SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant |X|
Filed by a party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
|_| Definitive Proxy Statement
|X| Definitive Additional Materials
|_| Soliciting Material Under Rule 14a-12
MAYTAG CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction
applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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FORWARD-LOOKING STATEMENTS
This document includes statements that do not directly or exclusively relate to
historical facts. Such statements are "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These forward-looking statements include
statements regarding benefits of the proposed transactions, expected cost
savings and anticipated future financial operating performance and results,
including estimates of growth. These statements are based on the current
expectations of management of Maytag. There are a number of risks and
uncertainties that could cause actual results to differ materially from the
forward-looking statements included in this document. For example, with respect
to the transaction with a group led by Ripplewood Holdings L.L.C. (1) Maytag may
be unable to obtain shareholder approval required for the transaction; (2)
Maytag may be unable to obtain regulatory approvals required for the
transaction, or required regulatory approvals may delay the transaction or
result in the imposition of conditions that could have a material adverse effect
on Maytag or cause the parties to abandon the transaction; (3) conditions to the
closing of the transaction may not be satisfied or the merger agreement may be
terminated prior to closing; (4) Maytag may be unable to achieve cost-cutting
goals or it may take longer than expected to achieve those goals; (5) the
transaction may involve unexpected costs or unexpected liabilities; (6) the
credit ratings of Maytag or its subsidiaries may be different from what the
parties expect; (7) the businesses of Maytag may suffer as a result of
uncertainty surrounding the transaction; (8) the industry may be subject to
future regulatory or legislative actions that could adversely affect Maytag; and
(9) Maytag may be adversely affected by other economic, business, and/or
competitive factors. Additional factors that may affect the future results of
Maytag are set forth in its filings with the Securities and Exchange Commission
("SEC"), which are available at www.maytagcorp.com. Maytag undertakes no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with the proposed transaction with an investor group led by
private equity firm Ripplewood Holdings L.L.C., Maytag has filed a definitive
proxy statement and may file other relevant documents concerning the proposed
merger with SEC. WE URGE INVESTORS TO READ THE DEFINITIVE PROXY STATEMENT AND
THE OTHER RELEVANT DOCUMENTS CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT MAYTAG AND THE PROPOSED TRANSACTION.
Investors can obtain free copies of the definitive proxy statement as well as
other filed documents containing information about Maytag at http://www.sec.gov,
SEC's Web site. Free copies of Maytag's SEC filings are also available on
Maytag's Web site at www.maytagcorp.com.
PARTICIPANTS IN THE SOLICITATION
Maytag and its executive officers and directors and Ripplewood Holdings L.L.C.,
Triton Acquisition Holding and Triton Acquisition and their respective
affiliates, executive officers and directors may be deemed, under SEC rules, to
be participants in the solicitation of proxies from Maytag's stockholders with
respect to the proposed transaction. Information regarding the officers and
directors of Maytag is included in its definitive proxy statement for its 2005
annual meeting filed with SEC on April 4, 2005. More detailed information
regarding the identity of potential participants, and their direct or indirect
interests, by securities, holdings or otherwise, is set forth
in the proxy statement and other materials filed or to be filed with SEC in
connection with the proposed transaction.
On August 10, 2005, Maytag Corporation (the "Company") received a revised formal
proposal from Whirlpool Corporation to acquire Maytag for $21.00 per share, of
which 50% would be paid in cash and the balance in shares of Whirlpool common
stock and would have such terms as set forth in the merger agreement executed by
Whirlpool and attached to such proposal. A copy of the Whirlpool proposal
including the proposed merger agreement is set forth below and is incorporated
herein by reference.
The following is the Whirlpool proposal:
WHIRLPOOL CORPORATION
2000 M63 North
Benton Harbor, Michigan 49022
August 10, 2005
Mr. Ralph F. Hake Chairman and CEO
Mr. Howard L. Clark, Jr.
Chairman, Special Committee
of the Board of Directors
Maytag Corporation
403 West Fourth Street, North
Newton, Iowa 50208
Dear Messrs. Hake and Clark:
We are pleased to increase our offer to acquire Maytag. We are
now offering to acquire all of Maytag's outstanding shares by means of a merger
that would provide Maytag shareholders $21.00 of total consideration per Maytag
share in a taxable transaction. Of the total consideration, 50% would be paid in
cash and the balance in shares of Whirlpool common stock. All other material
terms of this offer, including the "reverse break-up fee" of $120 million,
remain unchanged from those contained in my August 8, 2005 letter to you.
Based on our understanding that your Board prefers certainty
of value on the portion of the consideration that will be based on Whirlpool
stock, we will provide your shareholders the benefit of a floating exchange
ratio to determine the number of shares at closing. Such floating exchange ratio
will be subject to a collar range equal to +/- 10% of the volume weighted
average price of our common stock on the New York Stock Exchange on the day you
first declare our offer a "Superior Company Proposal" (as defined in the
Agreement and Plan of Merger, dated as of May 19, 2005, among Triton Acquisition
Holding, Triton Acquisition Co. and Maytag) and, if such day is not a business
day, on the trading day immediately preceding such day.
Please find attached hereto a new Agreement and Plan of Merger
(the "MERGER AGREEMENT"), dated as of August 10, 2005, among Whirlpool
Corporation ("WHIRLPOOL"), Whirlpool Acquisition Co. ("MERGER SUB") and Maytag
Corporation ("MAYTAG") executed by Whirlpool and Merger Sub. The execution and
delivery of the Merger Agreement by Whirlpool and Merger Sub constitutes a
binding irrevocable offer by Whirlpool and Merger Sub to Maytag to enter into
the transactions contemplated by the Merger Agreement on the terms specified
therein (the "Offer"). Unless previously accepted by Maytag, the Offer will
expire at 5:00 pm. Eastern Standard Time on August 21, 2005.
Whirlpool represents to Maytag that Whirlpool's execution,
delivery and performance of the Merger Agreement, and the consummation of the
transactions contemplated thereby, are within Whirlpool's corporate powers, and
have been duly authorized by all necessary corporate action. In addition,
Whirlpool represents to Maytag that the Merger Agreement constitutes a valid and
binding agreement of Whirlpool and will, upon execution by Maytag, be
enforceable against Whirlpool in accordance with its terms.
This offer and our other agreements set forth in this letter
shall be governed by and construed in accordance with the laws of the State of
Delaware without regard to the conflicts of laws principles thereof.
We look forward to hearing from you with regard to your
determination.
Very truly yours,
WHIRLPOOL CORPORATION
By: /s/ Jeff M. Fettig
---------------------------
Jeff M. Fettig
Chairman, CEO and President
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
Dated as of August 10, 2005,
Among
WHIRLPOOL CORPORATION,
WHIRLPOOL ACQUISITION CO.
and
MAYTAG CORPORATION
TABLE OF CONTENTS
PAGE
ARTICLE I THE MERGER...........................................1
SECTION 1.01 THE MERGER...................................1
SECTION 1.02 CLOSING......................................1
SECTION 1.03 EFFECTIVE TIME...............................1
SECTION 1.04 EFFECTS......................................2
SECTION 1.05 CERTIFICATE OF INCORPORATION AND BY-LAWS.....2
SECTION 1.06 DIRECTORS....................................2
SECTION 1.07 OFFICERS.....................................2
ARTICLE II EFFECT ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES...............2
SECTION 2.01 EFFECT ON CAPITAL STOCK......................2
SECTION 2.02 APPRAISAL RIGHTS; STOCK OPTIONS;
AFFILIATES...................................4
SECTION 2.03 EXCHANGE OF CERTIFICATES.....................5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY........9
SECTION 3.01 ORGANIZATION, STANDING AND POWER.............9
SECTION 3.02 COMPANY SUBSIDIARIES: EQUITY INTERESTS.......9
SECTION 3.03 CAPITAL STRUCTURE...........................10
SECTION 3.04 AUTHORITY; EXECUTION AND DELIVERY;
ENFORCEABILITY..............................11
SECTION 3.05 NO CONFLICTS; CONSENTS......................12
SECTION 3.06 SEC DOCUMENTS; UNDISCLOSED LIABILITIES......13
SECTION 3.07 INFORMATION SUPPLIED........................15
SECTION 3.08 ABSENCE OF CERTAIN CHANGES OR EVENTS........16
SECTION 3.09 TAXES.......................................17
SECTION 3.10 ABSENCE OF CHANGES IN BENEFIT PLANS.........19
SECTION 3.11 ERISA COMPLIANCE; EXCESS PARACHUTE
PAYMENTS....................................19
SECTION 3.12 LITIGATION..................................23
SECTION 3.13 COMPLIANCE WITH APPLICABLE LAWS.............23
SECTION 3.14 LABOR MATTERS...............................24
SECTION 3.15 ENVIRONMENTAL MATTERS.......................24
SECTION 3.16 INTELLECTUAL PROPERTY.......................26
i
SECTION 3.17 BROKERS; SCHEDULE OF FEES AND EXPENSES......26
SECTION 3.18 OPINION OF FINANCIAL ADVISOR................27
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB....27
SECTION 4.01 ORGANIZATION, STANDING AND POWER............27
SECTION 4.02 CAPITAL STRUCTURE...........................27
SECTION 4.03 SUB.........................................28
SECTION 4.04 AUTHORITY; EXECUTION AND DELIVERY;
ENFORCEABILITY..............................29
SECTION 4.05 NO CONFLICTS; CONSENTS......................29
SECTION 4.06 SEC DOCUMENTS; UNDISCLOSED LIABILITIES......30
SECTION 4.07 INFORMATION SUPPLIED........................32
SECTION 4.08 ABSENCE OF CERTAIN CHANGES OR EVENTS........33
SECTION 4.09 LITIGATION..................................33
SECTION 4.10 COMPLIANCE WITH APPLICABLE LAWS.............33
SECTION 4.11 ENVIRONMENTAL MATTERS.......................33
SECTION 4.12 INTELLECTUAL PROPERTY.......................35
SECTION 4.13 FINANCING...................................35
SECTION 4.14 BROKERS; SCHEDULE OF FEES AND EXPENSES......35
ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS...........35
SECTION 5.01 CONDUCT OF BUSINESS.........................35
SECTION 5.02 NO SOLICITATION.............................41
ARTICLE VI ADDITIONAL AGREEMENTS...............................43
SECTION 6.01 PREPARATION OF PROXY STATEMENT AND FORM
S-4; STOCKHOLDERS MEETING...................43
SECTION 6.02 ACCESS TO INFORMATION; CONFIDENTIALITY......44
SECTION 6.03 REASONABLE BEST EFFORTS; NOTIFICATION.......44
SECTION 6.04 ESPP........................................46
SECTION 6.05 BENEFIT PLANS...............................46
SECTION 6.06 INDEMNIFICATION.............................49
SECTION 6.07 FEES AND EXPENSES...........................49
ii
SECTION 6.08 PUBLIC ANNOUNCEMENTS........................51
SECTION 6.09 TRANSFER TAXES..............................51
SECTION 6.10 RIGHTS AGREEMENTS; CONSEQUENCES IF
RIGHTS TRIGGERED............................51
SECTION 6.11 STOCKHOLDER LITIGATION......................52
SECTION 6.12 STOCK EXCHANGE LISTING......................52
SECTION 6.13 AFFILIATES..................................52
SECTION 6.14 OTHER ACTIONS BY PARENT.....................52
SECTION 6.15 SECTION 16(B)...............................52
ARTICLE VII CONDITIONS PRECEDENT................................53
SECTION 7.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO
EFFECT THE MERGER...........................53
SECTION 7.02 CONDITIONS TO OBLIGATIONS OF PARENT AND
SUB.........................................53
SECTION 7.03 CONDITIONS TO OBLIGATION OF THE COMPANY.....54
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER...................55
SECTION 8.01 TERMINATION.................................55
SECTION 8.02 EFFECT OF TERMINATION.......................56
SECTION 8.03 AMENDMENT...................................56
SECTION 8.04 EXTENSION; WAIVER...........................56
SECTION 8.05 PROCEDURE FOR TERMINATION...................56
ARTICLE IX GENERAL PROVISIONS..................................57
SECTION 9.01 NONSURVIVAL OF REPRESENTATIONS AND
WARRANTIES..................................57
SECTION 9.02 NOTICES.....................................57
SECTION 9.03 DEFINITIONS.................................58
SECTION 9.04 INTERPRETATION; DISCLOSURE LETTER...........59
SECTION 9.05 SEVERABILITY................................59
SECTION 9.06 COUNTERPARTS................................59
SECTION 9.07 ENTIRE AGREEMENT; NO THIRD-PARTY
BENEFICIARIES...............................59
SECTION 9.08 GOVERNING LAW...............................60
SECTION 9.09 ASSIGNMENT..................................60
SECTION 9.10 ENFORCEMENT.................................60
iii
INDEX OF DEFINED TERMS
Defined Term Location
- ----------------------------------------------------------------------
"20-DAY AVERAGE PRICE".................................. 2.01(f)
"2005 BONUS PLANS"...................................... 6.05(e)
"2006 BONUS PLANS"...................................... 6.05(e)
"AFFILIATE"............................................. 9.03
"AFFILIATE AGREEMENT"................................... 6.13(a)
"ANTITRUST LAWS"........................................ 6.03(b)(i)
"APPRAISAL SHARES"...................................... 2.02(a)
"BOOK ENTRY SHARES"..................................... 2.03(a)
"CASH LTIPS"............................................ 2.02(b)(2)
"CERTIFICATE"........................................... 2.01(d)
"CERTIFICATE OF MERGER"................................. 1.03
"CLOSING"............................................... 1.02
"CLOSING DATE".......................................... 1.02
"CODE".................................................. 2.03(j)
"COMMON SHARES TRUST"................................... 2.03(e)(2)
"COMMONLY CONTROLLED ENTITY"............................ 3.10(a)
"COMPANY"............................................... Preamble
"COMPANY BENEFIT AGREEMENTS"............................ 3.10(b)
"COMPANY BENEFIT PLANS"................................. 3.10(a)
"COMPANY BOARD"......................................... 2.02(b)(1)
"COMPANY BY-LAWS"....................................... 3.01
"COMPANY CAPITAL STOCK"................................. 3.03(a)
"COMPANY CHARTER"....................................... 3.01
"COMPANY COMMON STOCK".................................. 2.01
"COMPANY DISCLOSURE LETTER"............................. Article III
"COMPANY EMPLOYEES"..................................... 6.05(d)
"COMPANY MATERIAL ADVERSE EFFECT"....................... 9.03
"COMPANY PENSION PLANS"................................. 3.11(a)
"COMPANY PREFERRED STOCK"............................... 3.03(a)
"COMPANY RIGHTS"........................................ 3.03(a)
"COMPANY RIGHTS AGREEMENT".............................. 3.03(a)
"COMPANY SEC DOCUMENTS"................................. 3.06(a)
"COMPANY STOCK OPTION".................................. 2.02(b)(1)
"COMPANY STOCK PLANS"................................... 2.02(b)(4)
"COMPANY STOCKHOLDER APPROVAL".......................... 3.04(c)
"COMPANY STOCKHOLDERS MEETING".......................... 6.01(d)
"COMPANY SUBSIDIARY".................................... 3.01
"COMPANY TAKEOVER PROPOSAL"............................. 5.02(f)
"COMPETITIVELY SENSITIVE INFORMATION"................... 6.02(a)
"CONFIDENTIALITY AGREEMENT"............................. 6.02(a)
"CONSENT"............................................... 3.05(b)
"CONTRACT".............................................. 3.05(a)
vi
"DGCL".................................................. 1.01
"DISQUALIFIED INDIVIDUAL"............................... 3.11(e)
"EFFECTIVE TIME"........................................ 1.03
"ENVIRONMENTAL CLAIM"................................... 3.15(i)(1)
"ENVIRONMENTAL LAWS".................................... 3.15(i)(2)
"ENVIRONMENTAL PERMITS"................................. 3.15(b)(i)
"ERISA"................................................. 3.11(a)
"ESPP".................................................. 2.02(b)(4)
"EXCESS SHARES"......................................... 2.03(e)(1)
"EXCHANGE ACT".......................................... 3.05(b)
"EXCHANGE AGENT"........................................ 2.03(a)
"EXCHANGE FUND"......................................... 2.03(a)
"EXCHANGE RATIO"........................................ 2.01(f)
"EXCLUDED PARTICIPANTS"................................. 5.01(a)
"FILED COMPANY SEC DOCUMENT"............................ Article III
"FILED PARENT SEC DOCUMENT"............................. Article IV
"FORM S-4".............................................. 4.05(b)(iii)(A)
"GAAP".................................................. 3.06(b)
"GOVERNMENTAL ANTITRUST ENTITY"......................... 6.03(b)(i)
"GOVERNMENTAL ENTITY"................................... 3.05(b)
"HAZARDOUS MATERIALS"................................... 3.15(i)(3)
"HSR ACT"............................................... 3.05(b)
"INTELLECTUAL PROPERTY RIGHTS".......................... 3.16
"JUDGMENT".............................................. 3.05(a)
"KNOWLEDGE"............................................. 9.03
"LAW"................................................... 3.05(a)
"LAZARD"................................................ 3.17
"LIENS"................................................. 3.02(a)
"MAXIMUM PREMIUM"....................................... 6.06(b)
"MERGER"................................................ Recitals
"MERGER CONSIDERATION".................................. 2.01(c)
"NEW PLANS"............................................. 6.05(b)
"NON-U.S. BENEFIT PLANS"................................ 3.11(j)
"NONCLEARANCE TERMINATION FEE".......................... 6.07(d)
"NYSE".................................................. 2.01(f)
"OLD PLANS"............................................. 6.05(b)
"OUTSIDE DATE".......................................... 8.01(b)(i)
"PARENT"................................................ Preamble
"PARENT BOARD".......................................... 4.05(c)
"PARENT BY-LAWS"........................................ 4.02
"PARENT CAPITAL STOCK".................................. 4.02
"PARENT CHARTER"........................................ 4.02
"PARENT COMMON STOCK"................................... 1.01
"PARENT DISCLOSURE LETTER".............................. Article IV
"PARENT MATERIAL ADVERSE EFFECT"........................ 9.03
"PARENT PREFERRED STOCK"................................ 4.02
vii
"PARENT RIGHTS"......................................... 4.02
"PARENT RIGHTS AGREEMENT"............................... 4.02
"PARENT SEC DOCUMENTS".................................. 4.06(a)
"PARENT SUBSIDIARY"..................................... 4.02
"PARTICIPANT"........................................... 3.08(iv)(A)
"PERMITS"............................................... 3.13
"PERSON"................................................ 9.03
"PRIMARY COMPANY EXECUTIVE"............................. 3.11(e)
"PROXY STATEMENT"....................................... 3.05(b)
"RELEASE"............................................... 3.15(i)(4)
"REPRESENTATIVES"....................................... 5.02(a)
"RETENTION BONUS"....................................... 6.05(d)
"RETENTION POOL"........................................ 6.05(d)
"SARBANES-OXLEY ACT".................................... 3.06(d)
"SEC"................................................... 2.02(b)(3)
"SECTION 262"........................................... 2.02(a)
"SECURITIES ACT"........................................ 3.06(b)
"SEVERANCE PLAN"........................................ 6.05(f)
"SUB"................................................... Preamble
"SUBSIDIARY"............................................ 9.03
"SUPERIOR COMPANY PROPOSAL"............................. 5.02(f)
"SUPERIOR PROPOSAL AVERAGE PRICE"....................... 2.01(f)
"SURVIVING CORPORATION"................................. 1.01
"TAX RETURN"............................................ 3.09(a)
"TAXES"................................................. 3.09(a)
"TAXING AUTHORITY"...................................... 3.09(a)
"TRANSACTIONS".......................................... 1.01
"TRANSFER TAXES"........................................ 6.09
"TRUST AGREEMENT"....................................... 3.11(i)
"US PENSION PLAN"....................................... 3.11(c)
"VOTING COMPANY DEBT"................................... 3.03(a)
"VESTING DATE".......................................... 6.05(d)
"TRITON"................................................ 2.01(f)
"TRITON AGREEMENT"...................................... 2.01(f)
"VOTING PARENT DEBT".................................... 4.02
viii
AGREEMENT AND PLAN OF MERGER dated as of August 10, 2005, among
WHIRLPOOL CORPORATION, a Delaware corporation ("Parent"), WHIRLPOOL ACQUISITION
CO., a Delaware corporation and a wholly owned subsidiary of Parent ("SUB"), and
MAYTAG CORPORATION, a Delaware corporation (the "COMPANY").
WHEREAS the respective Boards of Directors of Parent, Sub and the
Company have approved the acquisition of the Company by Parent on the terms and
subject to the conditions set forth in this Agreement;
WHEREAS the respective Boards of Directors of Sub and the Company
have approved and declared advisable this Agreement and the merger (the
"MERGER") of Sub into the Company, on the terms and subject to the conditions
set forth in this Agreement; and
WHEREAS Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01 THE MERGER. On the terms and subject to the conditions set
forth in this Agreement, and in accordance with the General Corporation Law of
the State of Delaware (the "DGCL"), Sub shall be merged with and into the
Company at the Effective Time. At the Effective Time, the separate corporate
existence of Sub shall cease and the Company shall continue as the surviving
corporation (the "SURVIVING CORPORATION"). The Merger, the payment of cash and
shares of common stock, par value $1.00 per share, of Parent ("PARENT COMMON
STOCK") in connection with the Merger and the other transactions contemplated by
this Agreement are referred to herein as the "TRANSACTIONS".
SECTION 1.02 CLOSING. The closing (the "CLOSING") of the Merger shall take
place at the offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York,
New York 10153 at 10:00 a.m. on the second business day following the
satisfaction (or, to the extent permitted by Law, waiver by all parties) of the
conditions set forth in Section 7.01 (other than those conditions that by their
nature are to be fulfilled at the Closing), or, if on such day any condition set
forth in Section 7.02 or 7.03 has not been satisfied (or, to the extent
permitted by Law, waived by the party or parties entitled to the benefits
thereof and other than those conditions that by their nature are to be fulfilled
at the Closing), as soon as practicable after all the conditions set forth in
Article VII have been satisfied (or, to the extent permitted by Law, waived by
the parties entitled to the benefits thereof), or at such other place, time and
date as shall be agreed in writing between Parent and the Company. The date on
which the Closing occurs is referred to in this Agreement as the "CLOSING DATE".
SECTION 1.03 EFFECTIVE TIME. Prior to the Closing, Parent shall prepare,
and on the Closing Date or as soon as practicable thereafter the Surviving
Corporation shall file with the Secretary of State of the State of Delaware, a
certificate of merger (the "CERTIFICATE OF MERGER")
executed in accordance with the relevant provisions of the DGCL and shall make
all other filings or recordings required under the DGCL. The Merger shall become
effective at such time as the Certificate of Merger is duly filed with such
Secretary of State, or at such subsequent time as Parent and the Company shall
agree and specify in the Certificate of Merger (the time the Merger becomes
effective being the "EFFECTIVE TIME").
SECTION 1.04 EFFECTS. The Merger shall have the effects set forth in
Section 259 of the DGCL.
SECTION 1.05 CERTIFICATE OF INCORPORATION AND BY-LAWS. (a) The 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 changed or amended as provided therein or by applicable Law.
(b) The By-laws of Sub, as in effect immediately prior to the Effective
Time, shall be the By-laws of the Surviving Corporation until thereafter changed
or amended as provided therein or by applicable Law.
SECTION 1.06 DIRECTORS. The directors of Sub immediately prior to the
Effective Time shall be the directors of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
SECTION 1.07 OFFICERS. The officers of the Company immediately prior to the
Effective Time shall be the officers of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected or appointed and qualified, as the case may be.
ARTICLE II
EFFECT ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION 2.01 EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of
the Merger and without any action on the part of the holder of any shares of
common stock, par value $1.25 per share, of the Company ("COMPANY COMMON STOCK")
or any shares of capital stock of Sub:
(a) CAPITAL STOCK OF SUB. Each issued and outstanding share of capital
stock of Sub shall be converted into and become one fully paid and nonassessable
share of common stock, par value $1.00 per share, of the Surviving Corporation.
(b) CANCELLATION OF TREASURY STOCK AND PARENT-OWNED STOCK. Each share
of Company Common Stock that is owned by the Company, Parent or Sub shall no
longer be outstanding and shall automatically be canceled and shall cease to
exist, and no consideration shall be delivered or deliverable in exchange
therefor.
(c) CONVERSION OF COMPANY COMMON STOCK. Subject to Sections 2.01(b),
2.02(a) and 2.02(b), each issued and outstanding share of Company Common Stock
shall be
2
converted into the right to receive (x) $10.50 in cash, without
interest, and (y) that number of validly issued, fully paid and non-assessable
shares of Parent Common Stock equal to the Exchange Ratio (together, the "MERGER
CONSIDERATION").
(d) EFFECT OF CONVERSION. From and after the Effective Time, all of
the shares of Company Common Stock converted into the Merger Consideration
pursuant to this Section 2.01 shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each holder
of a certificate (each a "CERTIFICATE") theretofore representing any such shares
of Company Common Stock shall thereafter cease to have any rights with respect
thereto, except the right to receive (i) the Merger Consideration, (ii) any
dividends and other distributions in accordance with Section 2.03(d) and 2.03(f)
and (iii) any cash to be paid in lieu of any fractional share of Parent Common
Stock in accordance with Section 2.03(e).
(e) CHANGES TO STOCK. If at any time during the period between the
date of this Agreement and the Effective Time, any change in the outstanding
shares of capital stock of Parent or the Company shall occur by reason of any
reclassification, recapitalization, stock split or combination, split-up,
exchange or readjustment of shares, rights issued in respect of Parent Common
Stock or any stock dividend thereon with a record date during such period, the
Merger Consideration, the Exchange Ratio and any other similarly dependent
items, as the case may be, shall be appropriately adjusted to provide the
holders of shares of Company Common Stock the same economic effect as
contemplated by this Agreement prior to such event.
(f) DEFINITIONS. For purposes of this Agreement:
"EXCHANGE RATIO" means the quotient obtained by dividing $10.50 by
the 20-Day Average Price and rounding to the nearest 1/10,000; provided that if
the 20-Day Average Price is less than an amount equal to 90% of the Superior
Proposal Average Price, the Exchange Ratio shall be equal to the quotient
obtained by dividing $10.50 by the product of 90% and the Superior Proposal
Average Price; and if the 20-Day Average Price is greater than an amount equal
to 110% of the Superior Proposal Average Price, the Exchange Ratio shall be
equal to the quotient obtained by dividing $10.50 by the product of 110% and the
Superior Proposal Average Price.
"20-DAY AVERAGE PRICE" shall mean the average (rounded to nearest
1/10,000), of the volume weighted averages (rounded to the nearest 1/10,000), of
the trading prices of the Parent Common Stock on the New York Stock Exchange,
Inc. (the "NYSE") as reported by Bloomberg Financial Markets (or such other
source as the parties shall agree in writing) for each of the 20 consecutive
trading days ending on and including the second trading day prior to the Closing
Date.
"SUPERIOR PROPOSAL AVERAGE PRICE" shall mean the volume weighted
average (rounded to the nearest 1/10,000) of the trading prices of the Parent
Common Stock on the NYSE as reported by Bloomberg Financial Markets (or such
other source as the parties shall agree in writing) on the day that the Company
Board first declares Parent's offer a Company Superior Proposal under the
Agreementand Plan of Merger, dated as of May 19, 2005 (the "TRITON AGREEMENT"),
among Triton Acquisition Holding Co. and Triton Acquisition Co. (collectively,
3
"TRITON") and the Company, or, if such declaration is not made on a NYSE trading
day, on the NYSE trading day immediately prior to the date of such declaration.
SECTION 2.02 APPRAISAL RIGHTS; STOCK OPTIONS; AFFILIATES.
(a) APPRAISAL RIGHTS. Notwithstanding anything in this Agreement to
the contrary, shares ("APPRAISAL SHARES") of Company Common Stock that are
issued and outstanding immediately prior to the Effective Time and that are held
by any person who is entitled to demand and properly demands appraisal of such
Appraisal Shares pursuant to, and who complies with, Section 262 of the DGCL
("SECTION 262") shall not be converted into Merger Consideration as provided in
Section 2.01(c), but rather the holders of Appraisal Shares shall be entitled to
the rights provided for under Section 262; provided, however, that if any such
holder shall fail to perfect or otherwise shall waive, withdraw or lose the
right to appraisal under Section 262, then such holder's Appraisal Shares shall
be deemed to have been converted as of the Effective Time into, and to have
become exchangeable solely for the right to receive, the Merger Consideration as
provided in Section 2.01(c) and unpaid dividends and other distributions as
provided in Section 2.03(d). The Company shall serve prompt notice to Parent of
any demands received by the Company for appraisal of any shares of Company
Common Stock, and Parent shall have the right to participate in and direct all
negotiations and proceedings with respect to such demands. Prior to the
Effective Time, the Company shall not, without the prior written consent of
Parent, make any payment with respect to, or settle or offer to settle, any such
demands, or agree to do any of the foregoing.
(b) STOCK OPTIONS AND EQUITY AWARDS.
(1) The Board of Directors of the Company (the "COMPANY BOARD"),
or the appropriate committee thereof, shall take such action as is necessary so
that at the Effective Time, each outstanding option to purchase shares of
Company Common Stock (a "COMPANY STOCK OPTION") granted under the Company Stock
Plans, whether or not vested, shall cease to represent a right to acquire shares
of Company Common Stock, and shall thereafter constitute an option to acquire,
on the same terms and conditions as were applicable to such Company Stock Option
pursuant to the relevant Company Stock Plan under which it was issued and the
agreement evidencing the grant thereof prior to the Effective Time, the number
(rounded to the nearest whole number) of shares of Parent Common Stock
determined by multiplying (x) the number of shares of Company Common Stock
subject to such Company Stock Option immediately prior to the Effective Time by
(y) two times the Exchange Ratio. The exercise price or base price per share of
Parent Common Stock subject to any such Company Stock Option at and after the
Effective Time shall be an amount (rounded to the nearest one hundredth of a
cent) equal to (A) the exercise price or base price per share of Company Common
Stock subject to such Company Stock Option prior to the Effective Time divided
by (B) two times the Exchange Ratio. The parties acknowledge that as of the
Effective Time, all Company Stock Options granted under the 2002 Employee and
Director Stock Incentive Plan, the 1998 Non-Employee Directors' Stock Option
Plan, the 2000 Employee Stock Incentive Plan, the 1996 Employee Stock Incentive
Plan, the 1992 Stock Option Plan for Executives and Key Employees and the 1989
Stock Option Plan for Non-Employee Directors, if unvested, shall vest in full
and shall remain exercisable in accordance with the terms of the applicable plan
documents and award agreements for each such Company Stock Option. The parties
will make good faith efforts to
4
make equitable adjustments to ensure that the conversions of Company Stock
Options contemplated by this Section 2.02(b)(1) comply with Section 409A of the
Code.
(2) At the Effective Time, (i) each restricted stock unit or
performance unit granted under the Company Stock Plans, if unvested, shall vest
in full and be settled for a cash payment to the holder of such award equal to
$10.50 plus (A) the Exchange Ratio times (B) the closing price of the Parent
Common Stock on the Closing Date per unit; and (ii) each award granted under the
Company's Performance Incentive Award Plan and the Company's Executive Economic
Profit Plan (together, the "CASH LTIPS") shall vest and be settled in cash
(based on a per share valuation equal to $10.50 plus (A) the Exchange Ratio
times (B) the closing price of the Parent Common Stock on the Closing Date) at
the Effective Time at 100% of target.
(3) Parent shall take all corporate action necessary to assume as
of the Effective Time the Company's obligations under the Company Stock Options
and to otherwise effectuate the provisions of this Section 2.02(b), and shall
reserve for issuance a sufficient number of shares of Parent Common Stock for
delivery pursuant to the terms set forth in this Section 2.02(b). Effective as
of the Closing Date, Parent shall file with the U.S. Securities and Exchange
Commission (the "SEC") a registration statement on an appropriate form or a
post-effective amendment to a previously filed registration statement under the
Securities Act with respect to the Parent Common Stock subject to Company Stock
Options and shall use its reasonable best efforts to maintain the effectiveness
of such registration statement (and maintain the current status of the
prospectus contained therein), as well as comply with any applicable state
securities or "blue sky" laws, for so long as such options remain outstanding.
(4) For purposes of this Agreement, "COMPANY STOCK PLANS" mean
the 2002 Employee and Director Stock Incentive Plan, the 1998 Non-Employee
Directors' Stock Option Plan, the 2000 Employee Stock Incentive Plan, the 1996
Employee Stock Incentive Plan, the 1992 Stock Option Plan for Executives and Key
Employees, the 1989 Stock Option Plan for Non-Employee Directors and the
Company's Employee Discount Stock Purchase Plan (the "ESPP").
(c) COMPANY AFFILIATES. Anything to the contrary herein
notwithstanding, no shares of Parent Common Stock (or certificates therefor)
shall be issued in exchange for any Certificate to any "AFFILIATE" of the
Company (identified pursuant to Section 6.13) until such person shall have
delivered to Parent duly executed Affiliate Agreements as contemplated by
Section 6.13. Such persons shall be subject to the restrictions described in
such agreements, and such shares (or certificates therefor) shall bear a legend
describing such restrictions.
SECTION 2.03 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. Prior to the Effective Time, Parent shall appoint
the transfer agent for the Parent Common Stock or such other exchange agent
reasonably acceptable to the Company (the "EXCHANGE AGENT") for the purpose of
exchanging Certificates representing shares of Company Common Stock and
non-certificated shares represented by book entry ("BOOK ENTRY SHARES") for the
Merger Consideration. Parent will make available to the Exchange Agent, at or
prior to the Effective Time, the cash and Parent Common Stock to be delivered in
respect of the shares of Company Common Stock (such cash and Parent Common Stock
being hereinafter referred to as the "EXCHANGE FUND"). Promptly after the
Effective Time,
5
Parent will send, or will cause the Exchange Agent to send, to each holder of
record of shares of Company Common Stock as of the Effective Time a letter of
transmittal for use in such exchange (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates theretofore
representing shares of Company Common Stock shall pass, only upon proper
delivery of such Certificates to the Exchange Agent or by appropriate guarantee
of delivery in the form customarily used in transactions of this nature from a
member of a national securities exchange, a member of the National Association
of Securities Dealers, Inc., or a commercial bank or trust company in the United
States) in such form as the Company and Parent may reasonably agree, for use in
effecting delivery of shares of Company Common Stock to the Exchange Agent.
Exchange of any Book-Entry Shares shall be effected in accordance with Parent's
customary procedures with respect to securities represented by book entry.
(b) EXCHANGE PROCEDURE. Each holder of shares of Company Common Stock
that have been converted into a right to receive the Merger Consideration, upon
surrender to the Exchange Agent of a Certificate, together with a properly
completed letter of transmittal, will be entitled to receive (A) one or more
shares of Parent Common Stock (which shall be in non-certificated book-entry
form unless a physical certificate is requested) representing, in the aggregate,
the whole number of shares of Parent Common Stock, if any, that such holder has
the right to receive pursuant to Section 2.01(c) and (B) a check in the amount
equal to the cash portion of the Merger Consideration, if any, that such holder
has the right to receive pursuant to Section 2.01(c) and this Article II,
including cash payable in lieu of fractional shares pursuant to Section 2.03(e)
and dividends and other distributions pursuant to Section 2.03(d). No interest
shall be paid or accrued on any Merger Consideration, cash in lieu of fractional
shares or on any unpaid dividends and distributions payable to holders of
Certificates. Until so surrendered, each such Certificate shall, after the
Effective Time, represent for all purposes only the right to receive such Merger
Consideration and any dividends and other distributions in accordance with
Sections 2.03(d) and 2.03(f), and any cash to be paid in lieu of any fractional
share of Parent Common Stock in accordance with Section 2.03(e).
(c) CERTIFICATE HOLDER. If any portion of the Merger Consideration is
to be registered in the name of a person other than the person in whose name the
applicable surrendered Certificate is registered, it shall be a condition to the
registration thereof that the surrendered Certificate shall be properly endorsed
or otherwise be in proper form for transfer and that the person requesting such
delivery of the Merger Consideration shall pay to the Exchange Agent any
transfer or other similar Taxes required as a result of such registration in the
name of a person other than the registered holder of such Certificate or
establish to the satisfaction of the Exchange Agent that such Tax has been paid
or is not payable.
(d) DIVIDENDS AND DISTRIBUTIONS. No dividends or other distributions
with respect to shares of Parent Common Stock issued in the Merger shall be paid
to the holder of any unsurrendered Certificates or Book-Entry Shares until such
Certificates or Book-Entry Shares are properly surrendered. Following such
surrender, there shall be paid, without interest, to the record holder of the
shares of Parent Common Stock issued in exchange therefor (i) at the time of
such surrender, all dividends and other distributions payable in respect of such
shares of Parent Common Stock with a record date after the Effective Time and a
payment date on or prior to the date of such surrender and not previously paid
and (ii) at the appropriate payment date, the
6
dividends or other distributions payable with respect to such shares of Parent
Common Stock with a record date after the Effective Time but with a payment date
subsequent to such surrender. For purposes of dividends or other distributions
in respect of shares of Parent Common Stock, all shares of Parent Common Stock
to be issued pursuant to the Merger shall be entitled to dividends pursuant to
the immediately preceding sentence as if issued and outstanding as of the
Effective Time.
(e) FRACTIONAL SHARES.
(1) No fractional shares of Parent Common Stock shall be issued
in the Merger, but in lieu thereof each holder of shares of Company Common Stock
otherwise entitled to a fractional share of Parent Common Stock will be entitled
to receive, from the Exchange Agent in accordance with the provisions of this
Section 2.03(e), a cash payment in lieu of such fractional shares of Parent
Common Stock representing such holder's proportionate interest, if any, in the
proceeds from the sale by the Exchange Agent in one or more transactions of
shares of Parent Common Stock equal to the excess of (x) the aggregate number of
shares of Parent Common Stock to be delivered to the Exchange Agent by Parent
pursuant to Section 2.03(a) over (y) the aggregate number of whole shares of
Parent Common Stock to be distributed to the holders of Certificates pursuant to
Section 2.03(b) (such excess being herein called the "EXCESS SHARES"). As soon
as practicable after the Effective Time, the Exchange Agent, as agent for the
holders of the Certificates representing shares of Company Common Stock, shall
sell the Excess Shares at then prevailing prices on the NYSE in the manner
provided in the following paragraph.
(2) The sale of the Excess Shares by the Exchange Agent, as agent
for the holders that would otherwise receive fractional shares, shall be
executed on the NYSE through one or more member firms of the NYSE and shall be
executed in round lots to the extent practicable. Until the proceeds of such
sale or sales have been distributed to the holders of shares of Company Common
Stock, the Exchange Agent shall hold such proceeds in trust for the holders of
shares of Company Common Stock (the "COMMON SHARES TRUST"). Parent shall pay all
commissions, transfer taxes and other out-of-pocket transactions costs,
including the expenses and compensation of the Exchange Agent, incurred in
connection with such sale of Excess Shares. The Exchange Agent shall determine
the portion of the Common Shares Trust to which each holder of shares of Company
Common Stock shall be entitled, if any, by multiplying the amount of the
aggregate proceeds comprising the Common Shares Trust by a fraction, the
numerator of which is the amount of the fractional share interest to which such
holder of shares of Company Common Stock would otherwise be entitled and the
denominator of which is the aggregate amount of fractional share interests to
which all holders of shares of Company Common Stock would otherwise be entitled.
(3) As soon as practicable after the determination of the amount
of cash, if any, to be paid to holders of shares of Company Common Stock in lieu
of any fractional shares of Parent Common Stock, the Exchange Agent shall make
available such amounts to such holders of shares of Company Common Stock without
interest, subject to and in accordance with this Section 2.03.
7
(f) NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. The Merger
Consideration paid in accordance with the terms of this Article II upon
conversion of any shares of Company Common Stock shall be deemed to have been
paid in full satisfaction of all rights pertaining to such shares of Company
Common Stock, subject, however, to the Surviving Corporation's obligation to pay
any dividends or make any other distributions with a record date prior to the
Effective Time that may have been declared or made by the Company on such shares
of Company Common Stock in accordance with the terms of this Agreement or prior
to the date of this Agreement and which remain unpaid at the Effective Time, and
after the Effective Time there shall be no further registration of transfers on
the stock transfer books of the Surviving Corporation of shares of Company
Common Stock that were outstanding immediately prior to the Effective Time. If,
after the Effective Time, any certificates formerly representing shares of
Company Common Stock are presented to the Surviving Corporation or the Exchange
Agent for any reason, they shall be canceled and exchanged as provided in this
Article II.
(g) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund
that remains undistributed to the holders of Company Common Stock for six months
after the Effective Time shall be delivered to Parent, upon demand, and any
holder of Company Common Stock who has not theretofore complied with this
Article II shall thereafter look only to Parent and/or the Surviving Corporation
for payment of its claim for Merger Consideration.
(h) NO LIABILITY. None of Parent, Sub, the Company or the Exchange
Agent shall be liable to any person in respect of any cash or Parent Common
Stock from the Exchange Fund delivered to a public official to the extent
required by any applicable abandoned property, escheat or similar Law. If any
Certificate has not been surrendered immediately prior to such date on which the
Merger Consideration in respect of such Certificate would otherwise irrevocably
escheat to or become the property of any Governmental Entity, any such shares,
cash, dividends or distributions in respect of such Certificate shall, to the
extent permitted by applicable Law, become the property of the Surviving
Corporation, free and clear of all claims or interest of any person previously
entitled thereto.
(i) INVESTMENT OF EXCHANGE FUND. The Exchange Agent shall invest any
cash included in the Exchange Fund, as directed by Parent, in (i) direct
obligations of the United States of America, (ii) obligations for which the full
faith and credit of the United States of America is pledged to provide for the
payment of all principal and interest or (iii) commercial paper obligations
receiving the highest rating from either Moody's Investor Services, Inc. or
Standard & Poor's, a division of The McGraw Hill Companies, or a combination
thereof; provided that, in any such case, no such instrument shall have a
maturity exceeding three months from the date of the investment therein. Any
interest and other income resulting from such investments shall be paid to
Parent.
(j) WITHHOLDING RIGHTS. Parent and the Exchange Agent shall be
entitled to deduct and withhold from the consideration otherwise payable to any
holder of Company Common Stock pursuant to this Agreement such amounts as are
required to be deducted and withheld with respect to the making of such payment
under the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder (the "CODE"), or under any other provision of
applicable federal, state, local or foreign tax Law. To the extent that amounts
are so withheld and paid over to the appropriate taxing authority by Parent or
the Exchange
8
Agent, as applicable, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the holders of the shares of Company
Common Stock in respect of which such deduction and withholding was made by
Parent or the Exchange Agent.
(k) LOST CERTIFICATES. If any Certificate shall have been lost,
stolen, defaced or destroyed, upon the making of an affidavit of that fact by
the person claiming such Certificate to be lost, stolen, defaced or destroyed
and, if reasonably required by the Surviving Corporation, the posting by such
person of a bond in such reasonable amount as the Surviving Corporation may
direct as indemnity against any claim that may be made against it with respect
to such Certificate, the Exchange Agent shall pay in respect of such lost,
stolen, defaced or destroyed Certificate the Merger Consideration with respect
to each share of Company Common Stock formerly represented by such Certificate.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub that, except as
set forth in the disclosure letter, dated as of the date of this Agreement, from
the Company to Parent and Sub (the "COMPANY DISCLOSURE LETTER") or in any
Company SEC Document filed and publicly available prior to the date of this
Agreement (each, a "FILED COMPANY SEC DOCUMENT"):
SECTION 3.01 ORGANIZATION, STANDING AND POWER. Each of the Company and each
of its subsidiaries (each, a "COMPANY SUBSIDIARY") (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it is organized, other than defects in such organization, existence or
good standing that, individually and in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect, and (b) has full corporate
power and authority and possesses all governmental franchises, licenses,
permits, authorizations and approvals necessary to enable it to own, lease or
otherwise hold its properties and assets and to conduct its businesses as
presently conducted, other than such corporate power and authority, franchises,
licenses, permits, authorizations and approvals the lack of which, individually
and in the aggregate, would not reasonably be expected to have a Company
Material Adverse Effect. The Company and each Company Subsidiary is duly
qualified to do business in each jurisdiction where the nature of its business
or the ownership or leasing of its properties make such qualification necessary
or the failure to so qualify would reasonably be expected to have a Company
Material Adverse Effect. The Company has delivered to Parent true and complete
copies of the certificate of incorporation of the Company, as amended to the
date of this Agreement (as so amended, the "COMPANY CHARTER"), and the by-laws
of the Company, as amended to the date of this Agreement (as so amended, the
"COMPANY BY-LAWS").
SECTION 3.02 COMPANY SUBSIDIARIES: EQUITY INTERESTS.
(a) Section 3.02(a) of the Company Disclosure Letter lists each
"SIGNIFICANT SUBSIDIARY", as such term is defined in Rule 1-02 of Regulation S-X
under the Exchange Act and its jurisdiction of organization. All the outstanding
shares of capital stock of each Company Subsidiary have been validly issued and
are fully paid and nonassessable and are owned by the Company, by another
Company Subsidiary or by the Company and another Company
9
Subsidiary, free and clear of all pledges, liens, charges, mortgages,
encumbrances and security interests of any kind or nature whatsoever
(collectively, "LIENS").
(b) Except for its interests in the Company Subsidiaries, the Company
does not own, directly or indirectly, any capital stock, equity membership
interest, partnership interest, joint venture interest or other equity interest
in any person.
SECTION 3.03 CAPITAL STRUCTURE. (a) The authorized capital stock of the
Company consists of 200,000,000 shares of Company Common Stock and 24,000,000
shares of preferred stock, par value $1.00 per share ("COMPANY PREFERRED STOCK"
and, together with the Company Common Stock, the "COMPANY CAPITAL STOCK"). At
the close of business on July 31, 2005, (i) 79,943,633 shares of Company Common
Stock (each together with a Company Right) and no shares of Company Preferred
Stock were issued and outstanding, (ii) 37,206,960 shares of Company Common
Stock were held by the Company in its treasury, (iii) 7,521,608 shares of
Company Common Stock were subject to outstanding Company Stock Options and
891,921 additional shares of Company Common Stock were reserved for issuance
pursuant to the Company Stock Plans, (other than any shares reserved under the
Employee Discount Stock Purchase Plan) and (iv) 4,000,000 shares of Company
Preferred Stock were reserved for issuance in connection with the rights (the
"COMPANY RIGHTS") issued pursuant to the Rights Agreement dated as of February
12, 1998 (as amended from time to time, the "COMPANY RIGHTS AGREEMENT"), between
the Company and Computershare Investor Services, LLC, as Rights Agent. Except as
set forth above, at the close of business on July 31, 2005, no shares of capital
stock or other voting securities of the Company were issued, reserved for
issuance or outstanding. During the period from July 31, 2005 to the date of
this Agreement, (x) there have been no issuances by the Company of shares of
capital stock or other voting securities of the Company other than issuances of
shares of Company Common Stock pursuant to the exercise of Company Stock Options
outstanding on such date as required by their terms as in effect on the date of
such issuance and (y) there have been no issuances by the Company of options,
warrants or other rights to acquire shares of capital stock or other voting
securities of the Company. There are no outstanding stock appreciation rights
linked to the price of the Company Common Stock that were not granted in tandem
with a related Company Stock Option. All outstanding shares of Company Capital
Stock are, and all such shares that may be issued prior to the Effective Time
will be when issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to or issued in violation of any purchase option,
call option, right of first refusal, preemptive right, subscription right or any
similar right under any provision of the DGCL, the Company Charter, the Company
By-laws or any Contract to which the Company is a party or otherwise bound.
There are not any bonds, debentures, notes or other indebtedness of the Company
having the right to vote (or convertible into, or exchangeable for, securities
having the right to vote) on any matters on which holders of Company Capital
Stock may vote ("VOTING COMPANY DEBT"). Except as set forth above, as of the
date of this Agreement, there are not any options, warrants, rights, convertible
or exchangeable securities, "PHANTOM" stock rights, stock appreciation rights,
stock-based performance units, commitments, Contracts, arrangements or
undertakings of any kind to which the Company or any Company Subsidiary is a
party or by which any of them is bound (i) obligating the Company or any Company
Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or other equity interests in, or any security
convertible or exercisable for or exchangeable into any capital stock of or
other equity interest in, the Company or any Company Subsidiary or any Voting
Company Debt,
10
(ii) obligating the Company or any Company Subsidiary to issue, grant, extend or
enter into any such option, warrant, call, right, security, unit, commitment,
Contract, arrangement or undertaking or (iii) that give any person the right to
receive any economic benefit or right similar to or derived from the economic
benefits and rights occurring to holders of Company Capital Stock. As of the
date of this Agreement, there are not any outstanding contractual obligations of
the Company or any Company Subsidiary to repurchase, redeem or otherwise acquire
any shares of capital stock of the Company or any Company Subsidiary. The
Company has made available to Parent a complete and correct copy of the Company
Rights Agreement, as amended to the date of this Agreement.
(b) The Company has delivered or made available to Parent a true,
complete and correct list of all outstanding Company Stock Options, the number
of shares of Company Common Stock subject to each such Company Stock Option, the
grant dates, exercise prices, expiration dates and vesting schedule of each such
Company Stock Option and the names of the holders of each Company Stock Option.
All outstanding Company Stock Options are evidenced by the forms of Company
Stock Option agreements delivered or made available to Parent, and no Company
Stock Option agreement contains terms that are materially inconsistent with, or
in addition in any material respect to, the terms contained therein.
SECTION 3.04 AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY. (a) The
Company has all requisite corporate power and authority to execute and deliver
this Agreement and to consummate the Merger and the other Transactions to be
performed or consummated by the Company. The execution and delivery by the
Company of this Agreement and the consummation by the Company of the Merger and
the other Transactions to be performed or consummated by the Company have been
duly authorized by all necessary corporate action on the part of the Company,
subject, in the case of the Merger, to receipt of the Company Stockholder
Approval. The Company has duly executed and delivered this Agreement, and this
Agreement constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights, and to general equity
principles.
(b) The Company Board, at a meeting duly called and held, duly adopted
resolutions (i) approving this Agreement, the Merger and the other Transactions
to be performed or consummated by the Company, (ii) determining that the terms
of the Merger and the other Transactions to be performed or consummated by the
Company are fair to and in the best interests of the Company and its
stockholders, (iii) directing that this Agreement be submitted to a vote at the
Company Stockholders Meeting, (iv) recommending that the Company's stockholders
adopt this Agreement and (v) declaring the advisability of this Agreement.
Assuming that the representation set forth in the second sentence of Section
4.03(c) is true and correct, such resolutions of the Company Board are
sufficient to render inapplicable to Parent and Sub and this Agreement, the
Merger and the other Transactions (i) the restrictions on "BUSINESS
COMBINATIONS" contained in Section 203 of the DGCL and (ii) the provisions of
Article Eleventh of the Company Charter. To the Company's knowledge, no other
state takeover statute or similar statute or regulation applies or purports to
apply to the Company with respect to this Agreement, the Merger or any other
Transaction.
11
(c) Assuming that the representation set forth in the second sentence
of Section 4.03(c) is true and correct, the only vote of holders of any class or
series of Company Capital Stock necessary to approve and adopt this Agreement
and the Merger is the adoption of this Agreement by the holders of a majority of
the outstanding shares of Company Common Stock entitled to vote thereon (the
"COMPANY STOCKHOLDER APPROVAL"). The affirmative vote of the holders of Company
Capital Stock, or any of them, is not necessary to consummate any Transaction
other than the Merger.
SECTION 3.05 NO CONFLICTS; CONSENTS. (a) The execution and delivery by the
Company of this Agreement do not, and the consummation of the Merger and the
other Transactions and compliance with the terms hereof will not, conflict with,
or result in any violation of or default (with or without the lapse of time or
the giving of notice, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a material benefit
under, or to increased, additional, accelerated or guaranteed rights or
entitlements of any person under, or result in the creation of any Lien upon any
of the properties or assets of the Company or any Company Subsidiary under, any
provision of (i) the Company Charter, the Company By-laws or the comparable
charter or organizational documents of any Company Subsidiary, (ii) any
contract, lease, license, indenture, note, bond, agreement, permit, concession,
franchise or other instrument (a "CONTRACT") to which the Company or any Company
Subsidiary is a party or by which any of their respective properties or assets
is bound or (iii) subject to the filings and other matters referred to in
Section 3.05(b), any judgment, order or decree ("JUDGMENT") or statute, law
(including common law), ordinance, rule or regulation ("LAW") applicable to the
Company or any Company Subsidiary or their respective properties or assets,
other than, in the case of clauses (ii) and (iii) above, any such items that,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect.
(b) No consent, approval, license, permit, order or authorization
("CONSENT") of, or registration, declaration or filing with, or permit from, any
federal, state, local or foreign government or any court of competent
jurisdiction, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign (a "GOVERNMENTAL ENTITY"), is
required to be obtained or made by or with respect to the Company or any Company
Subsidiary in connection with the execution, delivery and performance of this
Agreement or the consummation of the Transactions, other than (i) compliance
with and filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the "HSR ACT"), (ii) any additional Consents and filings under any
foreign Antitrust Laws (including, if applicable, the competition or antitrust
laws of Mexico and Brazil, and the Competition Act (Canada)) or under the
Investment Canada Act (Canada), (iii) the filing with the SEC of (A) a proxy or
information statement relating to the adoption of this Agreement by the
Company's stockholders (the "PROXY STATEMENT") and (B) such reports under, or
other applicable requirements of, the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), as may be required in connection with this
Agreement, the Merger and the other Transactions, (iv)the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware and
appropriate documents with the relevant authorities of the other jurisdictions
in which the Company is qualified to do business, (v) compliance with and such
filings as may be required under applicable Environmental Laws, (vi) such
filings as may be required in connection with the Taxes described in Section
6.09, (vii) filings under any applicable state takeover Law and (viii) such
other items that, individually
12
or in the aggregate, would not reasonably be expected to have a Company Material
Adverse Effect.
(c) The Company and the Company Board have taken all action necessary
to (i) render the Company Rights Agreement inapplicable to this Agreement, the
Merger and the other Transactions and (ii) ensure that (A) neither Parent nor
any of its affiliates or associates is or will become an "ACQUIRING PERSON" (as
defined in the Company Rights Agreement) by reason of this Agreement, the Merger
or any other Transaction, (B) a "DISTRIBUTION DATE" or a "SHARE ACQUISITION
DATE" (as each such term is defined in the Company Rights Agreement) shall not
occur by reason of this Agreement, the Merger or any other Transaction and (C)
the Company Rights shall expire immediately prior to the Effective Time.
SECTION 3.06 SEC DOCUMENTS; UNDISCLOSED LIABILITIES. (a) The Company has
filed all reports, schedules, forms, statements and other documents required to
be filed by the Company with the SEC since January 1, 2003 pursuant to Sections
13(a) and 15(d) of the Exchange Act (the "COMPANY SEC DOCUMENTS").
(b) As of its respective date, each Company SEC Document complied as
to form in all material respects with the requirements of the Exchange Act or
the Securities Act of 1933, as amended (the "SECURITIES ACT"), as the case may
be, and the rules and regulations of the SEC promulgated thereunder applicable
to such Company SEC Document, and did not 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 light of the circumstances
under which they were made, not misleading. Except to the extent that
information contained in any Filed Company SEC Document has been revised or
superseded by a later filed Filed Company SEC Document, none of the Company SEC
Documents contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The consolidated financial statements of the Company included in
the Company SEC Documents (including the related notes and schedules thereto)
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with generally accepted accounting
principles ("GAAP") (except, in the case of unaudited statements, as permitted
by Form 10-Q of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present,
in all material respects, the consolidated financial position of the Company and
its consolidated subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods shown (subject, in
the case of unaudited statements, to normal year-end audit adjustments).
(c) Other than liabilities or obligations (i) disclosed or provided
for in the financial statements included in the Filed Company SEC Documents or
(ii) incurred since March 31, 2005 in the ordinary course of business, neither
the Company nor any Company Subsidiary has any liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise) required by GAAP to
be set forth on a consolidated balance sheet of the Company and its consolidated
subsidiaries or in the notes thereto and that, individually or in the aggregate,
would reasonably be expected to have a Company Material Adverse Effect.
13
(d) Each of the principal executive officer and the principal
financial officer of the Company (or each former principal executive officer and
former principal financial officer of the Company, as applicable) has made all
certifications required under Sections 302 and 906 of the Sarbanes-Oxley Act of
2002 and the related rules and regulations promulgated thereunder and under the
Exchange Act (collectively, the "SARBANES-OXLEY ACT") with respect to the
Company SEC Documents, and the Company has delivered to Parent a summary of any
disclosure made by the Company's management to the Company's auditors and audit
committee referred to in such certifications. For purposes of the preceding
sentence, "PRINCIPAL EXECUTIVE OFFICER" and "PRINCIPAL FINANCIAL OFFICER" shall
have the meanings ascribed to such terms in the Sarbanes-Oxley Act.
(e) The Company has (i) designed and maintained disclosure controls
and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
Act) to ensure that material information relating to the Company, including its
consolidated subsidiaries, that is required to be disclosed by the Company in
the reports it files under the Exchange Act is made known to its principal
executive officer and principal financial officer or other appropriate members
of management as appropriate to allow timely decisions regarding required
disclosure; (ii) designed and maintained a system of internal control over
financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange
Act) sufficient to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with GAAP, including reasonable assurance (A) that
transactions are executed in accordance with management's general or specific
authorizations and recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability and (B)
regarding prevention or timely detection of any unauthorized acquisition, use or
disposition of assets that could have a material effect on the Company's
financial statements; (iii) with the participation of the Company's principal
executive and financial officers, completed an assessment of the effectiveness
of the Company's internal controls over financial reporting in compliance with
the requirements of Section 404 of the Sarbanes-Oxley Act for the year ended
January 1, 2005, and such assessment concluded that such internal controls were
effective using the framework specified in the Company's Annual Report on Form
10-K for such year ended; and (iv) to the extent required by applicable Law,
disclosed in such report or in any amendment thereto any change in the Company's
internal control over financial reporting that occurred during the period
covered by such report or amendment that has materially affected, or is
reasonably likely to materially affect, the Company's internal control over
financial reporting.
(f) The Company has disclosed, based on the most recent evaluation of
internal control over financial reporting, to the Company's auditors and the
audit committee of the Company Board (i) any significant deficiencies or
material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the
Company's ability to record, process, summarize and report financial information
and (ii) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company's internal control over
financial reporting. The Company has identified, based on the most recent
evaluation of internal control over financial reporting, for the Company's
auditors any material weaknesses in internal controls. The Company has provided
to Parent true and correct copies of any of the foregoing disclosures to the
auditors or audit committee that have been made in writing from January 1, 2003
through the date hereof, and will
14
promptly provide Parent true and correct copies of any such disclosure that is
made after the date hereof.
(g) None of the Company Subsidiaries is, or has at any time since
January 1, 2003 been, subject to the reporting requirements of Sections 13(a)
and 15(d) of the Exchange Act.
(h) As of the date of this Agreement, to the knowledge of the Company,
there is no applicable accounting rule, consensus or pronouncement that has been
adopted by the SEC, the Financial Accounting Standards Board, the Emerging
Issues Task Force or any similar body but that is not in effect as of the date
of this Agreement that, if implemented, would reasonably be expected to have a
Company Material Adverse Effect.
(i) There are no pending (A) formal or, to the knowledge of the
Company, informal investigations of the Company by the SEC, (B) to the knowledge
of the Company, inspections of an audit of the Company's financial statements by
the Public Company Accounting Oversight Board or (C) investigations by the audit
committee of the Company Board regarding any complaint, allegation, assertion or
claim that the Company or any Company Subsidiary has engaged in improper or
illegal accounting or auditing practices or maintains improper or inadequate
internal accounting controls. The Company will promptly provide to Parent
information as to any such matters that arise after the date hereof.
(j) Since July 30, 2002, the Company has been in compliance in all
material respects with the applicable requirements of the Sarbanes-Oxley Act in
effect from time to time.
(k) Since the date of the Company's 2004 annual meeting of
stockholders, the Company has been in compliance with the applicable corporate
governance listing standards of the NYSE in all material respects.
SECTION 3.07 INFORMATION SUPPLIED.
(a) None of the information supplied or to be supplied by the Company
for inclusion or incorporation by reference in the Proxy Statement will, at the
date it is first mailed to the Company's stockholders or at the time of the
Company Stockholders Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. The Proxy Statement will comply as to form in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder, except that no representation is made by the Company
with respect to statements made or incorporated by reference therein based on
information supplied by Parent or Sub in writing for inclusion or incorporation
by reference therein.
(b) None of the information supplied or to be supplied by the Company
for inclusion or incorporation by reference in the Form S-4 or any amendment or
supplement thereto will, at the time the Form S-4 or any such amendment or
supplement becomes effective under the Securities Act or at the time of the
Company Stockholders Meeting, contain any untrue statement of a material fact or
omit to state a material fact required to be included in order to
15
make the statements therein, in light of the circumstances under which they were
made, not misleading.
SECTION 3.08 ABSENCE OF CERTAIN CHANGES OR EVENTS. From the date of the
most recent audited financial statements included in the Filed Company SEC
Documents to the date of this Agreement, the Company has conducted its business
only in the ordinary course, and during such period there has not been:
(i) any event, change, effect, development, condition or
occurrence that, individually or in the aggregate, would reasonably be
expected to have a Company Material Adverse Effect;
(ii) any declaration, setting aside or payment of any
dividend or other distribution (whether in cash, stock or property) with
respect to any Company Common Stock or any repurchase for value by the
Company of any Company Common Stock, other than quarterly cash dividends
with respect to the Company Common Stock of (A) $0.18 per share with
respect to the first quarter of 2005 and (B) $0.09 per share with respect
to the second and third quarters of 2005, in each case with usual
declaration, record and payment dates;
(iii) any split, combination or reclassification of any
Company Common Stock or any issuance or the authorization of any issuance
of any other securities in respect of, in lieu of or in substitution for
shares of Company Common Stock;
(iv) (A) any granting by the Company or any Company
Subsidiary to any current or former director, officer, employee or
independent contractor of the Company or any Company Subsidiary (each, a
"PARTICIPANT") of any loan or any increase in any type of compensation,
benefits, perquisites or any bonus or award, except for grants of normal
cash bonus opportunities and normal increases of cash compensation
(including compensation in connection with new hires), in each case in the
ordinary course of business consistent with past practice or as was
required under employment agreements in effect as of the date of the most
recent audited financial statements included in the Filed Company SEC
Documents, (B) any payment of any bonus to any Participant, except for
bonuses paid in the ordinary course of business consistent with past
practice, (C) any granting by the Company or any Company Subsidiary to any
Participant of any severance, change in control, termination or similar
compensation, pay or benefits or increases therein, or of the right to
receive any severance, change in control, termination or similar
compensation, pay or benefits or increases therein, except (x) as was
required under any employment, severance or termination agreements in
effect as of the date of the most recent audited financial statements
included in the Filed Company SEC Documents, (y) in the ordinary course of
business consistent with past practice in connection with new hires to
replace departed employees and (z) in the ordinary course of business
consistent with past practice in connection with promotions made in the
ordinary course of business consistent with past practice, or (D) any entry
by the Company or any Company Subsidiary into, or any amendment of, any
Company Benefit Agreement;
16
(v) any damage, destruction or loss, whether or not covered
by insurance, that, individually or in the aggregate, would reasonably be
expected to have a Company Material Adverse Effect;
(vi) any change in accounting methods, principles or
practices by the Company or any Company Subsidiary, except for any change
which is not material or which is required by a change in GAAP or
applicable Law;
(vii) any material elections with respect to Taxes by the
Company or any Company Subsidiary or settlement or compromise by the
Company or any Company Subsidiary of any material Tax liability or refund;
or
(viii) any revaluation by the Company or any Company
Subsidiary of any of the assets of the Company or any Company Subsidiary,
except insofar as may have been required by applicable Law or that would
not reasonably be expected to have a Company Material Adverse Effect.
SECTION 3.09 TAXES. (a) As used in this Agreement:
"TAXES" shall mean all (i) federal, state and local, domestic and
foreign, taxes, assessments, duties or similar charges of any kind whatsoever,
including all corporate franchise, income, sales, use, ad valorem, receipts,
value added, profits, license, withholding, employment, excise, property, net
worth, capital gains, transfer, stamp, documentary, social security, payroll,
environmental, alternative minimum, occupation, recapture and other taxes, and
including any interest, penalties and additions imposed with respect to such
amounts; (ii) liability for the payment of any amounts of the type described in
clause (i) as a result of being a member of an affiliated, consolidated,
combined, unitary or aggregate group; and (iii) liability for the payment of any
amounts as a result of an obligation to indemnify any other person with respect
to the payment of any amounts of the type described in clause (i) or (ii).
"TAXING AUTHORITY" shall mean any federal, state or local, domestic
or foreign, governmental body (including any subdivision, agency or commission
thereof), or any quasi-governmental body, in each case, exercising regulatory
authority in respect of Taxes.
"TAX RETURN" shall mean all returns, declarations of estimated tax
payments, reports, estimates, information returns and statements, including any
related or supporting information with respect to any of the foregoing, filed or
to be filed with any Taxing Authority in connection with the determination,
assessment, collection or administration of any Taxes.
(b) The Company and each Company Subsidiary has timely filed, or has
caused to be timely filed on its behalf, all material Tax Returns required to be
filed by or on behalf of the Company and each Company Subsidiary in the manner
prescribed by applicable Law. All such Tax Returns are complete and correct,
except as, individually or in the aggregate, would not reasonably be expected to
have a Company Material Adverse Effect. The Company and each Company Subsidiary
has timely paid (or the Company has paid on each such Company Subsidiary's
behalf) all Taxes due and owing, and, in accordance with GAAP, the most recent
financial statements contained in the Filed Company SEC Documents reflect a
reserve (excluding any reserve for deferred Taxes) for all Taxes payable by the
Company and each
17
Company Subsidiary for all taxable periods and portions thereof through the date
of such financial statement, in each case except as, individually or in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect.
(c) No Tax Return of the Company or any Company Subsidiary is under
audit or examination by any Taxing Authority, and no written notice or, to the
knowledge of the Company, unwritten notice of such an audit or examination has
been received by the Company or any Company Subsidiary. Each material assessed
deficiency resulting from any audit or examination relating to Taxes by any
Taxing Authority has been timely paid and there is no assessed deficiency,
refund litigation, proposed adjustment or matter in controversy with respect to
any Taxes due and owing by the Company or any Company Subsidiary. The federal
income Tax Returns of the Company and each Company Subsidiary have been examined
by the Internal Revenue Service or the relevant statute of limitations has
closed for all years through 1997.
(d) There is no agreement or other document extending, or having the
effect of extending, the period of assessment or collection of any material
Taxes and no power of attorney with respect to any such Taxes has been executed
or filed with any Taxing Authority by or on behalf of the Company or any Company
Subsidiary.
(e) No material Liens for Taxes exist with respect to any assets or
properties of the Company or any Company Subsidiary, except for statutory liens
for Taxes not yet due.
(f) Neither the Company nor any Company Subsidiary is a party to or
bound by any material Tax sharing agreement, material Tax indemnity obligation
or similar material agreement or arrangement with respect to Taxes (including
any advance pricing agreement, closing agreement or other agreement relating to
Taxes with any Taxing Authority), other than any such agreements (i) with
customers, vendors, lessors or similar persons entered into in the ordinary
course of business and (ii) among the Company and the Company Subsidiaries.
(g) Except as, individually or in the aggregate, would not reasonably
be expected to have a Company Material Adverse Effect, the Company and each
Company Subsidiary has complied with all applicable Laws relating to the payment
and withholding of Taxes (including withholding of Taxes pursuant to Sections
1441, 1442, 3121 and 3402 of the Code or similar provisions under any federal,
state or local, domestic or foreign, Laws) and has, within the time and the
manner prescribed by applicable Law, withheld from and paid over to the proper
Governmental Entities all amounts required to be so withheld and paid over under
applicable Law.
(h) Neither the Company nor any Company Subsidiary is or has been a
United States real property holding corporation within the meaning of Section
897(c)(2) of the Code.
(i) Neither the Company nor any Company Subsidiary shall be required
to include in a taxable period ending after the Closing Date taxable income
attributable to income that accrued in a prior taxable period but was not
recognized in any prior taxable period as a result of the installment method of
accounting, the long-term contract method of accounting, the cash method of
accounting or Section 481 of the Code or comparable provisions of state, local
or foreign Tax law.
18
(j) Neither the Company nor any Company Subsidiary has participated in
any "LISTED TRANSACTION" as defined in Treasury Regulation Section 1.6011-4.
SECTION 3.10 ABSENCE OF CHANGES IN BENEFIT PLANS. (a) From the date of the
most recent audited financial statements included in the Filed Company SEC
Documents to the date of this Agreement, neither the Company nor any Company
Subsidiary has terminated, adopted, amended, modified or agreed to terminate,
adopt, amend or modify (or announced an intention to terminate, adopt, amend or
modify), in any material respect, any collective bargaining agreement or any
bonus, pension, profit sharing, deferred compensation, incentive compensation,
stock ownership, stock purchase, stock appreciation, restricted stock, stock
repurchase rights, stock option, phantom stock, performance, retirement, thrift,
savings, stock bonus, cafeteria, paid time off, perquisite, fringe benefit,
vacation, severance, disability, death benefit, hospitalization, medical or
other welfare benefit or other plan, program, arrangement or understanding,
whether oral or written, formal or informal, funded or unfunded (whether or not
legally binding), maintained, contributed to or required to be maintained or
contributed to by the Company or any Company Subsidiary or any other person or
entity that, together with the Company or any Company Subsidiary, is treated as
a single employer under Section 414(b), (c), (m) or (o) of the Code or any other
applicable Law (each, a "COMMONLY CONTROLLED ENTITY"), in each case providing
benefits to any Participant and whether or not subject to United States law (all
such plans, programs, arrangements and understandings, including any such plan,
program, arrangement or understanding entered into or adopted on or after the
date of this Agreement, "COMPANY BENEFIT PLANS") or has made any change, in any
material respect, in any actuarial or other assumption used to calculate funding
obligations with respect to any Company Benefit Plan that is a Company Pension
Plan, or any change, in any material respect, in the manner in which
contributions to any such Company Pension Plan are made or the basis on which
such contributions are determined.
(b) Section 3.10 of the Company Disclosure Letter contains a complete
and correct list of (i) any material employment, deferred compensation,
severance, change in control, termination, employee benefit, loan (other than
Participant loans under any Company Pension Plan that includes a qualified cash
or deferred arrangement within the meaning of Section 401(k) of the Code),
indemnification, retention, stock repurchase, stock option, consulting or
similar agreement, commitment or obligation between the Company or any Company
Subsidiary, on the one hand, and any Participant, on the other hand, and (ii)
any agreement between the Company or any Company Subsidiary, on the one hand,
and any Participant, on the other hand, the benefits of which are contingent, or
the terms of which are materially altered, upon the occurrence of transactions
involving the Company or any Company Subsidiary of the nature contemplated by
this Agreement (all such agreements, collectively, the "COMPANY BENEFIT
AGREEMENTS").
SECTION 3.11 ERISA COMPLIANCE; EXCESS PARACHUTE PAYMENTS.
(a) Section 3.11(a) of the Company Disclosure Letter contains a
complete and correct list of all Company Benefit Plans that are "EMPLOYEE
PENSION BENEFIT PLANS" (as defined in Section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) (all such plans,
collectively, the "COMPANY PENSION PLANS") or "EMPLOYEE WELFARE BENEFIT PLANS"
(as defined in Section 3(1) of ERISA) and all other material Company Benefit
Plans; provided, however, that no Company Benefit Agreement shall be deemed a
Company
19
Benefit Plan or listed in Section 3.11(a) of the Company Disclosure Letter. Each
Company Benefit Plan has been administered in compliance with its terms and
applicable Law, and the terms of any applicable collective bargaining
agreements, except to the extent that the failure to comply with any such terms
or Law, individually or in the aggregate, would not reasonably be expected to
have a Company Material Adverse Effect. The Company has delivered or made
available to Parent complete and correct copies of (i) each Company Benefit Plan
and each Company Benefit Agreement (or, in the case of any unwritten Company
Benefit Plan or Company Benefit Agreement, a description thereof), (ii) the most
recent annual report on Form 5500 (including accompanying schedules and
attachments) with respect to each Company Benefit Plan for which such a report
is required, (iii) the most recent summary plan description for each Company
Benefit Plan for which such summary plan description is required under ERISA,
(iv) each material trust agreement and material group annuity contract relating
to the funding or payment of benefits under any Company Benefit Plan, (v) the
most recent determination or qualification letter issued by the Internal Revenue
Service for each Company Benefit Plan intended to qualify for favorable tax
treatment in the United States of America, as well as a true, correct and
complete copy of each pending application for such letter, if applicable, and
(vi) the most recent actuarial valuation, if applicable, for each Company
Pension Plan.
(b) All Company Pension Plans intended to be tax qualified have been
the subject of determination letters from the Internal Revenue Service with
respect to all tax Law changes through the Economic Growth and Tax Relief
Reconciliation Act of 2001 with respect to which a determination letter from the
Internal Revenue Service can be obtained to the effect that such Company Pension
Plans are qualified and exempt from federal income taxes under Sections 401(a)
and 501(a), respectively, of the Code, and no such determination letter has been
revoked nor, to the knowledge of the Company, has revocation been threatened,
nor has any such Company Pension Plan been amended since the date of its most
recent determination letter or application therefor in any respect that would
adversely affect its qualification or materially increase its costs or require
security under Section 307 of ERISA. All Company Pension Plans that are required
to have been approved by any non-U.S. Governmental Entity have been so approved.
(c) Except as set forth in Section 3.11(c) of the Company Disclosure
Letter, neither the Company nor any Commonly Controlled Entity has maintained,
contributed to or been obligated to maintain or contribute to, or has any
liability under, any Company Benefit Plan that is subject to Title IV of ERISA.
With respect to the Maytag Corporation Employees Retirement Plan (the "US
PENSION PLAN"), to the knowledge of the Company there has been no material
adverse change in the financial condition of such plan from the date of the most
recent audited financial statements included in the Filed Company SEC Documents
to the date of this Agreement, assuming for such purpose that there has been no
change in the discount rate used for purposes of valuing the liabilities of such
plan from the discount rate applied in such financial statements. No liability
under Title IV of ERISA (other than for premiums to the Pension Benefit Guaranty
Corporation) has been or is expected to be incurred by the Company or any
Company Subsidiary with respect to any ongoing, frozen or terminated
"SINGLE-EMPLOYER" plan (as defined in Section 4001(a)(15) of ERISA), currently
or formerly maintained by any of them or by any Commonly Controlled Entity,
except for any such liabilities that, individually or in the aggregate, would
not reasonably be expected to have a Company Material Adverse Effect. None
20
of the Company Pension Plans has an "ACCUMULATED FUNDING DEFICIENCY" (as defined
in Section 302 of ERISA or Section 412 of the Code), whether or not waived, nor
has any waiver of the minimum funding standards of Section 302 of ERISA or
Section 412 of the Code been requested. None of the Company, any Company
Subsidiary, any employee of the Company or any Company Subsidiary or any of the
Company Benefit Plans, including the Company Pension Plans, or any trusts
created thereunder or any trustee, administrator or other fiduciary of any
Company Benefit Plan or trust created thereunder, or any agents of the
foregoing, has engaged in a "PROHIBITED TRANSACTION" (as defined in Section 406
of ERISA or Section 4975 of the Code) that would be reasonably expected to
subject the Company, any Company Subsidiary or any officer of the Company or any
Company Subsidiary or any of the Company Benefit Plans, or, to the knowledge of
the Company, any trusts created thereunder or any trustee or administrator of
any Company Benefit Plan or trust created thereunder to the tax or penalty on
prohibited transactions imposed by such Section 4975 of the Code or to the
sanctions imposed under Title I of ERISA or to any other liability for breach of
fiduciary duty under ERISA, except for any such prohibited transactions that,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect. No Company Pension Plan or related trust has
been terminated during the last five years, nor has there been any "REPORTABLE
EVENT" (as defined in Section 4043 of ERISA), other than an event for which the
30-day notice period has been waived, with respect to any Company Pension Plan
since January 1, 2004, and no notice of a reportable event will be required to
be filed in connection with the Transactions. Neither the Company nor any
Company Subsidiary has incurred any material liability that has not been
satisfied in full as a result of a "COMPLETE WITHDRAWAL" or a "PARTIAL
WITHDRAWAL" (as each such term is defined in Sections 4203 and 4205,
respectively, of ERISA) during the past six years from any "MULTIEMPLOYER PLAN"
within the meaning of Section 4001(a)(3) of ERISA.
(d) With respect to any Company Benefit Plan that is an employee
welfare benefit plan, whether or not subject to ERISA, such Company Benefit Plan
is either funded through an insurance company contract and is not a "WELFARE
BENEFITS FUND" (as defined in Section 419(e) of the Code) or it is unfunded.
(e) Other than payments or benefits that may be made to the persons
listed in Section 3.11(e) of the Company Disclosure Letter (each, a "PRIMARY
COMPANY EXECUTIVE"), no amount or other entitlement that could be received
(whether in cash or property or the vesting of property) as a result of any of
the Transactions (alone or in combination with any other event) by any
Participant who is a "DISQUALIFIED INDIVIDUAL" (as defined in final Treasury
Regulation Section 1.280G-1) (each, a "DISQUALIFIED INDIVIDUAL") under any
Company Benefit Plan, Company Benefit Agreement or other compensation
arrangement currently in effect would be an "EXCESS PARACHUTE PAYMENT" (as
defined in Section 280G(b)(1) of the Code) and no such Disqualified Individual
is entitled to receive any additional payment (e.g., any tax gross-up or any
other payment) from the Company, the Surviving Corporation or any other person
in the event that the excise tax required by Section 4999(a) of the Code is
imposed on such Disqualified Individual. The Company has provided Parent with
calculations performed in 2004 by Hewitt Associates of the estimated amounts of
compensation and benefits that could be received (whether in cash or property or
the vesting of property) by certain Primary Company Executives as a result of a
transaction of the nature contemplated by this Agreement (alone or in
combination with any other event), and the "BASE AMOUNT" (as defined in Section
280G(b)(3) of the Code) for certain Primary Company Executives, in each case as
of the date specified in such
21
calculations and in accordance with the assumptions made by Hewitt Associates as
set forth in such calculations. To the knowledge of the Company, the Company
provided true and complete compensation and benefit information and data to
Hewitt Associates necessary to perform such calculations, which information and
data was correct in all material respects as of the date provided by the Company
to Hewitt Associates.
(f) The execution and delivery by the Company of this Agreement do
not, and the consummation of the Transactions and compliance with the terms
hereof will not (either alone or in combination with any other event) (i)
entitle any Participant to any additional compensation, severance, termination,
change in control or other benefits or any benefits the value of which will be
calculated on the basis of any of the Transactions (alone or in combination with
any other event), (ii) accelerate the time of payment or vesting or trigger any
payment or funding (through a grantor trust or otherwise) of any compensation,
severance or other benefits under, or increase the amount payable or trigger any
other material obligation pursuant to, any Company Benefit Plan or Company
Benefit Agreement, or (iii) trigger the forgiveness of indebtedness owed by any
Participant to the Company or any of its affiliates.
(g) Since January 1, 2004, and through the date of this Agreement,
neither the Company nor any Company Subsidiary has received notice of, and, to
the knowledge of the Company, there are no (i) material pending termination
proceedings or other suits, claims (except claims for benefits payable in the
normal operation of the Company Benefit Plans), actions or proceedings against
or involving or asserting any rights or claims to benefits under any Company
Benefit Plan or Company Benefit Agreement or (ii) pending investigations (other
than routine inquiries) by any Governmental Entity with respect to any Company
Benefit Plan or Company Benefit Agreement, except for any such suits, claims,
proceedings or investigations that, individually or in the aggregate, would not
reasonably be expected to have a Company Material Adverse Effect. All
contributions, premiums and benefit payments under or in connection with the
Company Benefit Plans or Company Benefit Agreements that are required to have
been made by the Company or any Company Subsidiary have been timely made,
accrued or reserved for, except for failures to make, accrue or reserve for any
such contributions, premiums and benefit payments that, individually or
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect.
(h) Neither the Company nor any Company Subsidiary has any liability
or obligations, including under or on account of a Company Benefit Plan or
Company Benefit Agreement, arising out of the hiring of persons to provide
services to the Company or any Company Subsidiary and treating such persons as
consultants or independent contractors and not as employees of the Company or
any Company Subsidiary, except for any such liabilities or obligations that,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect.
(i) The Agreement for the Trust for Maytag Corporation Non-Qualified
Deferred Compensation Plans dated as of October 1, 2003 (the "TRUST AGREEMENT"),
by and between the Company and KeyBank National Association, and each Plan (as
such term is defined in the Trust Agreement) has been amended to provide that no
funding shall be required in connection with the execution of this Agreement or
the consummation of the Transactions. With respect to the Maytag Corporation
Supplemental Retirement Plan II, the Maytag
22
Corporation Deferred Compensation Plan II, their predecessor plans and any trust
agreements relating to the payment of benefits under these plans, all necessary
actions have been taken to ensure that no funding shall be required in
connection with the execution of this Agreement or the consummation of the
Transactions.
(j) Except for any items that, individually or in the aggregate, would
not reasonably be expected to have a Company Material Adverse Effect, (i) all
Company Benefit Plans maintained primarily for the benefit of Participants
principally employed in jurisdictions other than the United States of America
(all such plans, collectively, the "NON-U.S. BENEFIT PLANS") have been
maintained in accordance with their terms and all applicable legal requirements,
(ii) if any Non-U.S. Benefit Plan is intended to qualify for special tax
treatment, such Non-U.S. Benefit Plan meets all requirements for such treatment,
and (iii) the fair market value of the assets of each Non-U.S. Benefit Plan
required to be funded, the liability of each insurer for any Non-U.S. Benefit
Plan required to be funded, and the book reserve established for any Non-U.S.
Benefit Plan, together with any accrued contributions, is sufficient to provide
for the accrued benefit obligations under each Non-U.S. Benefit Plan.
SECTION 3.12 LITIGATION. There are no suits, actions or proceedings pending
or, to the knowledge of the Company, threatened against or affecting the Company
or any Company Subsidiary (and the Company is not aware of any basis for any
such suit, action or proceeding) that, individually or in the aggregate, would
reasonably be expected to have a Company Material Adverse Effect, nor are there
any Judgments outstanding against the Company or any Company Subsidiary that,
individually or in the aggregate, would reasonably be expected to have a Company
Material Adverse Effect.
SECTION 3.13 COMPLIANCE WITH APPLICABLE LAWS. The Company and the Company
Subsidiaries and their relevant personnel and operations are in compliance with
all applicable Laws, including those relating to occupational health and safety,
except for such failure to be in compliance as, individually or in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect. Neither the Company nor any Company Subsidiary has received any written
communication during the past two years from a Governmental Entity that alleges
that the Company or a Company Subsidiary is not in compliance in any material
respect with any applicable Law, except for such failure to be in compliance as,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect. The Company and the Company Subsidiaries have
in effect all permits, licenses, variances, exemptions, authorizations,
operating certificates, franchises, orders and approvals of all Governmental
Entities (collectively, "PERMITS"), necessary or advisable for them to own,
lease or operate their properties and assets and to carry on their businesses as
now conducted, except for such Permits the absence of which, individually or in
the aggregate, would not reasonably be expected to have a Company Material
Adverse Effect, and there has occurred no violation of, default (with or without
the lapse of time or the giving of notice, or both) under, or event giving to
others any right of termination, amendment or cancellation of, with or without
notice or lapse of time or both, any such Permit, except for any such
violations, defaults or events that, individually or in the aggregate, would not
reasonably be expected to have a Company Material Adverse Effect. There is no
event which, to the knowledge of the Company, would reasonably be expected to
result in the revocation, cancellation, non-renewal or adverse modification of
any such Permit, except for any such events that, individually or in the
aggregate, would not
23
reasonably be expected to have a Company Material Adverse Effect. This Section
3.13 does not relate to matters with respect to Taxes, which are the subject of
Section 3.09.
SECTION 3.14 LABOR MATTERS. Since January 1, 2004 to the date of this
Agreement, neither the Company nor any Company Subsidiary has experienced any
material labor strikes, union organization attempts, requests for
representation, work slowdowns or stoppages or disputes due to labor
disagreements, and to the knowledge of the Company there is currently no such
action threatened against or affecting the Company or any Company Subsidiary.
The Company and the Company Subsidiaries are each, and since January 1, 2002
have each been, in compliance with all applicable Laws with respect to labor
relations, employment and employment practices, terms and conditions of
employment and wages and hours, human rights, pay equity and workers
compensation, except to the extent that the failure to comply with any such Law,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect, and is not, and since January 1, 2002 has not,
engaged in any unfair labor practice that, individually or in the aggregate,
would reasonably be expected to have a Company Material Adverse Effect. There is
no unfair labor practice charge or complaint against the Company or any Company
Subsidiary pending or, to the knowledge of the Company, threatened, in each
case, before the National Labor Relations Board or any comparable federal,
state, provincial or foreign agency or authority, except for any such charges or
complaints that, individually or in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect. No grievance or arbitration
proceeding arising out of a collective bargaining agreement is pending or, to
the knowledge of the Company, threatened against the Company or any Company
Subsidiary, except for any such grievances or proceedings that, individually or
in the aggregate, would not reasonably be expected to have a Company Material
Adverse Effect.
SECTION 3.15 ENVIRONMENTAL MATTERS.
(a) Except for such matters that, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect, the
Company and each of the Company Subsidiaries are, and have been, in compliance
with all Environmental Laws, and neither the Company nor any of the Company
Subsidiaries has received any written communication from a Governmental Entity
that alleges that the Company or any of the Company Subsidiaries is in violation
of, or has liability under, any Environmental Law.
(b) (i) Except for such matters that, individually or in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect, the Company and each of the Company Subsidiaries have obtained and are
in compliance with all material permits, licenses and governmental
authorizations pursuant to Environmental Law (collectively "ENVIRONMENTAL
PERMITS") necessary for their operations as presently conducted, (ii) all such
Environmental Permits are valid and in good standing and (iii) since January 1,
2003, neither the Company nor any of the Company Subsidiaries has been advised
in writing by any Governmental Entity of any actual or potential change in the
status or terms and conditions of any Environmental Permit.
(c) Except for such matters that, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect,
there are no Environmental
24
Claims pending or, to the knowledge of the Company, threatened, against the
Company or any of the Company Subsidiaries.
(d) Except for such matters that, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect,
neither the Company nor any of the Company Subsidiaries has entered into or
agreed to, or is otherwise subject to, any Judgment relating to any
Environmental Law or to the investigation or remediation of Hazardous Materials.
(e) Except for such matters that, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect,
there has been no treatment, storage or Release of any Hazardous Material that
would reasonably be expected to form the basis of any Environmental Claim
against the Company or any of the Company Subsidiaries or against any person
whose liabilities for such Environmental Claims the Company or any of the
Company Subsidiaries has, or may have, retained or assumed, either contractually
or by operation of law.
(f) Except for such matters that, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect,
there are no underground storage tanks at, on, under or about (i) any
manufacturing facility owned, operated or leased by the Company or any Company
Subsidiary, (ii) any other property owned by the Company or any Company
Subsidiary or (iii) to the knowledge of the Company, any other property leased
or operated by the Company or any Company Subsidiary.
(g) Except for such matters that, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect, to
the knowledge of the Company, any asbestos-containing material that is at, under
or about property owned, operated or leased by the Company or any Company
Subsidiary is non-friable or encapsulated and in good condition according to the
generally accepted standards and practices governing such material, and its
presence or condition does not violate or otherwise require abatement or removal
pursuant to any applicable Environmental Law.
(h) Except for such matters that, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect, (i)
neither the Company nor any of the Company Subsidiaries has retained or assumed,
either contractually or by operation of law, any liabilities or obligations that
would reasonably be expected to form the basis of any Environmental Claim
against the Company or any of the Company Subsidiaries, and (ii) to the
knowledge of the Company, no Environmental Claims are pending against any person
whose liabilities for such Environmental Claims the Company or any of the
Company Subsidiaries has, or may have, retained or assumed, either contractually
or by operation of law.
(i) DEFINITIONS. As used in this Agreement:
(1) "ENVIRONMENTAL CLAIM" means any and all administrative,
regulatory or judicial actions, suits, orders, demands, directives, claims,
liens, judgments, investigations, proceedings or written notices of
noncompliance or violation by or from any person alleging liability of whatever
kind or nature (including liability or responsibility for the
25
costs of enforcement proceedings, investigations, cleanup, governmental
response, removal or remediation, natural resources damages, property damages,
personal injuries, medical monitoring, penalties, contribution, indemnification
and injunctive relief) arising out of, based on or resulting from (x) the
presence or Release of, or exposure to, any Hazardous Materials at any location;
or (y) the failure to comply with any Environmental Law;
(2) "ENVIRONMENTAL LAWS" means all applicable federal, state,
local and foreign laws, rules, regulations, orders, decrees, judgments, legally
binding agreements or Environmental Permits issued, promulgated or entered into
by or with any Governmental Entity, relating to pollution, natural resources or
protection of endangered or threatened species, human health or the environment
(including ambient air, surface water, groundwater, land surface or subsurface
strata);
(3) "HAZARDOUS MATERIALS" means (x) any petroleum or petroleum
products, radioactive materials or wastes, asbestos in any form, urea
formaldehyde foam insulation and polychlorinated biphenyls; and (y) any other
chemical, material, substance or waste that in relevant form or concentration is
prohibited, limited or regulated under any Environmental Law; and
(4) "RELEASE" means any actual or threatened release, spill,
emission, leaking, dumping, injection, pouring, deposit, disposal, discharge,
dispersal, leaching or migration into or through the environment (including
ambient air, surface water, groundwater, land surface or subsurface strata) or
within any building, structure, facility or fixture.
SECTION 3.16 INTELLECTUAL PROPERTY. The Company and the Company
Subsidiaries own, or are validly licensed or otherwise have the right to use,
all patents, patent rights, trademarks, trademark rights, trade names, trade
name rights, service marks, service mark rights, copyrights, domain names and
other proprietary intellectual property rights and computer programs
(collectively, "INTELLECTUAL PROPERTY RIGHTS") which are material to the conduct
of the business of the Company and the Company Subsidiaries taken as a whole. No
claims are pending or, to the knowledge of the Company, threatened that the
Company or any Company Subsidiary is infringing or otherwise adversely affecting
the rights of any person with regard to any Intellectual Property Right, except
for any such claims that, individually or in the aggregate, would not reasonably
be expected to have a Company Material Adverse Effect. To the knowledge of the
Company, no person is infringing the rights of the Company or any Company
Subsidiary with respect to any Intellectual Property Right, except for any such
infringements that, individually or in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect.
SECTION 3.17 BROKERS; SCHEDULE OF FEES AND EXPENSES. No broker, investment
banker, financial advisor or other person, other than Lazard Freres & Co. LLC
("LAZARD"), the fees and expenses of which will be paid by the Company, is
entitled to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the Merger and the other Transactions based upon
arrangements made by or on behalf of the Company. The Company has furnished to
Parent a true and complete copy of all agreements between the Company and Lazard
relating to the Merger and the other Transactions.
26
SECTION 3.18 OPINION OF FINANCIAL ADVISOR. The Company has received the
opinion of Lazard, dated as of the date of the meeting of the Company Board
referred to in Section 3.04(b), to the effect that, as of such date, the
consideration to be received in the Merger by the holders of the Company Common
Stock is fair from a financial point of view to such holders, a signed copy of
which opinion shall be delivered to Parent as soon as reasonably practicable
following the date of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub, jointly and severally, represent and warrant to the
Company that, except as set forth in the disclosure letter, dated as of the date
of this Agreement, from Parent and Sub to the Company (the "PARENT DISCLOSURE
LETTER") or in any Parent SEC Document filed and publicly available prior to the
date of this Agreement (each, a "FILED PARENT SEC DOCUMENT"):
SECTION 4.01 ORGANIZATION, STANDING AND POWER. Each of Parent and Sub (a)
is duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized, other than defects in such organization,
existence or good standing that, individually and in the aggregate, would not
reasonably be expected to have a Parent Material Adverse Effect, and (b) has
full corporate power and authority and possesses all governmental franchises,
licenses, permits, authorizations and approvals necessary to enable it to own,
lease or otherwise hold its properties and assets and to conduct its businesses
as presently conducted, other than such corporate power and authority,
franchises, permits, authorizations and approvals the lack of which,
individually or in the aggregate, would not reasonably be expected to have a
Parent Material Adverse Effect.
SECTION 4.02 CAPITAL STRUCTURE. The authorized capital stock of Parent
consists of 250,000,000 shares of Parent Common Stock and 10,000,000 shares of
preferred stock, par value $1.00 per share ("PARENT PREFERRED STOCK" and,
together with the Parent Common Stock, the "PARENT CAPITAL STOCK"). At the close
of business on July 31, 2005, (i) 66,797,864 shares of Parent Common Stock (each
together with a Parent Right) and no shares of Parent Preferred Stock were
issued and outstanding, (ii) 23,729,728 shares of Parent Common Stock were held
by Parent in its treasury, (iii) 5,878,756 shares of Parent Common Stock were
reserved for issuance pursuant to outstanding options and other stock-based
awards (other than shares of restricted stock or other equity based awards
included in the number of shares of Parent Common Stock outstanding set forth
above) and (iv) shares of Parent Preferred Stock reserved for issuance in
connection with the rights (the "PARENT RIGHTS") issued pursuant to the Rights
Agreement dated as of April 21, 1998 (as amended from time to time, the "PARENT
RIGHTS AGREEMENT"), between Parent and First Chicago Trust Company of New York,
as Rights Agent. Except as set forth above, at the close of business on July 31,
2005, no shares of capital stock or other voting securities of Parent were
issued, reserved for issuance or outstanding. During the period from July 31,
2005 to the date of this Agreement, (x) there have been no issuances by Parent
of shares of capital stock or other voting securities of Parent other than
issuances of shares of Parent Common Stock pursuant to the exercise of options
and other stock-based awards outstanding on such date as required by their terms
as in effect on the date of such issuance and (y) there have been no issuances
by Parent of options, warrants or other rights to acquire shares of capital
stock
27
or other voting securities of Parent. All outstanding shares of Parent Capital
Stock are, and all such shares that may be issued prior to the Effective Time
will be when issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to or issued in violation of any purchase option,
call option, right of first refusal, preemptive right, subscription right or any
similar right under any provision of the DGCL, the Restated Certificate of
Incorporation of Parent (the "PARENT CHARTER") and the Amended and Restated
By-laws of Parent (the "PARENT BY-LAWS") or any Contract to which Parent is a
party or otherwise bound. There are not any bonds, debentures, notes or other
indebtedness of Parent having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
holders of Parent Capital Stock may vote ("VOTING PARENT DEBT"). Except as set
forth above, as of the date of this Agreement, there are not any options,
warrants, rights, convertible or exchangeable securities, "PHANTOM" stock
rights, stock appreciation rights, stock-based performance units, commitments,
Contracts, arrangements or undertakings of any kind to which Parent or any of
Parent's subsidiaries (each, a "PARENT SUBSIDIARY") is a party or by which any
of them is bound (i) obligating Parent or any Parent Subsidiary to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
capital stock or other equity interests in, or any security convertible or
exercisable for or exchangeable into any capital stock of or other equity
interest in, Parent or any Parent Subsidiary or any Voting Parent Debt, (ii)
obligating Parent or any Parent Subsidiary to issue, grant, extend or enter into
any such option, warrant, call, right, security, unit, commitment, Contract,
arrangement or undertaking or (iii) that give any person the right to receive
any economic benefit or right similar to or derived from the economic benefits
and rights occurring to holders of Parent Capital Stock. As of the date of this
Agreement, there are not any outstanding contractual obligations of Parent or
any Parent Subsidiary to repurchase, redeem or otherwise acquire any shares of
capital stock of Parent or any Parent Subsidiary. Parent has made available to
the Company a complete and correct copy of the Parent Rights Agreement, as
amended to the date of this Agreement.
SECTION 4.03 SUB. (a) Since the date of its incorporation, Sub has not
carried on any business, conducted any operations or incurred any obligations or
liabilities other than (i) the execution of this Agreement and the other
agreements referred to herein, (ii) the performance of its obligations hereunder
and thereunder, and (iii) matters ancillary hereto and thereto.
(b) The authorized capital stock of Sub consists of 1,000 shares of
common stock, par value $1.00 per share, all of which have been validly issued,
are fully paid and nonassessable and are owned by Parent free and clear of any
Lien.
(c) As of the date of this Agreement, except as set forth on Section
4.03(c) of the Parent Disclosure Letter, neither Parent nor Sub owns any shares
of Company Common Stock. None of Parent or any of its affiliates is (i) an
"INTERESTED STOCKHOLDER" (as defined in Section 203 of the DGCL) of the Company
or (ii) an "INTERESTED SHAREHOLDER" or an "AFFILIATE" of an Interested
Shareholder (as each such term is defined in Article Eleventh of the Company
Charter).
SECTION 4.04 AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY. Each of
Parent and Sub has all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the Merger and the other Transactions
to be performed or consummated by Parent or Sub, as the case may be. The
execution and delivery by each of Parent and Sub of this
28
Agreement and the consummation by it of the Merger and the other Transactions to
be performed or consummated by Parent or Sub, as the case may be, have been duly
authorized by all necessary corporate action on the part of Parent and Sub.
Parent, as sole stockholder of Sub, shall adopt this Agreement as soon as
reasonably practicable following its execution. Each of Parent and Sub has duly
executed and delivered this Agreement, and this Agreement constitutes its legal,
valid and binding obligation, enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights, and to general equity principles. To the Parent's knowledge,
no state takeover statute or similar statute or regulation applies or purports
to apply to Parent with respect to this Agreement, the Merger or any other
Transaction.
SECTION 4.05 NO CONFLICTS; CONSENTS. (a) The execution and delivery by each
of Parent and Sub of this Agreement, do not, and the consummation of the Merger
and the other Transactions and compliance with the terms hereof will not,
conflict with, or result in any violation of or default (with or without the
lapse of time or the giving of notice, or both) under, or give rise to a right
of termination, cancellation or acceleration of any obligation or to loss of a
material benefit under, or to increased, additional, accelerated or guaranteed
rights or entitlements of any person under, or result in the creation of any
Lien upon any of the properties or assets of Parent or any Parent Subsidiary
under, any provision of (i) the Parent Charter or Parent By-laws or
organizational documents of any Parent Subsidiaries, (ii) any Contract to which
Parent or any of the Parent Subsidiaries is a party or by which any of their
respective properties or assets is bound or (iii) subject to the filings and
other matters referred to in Section 4.05(b), any Judgment or Law applicable to
Parent or any Parent Subsidiaries or their respective properties or assets,
other than, in the case of clauses (ii) and (iii) above, any such items that,
individually or in the aggregate, would not reasonably be expected to have a
Parent Material Adverse Effect.
(b) No Consent of, or registration, declaration or filing with, any
Governmental Entity is required to be obtained or made by or with respect to
Parent or any Parent Subsidiaries in connection with the execution, delivery and
performance of this Agreement or the consummation of the Transactions, other
than (i) compliance with and filings under the HSR Act, (ii) any additional
consents and filings under any Antitrust Law or under the Investment Canada Act
(Canada), (iii) the filing with the SEC of (A) a Registration Statement on Form
S-4 (the "FORM S-4") relating to the issuance of the Parent Common Stock in the
Merger and (B) such reports under, or other applicable requirements of, the
Exchange Act, as may be required in connection with this Agreement, the Merger
and the other Transactions, (iv) the filing of the Certificate of Merger with
the Secretary of State of the State of Delaware, (v) compliance with and such
filings as may be required under applicable Environmental Laws, (vi) such
filings as may be required in connection with the Taxes described in Section
6.09, (vii) filings under any applicable state takeover Law and (viii) such
other items that, individually or in the aggregate, would not reasonably be
expected to have a Parent Material Adverse Effect.
(c) Parent and the Board of Directors of Parent (the "PARENT BOARD")
have taken all action necessary to (i) render the Parent Rights Agreement
inapplicable to this Agreement, the Merger and the other Transactions and (ii)
ensure that (A) neither Company nor any of its affiliates or associates is or
will become an "ACQUIRING PERSON" (as defined in the Parent Rights Agreement) by
reason of this Agreement, the Merger or any other Transaction, and
29
(B) a "DISTRIBUTION DATE" or a "SHARE ACQUISITION DATE" (as each such term is
defined in the Parent Rights Agreement) shall not occur by reason of this
Agreement, the Merger or any other Transaction.
SECTION 4.06 SEC DOCUMENTS; UNDISCLOSED LIABILITIES. (a) Parent has filed
all reports, schedules, forms, statements and other documents required to be
filed by Parent with the SEC since January 1, 2003 pursuant to Sections 13(a)
and 15(d) of the Exchange Act (the "PARENT SEC DOCUMENTS").
(b) As of its respective date, each Parent SEC Document complied as to
form in all material respects with the requirements of the Exchange Act or the
Securities Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such Parent SEC Document, and did not
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 light of the circumstances under which they were made, not
misleading. Except to the extent that information contained in any Filed Parent
SEC Document has been revised or superseded by a later filed Filed Parent SEC
Document, none of the Parent SEC Documents contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of Parent included in the Parent SEC Documents (including
the related notes and schedules thereto) comply as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with GAAP (except, in the case of unaudited statements, as permitted by Form
10-Q of the SEC) applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and fairly present, in all
material respects, the consolidated financial position of Parent and its
consolidated subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods shown (subject, in the case
of unaudited statements, to normal year-end audit adjustments).
(c) Other than liabilities or obligations (i) disclosed or provided
for in the financial statements included in the Filed Parent SEC Documents or
(ii) incurred since June 30, 2005 in the ordinary course of business, neither
Parent nor any Parent Subsidiary has any liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise) required by GAAP to
be set forth on a consolidated balance sheet of Parent and its consolidated
subsidiaries or in the notes thereto and that, individually or in the aggregate,
would reasonably be expected to have a Parent Material Adverse Effect.
(d) Each of the principal executive officer and the principal
financial officer of Parent (or each former principal executive officer and
former principal financial officer of Parent, as applicable) has made all
certifications required under Sections 302 and 906 of the Sarbanes-Oxley Act
with respect to the Parent SEC Documents, and Parent has delivered to the
Company a summary of any disclosure made by Parent's management to Parent's
auditors and audit committee referred to in such certifications. For purposes of
the preceding sentence, "PRINCIPAL EXECUTIVE OFFICER" and "PRINCIPAL FINANCIAL
OFFICER" shall have the meanings ascribed to such terms in the Sarbanes-Oxley
Act.
30
(e) Parent has (i) designed and maintained disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act)
to ensure that material information relating to Parent, including its
consolidated subsidiaries, that is required to be disclosed by Parent in the
reports it files under the Exchange Act is made known to its principal executive
officer and principal financial officer or other appropriate members of
management as appropriate to allow timely decisions regarding required
disclosure; (ii) designed and maintained a system of internal control over
financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange
Act) sufficient to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with GAAP, including reasonable assurance (A) that
transactions are executed in accordance with management's general or specific
authorizations and recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability and (B)
regarding prevention or timely detection of any unauthorized acquisition, use or
disposition of assets that could have a material effect on Parent's financial
statements; (iii) with the participation of Parent's principal executive and
financial officers, completed an assessment of the effectiveness of Parent's
internal controls over financial reporting in compliance with the requirements
of Section 404 of the Sarbanes-Oxley Act for the year ended December 31, 2004,
and such assessment concluded that such internal controls were effective using
the framework specified in Parent's Annual Report on Form 10-K for such year
ended; and (iv) to the extent required by applicable Law, disclosed in such
report or in any amendment thereto any change in Parent's internal control over
financial reporting that occurred during the period covered by such report or
amendment that has materially affected, or is reasonably likely to materially
affect, Parent's internal control over financial reporting.
(f) Parent has disclosed, based on the most recent evaluation of
internal control over financial reporting, to Parent's auditors and the audit
committee of the Parent Board (i) any significant deficiencies or material
weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect Parent's ability to
record, process, summarize and report financial information and (ii) any fraud,
whether or not material, that involves management or other employees who have a
significant role in Parent's internal control over financial reporting. Parent
has identified, based on the most recent evaluation of internal control over
financial reporting, for Parent's auditors any material weaknesses in internal
controls. Parent has provided to the Company true and correct copies of any of
the foregoing disclosures to the auditors or audit committee that have been made
in writing from January 1, 2003 through the date hereof, and will promptly
provide the Company true and correct copies of any such disclosure that is made
after the date hereof.
(g) None of the Parent Subsidiaries is, or has at any time since
January 1, 2003 been, subject to the reporting requirements of Sections 13(a)
and 15(d) of the Exchange Act.
(h) As of the date of this Agreement, to the knowledge of Parent,
there is no applicable accounting rule, consensus or pronouncement that has been
adopted by the SEC, the Financial Accounting Standards Board, the Emerging
Issues Task Force or any similar body but that is not in effect as of the date
of this Agreement that, if implemented, would reasonably be expected to have a
Parent Material Adverse Effect.
31
(i) There are no pending (A) formal or, to the knowledge of Parent,
informal investigations of Parent by the SEC, (B) to the knowledge of Parent,
inspections of an audit of Parent's financial statements by the Public Company
Accounting Oversight Board or (C) investigations by the audit committee of the
Parent Board regarding any complaint, allegation, assertion or claim that Parent
or any Parent Subsidiary has engaged in improper or illegal accounting or
auditing practices or maintains improper or inadequate internal accounting
controls. Parent will promptly provide to the Company information as to any such
matters that arise after the date hereof.
(j) Since July 30, 2002, Parent has been in compliance in all material
respects with the applicable requirements of the Sarbanes-Oxley Act in effect
from time to time.
(k) Since the date of Parent's 2004 annual meeting of stockholders,
Parent has been in compliance with the applicable corporate governance listing
standards of the NYSE in all material respects.
SECTION 4.07 INFORMATION SUPPLIED.
(a) None of the information supplied or to be supplied by Parent for
inclusion or incorporation by reference in the Form S-4, and any amendments or
supplements thereto, will, at the time it becomes effective under the Securities
Act or at the time of the Company Stockholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The Form S-4 will
comply as to form in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations thereunder,
except that no representation is made by Parent with respect to statements made
or incorporated by reference therein based on information supplied by the
Company in writing for inclusion or incorporation by reference therein.
(b) None of the information supplied or to be supplied by Parent for
inclusion or incorporation by reference in the Proxy Statement or any amendment
or supplement thereto will, at the date it is first mailed to the Company's
Stockholders or at the time of the Company Stockholders Meeting, contain any
untrue statement of a material fact or omit to state a material fact required to
be included in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(c) As of the opening of business on August 8, 2005, to the knowledge
of Parent, Parent has delivered to the Company true and correct copies of all
letters in its possession from Parent's trade customers, retail buying groups
and retail dealer associations regarding Parent's proposed acquisition of the
Company. As of the opening of business on August 8, 2005 and except as
previously disclosed to the Company, Parent has no knowledge of any opposition
of Parent's proposed acquisition of the Company by any trade customers, retail
buying groups or retail dealer associations contacted by Parent in connection
with the Merger.
SECTION 4.08 ABSENCE OF CERTAIN CHANGES OR EVENTS. From the date of the
most recent audited financial statements included in the Filed Parent SEC
Documents to the date of
32
this Agreement, Parent has conducted its business only in the ordinary course,
and during such period there has not been:
(i) any event, change, effect, development, condition or
occurrence that, individually or in the aggregate, would reasonably be
expected to have a Parent Material Adverse Effect;
(ii) any declaration, setting aside or payment of any
dividend or other distribution (whether in cash, stock or property) with
respect to any Parent Common Stock or any repurchase for value by Parent of
any Parent Common Stock, other than quarterly cash dividends with respect
to the Parent Common Stock with usual declaration, record and payment
dates;
(iii) any change in accounting methods, principles or
practices by Parent or any Parent Subsidiary, except for any change which
is not material or which is required by a change in GAAP or applicable Law;
(iv) any material elections with respect to Taxes by Parent
or any Parent Subsidiary or settlement or compromise by Parent or any
Parent Subsidiary of any material Tax liability or refund
(v) any damage, destruction or loss, whether or not covered
by insurance, that, individually or in the aggregate, would reasonably be
expected to have a Parent Material Adverse Effect; or
(vi) any revaluation by Parent or any Parent Subsidiary of
any of the assets of Parent or any Parent Subsidiary, except insofar as may
have been required by applicable Law or that would not reasonably be
expected to have a Parent Material Adverse Effect.
SECTION 4.09 LITIGATION. There are no suits, actions or proceedings pending
or, to the knowledge of Parent, threatened against or affecting Parent or any
Parent Subsidiary (and Parent is not aware of any basis for any such suit,
action or proceeding) that, individually or in the aggregate, would reasonably
be expected to have a Parent Material Adverse Effect, nor are there any
Judgments outstanding against Parent or any Parent Subsidiary that, individually
or in the aggregate, would reasonably be expected to have a Parent Material
Adverse Effect.
SECTION 4.10 COMPLIANCE WITH APPLICABLE LAWS. Parent and the Parent
Subsidiaries and their relevant personnel and operations are in compliance with
all applicable Laws, except for such failure to be in compliance as,
individually or in the aggregate, would not reasonably be expected to have a
Parent Material Adverse Effect.
SECTION 4.11 ENVIRONMENTAL MATTERS.
(a) Except for such matters that, individually or in the aggregate,
would not reasonably be expected to have a Parent Material Adverse Effect,
Parent and each of the Parent Subsidiaries are, and have been, in compliance
with all Environmental Laws, and neither Parent nor any of the Parent
Subsidiaries has received any written communication from a Governmental
33
Entity that alleges that Parent or any of the Parent Subsidiaries is in
violation of, or has liability under, any Environmental Law.
(b) (i) Except for such matters that, individually or in the
aggregate, would not reasonably be expected to have a Parent Material Adverse
Effect, Parent and each of the Parent Subsidiaries have obtained and are in
compliance with all Environmental Permits necessary for their operations as
presently conducted, (ii) all such Environmental Permits are valid and in good
standing and (iii) since January 1, 2003, neither Parent nor any of the Parent
Subsidiaries has been advised in writing by any Governmental Entity of any
actual or potential change in the status or terms and conditions of any
Environmental Permit.
(c) Except for such matters that, individually or in the aggregate,
would not reasonably be expected to have a Parent Material Adverse Effect, there
are no Environmental Claims pending or, to the knowledge of Parent, threatened,
against Parent or any of the Parent Subsidiaries.
(d) Except for such matters that, individually or in the aggregate,
would not reasonably be expected to have a Parent Material Adverse Effect,
neither the Parent nor any of the Parent Subsidiaries has entered into or agreed
to, or is otherwise subject to, any Judgment relating to any Environmental Law
or to the investigation or remediation of Hazardous Materials.
(e) Except for such matters that, individually or in the aggregate,
would not reasonably be expected to have a Parent Material Adverse Effect, there
has been no treatment, storage or Release of any Hazardous Material that would
reasonably be expected to form the basis of any Environmental Claim against
Parent or any of the Parent Subsidiaries or against any person whose liabilities
for such Environmental Claims Parent or any of the Parent Subsidiaries has, or
may have, retained or assumed, either contractually or by operation of law.
(f) Except for such matters that, individually or in the aggregate,
would not reasonably be expected to have a Parent Material Adverse Effect, there
are no underground storage tanks at, on, under or about (i) any manufacturing
facility owned, operated or leased by Parent or any Parent Subsidiary, (ii) any
other property owned by the Parent or any Parent Subsidiary or (iii) to the
knowledge of Parent, any other property leased or operated by Parent or any
Parent Subsidiary.
(g) Except for such matters that, individually or in the aggregate,
would not reasonably be expected to have a Parent Material Adverse Effect, to
the knowledge of Parent, any asbestos-containing material that is at, under or
about property owned, operated or leased by Parent or any Parent Subsidiary is
non-friable or encapsulated and in good condition according to the generally
accepted standards and practices governing such material, and its presence or
condition does not violate or otherwise require abatement or removal pursuant to
any applicable Environmental Law.
(h) Except for such matters that, individually or in the aggregate,
would not reasonably be expected to have a Parent Material Adverse Effect, (i)
neither the Parent nor any of the Parent Subsidiaries has retained or assumed,
either contractually or by operation of law, any liabilities or obligations that
would reasonably be expected to form the basis of any
34
Environmental Claim against Parent or any of the Parent Subsidiaries, and (ii)
to the knowledge of Parent, no Environmental Claims are pending against any
person whose liabilities for such Environmental Claims Parent or any of the
Parent Subsidiaries has, or may have, retained or assumed, either contractually
or by operation of law.
SECTION 4.12 INTELLECTUAL PROPERTY. Parent and the Parent Subsidiaries own,
or are validly licensed or otherwise have the right to use, all Intellectual
Property Rights which are material to the conduct of the business of Parent and
the Parent Subsidiaries taken as a whole. No claims are pending or, to the
knowledge of Parent, threatened that Parent or any Parent Subsidiary is
infringing or otherwise adversely affecting the rights of any person with regard
to any Intellectual Property Right, except for any such claims that,
individually or in the aggregate, would not reasonably be expected to have a
Parent Material Adverse Effect. To the knowledge of Parent, no person is
infringing the rights of Parent or any Parent Subsidiary with respect to any
Intellectual Property Right, except for any such infringements that,
individually or in the aggregate, would not reasonably be expected to have a
Parent Material Adverse Effect.
SECTION 4.13 FINANCING. Parent has a sufficient amount of cash on hand or
available borrowing capacity under existing loan agreements and a sufficient
number of authorized shares of Parent Common Stock in order to pay the Merger
Consideration in accordance with Article II.
SECTION 4.14 BROKERS; SCHEDULE OF FEES AND EXPENSES. No broker, investment
banker, financial advisor or other person, other than Greenhill & Co. the fees
and expenses of which will be paid by Parent, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the Merger and the other Transactions based upon arrangements made by or on
behalf of Parent.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 5.01 CONDUCT OF BUSINESS. (a) CONDUCT OF BUSINESS BY THE COMPANY.
Except for matters set forth in Section 5.01(a) of the Company Disclosure Letter
or otherwise expressly permitted by this Agreement, from the date of this
Agreement to the Effective Time the Company shall, and shall cause each Company
Subsidiary to, conduct its business in the ordinary course in substantially the
same manner as previously conducted and, to the extent consistent therewith, use
commercially reasonable best efforts to preserve intact its current business
organization, keep available the services of its current officers and employees
and keep its relationships with customers, suppliers, licensors, licensees,
distributors and others having business dealings with them. In addition, and
without limiting the generality of the foregoing, except for matters set forth
in Section 5.01(a) of the Company Disclosure Letter or otherwise expressly
permitted by this Agreement, from the date of this Agreement to the Effective
Time, the Company shall not, and shall not permit any Company Subsidiary to, do
any of the following without the prior written consent of Parent:
(i) (A) declare, set aside or pay any dividends on, or make
any other distributions in respect of (in each case, whether in cash, stock
or property), any of
35
its capital stock, other than (1) dividends and distributions by a direct
or indirect wholly owned Company Subsidiary to its parent and (2) quarterly
cash dividends with respect to the Company Common Stock not in excess of
$0.09 per share, with usual declaration, record and payment dates, (B)
split, combine or reclassify any of its capital stock or issue or authorize
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, other than (1) any such
issuance by a direct or indirect wholly owned Company Subsidiary to its
parent and (2) as permitted under Section 5.01(a)(v), or (C) purchase,
redeem or otherwise acquire any (1) shares of capital stock of the Company
or any Company Subsidiary, (2) any other securities thereof or any rights,
warrants or options to acquire any such shares or other securities, except
as permitted by Section 5.02(a)(viii), or (3) any options, warrants,
rights, securities, units, commitments, contracts, arrangements or
undertakings of any kind that give any person the right to receive any
economic benefit and rights accruing to holders of capital stock of the
Company or any Company Subsidiary;
(ii) except to the extent permitted under Section
5.01(a)(v), issue, deliver, sell or grant (A) any shares of its capital
stock, (B) any Voting Company Debt or other voting securities, (C) any
securities convertible into or exchangeable for, or any options, warrants
or rights to acquire, any such shares, Voting Company Debt, voting
securities or convertible or exchangeable securities, (D) any "PHANTOM"
stock, "PHANTOM" stock rights, stock appreciation rights or stock-based
performance units or (E) any options, warrants, rights, securities, units,
commitments, Contracts, arrangements or undertakings of any kind that give
any person the right to receive any economic benefits and rights accruing
to holders of capital stock of the Company or any Company Subsidiary, other
than the issuance of shares of its capital stock by a wholly owned Company
Subsidiary to the Company or another wholly owned Company Subsidiary and
other than the issuance of Company Common Stock (and associated Company
Rights) (1) upon the exercise of Company Stock Options or rights under the
ESPP outstanding as of the date of this Agreement and only if and to the
extent required by their terms as in effect on the date of this Agreement
and (2) with respect to rights outstanding as of the date of this Agreement
under restricted stock units, performance stock rights and deferred
compensation plans as set forth in Section 3.03 of the Company Disclosure
Letter and only if and to the extent required by their terms in effect on
the date of this Agreement;
(iii) amend its certificate of incorporation, by-laws or
other comparable charter or organizational documents;
(iv) acquire or agree to acquire (A) by merging or
consolidating with, or by purchasing a substantial equity interest in or
portion of the assets of, or by any other manner, any business or any
corporation, partnership, joint venture, association or other business
organization or division thereof, except for acquisitions permitted by
Section 5.01(a)(iv)(B) or 5.01(a)(ix), or (B) any assets that are material,
individually or in the aggregate, to the Company and the Company
Subsidiaries, taken as a whole, except (x) purchases of assets in the
ordinary course of business consistent with past practice and (y)
acquisitions of assets pursuant to capital expenditures in an amount not in
excess of $200,000,000 in the aggregate (including expenditures pursuant to
Section 5.01(a)(ix)) and taken together with all such expenditures made
since January 1, 2005;
36
(v) except as required under applicable Law or the terms of
any plan or agreement in effect on the date of this Agreement, (A) grant to
any Participant any loan or increase in compensation, except for any such
increase in compensation (other than a base salary increase to a Primary
Company Executive) made in the ordinary course of business consistent with
past practice, (B) grant to any Participant any increase in severance,
change in control or termination pay or benefits, or pay any bonus to any
Participant, except for bonuses paid to Participants in the ordinary course
of business consistent with past practice, (C) enter into any employment,
change in control, loan, retention, consulting, indemnification, severance,
termination or similar agreement with any Participant, except (x) in the
ordinary course of business consistent with past practice in connection
with new hires to replace departed key employees, (y) in the ordinary
course of business consistent with past practice in connection with
promotions made in the ordinary course of business consistent with past
practice (except, in the case of clauses (x) and (y), any change in control
agreements) and (z) for severance arrangements entered into with
Participants (other than Excluded Participants) in the ordinary course of
business consistent with past practice after consultation in good faith
with Parent), (D) take any action to fund or in any other way secure the
payment of compensation or benefits under any Company Benefit Plan or
Company Benefit Agreement, (E) establish, adopt, enter into, terminate or
amend any collective bargaining agreement or other labor union Contract,
Company Benefit Plan or Company Benefit Agreement, (F) pay or provide to
any Participant any benefit not provided for under a Company Benefit Plan
or Company Benefit Agreement as in effect on the date hereof other than the
payment of compensation and severance in the ordinary course of business
consistent with past practice, (G) grant any incentive awards under any
Company Benefit Plan (including the grant of Company Stock Options, stock
appreciation rights, performance units, performance shares, restricted
stock, stock purchase rights or other stock-based or stock-related awards
or the removal or modification of existing restrictions in any Contract,
Company Benefit Plan or Company Benefit Agreement on incentive awards made
thereunder), other than in the ordinary course of business consistent with
past practice, or (H) take any action to accelerate any material rights or
benefits, including vesting and payment, under any collective bargaining
agreement, Company Benefit Plan or Company Benefit Agreement (for the
avoidance of doubt, under no circumstances shall any voluntary
contributions to the US Pension Plan not prohibited by Section
5.01(a)(xiii) be deemed prohibited under this Section 5.01(a)(v) or under
any other sub-clause of this Section 5.01(a)); provided that under no
circumstances shall this Section 5.01 be deemed to prohibit any of the
following actions by the Company and its affiliates between the date hereof
and the Closing Date (and the parties acknowledge that such actions shall
be permitted during such period): (x) administration of the Company's
annual bonus program in the ordinary course of business consistent with
past practice (including determination and payment of 2005 bonuses and
establishment and implementation of a plan for the 2006 calendar year), and
(y) grants of Company Stock Options and restricted stock units and
performance units in amounts and on terms consistent with past practice (it
being agreed that aggregate grants of each type of award in an amount that
does not exceed the amount of such type that was granted in 2004 shall be
conclusively deemed consistent with past practice), and implementation of a
long-term incentive program for the 2006-2008 cycle with target amounts and
terms consistent with those of the Cash
37
LTIPs, each under the Company Stock Plans; and, provided, further, that
between the date hereof and the Closing Date, the Company and its
affiliates may negotiate in good faith a settlement with applicable labor
unions with respect to grievances concerning the freezing of the ESPP, and
provide compensation to the extent determined in good faith to be necessary
to facilitate such a settlement;
(vi) make any change in accounting methods, principles or
practices materially affecting the reported consolidated assets,
liabilities or results of operations of the Company, except insofar as may
have been required by a change in GAAP;
(vii) sell, lease (as lessor), license or otherwise dispose
of or subject to any Lien any material properties or assets, except (x)
pursuant to contracts or agreements in effect as of the date of this
Agreement, (y) sales of assets in the ordinary course of business
consistent with past practice or (z) sales of assets or properties in the
commercial appliance segment; provided, in the case of clause (z), that
such sale, lease, license or other disposition or subjection of Lien (1) is
not consummated prior to the first anniversary of the date hereof, (2) any
agreement for such sale is terminable if the Effective Time occurs prior to
the first anniversary of the date hereof and (3) includes only the
Dixie-Narco and/or Jade brands (solely with respect to such segment);
(viii)(A) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person (other than any such
indebtedness or guarantees among the Company and the direct or indirect
wholly owned Company Subsidiaries or among the direct and indirect wholly
owned Company Subsidiaries), issue or sell any debt securities or warrants
or other rights to acquire any debt securities of the Company or any
Company Subsidiary, guarantee any debt securities of another person, enter
into any "keep well" or other agreement to maintain any financial statement
condition of another person or enter into any arrangement having the
economic effect of any of the foregoing, provided that the Company may
enter into a credit facility so long as the Company does not incur any
indebtedness thereunder, except as permitted hereby, except, in the case of
this clause (A) for (x) short-term borrowings (1) incurred in the ordinary
course of business consistent with past practice or (2) for working capital
purposes, (y) indebtedness incurred to refinance indebtedness existing on
the date of this Agreement or (z) indebtedness incurred in connection with
capital expenditures permitted by Section 5.01(a)(ix); or (B) make any
loans, advances or capital contributions to, or investments in, any other
person, other than to or in the Company or any direct or indirect wholly
owned Company Subsidiary;
(ix) make or agree to make any capital expenditures other
than those capital expenditures in an amount not in excess of $200,000,000
in the aggregate (including expenditures pursuant to Section 5.01(a)(iv))
and taken together with all such expenditures made since January 1, 2005;
(x) make or change any material Tax election or settle or
compromise any material Tax liability or refund, other than in the ordinary
course of business consistent with past practice or as required by
applicable Law;
38
(xi) (A) pay, discharge or satisfy any claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business consistent with past practice or in accordance
with their terms, of liabilities reflected or reserved against in, or
contemplated by, the most recent consolidated financial statements (or the
notes thereto) of the Company included in the Filed Company SEC Documents
or incurred in the ordinary course of business consistent with past
practice, (B) cancel any material indebtedness (individually or in the
aggregate) or waive any claims or rights of substantial value or (C) waive
the benefits of, or agree to modify in any manner, any confidentiality or
similar agreement (excluding any standstill provision in any such
agreement) to which the Company or any Company Subsidiary is a party;
(xii) permit any insurance policy or arrangement naming or
providing for it as a beneficiary or a loss payable payee to be canceled or
terminated (unless such policy or arrangement is canceled or terminated in
the ordinary course of business and concurrently replaced with a policy or
arrangement with substantially similar coverage) or materially impaired;
(xiii)make any contributions to the US Pension Plan, except
for (x) contributions of up to $70,000,000 from and after the date hereof
through December 31, 2005, (y) contributions of up to $100,000,000 during
the 2006 calendar year and (z) with the consent of Parent (not to be
unreasonably withheld), additional contributions of up to $100,000,000
during the 2006 calendar year;
(xiv) enter into any material agreement that is not
terminable by the Company or a Company Subsidiary, without penalty, within
one year from the date of entering into any such agreement;
(xv) renew, extend or amend any material agreement if doing
so would cause such agreement to not be terminable by the Company or a
Company Subsidiary, without penalty, within one year from the date of
entering into any such renewal, extension or amendment; or
(xvi) authorize any of, or commit or agree to take any of,
the foregoing actions.
For the purposes of this Section 5.01(a), "EXCLUDED PARTICIPANTS" shall mean
those Participants (1) listed in Items 1 and 2 of Section 3.10(b) of the Company
Disclosure Letter or (2) that are otherwise employed with the Company at the
level of director or at any more-senior level of employment.
(b) OTHER ACTIONS. The Company shall not, and shall not permit any of
the Company Subsidiaries to, take any action that would reasonably be expected
to result in any condition to the Merger set forth in Article VII not being
satisfied, except any action permitted by Section 5.02 or Section 8.01.
39
(c) ADVICE OF CHANGES. The Company shall promptly advise Parent orally
and in writing of any event, change, effect, development, condition or
occurrence that, individually or in the aggregate, would reasonably be expected
to have a Company Material Adverse Effect.
(d) CONDUCT OF BUSINESS BY PARENT. Except for matters set forth in
Section 5.01(d) of the Parent Disclosure Letter or otherwise expressly permitted
by this Agreement, from the date of this Agreement to the Effective Time Parent
shall, and shall cause each Parent Subsidiary to, conduct its business in the
ordinary course in substantially the same manner as previously conducted and, to
the extent consistent therewith, use commercially reasonable best efforts to
preserve intact its current business organization, keep available the services
of its current officers and employees and keep its relationships with customers,
suppliers, licensors, licensees, distributors and others having business
dealings with them. In addition, and without limiting the generality of the
foregoing, except as otherwise expressly permitted by this Agreement, from the
date of this Agreement to the Effective Time, Parent shall not, and shall not
permit any Parent Subsidiary to, do any of the following without the prior
written consent of the Company:
(i) declare, set aside or pay any dividends on, or make any
other distributions in respect of (in each case, whether in cash, stock or
property), any of its capital stock, other than (1) dividends and
distributions by a direct or indirect wholly owned Parent Subsidiary to its
parent, (2) regular quarterly cash dividends with respect to the Parent
Common Stock, with usual declaration, record and payment dates or (3) any
distribution of stock or property for which adjustment is made pursuant to
Section 2.01(e);
(ii) adopt or propose any change in its certificate of
incorporation or by-laws or other comparable organizational documents in a
manner that would adversely affect the economic benefits of the Merger or
the other Transactions to the Company's stockholders;
(iii) engage in any merger, consolidation, share exchange,
business combination, reorganization, recapitalization or other similar
transaction unless Parent is the surviving or resulting corporation, the
shareholders of Parent prior to such transaction own, directly or
indirectly, a majority of the voting common equity interests in the
surviving or resulting corporation and such voting common equity interests
are publicly traded;
(iv) take any action that would be reasonably likely to
prevent, hinder or delay the consummation of the Merger or the other
Transactions; or
(v) authorize any of, or commit or agree to take any of, the
foregoing actions.
SECTION 5.02 NO SOLICITATION. (a) Subject to Section 5.02(b), from the date
hereof until the earlier of the Effective Time and the termination of this
Agreement pursuant to Article VIII, the Company shall not, nor shall it
authorize or permit any Company Subsidiary to, and the Company shall direct and
use its reasonable best efforts to cause any officer, director or
40
employee of, or any investment banker, attorney or other advisor or
representative (collectively, "REPRESENTATIVES") of the Company or any Company
Subsidiary not to, (i) directly or indirectly solicit, initiate or encourage the
submission of any Company Takeover Proposal, (ii) enter into any agreement with
respect to any Company Takeover Proposal, except as contemplated by Section
5.02(b), or (iii) directly or indirectly participate in any discussions or
negotiations regarding, or furnish to any person any non-public information with
respect to, or knowingly take any other action to facilitate any inquiries or
the making of any proposal that constitutes, or may reasonably be expected to
lead to, any Company Takeover Proposal. Without limiting the foregoing, it is
agreed that any violation of the restrictions set forth in the preceding
sentence by any Representative of the Company or any Company Subsidiary, whether
or not such person is purporting to act on behalf of the Company or any Company
Subsidiary or otherwise, shall be deemed to be a breach of this Section 5.02(a)
by the Company. On the date hereof, the Company shall immediately cease and
cause to be terminated any existing solicitation, encouragement, discussion,
negotiation or other action conducted by the Company, any Company Subsidiary or
any of their respective Representatives with respect to a Company Takeover
Proposal.
(b) Notwithstanding anything to the contrary in Section 5.02(a), from
the date hereof and prior to the receipt of the Company Stockholder Approval,
the Company may, in response to an unsolicited Company Takeover Proposal which
did not result from a breach of Section 5.02(a) and which the Company Board
determines, in good faith, after consultation with outside counsel and financial
advisors, may reasonably be expected to lead to a transaction (i) more favorable
from a financial point of view to the holders of Company Common Stock than the
Merger, taking into account all the terms and conditions of such proposal, and
this Agreement (including any amendment to the terms of this Agreement and the
Merger in effect as of the date of such determination) and (ii) that is
reasonably capable of being completed, taking into account all financial,
regulatory, legal and other aspects of such proposal, and subject to compliance
with Section 5.02(d), (x) furnish information with respect to the Company and
the Company Subsidiaries to the person making such Company Takeover Proposal and
its Representatives pursuant to a customary confidentiality agreement not less
restrictive of the other party than the Confidentiality Agreement (excluding the
provisions of the tenth and eleventh paragraphs thereof) and (y) participate in
discussions or negotiations with such person and its Representatives regarding
any Company Takeover Proposal; provided, however, that the Company shall
promptly provide to Parent any non-public information concerning the Company or
any Company Subsidiary that is provided to the person making such Company
Takeover Proposal or its Representatives which was not previously provided to
Parent, other than any Competitively Sensitive Information.
(c) Subject to Section 8.01(e), neither the Company Board nor any
committee thereof shall (i) withdraw or modify in a manner adverse to Parent or
Sub, or publicly propose to withdraw or modify in a manner adverse to Parent or
Sub, the approval or recommendation by the Company Board or any such committee
of this Agreement or the Merger, (ii) approve any letter of intent, agreement in
principle, acquisition agreement or similar agreement relating to any Company
Takeover Proposal or (iii) approve or recommend, or publicly propose to approve
or recommend, any Company Takeover Proposal. Notwithstanding the foregoing, if,
prior to receipt of the Company Stockholder Approval, the Company Board
determines in good faith, after consultation with outside counsel, that failure
to so withdraw or modify its recommendation of the Merger and this Agreement
would be inconsistent with the Company Board's exercise of
41
its fiduciary duties, the Company Board or any committee thereof may withdraw or
modify its recommendation of the Merger and this Agreement.
(d) The Company promptly shall advise Parent orally and in writing of
any Company Takeover Proposal or any inquiry with respect to or that would
reasonably be expected to lead to any Company Takeover Proposal, the identity of
the person making any such Company Takeover Proposal or inquiry and the material
terms of any such Company Takeover Proposal or inquiry. The Company shall keep
Parent reasonably informed of the status (including any change to the terms
thereof) of any such Company Takeover Proposal or inquiry.
(e) Nothing contained in this Section 5.02 shall prohibit the Company
from taking and disclosing to its stockholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or from making any required
disclosure to the Company's stockholders if, in the good faith judgment of the
Company Board, after consultation with outside counsel, failure so to disclose
would be inconsistent with its obligations under applicable Law.
(f) For purposes of this Agreement:
"COMPANY TAKEOVER PROPOSAL" means (i) any proposal or offer for a
merger, consolidation, dissolution, recapitalization or other business
combination involving the Company, (ii) any proposal for the issuance by the
Company of over 20% of its equity securities as consideration for the assets or
securities of another person or (iii) any proposal or offer to acquire in any
manner, directly or indirectly, over 20% of the equity securities or
consolidated total assets of the Company, in each case other than the Merger.
"SUPERIOR COMPANY PROPOSAL" means any proposal made by a third party
to acquire all or substantially all the equity securities or assets of the
Company, pursuant to a tender or exchange offer, a merger, a consolidation, a
liquidation or dissolution, a recapitalization, a sale of all or substantially
all its assets or otherwise, (i) on terms which the Company Board determines in
good faith, after consultation with the Company's outside legal counsel and
financial advisors, to be more favorable from a financial point of view to the
holders of Company Common Stock than the Merger, taking into account all the
terms and conditions of such proposal, and this Agreement (including any
proposal by Parent to amend the terms of this Agreement and the Merger) and (ii)
that is reasonably capable of being completed, taking into account all
financial, regulatory, legal and other aspects of such proposal; provided that
the Company Board shall not so determine that any such proposal is a Superior
Company Proposal prior to the time that is 48 hours after the time at which the
Company has complied in all material respects with Section 5.02(d) with respect
to such proposal.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01 PREPARATION OF PROXY STATEMENT AND FORM S-4; STOCKHOLDERS
MEETING. (a) As promptly as practicable following the date of this Agreement,
Parent and the Company shall prepare, and Parent shall file with the SEC, the
Form S-4, in which the Proxy Statement will be included as a prospectus, and
each of the Company and Parent shall use its
42
reasonable best efforts to respond as promptly as practicable to any comments of
the SEC with respect thereto. Each of Parent and the Company shall use all
reasonable best efforts to have the Form S-4 declared effective under the
Securities Act, and for the Proxy Statement to be cleared by the SEC and its
staff under the Exchange Act, as promptly as practicable after such filing.
Without limiting any other provision herein, the Form S-4 and the Proxy
Statement will contain such information and disclosure reasonably requested by
either Parent or the Company so that the Form S-4 conforms in form and substance
to the requirements of the Securities Act and the Proxy Statement conforms in
form and substance to the requirements of the Exchange Act. The Company shall
use its reasonable best efforts to cause the Proxy Statement to be mailed to
holders of Company Common Stock as promptly as practicable after the Form S-4 is
declared effective under the Securities Act.
(b) Each of the Company and Parent shall promptly notify the other of
the receipt of any comments from the SEC or its staff and of any request by the
SEC or its staff for amendments or supplements to the Form S-4 or Proxy
Statement or for additional information and shall supply the other with copies
of all correspondence between the Company or any of its representatives or
Parent or any of its representatives, on the one hand, and the SEC or its staff,
on the other hand, with respect to the Form S-4 or the Proxy Statement. The
Company and Parent shall cooperate with each other and provide to each other all
information necessary in order to prepare the Form S-4 and the Proxy Statement
as expeditiously as practicable.
(c) If at any time prior to the Effective Time there shall occur (i)
any event with respect to the Company or any of Company Subsidiaries, or with
respect to other information supplied by Company for inclusion in the Form S-4
or the Proxy Statement, or (ii) any event with respect to Parent, or with
respect to information supplied by Parent for inclusion in the Form S-4 or the
Proxy Statement, in either case, which event is required to be described in an
amendment of or a supplement to the Form S-4 or the Proxy Statement, such event
shall be so described, and such amendment or supplement shall be promptly filed
with the SEC and, as required by Law, disseminated to the stockholders of the
Company.
(d) The Company shall, as soon as practicable following the date the
Form S-4 is declared effective under the Securities Act, duly call, give notice
of, convene and hold a meeting of its stockholders (the "COMPANY STOCKHOLDERS
MEETING") for the purpose of seeking the Company Stockholder Approval. The
Company shall, through the Company Board, recommend to its stockholders that
they give the Company Stockholder Approval, except to the extent that the
Company Board shall have withdrawn or modified its recommendation of this
Agreement or the Merger as permitted by Section 5.02(c). Without limiting the
generality of the foregoing, the Company agrees that its obligations pursuant to
the first sentence of this Section 6.01(d) shall not be affected by (i) the
commencement, public proposal, public disclosure or communication to the Company
of any Company Takeover Proposal or (ii) the withdrawal or modification by the
Company Board of its recommendation of this Agreement or the Merger.
SECTION 6.02 ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) Subject to compliance with applicable Law, the Company and Parent
shall, and shall cause each of their respective subsidiaries to, afford to the
other party and its
43
officers, employees, accountants, counsel, financial advisors and other
representatives, reasonable access during normal business hours during the
period prior to the Effective Time to all their respective properties, books,
contracts, commitments, personnel and records and, during such period, shall,
and shall cause each of their respective subsidiaries to, furnish promptly to
the other party (i) a copy of each report, schedule, registration statement and
other document filed by it during such period pursuant to the requirements of
federal or state securities laws and (ii) all other information concerning its
business, properties and personnel as the other party may reasonably request and
receive consistent with the provisions of applicable Law. All information
exchanged pursuant to this Section 6.02 shall be subject to the confidentiality
agreement dated July 26, 2005 between the Company and Parent (the
"CONFIDENTIALITY AGREEMENT"). Notwithstanding anything to the contrary contained
in this Section 6.02, the Company and Parent shall not be obligated, and shall
not be obligated to cause any of their respective subsidiaries, to afford the
other party or its officers, employees, accountants, counsel, financial advisors
or other representatives, any access to any properties, books, contracts,
commitments, personnel or records relating to, or in respect of, any forward
product plans, product specific cost information, pricing information, customer
specific information, merchandising information, or other similar competitively
sensitive information ("COMPETITIVELY SENSITIVE INFORMATION").
(b) To the extent not already done, the Company shall promptly upon
execution of this Agreement request each person that has heretofore executed a
confidentiality or non-disclosure agreement in connection with its consideration
of acquiring the Company or any of the Company Subsidiaries to return (or
certify in writing the destruction of) all materials containing confidential
information and copies thereof furnished to such person by or on behalf of the
Company or any of the Company Subsidiaries.
SECTION 6.03 REASONABLE BEST EFFORTS; NOTIFICATION. (a) Upon the terms and
subject to the conditions set forth in this Agreement (including, without
limitation, those contained in Sections 6.03(b) and (c)), each of the parties
shall use its reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with the
other parties in doing, all things necessary, proper or advisable to consummate
and make effective, in the most expeditious manner practicable, the Merger and
the other Transactions, including (i) the obtaining of all necessary actions or
nonactions, waivers, consents and approvals from Governmental Entities and the
making of all necessary registrations and filings (including filings with
Governmental Entities, if any) and the taking of all reasonable steps as may be
necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity, (ii) the obtaining of all necessary
Consents or waivers from third parties, (iii) the defending of any lawsuits or
other legal proceedings, whether judicial or administrative, challenging this
Agreement or the consummation of the Transactions, including seeking to have
vacated or reversed any decree, order or judgment entered by any court or other
Governmental Entity that would restrain, prevent or delay the Closing and (iv)
the execution and delivery of any additional instruments necessary to consummate
the Transactions and to fully carry out the purposes of this Agreement. In
connection with and without limiting the foregoing, the Company and the Company
Board shall (i) use their reasonable best efforts to ensure that no state
takeover statute or similar statute or regulation is or becomes applicable to
any Transaction or this Agreement and (ii) if any state takeover statute or
similar statute or regulation becomes applicable to this Agreement, use their
reasonable best efforts to ensure that the Merger and the other Transactions may
be consummated as promptly as practicable on the
44
terms contemplated by this Agreement and otherwise to minimize the effect of
such statute or regulation on the Merger and the other Transactions. Parent will
take all action necessary to cause Sub to perform its obligations under this
Agreement and to consummate the Merger on the terms and conditions set forth in
this Agreement. Subject to applicable Law relating to the exchange of
information, the Company and Parent and their respective counsel shall (i) have
the right to review in advance, and to the extent practicable each shall consult
the other on, any filing made with, or written materials to be submitted to, any
Governmental Entity in connection with the Merger and the other Transactions,
(ii) promptly inform each other of any communication (or other correspondence or
memoranda) received from, or given to, the U.S. Department of Justice, the U.S.
Federal Trade Commission, or any other Governmental Antitrust Entity and (iii)
furnish each other with copies of all correspondence, filings and written
communications between them or their subsidiaries or affiliates, on the one
hand, and any Governmental Entity or its respective staff, on the other hand,
with respect to this Agreement and the Merger. The Company and Parent shall, to
the extent practicable, provide the other party and its counsel with advance
notice of and the opportunity to participate in any discussion, telephone call
or meeting with any Governmental Entity in respect of any filing, investigation
or other inquiry in connection with the Merger or the other Transactions and to
participate in the preparation for such discussion, telephone call or meeting.
The Company and Parent may, as each deems advisable and necessary, reasonably
designate any competitively sensitive material provided to the other under this
Section 6.03 as "Antitrust Counsel Only Material" (as defined in the
Confidentiality Agreement). Notwithstanding anything to the contrary in this
Section 6.03, materials provided to the other party or its counsel may be
redacted to remove references concerning the valuation of the Company and its
Subsidiaries.
(b) (i) Without limiting the generality of the undertakings pursuant
to this Section 6.03, the parties hereto shall provide or cause to be provided
as promptly as practicable to Governmental Entities with regulatory jurisdiction
over enforcement of any applicable federal, state, local or foreign antitrust,
competition, premerger notification or trade regulation law, regulation or order
("ANTITRUST LAWS" and each such Governmental Entity, a "GOVERNMENTAL ANTITRUST
ENTITY") information and documents requested by any Governmental Antitrust
Entity or necessary, proper or advisable to permit consummation of the
Transactions, including preparing and filing any notification and report form
and related material required under the HSR Act and any additional Consents and
filings under any Antitrust Laws as promptly as practicable following the date
of this Agreement (but in no event more than five business days from the date
hereof) and thereafter to respond as promptly as practicable to any request for
additional information or documentary material that may be made under the HSR
Act and any additional Consents and filings under any Antitrust Laws; (ii) the
parties shall use their best efforts to take such actions as are necessary or
advisable to obtain prompt approval of consummation of the Transactions by any
Governmental Antitrust Entity; and (iii) the parties shall use their best
efforts to resolve any objections and challenges, including by contest through
litigation on the merits, negotiation or other action, that may be asserted by
any Governmental Antitrust Entity with respect to the transaction contemplated
by this Agreement under the HSR Act and any Antitrust Laws.
(c) Notwithstanding anything in this Agreement to the contrary, in no
event will Parent or Sub be obligated to propose or agree to accept any
undertaking or condition, to enter into any consent decree, to make any
divestiture, to accept any operational restriction, or
45
take any other action that, in the reasonable judgment of Parent, could be
expected to limit the right of Parent or the Surviving Corporation to own or
operate all or any portion of their respective businesses or assets. With regard
to any Governmental Antitrust Entity, neither the Company nor any Company
Subsidiary (or any of their respective affiliates) shall, without Parent's prior
written consent in Parent's sole discretion, discuss or commit to any
divestiture transaction, or discuss or commit to alter their businesses or
commercial practices in any way, or otherwise take or commit to take any action
that limits the Parent's freedom of action with respect to, or the Parent's
ability to retain any of the businesses, product lines or assets of, the
Surviving Corporation or otherwise receive the full benefits of this Agreement.
(d) The Company shall give prompt notice to Parent, and Parent or Sub
shall give prompt notice to the Company, of (i) any representation or warranty
made by it contained in this Agreement that is qualified as to materiality
becoming untrue or inaccurate in any respect or any such representation or
warranty that is not so qualified becoming untrue or inaccurate in any material
respect or (ii) the failure by it to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied by
it under this Agreement; provided, however, that no such notification shall
affect the representations, warranties, covenants or agreements of the parties
or the conditions to the obligations of the parties under this Agreement.
(e) As soon as reasonably practicable following the execution of this
Agreement, Parent, in its capacity as the sole stockholder of Sub, shall adopt
this Agreement.
SECTION 6.04 ESPP. As soon as practicable following the date of this
Agreement, the Company Board (or, if appropriate, any committee of the Company
Board administering the ESPP) shall adopt such resolutions or take such other
actions as may be required to provide that with respect to the ESPP no purchase
period shall be commenced after the date of this Agreement.
SECTION 6.05 BENEFIT PLANS. (a) Subject to all applicable collective
bargaining agreements, from the Effective Time through December 31, 2006, except
as set forth below, Parent shall provide or cause the Surviving Corporation to
provide to employees of the Company and the Company Subsidiaries who remain
employed by the Surviving Corporation and its subsidiaries compensation and
employee benefits that, taken as a whole, are comparable in the aggregate to
those provided to such employees immediately prior to the Effective Time (it
being understood and agreed that modifications to Company Benefit Plans that
have been announced to participants or planned and otherwise disclosed to Parent
but not yet implemented as of the Effective Time shall be taken into account for
purposes of the foregoing). Without limiting the foregoing, Parent agrees that,
with respect to service through December 31, 2006, it shall, or shall cause the
Surviving Corporation to, maintain the employer matching contribution component
of the Maytag Corporation Salary Savings Plan without reduction. Parent and the
Company agree and acknowledge that consummation of the Transactions shall
constitute a "change of control" for purposes of each applicable Company Benefit
Plan and Company Benefit Agreement. Nothing herein shall be construed to
prohibit Parent or the Surviving Corporation from amending or terminating any
Company Benefit Plan in accordance with the terms thereof and with applicable
Law, so long as they comply with the requirements of this Section 6.05.
46
(b) From and after the Effective Time, Parent shall, and shall cause
the Surviving Corporation to, honor in accordance with their respective terms
(as in effect on the date of this Agreement), all the Company Benefit Plans and
Company Benefit Agreements disclosed in Sections 3.10(b) and 3.11(a) of the
Company Disclosure Letter (subject, in each case, to the right of Parent or the
Surviving Corporation to amend or terminate any Company Benefit Plan or Company
Benefit Agreement in accordance with the terms thereof and with applicable Law).
For purposes of eligibility, vesting and benefit accrual (other than benefit
accrual under defined benefit pension plans) under the employee benefit plans of
Parent and its subsidiaries providing benefits after the Effective Time to any
employee of the Company or any Company Subsidiary immediately prior to the
Effective Time (all such plans, collectively, the "NEW PLANS"), each such
employee shall be credited with all years of service for which such employee was
credited before the Effective Time under any comparable Company Benefit Plans,
except where such crediting would lead to a duplication of benefits or to the
extent such service credit is not provided under a newly adopted plan to
similarly situated employees of Parent who were never employees of the Company
and its affiliates. In addition and without limiting the generality of the
foregoing, (i) Parent shall use its commercially reasonable efforts to cause
each employee of the Company or any Company Subsidiary as of the Effective Time
to be immediately eligible to participate, without any waiting period, in any
and all New Plans to the extent coverage under any such New Plan replaces
coverage under a comparable Company Benefit Plan in which such employee
participated immediately prior to the Effective Time (all such plans,
collectively, the "OLD PLANS"), (ii) for purposes of each New Plan providing
medical, dental, pharmaceutical and/or vision benefits to any such employee,
Parent shall use its commercially reasonable efforts to cause all pre-existing
condition exclusions, limitations and actively-at-work requirements of such New
Plan to be waived for such employee and his or her covered dependent (to the
extent such exclusions, limitations and actively-at-work requirements were
waived or satisfied as of the Effective Time under the corresponding Old Plan)
and (iii) all deductibles, coinsurance and maximum out-of-pocket expenses
incurred by such employee and his or her covered dependents under any Old Plan
during the portion of the plan year of such Old Plan ending on the date such
employee's participation in the corresponding New Plan begins shall be taken
into account under such New Plan for purposes of satisfying all deductible,
co-insurance and maximum out-of-pocket requirements applicable to such employee
and his or her covered dependents for the applicable plan year as if such
amounts had been paid in accordance with such New Plan.
(c) Nothing contained herein shall be construed as requiring Parent or
the Surviving Corporation to continue the employment of any specific person.
(d) The Company may provide up to the Retention Amount as a retention
pool (the "RETENTION POOL") for the purposes of retaining the services of
employees of the Company and the Company Subsidiaries ("COMPANY EMPLOYEES") who
are key employees. The Chief Executive Officer of the Company shall determine in
his sole discretion, subject to approval by (i) the Company Board (or the
Compensation Committee thereof) and (ii) Parent (whose approval shall not be
unreasonably withheld), the Company Employees eligible to receive retention
awards from the Retention Pool (who shall not include Primary Company
Executives) (each, a "RETENTION BONUS"), the amounts of the Retention Bonus,
individually and in the aggregate, and any criteria for payment of the Retention
Bonus. Any Retention Bonus shall be intended to retain the services of the
recipient through, and shall be payable (if such recipient
47
still remains employed by the Company and the Company Subsidiaries at such time)
as soon as practicable following (but in no event more than 30 days following)
the first to occur of (x) the 90th day following the Closing Date or (y) if this
Agreement is terminated pursuant to Section 8.01 hereof, the date of such
termination (such first to occur, the "Vesting Date"); provided that such
Retention Bonus shall be payable in the event that the applicable recipient's
employment has been terminated (i) prior to the Closing Date without cause by
mutual agreement of Parent and the Company, (ii) following the Closing Date but
prior to the date of payment of Retention Bonuses without cause (or by the
applicable recipient in a termination otherwise entitling such recipient to
severance), or (iii) due to death or long-term disability. In the event this
Agreement is terminated pursuant to Section 8.01(a), (b) or (f) hereof,
Parent shall be solely responsible for making payments of Retention Bonuses, and
shall indemnify and hold harmless the Company and its affiliates in connection
with such bonuses. For purposes of this Agreement, the Retention Amount shall
equal the product of (x) $15,000,000 times (y) a fraction, the numerator of
which is the number of days from the date hereof through the earlier of the
Vesting Date and the Closing Date, the denominator of which is the number of
days from the date hereof through December 31, 2006.
(e) In the event that the Closing Date occurs prior to payment of
annual bonuses for the 2005 calendar year, Parent shall cause the Surviving
Corporation to continue to maintain and honor the Company's 2005 annual bonus
plans set forth in Section 6.05(e) of the Company Disclosure Letter (the "2005
BONUS PLANS") for the 2005 calendar year and to pay Company Employees the bonus
amounts due under such 2005 Bonus Plans pursuant to the objective formulae set
forth therein (including formulae approved thereunder by the Company or the
Company Board, or a committee thereof, prior to the date of this Agreement and
previously provided to Parent), based on the performance of the Company and its
operating units, without adjusting such total for individual performance. If the
Effective Date has not occurred prior to or on December 31, 2005, the Company
may establish annual bonus plans ("2006 BONUS PLANS") for the 2006 calendar year
on terms consistent with past practice. If the Effective Date occurs during the
2006 calendar year, (x) Parent will pay, as soon as practicable following the
Effective Time, prorated bonuses (prorated to the Effective Time) to Company
Employees who were employed as of the Effective Time, assuming for purposes of
such prorated bonuses that all performance measures relevant to the
determination of bonuses under such 2006 Bonus Plans shall be deemed to have
been met for the period beginning on January 1, 2006 and ending on the Closing
Date, and (y) Parent shall implement a bonus plan for purposes of bonuses for
Company Employees for the balance of the 2006 calendar year. Company performance
in respect of calculations to be made under the 2005 Bonus Plans and 2006 Bonus
Plans shall be calculated without taking into account any expenses or costs
related to or arising out of the Transactions or any non-recurring charges that
would not reasonably be expected to have been incurred had the Transactions not
occurred.
(f) From the Effective Time through December 31, 2006, (i) Company
Employees below the level of Director shall continue to participate in the
Maytag Corporation Separation Pay and Benefits Plan (the "SEVERANCE PLAN"), (ii)
Company Employees at the levels of Director and above shall be eligible for
severance benefits pursuant to the plan set forth in Section 6.05(f) of the
Company Disclosure Letter and (iii) none of the Severance Plan, the Maytag
Corporation Separation of Employment Plan or the plan set forth in Section
6.05(f) of the Company Disclosure Letter shall be amended in any manner adverse
to the Company Employees.
48
SECTION 6.06 INDEMNIFICATION. (a) Parent shall, to the fullest extent
permitted by Law, cause the Surviving Corporation to honor all the Company's
obligations to indemnify the current or former directors or officers of the
Company for acts or omissions by such directors and officers occurring prior to
the Effective Time to the extent that such obligations of the Company exist on
the date of this Agreement, whether pursuant to the Company Charter, the Company
By-laws or individual indemnity agreements, and such obligations shall survive
the Merger and shall continue in full force and effect in accordance with the
terms of the Company Charter, the Company By-laws and such individual indemnity
agreements from the Effective Time until the expiration of the applicable
statute of limitations with respect to any claims against such directors or
officers arising out of such acts or omissions. Parent shall, to the fullest
extent permitted by Law, cause the Surviving Corporation to advance funds for
expenses incurred by a director or officer in defending a civil or criminal
action, suit or proceeding relating to the indemnification obligations
referenced in the immediately preceding sentence in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of such director or officer to repay such amount if it shall be
ultimately determined that he or she is not entitled to the indemnification
referenced in the immediately preceding sentence.
(b) For a period of six years after the Effective Time, Parent shall
cause to be maintained in effect the current policies of directors' and
officers' liability insurance maintained by the Company (provided that Parent
may substitute therefor policies purchased by Parent or the Surviving
Corporation, at the sole election of Parent, with reputable and financially
sound carriers of at least the same coverage and amounts containing terms and
conditions which are no less advantageous) with respect to claims arising from
or related to facts or events which occurred at or before the Effective Time;
provided, however, that Parent or the Surviving Corporation shall not be
obligated to make annual premium payments for such insurance to the extent such
premiums exceed 300% of the annual premiums paid as of the date hereof by the
Company for such insurance (such 300% amount, the "MAXIMUM PREMIUM"). If such
insurance coverage cannot be obtained at all, or can only be obtained at an
annual premium in excess of the Maximum Premium, Parent shall maintain the most
advantageous policies of directors' and officers' insurance obtainable for an
annual premium equal to the Maximum Premium. The Company represents to Parent
that the Maximum Premium is $3,696,000.
SECTION 6.07 FEES AND EXPENSES. (a) Except as provided in this Section
6.07, all fees and expenses incurred in connection with the Merger and the other
Transactions shall be paid by the party incurring such fees or expenses, whether
or not the Merger is consummated, except for (i) expenses incurred in connection
with printing, mailing and filing the Form S-4 and the Proxy Statement and (ii)
all fees paid in respect of filings made by the Company and Parent pursuant to
the HSR Act in connection with the Merger, with the expenses and fees referred
to in clauses (i) and (ii) to be borne by Parent.
(b) The Company shall pay to Parent a fee of $60,000,000 and shall
reimburse Parent for its payment to Triton of $40,000,000 in connection with the
Company's termination of the Triton Agreement if: (i) Parent terminates this
Agreement pursuant to Section 8.01(d); (ii) (A) after the date of this Agreement
and prior to the termination of this Agreement pursuant to Article VIII, any
person makes a Company Takeover Proposal or amends a Company Takeover Proposal
made prior to the date of this Agreement, (B) this Agreement is terminated by
49
either the Company or Parent pursuant to Section 8.01(b)(i) (and prior to such
termination the Company shall have breached or failed to perform any of its
covenants or agreements set forth in this Agreement) or 8.01(b)(iii) (but only
if a Company Takeover Proposal is publicly announced at or prior to the time of
the Company Stockholders Meeting) or by Parent pursuant to Section 8.01(c) and
(C) within 12 months after the date of such termination the Company enters into
a definitive agreement to consummate, or consummates, the transactions
contemplated by a Company Takeover Proposal; or (iii) the Company terminates
this Agreement pursuant to Section 8.01(e). The Company shall (i) pay to Parent
a fee of $60,000,000 if Parent terminates this Agreement pursuant to Section
8.01(c) by reason of the Company knowingly breaching its obligations under
Section 5.02 (unless such breach of Section 5.02 has only an immaterial effect
on Parent) and (ii) in such event, if the circumstance described in clause (ii)
(C) of the immediately preceding sentence occurs, also reimburse Parent for its
payment to Triton of $40,000,000 in connection with the Company's termination of
the Triton Agreement. Any fee due under this Section 6.07(b) shall be paid by
wire transfer of same-day funds on the date of termination of this Agreement
(except that in the case of termination pursuant to clause (ii) of either of the
first or second sentence of this Section 6.07(b), such payment shall be made on
the date of execution of such definitive agreement or, if earlier, consummation
of such transactions and in the case of termination pursuant to the immediately
preceding sentence, such payment shall be made on or before the fifth business
day following such termination). Solely for the purposes of clause (ii) of each
of the first and second sentences of this Section 6.07(b), the term "COMPANY
TAKEOVER PROPOSAL" shall have the meaning assigned to such term in Section
5.02(f), except that all references to "20%" shall be changed to "40%". The
Company acknowledges that the agreements contained in this Section 6.07(b) are
an integral part of the Transactions, and that, without these agreements, Parent
would not enter into this Agreement; accordingly, if the Company fails promptly
to pay the amounts due pursuant to this Section 6.07(b), and, in order to obtain
such payment, Parent commences a suit that results in a judgment against the
Company for the amounts set forth in this Section 6.07(b), the Company shall pay
to Parent interest on the amounts set forth in this Section 6.07(b) from and
including the date payment of such amount was due to but excluding the date of
actual payment at the prime rate of JPMorgan Chase Bank in effect on the date
such payment was required to be made, together with reasonable legal fees and
expenses incurred in connection with such suit. It is expressly understood that
in no event shall the Company be required to pay the $60,000,000 fee or
reimburse the $40,000,000 payment referred to in this Section 6.07(b) on more
than one occasion.
(c) In the event that either the Company or Parent is entitled to
terminate, and terminates, this Agreement pursuant to Section 8.01(b)(i) or
8.01(b)(ii)(A) and at the time of such termination (i) all of the conditions set
forth in Sections 7.02(a), 7.02(b) and 7.02(c) have been satisfied or waived
(other than the delivery of certificates and provided that the term "Closing
Date" shall in any of such sections be deemed to refer to the date of such
termination), (ii) neither the Company nor Parent is entitled to terminate this
Agreement pursuant to Section 8.01(b)(ii)(B) and (iii) if a vote to obtain the
Company Stockholder Approval has been taken at a Company Stockholder Meeting,
Company Stockholder Approval has been obtained, then Parent shall pay a
termination fee equal to $120,000,000 (the "NONCLEARANCE TERMINATION FEE") on or
before the fifth business day following such termination by wire transfer of
same day funds to an account designated in writing to Parent by the Company at
least two business days after such termination.
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SECTION 6.08 PUBLIC ANNOUNCEMENTS. Each of Parent and Sub, on the one hand,
and the Company, on the other hand, shall use its reasonable best efforts to
consult with each other before issuing, and, to the extent reasonably feasible,
provide each other the opportunity to review and comment upon, any press release
or other public statements with respect to the Merger and the other Transactions
and shall not issue any such press release or make any such public statement
prior to such consultation, except as may be required by applicable Law, court
process or by obligations pursuant to any listing agreement with any national
securities exchange.
SECTION 6.09 TRANSFER TAXES. All stock transfer, real estate transfer,
documentary, stamp, recording and other similar Taxes (including interest,
penalties and additions to any such Taxes) ("TRANSFER TAXES") incurred in
connection with the Transactions shall be paid by either Sub or the Surviving
Corporation, and the Company shall cooperate with Sub and Parent in preparing,
executing and filing any Tax Returns with respect to such Transfer Taxes,
including supplying in a timely manner a complete list of all real property
interests held by the Company that are located in New York State and any
information with respect to such property that is reasonably necessary to
complete such Tax Returns.
SECTION 6.10 RIGHTS AGREEMENTS; CONSEQUENCES IF RIGHTS TRIGGERED.
(a) The Company Board shall take all further actions (in addition to
those referred to in Section 3.05(c)) requested in writing by Parent in order to
render the Company Rights inapplicable to the Merger and the other Transactions.
Except as approved in writing by Parent, the Company Board shall not (i) amend
the Company Rights Agreement, (ii) redeem the Company Rights or (iii) take any
action with respect to, or make any determination under, the Company Rights
Agreement. If any Distribution Date or Share Acquisition Date occurs under the
Company Rights Agreement at any time during the period from the date of this
Agreement to the Effective Time, the Company and Parent shall make such
adjustment to the Merger Consideration as the Company and Parent shall mutually
agree so as to preserve the economic benefits that the Company and Parent each
reasonably expected on the date of this Agreement to receive as a result of the
consummation of the Merger and the other Transactions.
(b) The Parent Board shall take all further actions (in addition to
those referred to in Section 4.05(c)) requested in writing by the Company in
order to render the Parent Rights inapplicable to the Merger and the other
Transactions. Except as would not adversely affect the ability of Parent to
consummate the Merger and the Transactions, unless approved in writing by the
Company, the Parent Board shall not (i) amend the Parent Rights Agreement, (ii)
redeem the Parent Rights or (iii) take any action with respect to, or make any
determination under, the Parent Rights Agreement.
SECTION 6.11 STOCKHOLDER LITIGATION. The Company shall give Parent the
opportunity to participate in the defense or settlement of any stockholder
litigation against the Company and its directors relating to any Transaction;
provided, however, that no such settlement shall be agreed to without Parent's
consent, which consent shall not be unreasonably withheld.
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SECTION 6.12 STOCK EXCHANGE LISTING. Parent shall use its reasonable best
efforts to cause the shares of Parent Common Stock to be issued in connection
with the Merger and the shares of Parent Common Stock to be reserved for
issuance upon exercise of Company Stock Options to be approved for listing on
the NYSE, subject to official notice of issuance.
SECTION 6.13 AFFILIATES.
(a) Not less than forty-five (45) days prior to the Effective Time,
the Company (i) shall deliver to Parent a letter identifying all Persons who, in
the Company's opinion, may be, as of the Effective Time, its "AFFILIATES" for
purposes of Rule 145 under the Securities Act, and (ii) shall use its reasonable
best efforts to cause each Person who is identified as an "AFFILIATE" of it in
such letter to deliver to Parent, as promptly as practicable but in no event
later than thirty (30) days prior to the Effective Time, a signed agreement
reasonably acceptable to both Parent and the Company (an "AFFILIATE AGREEMENT").
The Company shall notify Parent from time to time after the delivery of the
letter described above of any Person not identified on such letter who then is,
or may be, such an "AFFILIATE" and use its reasonable best efforts to cause each
additional Person who is identified as an "AFFILIATE" to execute an Affiliate
Agreement.
(b) Neither Parent or the Company shall register, or allow its
transfer agent to register, on its books, any transfer of any shares of Parent
Common Stock or Company Common Stock of any affiliate of the Company who has not
provided an executed Affiliate Agreement in accordance with this Section 6.13
unless the transfer is made in compliance with the foregoing.
(c) For one year following the Closing, Parent shall continue to make
available such adequate current public information as shall satisfy the
conditions set forth in Rule 144(c) of the Securities Act.
SECTION 6.14 OTHER ACTIONS BY PARENT. Parent shall not, and shall use its
reasonable best efforts to cause its affiliates not to, take any action that
would reasonably be expected to result in any condition to the Merger set forth
in Article VII not being satisfied, except any action permitted to be taken
pursuant to Section 8.01.
SECTION 6.15 SECTION 16(B). Parent shall take all such steps as may be
reasonably necessary to cause the Transactions and any other dispositions of
equity securities of the Company (including derivative securities) or
acquisitions of Parent equity securities (including derivative securities) in
connection with this Agreement by each individual who (a) is a director or
officer of the Company or (b) at the Effective Time will become a director or
officer of Parent, to be exempt under Rule 16b-3 promulgated under the Exchange
Act.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
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(a) STOCKHOLDER APPROVAL. The Company shall have obtained the Company
Stockholder Approval.
(b) ANTITRUST. Any waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or shall
have expired. Any Consents and filings required prior to the Closing under any
Antitrust Law, the absence of which would reasonably be expected to (i) have a
Company Material Adverse Effect, (ii) have a Parent Material Adverse Effect or
(iii) result in a criminal violation, shall have been obtained or made.
(c) NO INJUNCTIONS OR RESTRAINTS. No restraining order, preliminary or
permanent injunction or other order issued by any court of competent
jurisdiction or other legal restraint or prohibition preventing the consummation
of the Merger shall be in effect; provided, however, that prior to asserting
this condition, subject to Section 6.03, the asserting party shall have used its
reasonable best efforts or best efforts, as applicable, in a manner consistent
with this Agreement, including, without limitation, Section 6.03(b), to prevent
the entry of any such injunction or other order and to appeal as promptly as
possible any such judgment that may be entered.
(d) FORM S-4 EFFECTIVE. The Form S-4 shall have been declared
effective under the Securities Act and no stop order suspending the
effectiveness of the Form S-4 shall be in effect and no proceedings for such
purpose shall be pending before or threatened by the SEC.
(e) LISTING OF PARENT COMMON STOCK. The shares of Parent Common Stock
to be issued in the Merger and such other shares of Parent Common Stock to be
reserved for issuance in connection with the Merger shall have been approved for
listing on the NYSE, subject to official notice of issuance.
SECTION 7.02 CONDITIONS TO OBLIGATIONS OF PARENT AND SUB. The obligations
of Parent and Sub to effect the Merger are further subject to the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company set forth in this Agreement that are qualified as to Company
Material Adverse Effect shall be true and correct, and those not so qualified
shall be true and correct except for such failures to be true and correct as
would not reasonably be expected to have a Company Material Adverse Effect
(other than the representations and warranties set forth in Sections 3.02, 3.03,
3.04 and 3.18, which shall be true and correct in all material respects), as of
the date of this Agreement and as of the Closing Date as though made on the
Closing Date, except to the extent such representations and warranties expressly
relate to an earlier date (in which case such representations and warranties
qualified as to Company Material Adverse Effect shall be true and correct, and
those not so qualified shall be true and correct except for such failures to be
true and correct as would not reasonably be expected to have a Company Material
Adverse Effect (other than the representations and warranties set forth in
Sections 3.02, 3.03, 3.04 and 3.18, which shall be true and correct in all
material respects), on and as of such earlier date). Parent shall have received
a certificate signed on behalf of the Company by the chief executive officer and
the chief financial officer of the Company to such effect.
53
(b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and Parent shall have
received a certificate signed on behalf of the Company by the chief executive
officer and the chief financial officer of the Company to such effect.
(c) ABSENCE OF COMPANY MATERIAL ADVERSE EFFECT. Except as disclosed in
the Company Disclosure Letter or in any Filed Company SEC Document, since the
date of this Agreement there shall not have been any event, change, effect,
development, condition or occurrence that, individually or in the aggregate, has
had or would reasonably be expected to have a Company Material Adverse Effect.
SECTION 7.03 CONDITIONS TO OBLIGATION OF THE COMPANY. The obligation of the
Company to effect the Merger is further subject to the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Parent and Sub set forth in this Agreement that are qualified as to Parent
Material Adverse Effect shall be true and correct, and those not so qualified
shall be true and correct except for such failures to be true and correct as
would not reasonably be expected to have a Parent Material Adverse Effect (other
than the representations and warranties set forth in Sections 4.02 and 4.04,
which shall be true and correct in all material respects), as of the date of
this Agreement and as of the Closing Date as though made on the Closing Date,
except to the extent such representations and warranties expressly relate to an
earlier date (in which case such representations and warranties qualified as to
Parent Material Adverse Effect shall be true and correct, and those not so
qualified shall be true and correct except for such failures to be true and
correct as would not reasonably be expected to have a Parent Material Adverse
Effect (other than the representations and warranties set forth in Sections 4.02
and 4.04, which shall be true and correct in all material respects), on and as
of such earlier date). The Company shall have received a certificate signed on
behalf of Parent by an executive officer of Parent to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF PARENT AND SUB. Parent and Sub shall
have performed in all material respects all obligations required to be performed
by them under this Agreement at or prior to the Closing Date, and the Company
shall have received a certificate signed on behalf of Parent by an executive
officer of Parent to such effect.
(c) ABSENCE OF PARENT MATERIAL ADVERSE EFFECT. Except as disclosed in
the Parent Disclosure Letter or in any Filed Parent SEC Document, since the date
of this Agreement there shall not have been any event, change, effect,
development, condition or occurrence that, individually or in the aggregate, has
had or would reasonably be expected to have a Parent Material Adverse Effect.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01 TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after receipt of the Company
Stockholder Approval:
54
(a) by mutual written consent of Parent, Sub and the Company;
(b) by either Parent or the Company:
(i) if the Merger is not consummated on or before December
31, 2006 (the "OUTSIDE DATE"), unless the failure to consummate the Merger
is the result of a willful and material breach of this Agreement by the
party seeking to terminate this Agreement;
(ii) if any Governmental Entity issues an order, decree or
ruling or takes any other action permanently enjoining, restraining or
otherwise prohibiting the Merger (A) as violative of any Antitrust Law or
(B) for any reason other than as contemplated by Section 8.01(b)(ii)(A),
and, in either case, such order, decree, ruling or other action shall have
become final and non-appealable; or
(iii) if, upon a vote thereon at the Company Stockholder
Meeting, the Company Stockholder Approval is not obtained;
(c) by Parent, if the Company breaches or fails to perform in any
material respect any of its representations, warranties or covenants contained
in this Agreement, which breach or failure to perform (i) would give rise to the
failure of a condition set forth in Section 7.02(a) or 7.02(b), and (ii) cannot
be or has not been cured by the Outside Date (provided that neither Parent nor
Sub is then in willful and material breach of any representation, warranty or
covenant contained in this Agreement);
(d) by Parent:
(i) if the Company Board or any committee thereof withdraws
or modifies, in a manner adverse to Parent or Sub, or publicly proposes to
withdraw or modify, in a manner adverse to Parent or Sub, its approval or
recommendation of this Agreement or the Merger, fails to recommend to the
Company's stockholders that they give the Company Stockholder Approval or
approves or recommends, or publicly proposes to approve or recommend, any
Company Takeover Proposal; or
(ii) if the Company gives Parent the notification
contemplated by Section 8.05(b)(iii);
(e) by the Company prior to receipt of the Company Stockholder
Approval in accordance with Section 8.05(b); provided, however, that the Company
shall have complied with all provisions thereof, including the notice provisions
therein; or
(f) by the Company, if Parent or Sub breaches or fails to perform in
any material respect any of its representations, warranties or covenants
contained in this Agreement, which breach or failure to perform (i) would give
rise to the failure of a condition set forth in Section 7.03(a) or 7.03(b), and
(ii) cannot be or has not been cured by the Outside Date (provided that the
Company is not then in willful and material breach of any representation,
warranty or covenant contained in this Agreement).
55
SECTION 8.02 EFFECT OF TERMINATION. In the event of termination of this
Agreement by either the Company or Parent as provided in Section 8.01, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Parent, Sub or the Company, other than the last
sentence of Section 6.02, Section 6.07, this Section 8.02 and Article IX, which
provisions shall survive such termination, and except to the extent that such
termination results from the willful and material breach by a party of any
representation, warranty or covenant set forth in this Agreement.
SECTION 8.03 AMENDMENT. This Agreement may be amended by the parties at any
time before or after receipt of the Company Stockholder Approval; provided,
however, that after receipt of the Company Stockholder Approval, there shall be
made no amendment that by Law requires further approval by the stockholders of
the Company without the further approval of such stockholders. This Agreement
may not be amended except by an instrument in writing signed on behalf of each
of the parties.
SECTION 8.04 EXTENSION; WAIVER. At any time prior to the Effective Time,
the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement or (c) waive compliance with any
of the agreements or conditions contained in this Agreement. No extension or
waiver by the Company shall require the approval of the stockholders of the
Company. Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of such
rights.
SECTION 8.05 PROCEDURE FOR TERMINATION. (a) A termination of this Agreement
pursuant to Section 8.01 shall, in order to be effective, require in the case of
Parent, Sub or the Company, action by its Board of Directors or, to the extent
permitted by law, the duly authorized designee of its Board of Directors.
Termination of this Agreement prior to the Effective Time shall not require the
approval of the stockholders of the Company.
(b) The Company may terminate this Agreement pursuant to Section
8.01(e) only if (i) the Company Board has received a Superior Company Proposal,
(ii) in light of such Superior Company Proposal a majority of the disinterested
directors of the Company shall have determined in good faith, after consultation
with outside counsel, that the failure to withdraw or modify its recommendation
of the Merger and this Agreement would be inconsistent with the Company Board's
exercise of its fiduciary duty under applicable Law, (iii) the Company has
notified Parent in writing of the determinations described in clause (ii) above,
(iv) at least five business days following receipt by Parent of the notice
referred to in clause (iii) above, and taking into account any revised proposal
made by Parent since receipt of the notice referred to in clause (iii) above,
such Superior Company Proposal remains a Superior Company Proposal and a
majority of the disinterested directors of the Company has again made the
determinations referred to in clause (ii) above, (v) the Company is in
compliance, in all material respects, with Section 5.02, (vi) the Company has
previously paid the fee and reimbursement, as applicable, due under Section
6.07, (vii) the Company Board concurrently approves, and the Company
concurrently enters into, a definitive agreement providing for the
implementation of such Superior Company Proposal and (viii) Parent is not at
such time entitled to terminate this
56
Agreement pursuant to Section 8.01(c) (assuming for purposes of this clause
(viii) that the Outside Date is the date of termination of this Agreement by the
Company, except where the applicable breach or failure to perform is not willful
and material and is capable of being cured prior to the Outside Date).
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time. This Section 9.01
shall not limit any covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time.
SECTION 9.02 NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given upon receipt by the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Parent or Sub, to
Whirlpool Corporation
2000 M63 North
Benton Harbor, MI 49022
Attention: Daniel F. Hopp
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attention: Thomas A. Roberts, Esq.
Ellen J. Odoner, Esq.
(b) if to the Company, to
Maytag Corporation
403 West Fourth Street, North
Newton, IA 50208
Attention: Roger K. Scholten
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Attention: Richard D. Katcher, Esq.
James Cole, Jr., Esq.
57
SECTION 9.03 DEFINITIONS. For purposes of this Agreement:
An "AFFILIATE" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person.
A "COMPANY MATERIAL ADVERSE EFFECT" means (a) a material adverse
effect on the business, assets (including, without limitation, the Maytag brand)
or financial condition of the Company and the Company Subsidiaries, taken as a
whole, (b) a material adverse effect on the ability of the Company to perform
its obligations under this Agreement or (c) a material adverse effect on the
ability of the Company to consummate the Merger and the other Transactions to be
performed or consummated by the Company; provided, however, that a Company
Material Adverse Effect shall not include any event, change, effect,
development, condition or occurrence arising out of or relating to (i) general
economic or political conditions in the United States of America, (ii)
conditions generally affecting industries in which any of the Company or the
Company Subsidiaries operates (except, in the case of clauses (i) and (ii)
above, if the event, change, effect, development, condition or occurrence
disproportionately impacts the business, assets or financial condition of the
Company and the Company Subsidiaries, taken as a whole), (iii) the public
announcement of this Agreement or the consummation of the Transactions
contemplated hereby (including, without limitation, any loss of customers,
suppliers, licensors, licensees, or distributors of the Company or any Company
Subsidiary as a result thereof, or changes arising out of, or attributable to,
any such loss, with the burden of proving that any such loss was not caused by
such public announcement or consummation to be borne by Parent) or (iv) the loss
of employees of the Company or any Company Subsidiary or changes arising out of,
or attributable to, such loss; and provided, further, that (x) any change in the
Company's stock price or trading volume or (y) any failure of the Company to
meet its internal financial projections or published analysts' forecasts
relating to it, or any other amount of revenues or earnings of the Company shall
each not, individually or collectively, be deemed to constitute a Company
Material Adverse Effect.
"KNOWLEDGE" means, with respect to the Company, the knowledge of any
of Ralph F. Hake, George C. Moore, Roger K. Scholten or Steven Klyn, and with
respect to Parent, the knowledge of Jeff M. Fettig, Roy W. Templin, Blair A.
Clark or Daniel F. Hopp.
A "PARENT MATERIAL ADVERSE EFFECT" means (a) a material adverse
effect on the business, assets, financial condition or results of operations of
Parent and the Parent Subsidiaries, taken as a whole, (b) a material adverse
effect on the ability of Parent to perform its obligations under this Agreement
or (c) a material adverse effect on the ability of Parent to consummate the
Merger and the other Transactions to be performed or consummated by Parent;
provided, however, that a Parent Material Adverse Effect shall not include any
event, change, effect, development, condition or occurrence arising out of or
relating to (i) general economic or political conditions in the United States of
America or (ii) conditions generally affecting industries in which any of Parent
or the Parent Subsidiaries operates (except, in the case of clauses (i) and (ii)
above, if the event, change, effect, development, condition or occurrence
disproportionately impacts the business, assets, financial condition or results
of operations of Parent and the Parent Subsidiaries, taken as a whole);
provided, however, that any change in
58
Parent's stock price or trading volume shall not be deemed to constitute a
Parent Material Adverse Effect.
A "PERSON" means any individual, firm, corporation, partnership,
company, limited liability company, trust, joint venture, association,
Governmental Entity or other entity.
A "SUBSIDIARY" of any person means another person (a) an amount of
the voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
person, or (b) of which such first person is, in the case of a partnership, the
general partner or, in the case of a limited liability company, the managing
member.
SECTION 9.04 INTERPRETATION; DISCLOSURE LETTER. When a reference is made in
this Agreement to a Section or subsection, such reference shall be to a Section
or subsection, as applicable, of this Agreement unless otherwise indicated. The
table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "INCLUDE", "INCLUDES" or "INCLUDING" are used
in this Agreement, they shall be deemed to be followed by the words "WITHOUT
LIMITATION". Any matter disclosed in any section of the Company Disclosure
Letter shall be deemed disclosed only for the purposes of the specific Sections
of this Agreement to which such section relates.
SECTION 9.05 SEVERABILITY. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule or 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 is not affected in any manner materially adverse to any party.
Upon such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that Transactions are
fulfilled to the extent possible.
SECTION 9.06 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
SECTION 9.07 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This
Agreement, taken together with the Company Disclosure Letter and the
Confidentiality Agreement, (a) constitute the entire agreement, and supersede
all prior agreements and understandings, both written and oral, among the
parties with respect to the Transactions and (b) except for Section 6.06 and
except as otherwise provided in the Confidentiality Agreement, are not intended
to confer upon any person other than the parties hereto any rights or remedies.
Notwithstanding clause (b) of the immediately preceding sentence, following the
Effective Time the provisions of Article II shall be enforceable by holders of
Certificates.
59
SECTION 9.08 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof, except to the extent the laws of Delaware are mandatorily
applicable to the Merger.
SECTION 9.09 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other parties, except that Sub may assign, in its sole
discretion, any of or all its rights, interests and obligations under this
Agreement to any direct or indirect, wholly owned subsidiary of Parent, but no
such assignment shall relieve Sub of any of its obligations under this
Agreement. Any purported assignment without such consent shall be void. Subject
to the preceding sentences, this Agreement will be binding upon, inure to the
benefit of, and be enforceable by, the parties and their respective successors
and assigns.
SECTION 9.10 ENFORCEMENT. 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 or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any New York state court, any
federal court located in the State of New York or the State of Delaware, or the
Court of Chancery of the State of Delaware, this being in addition to any other
remedy to which they are entitled at law or in equity. In addition, each of the
parties hereto (a) consents to submit itself to the personal jurisdiction of any
New York state court, any federal court located in the State of New York or the
State of Delaware, or the Court of Chancery of the State of Delaware in the
event any dispute arises out of this Agreement or any Transaction, (b) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court, (c) agrees that it will not
bring any action relating to this Agreement or any Transaction in any court
other than any New York state court, any federal court sitting in the State of
New York or the State of Delaware or the Court of Chancery of the State of
Delaware and (d) waives any right to trial by jury with respect to any action
related to or arising out of this Agreement or any Transaction.
[Signature page follows.]
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IN WITNESS WHEREOF, Parent, Sub and the Company have duly executed
this Agreement, all as of the date first written above.
WHIRLPOOL CORPORATION
by /S/ JEFF M. FETTIG
----------------------------------
Name: Jeff M. Fettig
Title: Chairman, CEO & President
WHIRLPOOL ACQUISITION CO.
by /S/ DANIEL F. HOPP
----------------------------------
Name: Daniel F. Hopp
Title: President
MAYTAG CORPORATION
by
----------------------------------
Name:
Title: