AGREEMENT AND PLAN OF MERGER
BY AND AMONG
VISHAY INTERTECHNOLOGY, INC.
VISHAY ACQUISITION CORP.
and
GENERAL SEMICONDUCTOR, INC.
Dated as of July 31, 2001
TABLE OF CONTENTS
ARTICLE I.....................................................................6
SECTION 1.01. The Merger..................................................6
SECTION 1.02. Effective Time..............................................7
SECTION 1.03. Effect of the Merger........................................7
SECTION 1.04. Certificate of Incorporation; Bylaws........................7
SECTION 1.05. Directors and Officers......................................7
SECTION 1.06. Effect on Securities, Etc...................................8
SECTION 1.07. Exchange of Shares..........................................9
SECTION 1.08. Stock Transfer Books.......................................11
SECTION 1.09. No Further Ownership Rights in Company Common Stock........11
SECTION 1.10. Lost, Stolen or Destroyed Certificates.....................11
SECTION 1.11. Tax Consequences...........................................11
SECTION 1.12. Taking of Necessary Action; Further Action.................11
ARTICLE II...................................................................11
SECTION 2.01. Organization and Qualification; Subsidiaries...............11
SECTION 2.02. Certificate of Incorporation and By-laws...................12
SECTION 2.03. Capitalization.............................................13
SECTION 2.04. Authority Relative to This Agreement.......................14
SECTION 2.05. Material Contracts; No Conflict; Required Filings
and Consents.............................................14
SECTION 2.06. Compliance; Permits........................................15
SECTION 2.07. SEC Filings; Financial Statements; Projections.............16
SECTION 2.08. Absence of Certain Changes or Events.......................17
SECTION 2.09. No Undisclosed Liabilities.................................17
SECTION 2.10. Absence of Litigation......................................17
SECTION 2.11. Employee Benefit Plans; Employment Agreements..............18
SECTION 2.12. Employment and Labor Matters...............................22
SECTION 2.13. Registration Statement; Joint Proxy Statement/
Prospectus...............................................23
SECTION 2.14. Restrictions on Business Activities........................23
SECTION 2.15. Title to Property..........................................24
SECTION 2.16. Taxes......................................................24
SECTION 2.17. Environmental Matters......................................25
SECTION 2.18. Brokers....................................................27
SECTION 2.19. Intellectual Property......................................27
SECTION 2.20. Interested Party Transactions..............................28
SECTION 2.21. Insurance..................................................29
SECTION 2.22. Products; Product Liability and Recalls....................29
SECTION 2.23. Opinion of Financial Advisor...............................29
SECTION 2.24. Tax Treatment..............................................29
SECTION 2.25. Supplements to the Company Disclosure Schedule.............29
ARTICLE III..................................................................30
SECTION 3.01. Organization and Qualification; Subsidiaries...............30
SECTION 3.02. Certificate of Incorporation and By-laws...................30
SECTION 3.03. Capitalization.............................................31
SECTION 3.04. Authority Relative to this Agreement.......................32
SECTION 3.05. Material Contracts; No Conflicts; Required Filings
and Consents.............................................32
SECTION 3.06. Compliance; Permits........................................33
SECTION 3.07. SEC Filings; Financial Statements..........................34
SECTION 3.08. Absence of Certain Changes or Events.......................34
SECTION 3.09. No Undisclosed Liabilities.................................35
SECTION 3.10. Absence of Litigation......................................35
SECTION 3.11. Employee Benefit Plans; Employment Agreements..............35
SECTION 3.12. Employment and Labor Matters...............................37
SECTION 3.13. Registration Statement; Joint Proxy Statement/
Prospectus...............................................37
SECTION 3.14. Restrictions on Business Activities........................38
SECTION 3.15. Title to Property..........................................38
SECTION 3.16. Taxes......................................................39
SECTION 3.17. Environmental Matters......................................40
SECTION 3.18. Brokers....................................................40
SECTION 3.19. Intellectual Property......................................40
SECTION 3.20. Product Liability and Recalls..............................41
SECTION 3.21. Ownership of Parent and Merger Sub.........................42
SECTION 3.22. No Prior Activities........................................42
SECTION 3.23. Ownership Interest in the Company..........................42
SECTION 3.24. Tax Treatment..............................................42
ARTICLE IV...................................................................42
SECTION 4.01. Conduct of Business by the Company Pending the Merger......42
SECTION 4.02. No Solicitation............................................45
SECTION 4.03. Conduct of Business by Parent Pending the Merger...........47
ARTICLE V....................................................................48
SECTION 5.01. Joint Proxy Statement/Prospectus; Registration
Statement................................................48
SECTION 5.02. Stockholders Meetings......................................50
SECTION 5.03. Access to Information; Confidentiality.....................51
SECTION 5.04. Consents; Approvals........................................51
SECTION 5.05. Agreements with Respect to Affiliates......................51
SECTION 5.06. Indemnification and Insurance..............................52
SECTION 5.07. Notification of Certain Matters............................53
SECTION 5.08. Further Action/Tax Treatment...............................53
SECTION 5.09. Public Announcements.......................................54
SECTION 5.10. Parent Common Stock........................................54
SECTION 5.11. Stock Option Plans, etc....................................54
SECTION 5.12. Certain Employee Benefits..................................55
SECTION 5.13. Rights Agreement...........................................56
SECTION 5.14. Conveyance Taxes...........................................56
SECTION 5.15. Accountant's Letters.......................................56
SECTION 5.16. Compliance with State Property Transfer Statutes...........56
SECTION 5.17. Parent Director............................................57
ARTICLE VI...................................................................57
SECTION 6.01. Conditions to Obligation of Each Party to Effect
the Merger...............................................57
SECTION 6.02. Additional Conditions to Obligations of Parent and
Merger Sub...............................................58
SECTION 6.03. Additional Conditions to Obligation of the Company.........59
ARTICLE VII..................................................................60
SECTION 7.01. Termination................................................60
SECTION 7.02. Effect of Termination......................................62
SECTION 7.03. Fees and Expenses..........................................62
ARTICLE VIII.................................................................64
SECTION 8.01. Effectiveness of Representations, Warranties and
Agreements...............................................64
SECTION 8.02. Notices....................................................64
SECTION 8.03. Certain Definitions........................................65
SECTION 8.04. Amendment..................................................66
SECTION 8.05. Waiver.....................................................66
SECTION 8.06. Headings...................................................67
SECTION 8.07. Severability...............................................67
SECTION 8.08. Entire Agreement...........................................67
SECTION 8.09. Assignment.................................................67
SECTION 8.10. Parties in Interest........................................67
SECTION 8.11. Failure or Indulgence Not Waiver; Remedies Cumulative......67
SECTION 8.12. Governing Law; Jurisdiction................................68
SECTION 8.13. Counterparts...............................................68
SECTION 8.14. Waiver of Jury Trial.......................................68
SECTION 8.15. Performance of Obligations.................................68
SECTION 8.16. Enforcement................................................68
AGREEMENT AND PLAN OF MERGER
----------------------------
AGREEMENT AND PLAN OF MERGER, dated as of July 31, 2001 (this
"Agreement"), among Vishay Intertechnology, Inc., a Delaware corporation
("Parent"), Vishay Acquisition Corp., a Delaware corporation and a direct,
wholly owned subsidiary of Parent ("Merger Sub"), and General
Semiconductor, Inc., a Delaware corporation (the "Company").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Boards of Directors of Parent, Merger Sub and the
Company have each determined that it is advisable and in the best interests
of their respective stockholders, and consistent with and in furtherance of
their respective business strategies and goals, for Parent to acquire all
of the outstanding shares of the Company through the merger of Merger Sub
with and into the Company upon the terms and subject to the conditions set
forth herein;
WHEREAS, in furtherance of such combination, the Boards of
Directors of Parent, Merger Sub and the Company have each approved the
merger (the "Merger") of Merger Sub with and into the Company in accordance
with the applicable provisions of the Delaware General Corporation Law (the
"DGCL"), and upon the terms and subject to the conditions set forth herein;
WHEREAS, Parent, Merger Sub and the Company intend, by approving
resolutions authorizing this Agreement, to adopt this Agreement as a plan
of reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated
thereunder (the "Code") and that the transactions contemplated by this
Agreement be undertaken pursuant to such plan;
WHEREAS, Parent, Merger Sub and the Company intend that the
Merger qualify as a reorganization within the meaning of Section 368(a) of
the Code;
WHEREAS, pursuant to the Merger, each outstanding share (together
with the preferred stock purchase right associated therewith, a "Share") of
the Company's common stock, par value $.01 per share (the "Company Common
Stock"), shall be converted into the right to receive the Merger
Consideration (as defined in Section 1.07(b)), upon the terms and subject
to the conditions set forth herein; and
WHEREAS, as an inducement and a condition to the Company's
willingness to enter into this Agreement, contemporaneously with the
execution hereof, certain holders of Parent Common Stock are entering into
Voting Agreements (the "Voting Agreements") pursuant to which, among other
things, such holders are agreeing to vote, or execute written consents in
respect of, all Shares beneficially owned by them or over which such
holders have voting control, in favor of the Parent Stockholder Meeting
Proposals, at any meeting of Parent stockholders or any adjournment thereof
or in connection with any solicitation of written consents, in each case,
at or in connection with which Parent stockholder action is sought on such
Parent Stockholder Meeting Proposals;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally
bound hereby, Parent, Merger Sub and the Company hereby agree as follows:
Definitions:
- -----------
"Acquisition Proposal" is defined in Section 4.02(a).
"Adjusted Option" is defined in Section 5.11(a).
"Affiliate Plan" is defined in Section 2.11(a).
"affiliates" is defined in Section 8.03(a).
"Agreement" is defined in the preamble.
"Alternative Transaction" is defined in Section 4.02(a).
"Alternative Transaction Condition" is defined in Section
7.03(b).
"Benefits Continuation Period" is defined in Section 5.12(a)
"business day" is defined in Section 8.03(b).
"CERCLA" is defined in Section 2.17(f)(ii).
"Certificate of Merger" is defined in Section 1.02.
"Certificates" is defined in Section 1.06(f).
"COBRA" is defined in Section 2.11(b).
"Code" is defined in the recitals.
"Company" is defined in the preamble.
"Company Affiliate Letter" is defined in Section 5.05.
"Company Charter Documents" is defined in Section 2.02.
"Company Common Stock" is defined in the recitals.
"Company Confidentiality Agreement" is defined in Section 5.03.
"Company Convertible Notes" is defined in Section 2.03(a).
"Company Disclosure Schedule" is defined in Section 2.01(b).
"Company Employee" is defined in Section 5.12(a).
"Company Employee Plans" is defined in Section 2.11(a).
"Company Financial Advisor" is defined in Section 2.18.
"Company Intellectual Property Assets" is defined in Section
2.19(a).
"Company Permits" is defined in Section 2.06(b).
"Company Preferred Stock" is defined in Section 2.03(a).
"Company SEC Documents" is defined in Section 2.03(b).
"Company Significant Subsidiaries" is defined in Section 2.01(a).
"Company Stockholders Meeting" is defined in Section 2.04(b).
"Company Stock Option" is defined in Section 1.06(c).
"Company Stock Option Plans" is defined in Section 1.06(c).
"Company 2000 Form 10-K" is defined in Section 2.01(b).
"control" is defined in Section 8.03(c).
"Covered Persons" is defined in Section 5.06(c).
"DGCL" is defined in the recitals.
"D&O Insurance" is defined in Section 5.06(d).
"Effective Time" is defined in Section 1.02.
"Employee Benefits Supplemental Disclosure Schedule" is defined
in Section 2.11(a).
"Environmental Claim" is defined in Section 2.17(f)(i).
"Environmental, Health and Safety Transfer Laws" is defined in
Section 2.05(c).
"Environmental Laws" is defined in Section 2.17(f)(ii).
"ERISA" is defined in Section 2.11(a).
"Exchange Act" is defined in Section 2.05(c).
"Exchange Agent" is defined in Section 1.07(a).
"Exchange Ratio" is defined in Section 1.06(a).
"Expenses" is defined in Section 7.03(b).
"Fee" is defined in Section 7.03(b).
"GAAP" is defined in Section 2.07(b).
"Governmental Authority" is defined in Section 2.05(c).
"HSR Act" is defined in Section 2.05(c).
"Indemnified Parties" is defined in Section 5.06(b).
"Intellectual Property Assets" is defined in Section 2.19(a).
"IRS" is defined in Section 2.11(b).
"Joint Proxy Statement/Prospectus" is defined in Section
2.13(a)(ii).
"knowledge" is defined in Section 8.03(d).
"leased employee" is defined in Section 3.11(c).
"Material Adverse Effect" is defined in Section 8.03(e).
"Materials of Environmental Concern" is defined in Section
2.17(f)(iii).
"Merger" is defined in the preamble.
"Merger Consideration" is defined in Section 1.07(b).
"Merger Sub" is defined in the preamble.
"multiemployer plan" is defined in Section 3.11(b).
"Non-Competition Agreement" is defined in Section 2.11(h).
"Non-U.S. Monopoly Laws" is defined in Section 2.05(c).
"Non-U.S. Plan" is defined Section 2.11(a).
"NYSE" is defined in Section 1.06(f).
"OSHA" is defined in Section 2.17(f)(ii).
"Parent" is defined in the preamble.
"Parent Affiliate Plan" is defined in Section 3.11(a).
"Parent Charter Documents" is defined in Section 3.02.
"Parent Class B Stock" is defined in Section 3.03(a).
"Parent Common Stock" is defined in Section 1.06(a).
"Parent Confidentiality Agreement" is defined in Section 5.03.
"Parent Disclosure Schedule" is defined in Section 3.01(b).
"Parent Employee Plans" is defined in Section 3.11(a).
"Parent Intellectual Property Assets" is defined in Section
3.19(a).
"Parent Non-U.S. Plan" is defined in Section 3.11(a).
"Parent Permits" is defined in Section 3.06(b).
"Parent Preferred Stock" is defined in Section 3.03(a).
"Parent SEC Documents" is defined in Section 3.06(a).
"Parent Significant Subsidiaries" is defined in Section 3.01(b).
"Parent Stockholders Meeting" is defined in Section 3.13(a)(ii).
"Parent Stockholders Meeting Proposals" is defined in Section
3.13(a)(ii).
"Parent Subsidiary Documents" is defined in Section 3.02.
"Parent 2000 Form 10-K" is defined in Section 3.01(b).
"PBGC" is defined in Section 2.11(b).
"person" is defined in Section 8.03(f).
"Post-1998 Company SEC Documents" is defined in Section 2.07(a).
"Post-1998 Parent SEC Documents" is defined in Section 3.07(a).
"RCRA" is defined in Section 2.17(f)(ii).
"Registration Statement" is defined in Section 3.13(a)(i).
"Regulation S-K" is defined in Section 2.05(a).
"Regulation S-X" is defined in Section 2.01(a).
"reportable event" is defined in Section 3.11(b).
"Rights" is defined in Section 4.02(d).
"Rights Agreement" is defined in Section 4.02(d).
"Rule 145" is defined in Section 5.05.
"SEC" is defined in Section 2.03(b).
"Securities Act" is defined in Section 2.05(c).
"Share" is defined in the recitals.
"S Litigation" is defined in Section 8.03(e).
"Stockholders Meetings" is defined in Section 2.13(a)(ii).
"subsidiary" and "subsidiaries" are defined in Section 8.03(g).
"Subsidiary Documents" is defined in Section 2.02.
"Superior Proposal" is defined in Section 4.02(a).
"Surviving Corporation" is defined in Section 1.01.
"Tax" is defined in Section 2.16(b).
"Tax Return" is defined in Section 2.16(b).
"Terminating Breach" is defined in Section 7.01(h).
"Terminating Change" is defined in Section 7.01(g).
"Termination Misrepresentation" is defined in Section 7.01(f).
"Third Party" is defined in Section 4.02(a).
"Third Party Intellectual Property Assets" is defined in Section
2.19(c).
"TSCA" is defined in Section 2.17(f)(ii).
"Voting Agreements" is defined in the recitals.
"2001 Company Balance Sheet" is defined in Section 2.09.
"2001 Parent Balance Sheet" is defined in Section 3.09.
ARTICLE I
THE MERGER
----------
SECTION 1.01. The Merger. At the Effective Time, and subject to
and upon the terms and conditions of this Agreement and the DGCL, Merger
Sub shall be merged with and into the Company, the separate corporate
existence of Merger Sub shall cease, and the Company shall continue as the
surviving corporation (hereinafter sometimes referred to as the "Surviving
Corporation").
SECTION 1.02. Effective Time. Unless this Agreement shall have
been terminated and the transactions herein contemplated shall have been
abandoned pursuant to Section 7.01, as promptly as practicable (and in any
event within two business days) after the satisfaction or waiver of the
conditions set forth in Article VI, the parties hereto shall cause the
Merger to be consummated by filing a properly executed agreement or
certificate of merger as contemplated by the DGCL (the "Certificate of
Merger"), together with any required related certificates, with the
Secretary of State of Delaware, in such form as required by, and executed
in accordance with the relevant provisions of, the DGCL. The Merger shall
become effective at the time of such filing or at such later time, which
will be as soon as reasonably practicable, specified in the Certificate of
Merger (the "Effective Time"). Prior to such filing, a closing shall be
held at the offices of Kramer Levin Naftalis & Frankel LLP, 919 Third
Avenue, New York, NY, unless another time or place is agreed to in writing
by the parties hereto, for the purpose of confirming the satisfaction or
waiver, as the case may be, of the conditions set forth in Article VI.
SECTION 1.03. Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided in this Agreement, the
Certificate of Merger and the applicable provisions of the DGCL. Without
limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and franchises
of the Company and Merger Sub shall vest in the Surviving Corporation, and
all debts, liabilities and duties of the Company and Merger Sub shall
become the debts, liabilities and duties of the Surviving Corporation.
SECTION 1.04. Certificate of Incorporation; Bylaws. (a)
Certificate of Incorporation. At the Effective Time, the Restated
Certificate of Incorporation of the Company, as in effect immediately prior
to the Effective Time, shall be the Certificate of Incorporation of the
Surviving Corporation until thereafter amended as provided by the DGCL and
such Certificate of Incorporation; provided, however, that Article Third of
the Surviving Corporation's Certificate of Incorporation shall be amended
in the Merger to read in its entirety as follows: "ARTICLE THIRD. The
aggregate number of shares authorized is 1,000 shares of common stock, par
value $0.01 per share."
(b) By-laws. Subject to Section 5.06, at the Effective Time, the
By-laws of Merger Sub, as in effect immediately prior to the Effective
Time, shall be the By-laws of the Surviving Corporation until thereafter
amended as provided by the DGCL.
SECTION 1.05. Directors and Officers. The directors of Merger Sub
immediately prior to the Effective Time shall be the initial directors of
the Surviving Corporation, each to hold office in accordance with the
Certificate of Incorporation and By-laws of the Surviving Corporation, and
the officers of the Company immediately prior to the Effective Time shall
be the initial officers of the Surviving Corporation, in each case until
their respective successors are duly elected or appointed and qualified.
SECTION 1.06. Effect on Securities, Etc. At the Effective Time,
by virtue of the Merger and without any action on the part of Parent,
Merger Sub, the Company or the holders of any securities of the Company:
(a) Conversion of Securities. Each Share issued and outstanding
immediately prior to the Effective Time (excluding any Shares to be
canceled pursuant to Section 1.06(b)) shall be converted, subject to
Sections 1.06 (e) and (f), into 0.563 (such ratio, the "Exchange Ratio")
fully paid and nonassessable shares of common stock of Parent, par value
$0.10 per share ("Parent Common Stock").
(b) Cancellation. Each Share held in the treasury of the Company
and each Share owned by Parent immediately prior to the Effective Time
shall, by virtue of the Merger and without any action on the part of the
holder thereof, cease to be outstanding, be canceled and retired without
payment of any consideration therefor, and cease to exist.
(c) Stock Options. At the Effective Time, all options or rights
to purchase shares of Company Common Stock (a "Company Stock Option") then
outstanding, whether under (A) the Amended and Restated General
Semiconductor, Inc. 1993 Long-Term Incentive Plan, (B) the General
Semiconductor, Inc. Amended and Restated 1998 Long-Term Incentive Plan,
and/or (C) any other stock option or stock plan or agreement of the Company
(collectively, the "Company Stock Option Plans"), shall be treated in
accordance with Section 5.11 of this Agreement.
(d) Capital Stock of Merger Sub. Each share of common stock,
$0.01 par value per share, of Merger Sub issued and outstanding immediately
prior to the Effective Time shall be converted into and exchanged for one
validly issued, fully paid and nonassessable share of common stock, $0.01
par value, of the Surviving Corporation.
(e) Adjustments to Exchange Ratio. The Exchange Ratio, the Merger
Consideration and any other relevant amounts and terms in this Agreement
shall be appropriately adjusted to reflect fully the effect of: any stock
split, reverse split, or stock dividend (including any dividend or
distribution of securities convertible into Parent Common Stock or Company
Common Stock); any distribution, exercise or exchange of Rights or such
Rights becoming exercisable; or any reorganization, recapitalization,
reclassification, readjustment, split up, combination or exchange of
shares, or other like event with respect to Parent Common Stock or Company
Common Stock, in any case occurring after the date hereof and prior to the
Effective Time.
(f) Fractional Shares. No certificates or scrip representing less
than one share of Parent Common Stock shall be issued in exchange for
Shares upon the surrender for exchange of a certificate which immediately
prior to the Effective Time represented outstanding Shares (the
"Certificates"). In lieu of any such fractional share, each holder of
Shares who would otherwise have been entitled to a fraction of a Share of
Parent Common Stock upon surrender of Certificates for exchange shall be
paid upon such surrender (and after taking into account all Certificates
surrendered by such holder) cash (without interest) in an amount equal to
such fraction multiplied by the closing price of Parent Common Stock on the
New York Stock Exchange (the "NYSE") trading day immediately prior to the
Effective Time of the Merger. The fractional shares of Parent Common Stock
will be aggregated and no stockholder of the Company will be entitled to
receive cash in an amount equal to or greater than the value of one full
share of Parent Common Stock.
SECTION 1.07. Exchange of Shares. (a) Exchange Agent. Parent
shall cause to be supplied to or for such bank or trust company as shall be
designated by Parent and shall be reasonably acceptable to the Company (the
"Exchange Agent"), in trust for the benefit of the holders of Company
Common Stock, as needed for exchange and payment in accordance with this
Section 1.07 through the Exchange Agent, the Parent Common Stock
deliverable pursuant to Section 1.06(a), the cash to be paid in lieu of
fractional shares in exchange for outstanding Shares pursuant to Section
1.06(f) and the cash or other property in respect of any dividends or other
distributions payable pursuant to Section 1.07(c).
(b) Exchange Procedures. As soon as reasonably practicable after
the Effective Time, Parent will cause the Exchange Agent to mail to each
holder of record of Certificates (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the Certificates to
the Exchange Agent and shall be in such form and have such other provisions
as Parent may reasonably specify and as are consistent with the terms of
this Agreement), and (ii) instructions to effect the surrender of the
Certificates in exchange for the Parent Common Stock and cash in lieu of
fractional shares. Upon surrender of a Certificate for cancellation to the
Exchange Agent together with such letter of transmittal, duly executed, and
such other customary documents as may be required pursuant to such
instructions, the holder of such Certificate shall be entitled to receive
in exchange therefor (A) that number of whole shares of Parent Common Stock
which such holder has the right to receive in accordance with Section
1.06(a) in respect of the Shares formerly evidenced by such Certificate and
(B) cash in respect of fractional shares as provided in Section 1.06(f)
(the Parent Common Stock and cash in respect of fractional shares being
referred to, collectively, as the "Merger Consideration").
The holder of such Certificate, upon its exchange for shares of
Parent Common Stock, shall also receive any dividends or other
distributions to which such holder is entitled pursuant to Section 1.07(c).
Certificates surrendered shall forthwith be canceled following the
Effective Time. In the event of a transfer of ownership of Shares which is
not registered in the transfer records of the Company as of the Effective
Time, the Merger Consideration, dividends and distributions may be issued
and paid in accordance with this Article I to a transferee if the
Certificate evidencing such Shares is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect such transfer
pursuant to this Section 1.07(b) and by evidence that any applicable stock
transfer taxes have been paid. Until so surrendered, each outstanding
Certificate that, prior to the Effective Time, represented Shares will be
deemed from and after the Effective Time, for all corporate purposes other
than the payment of dividends or other distributions, to evidence the
ownership of the number of whole shares of Parent Common Stock, and cash in
respect of fractional shares, into which such Shares shall have been so
converted.
Shares held at the Effective Time in book-entry form shall be
exchanged for Merger Consideration in accordance with the customary
procedures of The Depository Trust Company.
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions declared or made after the Effective Time
with respect to Parent Common Stock with a record date after the Effective
Time shall be paid to the holder of any unsurrendered Certificate with
respect to the Parent Common Stock that such holder is entitled to receive,
until the holder of such Certificate shall surrender such Certificate in
accordance with the provisions of Section 1.07(b). Subject to applicable
law, following surrender of any such Certificate, there shall be paid to
the record holder of the whole shares of Parent Common Stock issued in
exchange therefor, without interest, (i) at the time of such surrender, the
amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole shares of Parent
Common Stock, and (ii) on the applicable payment date, the amount of
dividends or other distributions with a record date after the Effective
Time not yet paid on the date of surrender of such Certificate to be paid
with respect to such whole shares of Parent Common Stock.
(d) Transfers of Ownership. If any shares of Parent Common Stock
are to be delivered in a name other than that in which the Certificate
surrendered in exchange therefor is registered, it will be a condition of
the delivery thereof that the Certificate so surrendered shall be properly
endorsed and otherwise in proper form for transfer and that the person
requesting such exchange shall have paid to Parent or any agent designated
by it any transfer or other taxes required by reason of the delivery of
Parent Common Stock in any name other than that of the registered holder of
the Certificate surrendered, or establish to the satisfaction of Parent or
any agent designated by it that such tax has been paid or is not payable.
(e) Escheat. Neither Parent, Merger Sub nor the Company nor any
of their respective affiliates shall be liable to any holder of Company
Common Stock for any Merger Consideration delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(f) Withholding Rights. The Exchange Agent shall be entitled to
deduct and withhold from the Merger Consideration otherwise payable
pursuant to this Agreement to any holder of Company Common Stock, and from
any cash dividends or other distributions that such holder is entitled to
receive under Section 1.07(c), such amounts as the Exchange Agent is
required to deduct and withhold with respect to the making of such payment
under the Code, or any provision of state, local or non-United States tax
law. To the extent that amounts are so withheld by the Exchange Agent, such
portion of the Merger Consideration and other such amounts payable under
Section 1.07(c) that are withheld shall be treated for all purposes of this
Agreement as having been received by the holder of the Shares in respect of
which such deduction and withholding was made by the Exchange Agent.
(g) Undistributed Merger Consideration. Any portion of the Parent
Common Stock, the cash to be paid in lieu of fractional shares and the cash
or other property in respect of dividends or other distributions that the
holder is entitled to receive under Section 1.07(c) supplied to the
Exchange Agent which remains undistributed to the holders of the
Certificates for one year after the Effective Time shall be delivered to
Parent, upon demand, and any holders of Certificates who have not
theretofore complied with this Section 1.07 shall thereafter look only to
Parent for payment of their claim for Merger Consideration and any
dividends or distributions with respect to Parent Common Stock.
SECTION 1.08. 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 the Company Common Stock thereafter on
the records of the Company.
SECTION 1.09. No Further Ownership Rights in Company Common
Stock. The Merger Consideration and distributions, if any, pursuant to
Section 1.07(c) delivered upon the surrender for exchange of Shares in
accordance with the terms hereof shall be deemed to have been issued in
full satisfaction of all rights pertaining to such Shares, and there shall
be no further registration of transfers on the records of the Surviving
Corporation of Shares which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to
the Surviving Corporation for any reason, they shall be canceled and
exchanged as provided in this Article I.
SECTION 1.10. Lost, Stolen or Destroyed Certificates. In the
event any Certificates shall have been lost, stolen or destroyed, the
Exchange Agent shall issue in exchange for such lost, stolen or destroyed
Certificates, upon the making of an affidavit of that fact by the holder
thereof, such Merger Consideration and any dividends or other distributions
as may be required pursuant to this Article I; provided, however, that
Parent may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed Certificates
to deliver a bond in such sum as it may reasonably direct as indemnity
against any claim that may be made against Parent or the Exchange Agent
with respect to the Certificates alleged to have been lost, stolen or
destroyed.
SECTION 1.11. Tax Consequences. The parties hereto intend that
the Merger shall constitute a reorganization within the meaning of Section
368(a) of the Code. The parties hereto hereby adopt this Agreement as a
"plan of reorganization" within the meaning of Sections 1.368-2(g) and
1.368-3(a) of the United States Treasury Regulations.
SECTION 1.12. Taking of Necessary Action; Further Action. Each of
Parent, Merger Sub and the Company will take, and cause their affiliates to
take, all such reasonable and lawful actions as may be necessary or
appropriate in order to effectuate the Merger and the other transactions
contemplated by this Agreement in accordance with this Agreement as
promptly as possible. If, at any time after the Effective Time, any such
further action is necessary or desirable to carry out the purposes of this
Agreement and to vest the Surviving Corporation with full right, title and
possession to all assets, property, rights, privileges, powers and
franchises of the Company and Merger Sub, the officers and directors of the
Company and Merger Sub immediately prior to the Effective Time are fully
authorized in the name of their respective corporations or otherwise to
take, and will take, all such lawful and necessary action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company hereby represents and warrants to Parent and Merger
Sub as follows:
SECTION 2.01. Organization and Qualification; Subsidiaries. (a)
Each of the Company and its "significant subsidiaries," as defined in
Regulation S-X of the federal securities laws ("Regulation S-X")
(substituting for this purpose a 5% threshold for the 10% threshold
appearing therein; the "Company Significant Subsidiaries") is an entity
duly organized, validly existing and (to the extent the concept of good
standing exists in the applicable jurisdiction) in good standing under the
laws of the jurisdiction of its organization and has the requisite
corporate or other power and authority necessary to own, lease or operate
the properties it owns, leases or operates and to carry on its business as
it is now being conducted, except where the failure to be so organized,
existing and in good standing or to have such power or authority would not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(b) Each of the Company and each Company Significant Subsidiary
is duly qualified or licensed as a foreign corporation to do business, and
is in good standing, in each jurisdiction where the character of the
properties owned, leased or operated by it or the nature of its business
activities makes such qualification or licensing necessary, except where
such failures to be so duly qualified or licensed and in good standing
would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect. A true and complete list of all of the Company's
"significant" subsidiaries, as defined in Regulation S-X, is included as an
exhibit to the Company's Annual Report on Form 10-K for the year ended
December 31, 2000 (the "Company 2000 Form 10-K"). A list of all
subsidiaries of the Company together with the jurisdiction of organization
of each such subsidiary and the percentage of each such subsidiary's
outstanding capital stock owned by the Company or another subsidiary of the
Company is contained in Section 2.01 of the written disclosure schedule
previously delivered by the Company to Parent (the "Company Disclosure
Schedule").
(c) Except as set forth in Section 2.01 of the Company Disclosure
Schedule or the Company SEC Documents, neither the Company nor any of its
subsidiaries directly or indirectly owns any equity or similar interest in,
or any interest convertible into or exchangeable or exercisable for, any
equity or similar interest in, any corporation, partnership, joint venture
or other business association or entity (other than its wholly owned
subsidiaries) (i) with respect to which interest the Company or a
subsidiary has invested (and currently owns) or is required to invest
$1,000,000 or more, or (ii) which is a publicly-traded entity unless such
interest is held for investment by the Company or its subsidiary and, to
the knowledge of the Company, comprises less than five percent of the
outstanding stock of such entity.
SECTION 2.02. Certificate of Incorporation and By-laws. The
Company has heretofore made available to Parent a complete and correct copy
of its Restated Certificate of Incorporation and By-laws as amended to date
(the "Company Charter Documents"), and will make available to Parent, as
promptly as practicable, the Certificate of Incorporation and By-laws (or
equivalent organizational documents) of each of the Company Significant
Subsidiaries (the "Subsidiary Documents") reasonably requested by Parent.
All such Company Charter Documents and Subsidiary Documents are in full
force and effect, except in the case of Subsidiary Documents where the
failure to be in full force and effect would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect. Except
as set forth in Section 2.02 of the Company Disclosure Schedule or as would
not reasonably be expected materially to interfere with its operations,
neither the Company nor any of the Company Significant Subsidiaries is in
violation of any of the provisions of its Certificate of Incorporation or
By-laws or equivalent organizational documents.
SECTION 2.03. Capitalization. (a) The authorized capital stock of
the Company consists of 400,000,000 shares of Company Common Stock and
20,000,000 shares of preferred stock, par value $.01 per share (the
"Company Preferred Stock"). As of July 23, 2001, (i) 37,925,131 shares of
Company Common Stock were issued and outstanding, all of which are validly
issued, fully paid and nonassessable (excluding treasury shares which are
issued but not outstanding, all of which are not entitled to vote), and
none of which has been issued in violation of preemptive or similar rights,
(ii) no shares of Company Common Stock were held by subsidiaries of the
Company, (iii) 7,549,833 shares of Company Common Stock were reserved for
existing grants and 22,230 shares of Company Common Stock were reserved for
future grants pursuant to the Company Stock Option Plans, and (iv)
11,093,248 shares of Company Common Stock were reserved for issuance upon
conversion of the Company's 5.75% convertible subordinated notes due 2006
(the "Company Convertible Notes"). There are no outstanding shares of
Company Preferred Stock. Except as set forth in Section 2.03 of the Company
Disclosure Schedule, no change in such capitalization has occurred since
July 23, 2001 except for changes resulting from the exercise or termination
of Company Stock Options which were outstanding and exercisable as of July
23, 2001 (or were outstanding as of July 23, 2001 and became exercisable in
accordance with their terms thereafter) or from the conversion of Company
Convertible Notes that were outstanding as of July 23, 2001.
Except as set forth in Section 2.01, this Section 2.03 or Section
2.11 or in Section 2.03 or Section 2.11 of the Company Disclosure Schedule
or the Company SEC Documents and except for the Rights and this Agreement,
there are no options, warrants or other rights, agreements, arrangements or
commitments of any character, including any stock purchase plan, binding on
the Company or any of its subsidiaries relating to the issued or unissued
capital stock of the Company or any of its subsidiaries or obligating the
Company or any of its subsidiaries to issue or sell any shares of capital
stock of, or other equity interests in, the Company or any of its
subsidiaries. All shares of Company Common Stock subject to issuance as
aforesaid, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, shall be duly authorized,
validly issued, fully-paid and nonassessable and will not be issued in
violation of preemptive or similar rights.
(b) Except as set forth in Section 2.03 of the Company Disclosure
Schedule or the reports, schedules, forms, statements, registration
statements, proxy statements and other documents filed by the Company with
the Securities and Exchange Commission ("SEC") since December 31, 2000 and
prior to the date of this Agreement, including those incorporated by
reference and not superseded by other Company SEC Documents (the "Company
SEC Documents"), there are no obligations, contingent or otherwise, of the
Company or any of its subsidiaries to repurchase, redeem or otherwise
acquire any shares of the Company Common Stock or the capital stock of any
subsidiary. Except as set forth in Section 2.03 of the Company Disclosure
Schedule or the Company SEC Documents, there are no obligations, contingent
or otherwise, of the Company or any of its subsidiaries to provide funds to
or make any investment (in the form of a loan, capital contribution or
otherwise) in any such subsidiary or any other entity other than guarantees
of bank obligations of subsidiaries and intercompany book entry
transactions, in either case entered into in the ordinary course of
business. Except as set forth in Section 2.01 or 2.03 of the Company
Disclosure Schedule, (i) all of the outstanding shares of capital stock
(other than directors' qualifying shares) of each of the Company's
subsidiaries are duly authorized, validly issued, fully-paid and
nonassessable, and (ii) all such shares (other than directors' qualifying
shares and a de minimis number of shares owned by employees of such
subsidiaries) are owned by the Company or another subsidiary, free and
clear of all security interests, liens, claims, pledges, agreements,
limitations in the Company's voting rights, charges or other encumbrances
of any nature whatsoever.
SECTION 2.04. Authority Relative to This Agreement. (a) The
Company has all necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby subject to the requisite
approval of the Company's stockholders in accordance with the DGCL. The
execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action, and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions so contemplated
(other than the requisite approval by the Company's stockholders in
accordance with the DGCL and the Company Charter Documents and the filings
and recording of appropriate merger documents as required by the DGCL).
(b) As of the date hereof, the Board of Directors of the Company
has unanimously (i) determined that it is advisable and in the best
interest of the Company's stockholders for the Company to enter into this
Agreement and to consummate the Merger upon the terms and subject to the
conditions of this Agreement, (ii) approved this Agreement in accordance
with the applicable provisions of the DGCL, and (iii) recommended the
approval of this Agreement by holders of the Company Common Stock and
directed that this Agreement be submitted for consideration by the
Company's stockholders at a meeting of the stockholders of the Company to
consider the Merger Agreement (the "Company Stockholders Meeting"). This
Agreement has been duly and validly executed and delivered by the Company
and, assuming the due authorization, execution and delivery by Parent and
Merger Sub of this Agreement, constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms, subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect
relating to creditors' rights generally or to general principles of equity.
SECTION 2.05. Material Contracts; No Conflict; Required Filings
and Consents. (a) Except as set forth in Section 2.05(a) of the Company
Disclosure Schedule, the Company has filed or incorporated by reference as
an exhibit to the Company SEC Documents all agreements, contracts,
instruments, indentures, mortgages, security agreements, guaranties and
other documents required to be filed as exhibits pursuant to Items
601(b)(4) and 601(b)(10) of Regulation S-K of the federal securities laws
("Regulation S-K") (without regard to the exclusion set forth in Item
601(b)(4)(iii)(A)).
(b) Except as set forth in Section 2.05(b) of the Company
Disclosure Schedule, the execution and delivery of this Agreement by the
Company do not, and the performance of this Agreement by the Company will
not, (i) conflict with or violate the Company Charter Documents, (ii)
assuming compliance with the matters referred to in Section 2.05(c),
conflict with or violate the Subsidiary Documents or any law, rule,
regulation, order, judgment or decree applicable to the Company or any of
its subsidiaries or by which its or any of their respective properties is
bound, or (iii) result in any breach of or constitute a default (or an
event that with notice or lapse of time or both would become a default)
under, or impair the Company's or any of its subsidiaries' rights or alter
the rights or obligations of any third party under, or give to others any
rights of, or cause any, termination, amendment, redemption, acceleration
or cancellation of, or result in the creation of a lien or encumbrance on
(including a right to purchase) any of the properties or assets of the
Company or any of its subsidiaries pursuant to, any note, bond, mortgage,
indenture, credit facility, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries or its or any of their respective properties is bound, except,
in the case of clause (ii) or (iii), for any such conflicts, violations,
breaches, defaults or other occurrences that would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect.
(c) The execution and delivery of this Agreement by the Company
do not, and the performance of this Agreement by the Company will not,
require the Company or any of its subsidiaries to make or seek any consent,
approval, authorization or permit of, or filing with or notification to,
any governmental, administrative or regulatory authority, domestic or
foreign (each, a "Governmental Authority"), except (i) for applicable
requirements, if any, of the Securities Act of 1933, as amended, and the
rules and regulations of the SEC thereunder (the "Securities Act"), the
Securities Exchange Act of 1934, as amended, and the rules and regulations
of the SEC thereunder (the "Exchange Act"), state securities laws, the
pre-merger notification requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations
thereunder (the "HSR Act"), and the NYSE; filings and consents under any
applicable non-United States laws intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or
restraint of trade ("Non-U.S. Monopoly Laws"); filings and consents as may
be required under any environmental, health or safety law or regulation
pertaining to any notification, disclosure or required approval triggered
by the Merger or the transactions contemplated by this Agreement
("Environmental, Health and Safety Transfer Laws"); and the filing and
recordation of appropriate merger or other documents as required by the
DGCL; (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would
not prevent or materially delay consummation of the Merger, or otherwise
prevent or materially delay the Company from performing its material
obligations under this Agreement, or would not otherwise reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect; or (iii) as to which any necessary consents, approvals,
authorizations, permits, filings or notifications have heretofore been
obtained or filed, as the case may be, by the Company.
SECTION 2.06. Compliance; Permits. (a) Except as set forth in
Section 2.06(a) of the Company Disclosure Schedule or the Company SEC
Documents, neither the Company nor any of its subsidiaries is in default or
violation of, (i) any law, rule, regulation, order, judgment or decree
applicable to the Company or any of its subsidiaries or by which its or any
of their respective properties is bound or (ii) any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries or its or any of
their respective properties is bound, except for any such conflicts,
defaults or violations which would not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect.
No investigation by any Governmental Authority with respect to
the Company or any of its subsidiaries is pending or, to the Company's
knowledge, threatened, except as disclosed in the Company SEC Documents,
except for investigations which, if they resulted in action being taken
against the Company would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(b) Except as set forth in Section 2.06(b) of the Company
Disclosure Schedule or the Company SEC Documents, the Company and its
subsidiaries hold all permits, licenses, easements, variances, exemptions,
consents, certificates, orders and approvals from governmental authorities
which are material to the operation of the business of the Company and its
subsidiaries, taken as a whole, as it is now being conducted (collectively,
the "Company Permits"), except where the failure to hold such Company
Permits would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect. The Company and its subsidiaries are in
compliance with the terms of the Company Permits, except as described in
the Company SEC Documents or where the failure to so comply would not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
SECTION 2.07. SEC Filings; Financial Statements; Projections. (a)
The Company has filed all reports, schedules, forms, statements and other
documents (including all exhibits thereto) required to be filed by it with
the SEC since December 31, 1998 (the "Post-1998 Company SEC Documents").
Except as set forth in Section 2.07 of the Company Disclosure Schedule or
the Company SEC Documents, the Post-1998 SEC Documents (i) were prepared in
all material respects in accordance with the applicable requirements of the
Securities Act or the Exchange Act, as the case may be, and (ii) did not at
the time they were filed (or if amended or superseded by a filing prior to
the date of this Agreement, then on the date of such filing) 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. None of the Company's subsidiaries is required to file any
forms, reports or other documents with the SEC.
(b) Each of the consolidated financial statements (including, in
each case, any related notes thereto) contained in the Post-1998 Company
SEC Documents was prepared in accordance with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes
thereto or in the Post-1998 Company SEC Documents), and fairly presents in
all material respects the consolidated financial position of the Company
and its subsidiaries as at the respective dates thereof and the
consolidated results of its operations and cash flows for the periods
indicated, except that the unaudited interim financial statements (i)
should be read in conjunction with the Company's consolidated financial
statements contained in the Company 2000 Form 10-K, and (ii) were or are
subject to normal and recurring year-end adjustments which were not or are
not expected to be material in amount. The fact that the Company amends any
of the Post-1998 Company SEC Documents in response to comments received
from the staff of the SEC upon its review of the Joint Proxy
Statement/Prospectus shall not, in and of itself and without regard to the
substance of any such amendment, be deemed prima facie or conclusive
evidence that the representation and warranty contained in this Section
2.07(b) is not true and correct.
(c) The projections of the Company's revenues and net income for
the calendar quarters ended September 30, 2001 and December 31, 2001
previously delivered to Parent were prepared in good faith and, to the
Company's knowledge, are reasonable as of the date hereof except as they
may be affected by conditions in the semiconductor industry generally or
the discrete electronics component industry generally, the effects of the
announcement of the transactions contemplated by this Agreement (including,
without limitation, personnel changes, and any disruption of customer,
supplier or employee relationships), or changes in economic, regulatory or
political conditions generally or in any region in the world.
SECTION 2.08. Absence of Certain Changes or Events. Except as set
forth in Section 2.08 or Section 4.01 of the Company Disclosure Schedule or
the Company SEC Documents or as contemplated by this Agreement, since
December 31, 2000, the Company has conducted its business in the ordinary
course and there has not occurred: (i) any changes, effects or
circumstances constituting, or which would reasonably be expected to
constitute, individually or in the aggregate, a Material Adverse Effect;
(ii) any amendments or changes in the Company Charter Documents; (iii) any
material changes to any Company Employee Plans or other employee benefit
arrangements or agreements, including the establishment of any new such
plans, arrangements or agreements or the extension of coverage under any
such plans, arrangements or agreements to new groups of employees or other
individuals, except that with respect to Non-U.S. Plans (as defined in
Section 2.11(a)), any such material changes that the Company in good faith
is not able to list on the Company Disclosure Schedule by the date of this
Agreement may be included on the Employee Benefits Supplemental Disclosure
Schedule (as defined in Section 2.11(a)); (iv) any damage to, destruction
or loss of any asset of the Company (not covered by insurance) that would
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect; (v) any material change by the Company in its
accounting methods, principles or practices (other than as required by
changes in GAAP subsequent to the date hereof); or (vi) other than in the
ordinary course of business, any sale of a material amount of assets of the
Company.
SECTION 2.09. No Undisclosed Liabilities. Except as set forth in
Section 2.09 or 4.01 of the Company Disclosure Schedule or the Company SEC
Documents, neither the Company nor any of its subsidiaries has any
liabilities (absolute, accrued, contingent or otherwise), except
liabilities (a) in the aggregate adequately provided for in the Company's
unaudited balance sheet (including any related notes thereto) as of June
30, 2001 included in the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 2001 (the "2001 Company Balance Sheet"), (b)
incurred in the ordinary course of business and not required under GAAP to
be reflected on the 2001 Company Balance Sheet, (c) incurred since June 30,
2001 in the ordinary course of business, (d) incurred in connection with
this Agreement or the Merger or the other transactions contemplated hereby,
or (e) which would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
SECTION 2.10. Absence of Litigation. Except as set forth in
Section 2.10 and Section 2.19(c) of the Company Disclosure Schedule or the
Company SEC Documents or arising out of the transactions contemplated by
this Agreement, there are no claims, actions, suits, proceedings or
investigations pending or, to the knowledge of the Company, threatened
against the Company or any of its subsidiaries, or any properties or assets
of the Company or any of its subsidiaries, before any court, arbitrator or
Governmental Authority, that would reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect.
SECTION 2.11. Employee Benefit Plans; Employment Agreements. (a)
"Company Employee Plans" shall mean all "employee pension benefit plans"
(as defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")), all "employee welfare benefit plans" (as
defined in Section 3(1) of ERISA), all similar plans maintained outside the
United States and not required by applicable law (any non-U.S., Company
Employee Plan not required by applicable law, a "Non-U.S. Plan") and all
other bonus, stock option, stock purchase, incentive, deferred
compensation, supplemental retirement, severance and other similar fringe
or employee benefit plans, programs or arrangements (including those which
contain change of control provisions or pending change of control
provisions), and any employment, executive compensation or severance
agreements (including those which contain change of control provisions or
pending change of control provisions), whether maintained in the U.S. or a
Non-U.S. Plan, written or otherwise, as amended, modified or supplemented,
maintained or contributed to by the Company or a subsidiary of the Company
for the benefit of, or relating to, any former or current employee, officer
or director (or any of their beneficiaries) of the Company or a subsidiary
of the Company. The term "Affiliate Plan" shall mean any other such plan,
program or arrangement with respect to which the Company or any subsidiary
of the Company has or would reasonably be expected to have any material
liability, either as a member of a controlled group of corporations or
trades or businesses, as defined under section 414 of the Code and
comparable provisions of ERISA, or by contractual arrangement. Section
2.11(a) of the Company Disclosure Schedule lists each material Company
Employee Plan and each material Affiliate Plan; provided, however, that the
Company may omit from the Company Disclosure Schedule and instead include
in an employee benefits supplement to the Company Disclosure Schedule (the
"Employee Benefits Supplemental Disclosure Schedule") any material Non-U.S.
Plan that the Company in good faith is not able to list on Section 2.11 of
the Company Disclosure Schedule by the date of this Agreement. The Employee
Benefits Supplemental Disclosure Schedule shall be delivered to Parent as
promptly as practicable but in no event later than 30 days after the date
hereof. With respect to each Company Employee Plan or Affiliate Plan listed
in Section 2.11(a) of the Company Disclosure Schedule, the Company has
provided or made available to Parent, and, with respect to each Company
Employee Plan or Affiliate Plan listed in the Employee Benefits
Supplemental Disclosure Schedule, the Company will provide or make
available at such time as the Employee Benefits Supplemental Disclosure
Schedule is provided to Parent: (i) each such written Company Employee Plan
(and, with respect to Company Employee Plans that provide equity-based
benefits or that cover 50 or more participants, a written description in
English of any Company Employee Plan which is not written, provided
however, that such written descriptions may be included on the Employee
Benefits Supplemental Disclosure Schedule to the extent that the Company in
good faith is not able to provide such descriptions by the date hereof) and
any related trust agreement, material insurance or other contract
(including a policy), if any, the most recently prepared summary plan
description, if any, summary of material modifications the substance of
which is not already incorporated in the corresponding summary plan
description or Company Employee Plan document, if any, and communications
distributed to one or more plan participants that would reasonably be
expected to materially modify the terms of any Company Employee Plan or
summary plan description, whether through information actually conveyed in
the communication or through a failure to convey information; (ii) the most
recent annual report on Form 5500 series (or equivalent filing with respect
to Non-U.S. Plans), with accompanying schedules and attachments, filed with
respect to each Company Employee Plan; (iii) the most recent actuarial
valuation, if any, for each Company Employee Plan and each material
Affiliate Plan subject to Title IV of ERISA and each material Non-U.S.
Plan, to the extent applicable; and (iv) the most recent favorable
determination letters issued for each Company Employee Plan and related
trust which is intended to be qualified under Section 401(a) of the Code
(and, if an application for such determination is pending, a copy of the
application for such determination).
(b) Except as set forth in Section 2.11(b) of the Company
Disclosure Schedule or, with respect to Non-U.S. Plans, the Employee
Benefits Supplemental Disclosure Schedule, or as disclosed in the Post-1998
Company SEC Documents (i) none of the Company Employee Plans or Affiliate
Plans promises or provides medical or other welfare benefits to any
director, officer, employee or consultant (or any of their beneficiaries)
after their service with the Company or its subsidiary or affiliate
terminates, other than as required by Section 4980B of the Code or Part 6
of Subtitle B of Title I of ERISA (hereinafter, "COBRA"), or any similar
state laws; (ii) none of the Company Employee Plans or Affiliate Plans is a
"multiemployer plan" as such term is defined in Section 3(37) of ERISA and
no Non-U.S. Plan is a multiemployer plan and no Company Employee Plan or
Affiliate Plan has incurred any withdrawal liability that remains
unsatisfied that would reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect; (iii) neither the Company nor
any of its subsidiaries, any of their respective executives nor, to the
knowledge of the Company, any other party in interest or disqualified
person (as defined in Section 3(14) of ERISA and Section 4975 of the Code)
has engaged in a transaction with respect to any Company Employee Plan or
Affiliate Plan which would reasonably be expected to subject the Company or
any subsidiary, directly or indirectly, to a tax, penalty or other
liability for prohibited transactions under ERISA or Section 4975 of the
Code that would reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect; (iv) neither the Company or any of its
subsidiaries, nor any executive of the Company or one of its subsidiaries
as fiduciary of the Company Employee Plans or to the knowledge of the
Company any other fiduciary of any Company Employee Plan has breached any
of the responsibilities or obligations imposed upon fiduciaries under Title
I of ERISA and that would reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect; (v) all Company Employee
Plans, and to the knowledge of the Company, all Affiliate Plans have been
established and maintained in accordance with their terms and have been
operated in compliance in all respects with the requirements of applicable
law, including all filing requirements with the Department of Labor except
for such failure as would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect; (vi) each Company
Employee Plan which is intended to be qualified under Section 401(a) of the
Code is the subject of a favorable determination letter from the Internal
Revenue Service (the "IRS"); (vii) all contributions required to be made
with respect to any Company Employee Plan (whether pursuant to the terms of
such plan, Section 412 of the Code, any collective bargaining agreement, or
otherwise) have been made on or before their due dates (including any
extensions thereof) except to the extent any failure to have made such a
contribution on or before its due date would not reasonably be expected to
result in a current or future liability that would reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect; (viii)
with respect to each Company Employee Plan and each Affiliate Plan, no
"reportable event" within the meaning of Section 4043 of ERISA (excluding
any such event for which the 30-day notice requirement has been waived
under the regulations to Section 4043 of ERISA) has occurred with respect
to which the Company or one of its subsidiaries has any outstanding
liability that would reasonably be expected to have a Material Adverse
Effect, and no Company action has occurred that resulted or is reasonably
likely to result in any adverse liability for any Non-U.S. Plan that, in
any case, reasonably would be expected, individually or in the aggregate,
to have a Material Adverse Effect; (ix) none among the Company or any
subsidiary thereof has incurred (or would reasonably be expected to incur)
any liability that remains unsatisfied, or reasonably expects to incur any
liability, under Title IV of ERISA with respect to either a Company
Employee Plan or an Affiliate Plan including, without limitation, with
respect to an event described in Section 4062, 4063 or 4041 of ERISA (other
than liability for premium payments to the Pension Benefit Guaranty
Corporation (the "PBGC") arising in the ordinary course) that would
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect; and (x) other than routine claims for benefits
made in the ordinary course of the operation of the Company Employee Plans,
there are no pending, nor to the Company's knowledge, any threatened,
claims, investigations or causes of action with respect to any Company
Employee Plan or Affiliate Plan, whether maintained in the U.S. or a
Non-U.S. Plan, whether made by a participant or beneficiary of such a plan,
a governmental agency or otherwise, against the Company or any subsidiary
of the Company, any Company director, officer or employee, any Company
Employee Plan, or Affiliate Plan or any fiduciary of a Company Employee
Plan or, to the knowledge of the Company, Affiliate Plan that, in any case,
would reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(c) The Company has set forth in Section 2.11(c) of the Company
Disclosure Schedule the aggregate number of options to purchase Company
Common Stock outstanding as of the date hereof, and will provide to Parent,
as soon as practicable after the date hereof but no later than upon
delivery of the Employee Benefits Supplemental Disclosure Schedule, a true
and complete list of each current or former employee, consultant, officer
or director of the Company or any of its subsidiaries who, as of two days
prior to the date such list is delivered, which date shall be subsequent to
the date of this Agreement, holds (i) any option to purchase the Company
Common Stock, together with the number of shares of the Company Common
Stock subject to such option, the exercise price of such option (to the
extent determined as of the date hereof), whether such option is intended
to qualify as an incentive stock option within the meaning of Section
422(b) of the Code and the expiration date of such option; (ii) any shares
of Company Common Stock that, as of two days prior to the date such list is
delivered, which date shall be subsequent to the date of this Agreement,
were unvested or subject to a repurchase option, risk of forfeiture or
other condition providing that such shares may be forfeited or repurchased
by the Company upon any termination of the stockholder's employment,
directorship or other relationship with the Company or any of its
subsidiaries or which shares are subject to performance-based vesting; and
(iii) any other award or right (including share units), directly or
indirectly, to receive Company Common Stock (or any other unit of Company
equity) or any amount payable by reference to Company Common Stock (or any
other unit of Company equity), together with the number of shares of
Company Common Stock (or any other unit of Company equity) subject to such
right.
(d) To the extent not already included and so labeled in Section
2.11(a) or such other section of the Company Disclosure Schedule as is
specifically referenced in Section 2.11(d) of the Company Disclosure
Schedule, Section 2.11(d) of the Company Disclosure Schedule sets forth a
true and complete (i) list of all material outstanding agreements with any
consultants who provide services to the Company or any of its subsidiaries;
(ii) list of all material agreements with respect to the services of
independent contractors or leased employees who provide services to the
Company or any of its subsidiaries, whether or not they participate in any
of the Company Employee Plans; (iii) description of any situation in which
a material portion of the workforce of a component of the Company or its
subsidiaries, whether such component is a subsidiary, unit, work location,
line of business or otherwise, is composed of non common law employees,
whether consultants, independent contractors or otherwise, which
description shall include, if applicable, representative samples of
agreements with such non common law employees; and (iv) list of all
material worker council agreements of the Company or any of its
subsidiaries with or relating to its employees.
(e) Except as set forth in Section 2.11(e) of the Company
Disclosure Schedule, with respect to each Company Employee Plan or material
Affiliate Plan that is subject to Title IV of ERISA, since the date of the
most recent actuarial report prepared by each such plan's actuary with
respect to that plan's most recently completed fiscal year, nothing has
occurred that would materially adversely affect the funding status of such
Company Employee Plan that is not attributable to a decline in the market
value of the plan's assets or an increase in the plan's liabilities in the
ordinary course.
(f) Except as set forth in Section 2.11(f) of the Company
Disclosure Schedule or, with respect to Non-U.S. Plans, the Employee
Benefits Supplemental Disclosure Schedule, the consummation of the
transactions contemplated by this Agreement, either alone or in combination
with another event, will not (i) result in any payment (including, without
limitation, severance, golden parachute or bonus payments or otherwise)
becoming due pursuant to any Company Employee Plan to any current or former
director, officer, employee or consultant of the Company which either alone
or in the aggregate are material, (ii) result in any material increase in
the amount of compensation or benefits payable pursuant to any Company
Employee Plan in respect of any director, officer, employee or consultant
of the Company, or (iii) accelerate the vesting or timing of payment of any
benefits or compensation payable pursuant to any Company Employee Plan in
respect of any director, officer, employee or consultant of the Company.
(g) There are no complaints, charges or claims against the
Company or any of its subsidiaries pending or, to the knowledge of the
Company, threatened to be brought by or filed with any governmental
authority based on, arising out of, in connection with or otherwise
relating to the classification of any individual by the Company as an
independent contractor or "leased employee" (within the meaning of section
414(n) of the Code) rather than as an employee, and the Company neither
knows nor should the Company know of any conditions under which the Company
or any of its subsidiaries is reasonably likely to incur any such liability
that in each case would reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
(h) The Company shall indicate on Section 2.11(h) of the Company
Disclosure Schedule (i) with respect to each participant in any executive
severance plan or arrangement, whether such employee has entered into an
agreement or a provision of an agreement prohibiting or restricting such
employee from accepting employment or otherwise engaging in activity that
is in competition with the business of the Company or its subsidiaries
(other than with respect to the use of confidential information or trade
secrets) after the termination of such individual's employment with the
Company (a "Non-Competition Agreement"); and (ii) a description of those
classes of employees that are required to execute a Non-Competition
Agreement.
(i) Section 2.11(i) of the Company Disclosure Schedule sets forth
the maximum amount of payments (including any gross-up benefits referred to
in the following sentence), for which the Company is reasonably expected to
be liable, as a result of the transactions contemplated by this Agreement,
under (i) any employment, severance or other agreements with consultants to
or employees or executives of the Company, (ii) any severance plans or
agreements (or sections of other plans or agreements that provide for
severance payments) with respect to executives of the Company, (iii) any
other Company Employee Plan, including, without limitation, cash out of
stock options and other equity-based compensation, accelerated or enhanced
payments for deferred compensation or retirement plans and payment of
performance bonuses, assuming, for purposes of this sentence, the
termination following the Merger of such consultant, employee or executive;
it being understood that the amounts set forth on Section 2.11(i) of the
Company Disclosure Schedule only include amounts that are payable,
increased or otherwise enhanced as a result of the transactions
contemplated by this Agreement. Other than as set forth on Section 2.11(i)
of the Company Disclosure Schedule, no employee is entitled to any benefits
that include a gross-up with respect to excise taxes pursuant to Section
280G of the Code.
SECTION 2.12. Employment and Labor Matters. Except as set forth
in Section 2.11(b) or Section 2.12 of the Company Disclosure Schedule or
the Company SEC Documents:
(a) Each of the Company and its subsidiaries is in compliance,
and has not failed to be in compliance as a result of which it would
reasonably be expected now or in the future to have liability, with all
applicable U.S. and non-U.S. laws, agreements and contracts relating to
employment practices, terms and conditions of employment, and the
employment of former, current, and prospective employees, independent
contractors and "leased employees" (within the meaning of Section 414(n) of
the Code) of the Company or any of its subsidiaries, including all such
U.S. and non-U.S. laws, agreements and contracts relating to wages, hours,
collective bargaining, employment discrimination, immigration, disability,
civil rights, human rights, fair labor standards, occupational safety and
health, workers' compensation, pay equity, wrongful discharge and violation
of the potential rights of such former, current, and prospective employees,
independent contractors and leased employees, and has timely prepared and
filed all appropriate forms (including Immigration and Naturalization
Service Form I-9) required by any relevant Governmental Authority, except
where the failure to be or have been in compliance would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(b) Neither the Company nor any of its subsidiaries is a party to
any material U.S. or non-U.S. collective bargaining agreement or other
labor union contract applicable to persons employed by the Company or its
subsidiaries, nor, to the knowledge of the Company, are there any
activities or proceedings of any labor union to organize any employees of
the Company or any of its subsidiaries.
(c) Neither the Company nor any of its subsidiaries is in breach
of any U.S. or non-U.S. collective bargaining agreement or labor union
contract, or has any knowledge of any strikes, slowdowns, work stoppages,
lockouts, or threats thereof, by or with respect to any employees of the
Company or any of its subsidiaries which breach, strike, slowdown, work
stoppage, lockout or threat would reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect.
SECTION 2.13. Registration Statement; Joint Proxy
Statement/Prospectus. (a) Subject to the accuracy of the representations of
Parent and Merger Sub in Section 3.13:
(i) the information supplied by the Company for inclusion in the
Registration Statement shall not at the time the Registration Statement is
declared effective by the SEC 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; and
(ii) the information supplied by the Company for inclusion or
incorporation by reference in the joint proxy statement/prospectus to be
sent to the stockholders of the Company in connection with the Company
Stockholders Meeting and to the stockholders of Parent in connection with
the Parent Stockholders Meeting (the Company Stockholders Meeting and the
Parent Stockholders Meeting together being referred to as the "Stockholders
Meetings"; and such joint proxy statement/prospectus as amended or
supplemented is referred to herein as the "Joint Proxy
Statement/Prospectus") will not, on the date the Joint Proxy
Statement/Prospectus (or any amendment thereof or supplement thereto) is
mailed to stockholders or at the respective times of the Stockholders
Meetings, contain any statement which, at such time and in light of the
circumstances under which it shall be made, is false or misleading with
respect to any material fact, or omit to state any material fact required
to be stated therein or necessary in order to make the statements made
therein not false or misleading or necessary to correct any statement in
any earlier written communication to stockholders with respect to the
solicitation of proxies for the Stockholders Meetings which has become
false or misleading.
(b) If at any time prior to the respective vote of stockholders
at the Stockholders Meetings, any event relating to the Company or any of
its respective affiliates, officers or directors is discovered by the
Company which is required to be set forth in an amendment to the
Registration Statement or a supplement to the Joint Proxy
Statement/Prospectus, the Company shall promptly inform Parent and Merger
Sub.
(c) The Joint Proxy Statement/Prospectus (to the extent it
relates to information supplied by the Company for inclusion or
incorporation by reference) shall comply in all material respects with the
requirements of all applicable laws, including the Securities Act and the
Exchange Act.
(d) Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to any information supplied by
Parent or Merger Sub or any third party that is contained or incorporated
by reference in, or furnished in connection with the preparation of, the
Joint Proxy Statement/Prospectus.
SECTION 2.14. Restrictions on Business Activities. Except for
this Agreement or as set forth in Section 2.14 of the Company Disclosure
Schedule or the Company SEC Documents, there is no agreement, judgment,
injunction, order or decree binding upon the Company or any of its
subsidiaries which has or would reasonably be expected to have the effect
of prohibiting or restricting the conduct of business by the Company or any
of its subsidiaries as currently conducted by the Company or such
subsidiary, or restricting any transactions (including payment of dividends
and distributions) between the Company and its subsidiaries, except for any
prohibition or restriction as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
SECTION 2.15. Title to Property. Except as set forth in Sections
2.15 and 2.19(b) of the Company Disclosure Schedule or the Company SEC
Documents, each of the Company and its subsidiaries has marketable title to
all of its owned real properties and other owned assets, free and clear of
all liens, charges and encumbrances, except for (i) statutory liens for
taxes that are not yet due and payable or are being contested in good
faith, (ii) statutory or common law liens in favor of carriers,
warehousemen, mechanics and materialmen, to secure claims for labor,
materials or supplies and other like liens and (iii) such liens or other
imperfections of title, if any, as do not materially interfere with the
present use of the assets affected thereby or which would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect, and except for liens which secure indebtedness reflected in the
2001 Company Balance Sheet; and, to the knowledge of the Company, all
leases pursuant to which the Company or any of its subsidiaries lease from
others material amounts of real or personal property are in good standing,
valid and effective in accordance with their respective terms, and there is
not, to the knowledge of the Company, under any of such leases, any
existing material default or event of default (or event which with notice
or lapse of time, or both, would constitute a material default or event of
default), except where the lack of such good standing, validity and
effectiveness or the existence of such default or event of default would
not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
SECTION 2.16. Taxes. Except as set forth in Section 2.16 of the
Company Disclosure Schedule or as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect:
(a) The Company and each of its subsidiaries has timely and
accurately filed, or caused to be timely and accurately filed, all Tax
Returns required to be filed by it, and has paid, collected or withheld, or
caused to be paid, collected or withheld, all amounts of Taxes required to
be paid, collected or withheld, other than such Taxes for which adequate
reserves in the 2001 Company Balance Sheet have been established or which
are being contested in good faith. There are no claims or assessments
pending against the Company or any of its subsidiaries for any alleged
deficiency in any Tax, there are no pending or, to the knowledge of the
Company, threatened audits or investigations for or relating to any
liability in respect of any Taxes, and the Company has not been notified in
writing of any proposed Tax claims or assessments against the Company or
any of its subsidiaries (other than in each case, claims or assessments for
which adequate reserves in the 2001 Company Balance Sheet have been
established or which are being contested in good faith). Neither the
Company nor any of its subsidiaries has executed any waivers or extensions
of any applicable statute of limitations to assess any amount of Taxes.
There are no outstanding requests by the Company or any of its subsidiaries
for any extension of time within which to file any Tax Return or within
which to pay any amounts of Taxes shown to be due on any Tax Return. To the
best knowledge of the Company, there are no liens for amounts of Taxes on
the assets of the Company or any of its subsidiaries except for statutory
liens for current Taxes not yet due and payable. There are no outstanding
powers of attorney enabling any party to represent the Company or any of
its subsidiaries with respect to Taxes.
Other than with respect to the Company and its subsidiaries,
neither the Company nor any of its subsidiaries is liable for Taxes of any
other person, or is currently under any contractual obligation to indemnify
any person with respect to any amounts of Taxes (except for customary
agreements to indemnify lenders or security holders in respect of Taxes and
except for provisions in agreements for the divestiture of subsidiaries,
assets or business lines of the Company or its subsidiaries that require
the Company or its subsidiaries (as applicable) to indemnify a purchaser or
purchaser group for amounts of Taxes of the Company or its subsidiaries (as
applicable) in the nature of sales or similar Taxes incurred as a
consequence of any such divestiture transactions), or is a party to any tax
sharing agreement or any other agreement providing for payments by the
Company or any of its subsidiaries with respect to any amounts of Taxes.
(b) For purposes of this Agreement, the term "Tax" shall mean any
United States federal, foreign, national, state, provincial, local or other
jurisdictional income, gross receipts, property, sales, use, license,
excise, franchise, employment, payroll, estimated, alternative, or add-on
minimum, ad valorem, transfer or excise tax, or any other tax, custom,
duty, governmental fee or other like assessment or charge imposed by any
Governmental Authority, together with any interest or penalty imposed
thereon. The term "Tax Return" shall mean a report, return or other
information (including any attached schedules or any amendments to such
report, return or other information) required to be supplied to or filed
with a Governmental Authority with respect to any Tax, including an
information return, claim for refund, amended return or declaration or
estimated Tax.
SECTION 2.17. Environmental Matters. (a) Except as set forth in
Section 2.17(a) to the Company Disclosure Schedule or in the Company SEC
Documents or as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, the operations and properties
of the Company and its subsidiaries are in compliance with the
Environmental Laws, which compliance includes the possession by the Company
and its subsidiaries of all permits and governmental authorizations
required under applicable Environmental Laws, and compliance with the terms
and conditions thereof.
(b) Except as set forth in Section 2.17(b) of the Company
Disclosure Schedule or the Company SEC Documents or as would not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect, there are no Environmental Claims, including claims based on
"arranger liability," pending or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries or, to the
knowledge of the Company, against any person or entity whose liability for
any Environmental Claim the Company or any of its subsidiaries has retained
or assumed.
(c) Except as set forth on Section 2.17(c) of the Company
Disclosure Schedule or in the Company SEC Documents, to the knowledge of
the Company, there are no past or present actions, circumstances,
conditions, events or incidents, including the release, emission,
discharge, presence or disposal of any Materials of Environmental Concern,
that are reasonably likely to form the basis of any Environmental Claim
against the Company or any of its subsidiaries or against any person or
entity whose liability for any Environmental Claim the Company or any of
its subsidiaries have retained or assumed, except for such Environmental
Claims that would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
(d) Except as would not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect or as set forth in
Section 2.17(d) of the Company Disclosure Schedule or the Company SEC
Documents, (i) to the knowledge of the Company, there are no off-site
locations where the Company or any of its subsidiaries has stored, disposed
or arranged for the disposal of Materials of Environmental Concern which
have been listed on the National Priority List, CERCLIS, or state Superfund
site list, and the Company and its subsidiaries have not been notified that
any of them is a potentially responsible party at any such location; and
(ii) there is no friable asbestos containing material contained in or
forming part of any building, building component, structure or office space
owned, leased or operated by the Company or any of its subsidiaries.
(e) Except as would not reasonably be expected to have a Material
Adverse Effect, the Company is not reasonably expected to have liability
for Environmental Claims beyond the reserve recorded on the 2001 Company
Balance Sheet for environmental matters.
(f) For purposes of this Agreement:
(i) "Environmental Claim" means any claim, action, cause of
action, investigation or notice (in each case in writing or, if not in
writing, to the knowledge of the Company) by any person or entity alleging
potential liability (including potential liability for investigatory costs,
cleanup costs, governmental response costs, natural resources damages,
property damages, personal injuries, or penalties) arising out of, based on
or resulting from the presence, or release or threat of release into the
environment, of any Material of Environmental Concern at any location,
whether or not owned or operated by Parent or the Company or any of their
respective subsidiaries.
(ii) "Environmental Laws" means, as they exist on the date
hereof, all applicable United States federal, state, local and non-United
States laws, regulations, codes and ordinances, relating to pollution or
protection of human health (as relating to the environment or the
workplace) and the environment (including ambient air, surface water,
ground water, land surface or sub-surface strata), including laws and
regulations relating to emissions, discharges, releases or threatened
releases of Materials of Environmental Concern, or otherwise relating to
the use, treatment, storage, disposal, transport or handling of Materials
of Environmental Concern, including, but not limited to Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"),
42 U.S.C. ss. 9601 et seq., Resource Conservation and Recovery Act ("RCRA"),
42 U.S.C. ss. 6901 et seq., Toxic Substances Control Act ("TSCA"), 15
U.S.C. ss. 2601 et seq., Occupational Safety and Health Act ("OSHA"), 29
U.S.C. ss. 651 et seq., the Clean Air Act, 42 U.S.C. ss. 7401 et
seq., the Clean Water Act, 33 U.S.C. ss. 1251 et seq., each as may have been
amended or supplemented, and any applicable environmental transfer statutes
or laws.
(iii) "Materials of Environmental Concern" means chemicals,
pollutants, contaminants, hazardous materials, hazardous substances and
hazardous wastes, medical waste, toxic substances, petroleum and petroleum
products and by-products, asbestos-containing materials, PCBs, and any
other chemicals, pollutants, substances or wastes, in each case regulated
under any Environmental Law.
SECTION 2.18. Brokers. There is no investment banker, broker,
finder or other intermediary, other than Credit Suisse First Boston (the
"Company Financial Advisor"), the fees and expenses of which will be paid
by the Company, that has been retained by or is authorized to act on behalf
of the Company or any of its affiliates who might be entitled to any fee or
commission in connection with the transactions contemplated by this
Agreement. The Company has heretofore furnished to Parent a complete and
correct copy of all agreements or other arrangements, whether written or
oral, between the Company and the Company Financial Advisor pursuant to
which the Company would have any obligation to such firm arising out of the
transactions contemplated by this Agreement.
SECTION 2.19. Intellectual Property. (a) As used herein, the term
"Intellectual Property Assets" shall mean all worldwide intellectual
property rights, including, without limitation, patents, trademarks,
service marks, copyrights, and registrations and applications therefor,
licenses, trade names, Internet domain names, know-how, trade secrets,
computer software programs and development tools and proprietary
information, technologies and processes, and all documentation and media
describing or relating to the above, in any format, whether hard copy or
machine-readable only. As used herein, "Company Intellectual Property
Assets" shall mean the Intellectual Property Assets used or owned by the
Company or any of its subsidiaries.
(b) Except as set forth in Section 2.19(b) of the Company
Disclosure Schedule or as would not reasonably be expected, individually or
in the aggregate to have a Material Adverse Effect, the Company and/or each
of its subsidiaries owns, or is licensed or otherwise possesses legally
enforceable rights to use, all of the Company Intellectual Property Assets
that are used in and are material to the business of the Company and its
subsidiaries as currently conducted, without infringing or violating the
rights of others.
(c) Except as set forth in Section 2.19(c) of the Company
Disclosure Schedule or as would not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect, no claims (i) are
currently pending or, to the knowledge of the Company, are threatened by
any person with respect to the Company Intellectual Property Assets, or
(ii) are, to the knowledge of the Company, currently pending or threatened
by any person with respect to the Intellectual Property Assets of a third
party (the "Third Party Intellectual Property Assets") to the extent
arising out of any use, reproduction or distribution of, or of products or
methods covered by, such Third Party Intellectual Property Assets by or
through the Company or any of its subsidiaries.
(d) Except as set forth in Section 2.19(d) of the Company
Disclosure Schedule, to the Company's knowledge, there are no valid grounds
for any bona fide claim to the effect that the manufacture, offer for sale,
sale, licensing or use of any product, system or method either (i) now
used, offered for sale, sold or licensed or, (ii) to the Company's
knowledge as of the date hereof, scheduled for commercialization prior to
the first anniversary of the date hereof, in each case by or for the
Company or any of its subsidiaries, infringes on any Third Party
Intellectual Property Assets.
(e) Section 2.19(e) of the Company Disclosure Schedule sets forth
a list of (i) to the Company's knowledge, all patents and patent
applications owned by the Company and/or each of its subsidiaries
worldwide; (ii) to the Company's knowledge, all trademark and service mark
registrations and all trademark and service mark applications; (iii) all
material common law trademarks, material trade dress and material slogans;
(iv) to the Company's knowledge, all material trade names owned by the
Company and/or each of its subsidiaries worldwide; (v) to the Company's
knowledge, all copyright registrations and copyright applications owned by
the Company and/or each of its subsidiaries worldwide; (vi) to the
Company's knowledge, all Internet domain name registrations owned by the
Company and/or its subsidiaries worldwide; and (vii) to the Company's
knowledge, all material licenses owned by the Company and/or each of its
subsidiaries in which the Company and/or each of its subsidiaries is (A) a
licensor with respect to any of the patents, trademarks, service marks,
trade names, Internet domain names, or copyrights listed in Section 2.19(e)
of the Company Disclosure Schedule which are material to the Company or (B)
a licensee of any other person's patents, trade names, trademarks, service
marks or copyrights material to the Company except for any licenses of
software programs that are commercially available "off the shelf." Except
as set forth in Section 2.19(e)(viii) of the Company Disclosure Schedule,
the Company and/or each of its subsidiaries has made all necessary filings
and recordations to protect and maintain its interest in the patents,
patent applications, trademark and service mark registrations, trademark
and service mark applications, Internet domain names, copyright
registrations and copyright applications and licenses set forth in Section
2.19(e) of the Company Disclosure Schedule, except where the failure to so
protect or maintain would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect. The Company may
supplement Section 2.19(e) of the Company Disclosure Schedule during the 30
days following the date of this Agreement, provided that there shall not be
omitted from Section 2.19(e) of the Company Disclosure Schedule any Company
Intellectual Property Assets, where the failure of the Company to own any
such assets would, individually or in the aggregate, have a Material
Adverse Effect.
(f) To the knowledge of the Company, except as set forth in
Section 2.19(e)(viii) or 2.19(f) of the Company Disclosure Schedule or the
Company SEC Documents: (i) each patent, trademark or service mark
registration and copyright registration of the Company and/or each of its
subsidiaries is valid and subsisting and (ii) each material license of the
Company Intellectual Property Assets listed on Section 2.19(e) of the
Company Disclosure Schedule is valid, subsisting and enforceable.
(g) Except as set forth in Section 2.19(g) of the Company
Disclosure Schedule, to the Company's knowledge, there is no unauthorized
use, infringement or misappropriation of any of the Company's Intellectual
Property Assets by any third party, including any employee, former
employee, independent contractor or consultant of the Company or any of its
subsidiaries.
SECTION 2.20. Interested Party Transactions. Except as set forth
in Section 2.20 of the Company Disclosure Schedule or the Company SEC
Documents or for events as to which the amounts involved do not, in the
aggregate, exceed $200,000, since the Company's proxy statement dated March
30, 2001, no event has occurred that would be required to be reported as a
Certain Relationship and Related Transaction pursuant to Item 404 of
Regulation S-K promulgated by the SEC.
SECTION 2.21. Insurance. Except as set forth in Section 2.21 of
the Company Disclosure Schedule or the Company SEC Documents, all material
fire and casualty, general liability, business interruption, product
liability and sprinkler and water damage insurance policies maintained by
the Company or any of its subsidiaries are with reputable insurance
carriers and, in character and amount, insure against such risks as are
customarily insured against by companies in the same or similar businesses
and having a similar size and scope of operations as the Company, except as
would not reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect. A list of all such policies will be provided to
Parent as a supplement to the Company Disclosure Schedule as soon as
practicable, but in no event later than thirty (30) days after the date
hereof.
SECTION 2.22. Products; Product Liability and Recalls. (a) As of
the date of this Agreement, the Company has a proven process of wafer fab
for a 200 million cell trench power MOSFET and has delivered the same to
customers for sampling.
(b) Except as set forth in Section 2.22(b) of the Company
Disclosure Schedule or the Company SEC Documents, to the Company's
knowledge, there is no claim, pending or threatened, against the Company or
any of its subsidiaries for injury to person or property of employees or
any third parties suffered as a result of the sale of any product or
performance of any service by the Company or any of its subsidiaries,
including claims arising out of the defective or unsafe nature of its
products or services, which would reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect.
(c) Except as set forth in Section 2.22(c) of the Company
Disclosure Schedule or the Company SEC Documents, there is no pending or,
to the knowledge of the Company, threatened recall or investigation of any
product sold by the Company, which recall or investigation would reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect.
(d) All of the test results or other information submitted in the
past five years by the Company to any Governmental Authority or independent
testing agency for the rating or certification of any product or facility
were, to the knowledge of the Company at the time of such submission, true
and correct in all material respects.
SECTION 2.23. Opinion of Financial Advisor. The Board of
Directors of the Company has been advised by the Company Financial Advisor
to the effect that in its opinion, as of the date of such opinion, which
date shall be within 2 business days of the date of this Agreement, the
Exchange Ratio is fair to the holders of Shares from a financial point of
view.
SECTION 2.24. Tax Treatment. The Company has not taken or agreed
to take any action or failed to take any action, nor is the Company aware
of any facts or circumstances, that would prevent the Merger from
qualifying as a reorganization within the meaning of section 368(a) of the
Code.
SECTION 2.25. Supplements to the Company Disclosure Schedule. No
disclosure which will be made on any supplements to the Company Disclosure
Schedule will be of a matter which would be reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
-------------------------------------------------------
Parent and Merger Sub hereby, jointly and severally, represent
and warrant to the Company as follows:
SECTION 3.01. Organization and Qualification; Subsidiaries. (a)
Each of Parent and Merger Sub is an entity duly organized, validly existing
and (to the extent the concept of good standing exists in the applicable
jurisdiction) in good standing under the laws of the jurisdiction of its
organization and has the requisite corporate or other power and authority
necessary to own, lease or operate the properties it owns, leases or
operates and to carry on its business as it is now being conducted, except
where the failure to be so organized, existing and in good standing or to
have such power or authority would not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect. Each of Parent and
Merger Sub is duly qualified or licensed as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character
of the properties owned, leased or operated by it or the nature of its
business activities makes such qualification or licensing necessary, except
for such failures to be so duly qualified or licensed and in good standing
that would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(b) Each "significant subsidiary," as defined in Regulation S-X,
of Parent (substituting for this purpose a 5% threshold for the 10%
threshold appearing therein; the "Parent Significant Subsidiaries") is an
entity duly organized, validly existing and (to the extent the concept of
good standing exists in the applicable jurisdiction) in good standing under
the laws of the jurisdiction of its organization, and has the requisite
corporate or other power and authority necessary to own, lease or operate
the properties it owns, leases or operates and to carry on its business as
it is now being conducted, except where the failure to be so organized,
existing and in good standing or to have such power or authority would not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect. Each Parent Significant Subsidiary is an entity
duly qualified or licensed as a foreign corporation to do business and is
in good standing in each jurisdiction where the character of the properties
owned, leased or operated by it or the nature of its business activities
makes such qualification or licensing necessary, except where such failure
to be so duly qualified or licensed and in good standing would not
reasonably be expected to have a Material Adverse Effect. Except as set
forth in Section 3.01 of the written disclosure schedule previously
delivered by Parent to the Company (the "Parent Disclosure Schedule"), all
of Parent's significant subsidiaries and their respective jurisdictions of
organization are included in the subsidiary list contained in Parent's
Annual Report on Form 10-K for the fiscal year ended December 31, 2000 (the
"Parent 2000 Form 10-K").
SECTION 3.02. Certificate of Incorporation and By-laws. Parent
and Merger Sub have heretofore made available to the Company a complete and
correct copy of each of its Restated Certificate of Incorporation and
By-laws as amended to date (the "Parent Charter Documents"), and will make
available to the Company, as promptly as practicable, the Certificate of
Incorporation and By-laws (or equivalent organizational documents) of each
Parent Significant Subsidiary (the "Parent Subsidiary Documents")
reasonably requested by the Company. All such Parent Charter Documents and
Parent Subsidiary Documents are in full force and effect, except in the
case of Parent Subsidiary Documents where the failure to be in full force
and effect would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect. Except as would not
reasonably be expected materially to interfere with its operations, neither
Parent, Merger Sub nor any Parent Significant Subsidiary is in violation of
any of the provisions of its Certificate of Incorporation or By-laws or
equivalent organizational documents.
SECTION 3.03. Capitalization. (a) The authorized capital stock of
Parent consists of 150,000,000 shares of Parent Common Stock, 20,000,000
shares of Parent's Class B convertible common stock, par value $0.10 per
share (the "Parent Class B Stock") and 1,000,000 shares of preferred stock,
par value $1.00 per share ("Parent Preferred Stock"). As of July 27, 2001
(i) 122,432,672 shares of Parent Common Stock were issued and outstanding,
all of which are duly authorized, validly issued, fully paid and
non-assessable, and none of which have been issued in violation of
preemptive or similar rights, (ii) 15,506,634 shares of Parent Class B
Stock were issued and outstanding, all of which are duly authorized,
validly issued, fully paid and non-assessable, and none of which have been
issued in violation of preemptive or similar rights, (iii) no shares of
Parent Preferred Stock were issued and outstanding; (iv) 5,139,543 shares
of Parent Common Stock were issuable upon conversion of the outstanding
shares of Parent Class B Common Stock; (v) 9,717,724 shares of Parent
Common Stock were issuable upon conversion of Parent's Liquid Yield Option
Notes (LYONs); and (v) shares of Parent Common Stock were issuable upon
exercise of stock options issued under Parent's stock option plans.
(b) Except (i) as set forth in Section 3.03(a), (ii) for changes
since July 27, 2001 resulting from the exercise of stock options, (iii) for
securities of Parent or its subsidiaries convertible into or exchangeable
for shares of capital stock or voting securities of Parent set forth in the
Parent SEC Documents and the conversion or exchange thereof, (iv) for other
rights to acquire immaterial (individually or in the aggregate) amounts of
Parent Common Stock and changes resulting from the exercise thereof, (v)
for changes resulting from the grant of stock based compensation to
directors or employees or (vi) for changes resulting from the issuance of
stock or other securities in connection with a merger or other acquisition
or business combination, an underwritten public offering or an offering
pursuant to Rule 144A under the Securities Act approved by Parent's Board
of Directors and undertaken in compliance with Section 4.03(b), as
applicable, there are no outstanding (x) shares of capital stock or voting
securities of Parent, (y) securities of Parent convertible into or
exchangeable for shares of capital stock or voting securities of Parent or
(z) options, warrants or other rights agreements, arrangements or
commitments of any character, including any stock purchase plan, binding on
Parent, to acquire from Parent or other obligations of Parent to issue, any
capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of Parent. Except as
set forth in the Parent SEC Documents (as defined in Section 3.06(a)),
there are no outstanding obligations, contingent or otherwise, of Parent or
any of its subsidiaries to repurchase, redeem or otherwise acquire any of
the Parent Common Stock or the capital stock of any subsidiary.
(c) The Parent Common Stock to be delivered as Merger
Consideration has been duly authorized and, when issued and delivered in
accordance with the terms of this Agreement, will have been validly issued
and will be fully paid and nonassessable, and the issuance thereof is not
subject to any preemptive or other similar right.
SECTION 3.04. Authority Relative to this Agreement. (a) Parent
and Merger Sub have all necessary corporate power and authority to execute
and deliver this Agreement and to perform their obligations hereunder and
to consummate the transactions contemplated hereby, subject to the approval
of the Parent Stockholders Meeting Proposals. The execution, delivery and
performance by Parent and Merger Sub of this Agreement and the consummation
by Parent and Merger Sub of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of Parent or Merger Sub are necessary to
authorize this Agreement or to consummate the transactions so contemplated
(other than the approval of the Parent Stockholders Meeting Proposals by a
majority of the outstanding voting power of Parent in accordance with the
DGCL, the Parent Charter Documents and the rules of the NYSE). This
Agreement has been duly and validly executed and delivered by Parent and
Merger Sub and, assuming the due authorization, execution and delivery by
the Company of this Agreement, constitutes a legal, valid and binding
obligation of each of Parent and Merger Sub enforceable against each of
them in accordance with its terms, subject to any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors' rights generally or to general principles of
equity.
(b) At a meeting duly called and held, or by written consent in
lieu of meeting, the respective Boards of Directors of Parent and Merger
Sub have (i) determined that this Agreement, the Merger and the other
transactions contemplated hereby are fair to and in the best interests of
Parent, Merger Sub and Parent's stockholders, (ii) approved this Agreement
and the transactions contemplated hereby, (iii) approved the Parent
Stockholder Meeting Proposals and (iv) recommended approval of the Parent
Stockholder Meeting Proposals by the stockholders of Parent at the Parent
Stockholders Meeting.
SECTION 3.05. Material Contracts; No Conflicts; Required Filings
and Consents. (a) Except as set forth in Section 3.05(a) of the Parent
Disclosure Schedule, the Parent has filed or incorporated by reference as
an exhibit to the Parent SEC Documents all agreements, contracts,
instruments, indentures, mortgages, security agreements, guaranties and
other documents required to be filed as exhibits pursuant to Items
601(b)(4) and 601(b)(10) of Regulation S-K (without regard to the exclusion
set forth in Item 601(b)(4)(iii)(A)).
(b) The execution and delivery of this Agreement by Parent and
Merger Sub do not, and the performance of this Agreement by Parent and
Merger Sub will not (i) conflict with or violate the Parent Charter
Documents, (ii) assuming compliance with the matters referred to in Section
3.05(c), conflict with or violate the Parent Subsidiary Documents or any
law, rule, regulation, order, judgment or decree applicable to Parent or
any of its subsidiaries or by which its or any of their respective
properties is bound, or (iii) result in any breach of or constitute a
default (or an event that with notice or lapse of time or both would become
a default) under, or impair Parent's or any of its subsidiaries' rights or
alter the rights or obligations of any third party under, or give to others
any rights of, or cause any, termination, amendment, redemption,
acceleration or cancellation of, or result in the creation of a lien or
encumbrance on (including a right to purchase) any of the properties or
assets of Parent or any of its subsidiaries pursuant to, any note, bond,
mortgage, indenture, credit facility, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which Parent or any
of its subsidiaries is a party or by which Parent or any of its
subsidiaries or its or any of their respective properties is bound, except,
in the case of clause (ii) or (iii), for any such conflicts, violations,
breaches, defaults or other occurrences that would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect.
(c) The execution and delivery of this Agreement by Parent and
Merger Sub do not, and the performance of this Agreement by Parent and
Merger Sub will not, require Parent, Merger Sub or any their subsidiaries
to make or seek any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Authority, except (i) the
filing of a Certificate of Merger with respect to the Merger with the
Secretary of State of Delaware; (ii) for applicable requirements, if any of
the Securities Act, the Exchange Act, state securities laws, the HSR Act,
and the NYSE; Non-U.S. Monopoly Laws; Environmental, Health and Safety
Transfer Laws; and the filing and recordation of appropriate merger or
other documents as required by the DGCL; (iii) where the failure to obtain
such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not prevent or materially delay
consummation of the Merger, or otherwise prevent or materially delay Parent
and Merger Sub from performing their respective material obligations under
this Agreement, or would not otherwise reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect; or (iii) as to
which any necessary consents, approvals, authorizations, permits, filings
or notifications have heretofore been obtained or filed, as the case may
be, by Parent and Merger Sub.
SECTION 3.06. Compliance; Permits. (a) Except as set forth in the
reports, schedules, forms, statements, registration statements, proxy
statements and other documents (the "Parent SEC Documents") filed by the
Parent with the SEC since December 31, 2000 and prior to the date of this
Agreement, including those incorporated therein by reference and not
superseded by other Parent SEC Documents, neither Parent nor any of its
subsidiaries is in default or violation of, (i) any law, rule, regulation,
order, judgment or decree applicable to Parent or any of its subsidiaries
or by which its or any of their respective properties is bound or (ii) any
note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which Parent or any
of its subsidiaries is a party or by which Parent or any of its
subsidiaries or its or any of their respective properties is bound, except
for any such conflicts, defaults or violations which would not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect.
No investigation by any Governmental Authority with respect to
Parent or any of its subsidiaries is pending or, to Parent's knowledge,
threatened, except for investigations which, if they resulted in action
being taken against Parent, would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(b) Except as set forth in the Parent SEC Documents, Parent and
its subsidiaries hold all permits, licenses, easements, variances,
exemptions, consents, certificates, orders and approvals from governmental
authorities which are material to the operation of the businesses of Parent
and its subsidiaries, taken as a whole, as it is now being conducted
(collectively, the "Parent Permits"), except where the failure to hold such
Parent Permits would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect. Parent and its subsidiaries
are in compliance with the terms of the Parent Permits, except as described
in the Parent SEC Documents or where the failure to so comply would not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
SECTION 3.07. SEC Filings; Financial Statements. (a) Parent has
filed all reports, schedules, forms, statements and other documents
(including all exhibits thereto) required to be filed by it with the SEC
since December 31, 1998 (the "Post-1998 Parent SEC Documents"). Except as
set forth in the Parent SEC Documents, the Post-1998 Parent SEC Documents
(i) were prepared in all material respects in accordance with the
applicable requirements of the Securities Act or the Exchange Act, as the
case may be, and (ii) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the
date of such filing) 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. Except as set forth in Section
3.07 of the Parent Disclosure Schedule, none of the Parent's subsidiaries
is required to file with the SEC periodic reports pursuant to the Exchange
Act.
(b) Each of the consolidated financial statements (including, in
each case, any related notes thereto) contained in the Post-1998 Parent SEC
Documents was prepared in accordance with GAAP applied on a consistent
basis throughout the periods involved (except as may be indicated in the
notes thereto or in the Post-1998 Parent SEC Documents), and fairly
presents in all material respects, the consolidated financial position of
Parent and its subsidiaries as at the respective dates thereof and the
consolidated results of its operations and cash flows for the periods
indicated, except that the unaudited interim financial statements (i)
should be read in conjunction with the Parent's consolidated financial
statements contained in the Parent 2000 Form 10-K, and (ii) were or are
subject to normal and recurring year end adjustments which were not or are
not expected to be material in amount. The fact that Parent amends any of
the Post-1998 Parent SEC Documents in response to comments received from
the staff of the SEC upon its review of the Joint Proxy
Statement/Prospectus shall not, in and of itself and without regard to the
substance of any such amendment, be deemed prima facie or conclusive
evidence that the representation and warranty contained in this Section
3.07(b) is not true and correct.
(c) The projections of the Parent revenues and net income for the
calendar quarters ended September 30, 2001 and December 31, 2001,
previously delivered to the Company, were prepared in good faith and, to
the Parent's knowledge, are reasonable as of the date hereof, except as
they may be affected by conditions in the semiconductor industry generally
or the discrete electronics component industry generally, the effects of
the announcement of the transactions contemplated by this Agreement
(including, without limitation, personnel changes and any disruption of
customer, supplier or employee relationships), or changes in economic,
regulatory or political conditions generally or in any region in the world.
SECTION 3.08. Absence of Certain Changes or Events. Except as set
forth in the Parent SEC Documents or as contemplated by this Agreement,
since December 31, 2000, Parent has conducted its business in the ordinary
course and there has not occurred: (i) any changes, effects or
circumstances constituting, or which would reasonably be expected to
constitute, individually or in the aggregate, a Material Adverse Effect;
(ii) any amendments or changes in the Parent Charter Documents, except to
increase the authorized capital of Parent; (iii) any damage to, destruction
or loss of any asset of Parent (not covered by insurance) that would
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect; (iv) any material change by Parent in its
accounting methods, principles or practices (other than as required by GAAP
subsequent to the date hereof); or (v) other than in the ordinary course of
business, any sale of a material amount of assets of Parent.
SECTION 3.09. No Undisclosed Liabilities. Except as set forth in
the Parent SEC Documents, neither Parent nor any of its subsidiaries has
any liabilities (absolute, accrued, contingent or otherwise), except
liabilities (a) in the aggregate adequately provided for in Parent's
unaudited balance sheet (including any related notes thereto) as of March
31, 2001 included in Parent's Quarterly Report on Form 10-Q for the fiscal
period ended March 31, 2001 (the "2001 Parent Balance Sheet"), (b) incurred
in the ordinary course of business and not required under GAAP to be
reflected on the 2001 Parent Balance Sheet, (c) incurred since March 31,
2001 in the ordinary course of business, (d) incurred in connection with
this Agreement or the Merger or the other transactions contemplated hereby,
or (e) which would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
SECTION 3.10. Absence of Litigation. Except as set forth in the
Parent SEC Documents or arising out of the transactions contemplated by
this Agreement, there are no claims, actions, suits, proceedings or
investigations pending or, to the knowledge of Parent, threatened against
Parent or any of its subsidiaries, or any properties or assets of Parent or
any of its subsidiaries, before any court, arbitrator or Governmental
Authority, that would reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
SECTION 3.11. Employee Benefit Plans; Employment Agreements. (a)
"Parent Employee Plans" shall mean all "employee pension benefit plans" (as
defined in Section 3(2) of ERISA), all "employee welfare benefit plans" (as
defined in Section 3(1) of ERISA), all similar plans maintained outside the
United States and not required by applicable law (any non-U.S. Parent
Employee Plan not required by applicable law, a "Parent Non-U.S. Plan") and
all other bonus, stock option, stock purchase, incentive, deferred
compensation, supplemental retirement, severance and other similar fringe
or employee benefit plans, programs or arrangements (including those which
contain change of control provisions or pending change of control
provisions), and any employment, executive compensation or severance
agreements (including those which contain change of control provisions or
pending change of control provisions), whether maintained in the U.S. or a
Parent Non-U.S. Plan, written or otherwise, as amended, modified or
supplemented, maintained or contributed to by Parent or a subsidiary of
Parent for the benefit of, or relating to, any former or current employee,
officer or director (or any of their beneficiaries) of Parent or a
subsidiary of the Parent. The term "Parent Affiliate Plan" shall mean any
other such plan, program or arrangement with respect to which Parent or any
subsidiary of Parent has or would reasonably be expected to have any
material liability, either as a member of a controlled group of
corporations or trades or businesses, as defined under section 414 of the
Code and comparable provisions of ERISA, or by contractual arrangement.
(b) Except as set forth in Section 3.11(b) of the Parent
Disclosure Schedule or as disclosed in the Post-1998 Parent SEC Documents
(i) none of the Parent Employee Plans or Parent Affiliate Plans is a
"multiemployer plan" as such term is defined in Section 3(37) of ERISA and
no Parent Non-U.S. Plan is a multiemployer plan and no Parent Employee Plan
or Parent Affiliate Plan has incurred any withdrawal liability that remains
unsatisfied that would reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect; (ii) neither Parent nor any
of its subsidiaries, any of their respective executives nor, to the
knowledge of Parent, any other party in interest or disqualified person (as
defined in Section 3(14) of ERISA and Section 4975 of the Code) has engaged
in a transaction with respect to any Parent Employee Plan or Parent
Affiliate Plan which would reasonably be expected to subject Parent or any
subsidiary, directly or indirectly, to a tax, penalty or other liability
for prohibited transactions under ERISA or Section 4975 of the Code that
would reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect; (iii) neither Parent or any of its subsidiaries,
nor any executive of Parent or one of its subsidiaries as fiduciary of the
Parent Employee Plans or to the knowledge of Parent any other fiduciary of
any Parent Employee Plan has breached any of the responsibilities or
obligations imposed upon fiduciaries under Title I of ERISA and that would
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect; (iv) all Parent Employee Plans, and to the
knowledge of Parent, all Parent Affiliate Plans have been established and
maintained in accordance with their terms and have been operated in
compliance in all respects with the requirements of applicable law,
including all filing requirements with the Department of Labor except for
such failure as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect; (v) each Parent Employee Plan
which is intended to be qualified under Section 401(a) of the Code is the
subject of a favorable determination letter from the IRS; (vi) all
contributions required to be made with respect to any Parent Employee Plan
(whether pursuant to the terms of such plan, Section 412 of the Code, any
collective bargaining agreement, or otherwise) have been made on or before
their due dates (including any extensions thereof) except to the extent any
failure to have made such a contribution on or before its due date could
not reasonably be expected to result in a current or future liability that
would reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect; (vii) with respect to each Parent Employee Plan
and each Parent Affiliate Plan, no "reportable event" within the meaning of
Section 4043 of ERISA (excluding any such event for which the 30-day notice
requirement has been waived under the regulations to Section 4043 of ERISA)
has occurred with respect to which Parent or one of its subsidiaries has
any material outstanding liability that would reasonably be expected to
have a Material Adverse Effect, and no Parent action has occurred that
resulted or is reasonably likely to result in any adverse liability for any
Parent Non-U.S. Plan that, in any case, reasonably would be expected,
individually or in the aggregate, to have a Material Adverse Effect; (viii)
none among Parent or any subsidiary thereof has incurred (or would
reasonably be expected to incur) any liability that remains unsatisfied, or
reasonably expects to incur any liability, under Title IV of ERISA with
respect to either a Parent Employee Plan or a Parent Affiliate Plan
including, without limitation, with respect to an event described in
Section 4062, 4063 or 4041 of ERISA (other than liability for premium
payments to the PBGC arising in the ordinary course) that would reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect; and (ix) other than routine claims for benefits made in the
ordinary course of the operation of the Parent Employee Plans, there are no
pending, nor to Parent's knowledge, any threatened, claims, investigations
or causes of action with respect to any Parent Employee Plan or Parent
Affiliate Plan, whether maintained in the U.S. or a Parent Non-U.S. Plan,
whether made by a participant or beneficiary of such a plan, a governmental
agency or otherwise, against Parent or any subsidiary of Parent, any Parent
director, officer or employee, any Parent Employee Plan, or Parent
Affiliate Plan or any fiduciary of a Parent Employee Plan or, to the
knowledge of Parent, Parent Affiliate Plan that, in any case, would
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(c) There are no complaints, charges or claims against Parent or
any of its subsidiaries pending or, to the knowledge of Parent, threatened
to be brought by or filed with any governmental authority based on, arising
out of, in connection with or otherwise relating to the classification of
any individual by Parent as an independent contractor or "leased employee"
(within the meaning of section 414(n) of the Code) rather than as an
employee, and Parent neither knows nor should Parent know of any conditions
under which Parent or any of its subsidiaries is reasonably likely to incur
any such liability that in each case would reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
SECTION 3.12. Employment and Labor Matters. Except as set forth
in Section 3.11(b) or Section 3.12 of the Parent Disclosure Schedule or the
Parent SEC Documents:
(a) Each of Parent and its subsidiaries is in compliance, and has
not failed to be in compliance as a result of which it would reasonably be
expected now or in the future to have liability, with all applicable U.S.
and non-U.S. laws, agreements and contracts relating to employment
practices, terms and conditions of employment, and the employment of
former, current, and prospective employees, independent contractors and
"leased employees" (within the meaning of Section 414(n) of the Code) of
Parent or any of its subsidiaries including all such U.S. and non-U.S.
laws, agreements and contracts relating to wages, hours, collective
bargaining, employment discrimination, immigration, disability, civil
rights, human rights, fair labor standards, occupational safety and health,
workers' compensation, pay equity, wrongful discharge and violation of the
potential rights of such former, current, and prospective employees,
independent contractors and leased employees, and has timely prepared and
filed all appropriate forms (including Immigration and Naturalization
Service Form I-9) required by any relevant Governmental Authority, except
where the failure to be or have been in compliance would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(b) Neither Parent nor any of its subsidiaries is in breach of
any U.S. or non-U.S. collective bargaining agreement or labor union
contract, or has any knowledge of any strikes, slowdowns, work stoppages,
lockouts, or threats thereof, by or with respect to any employees of Parent
or any of its subsidiaries which breach, strike, slowdown, work stoppage,
lockout or threat would reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
SECTION 3.13. Registration Statement; Joint Proxy
Statement/Prospectus. (a) Subject to the accuracy of the representations of
the Company in Section 2.13:
(i) the registration statement on Form S-4 (or on such other form
as shall be appropriate) (as it may be amended, the "Registration
Statement"), pursuant to which the Parent Common Stock to be delivered to
the stockholders of the Company by Parent in connection with the Merger
will be registered with the SEC, shall not, at the respective times the
Registration Statement (including any amendments or supplements thereto) is
filed with the SEC or declared effective by the SEC, 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; and
(ii) the information supplied by Parent or Merger Sub for
inclusion or incorporation by reference in the Joint Proxy
Statement/Prospectus will not, on the date the Joint Proxy
Statement/Prospectus (or any amendment thereof or supplement thereto) is
mailed to stockholders or, at the time of the Company Stockholder Meeting
or at the time of the meeting of the stockholders of Parent (the "Parent
Stockholders Meeting") to consider proposals for (1) an increase in the
authorized capital of Parent in an amount at least sufficient for (x) the
issuance of Parent Common Stock in the Merger as provided in this
Agreement, (y) the issuance of Parent Common Stock upon conversion of the
outstanding Company Convertible Notes (in accordance with the conversion
ratio as in effect on the date hereof) and (z) the issuance of Parent
Common Stock upon exercise of all outstanding Company Stock Options as
provided in this Agreement and (2) the authorization of the issuance of
Parent Common Stock as provided in the preceding clause (1) (such
proposals, the "Parent Stockholders Meeting Proposals"), contain any
statement which, at such time and in light of the circumstances under which
it shall be made, is false or misleading with respect to any material fact,
or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein not false or
misleading, or necessary to correct any statement in any earlier written
communication to stockholders with respect to the solicitation of proxies
for the respective Stockholders Meeting which has become false or
misleading.
(b) If at any time prior to the respective vote of stockholders
at the Stockholders Meetings, any event relating to Parent, Merger Sub or
any of their respective affiliates, officers or directors is discovered by
Parent or Merger Sub which should be set forth in an amendment to the
Registration Statement or a supplement to the Joint Proxy
Statement/Prospectus, Parent or Merger Sub shall promptly inform the
Company.
(c) The Registration Statement and the Joint Proxy
Statement/Prospectus shall comply in all material respects with the
requirements of all applicable laws, including the Securities Act and the
Exchange Act.
(d) Notwithstanding the foregoing, Parent and Merger Sub make no
representation or warranty with respect to any information supplied by the
Company or any third party that is contained or incorporated by reference
in, or furnished in connection with the preparation of, the Registration
Statement or the Joint Proxy Statement/Prospectus.
SECTION 3.14. Restrictions on Business Activities. Except for
this Agreement or as set forth in the Parent SEC Documents, there is no
agreement, judgment, injunction, order or decree binding upon Parent or any
of its subsidiaries which has or would reasonably be expected to have the
effect of prohibiting or restricting the conduct of business by Parent or
any of its subsidiaries as currently conducted by Parent or such
subsidiary, or restricting any transactions (including payment of dividends
and distributions) between Parent and its subsidiaries, except for any
prohibition or restriction as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
SECTION 3.15. Title to Property. Except as set forth in the
Parent SEC Documents, each of Parent and its subsidiaries has marketable
title to all of its owned real properties and other owned assets, free and
clear of all liens, charges and encumbrances, except for (i) statutory
liens for taxes that are not yet due and payable or are being contested in
good faith, (ii) statutory or common law liens in favor of carriers,
warehousemen, mechanics and materialmen, to secure claims for labor,
materials or supplies and other like liens and (iii) such liens or other
imperfections of title, if any, as do not materially interfere with the
present use of the assets affected thereby or which would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect, and except for liens which secure indebtedness reflected in the
2001 Parent Balance Sheet; and, to the knowledge of Parent, all leases
pursuant to which Parent or any of its subsidiaries lease from others
material amounts of real or personal property are in good standing, valid
and effective in accordance with their respective terms, and there is not,
to the knowledge of Parent, under any of such leases, any existing material
default or event of default (or event which with notice or lapse of time,
or both, would constitute a material default or event of default), except
where the lack of such good standing, validity and effectiveness or the
existence of such default or event of default would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect.
SECTION 3.16. Taxes. Except as set forth in Section 3.16 of the
Parent Disclosure Schedule or as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect:
Parent and each of its subsidiaries has timely and accurately
filed, or caused to be timely and accurately filed, all Tax Returns
required to be filed by it, and has paid, collected or withheld, or caused
to be paid, collected or withheld, all amounts of Taxes required to be
paid, collected or withheld, other than such Taxes for which adequate
reserves in the 2001 Parent Balance Sheet have been established or which
are being contested in good faith. There are no claims or assessments
pending against Parent or any of its subsidiaries for any alleged
deficiency in any Tax, there are no pending or, to the knowledge of Parent,
threatened audits or investigations for or relating to any liability in
respect of any Taxes, and Parent has not been notified in writing of any
proposed Tax claims or assessments against Parent or any of its
subsidiaries (other than in each case, claims or assessments for which
adequate reserves in the 2001 Parent Balance Sheet have been established or
which are being contested in good faith). Neither Parent nor any of its
subsidiaries has executed any waivers or extensions of any applicable
statute of limitations to assess any amount of Taxes. There are no
outstanding requests by Parent or any of its subsidiaries for any extension
of time within which to file any Tax Return or within which to pay any
amounts of Taxes shown to be due on any Tax Return. To the best knowledge
of Parent, there are no liens for amounts of Taxes on the assets of Parent
or any of its subsidiaries except for statutory liens for current Taxes not
yet due and payable.
Other than with respect to Parent and its subsidiaries, neither
Parent nor any of its subsidiaries is liable for Taxes of any other person,
or is currently under any contractual obligation to indemnify any person
with respect to any amounts of Taxes (except for customary agreements to
indemnify lenders or security holders in respect of Taxes and except for
provisions in agreements for the divestiture of subsidiaries, assets or
business lines of Parent or its subsidiaries, that require Parent or its
subsidiaries (as applicable) to indemnify a purchaser or purchaser group
for amounts of Taxes of Parent or its subsidiaries (as applicable) in the
nature of sales or similar Taxes incurred as a consequence of any such
divestiture transactions), or is a party to any tax sharing agreement or
any other agreement providing for payments by Parent or any of its
subsidiaries with respect to any amounts of Taxes.
SECTION 3.17. Environmental Matters. (a) Except as set forth in
Section 3.17(a) to the Parent Disclosure Schedule or in the Parent SEC
Documents or as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, the operations and properties
of Parent and its subsidiaries are in compliance with the Environmental
Laws, which compliance includes the possession by Parent and its
subsidiaries of all permits and governmental authorizations required under
applicable Environmental Laws, and compliance with the terms and conditions
thereof.
(b) Except as set forth in Section 3.17(b) of the Parent
Disclosure Schedule or the Parent SEC Documents or as would not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect, there are no Environmental Claims, including claims based on
"arranger liability," pending or, to the knowledge of Parent, threatened
against Parent or any of its subsidiaries or, to the knowledge of Parent,
against any person or entity whose liability for any Environmental Claim
has been retained or assumed by Parent or any of its subsidiaries.
(c) Except as set forth on Section 3.17(c) of the Parent
Disclosure Schedule or in the Parent SEC Documents, to the knowledge of
Parent, there are no past or present actions, circumstances, conditions,
events or incidents, including the release, emission, discharge, presence
or disposal of any Materials of Environmental Concern, that are reasonably
likely to form the basis of any Environmental Claim against Parent or any
of its subsidiaries or against any person or entity whose liability for any
Environmental Claim Parent or any of its subsidiaries have retained or
assumed, except for such Environmental Claims that would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect.
(d) Except as would not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect or as set forth in
Section 3.17(d) of the Parent Disclosure Schedule or the Parent SEC
Documents, (i) to the knowledge of Parent, there are no off-site locations
where the Company or any of its subsidiaries has stored, disposed or
arranged for the disposal of Materials of Environmental Concern which have
been listed on the National Priority List, CERCLIS, or state Superfund site
list, and Parent and its subsidiaries have not been notified that any of
them is a potentially responsible party at any such location; and (ii)
there is no friable asbestos containing material contained in or forming
part of any building, building component, structure or office space owned,
leased or operated by Parent or any of its subsidiaries.
SECTION 3.18. Brokers. There is no investment banker, broker,
finder or other intermediary that has been retained by or is authorized to
act on behalf of Parent or any of its affiliates who might be entitled to
any fee or commission from Parent or any of its affiliates in connection
with the transactions contemplated by this Agreement.
SECTION 3.19. Intellectual Property. (a) As used herein, "Parent
Intellectual Property Assets" shall mean the Intellectual Property Assets
used or owned by Parent or any of its subsidiaries.
(b) Except as would not reasonably be expected, individually or
in the aggregate to have a Material Adverse Effect, Parent and/or each of
its subsidiaries owns, or is licensed or otherwise possesses legally
enforceable rights to use, all of the Parent Intellectual Property Assets
that are used in and are material to the business of Parent and its
subsidiaries as currently conducted, without infringing or violating the
rights of others.
(c) Except as would not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect, no claims (i) are
currently pending or, to the knowledge of Parent are threatened by any
person with respect to the Parent Intellectual Property Assets, or (ii)
are, to the knowledge of Parent, currently pending or threatened by any
person with respect to Third Party Intellectual Property Assets to the
extent arising out of any use, reproduction or distribution of, or of
products or methods covered by, such Third Party Intellectual Property
Assets by or through Parent or any of its subsidiaries.
(d) Except as would not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect, to the knowledge of
Parent, there are no valid grounds for any bona fide claim to the effect
that the manufacture, offer for sale, sale, licensing or use of any
product, system or method either (i) now used, offered for sale, sold or
licensed or, (ii) to Parent's knowledge as of the date hereof, scheduled
for commercialization prior to the first anniversary of the date hereof, in
each case by or for Parent or any of its subsidiaries, infringes on any
Third Party Intellectual Property Assets.
(e) Parent and/or each of its subsidiaries has made all necessary
filings and recordations to protect and maintain its interest in the Parent
Intellectual Property Assets, except where the failure to so protect or
maintain would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
(f) To the knowledge of Parent, except as would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect: (i) each patent, trademark or service mark registration and
copyright registration of Parent and/or each of its subsidiaries is valid
and subsisting and (ii) each material license of the Parent Intellectual
Property Assets to a third party and each material license of Third Party
Intellectual Property Assets to Parent is valid, subsisting and
enforceable.
(g) To the knowledge of Parent, except as would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect, there is no unauthorized use, infringement or misappropriation of
any of Parent's Intellectual Property Assets by any third party, including
any employee, former employee, independent contractor or consultant of
Parent or any of its subsidiaries.
SECTION 3.20. Product Liability and Recalls. (a) Except as set
forth in the Parent SEC Documents, to Parent's knowledge, there is no
claim, pending or threatened, against Parent or any of its subsidiaries for
injury to person or property of employees or any third parties suffered as
a result of the sale of any product or performance of any service by Parent
or any of its subsidiaries, including claims arising out of the defective
or unsafe nature of its products or services, which would reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect.
(b) Except as set forth in the Parent SEC Documents, there is no
pending or, to the knowledge of Parent, threatened recall or investigation
of any product sold by Parent, which recall or investigation would
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(c) All of the test results or other information submitted in the
past five years by Parent to any Governmental Authority or independent
testing agency for the rating or certification of any product or facility
were, to the knowledge of Parent at the time of such submission, true and
correct in all material respects.
SECTION 3.21. Ownership of Parent and Merger Sub. Merger Sub is a
direct, wholly-owned subsidiary of Parent.
SECTION 3.22. No Prior Activities. (a) Merger Sub was formed
solely for the purpose of engaging in the transactions contemplated by this
Agreement.
(b) Except for obligations or liabilities incurred by Merger Sub
in connection with its incorporation or organization and the transactions
contemplated by this Agreement and except for this Agreement and any other
agreements or arrangements contemplated by this Agreement, Merger Sub has
not incurred, directly or indirectly, through any subsidiary or affiliate,
any obligations or liabilities or engaged in any business activities of any
type or kind whatsoever or entered into any agreements or arrangements with
any person.
SECTION 3.23. Ownership Interest in the Company. Other than by
reason of this Agreement or the transactions contemplated hereby, neither
Parent nor any of its affiliates is an "interested stockholder" of the
Company, as that term is defined in Section 203 of the DGCL.
SECTION 3.24. Tax Treatment. Neither Parent nor Merger Sub has
taken or agreed to take any action or failed to take any action, nor is
Parent or Merger Sub aware of any facts or circumstances, that would
prevent the Merger from qualifying as a reorganization within the meaning
of section 368(a) of the Code.
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE MERGER
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SECTION 4.01. Conduct of Business by the Company Pending the
Merger. The Company covenants and agrees that, during the period from the
date of this Agreement and continuing until the earlier of the termination
of this Agreement or the Effective Time, unless Parent shall otherwise
agree in writing, and except as set forth in Section 4.01 of the Company
Disclosure Schedule, or as required by law with prompt notification to
Parent, the Company shall conduct its business and shall cause the
businesses of its subsidiaries to be conducted only in, and the Company and
its subsidiaries shall not take any action except in, the ordinary course
of business and in a manner consistent with past practice; and the Company
shall use reasonable commercial efforts to preserve substantially intact
the business organization of the Company and its subsidiaries, to keep
available the services of the present officers, employees and consultants
of the Company and its subsidiaries and to preserve the present
relationships of the Company and its subsidiaries with customers, suppliers
and other persons with which the Company or any of its subsidiaries has
significant business relations. By way of amplification and not limitation,
except as contemplated by this Agreement, as set forth in Section 4.01 of
the Company Disclosure Schedule or as required by law with advance written
notification to Parent, neither the Company nor any of its subsidiaries
shall, during the period from the date of this Agreement and continuing
until the earlier of the termination of this Agreement or the Effective
Time, directly or indirectly do, or publicly propose to do, any of the
following without the prior written consent of Parent, which, in the case
of clauses (c), (d)(i) (but only in respect of cross-border dividends by a
subsidiary), (d)(iv), (e)(iv), (f), (h) or (i), will not be unreasonably
withheld or delayed:
(a) amend or otherwise change the Company Charter Documents;
(b) issue, sell, pledge, dispose of or encumber, or authorize the
issuance, sale, pledge, disposition or encumbrance of, any shares of
capital stock of any class, or any options, warrants, convertible
securities or other rights of any kind to acquire any shares of capital
stock, or any other ownership interest (including, without limitation, any
phantom interest) in the Company, any of its subsidiaries or affiliates
(except for the issuance of shares of Company Common Stock issuable
pursuant to Company Stock Options or Company Convertible Notes outstanding
on the date hereof, or the issuance by a wholly owned subsidiary of shares
of capital stock to its parent or for the issuance by a subsidiary of
directors qualifying shares as required by applicable law);
(c) sell, pledge, dispose of or encumber any assets of the
Company or any of its subsidiaries (except for (i) sales of assets in the
ordinary course of business and in a manner consistent with past practice,
(ii) dispositions of obsolete or worthless assets, and (iii) sales of
immaterial assets not in excess of $500,000 in the aggregate);
(d) (i) declare, set aside, make or pay any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of any of its capital stock, except that a wholly owned
subsidiary of the Company may declare and pay a dividend to its parent that
is not a cross-border dividend, (ii) split, combine or reclassify any of
its capital stock or issue or authorize or propose the issuance of any
other securities in respect of, in lieu of or in substitution for shares of
its capital stock, (iii) except (A) as required by the terms of any
security as in effect on the date hereof and set forth in Section 4.01 of
the Company Disclosure Schedule, (B) for the redemption of the Rights to
permit or facilitate the Merger and (C) to the extent necessary to effect
withholding to meet minimum tax withholding obligations in connection with
the exercise of any Company Stock Option, amend the terms or change the
period of exercisability of, purchase, repurchase, redeem or otherwise
acquire, or permit any subsidiary to amend the terms or change the period
of exercisability of, purchase, repurchase, redeem or otherwise acquire,
any of its securities or any securities of its subsidiaries, including,
without limitation, shares of Company Common Stock, or any option, warrant
or right, directly or indirectly, to acquire any such securities, or
propose to do any of the foregoing, or (iv) settle, pay or discharge any
claim, suit or other action brought or threatened against the Company with
respect to or arising out of a stockholder equity interest in the Company;
(e) (i) acquire (by merger, consolidation, or acquisition of
stock or assets) any corporation, partnership or other business
organization or division thereof other than those listed on Section 4.01 of
the Company Disclosure Schedule; (ii) incur any indebtedness for borrowed
money, except for (A) borrowings and reborrowings under the Company's or
any of its subsidiaries' existing committed or uncommitted credit
facilities listed on Section 4.01 of the Company Disclosure Schedule, as in
effect on the date of this Agreement, in the ordinary course of business
and (B) other borrowings not in excess of $1,000,000 in the aggregate;
(iii) issue any debt securities or assume, guarantee (other than guarantees
of the Company's subsidiaries entered into in the ordinary course of
business and except as required by any agreement in effect on the date
hereof and identified in Section 4.01 of the Company Disclosure Schedule)
or endorse, or otherwise as an accommodation become responsible for, the
obligations of any person, or make any loans or advances, except in the
ordinary course of business consistent with past practice (but not loans or
advances to employees of the Company to fund the exercise price of Company
Stock Options or otherwise to purchase shares of the Company Common Stock);
(iv) authorize any capital expenditures or purchases of fixed assets which
are, in the aggregate, in excess of $40 million over the next 12-month
period; or (v) enter into or materially amend any contract, agreement,
commitment or arrangement to effect any of the matters prohibited by this
Section 4.01(e);
(f) except as set forth in Section 4.01 of the Company Disclosure
Schedule, as required by law or as provided in an existing obligation of
the Company, (i) increase the compensation or severance payable or to
become payable to its directors, officers, employees or consultants, except
for increases in salary or wages of employees of the Company or its
subsidiaries, including in connection with promotions, in accordance with
past practices; (ii) grant any severance or termination pay (except to make
payments required to be made under obligations existing on the date hereof
in accordance with the terms of such obligations) to, or enter into or
amend any employment or severance agreement, with any current or
prospective employee of the Company or any of its subsidiaries, except for
new hire employees in the ordinary course of business whose annual salary
does not exceed $150,000 and whose severance benefits do not exceed one
times annual salary; or (iii) establish, adopt, enter into or amend any
collective bargaining agreement, Company Employee Plan, including, without
limitation, any plan that provides for the payment of bonuses or incentive
compensation, trust, fund, policy or arrangement for the benefit of any
current or former directors, officers, employees or consultants or any of
their beneficiaries, except, in each case, as may be required by law or as
would not result in a material increase in the cost of maintaining such
collective bargaining agreement, Company Employee Plan, trust, fund, policy
or arrangement.
(g) take any action to change accounting policies or procedures
(including, without limitation, procedures with respect to revenue
recognition, payments of accounts payable and collection of accounts
receivable) except as required by a change in GAAP occurring after the date
hereof;
(h) make any material tax election or settle or compromise any
material United States federal, state, local or non-United States tax
liability;
(i) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise) in excess of $1,000,000 in the aggregate, other than the
payment, discharge or satisfaction in the ordinary course of business and
consistent with past practice of liabilities reflected or reserved against
in the financial statements contained in the Company SEC Documents or
incurred in the ordinary course of business and consistent with past
practice; or
(j) take, or agree in writing or otherwise to take, any of the
actions described in Sections 4.01(a) through (i) above, or any action
which would make any of the representations or warranties of the Company
contained in this Agreement untrue or incorrect such that the conditions in
Section 6.02(a) would not be satisfied or prevent the Company from
performing or cause the Company not to perform its covenants hereunder such
that the condition in Section 6.02(b) would not be satisfied.
SECTION 4.02. No Solicitation. (a) The Company shall not,
directly or indirectly, through any officer, director, employee,
representative or agent of the Company or any of its subsidiaries, solicit
or encourage the initiation of (including by way of furnishing information)
any inquiries or proposals regarding any merger, sale of assets, sale of
shares of capital stock (including, without limitation, by way of a tender
offer) or similar transactions involving the Company or any subsidiaries of
the Company that if consummated would constitute an Alternative Transaction
(as defined below) (any of the foregoing inquiries or proposals being
referred to herein as an "Acquisition Proposal"). Nothing contained in this
Agreement shall prevent the Board of Directors of the Company from (i)
furnishing information to a third party which has made a bona fide
Acquisition Proposal that the Board of Directors of the Company concludes
in good faith after consulting with a nationally recognized investment
banking firm would, if consummated, constitute a Superior Proposal (as
defined below) not solicited in violation of this Agreement, provided that
such third party has executed an agreement with confidentiality provisions
substantially similar to those of the Company Confidentiality Agreement or
(ii) subject to compliance with the other terms of this Section 4.02,
including Sections 4.02(c) and (d), considering and negotiating a bona fide
Acquisition Proposal that the Board of Directors of the Company concludes
in good faith after consulting with a nationally recognized investment
banking firm would, if consummated, constitute a Superior Proposal not
solicited in violation of this Agreement; provided, however, that, as to
each of clauses (i) and (ii), (x) such actions occur at a time prior to
approval of the Merger and this Agreement at the Company Stockholders
Meeting and (y) the Board of Directors of the Company reasonably determines
in good faith (after due consultation with independent counsel, which may
be Fried, Frank, Harris, Shriver & Jacobson) that it is or is reasonably
likely to be required to do so in order to discharge properly its fiduciary
duties.
For purposes of this Agreement, "Alternative Transaction" means
any of (i) a transaction pursuant to which any person (or group of persons)
other than Parent or its affiliates (a "Third Party") acquires or would
acquire more than 25% of the outstanding shares of any class of equity
securities of the Company, whether from the Company or pursuant to a tender
offer or exchange offer or otherwise, (ii) a merger or other business
combination involving the Company pursuant to which any Third Party
acquires or would acquire more than 25% of the outstanding equity
securities of the Company or the entity surviving such merger or business
combination, (iii) any transaction pursuant to which any Third Party
acquires or would acquire control of assets (including for this purpose the
outstanding equity securities of subsidiaries of the Company and securities
of the entity surviving any merger or business combination including any of
the Company's subsidiaries) of the Company, or any of its subsidiaries
having a fair market value (as determined by the Board of Directors of the
Company in good faith) equal to more than 25% of the fair market value of
all the assets of the Company and its subsidiaries, taken as a whole,
immediately prior to such transaction, or (iv) any other consolidation,
business combination, recapitalization or similar transaction involving the
Company or any "significant subsidiary" (as defined in Rule 1-02 under
Regulation S-X) of the Company, other than the transactions contemplated by
this Agreement; provided, however, that the term Alternative Transaction
shall not include any acquisition of securities by a broker dealer in
connection with a bona fide public offering of such securities.
For purposes of this Agreement, a "Superior Proposal" means any
proposal made by a Third Party to acquire, directly or indirectly, for
consideration consisting of cash and/or securities, 90% or more of the
Company Common Stock entitled to vote generally in the election of
directors or all or substantially all of the assets of the Company, on
terms which the Board of Directors of the Company reasonably believes
(after consultation with a financial advisor of nationally recognized
reputation) to be more favorable from a financial point of view to its
shareholders than the Merger and the transactions contemplated by this
Agreement, taking into account at the time of determination any changes to
the financial terms of this Agreement proposed by Parent; provided,
however, that a Superior Proposal may be subject to a due diligence review
of confidential information and to other customary conditions.
(b) The Company shall notify Parent promptly (but in no event
later than 5:00 p.m. New York Time on the next business day) after receipt
of any Acquisition Proposal, or any modification of or amendment to any
Acquisition Proposal, or any request for nonpublic information relating to
the Company or any of its subsidiaries in connection with an Acquisition
Proposal or for access to the properties, books or records of the Company
or any subsidiary by any person or entity that informs the Board of
Directors of the Company or such subsidiary that it is considering making,
or has made, an Acquisition Proposal. Such notice to Parent shall be made
orally and in writing, and shall indicate the identity of the person making
the Acquisition Proposal or intending to make an Acquisition Proposal or
requesting non-public information or access to the books and records of the
Company, the terms of any such Acquisition Proposal or modification or
amendment to an Acquisition Proposal, and whether the Company is providing
or intends to provide the person making the Acquisition Proposal with
access to information concerning the Company as provided in Section
4.02(a). The Company shall keep Parent fully informed, on a current basis,
of any material changes in the status and any material changes or
modifications in the material terms of any such Acquisition Proposal,
indication or request. The Company shall also promptly notify Parent,
orally and in writing, if it enters into negotiations concerning any
Acquisition Proposal. Notwithstanding any other provision of this Section
4.02(b), the Company shall not be under any obligation to make any
disclosure to Parent in respect of an Acquisition Proposal if such
disclosure would violate any confidentiality agreement to which the Company
is a party as of the date hereof; provided, however, that the Company shall
not take any action permitted by clauses (i) or (ii) of Section 4.02(a) in
respect of any Acquisition Proposal unless the Company complies with the
provisions of this Section 4.02(b) in respect thereof.
(c) Except to the extent the Board of Directors of the Company
reasonably determines in good faith (after due consultation with
independent counsel, which may be Fried, Frank, Harris, Shriver & Jacobson)
that it is or is reasonably likely to be required to act to the contrary in
order to discharge properly its fiduciary duties, neither the Company nor
the Board of Directors of the Company shall withdraw or modify, or propose
to withdraw or modify, in a manner adverse to Parent or Merger Sub, the
approval by such Board of Directors of this Agreement or the Merger (and,
with respect to the approval, recommendation or entering into of any
Acquisition Proposal, it may take such contrary action only after the
second full business day (disregarding any partial business days) following
Parent's and Merger Sub's receipt of written notice of the Board of
Directors' intention to do so).
(d) The Company and the Board of Directors of the Company shall
not (i) redeem the rights (the "Rights") issued under the Rights Agreement,
dated as of January 6, 1997, as amended, between the Company and Mellon
Investor Services LLC (formerly known as ChaseMellon Shareholder Services,
L.L.C.), as Rights Agent (the "Rights Agreement"), or waive or amend any
provision of the Rights Agreement, in any such case to permit or facilitate
the consummation of any Acquisition Proposal or Alternative Transaction, or
(ii) enter into any agreement (other than a confidentiality agreement
entered into not in violation of Section 4.02(a)) with respect to, or
otherwise approve or recommend, or propose to approve or recommend, any
Acquisition Proposal or Alternative Transaction, unless this Agreement has
been terminated in accordance with its terms. It is understood and agreed
that a deferral of the distribution of Rights following the commencement of
a tender offer or exchange offer shall not be prohibited hereunder.
(e) Nothing contained in this Section 4.02 shall prohibit the
Company from taking and disclosing to its stockholders a position required
by Rules 14e-2(a) and 14d-9 promulgated under the Exchange Act or from
making any disclosure to its stockholders required by applicable law, rule
or regulation or by the NYSE.
(f) Subject to the other provisions of this Section 4.02, the
Company shall immediately cease and cause to be terminated any existing
discussions or negotiations with any persons (other than Parent and Merger
Sub) conducted heretofore with respect to any of the foregoing. The Company
agrees not to release any third party (i) from the confidentiality
provisions of, or (ii) except with respect to a party to whom the Board of
Directors is permitted to furnish information or with whom the Board of
Directors is permitted to negotiate pursuant to Section 4.02(a), from the
standstill provisions of, any agreement to which the Company is a party.
(g) The Company shall ensure that the officers and directors of
the Company and the Company's subsidiaries and any investment banker or
other advisor or representative retained by the Company are aware of the
restrictions described in this Section 4.02. It is understood that any
violation of the restrictions set forth in this Section 4.02 by any officer
or director of the Company or the Company subsidiaries, any investment
banker, attorney or other advisor or representative of the Company engaged
in respect of the transactions contemplated by this Agreement or any other
advisor or representative of the Company acting at the Company's direction
or with the Company's consent, shall be deemed to be a breach of this
Section 4.02 by the Company.
(h) No action taken in respect of an Acquisition Proposal which
is expressly permitted by the provisions of this Section 4.02 shall
constitute a breach of any other provision of this Agreement.
SECTION 4.03. Conduct of Business by Parent Pending the Merger.
During the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement or the Effective Time, Parent
covenants and agrees that, except as set forth in Section 4.03 of the
Parent Disclosure Schedule or unless the Company shall otherwise agree in
writing, Parent shall take all action necessary so that (i) Parent shall
conduct its business, and cause the businesses of its subsidiaries to be
conducted, in the ordinary course of business and consistent with past
practice, including actions taken by Parent or its subsidiaries in
contemplation of consummation of the Merger or other business acquisitions
otherwise in compliance with this Agreement, and (ii) Parent shall not
directly or indirectly do, or propose to do, any of the following without
the prior written consent of the Company:
(a) amend or otherwise change the Parent Charter Documents,
except as contemplated by this Agreement;
(b) acquire or agree to acquire, by merging or consolidating
with, by purchasing an equity interest in or a portion of the assets of, or
by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof, or
otherwise acquire or agree to acquire any assets of any other person, or
dispose of any assets, which, in any such case, would materially delay or
prevent the consummation of the Merger and the other transactions
contemplated by this Agreement or materially alter the nature or character
of the business of Parent as it is presently conducted;
(c) declare, set aside, make or pay any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of any of its capital stock, except that a wholly owned
subsidiary of Parent may declare and pay a dividend to its parent;
(d) take any action to change its accounting policies or
procedures (including, without limitation, procedures with respect to
revenue recognition, payments of accounts payable and collection of
accounts receivable), except as required by a change in GAAP occurring
after the date hereof; or
(e) take or agree in writing or otherwise to take any of the
actions described in Sections 4.03(a) through (d) above, or any actions
that would make any of the representations or warranties of Parent
contained in this Agreement untrue or incorrect such that the conditions in
Section 6.03(a) would not be satisfied or prevent Parent from performing or
cause Parent not to perform its covenants hereunder such that the condition
in Section 6.03(b) would not be satisfied.
ARTICLE V
ADDITIONAL AGREEMENTS
---------------------
SECTION 5.01. Joint Proxy Statement/Prospectus; Registration
Statement. (a) As promptly as practicable after the execution of this
Agreement, the Company and Parent shall prepare and Parent shall file with
the SEC, preliminary proxy materials which shall constitute the Joint Proxy
Statement/Prospectus and, if the parties so agree at the time, the
Registration Statement. Parent shall furnish all information concerning
Parent required to be contained in the Joint Proxy Statement/Prospectus,
and the Company shall furnish all information concerning the Company
required to be contained in the Joint Proxy Statement/Prospectus.
As promptly as practicable after comments are received from the
SEC thereon and after the furnishing by the Company and Parent of all
information required to be contained therein, Parent shall file (and the
Company shall cooperate with Parent in connection with the filing) with the
SEC the definitive Joint Proxy Statement/Prospectus and the Registration
Statement (or, if the Registration Statement has been previously filed, an
amendment thereto) relating to approval of this Agreement by the Company's
stockholders as set forth in Section 2.04(b), to the approval of the Parent
Stockholders Meeting Proposals by the Parent's stockholders as provided in
Section 3.13(a) and to the payment of the Merger Consideration in the form
of Parent Common Stock pursuant to this Agreement, and shall use all
reasonable efforts to cause the Registration Statement to become effective.
Parent shall take any action (other than qualifying to do
business in any jurisdiction in which it is not now so qualified or to file
a general consent to service of process) required to be taken under the
applicable state securities laws in connection with the issuance of Parent
Common Stock in connection with the Merger. The Company shall furnish to
Parent all information concerning the holders of capital stock of the
Company as may be reasonably requested in connection with any such action
and the preparation, filing and distribution of the Joint Proxy
Statement/Prospectus.
The Company and Parent shall notify the other promptly upon the
receipt of any comments from the SEC or its staff or any other government
officials in connection with any filing made pursuant hereto and of any
request by the SEC or its staff or any other government officials for
amendments or supplements to the Registration Statement, the Joint Proxy
Statement/Prospectus or any other filings or for additional information and
will supply the other with copies of all correspondence between such party
or any of its representatives, on the one hand, and the SEC, or its staff
or any other government officials, on the other hand, with respect to the
Registration Statement, the Joint Proxy Statement/Prospectus, the Merger or
any other filing. Neither Parent nor the Company will file any amendment or
supplement to, or any correspondence to the SEC or its staff with respect
to, the Joint Proxy Statement/Prospectus, without providing the other party
a reasonable opportunity to review and comment thereon.
Parent will advise the Company, promptly after Parent 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, the suspension of the qualification of the Parent Common
Stock issuable in connection with the Merger for offering or sale in any
jurisdiction, or any request by the SEC for amendment of the Registration
Statement or comments thereon and responses thereto or requests by the SEC
for additional information.
If at any time prior to the respective vote of stockholders at
the Stockholders Meeting any information relating to the Company or Parent,
or any of their respective affiliates, officers or directors, should be
discovered by the Company or Parent which should be set forth in an
amendment or supplement to either of the Registration Statement or the
Joint Proxy Statement/Prospectus so that any of such documents would not
include any misstatement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, the party which
discovers such information shall promptly notify the other parties hereto
and an appropriate amendment or supplement describing such information
shall be promptly filed with the SEC and, to the extent required by law,
disseminated to the stockholders of the Company. Whenever any event occurs
which is required to be set forth in an amendment or supplement to the
Registration Statement, the Joint Proxy Statement/Prospectus or any other
filing, the Company or Parent will promptly inform the other of such
occurrence and cooperate in filing with the SEC or its staff or any other
government officials and/or mailing to stockholders of Company, such
amendment or supplement.
(b) Parent shall include as an exhibit to the Registration
Statement tax opinions of Kramer Levin Naftalis & Frankel LLP and Fried,
Frank, Harris, Shriver & Jacobson, in form and substance reasonably
satisfactory to Parent and Merger Sub and to the Company, on the basis of
customary representations, warranties and covenants of Parent and the
Company and assumptions set forth in such opinions, in compliance with the
provisions of Item 601(b)(8) of Regulation S-K.
SECTION 5.02. Stockholders Meetings. (a) The Company shall
establish a record date for, duly call, give notice of, convene and hold
the Company Stockholders Meeting as promptly as practicable for the purpose
of voting upon the approval of this Agreement, and the Company shall use
all reasonable efforts to cause the Joint Proxy Statement/Prospectus to be
mailed to the Company's stockholders and to hold the Company Stockholders
Meeting as promptly as practicable after the Registration Statement is
declared effective under the Securities Act. The Company shall solicit from
its stockholders proxies in favor of approval of this Agreement and shall
take all other reasonable action necessary or advisable to secure the vote
or consent of stockholders in favor of such approval. The Joint Proxy
Statement/Prospectus shall include the recommendation of the Board of
Directors of the Company in favor of adoption of this Agreement.
Notwithstanding anything to the contrary set forth in Section 5.01 or this
Section 5.02, the Company shall not be obligated to take the action set
forth in this Section 5.02(a) to the extent that the Board of Directors of
the Company reasonably determines (after due consultation with independent
counsel, which may be Fried, Frank, Harris, Shriver & Jacobson) that such
action is, or is reasonably likely to be, inconsistent with the proper
discharge of its fiduciary duties.
(b) Parent shall establish a record date for, duly call, give
notice of, convene and hold the Parent Stockholders Meeting as promptly as
practicable for the purpose of voting upon the Parent Stockholder Meeting
Proposals, and Parent shall use all reasonable efforts to cause the Joint
Proxy Statement/Prospectus to be mailed to the Parent's stockholders and to
hold the Parent Stockholders Meeting as promptly as practicable after the
Registration Statement is declared effective under the Securities Act.
Parent shall solicit from its stockholders proxies in favor of approval of
this Agreement and shall take all other reasonable action necessary or
advisable to secure the vote or consent of stockholders in favor of such
approval. The Joint Proxy Statement/Prospectus shall include the
recommendation of the Board of Directors of Parent in favor of the Parent
Stockholders Meeting Proposals. Notwithstanding anything to the contrary
set forth in Section 5.01 or this Section 5.02, Parent shall not be
obligated to take the action set forth in the preceding sentences of this
Section 5.02(b) to the extent that the Board of Directors of Parent
determines (after due consultation with independent counsel, which may be
Kramer Levin Naftalis & Frankel LLP) that such action is, or is reasonably
likely to be, inconsistent with the proper discharge of its fiduciary
duties.
SECTION 5.03. Access to Information; Confidentiality. (a) Upon
reasonable notice and subject to restrictions contained in confidentiality
agreements (from which such party shall use reasonable efforts to be
released), the Company shall (and shall cause its subsidiaries to) and
Parent shall (and shall cause its subsidiaries to) (i) afford to the
officers, employees, accountants, counsel and other representatives of the
other, reasonable access, during the period after the execution and
delivery of this Agreement and prior to the Effective Time, to the
properties, books, contracts, commitments and records of the Company or the
Parent, as applicable, and, (ii) during such period, furnish promptly to
the other all information concerning the business, properties and personnel
of the Company or the Parent, as applicable, as such other party may
reasonably request, and each shall make available to the other the
appropriate individuals (including attorneys, accountants and other
professionals) for discussion of the Company's or Parent's, as applicable,
business, properties and personnel as either Parent or the Company may
reasonably request. All such information shall be kept confidential in
accordance with the terms of the confidentiality letter, dated July 27,
2001 (the "Parent Confidentiality Agreement"), from Parent to the Company
and the confidentiality letter, dated July 30, 2001 (the "Company
Confidentiality Agreement") from the Company to Parent, and such
information shall not be used by a party for any purpose other than
completing this Agreement or subsequently acting in accordance with its
terms. Notwithstanding the provisions of this Section 5.03, a party will
not be required to provide access or to disclose information where such
access or disclosure would violate any law or any confidentiality agreement
in effect on the date hereof between such party and a third party or, in
the opinion of counsel to such party, would result in the waiver of any
attorney-client privilege or work-product protection.
SECTION 5.04. Consents; Approvals. (a) The Company and Parent
shall each use its reasonable best efforts to obtain and to cooperate with
each other in order to obtain all consents, waivers, approvals,
authorizations or orders (including, without limitation, all United States
and non-United States governmental and regulatory rulings and approvals),
and the Company and Parent shall make all filings (including, without
limitation, all filings with United States and non-United States
governmental or regulatory agencies) required in connection with the
authorization, execution and delivery of this Agreement by the Company and
Parent and the consummation by them of the transactions contemplated
hereby. Each of the Company and Parent shall furnish all information in its
possession required for any application or other filing to be made pursuant
to the rules and regulations of any United States or non-United States
governmental body in connection with the transactions contemplated by this
Agreement.
(b) Each of the Company and Parent shall cause all documents that
it is responsible for filing with the SEC or other regulatory authorities
under Section 5.01 and this Section 5.04 to comply in all material respects
with all applicable requirements of law and the rules and regulations
promulgated thereunder.
SECTION 5.05. Agreements with Respect to Affiliates. The Company
shall deliver to Parent, prior to the date the Registration Statement
becomes effective under the Securities Act, a letter (the "Company
Affiliate Letter") identifying all persons who are, at the time of the
Company Stockholders Meeting, anticipated to be "affiliates" of the Company
for purposes of Rule 145 under the Securities Act ("Rule 145"). The Company
shall use its commercially reasonable efforts to cause each person who is
identified as an "affiliate" in the Affiliate Letter to deliver to Parent
prior to the Effective Time a written agreement in connection with
restrictions on affiliates under Rule 145, in a form mutually agreeable to
the Company and Parent.
SECTION 5.06. Indemnification and Insurance. (a) The Certificate
of Incorporation and By-laws of the Surviving Corporation shall contain the
provisions with respect to indemnification set forth in the Company Charter
Documents, which provisions shall not be amended, modified or otherwise
repealed for a period of six years from the Effective Time in any manner
that would adversely affect the rights thereunder as of the Effective Time
of individuals who at the Effective Time were directors, officers,
employees or agents of the Company, unless such modification is required
after the Effective Time by law and then only to the minimum extent
required by such law.
(b) The Surviving Corporation shall, to the fullest extent
permitted under applicable law or under the Surviving Corporation's
Certificate of Incorporation or By-laws, indemnify and hold harmless each
present and former director, officer or employee of the Company or any of
its subsidiaries (collectively, the "Indemnified Parties") against any
costs or expenses (including attorneys' fees), judgments, fines, losses,
claims, damages, liabilities and amounts paid in settlement in connection
with any claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative, (x) arising out of or pertaining
to the transactions contemplated by this Agreement or (y) otherwise with
respect to any acts or omissions occurring at or prior to the Effective
Time, to the same extent as provided in the Company Charter Documents or
any applicable contract or agreement as in effect on the date hereof, in
each case for a period of six years after the Effective Time. In the event
of any such claim, action, suit, proceeding or investigation (whether
arising before or after the Effective Time), (i) any counsel retained by
the Indemnified Parties for any period after the Effective Time shall be
reasonably satisfactory to the Surviving Corporation, (ii) after the
Effective Time, the Surviving Corporation shall pay the reasonable fees and
expenses of such counsel, promptly after statements therefor are received;
provided that the Indemnified Parties shall be required to reimburse the
Surviving Corporation for such payments in the circumstances and to the
extent required by the Company Charter Documents, any applicable contract
or agreement or applicable law and (iii) the Surviving Corporation shall
cooperate in the defense of any such matter; provided, however, that the
Surviving Corporation shall not be liable for any settlement effected
without its written consent (which consent shall not be unreasonably
withheld); and provided, further, that, in the event that any claim or
claims for indemnification are asserted or made within such six-year
period, all rights to indemnification in respect of any such claim or
claims shall continue until the final disposition of any and all such
claims. The Indemnified Parties as a group may retain only one law firm to
represent them in each applicable jurisdiction (other than local counsel)
with respect to any single action unless there is, under applicable
standards of professional conduct, a conflict on any significant issue
between the positions of any two or more Indemnified Parties, in which case
each Indemnified Person with respect to whom such a conflict exists (or
group of such Indemnified Persons who among them have no such conflict) may
retain one separate law firm in each applicable jurisdiction (other than
local counsel).
(c) The Surviving Corporation shall assume, honor and fulfill in
all respects the obligations of the Company pursuant to indemnification
agreements, employment agreements, severance agreements, retention bonuses
and similar agreements (the parties under such agreements being referred to
as the "Covered Persons") with the Company's directors and officers
existing at or before the Effective Time, provided such agreements (x) do
not violate Section 4.01(f) or (y) are entered into pursuant to this
Section 5.06.
(d) In addition, Parent will provide, or cause the Surviving
Corporation to provide, for a period of not less than six years after the
Effective Time, the Company's current directors and officers (and former
directors and officers, to the extent covered under the Company's current
insurance and indemnification policy for directors and officers) with an
insurance and indemnification policy that provides coverage for events
occurring at or prior to the Effective Time (the "D&O Insurance") that is
no less favorable than the existing policy or, if substantially equivalent
insurance coverage is unavailable, the best available coverage; provided,
however, that Parent and the Surviving Corporation shall not be required to
pay an annual premium for the D&O Insurance in excess of 250% of the annual
premium currently paid by the Company for such insurance, but in such case
shall purchase as much such coverage as possible for such amount.
(e) From and after the Effective Time, Parent shall
unconditionally guarantee the timely payment of all funds owing by, and the
timely performance of all other obligations of, the Surviving Corporation
under this Section 5.06.
(f) This Section 5.06 shall survive the consummation of the
Merger at the Effective Time, is intended to benefit the Company, the
Surviving Corporation, the Indemnified Parties and the Covered Persons,
shall be binding on all successors and assigns of the Surviving Corporation
and shall be enforceable by the Indemnified Parties and the Covered
Persons.
(g) Parent and Merger Sub agree that Ronald A. Ostertag, on
behalf of the Company, may grant the retention bonuses to be paid to
employees of the Company as described in Section 5.06 of the Company
Disclosure Schedule.
SECTION 5.07. Notification of Certain Matters. The Company shall
give prompt notice to Parent, and Parent shall give prompt notice to the
Company, of (i) the occurrence or nonoccurrence of any event the occurrence
or nonoccurrence of which would reasonably be expected to cause any
representation or warranty contained in this Agreement to be materially
untrue or inaccurate, or (ii) any failure of the Company, Parent or Merger
Sub, as the case may be, materially to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this Section
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice; and provided further that failure to give such
notice shall not be treated as a breach of a covenant for the purposes of
Sections 6.02(b), 6.03(b) or 7.01(h), unless the failure to give such
notice results in material prejudice to the other party.
SECTION 5.08. Further Action/Tax Treatment. (a) Upon the terms
and subject to the conditions hereof, each of the parties hereto shall use
all reasonable efforts to take, or cause to be taken, all actions and to
do, or cause to be done, all other things necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement, to obtain in a timely manner all necessary
waivers, consents and approvals and to effect all necessary registrations
and filings, and otherwise to satisfy or cause to be satisfied all
conditions precedent to its obligations under this Agreement. The foregoing
covenant shall not include the obligation by the Company or Parent to agree
to divest, abandon, license, hold separate or take similar action with
respect to any assets (tangible or intangible) which are, in the aggregate
material to Parent or the Company, as applicable.
(b) Notwithstanding anything herein to the contrary, each of
Parent, Merger Sub and the Company shall use its reasonable best efforts to
cause the Merger to qualify, and will not (both before and after the
Effective Time) take any actions, or fail to take any action, which could
reasonably be expected to prevent the Merger from qualifying as a
reorganization under the provisions of Section 368(a) of the Code. Parent
shall, and shall cause the Surviving Corporation to, report, to the extent
required by the Code or the regulations thereunder, the Merger for federal
income tax purposes as a reorganization within the meaning of Section
368(a) of the Code. Each of Parent and the Company shall make, and shall
cause their affiliates to make, such representations, warranties and
covenants as shall be requested reasonably in the circumstances by Kramer
Levin Naftalis & Frankel LLP and Fried, Frank, Harris, Shriver & Jacobson
in order for such firms to render their opinions referred to in Sections
5.01(b), 6.02(e) and 6.03(e).
SECTION 5.09. Public Announcements. Parent and the Company shall
consult with each other before issuing any press release or making any
written public statement with respect to the Merger or this Agreement and
shall not issue any such press release or make any such public statement
without the prior consent of the other party, which shall not be
unreasonably withheld; provided, however, that either party may, without
the prior consent of the other, issue such press release or make such
public statement as may upon the advice of counsel be required by law
(including, without limitation, Rules 165 and 425 under the Securities Act
and Rule 14a-12 under the Exchange Act) or the rules and regulations of the
NYSE, if it has used all reasonable efforts to consult with the other
party.
SECTION 5.10. Parent Common Stock. Parent shall use its best
efforts to cause the Parent Common Stock to be issued to the holders of
Company Common Stock in the Merger to be listed, upon official notice of
issuance, on the NYSE prior to the Effective Time.
SECTION 5.11. Stock Option Plans, etc. (a) At the Effective Time,
Parent shall, and shall cause its affiliates to, take all necessary action
to provide that each outstanding Company Stock Option shall continue to
have, and be subject to, the same terms and conditions set forth in the
relevant Company Stock Option Plan (and any related agreements not entered
into in contravention of this Agreement) immediately prior to the Effective
Time; except that (i) each Company Stock Option will be exercisable for
that number of whole shares of Parent Common Stock equal to the product of
the number of shares of Company Common Stock that were issuable upon
exercise of such Company Stock Option, immediately prior to the Effective
Time multiplied by the Exchange Ratio, rounded to the nearest whole number
of shares of Parent Common Stock, and (ii) the per share exercise price for
the Parent Common Stock issuable upon exercise of such Company Stock Option
will be equal to the quotient determined by dividing the exercise price per
share of the Company Common Stock at which such Company Stock Option was
exercisable immediately prior to the Effective Time by the Exchange Ratio,
rounded to the nearest whole cent (each such Company Stock Option, as
modified, an "Adjusted Option"); provided, however, that to the extent that
any Company Stock Option is intended to qualify as an incentive stock
option pursuant to section 422 of the Code immediately prior to the
Effective Time, the provisions of this Section 5.11 shall be applied in
good faith to comply with sections 422 and 424(a) of the Code.
(b) Parent will take all corporate action necessary to reserve
for issuance, as of the Effective Time a sufficient number of shares of
Parent Common Stock for delivery upon exercise of the Adjusted Options and
to deliver to holders of Adjusted Options, upon the exercise of such
options, Parent Common Stock listed on the NYSE.
(c) Not later than 15 days following the Effective Time, Parent
(i) shall file with the SEC a registration statement on Form S-8 of the SEC
(or any successor or other appropriate form) with respect to the shares of
Parent Common Stock issuable upon the exercise of the Adjusted Options and
shall use reasonable best efforts thereafter to maintain the effectiveness
of such registration statement and (ii) shall deliver to holders of the
Adjusted Options a prospectus or prospectuses relating to such registration
statement and thereafter maintain the current status of such prospectus or
prospectuses, until all of the Adjusted Options have been exercised,
expired or forfeited.
(d) Prior to the Effective Time, Parent and the Company shall
take all such reasonable steps as may be required to cause any dispositions
of Company Common Stock (including derivative securities with respect to
Company Common Stock) or acquisitions of Parent Common Stock (including
derivative securities with respect to Parent Common Stock) resulting from
the transactions contemplated by this Agreement by each officer and
director of the Company to be exempt under Rule 16b-3 promulgated under the
Exchange Act.
SECTION 5.12. Certain Employee Benefits. (a) For the period from
the Effective Time through December 31, 2001 (the "Benefits Continuation
Period"), Parent shall cause the Surviving Corporation to provide each
person who, as of the Effective Time, is an employee of the Company or any
subsidiary of the Company (a "Company Employee") with salary and employee
benefits that are comparable in the aggregate to those provided to such
Company Employee immediately prior to the Effective Time, provided,
however, that, (i) consistent with the foregoing, the Surviving Corporation
shall have the right to amend any Company Employee Plan in accordance with
the terms of such Company Employee Plan. Notwithstanding the foregoing, for
a period of six months following the Effective Time, the Surviving
Corporation shall not terminate or amend in a manner adverse to any Company
Employee the General Semiconductor, Inc. Severance Plan, as in effect on
the date hereof. After the Benefits Continuation Period, Parent shall cause
the Surviving Corporation to provide each Company Employee with salary and
employee benefits that are comparable in the aggregate to those provided to
similarly situated employees of Parent or its subsidiaries.
(b) With respect to the benefits provided pursuant to this
Section 5.12, service accrued by Company Employees during employment with
the Company and its subsidiaries (including any predecessor entity) prior
to the Effective Time shall be recognized for all purposes except for
benefit accruals under defined benefit pension plans.
(c) From and after the Effective Time, Parent shall cause the
Surviving Corporation to honor in accordance with their terms all benefits
and obligations under the Company Employee Plans, including without
limitation each employment, severance or change in control agreement, plan
or arrangement, each as in effect on the date of this Agreement (or as
amended as contemplated hereby or with the prior written consent of
Parent), provided, however, that except as precluded by law or the terms of
a Company Employee Plan and, subject to Section 5.12(a) hereof, nothing
herein shall prevent the Surviving Corporation or any other subsidiary of
Parent from amending or modifying any employee benefit plan, program or
arrangement in any respect or terminating or modifying the terms and
conditions of employment or other service of any particular employee or any
other person.
(d) It is expressly agreed that the provisions of Section 5.12
are not intended to be for the benefit of or otherwise enforceable by any
third party, including, without limitation, any Company Employees.
(e) The Company shall amend its 401(k) savings plan and any other
Company Employee Plan which permits participants to elect to invest in
stock of the Company, as necessary, to preclude any additional purchases of
stock of the Company, as of the date two (2) days prior to the Effective
Time, and the Company shall communicate this amendment to the participants
in such plans.
SECTION 5.13. Rights Agreement. As promptly as practicable on or
after the date of this Agreement, the Board of Directors of the Company
shall take all action necessary in order to render the Rights inapplicable
to the Merger and the other transactions contemplated by this Agreement.
SECTION 5.14. Conveyance Taxes. Parent and the Company shall
cooperate in the preparation, execution and filing of all returns,
questionnaires, applications, or other documents regarding any real
property transfer or gains, sales, use, transfer, value added, stock
transfer and stamp taxes, any transfer, recording, registration and other
fees, and any similar taxes which become payable in connection with the
transactions contemplated hereby that are required or permitted to be filed
on or before the Effective Time, and the Company shall be responsible for
the payment of all such taxes and fees. If the Merger is consummated, in no
event shall Parent or any affiliate thereof (other than a subsidiary of the
Company) reimburse the Company for the payment of such taxes and fees.
SECTION 5.15. Accountant's Letters. Upon reasonable notice from
the other, the Company shall use its reasonable efforts to cause Deloitte &
Touche LLP to deliver to Parent, and Parent shall use its reasonable
efforts to cause Ernst & Young LLP to deliver to the Company, a letter
covering such matters as are reasonably requested by Parent or the Company,
as the case may be, and as are customarily addressed in accountants'
"comfort letters."
SECTION 5.16. Compliance with State Property Transfer Statutes.
The Company agrees that it shall use its reasonable commercial efforts to
comply promptly with all requirements of applicable state property transfer
laws as may be required by the relevant state agency and shall take all
action reasonably necessary to cause the transactions contemplated hereby
to be effected in compliance with applicable state property transfer laws.
The Company, after consultation with Parent, shall determine which actions
must be taken prior to or after the Effective Time to comply with
applicable state property transfer laws, except where the failure to so
comply will not materially affect the right to use or enjoy any applicable
property after the Effective Time. The Company agrees to provide Parent
with any documents required to be submitted to the relevant state agency
prior to submission. Parent shall provide to the Company any assistance
reasonably requested by the Company with respect to such compliance.
SECTION 5.17. Parent Director. Subject to applicable fiduciary
obligations of Parent's Board of Directors, Parent shall take all such
actions as are required to cause its Board of Directors to be expanded by
one member and to elect or appoint Ronald Ostertag as a director of Parent
at or as soon as practicable following the Effective Time. Thereafter,
Parent shall take all action necessary to cause Ronald Ostertag to continue
to serve as a director of Parent until at least the date of the third
annual meeting of stockholders following the Effective Time. Mr. Ostertag
shall be entitled as a director of Parent after the Effective Time to
exculpation, indemnification and reimbursement of expenses pursuant to
terms and conditions identical to the terms and conditions applicable to
all other directors of Parent included in the Parent Charter Documents and
will be entitled to coverage under the directors' and officers' liability
and fiduciary liability insurance policies and any indemnification
agreements maintained or entered into by Parent on the same terms as
applicable to the other directors of Parent.
ARTICLE VI
CONDITIONS TO THE MERGER
------------------------
SECTION 6.01. Conditions to Obligation of Each Party to Effect
the Merger. The respective obligations of each party to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of
the following conditions:
(a) Effectiveness of the Registration Statement. The SEC shall
have declared the Registration Statement effective under the Securities
Act. No stop order suspending the effectiveness of the Registration
Statement shall have been issued by the SEC and no proceedings for that
purpose and no similar proceeding in respect of the Joint Proxy
Statement/Prospectus shall have been initiated or threatened by the SEC;
(b) Stockholder Approval. This Agreement shall have been approved
by the requisite vote of the stockholders of the Company, and the Parent
Stockholders Meeting Proposals shall have been approved by the stockholders
of Parent;
(c) Antitrust. All waiting periods applicable to the consummation
of the Merger under the HSR Act shall have expired or been terminated, and
all clearances and approvals required to be obtained in respect of the
Merger prior to the Effective Time under any Non-U.S. Monopoly Laws shall
have been obtained, except where the failure to have obtained any such
clearances or approvals with respect to any Non-U.S. Monopoly Laws would
not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect on the Company or Parent;
(d) Governmental Actions. There shall not have been instituted
and pending any action by any Governmental Authority that is reasonably to
be expected to result in an order, nor shall there be in effect any
judgment, decree or order of any Governmental Authority (i) preventing the
consummation of the Merger or (ii) compelling Parent or any of its
subsidiaries (including the Surviving Corporation and its subsidiaries) to
dispose of or hold separate assets which are material, in the aggregate, to
Parent or its subsidiaries taken as a whole, or to the Surviving
Corporation and its subsidiaries taken as a whole; and
(e) Illegality. No statute, rule, regulation, executive or other
order, ruling or injunction shall have been enacted, promulgated, entered,
enforced or deemed applicable to the Merger which makes the consummation of
the Merger illegal or that prohibits, restrains or enjoins consummation of
the Merger.
SECTION 6.02. Additional Conditions to Obligations of Parent and
Merger Sub. The obligations of Parent and Merger Sub to effect the Merger
are also subject to the following conditions:
(a) Representations and Warranties. (I) The representations and
warranties, (other than those contained in Sections 2.03, 2.04, 2.13, 2.18
and 2.23) of the Company contained in this Agreement (which for purposes of
this Section 6.02(a), shall be interpreted without giving effect to the
words "materially" or "material," individually or as it appears in the
defined term "Material Adverse Effect" or qualifications or exceptions
based on such terms) shall be true and correct in all respects on and as of
the Effective Time, with the same force and effect as if made on and as of
the Effective Time, except for (i) changes contemplated by this Agreement,
(ii) those representations and warranties which address matters only as of
a particular date (which shall have been true and correct as of such date),
or (iii) where the failure to be so true and correct would not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect on the Company, and (II) the representations and warranties of the
Company contained in Sections 2.03, 2.04, 2.13, 2.18 and 2.23 shall be true
and correct in all material respects on and as of the Effective Time with
the same force and effect as if made on and as of the Effective Time,
except for any representations and warranties contained therein which
address matters only as of a particular date (which shall have been true
and correct in all material respects as of such date); and Parent and
Merger Sub shall have received a certificate of the Company to such effect
signed by the Chief Executive Officer or Chief Financial Officer of the
Company;
(b) Agreements and Covenants. The Company shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or
prior to the Effective Time, and Parent and Merger Sub shall have received
a certificate to such effect signed by the Chief Executive Officer or Chief
Financial Officer of the Company; provided, however, that unless the
Company knowingly breaches Section 4.01(j), the Company shall be deemed to
have complied with Section 4.01(j) unless the failure to comply with such
section also results in the failure of the condition set forth in Section
6.02(a);
(c) Consents Obtained. All material consents, waivers, approvals,
authorizations or orders required to be obtained, and all filings required
to be made, by the Company for the authorization, execution and delivery of
this Agreement and the consummation by it of the transactions contemplated
hereby shall have been obtained and made by the Company, except where the
failure to receive such consents, waivers, approvals, authorizations or
orders or to make such filings would not reasonably be expected,
individually or in the aggregate with all other such failures, to have a
Material Adverse Effect on the Company or Parent;
(d) Rights Agreement. A Distribution Date shall not have occurred
under the Rights Agreement, and the Rights shall be inapplicable to the
Merger and to the other transactions contemplated by this Agreement; and
(e) Tax Opinion. Parent shall have received a written opinion of
Kramer Levin Naftalis & Frankel LLP, in form and substance reasonably
satisfactory to Parent, delivered and dated as of the date of the Effective
Time and on the basis of customary representations, warranties and
covenants of Parent and the Company and assumptions set forth in such
opinion, to the effect that the Merger will qualify as a reorganization
within the meaning of Section 368(a) of the Code.
SECTION 6.03. Additional Conditions to Obligation of the Company.
The obligation of the Company to effect the Merger is also subject to the
following conditions:
(a) Representations and Warranties. (I) The representations and
warranties (other than those contained in Sections 3.03, 3.04, 3.13 and
3.18) of Parent contained in this Agreement (which for purposes of this
Section 6.03(a), shall be interpreted without giving effect to the words
"materially" or "material," individually or as it appears in the defined
term "Material Adverse Effect" or qualifications or exceptions based on
such terms) shall be true and correct in all respects on and as of the
Effective Time, with the same force and effect as if made on and as of the
Effective Time, except for (i) changes contemplated by this Agreement, (ii)
those representations and warranties which address matters only as of a
particular date (which shall have been true and correct as of such date),
or (iii) where the failure to be so true and correct would not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect on the Company, and (II) the representations and warranties of
Parent contained in Sections 3.03, 3.04, 3.13, and 3.18 shall be true and
correct in all material respects on and as of the Effective Time, with the
same force and effect as if made on and as of the Effective Time, except
for any representations and warranties contained therein which address
matters only as of a particular date (which shall have been true and
correct in all material respects as of such date); and the Company shall
have received a certificate of Parent to such effect signed by the Chief
Executive Officer or Chief Financial Officer of Parent;
(b) Agreements and Covenants. Parent and Merger Sub shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by
them on or prior to the Effective Time, and the Company shall have received
a certificate of Parent to such effect signed by the President or Chief
Financial Officer of Parent; provided, however, that unless Parent
knowingly breaches Section 4.03(e), Parent shall be deemed to have complied
with Section 4.03(e) unless the failure to comply with such section also
results in the failure of the condition set forth in Section 6.03(a);
(c) Consents Obtained. All material consents, waivers, approvals,
authorizations or orders required to be obtained, and all filings required
to be made, by Parent or Merger Sub for the authorization, execution and
delivery of this Agreement, and the consummation by them of the
transactions contemplated hereby and thereby shall have been obtained and
made by Parent or Merger Sub, except where the failure to receive such
consents, waivers, approvals, authorizations or orders or to make such
filings would not reasonably be expected, individually or in the aggregate
with all other such failures, to have a Material Adverse Effect on the
Company or Parent;
(d) Listing. The Parent Common Stock to be issued by Parent in
connection with the Merger shall have been authorized for listing on the
NYSE upon official notice of issuance; and
(e) Tax Opinion. The Company shall have received a written
opinion of Fried, Frank, Harris, Shriver & Jacobson, in form and substance
reasonably satisfactory to the Company, delivered and dated as of the date
of the Effective Time and on the basis of customary representations,
warranties and covenants of Parent and the Company and assumptions set
forth in such opinion, to the effect that the Merger will qualify as a
reorganization within the meaning of Section 368(a) of the Code.
ARTICLE VII
TERMINATION
-----------
SECTION 7.01. Termination. This Agreement may be terminated at
any time prior to the Effective Time, notwithstanding approval thereof by
the stockholders of the Company:
(a) by mutual written consent duly authorized by the Boards of
Directors of Parent and the Company; or
(b) by either Parent or the Company if the Merger shall not have
been consummated by January 31, 2002 (other than for the reasons set forth
in clause (d) below); provided, however, that the right to terminate this
Agreement under this Section 7.01(b) shall not be available to any party
whose failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Merger to be consummated on or
prior to such date; or
(c) by either Parent or the Company if a court of competent
jurisdiction or governmental, regulatory or administrative agency or
commission shall have issued a nonappealable final order, decree or ruling
or taken any other nonappealable final action having the effect of
permanently restraining, enjoining or otherwise prohibiting the Merger; or
(d) by either Parent or the Company, if (i) the stockholders of
the Company shall not have approved this Agreement at the Company
Stockholders Meeting; provided, however, that the Company may not terminate
pursuant to this clause if the Company has not complied with its
obligations under Section 5.02; or if (ii) the stockholders of the Parent
shall not have approved the Parent Stockholders Meeting Proposals at the
Parent Stockholders Meeting; provided, however, that Parent may not
terminate pursuant to this clause if Parent has not complied with its
obligations under Section 5.02; or
(e) by Parent, if, whether or not permitted to do so by this
Agreement, the Board of Directors of the Company or the Company shall (i)
withdraw, modify or change its approval, adoption or recommendation of this
Agreement or the Merger in a manner adverse to Parent or shall have
resolved to do so; (ii) approve or recommend to the stockholders of the
Company an Alternative Transaction; (iii) approve or recommend that the
stockholders of the Company tender their shares in any tender or exchange
offer that is an Alternative Transaction; or (iv) fail to include the
recommendation of the Board of Directors of the Company in favor of
approval of this Agreement pursuant to Section 5.02(a) or fail to take the
action required by the second sentence of Section 5.02(a) (it being
understood and agreed that a communication by the Board of Directors of the
Company to the Company's stockholders pursuant to Rule 14d-9(f)(3) or
14(e)(2)of the Exchange Act, or any similar type of communication to the
Company's stockholders in connection with the making or amendment of a
tender offer or exchange offer, shall not be deemed to constitute a basis
for termination under this Section 7.01(e)); or
(f) by Parent or the Company, if any representation or warranty
of the Company, or Parent and Merger Sub, respectively, set forth in this
Agreement shall be untrue when made, such that the conditions set forth in
Sections 6.02(a) or 6.03(a), as the case may be, would not be satisfied (in
either case a "Terminating Misrepresentation"); provided that if such
Terminating Misrepresentation is curable prior to January 31, 2002 by the
Company or Parent, as the case may be, through the exercise of its
reasonable best efforts and for so long as the Company or Parent, as the
case may be, continues to exercise such reasonable best efforts, neither
Parent nor the Company, respectively, may terminate this Agreement under
this Section 7.01(f); or
(g) by Parent or the Company, if any representation or warranty
of the Company, or Parent and Merger Sub, respectively, set forth in this
Agreement shall have become untrue, such that the conditions set forth in
Sections 6.02(a) or 6.03(a), as the case may be, would not be satisfied (in
either case, a "Terminating Change"), in either case other than by reason
of a Terminating Breach (as hereinafter defined); provided that if any such
Terminating Change is curable prior to January 31, 2002 by the Company or
Parent, as the case may be, through the exercise of its reasonable best
efforts, and for so long as the Company or Parent, as the case may be,
continues to exercise such reasonable best efforts, neither Parent nor the
Company, respectively, may terminate this Agreement under this Section
7.01(g); or
(h) by Parent or the Company, upon a breach of any covenant or
agreement on the part of the Company or Parent, respectively, set forth in
this Agreement such that the conditions set forth in Sections 6.02(b) or
6.03(b), as the case may be, would not be satisfied (a "Terminating
Breach"); if such Terminating Breach is curable prior to January 31, 2002
by the Company or Parent, as the case may be, through the exercise of its
reasonable best efforts and for so long as the Company or Parent, as the
case may be, continues to exercise such reasonable best efforts, neither
Parent nor the Company, respectively, may terminate this Agreement under
this Section 7.01(h); or
(i) by the Company, if (w) the Board of Directors of the Company
shall have authorized the Company, subject to complying with the terms of
this Agreement, including Section 4.02, to enter into a definitive
agreement with respect to a Superior Proposal and the Company shall have
notified Parent in writing that it intends to enter into such an agreement,
attaching a summary of the material terms thereof, (x) Parent shall not
have made, within two full business days (disregarding any partial business
days) of receipt of the Company's written notification of its intention to
enter into a definitive agreement with respect to a Superior Proposal, an
offer that the Board of Directors of the Company determines, in good faith
after consultation with its financial advisors, is at least as favorable,
from a financial point of view, to the stockholders of the Company as the
Superior Proposal, (y) the Company prior to such termination pursuant to
this clause (i) shall have paid to Parent in immediately available funds
the Fee and the Expenses required to be paid pursuant to Section 7.03(b),
and (z) this Agreement shall not theretofore have been approved at the
Company Stockholders Meeting; or
(j) by the Company, if, whether or not permitted to do so by this
Agreement, the Board of Directors of Parent or Parent shall (i) withdraw,
modify or change its approval, adoption or recommendation of the Parent
Stockholders Meeting Proposals in a manner adverse to the Company or (ii)
fail to include the recommendation of the Board of Directors of Parent in
favor of approval of the Parent Stockholders Meeting Proposals pursuant to
Section 5.02(b) or fail to take the action required by the second sentence
of Section 5.02(b); or
(k) by the Company, if any party to a Voting Agreement shall
repudiate such agreement or such agreement shall otherwise be
unenforceable, provided that the Company shall not be entitled to terminate
this Agreement under this Section 7.01(k) as a result of the death or
incapacity of either of the stockholders that are parties to the Voting
Agreements or any circumstances arising from such death or incapacity.
SECTION 7.02. Effect of Termination. In the event of the
termination of this Agreement pursuant to Section 7.01, this Agreement
shall forthwith become void and there shall be no liability on the part of
any party hereto or any of its affiliates, directors, officers or
stockholders except that (i) the Company, Parent or Merger Sub may have
liabilities or obligations as set forth in Section 7.03 and as set forth in
or contemplated by Section 8.01 hereof. Notwithstanding the foregoing,
nothing herein shall relieve the Company, Parent or Merger Sub from
liability for any willful breach hereof or willful misrepresentation herein
(it being understood that (x) the provisions of Section 7.03 do not
constitute a sole or exclusive remedy for such willful breach or
misrepresentation and (y) the mere existence of a Material Adverse Effect,
by itself, shall not constitute such a willful breach).
SECTION 7.03. Fees and Expenses. (a) Except as set forth in this
Section 7.03, all fees and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expenses, whether or not the Merger is consummated;
provided, however, that if the Merger is not consummated, Parent and the
Company shall share equally (i) all SEC filing fees and printing expenses
incurred in connection with the printing and filing of the Joint Proxy
Statement/Prospectus (including any preliminary materials related thereto)
and the Registration Statement (including financial statements and
exhibits) and any amendments or supplements thereto and (ii) conveyance and
similar taxes required to be paid by the Company prior to the Effective
Time pursuant to Section 5.14.
(b) The Company shall pay Parent a fee of $22.5 million (the
"Fee"), and shall pay Parent's actual, documented and reasonable
out-of-pocket expenses, relating to the transactions contemplated by this
Agreement (including, but not limited to, fees and expenses of counsel and
accountants and out-of-pocket expenses (but not fees) of financial
advisors) ("Expenses," as applicable to Parent or the Company), in a
combined amount not to exceed $1.0 million, upon the first to occur of any
of the following events:
(i) the termination of this Agreement by Parent or the Company
pursuant to Section 7.01(d) following the Company Stockholder Meeting at
which the stockholders of the Company failed to approve this Agreement,
provided that the Alternative Transaction Condition (as defined below) is
satisfied; or
(ii) the termination of this Agreement by Parent pursuant to
Section 7.01(e); or
(iii) the termination of this Agreement by the Company pursuant
to Section 7.01(i).
The "Alternative Transaction Condition" shall be satisfied in
respect of a termination of this Agreement if (A) an Alternative
Transaction shall be publicly announced by the Company or any third party
during the period beginning on the date of this Agreement and ending 6
months following the date of termination of this Agreement and (B) such
transaction shall at any time thereafter be consummated on terms
substantially equivalent to or more favorable to the Company or its
stockholders than the terms theretofore announced; provided that for
purposes of this definition, the definition of Alternative Transaction set
forth in Section 4.02(a) shall be modified to replace "25%," as it appears
in such definition, with "40%".
(c) Upon a termination of this Agreement by Parent pursuant to
Section 7.01(h), the Company shall pay to Parent its Expenses relating to
the transactions contemplated by this Agreement in a combined amount not to
exceed $1.0 million; and, in addition, the Company shall pay Parent the Fee
provided that (i) such Terminating Breach is willful and (ii) the
Alternative Transaction Condition is satisfied.
(d) Upon a termination of this Agreement by Parent pursuant to
Section 7.01(f), the Company shall pay to Parent its Expenses relating to
the transactions contemplated by this Agreement in a combined amount not to
exceed $1.0 million. Upon termination of this Agreement by the Company
pursuant to Sections 7.01(f), 7.01(h) or 7.01(j), Parent shall pay to the
Company the Expenses of the Company relating to the transactions
contemplated by this Agreement, in an amount not to exceed $1.0 million.
(e) The Fee and/or Expenses payable pursuant to this Section 7.03
shall be paid within one business day after a demand for payment following
the first to occur of any of the events described in the aforesaid
Sections, as applicable; provided that in no event shall the Company be
required to pay the Fee or any Expenses to Parent, nor shall Parent be
required to pay any Expenses to the Company if, immediately prior to the
termination of this Agreement, the entity otherwise entitled to receive
such fee and/or expenses was in material breach of its obligations under
this Agreement or, in the case of Parent, Merger Sub was in material breach
of its obligations under this Agreement.
(f) Each of the Company, Parent and Merger Sub agrees that the
payments provided for in this Section 7.03 shall be the sole and exclusive
remedy of Parent and Merger Sub upon a termination of this Agreement by
Parent pursuant to Section 7.01(d), (e), (f), (h) or (i), and the payments
provided for in this Section 7.03 shall be the sole and exclusive remedy of
the Company upon a termination of this Agreement by the Company pursuant to
Section 7.01(f), (h) or (j), regardless of the circumstances giving rise to
such termination; provided, however, that the foregoing shall not apply to
any willful breach of this Agreement or any willful misrepresentation
hereunder giving rise to such termination. Subject to Section 7.03(e), if a
party is entitled to terminate this Agreement pursuant to more than one
clause of Section 7.01, such party shall be entitled to receive the Fees
and Expenses to which it is entitled as a result of any such termination,
provided that in no event shall there be any duplication of payment.
ARTICLE VIII
GENERAL PROVISIONS
------------------
SECTION 8.01. Effectiveness of Representations, Warranties and
Agreements. (a) Except as otherwise provided in this Section 8.01, 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 or directors, whether
prior to or after the execution of this Agreement. The representations,
warranties and agreements in this Agreement shall terminate at the
Effective Time or upon the termination of this Agreement pursuant to
Section 7.01, except that the agreements set forth in Article I and
Sections 5.06, 5.08(b), 5.11, 5.12 and 5.17 and any other agreement in this
Agreement which contemplates performance after the Effective Time shall
survive the Effective Time indefinitely and those set forth in Sections
7.02 and 7.03 and this Article VIII shall survive termination indefinitely.
The Parent Confidentiality Agreement and the Company Confidentiality
Agreement shall survive termination of this Agreement in accordance with
their respective terms.
(b) Any disclosure made with reference to one or more Sections of
the Company Disclosure Schedule or the Parent Disclosure Schedule shall be
deemed disclosed with respect to each other section therein as to which
such disclosure is relevant provided that such relevance is reasonably
apparent on the face of such disclosure. Disclosure of any matter in the
Company Disclosure Schedule or the Parent Disclosure Schedule shall not be
deemed an admission that such matter is material.
SECTION 8.02. Notices. All notices and other communications given
or made pursuant hereto shall be in writing and shall be deemed to have
been duly given or made if and when delivered personally or by overnight
courier to the parties at the following addresses or sent by electronic
transmission, with confirmation received, to the telecopy numbers specified
below (or at such other address or telecopy number for a party as shall be
specified by like notice):
(a) If to Parent or Merger Sub:
Vishay Intertechnology, Inc.
63 Lincoln Highway
Malvern, Pennsylvania 19355-2120
Attn: Avi D. Eden
Telecopy: (610) 889-2161
With a copy (which shall not constitute notice) to:
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, NY 10022
Attn: Abbe L. Dienstag, Esq.
Telecopy: (212) 715-8000
Confirm: (212) 715-9100
(b) If to the Company:
General Semiconductor, Inc.
10 Melville Park Road
Melville, New York 11747
Attn: Stephen B. Paige, Esq.
Telecopy: (631) 847-3033
With a copy (which shall not constitute notice) to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, NY 10004
Attn: Lois Herzeca, Esq.
Telecopy: (212) 859-4000
Confirm: (212) 859-8000
SECTION 8.03. Certain Definitions. For purposes of this
Agreement, the term:
(a) "affiliates", with respect to any person, means a person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the first mentioned person;
(b) "business day" means any day other than a day on which banks
in New York City are required or authorized to be closed;
(c) "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly or as
trustee or executor, of the power to direct or cause the direction of the
management or policies of a person, whether through the ownership of stock,
as trustee or executor, by contract or credit arrangement or otherwise;
(d) "knowledge" means, with respect to any matter in question,
that the executive officers or any employee having primary or substantial
oversight responsibility for the matter of the Company or Parent, as the
case may be, have or at any time had actual knowledge of such matter;
(e) "Material Adverse Effect," when used in connection with the
Company or any of its subsidiaries or Parent or any of its Subsidiaries, as
the case may be, means any change, effect or circumstance that is
materially adverse to the business, assets (including intangible assets),
financial condition or results of operations of the Company and its
subsidiaries, taken as whole, or Parent and its subsidiaries, taken as a
whole, as the case may be; provided, however, that each of the following
shall be excluded from the definition of Material Adverse Effect and from
any determination as to whether a Material Adverse Effect has occurred or
may occur: changes, effects or circumstances, that are applicable to (A)
the semiconductor industry or the discrete electronics components industry
generally, (B) the United States securities markets generally, (C)
personnel and other changes customarily attendant to transactions of the
type contemplated by this Agreement, including, without limitation, any
disruption of customer, supplier or employee relationships, (D) changes in
economic, regulatory or political conditions generally, (E) the litigation
brought against the Company by Siliconix Incorporated in the United States
District Court for the Northern District of California and any related
claims between the current parties to such litigation or between the
Company and Parent (the "S Litigation") and (F) the restructuring described
in Section 2.08 of the Company Disclosure Schedule.
(f) "person" means an individual, corporation, partnership,
association, trust, unincorporated organization, other entity or group (as
defined in Section 13(d)(3) of the Exchange Act); and
(g) "subsidiary" or "subsidiaries" of the Company, the Surviving
Corporation, Parent or any other person means any corporation, partnership,
joint venture or other legal entity of which the Company, the Surviving
Corporation, Parent or such other person, as the case may be (either alone
or through or together with any other subsidiary), owns, directly or
indirectly, more than 50% of the stock or other equity 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.
When reference is made in this Agreement to the Company or
Parent, such reference shall include their respective subsidiaries, as and
to the extent the context so requires, whether or not explicitly stated in
this Agreement.
SECTION 8.04. Amendment. This Agreement may be amended by the
parties hereto at any time prior to the Effective Time; provided, however,
that, after approval of this Agreement by the stockholders of the Company,
no amendment may be made which by law requires further approval by such
stockholders without such further approval. This Agreement may not be
amended except by an instrument in writing signed by the parties hereto.
SECTION 8.05. Waiver. At any time prior to the Effective Time,
any party hereto may with respect to any other party hereto (a) extend the
time for the performance of any of the obligations or other acts, (b) waive
any inaccuracies in the representations and warranties contained herein or
in any document delivered pursuant hereto, or (c) waive compliance with any
of the agreements or conditions contained herein. Any such extension or
waiver shall be valid if set forth in an instrument in writing signed by
the party or parties to be bound thereby.
SECTION 8.06. 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 8.07. Severability. (a) 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 material manner adverse to any party. Upon a 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 the transactions
contemplated hereby are fulfilled to the extent possible.
(b) The Company and Parent agree that the Fee provided in Section
7.03(b) is fair and reasonable in the circumstances. If a court of
competent jurisdiction shall nonetheless, by a final, non-appealable
judgment, determine that the amount of the Fee exceeds the maximum amount
permitted by law, then the amount of the Fee shall be reduced to the
maximum amount permitted by law in the circumstances, as determined by such
court of competent jurisdiction.
SECTION 8.08. Entire Agreement. This Agreement constitutes the
entire agreement and supersedes all prior agreements and undertakings, both
written and oral, among the parties, or any of them, with respect to the
subject matters hereof and thereof, except as otherwise expressly provided
herein or therein, other than the Parent Confidentiality Agreement and the
Company Confidentiality Agreement.
SECTION 8.09. Assignment. This Agreement shall not be assigned by
operation of law or otherwise, except that all or any of the rights of
Parent and/or Merger Sub hereunder may be assigned to any direct or
indirect wholly owned subsidiary of Parent, provided that no such
assignment shall relieve the assigning party of its obligations hereunder.
SECTION 8.10. Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and
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, including, without
limitation, by way of subrogation, other than Section 5.06 (which is
intended to be for the benefit of the Indemnified Parties and Covered
Persons and may be enforced by such Indemnified Parties and Covered
Persons) and other than the right of the stockholders of the Company to
receive the Merger Consideration if, but only if, the Merger is consummated
and not otherwise.
SECTION 8.11. 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 any other or further exercise thereof or of any
other right. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
SECTION 8.12. Governing Law; Jurisdiction. (a) All questions
concerning the construction, validity and interpretation of this agreement
and the schedules hereto will be governed by the internal law, and not the
law of conflicts, of the State of Delaware.
(b) Each of the parties to this Agreement submits to the
jurisdiction of any state or federal court sitting in Wilmington, Delaware,
in any action or proceeding arising out of or relating to this Agreement,
agrees that all claims in respect of the action or proceeding may be heard
and determined in any such court, and agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court.
Each of the parties to this Agreement waives any defense of inconvenient
forum to the maintenance of any action or proceeding so brought and waives
any bond, surety or other security that might be required of any other
party with respect thereto.
SECTION 8.13. Counterparts. This Agreement may be executed in two
or more 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.
SECTION 8.14. WAIVER OF JURY TRIAL. EACH OF PARENT, MERGER SUB
AND THE COMPANY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 8.15 Performance of Obligations. Unless otherwise
previously performed, Parent shall cause each of Merger Sub and the
Surviving Corporation to perform all of its obligations set forth in this
Agreement.
SECTION 8.16 Enforcement. (a) The parties agree that irreparable
damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms. It is
accordingly agreed that the parties shall be entitled to specific
performance of the terms hereof, this being in addition to any other remedy
to which they are entitled at law or in equity.
(b) The parties agree and acknowledge that (i) each of Parent and
the Company shall not, and shall cause their respective subsidiaries and
affiliates not to, utilize any statement herein or the failure to make a
statement herein, as evidence in support of any position of the parties or
their respective subsidiaries and affiliates in the S Litigation, and (ii)
the S Litigation, and the Intellectual Property Assets in issue, or which
in the future become an issue in the S Litigation shall be deemed expressly
excluded from the respective representations and warranties of the parties
in Section 2.19 and Section 3.19.
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have
caused this Agreement to be executed as of the date first written above by
their respective officers thereunto duly authorized.
VISHAY INTERTECHNOLOGY, INC.
By: /s/ Avi D. Eden
----------------------------------------
Name: Avi D. Eden
Title: Executive Vice President
and General Counsel
VISHAY ACQUISITION CORP.
By: /s/ Avi D. Eden
----------------------------------------
Name: Avi D. Eden
Title: Vice President
GENERAL SEMICONDUCTOR, INC.
By: /s/ Ronald A. Ostertag
--------------------------------------
Name: Ronald A. Ostertag
Title: COB, CEO