive Officer
AGREEMENT AND PLAN OF MERGER
-53-
ANNEX A
SCHEDULE OF DEFINED TERMS
The following terms when used in the Agreement shall have the meanings
set forth below unless the context shall otherwise require:
"Acquiror" shall mean Halliburton Company, a Delaware corporation, and
its successors from time to time.
"Acquiror Common Stock" shall mean the common stock, par value $2.50
per share, of the Acquiror.
"Acquiror Companies" shall have the meaning ascribed to such term in
the first paragraph of this Agreement.
"Acquiror's Audited Consolidated Financial Statements" shall mean the
consolidated balance sheets of the Acquiror and its Subsidiaries as of December
31, 1994 and December 31, 1995 and the related consolidated statements of
operations and cash flows for the fiscal years ended December 31, 1993, 1994 and
1995, together with the notes thereto, all as audited by Arthur Andersen LLP,
independent accountants, under their report with respect thereto dated January
23, 1996 and included in the Acquiror's Annual Report on Form 10-K for the year
ended December 31, 1995 filed with the Commission.
"Acquiror's Consolidated Balance Sheet" shall mean the consolidated
balance sheet of the Acquiror as of December 31, 1995 included in the Acquiror's
Audited Consolidated Financial Statements.
"Acquiror's Consolidated Financial Statements" shall mean the
Acquiror's Audited Consolidated Financial Statements and the Acquiror's
Unaudited Consolidated Financial Statements.
"Acquiror's Disclosure Letter" shall mean a letter of even date
herewith delivered by the Acquiror to the Company with the execution of the
Agreement, which, among other things, shall identify exceptions to the
Acquiror's representations and warranties contained in Article V by specific
section and subsection references.
"Acquiror's Unaudited Consolidated Financial Statements" shall mean the
unaudited consolidated balance sheet of the Acquiror and its Subsidiaries as of
March 31, 1996 and the related consolidated statements of operations and cash
flows for the fiscal quarters ended March 31, 1995 and March 31, 1996, together
with the notes thereto, included in the Acquiror's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1996 filed with the Commission.
"Acquiror's Rights Agreement" shall mean the Second Amended and
Restated Rights Agreement dated December 15, 1995 between Halliburton Company
and Chemical Mellon Shareholder Services LLC, as Rights Agent.
AGREEMENT AND PLAN OF MERGER
ANNEX A-1
"Acquiror Option Plan" shall mean the Halliburton Company 1993 Stock
and Long-Term Incentive Plan.
"Acquiror Stock Options" shall mean stock options granted pursuant to
the Acquiror Option Plan.
"Affiliate" shall, with respect to any Person, mean any other Person
that controls, is controlled by or is under common control with the former.
"Agreement" shall mean the Agreement and Plan of Merger made and
entered into as of June 30, 1996 among Acquiror, Newco and the Company,
including any amendments thereto and each Annex (including this Annex A) and
Schedule thereto (including the Acquiror's Disclosure Letter and the Company's
Disclosure Letter).
"Benefit Plans" shall mean, with respect to a specified Person, any
employee pension benefit plan (whether or not insured), as defined in Section
3(2) of ERISA, any employee welfare benefit plan (whether or not insured) as
defined in Section 3(1) of ERISA, any plans that would be employee pension
benefit plans or employee welfare benefit plans if they were subject to ERISA,
such as foreign plans and plans for directors, any stock bonus, stock ownership,
stock option, stock purchase, stock appreciation rights, phantom stock or other
stock plan (whether qualified or nonqualified), and any bonus or incentive
compensation plan sponsored, maintained, or contributed to by the specified
Person or any of its Subsidiaries for the benefit of any of the present or
former directors, officers, employees, agents, consultants or other similar
representatives providing services to or for the specified Person or any of its
Subsidiaries in connection with such services or any such plans which have been
so sponsored, maintained, or contributed to within six years prior to the date
of this Agreement; provided, however, that such term shall not include (a)
routine employment policies and procedures developed and applied in the ordinary
course of business and consistent with past practice, including wage, vacation,
holiday and sick or other leave policies, (b) workers compensation insurance and
(c) directors and officers liability insurance.
"Business Combination" shall mean (a) a merger, consolidation, share
exchange, business combination or similar transaction involving the Company; (b)
a sale, lease, exchange, transfer or other disposition of 50 percent or more of
the assets of the Company and its Subsidiaries, taken as a whole, in a single
transaction or series of transactions; or (c) the acquisition by a Person, or
any "group" (as such term is defined under Section 13(d) of the Exchange Act and
the Regulations promulgated thereunder), of beneficial ownership or the right to
acquire beneficial ownership of 50 percent or more of the outstanding Company
Common Stock, whether by tender offer or exchange offer or otherwise.
"Business Day" means any day other than a day on which banks in the
State of Texas are authorized or obligated to be closed;
"Certificate of Merger" shall have the meaning ascribed to such term
in Section 2.04.
AGREEMENT AND PLAN OF MERGER
ANNEX A-2
"Change in Control Agreements" shall mean those certain Change in
Control Agreements dated as of October 19, 1995 between the Company and certain
officers of the Company.
"Closing" shall mean a meeting, which shall be held in accordance with
Section 3.03, of all Persons interested in the transactions contemplated by the
Agreement at which all documents deemed necessary by the parties to the
Agreement to evidence the fulfillment or waiver of all conditions precedent to
the consummation of the transactions contemplated by the Agreement are executed
and delivered.
"Closing Date" shall mean the date of the Closing as determined
pursuant to Section 3.03.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and Regulations promulgated thereunder.
"Commission" shall mean the Securities and Exchange Commission.
"Common Stock Exchange Ratio" shall mean the ratio of conversion of
Company Common Stock into Acquiror Common Stock pursuant to the Merger as
provided in Section 3.01(a).
"Company" shall mean Landmark Graphics Corporation, a Delaware
corporation, and its successors from time to time.
"Company Common Stock" shall mean the common stock, par value $0.05 per
share, of the Company.
"Company Option Plans" shall mean the Landmark Graphics Corporation
1984 Incentive Stock Option Plan, the Landmark Graphics Corporation 1985
Incentive Stock Option Plan, the Landmark Graphics Corporation 1987 Nonqualified
Stock Option Plan, the Landmark Graphics Corporation 1989 Flexible Stock Option
Plan, the Landmark Graphics Corporation Directors' Stock Option Plan, the
Landmark Graphics Corporation Consultants' Stock Option Plan, the Landmark
Graphics Corporation 1990 Employee Stock Option Plan and the Landmark Graphics
Corporation 1994 Flexible Incentive Plan.
"Company Proxy Statement" shall have the meaning ascribed to such term
in Section 7.02(a).
"Company Proxy Statement/Prospectus" shall have the meaning ascribed to
such term in Section 7.02(a).
"Company Stock Options" shall mean stock options granted pursuant to
the Company Option Plans.
"Company Stockholders' Meeting" shall have the meaning ascribed to such
term in Section 7.01(a).
AGREEMENT AND PLAN OF MERGER
ANNEX A-3
"Company's Consolidated Balance Sheet" shall mean the consolidated
balance sheet of the Company as of June 30, 1995 included in the Company's
Audited Consolidated Financial Statements.
"Company's Audited Consolidated Financial Statements" shall mean the
consolidated balance sheets of the Company and its Subsidiaries as of June 30,
1994 and June 30, 1995 and the related consolidated and combined statements of
operations and cash flows for the fiscal years ended June 30, 1993, 1994 and
1995, together with the notes thereto, all as audited by Price Waterhouse LLP,
independent accountants, under their report with respect thereto dated July 26,
1995 and included in the Company's Annual Report on Form 10-K for the fiscal
year ended June 30, 1995 filed with the Commission.
"Company's Consolidated Financial Statements" shall mean the Company's
Audited Consolidated Financial Statements and the Company's Unaudited
Consolidated Financial Statements.
"Company's Disclosure Letter" shall mean a letter of even date herewith
delivered by the Company to the Acquiror Companies concurrently with the
execution of the Agreement, which, among other things, shall identify exceptions
to the Company's representations and warranties contained in Article IV by
specific section and subsection references.
"Company's Rights Agreement" shall mean that certain Rights Agreement
dated as of September 1, 1995 between the Company and Chemical Bank, as Rights
Agent.
"Company's Unaudited Consolidated Financial Statements" shall mean the
unaudited consolidated balance sheet of the Company and its Subsidiaries as of
March 31, 1996 and the related consolidated statements of operations and cash
flows for the three months periods and nine months periods ended March 31, 1995
and March 31, 1996, together with the notes thereto, included in the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996 filed with
the Commission.
"Competing Transaction" shall mean any merger, consolidation, share
exchange, business combination or similar transaction involving the Company or
any of its Subsidiaries or the acquisition in any manner, directly or
indirectly, of a Material equity interest in any voting securities of, or a
substantial portion of the assets of, the Company or any of its Significant
Subsidiaries, other than the transactions contemplated by this Agreement.
"Confidentiality Agreement" shall mean that certain confidentiality
agreement between the Acquiror and the Company dated June 18, 1996.
"Constituent Corporations" shall mean the Company and Newco.
"control" (including the terms "controlled," "controlled by" and "under
common control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct
AGREEMENT AND PLAN OF MERGER
ANNEX A-4
or cause the direction of the management or policies of a Person, whether
through the ownership of stock or as trustee or executor, by contract or credit
arrangement or otherwise.
"Court" shall mean any court or arbitration tribunal of the United
States, any foreign country or any domestic or foreign state, and any political
subdivision thereof, and shall include the European Court of Justice.
"Current Benefit Plans" shall mean Benefit Plans that are sponsored,
maintained, or contributed to by a specified Person or any of its Subsidiaries
as of the date of this Agreement.
"Effective Time" shall mean the date and time of the completion of the
filing of the Certificate of Merger with the Secretary of State of the State of
Delaware in accordance with Section 2.02.
"Employment Agreement" shall mean that certain Executive Employment
Agreement of even date herewith between the Company and Robert P. Peebler.
"Environmental Law or Laws" shall mean any and all laws, statutes,
ordinances, rules, regulations, or orders of any Governmental Authority
pertaining to health or the environment currently in effect and applicable to a
specified Person and its Subsidiaries, including the Clean Air Act, as amended,
the Comprehensive Environmental, Response, Compensation, and Liability Act of
1980 ("CERCLA"), as amended, the Federal Water Pollution Control Act, as
amended, the Occupational Safety and Health Act of 1970, as amended, the
Resource Conservation and Recovery Act of 1976 ("RCRA"), as amended, the Safe
Drinking Water Act, as amended, the Toxic Substances Control Act, as amended,
the Hazardous & Solid Waste Amendments Act of 1984, as amended, the Superfund
Amendments and Reauthorization Act of 1986, as amended, the Hazardous Materials
Transportation Act, as amended, the Oil Pollution Act of 1990, as amended
("OPA"), any state or local Laws implementing the foregoing federal Laws, and
all other environmental conservation or protection Laws. For purposes of the
Agreement, the terms "hazardous substance" and "release" have the meanings
specified in CERCLA; provided, however, that, to the extent the Laws of the
state or locality in which the property is located establish a meaning for
"hazardous substance" or "release" that is broader than that specified in
CERCLA, such broader meaning shall apply within the jurisdiction of such state
or locality, and the term "hazardous substance" shall include all dehydration
and treating wastes, waste (or spilled) oil, and waste (or spilled) petroleum
products, and (to the extent in excess of background levels) radioactive
material, even if such are specifically exempt from classification as hazardous
substances pursuant to CERCLA or RCRA or the analogous statutes of any
jurisdiction applicable to the specified Person or its Subsidiaries or any of
their respective properties or assets.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and the Regulations promulgated thereunder.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the Regulations promulgated thereunder.
AGREEMENT AND PLAN OF MERGER
ANNEX A-5
"Exchange Agent" shall mean a bank or trust company having a net worth
in excess of $100 million designated and appointed to act in the capacities
required thereof under Section 3.02.
"Exchange Fund" shall mean the fund of Acquiror Common Stock, cash in
lieu of fractional share interests and dividends and distributions, if any, with
respect to such shares of Acquiror Common Stock established at the Exchange
Agent pursuant to Section 3.02.
"Expenses" shall mean all reasonable out-of-pocket expenses (including
all fees and expenses of counsel, accountants, investment bankers, experts and
consultants to a party hereto and its affiliates) incurred by a party or on its
behalf in connection with or related to the authorization, preparation,
negotiation, execution and performance of this Agreement, the preparation,
printing, filing and mailing of the Registration Statement and the Company Proxy
Statement, the solicitation of stockholder approvals and all other matters
related to the consummation of the transactions contemplated hereby.
"GAAP" shall mean accounting principles generally accepted in the
United States consistently applied by a specified Person.
"GCL" shall mean the General Corporation Law of the State of Delaware.
"Governmental Authority" shall mean any governmental agency or
authority (other than a Court) of the United States, any foreign country, or any
domestic or foreign state, and any political subdivision or agency thereof, and
shall include any multinational authority having governmental or
quasi-governmental powers.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the Regulations promulgated thereunder.
"IRS" shall mean the Internal Revenue Service.
"Knowledge" shall mean, with respect to either the Company or the
Acquiror, the actual knowledge (without duty of inquiry) of any executive
officer of such party.
"Law" shall mean all laws, statutes, ordinances and Regulations of the
United States, any foreign country, or any domestic or foreign state, and any
political subdivision or agency thereof, including all decisions of Courts
having the effect of Law in each such jurisdiction.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any agreement to give any of the
foregoing), any conditional sale or other title retention agreement, any lease
in the nature thereof or the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction.
AGREEMENT AND PLAN OF MERGER
ANNEX A-6
"Material" shall mean material to the condition (financial and other),
results of operations or business of a specified Person and its Subsidiaries, if
any, taken as a whole; provided, however, that, as used in this definition the
word "material" shall have the meaning accorded thereto in Section 11 of the
Securities Act.
"Material Adverse Effect" shall mean any change or effect that would be
material and adverse to the consolidated business, condition (financial or
other), operations, performance or properties (but excluding any outstanding
capital stock or other securities) of a specified Person and its Subsidiaries,
if any, taken as a whole; provided, however, that, as used in this definition
the word "material" shall have the meaning accorded thereto in Section 11 of the
Securities Act.
"Material Contract" shall mean each contract, lease, indenture,
agreement, arrangement or understanding to which a specified Person or any of
its Subsidiaries is a party or to which any of the assets or operations of such
specified Person or any of its Subsidiaries is subject that is of a type that
would be required to be included as an exhibit to a registration statement on
Form S-1 pursuant, in the case of the Company, to Paragraph (2), (4), (10) or
(14) of Item 601(b) and, in the case of the Acquiror, to Paragraph (10) (other
than clause (iii) thereof) of Item 601(b) of Regulation S-K under the Securities
Act if such a registration statement were to be filed by such Person under the
Securities Act on the date of determination. Notwithstanding the foregoing, such
term shall, in the case of the Company, include any of the following contracts,
agreements or commitments, whether oral or written:
(1) Any collective bargaining agreement or other agreement
with any labor union;
(2) any agreement, contract or commitment with any other
Person, other than any agency or representation entered in the ordinary
course of business, containing any covenant limiting the freedom of
such specified Person or any of its Subsidiaries to engage in any line
of business or to compete with any other Person;
(3) any partnership, joint venture or profit sharing agreement
with any Person, which partnership, joint venture or profit sharing
agreement generated revenues during its most recently completed fiscal
year of $100,000 or more;
(4) any employment or consulting agreement, contract or
commitment between the Company or any of its Subsidiaries and any
employee, officer or director thereof (i) having more than one year to
run from the date hereof, (ii) providing for an obligation to pay or
accrue compensation of $100,000 or more per annum or (iii) providing
for the payment or accrual of any additional compensation upon a change
in control of such Person or any of its Subsidiaries or upon any
termination of such employment or consulting relationship following a
change in control of such Person or any of its Subsidiaries; and
(5) any agency or representation agreement with any Person
which is not terminable by the Company or one of its Subsidiaries
without penalty upon not more than one year's notice.
AGREEMENT AND PLAN OF MERGER
ANNEX A-7
"Merger" shall mean the merger of the Company with an into Newco as
provided in Article II of this Agreement.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Newco" shall mean Halliburton Acq. Company, a Delaware corporation
and a wholly-owned Subsidiary of the Acquiror.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Order" shall mean any judgment, order or decree of any Court or
Governmental Authority, federal, foreign, state or local.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Permit" shall mean any and all permits, licenses, authorizations,
orders, certificates, registrations or other approvals granted by any
Governmental Authority.
"Permitted Encumbrances" shall mean the following:
(1) liens for taxes, assessments and other governmental
charges not delinquent or which are currently being contested in good
faith by appropriate proceedings; provided that, in the latter case,
the specified Person or one of its Subsidiaries shall have set aside on
its books adequate reserves with respect thereto;
(2) mechanics' and materialmen's liens not filed of record and
similar charges not delinquent or which are filed of record but are
being contested in good faith by appropriate proceedings; provided
that, in the latter case, the specified Person or one of its
Subsidiaries shall have set aside on its books adequate reserves with
respect thereto;
(3) liens in respect of judgments or awards with respect to
which the specified Person or one of its Subsidiaries shall in good
faith currently be prosecuting an appeal or other proceeding for review
and with respect to which such Person or such Subsidiary shall have
secured a stay of execution pending such appeal or such proceeding for
review; provided that, such Person or such Subsidiary shall have set
aside on its books adequate reserves with respect thereto;
(4) easements, leases, reservations or other rights of others
in, or minor defects and irregularities in title to, property or assets
of a specified Person or any of its Subsidiaries; provided that, such
easements, leases, reservations, rights, defects or irregularities do
not materially impair the use of such property or assets for the
purposes for which they are held; and
AGREEMENT AND PLAN OF MERGER
ANNEX A-8
(5) any lien or privilege vested in any lessor, licensor or
permittor for rent or other obligations of a specified Person or any of
its Subsidiaries thereunder so long as the payment of such rent or the
performance of such obligations is not delinquent.
"Person" shall mean an individual, partnership, limited liability
company, corporation, joint stock company, trust, estate, joint venture,
association or unincorporated organization, or any other form of business or
professional entity, but shall not include a Governmental Authority.
"Registration Statement" shall have the meaning ascribed to such term
in Section 7.02(a).
"Regulation" shall mean any rule or regulation of any Governmental
Authority having the effect of Law.
"Reports" shall mean, with respect to a specified Person, all reports,
registrations, filings and other documents and instruments required to be filed
by the specified Person or any of its Subsidiaries with any Governmental
Authority (other than the Commission).
"Restricted Stock Agreement" shall mean that certain Restricted Stock
Agreement listed on Item 29 of Section 4.10 of the Company's Disclosure Letter.
"SEC Reports" shall mean (1) all Annual Reports on Form 10-K, (2) all
Quarterly Reports on Form 10-Q, (3) all proxy statements relating to meetings of
stockholders (whether annual or special), (4) all Current Reports on Form 8-K
and (5) all other reports, schedules, registration statements or other documents
required to be filed during a specified period by a Person with the Commission
pursuant to the Securities Act or the Exchange Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the Regulations promulgated thereunder.
"Significant Subsidiary" means any Subsidiary of the Company or
Acquiror, as the case may be, that would constitute a Significant Subsidiary of
such party within the meaning of Rule 1-02 of Regulation S-X of the Commission.
"Software" shall mean the following computer applications programs:
2DVIEW, 3D Knowledge Integrator (3DKI), 3DVIEW, Argus, Aries, Automate,
BatchZAP!, Blitz, CIMS, Compass, Continuity Tool, Contouring Assistant,
DESKTOP-PVT, DESKTOP-VIP, DIMS, DUAL, DXF (AutoCAD), EarthCube, EnerGIS, Fast
Track, GeoLink, GES, GMS, GRIDGENR, Geo-data Works, Jaguar, LeaseMap, LGR,
LogEdit, MIMIC+, MultiWell, OASIIS, OpenWorks, OpenWorks Development Kit, PAL,
PARALLEL VIP, PetroWorks, PlotView, PostStack, POWAR, Profile, ProMAX, ProMAX
VSP, QUIK+, QUIKDIG+, QUIKWELL+, RAYMAP+, RAVE, Resin-Plus, RMS, SeisCube,
Seismic Data Check, SeisTie, SeisVision, SeisWell, SeisWorks, SigmaView 2D,
SigmaView 3D, SIVA+, SuperSeisWorks, SurfCube, StrataModel SGM, StrataModel GTM,
StratWorks, SynTool, TDQ, TOW CS, VESPA, VIP-COMP, VIP-CORE, VIP-Encore,
VIP-THERM, VoxCube, Wellbore Manager, Wellplan, Z3D, Z-Cap, and Z-Map Plus.
AGREEMENT AND PLAN OF MERGER
ANNEX A-9
"Stock Option Agreement" shall mean that certain Stock Option Agreement
of even date herewith between the Acquiror and the Company.
A "Subsidiary" of a specified Person shall be any corporation,
partnership, limited liability company, joint venture or other legal entity of
which the specified Person (either alone or through or together with any other
Subsidiary) owns, directly or indirectly, 50 percent or more of the stock or
other equity or partnership interests the holders of which are generally
entitled to vote for the election of the board of directors or other governing
body of such corporation or other legal entity.
"Superior Proposal" means a bona fide proposal made by a third Person
to acquire the Company pursuant to a tender or exchange offer for all of the
outstanding capital stock of the Company, a merger, a sale of all or
substantially all of the Company's assets or otherwise on terms that the Board
of Directors of the Company determines in its good faith judgment to be more
favorable to the Company's stockholders than the Merger (based on the written
opinion, with only customary qualifications, of the Company's independent
financial advisor that the value of the consideration to the Company's
stockholders provided for in such proposal exceeds the value of the
consideration to the Company's stockholders provided for in the Merger) and for
which financing, to the extent required, is then committed or which, in the good
faith judgment of the Board of Directors of the Company (based on the written
advice of the Company's independent financial advisor), is reasonably capable of
being obtained by such third Person.
"Surviving Corporation" shall mean Newco as the corporation surviving
the Merger.
"Tax Returns" shall mean all returns and reports of or with respect to
any Tax which are required to be filed by or with respect to the Company or any
of its Subsidiaries.
"Taxes" shall mean all taxes, charges, imposts, tariffs, fees, levies
or other similar assessments or liabilities, including income taxes, ad valorem
taxes, excise taxes, withholding taxes, stamp taxes or other taxes of or with
respect to gross receipts, premiums, real property, personal property, windfall
profits, sales, use, transfers, licensing, employment, payroll and franchises
imposed by or under any Law; and such terms shall include any interest, fines,
penalties, assessments or additions to tax resulting from, attributable to or
incurred in connection with any such tax or any contest or dispute thereof.
"Terminated Benefit Plans" shall mean Benefit Plans that were
sponsored, maintained, or contributed to by a specified Person or any of its
Subsidiaries within six years prior to the date of this Agreement but which have
been terminated prior to the date of this Agreement.
"Voting Agreement" shall mean that certain Voting Agreement of even
date herewith between the Acquiror and S. Rutt Bridges and Barbara Ann Bridges.
VEHOU05:17945.1
AGREEMENT AND PLAN OF MERGER
ANNEX A-10
ANNEX B
Landmark Graphics Corporation Affiliates
AFFILIATE'S AGREEMENT
[Date]
Halliburton Company
3600 Lincoln Plaza
500 North Akard Street
Dallas, Texas 75201-3391
Ladies and Gentlemen:
The undersigned has been advised that, as of the date hereof, the
undersigned may be deemed to be an "affiliate" of Landmark Graphics Corporation,
a Delaware corporation (the "Company"), as that term is defined for purposes of
paragraphs (c) and (d) of Rule 145 of the Regulations of the Commission under
the Securities Act.
Pursuant to the terms and subject to the conditions of that certain
Agreement and Plan of Merger by and among Halliburton Company, a Delaware
corporation ("Acquiror"), Halliburton Acq. Company, a newly formed Delaware
corporation and a wholly-owned Subsidiary of Acquiror ("Newco"), and the Company
dated as of June 30, 1996 (the "Merger Agreement"), providing for, among other
things, the merger of the Company with and into Newco (the "Merger"), the
undersigned will be entitled to receive shares of Acquiror Common Stock in
exchange for shares of Company Common Stock owned by the undersigned at the
Effective Time of the Merger as determined pursuant to the Merger Agreement.
Capitalized terms used but not defined herein are defined in Annex A to the
Merger Agreement and are used herein with the same meanings as ascribed to them
therein.
The undersigned understands that the Merger will be treated for
financial accounting purposes as a "pooling of interests" in accordance with
generally accepted accounting principles and that the staff of the Commission
has issued certain guidelines that should be followed to ensure the application
of pooling of interests accounting to the transaction.
In consideration of the agreements contained herein, the Acquiror's
reliance on this letter in connection with the consummation of the Merger and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned hereby represents, warrants and agrees
that the undersigned will not make any sale, transfer or other disposition of
(i) Company Common Stock during the period from the date hereof until the
earlier of the Effective
ANNEX B
-1-
Time and the termination of the Merger Agreement (which period, if the Merger is
consummated, will be greater than thirty (30) days), (ii) Acquiror Common Stock
received by the undersigned pursuant to the Merger or otherwise owned by the
undersigned until such time as financial statements that include at least thirty
(30) days of combined operations of the Company and the Acquiror after the
Merger shall have been publicly reported, unless the undersigned shall have
delivered to the Acquiror, prior to any such sale, transfer or other
disposition, a written opinion from Arthur Andersen LLP, independent public
accountants for the Acquiror, or a written no-action letter from the accounting
staff of the Commission, in either case in form and substance reasonably
satisfactory to the Acquiror, to the effect that such sale, transfer or other
disposition will not cause the Merger not to be treated as a "pooling of
interests" for financial accounting purposes in accordance with generally
accepted accounting principles and the Regulations of the Commission or (iii)
Acquiror Common Stock received by the undersigned pursuant to the Merger in
violation of the Securities Act or the Regulations thereunder. The undersigned
has been advised that the offering, sale and delivery of the shares of Acquiror
Common Stock pursuant to the Merger will have been registered with the
Commission under the Securities Act on a Registration Statement on Form S-4. The
undersigned has also been advised, however, that, since the undersigned may be
deemed to be an Affiliate of the Company at the time the Merger is submitted for
a vote of the stockholders of the Company, the Acquiror Common Stock received by
the undersigned pursuant to the Merger can be sold by the undersigned only (i)
pursuant to an effective registration statement under the Securities Act, (ii)
in conformity with the volume and other limitations of Rule 145 promulgated by
the Commission under the Securities Act or (iii) in reliance upon an exemption
from registration that is available under the Securities Act.
The undersigned also understands that instructions will be given to the
transfer agent for the Acquiror Common Stock with respect to the Acquiror Common
Stock to be received by the undersigned pursuant to the Merger and that there
will be placed on the certificates representing such shares of Acquiror Common
Stock, or any substitutions therefor, a legend stating in substance as follows:
"These shares were issued in a transaction to which Rule 145
promulgated under the Securities Act of 1933, as amended, applies.
These shares may only be transferred in accordance with the terms of
such Rule and an Affiliate's Agreement between the original holder of
such shares and Halliburton Company, a copy of which agreement is on
file at the principal offices of Halliburton Company."
It is understood and agreed that the legend set forth above shall be removed
upon surrender of certificates bearing such legend by delivery of substitute
certificates without such legend if the undersigned shall have delivered to the
Acquiror an opinion of counsel, in form and substance reasonably satisfactory to
the Acquiror, to the effect that (i) the sale or disposition of the shares
represented by the surrendered certificates may be effected without registration
of the offering, sale and delivery of such shares under the Securities Act and
(ii) the shares to be so transferred may be publicly offered, sold and delivered
by the transferee thereof without compliance with the registration provisions of
the Securities Act.
By its execution hereof, the Acquiror agrees that it will, as long as
the undersigned owns any Acquiror Common Stock to be received by the undersigned
pursuant to the Merger, take all
ANNEX B
-2-
reasonable efforts to make timely filings with the Commission of all reports
required to be filed by it pursuant to the Exchange Act and will promptly
furnish upon written request of the undersigned a written statement confirming
that such reports have been so timely filed.
If you are in agreement with the foregoing, please so indicate by
signing below and returning a copy of this letter to the undersigned, at which
time this letter shall become a binding agreement between us.
Very truly yours,
By: __________________________________
Name:
Title:
Date:
Address:
ACCEPTED this ___ day
of __________, 1996
HALLIBURTON COMPANY
By:
Name:
Title:
VEHOU05:17948.1
ANNEX B
-3-
ANNEX C
Halliburton Company Affiliates
AFFILIATE'S AGREEMENT
[Date]
Halliburton Company
3600 Lincoln Plaza
500 North Akard Street
Dallas, Texas 75201-3391
Ladies and Gentlemen:
The undersigned has been advised that, as of the date hereof, the
undersigned may be deemed to be an "affiliate" of Halliburton Company, a
Delaware corporation (the "Acquiror"), as that term is defined in the
Regulations of the Commission under the Securities Act.
The undertakings contained in this Affiliate's Agreement are being
given by the undersigned in connection with that certain Agreement and Plan of
Merger by and among Acquiror, Halliburton Acq. Company, a newly formed Delaware
corporation and a wholly-owned Subsidiary of Acquiror ("Newco"), and Landmark
Graphics Corporation, a Delaware Corporation (the "Company") dated as of June
___, 1996 (the "Merger Agreement"), providing for, among other things, the
merger of the Company with and into Newco (the "Merger"). Capitalized terms used
but not defined herein are defined in Annex A to the Merger Agreement and are
used herein with the same meanings as ascribed to them therein.
The undersigned understands that the Merger will be treated for
financial accounting purposes as a "pooling of interests" in accordance with
generally accepted accounting principles and that the staff of the Commission
has issued certain guidelines that should be followed to ensure the application
of pooling of interests accounting to the transaction.
In consideration of the agreements contained herein, the Acquiror's
reliance on this letter in connection with the consummation of the Merger and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned hereby represents, warrants and agrees
that the undersigned will not make any sale, transfer or other disposition of
(i) Company Common Stock during the period from the date hereof until the
earlier of the Effective Time and the termination of the Merger Agreement (which
period, if the Merger is consummated, will be greater than thirty (30) days) or
(ii) Acquiror Common Stock owned by the undersigned until such time as financial
statements that include at least thirty (30) days of combined operations of the
ANNEX C
-1-
Company and the Acquiror after the Merger shall have been publicly reported,
unless the undersigned shall have delivered to the Acquiror, prior to any such
sale, transfer or other disposition, a written opinion from Arthur Andersen LLP,
independent public accountants for the Acquiror, or a written no-action letter
from the accounting staff of the Commission, in either case in form and
substance reasonably satisfactory to the Acquiror, to the effect that such sale,
transfer or other disposition will not cause the Merger not to be treated as a
"pooling of interests" for financial accounting purposes in accordance with
generally accepted accounting principles and the Regulations of the Commission.
If you are in agreement with the foregoing, please so indicate by
signing below and returning a copy of this letter to the undersigned, at which
time this letter shall become a binding agreement between us.
Very truly yours,
By:____________________________
Name:
Title:
Date:
Address:
ACCEPTED this ___ day
of __________, 1996
HALLIBURTON COMPANY
By:__________________________
Name:
Title:
VEHOU05:17949.1
ANNEX C
-2-