EXHIBIT 1
CONFORMED
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of May 10 , 1995 (the "Agreement"),
by and among BEST POWER TECHNOLOGY, INCORPORATED, a Delaware corporation
("Company"), GENERAL SIGNAL CORPORATION, a Delaware corporation ("Parent"), and
G.S. NEWCO INC., a Delaware corporation and a direct wholly owned subsidiary of
Parent ("Merger Sub"). Company and Merger Sub are hereinafter sometimes
collectively referred to as the "Constituent Corporations," and Company, Parent
and Merger Sub are hereinafter sometimes collectively referred to as the
"Parties."
WHEREAS, the Boards of Directors of Parent, Merger Sub and Company have
determined that it is in the best interests of their respective stockholders
for Parent to acquire Company upon the terms and subject to the conditions
hereinafter set forth; and
WHEREAS, in furtherance of such acquisition, it is proposed that Parent
shall cause Merger Sub to make a cash tender offer (the "Offer") to acquire all
the issued and outstanding shares of Common Stock, par value $.01 per share, of
Company ("Company Common Stock") (shares of Company Common Stock being
hereinafter collectively referred to as "Shares") for $21.00 per Share (such
amount, or any higher amount as may be paid for any Shares pursuant to the
Offer, being hereinafter referred to as the "Per Share Amount") net to the
seller in cash, upon the terms and subject to the conditions of this Agreement
and the Offer; and
WHEREAS, the Board of Directors of Parent, Merger Sub and Company have
approved the merger of Merger Sub with and into Company (the "Merger")
following consummation of the Offer, upon the terms and subject to the
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements herein contained, the
Parties agree as follows:
ARTICLE I
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THE OFFER
SECTION 1.01 The Offer (a) As promptly as practicable (but in no event
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later than five business days after the date of the initial public announcement
of the execution and delivery of this Agreement), Parent shall cause Merger
Sub to commence (within the meaning of Rule 14d-2 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), the Offer and, subject to the
conditions of the Offer, shall use all commercially reasonable efforts to
consummate the Offer as promptly as permitted by law. The obligation of Parent
and Merger Sub to consummate the Offer, to accept for payment and to pay for
any shares of Company Common Stock tendered pursuant to the Offer (i) shall be
subject to the condition that such number of shares of Company Common Stock
shall have been validly tendered and not withdrawn prior to the expiration date
of the Offer which, together with the shares of Company Common Stock
beneficially owned by Parent or any affiliate thereof on such date, constitute
a majority of the shares of Company Common Stock then outstanding on a fully
diluted basis (the "Minimum Condition") and (ii) shall be subject to the other
conditions set forth in Annex A hereto.
(b) Neither Parent nor Merger Sub will, without the prior written consent
of Company, decrease the consideration payable in the Offer or decrease the
number of shares of Company Common Stock sought pursuant to the Offer or impose
any additional conditions to the Offer. Company agrees that no shares of
Company Common Stock held by Company or any subsidiary thereof will be tendered
pursuant to the Offer. Notwithstanding any other provision of this Agreement,
the conditions of the Offer are for the sole benefit of Merger Sub and Parent
and may be asserted by Merger Sub and Parent regardless of the circumstances
giving rise to any such conditions or may be waived by Merger Sub and Parent in
whole or in part.
(c) As soon as practicable on the date of commencement of the Offer,
Parent shall cause Merger Sub to file with the Securities and Exchange
Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1 with respect
to the Offer which will contain the offer to purchase and form of the related
letter of transmittal (together with any supplements or amendments thereto,
collectively referred to herein as the "Offer Documents"). The Offer Documents
will comply in all material respects with the provisions of applicable federal
securities laws and, on the date filed with the SEC and on the date first
published, sent or given to Company's stockholders, shall not 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 were made, not misleading, except
that no representation is made by Parent or Merger Sub with respect to
information supplied by Company in writing for inclusion in the Offer
Documents. Parent, Merger Sub and Company each agrees promptly to correct any
information provided by it for use in the Offer Documents if and to the extent
that it shall have become false or misleading in any material respect, and
Parent and Merger Sub further agree to take all steps necessary to cause the
Offer Documents as so corrected to be filed with the SEC and to be disseminated
to holders of shares of Company
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Common Stock, in each case as and to the extent required by applicable federal
securities laws.
SECTION 1.02 Company Actions. Company hereby consents to the Offer and
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represents that (a) its Board of Directors (at a meeting duly called and held)
has unanimously (i) determined that as of the date of such meeting the Offer
and the Merger are fair to, and in the best interests of, Company's
stockholders, (ii) approved this Agreement and the transactions contemplated
hereby, including the Offer, the Merger and the execution and delivery of the
letter agreements in substantially the form of Exhibit A to this Agreement by
the stockholders of Company listed in Schedule 1.02 of the Disclosure Statement
being delivered confidentially by Company to Parent and Merger Sub concurrently
herewith (the "Disclosure Statement"), and (iii) resolved, subject to the terms
of this Agreement, to recommend acceptance of the Offer and approval and
adoption of this Agreement and the Merger by the stockholders of Company, and
(b) The Chicago Corporation has advised, and delivered its written opinion to,
Company's Board of Directors that as of the date hereof, the cash consideration
to be received by the Company's stockholders in the Offer and Merger is fair
from a financial point of view to such stockholders. Company hereby agrees to
file with the SEC contemporaneously with the commencement of the Offer a
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
containing such recommendation in favor of the Offer and the Merger. The
Schedule 14D-9 will comply in all material respects with the provisions of
applicable federal securities law. The Schedule 14D-9, on the date filed with
the SEC and on the date first published, sent or given to Company's
stockholders, shall not 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
were made, not misleading, and Company (and Merger Sub and the Parent, with
respect to written information supplied by either of them specifically for use
in the Schedule 14D-9) agree promptly to correct the Schedule 14D-9 if and to
the extent that it shall have become false or misleading in any material
respect and Company shall take all steps necessary to cause the Schedule 14D-9
as so corrected to be filed with the SEC and mailed to the Company's
stockholders to the extent required by applicable federal securities laws.
Company hereby consents to the inclusion in the Offer of the recommendation
referred to in clause (iii) above. In connection with the Offer, Company will
promptly furnish Merger Sub with mailing labels, security position listings and
any available listing or computer file containing the names and addresses of
the record holders of Company Common Stock as of a recent date, and shall
furnish Merger Sub with such information and assistance as Merger Sub or its
agents may reasonably request in communicating the Offer to the stockholders of
Company. Subject to the
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requirements of law, and except for such steps as are necessary to disseminate
the documents constituting the Offer and any other documents necessary to
consummate the Merger, Parent and Merger Sub and each of their affiliates and
associates shall hold in confidence the information contained in any of such
labels and lists, will use such information only in connection with the Offer
and the Merger, and, if this Agreement is terminated, will deliver to Company
all copies of such information then in their possession.
SECTION 1.03 Directors; Section 14(f). Promptly upon the purchase by
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Parent or Merger Sub of such number of shares as represents at least a majority
of the outstanding shares of Company Common Stock and from time to time
thereafter, Parent shall be entitled to designate such number of directors,
rounded up to the next whole number but in no event more than one less than the
total number of directors, on the Board of Directors of Company as will give
Parent, subject to compliance with Section 14(f) of the Exchange Act,
representation on the Board of Directors of Company equal to the product of the
number of directors on the Board of Directors of Company and the percentage
that such number of shares of Company Common Stock so purchased bears to the
number of shares of Company Common Stock outstanding, and Company shall, upon
request by Parent, promptly increase the size of the Board of Directors of
Company to the extent permitted by its Certificate of Incorporation or exercise
its best efforts to secure the resignations of such number of directors as is
necessary to enable Parent's designees to be elected to the Board of Directors
of Company and shall cause Parent's designees to be so elected. At the request
of Parent, Company shall take, at its expense, all action necessary to effect
any such election, including mailing to its stockholders the information
required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder.
ARTICLE II
THE MERGER; DISPOSITION OF SHARES
SECTION 2.01 The Merger. (a) In accordance with the provisions of this
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Agreement and the General Corporation Law of the State of Delaware (the
"DGCL"), at the Effective Time (as defined in Section 2.02 hereof), Merger Sub
shall be merged with and into Company, and Company shall be the surviving
corporation (hereinafter sometimes called the "Surviving Corporation") and
shall continue its corporate existence under the laws of the State of Delaware.
At the Effective Time the separate existence of Merger Sub shall cease.
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(b) The Merger shall have the effects on Company and Merger Sub as the
constituent corporations of the Merger as provided under the DGCL.
SECTION 2.02 Effective Time. The Merger shall become effective at the
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time of filing of, or at such later time as may be specified in, a certificate
of merger, in the form required by and executed in accordance with the DGCL,
with the Secretary of State of the State of Delaware in accordance with the
provisions of Section 251 of the DGCL (the "Certificate of Merger"). The date
and time when the Merger shall become effective is herein referred to as the
"Effective Time."
SECTION 2.03 Certificate of Incorporation and By-Laws of Surviving
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Corporation. The Certificate of Incorporation and By-Laws of Company shall be
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the Certificate of Incorporation and By-Laws of the Surviving Corporation until
thereafter amended as provided by law.
SECTION 2.04 Directors and Officers of Surviving Corporation. (a) The
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number of directors of the Surviving Corporation shall be as determined
pursuant to the By-Laws of the Surviving Corporation. The directors of Merger
Sub shall be the directors of the Surviving Corporation and will hold office
from and after the Effective Time until their respective successors are duly
elected or appointed and qualify in the manner provided in the Certificate of
Incorporation and By-Laws of the Surviving Corporation or as otherwise provided
by law or their earlier resignation or removal.
(b) The officers of the Surviving Corporation shall be determined by the
Board of Directors of the Surviving Corporation immediately after the Effective
Time, and will hold office from and after the Effective Time until their
respective successors are duly appointed and qualify in the manner provided in
the By-Laws of the Surviving Corporation or as otherwise provided by law or
their earlier resignation or removal.
SECTION 2.05 Further Assurances. If, at any time after the Effective
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Time, the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments, assurances, or any other actions or things are
necessary or desirable to vest, perfect or confirm of record or otherwise in
the Surviving Corporation its right, title or interest in, to or under any of
the rights, properties or assets of either of the Constituent Corporations
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger or otherwise to carry out this Agreement, the
officers and directors of the Surviving Corporation shall be authorized to
execute and deliver, in the name and on behalf of each of the Constituent
Corporations or otherwise, all such deeds, bills of sale,
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assignments and assurances and to take and do, in the name and on behalf of
each of the Constituent Corporations or otherwise, all such other actions and
things as may be necessary or desirable to vest, perfect or confirm any and all
right, title and interest in, to and under such rights, properties or assets in
the Surviving Corporation or otherwise to carry out this Agreement and the
transactions contemplated hereby.
SECTION 2.06 Effect on Shares of Merger Sub and Company. As of the
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Effective Time, by virtue of the Merger and without any action on the part of
the holders thereof:
(a) Each share of Company Common Stock issued and outstanding immediately
prior to the Effective Time (except for shares owned by Company or any of its
subsidiaries) shall be converted into the right to receive in cash the Per
Share Amount (the "Merger Consideration").
(b) All shares of common stock, par value $.01 per share, of Merger Sub
issued and outstanding immediately prior to the Effective Time shall, by virtue
of the Merger and without any action on the part of the holder thereof, be
converted at the Effective Time into such number of newly issued shares of
common stock of the Surviving Corporation as shall equal the sum of (x) the
number of shares of Company Common Stock outstanding immediately prior to the
Effective Time and (y) the number of shares of Company Common Stock underlying
options to purchase Company Common Stock cashed out by Parent pursuant to
Section 2.07.
(c) Each share of Company Common Stock owned by Company as treasury stock
or owned by any subsidiary of Company shall be canceled.
(d) All shares of Company Common Stock shall be canceled and retired, and
each certificate representing any such shares of Company Common Stock shall
thereafter represent only the right to receive the Merger Consideration payable
in exchange for such shares of Company Common Stock upon the surrender of such
certificate for payment in accordance with Section 2.08. The shares of Merger
Sub shall become the shares of Company.
(e) Notwithstanding anything in this Agreement to the contrary, shares of
Company Common Stock which are outstanding immediately prior to the Effective
Time and which are held by stockholders who (a) shall not have voted such
shares in favor of the Merger and (b) shall have delivered to Company a written
demand for appraisal of such shares in the manner provided in Section 262 of
the DGCL (the "Dissenting Shares") shall not be converted as described in this
Section 2.06, but instead the holders thereof shall be entitled to payment of
the appraised value of such shares
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in accordance with the provisions of such Section 262; provided, however, that
(i) if any holder of Dissenting Shares shall subsequently deliver a written
withdrawal of its demand for appraisal of such shares (with the written
approval of the Surviving Corporation, if such withdrawal is not tendered
within 60 days after the Closing Date), or (ii) if any holder fails to
establish such holder's entitlement to appraisal rights as provided in such
Section 262, or (iii) if neither any holder of Dissenting Shares nor the
Surviving Corporation has filed a petition demanding a determination of the
value of all Dissenting Shares within the time provided in such Section 262,
such holder or holders (as the case may be) shall forfeit the right to
appraisal of such shares and such shares shall thereupon be deemed to have been
converted into the right to receive, and to have become exchangeable for, as of
the Effective Time, the Merger Consideration applicable thereto. Each holder
of Dissenting Shares shall have only such rights and remedies as are granted to
such holder under Section 262 of the DGCL. Holders of Dissenting Shares shall
not, after the Effective Time, be entitled to vote for any purpose or be
entitled to the payment of dividends or other distributions (except dividends
or other distributions payable to stockholders of record prior to the Effective
Time).
SECTION 2.07 Effect on Company Options. Promptly after the Effective
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Time, each holder of options to acquire shares of Company Common Stock granted
under any stock option plan of the Company, whether or not such options are
then exercisable, will be entitled to receive an amount in cash equal to the
difference between (x) the product of the number of shares of Company Common
Stock covered by such option multiplied by the Merger Consideration, and (y)
the aggregate option exercise price payable upon exercise of such option.
SECTION 2.08 Payment for Shares. (a) Prior to the Effective Time, Parent
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shall designate a bank or trust company to act as Paying Agent in the Merger
(the "Paying Agent"). At or prior to the Effective Time, Parent will take all
steps necessary to enable and cause the Surviving Corporation to provide the
Paying Agent funds necessary to make the payments contemplated by Sections 2.06
and 2.07. Any funds remaining with the Paying Agent three months after the
Effective Time shall be released and repaid by the Paying Agent to the
Surviving Corporation, after which time persons entitled thereto may look,
subject to applicable escheat and other similar laws, only to the Surviving
Corporation for payment thereof.
(b) As soon as practicable after the Effective Time, Parent shall cause
the Paying Agent to mail to each record holder, as of the Effective Time, of an
outstanding certificate or certificates which immediately prior to the
Effective Time represented shares of
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Company Common Stock (the "Certificates") a form letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to
the Certificates shall pass, only upon proper delivery of the Certificates to
the Paying Agent) and instructions for use in effecting the surrender of the
Certificates for payment therefor. Upon surrender to the Paying Agent of a
Certificate, together with such letter of transmittal duly executed, the holder
of such Certificate shall be entitled to receive in exchange therefor an amount
equal to the product of the number of shares of Company Common Stock
represented by such Certificate and the Merger Consideration, and such
Certificate shall forthwith be cancelled. No interest will be paid or accrued
on the cash payable upon the surrender of the Certificates. If payment is to
be made to a person other than the person in whose name the Certificate
surrendered is registered, it shall be a condition of payment that the
Certificate so surrendered shall be properly endorsed or otherwise in proper
form for transfer and that the person requesting such payment shall pay any
transfer or other taxes required by reason of the payment to a person other
than the registered holder of the Certificate surrendered or establish to the
satisfaction of the Surviving Corporation that such tax has been paid or is not
applicable. Until surrendered in accordance with the provisions of this
Section 2.08, each Certificate (other than Certificates representing shares of
Company Common Stock held by Company or any subsidiary of Company and
Dissenting Shares) shall represent for all purposes the right to receive the
Merger Consideration in cash multiplied by the number of shares of Company
Common Stock evidenced by such Certificate, without any interest thereon.
SECTION 2.09 Transfers. From and after the Effective Time, there shall
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be no transfers on the stock transfer books of Company or the Surviving
Corporation of shares of Company Common Stock. If, after the Effective Time,
Certificates are presented to the Surviving Corporation, they shall be canceled
and exchanged as provided in this Article II.
SECTION 2.10 Special Meeting. (a) If required by applicable law in
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order to consummate the Merger, Company, acting through its Board of Directors,
shall, in accordance with applicable law and subject to the applicable
provisions of this Agreement:
(i) duly call, give notice of, convene and hold a special meeting
(the "Special Meeting") of its shareholders as soon as practicable
following the expiration or termination of the Offer for the purpose of
considering and taking action upon the Merger and this Agreement;
(ii) file with the SEC under the Exchange Act, a Proxy Statement (as
hereinafter defined) and use its best efforts to
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obtain and furnish the information required to be included by it in the
Proxy Statement and, after consultation with Parent, to respond promptly
to any comments made by the SEC with respect to the Proxy Statement and
any preliminary version thereof and cause the Proxy Statement to be mailed
to its shareholders at the earliest practicable time following the
expiration or termination of the Offer or at such other time as Parent
shall direct following consultation with Company;
(iii) include in the Proxy Statement the recommendation of its Board
of Directors that shareholders of Company vote in favor of the approval of
this Agreement and the Merger and use its best efforts to obtain the
necessary approval of this Agreement and the Merger by its shareholders.
(b) Parent agrees that, at the Special Meeting, all of the shares of
Company Common Stock then owned by Parent and Merger Sub will be voted in favor
of the Merger.
(c) As used in this Agreement, the term "Proxy Statement" means the
letter to shareholders, notice of meeting, proxy statement and form of proxy,
or the information statement, as the case may be, to be distributed to
shareholders in connection with the Merger, including any schedules required to
be filed with the SEC in connection therewith.
SECTION 2.11 Merger Without Meeting of Shareholders. Notwithstanding the
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foregoing Section 2.10, in the event that Parent, Merger Sub and any other
subsidiary of Parent shall acquire an aggregate of at least 90 percent of the
outstanding shares of Company Common Stock, the Parties agree, at the request
of Parent or Merger Sub, to take all necessary and appropriate action to cause
the merger of Merger Sub with and into Company to become effective as soon as
practicable after the expiration of the Offer or at such other time as Parent
shall direct following consultation with Company, without a meeting of
shareholders of Company, in accordance with Section 253 of the DGCL.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF COMPANY
Company represents and warrants to Parent and Merger Sub as follows:
SECTION 3.01 Organization. It and each of its Significant Subsidiaries
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is a corporation duly organized, validly existing and in good standing under
the laws of their respective jurisdictions of incorporation and it has all
requisite corporate power and authority to own, lease and operate its
properties and to carry on
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its business as now being conducted. It and each of its subsidiaries is duly
qualified or licensed and in good standing to do business in each jurisdiction
in which the property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification necessary, except in such
jurisdictions where the failure to be so duly qualified or licensed and in good
standing would not, individually or in the aggregate, have a material adverse
effect on the business, operations, assets, financial condition or results of
operations of Company and its subsidiaries taken as a whole (a "Material
Adverse Effect"). It owns directly all of the outstanding capital stock of
each of its Significant Subsidiaries except as listed on Schedule 3.01 of the
Disclosure Statement. As used in this Agreement a "Significant Subsidiary"
means a corporation or other entity which is a "significant subsidiary" of
Company within the meaning of Rule 1-02(v) of Regulation S-X of the Securities
and Exchange Commission ("SEC").
SECTION 3.02 Capitalization. Its authorized capital stock consists of
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25,000,000 shares of Company Common Stock and 10,000,000 shares of Preferred
Stock, par value $.01 per share ("Company Preferred Stock" and, together with
Company Common Stock "Company Shares"). As of the date hereof, there are
9,527,303 shares of Company Common Stock issued and outstanding, no shares of
Company Preferred Stock issued and outstanding and no Company Shares held in
its treasury. As of the date hereof, there were reserved under the stock
option plans of Company, all of which are listed on Schedule 3.02 of the
Disclosure Statement (the "Company Plans"), 129,559 shares of Company Common
Stock for issuance upon exercise of outstanding options. Except for the
options to receive Company Common Stock under the Company Plans, there are not
now, and at the Effective Time there will not be, any existing options,
warrants, calls, subscriptions, or other rights, agreements or commitments
obligating Company or any of its subsidiaries to issue, transfer or sell any
shares of capital stock of Company or any of its subsidiaries or any other
securities convertible into or evidencing the right to subscribe for any such
shares. All issued and outstanding shares of Company Common Stock are duly
authorized and validly issued, fully paid, non-assessable and free of
preemptive rights with respect thereto.
SECTION 3.03 Authority. (a) Company has full corporate power and
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authority to execute and deliver this Agreement and, subject to the requisite
approval of its stockholders, to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly authorized and
approved by its Board of Directors, and no corporate proceedings other than the
requisite approval by its stockholders are necessary to authorize this
Agreement or the consummation of the transactions
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contemplated hereby. This Agreement has been duly and validly executed and
delivered by Company and, assuming this Agreement constitutes a legal, valid
and binding agreement of the other Parties hereto, it constitutes a legal,
valid and binding agreement of Company, enforceable against Company in
accordance with its terms.
(b) Company's Board of Directors has taken all appropriate and necessary
action such that the provision of Section 203 of the DGCL will not apply to the
transactions contemplated by this Agreement.
SECTION 3.04 No Violations; Consents and Approvals. (a) Neither the
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execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby nor compliance by Company with any of the
provisions hereof will (i) subject to obtaining the requisite approval of its
stockholders, violate any provision of its certificate of incorporation or by-
laws, (ii) result in a violation or breach of, or constitute (with or without
due notice or lapse of time or both) a default, or give rise to any right of
termination, cancellation or acceleration or any right which becomes effective
upon the occurrence of a merger, consolidation or change in control, under, any
of the terms, conditions or provisions of any note, bond, mortgage, indenture
or other instrument of indebtedness for money borrowed to which it or any of
its subsidiaries is a party, or by which it or any of its subsidiaries or any
of their respective properties is bound, or (iii) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both)
a default, or except as set forth in Schedule 3.04 of the Disclosure Statement
give rise to any right of termination, cancellation or acceleration or any
right which becomes effective upon the occurrence of a merger, consolidation or
change in control, under, any of the terms, conditions or provisions of any
license, franchise, permit or agreement to which it or any of its subsidiaries
is a party, or by which it or any of its subsidiaries or any of their
respective properties is bound, or (iv) violate any statute, rule, regulation,
order or decree of any public body or authority by which it or any of its
subsidiaries or any of its respective properties is bound, excluding from the
foregoing clauses (iii) and (iv) violations, breaches, defaults or rights
which, either individually or in the aggregate, would not have a Material
Adverse Effect or materially impair its ability to consummate the transactions
contemplated hereby or for which it has received or, prior to the Merger, shall
have received appropriate consents or waivers.
(b) No filing or registration with, notification to, or authorization,
consent or approval of, any governmental entity is required by Company in
connection with the execution and delivery of this Agreement or the
consummation by it of the transactions contemplated hereby, except (i) in
connection with the applicable
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requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), (ii) in connection, or in compliance, with the
provisions of the Exchange Act, (iii) the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware, (iv) such filings and
consents as may be required under any environmental law pertaining to any
notification, disclosure or required approval triggered by the Merger or the
transactions contemplated by this Agreement, (v) filings with, and approval of,
the NASDAQ and the SEC with respect to the deregistration of Company Common
Stock, (vi) such consents, approvals, orders, authorizations, notifications,
approvals, registrations, declarations and filings as may be required under the
corporation, takeover or blue sky laws of various states and (vii) such other
consents, orders, authorizations, registrations, declarations and filings not
obtained prior to the Effective Time the failure of which to be obtained or
made would not, individually or in the aggregate, have a Material Adverse
Effect, or materially impair Company's ability to perform its obligations
hereunder or prevent the consummation of any of the transactions contemplated
hereby.
SECTION 3.05 SEC Documents; Financial Statements. (a) Company has made
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available to Parent and Merger Sub copies of each registration statement,
report, proxy statement or information statement heretofore filed by it with
the SEC (the "SEC Documents"). As of their respective dates, Company's SEC
Documents complied in all material respects with the applicable requirements of
the Securities Act of 1933, as amended (the "Securities Act") and the Exchange
Act, as the case may be, none of such SEC Documents contained any untrue
statement of material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and Company's Board
of Directors consists of the Directors identified in its 1995 proxy statement.
(b) Neither Company nor any of its subsidiaries, nor any of their
respective assets, businesses or operations, is as of the date of this
Agreement a party to, or is bound or affected by, or receives benefits under
any contract or agreement or amendment thereto, that in each case would be
required to be filed as an exhibit to a Form 10-K as of the date of this
Agreement that has not been filed as an exhibit to an SEC Document filed prior
to the date of this Agreement.
(c) As of their respective dates, the consolidated financial statements
included in Company's SEC Documents complied as to form in all material
respects with then applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto, were prepared in accordance
with generally
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accepted accounting principles applied on a consistent basis during the periods
involved (except as may be indicated therein or in the notes thereto) and
fairly presented its consolidated financial position and that of its
consolidated subsidiaries as at the dates thereof and the consolidated results
of their operations and statements of cash flows for the periods then ended
(subject, in the case of unaudited statements, to the lack of footnotes
thereto, to normal year-end audit adjustments and to any other adjustments
described therein).
(d) The SEC Documents include or there has otherwise been delivered to
Parent (i) consolidated balance sheets as of December 31, 1994 and March 31,
1995; and (ii) consolidated statements of income for the year ended December
31, 1994 and the three months ended March 31, 1995. The foregoing consolidated
audited balance sheet as at December 31, 1994 is sometimes herein referred to
as the "Balance Sheet." The foregoing consolidated unaudited balance sheet as
of March 31, 1995 is sometimes herein referred to as the "Interim Balance
Sheet."
(e) There are no liabilities or obligations of Company and its
consolidated subsidiaries accrued, absolute, or contingent and whether due or
to become due, other than liabilities and obligations (i) reflected, or
adequately reserved against, in the Interim Balance Sheet, (ii) arising in the
ordinary course of business subsequent to the date of the Interim Balance
Sheet, or (iii) which, individually or in the aggregate, would not have a
Material Adverse Effect.
SECTION 3.06 Absence of Certain Changes. Since March 31, 1995, Company
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has not (a) suffered any event or occurrence which would have a Material
Adverse Effect or (b) implemented any change in accounting methods, principles
or practices except as required or permitted by generally accepted accounting
principles.
SECTION 3.07 Legal Proceedings. Except as disclosed in Company's SEC
-----------------
Documents filed prior to the date hereof, or reflected or adequately reserved
against in its Interim Balance Sheet, there is no (i) claim, action, suit or
proceeding pending or, to its best knowledge, threatened, against or relating
to it or any of its subsidiaries or any of their respective assets before any
court or governmental or regulatory authority or body or arbitration tribunal
or (ii) outstanding judgment, order, writ, injunction or decree, or
application, request or motion therefor, of any court, governmental agency or
arbitration tribunal in a proceeding to which Company or any of its
subsidiaries is a party, except any such claim, action, suit or proceeding or
judgment, order, writ, injunction, decree, application, request or motion
which, either individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
-13-
SECTION 3.08 Compliance with Laws and Agreements. Neither Company nor
-----------------------------------
any of its subsidiaries is (i) in violation of or noncompliance with any
statute, law, ordinance, regulation, rule or order of any foreign, federal,
state or local government or any other governmental department or agency, or
any judgment, decree or order of any court, applicable to its business or
operations or (ii) in violation, breach or default (with or without due notice
or lapse of time or both) under any of the terms, conditions or provisions of
any agreement to which it is a party, or by which its properties are bound,
except where any such violations or failures to comply or breaches or defaults
would not, individually or in the aggregate, have a Material Adverse Effect.
Company and its subsidiaries have all permits, licenses and franchises from
governmental agencies required to conduct their businesses as now being
conducted, except for such permits, licenses and franchises the absence of
which would not, individually or in the aggregate, have a Material Adverse
Effect.
SECTION 3.09 Proxy Statement. If a Proxy Statement is required for the
---------------
consummation of the Merger under applicable law, the Proxy Statement shall
comply in all material respects with the Exchange Act; and any such Proxy
Statement will not, at the time it is filed with the SEC or is mailed to
shareholders, or at the time of the Special Meeting or the Effective Time,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of circumstances under which they were made, not misleading; provided,
however, that no representation or warranty is made by Company concerning any
information with respect to Parent or its affiliates supplied in writing by
Parent or any such affiliate to Company specifically for inclusion in the Proxy
Statement.
SECTION 3.10 State Antitakeover Statutes. No "business combination,"
---------------------------
"moratorium," "control share" or other state antitakeover statute or regulation
(x) prohibits or restricts Company's ability to perform its obligations under
this Agreement or its ability to consummate the transactions contemplated
hereby, (y) would have the effect of invalidating or voiding this Agreement, or
any material provision hereof, or (z) would subject Parent or Merger Sub to any
material impediment or condition in connection with the exercise of any of
their respective rights under this Agreement or with respect to Company or the
Surviving Corporation.
SECTION 3.11 Broker's Fees. Except for the engagement of The Chicago
-------------
Corporation by Company or as set forth in Schedule 3.11 of the Disclosure
Statement, neither Company nor any of its subsidiaries or any of their
respective directors or officers has employed any broker, finder or financial
advisor or incurred any
-14-
liability for any broker's fees, commissions, or financial advisory or finder's
fees in connection with any of the transactions contemplated by this Agreement.
SECTION 3.12 Environmental Matters. Company and its subsidiaries are
---------------------
each in compliance with all environmental laws, regulations and practices
applicable to their respective businesses and properties ("Applicable
Environmental Standards"), except where the failure to so be in compliance
would not have a Material Adverse Effect. Schedule 3.12 of the Disclosure
Statement lists any notices, requests or directives received by Company or any
subsidiary from any regulatory agency or authority or any other third party
since January 1, 1989 concerning any alleged non-compliance by Company or any
subsidiary with Applicable Environmental Standards or any suggestions, requests
or demands for remedial or prophylactic measures concerning their respective
businesses and properties. Except as listed in Schedule 3.12 of the Disclosure
Statement, there have been no releases, or any claims that there have been any
releases, of any hazardous or toxic substances, materials, wastes, pollutants,
contaminants, petroleum products, asbestos or pcbs into the environment or
within the buildings or structures owned or leased by Company or its
subsidiaries. No hazardous substances (including, without limitation, asbestos
or pcbs) are used or employed within products manufactured at any time by
Company or its subsidiaries or contained within the buildings or structures
owned or leased by Company or its subsidiaries. The Company has no knowledge
of any basis for a claim that it is subject to any material liability under
Applicable Environmental Standards.
SECTION 3.13 Intellectual Property Rights. The Company or its subsidiaries
----------------------------
own or believe they have the right to use all Intellectual Property Rights (as
defined below in this Section 3.13) necessary to the conduct of their
respective businesses. Schedule 3.13 of the Disclosure Statement contains a
worldwide list of all patents, registered trademarks, registered copyrights and
mask works and any application for the foregoing owned by the Company or its
subsidiaries. The Company and/or its subsidiaries have clear and unencumbered
title to the Intellectual Property Rights set forth in Schedule 3.13 of the
Disclosure Statement and such title has not been challenged (pending or
threatened) by others except for the encumbrances listed in Schedule 3.13 of
the Disclosure Statement. Schedule 3.13 of the Disclosure Statement also
contains a list of invention disclosures for which applications for patent are
in progress. No material rights or licenses to use the Intellectual Property
Rights for the manufacture or assembly of products have been granted or
acquired by the Company or its subsidiaries except those listed in Schedule
3.13 of the Disclosure Statement. Except as listed in Schedule 3.13 of the
Disclosure Statement, there have been no claims or
-15-
assertions made or threatened by others that the Company does not own or have
the right to use all Intellectual Property Rights or that the Company has
infringed or will infringe any Intellectual Property Rights of others by the
sale of products or any other activity in the preceding six year period and, to
the knowledge of the Company, there has been no such infringement by the
Company during this period. Except as listed in Schedule 3.13 of the
Disclosure Statement, the Company has no knowledge of any infringement of
Intellectual Property Rights of the Company by others. All such patents,
registered trademarks, service marks, and copyrights owned by the Company or
its subsidiaries are in good standing, and are recorded in the name of Company
or its subsidiaries. True and complete copies of all material listed in
Schedule 3.13 of the Disclosure Statement (except material for foreign patents,
trademarks and copyrights) will promptly be delivered to Parent.
"Intellectual Property Rights" shall mean and include rights relating to
patents, trademarks, service marks, trade names, copyrights, mask works,
inventions, processes, trade secrets, know-how, confidentiality agreements,
consulting agreements, software and documentation relating to the manufacture,
marketing and maintenance of products.
SECTION 3.14 Taxes. Except as disclosed on Schedule 3.14 of the
-----
Disclosure Statement: (i) the Company and its subsidiaries have prepared and
timely filed or will timely file with the appropriate governmental agencies all
material franchise, income and all other material Tax (as hereinafter defined)
returns and reports (Tax returns and reports are hereinafter collectively
referred to as "Tax Returns") required to be filed for any period on or before
the Effective Time, taking into account any extension of time to file granted
to or obtained on behalf of the Company and/or its subsidiaries (Schedules for
which the past three fiscal years have been delivered to Parent to be followed
by delivery of returns to Parent as requested); (ii) all material Taxes of the
Company and its subsidiaries due (whether or not reported) in respect of the
pre-Merger period have been paid in full to the proper authorities or fully
accrued for with respect to fiscal periods for which there are publicly
available financial statements in such statements and otherwise on the books at
the Company, other than such Taxes as are being contested in good faith by
appropriate proceedings and are adequately reserved for in accordance with
generally accepted accounting principles; (iii) all deficiencies resulting from
Tax examinations of federal, state and foreign income, sales and franchise and
all other material Tax Returns filed by the Company and its subsidiaries have
either been paid or adequately reserved for in accordance with generally
accepted accounting principles; (iv) to the best knowledge of the Company, no
deficiency has been asserted or assessed against the Company or
-16-
any of its subsidiaries and is pending, and no examination of the Company or
any of its subsidiaries is pending or threatened for any material amount of Tax
by any taxing authority (with respect to any such action, Schedule 3.14 of the
Disclosure Statement sets forth the periods at issue and the category of Tax,
and the examining authority's and any corresponding revenue agents' reports
relating to the issue have been delivered to Parent); (v) no extension of the
period for assessment or collection of any material Tax is currently in effect
and no extension of time within which to file any material Tax Return has been
requested, which Tax Return has not since been filed; (vi) no material Tax
liens have been filed with respect to any Taxes; (vii) the Company and each of
its subsidiaries have not agreed to make any Section 481 adjustment or similar
adjustment in any jurisdiction by reason of a change in their accounting
methods that would affect the taxable income or deductions of the Company or
any of its subsidiaries for any period ending after the Effective Time; (viii)
the Company and its subsidiaries have made timely payments of the Taxes
required to be deducted and withheld from the wages paid to their employees;
(ix) there are no Tax sharing agreements or arrangements under which the
Company or any subsidiary will have any obligation or liability on or after the
Effective Time; (x) the Company and its subsidiaries have the net operating
loss carryforwards set forth on Schedule 3.14 of the Disclosure Statement; (xi)
the Company and its subsidiaries have no foreign losses as defined in Section
904(f)(2) of the Code; (xii) neither the Company nor any of its subsidiaries
has unused foreign tax credits; (xiii) to the best knowledge of the Company,
all payments, other than payments of dividends (including any payments deemed
to be the equivalent of a dividend) or Taxes, made or incurred by the Company
or any of its subsidiaries since December 31, 1993 will be deductible or
capitalizable for Tax purposes including any payments made by the Company or
any of its subsidiaries pursuant to any transaction contemplated by this
Agreement, except for any payments the failure of which to be deductible or
capitalizable would not, individually or in the aggregate, have a Material
Adverse Effect; (xiv) to the best knowledge of the Company, no income under any
arrangement or understanding to which the Company or any of its subsidiaries is
a party will be attributed to the Company or any of its subsidiaries which is
not represented by income actually attributable to the same entity; (xv) to the
best knowledge of the Company, there are no transfer pricing agreements made
with any taxation authority; (xvi) no assets of the Company or any of its
subsidiaries is held in an arrangement for which partnership Tax Returns are
being filed and neither the Company nor any of its subsidiaries is a partner in
any partnership; (xvii) neither the Company nor any of its subsidiaries owns
any interest in any "controlled foreign corporation" (within the meaning of
Section 957 of the Code), "passive foreign investment company" (within the
meaning of Section 1296 of the Code) or other entity the income of which is
required
-17-
to be included in the income of the Company or such subsidiary; (xviii) neither
the Company nor any of its subsidiaries has made an election under Section
341(f) of the Code; and (xix) the Company is not obligated to make any payments
that would constitute excess parachute payments within the meaning of Section
280G of the Code.
"Tax" or "Taxes" shall mean all federal, state, local and foreign taxes,
duties, levies, charges and assessments of any nature, including social
security payments and deductibles relating to wages, salaries and benefits and
payments to sub-contractors (to the extent required under applicable Tax law),
and also including all interest, penalties and additions imposed with respect
to such amounts.
SECTION 3.15 Employee Benefit Plans; ERISA. (a) Except as set forth in
-----------------------------
Schedule 3.15 of the Disclosure Statement, there are no "employee pension
benefit plans" as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), covering employees (or former
employees) employed in the United States and maintained or contributed to by
the Company or any of its subsidiaries or any of their ERISA Affiliates (as
hereinafter defined), or to which the Company or any of its subsidiaries or any
of their ERISA Affiliates contributes or is obligated to make payments
thereunder or otherwise may have any liability ("Pension Benefits Plans"). For
purposes of this Agreement, the term "ERISA Affiliate" shall mean any person
(as defined in Section 3(9) of ERISA) that is a member of any group of persons
described in Section 414(b), (c), (m) or (o) of the Code of which the Company
or a subsidiary is a member.
(b) Company has delivered to Parent true and complete copies of all
"welfare benefit plans" (as defined in Section 3(1) of ERISA) covering
employees (or former employees) employed in the United States, maintained or
contributed to by the Company or any of its subsidiaries ("Welfare Plans"),
and, to the extent covering employees (or former employees) employed in the
United States, all stock bonus, stock option, restricted stock, stock
appreciation right, stock purchase, bonus, incentive, deferred compensation,
severance and vacation plans maintained or contributed to by the Company or a
subsidiary of the Company. The Company and its subsidiaries do not have and
have not had any multiemployer plans (as defined in Section 3(37) of ERISA)
covering employees (or former employees) employed in the United States to which
the Company or any of its subsidiaries or any of their ERISA Affiliates is
required to make contributions or otherwise may have any liability.
(c) The Company and each of its subsidiaries, and each of the Pension
Benefit Plans and Welfare Plans, are in compliance with the applicable
provisions of ERISA except where the failure to comply
-18-
would not, individually or in the aggregate, have a Material Adverse Effect.
(d) All contributions to, and payments from, and reports in respect of,
the Pension Benefit Plans and the Welfare Plans which are required to have been
made in accordance therewith and, when applicable, ERISA or the Code have
been timely made except where the failure to make such contributions or
payments on a timely basis would not, individually or in the aggregate, either
impair the Company's ability to consummate the Offer, the Merger and the other
transactions contemplated hereby or have a Material Adverse Effect.
SECTION 3.16 Disclosure. No representation or warranty by the Company
----------
and no statement or information relating to the Company or any of its
subsidiaries contained herein, or in any certificate furnished by or on behalf
of the Company to Parent or Merger Sub in connection herewith, contains or will
contain any untrue statement of a material fact or omits or will omit to state
a material fact necessary in order to make the statements herein or therein, in
light of the circumstances under which they were made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby jointly and severally represent and warrant
to Company as follows:
SECTION 4.01 Organization. Each is a corporation duly organized, validly
------------
existing and in good standing under the laws of their respective jurisdictions
of incorporation and each has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business as now being
conducted.
SECTION 4.02 Authority. Each has full corporate power and authority to
---------
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized and approved by their respective Boards of Directors and by Parent
as the sole shareholder of Merger Sub, and no other corporate proceedings are
necessary to authorize this Agreement or the consummation of the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Parent and Merger Sub and, assuming this Agreement constitutes a
legal, valid and binding agreement of Company, it constitutes a
-19-
legal, valid and binding agreement of Parent and Merger Sub, enforceable
against each of them in accordance with its terms.
SECTION 4.03 No Violations; Consents and Approvals. (a) Neither the
-------------------------------------
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby nor compliance by Parent and Merger Sub with
any of the provisions hereof will violate any provision of their respective
charters or by-laws.
(b) No filing or registration with, notification to, or authorization,
consent or approval of, any governmental entity is required by Parent or Merger
Sub in connection with the execution and delivery of this Agreement or the
consummation by either of the transactions contemplated hereby, except (i) in
connection with the applicable requirements of the HSR Act, (ii) in connection,
or in compliance, with the provisions of the Exchange Act, (iii) the filing of
the Certificate of Merger with the Secretary of State of the State of Delaware,
(iv) such filings and consents as may be required under any environmental law
pertaining to any notification, disclosure or required approval triggered by
the Merger or the transactions contemplated by this Agreement, (v) such
consents, approvals, orders, authorizations, notifications, approvals,
registrations, declarations and filings as may be required under the
corporation, takeover or blue sky laws of various states and (vi) such other
consents, orders, authorizations, registrations, declarations and filings not
obtained prior to the Effective Time the failure of which to be obtained or
made would not, individually or in the aggregate, materially impair the ability
of Parent or Merger Sub to perform their respective obligations hereunder or
prevent the consummation of any of the transactions contemplated hereby.
SECTION 4.04 Legal Proceedings. There is no (i) claim, action, suit or
-----------------
proceeding pending or, to Parent's best knowledge, threatened, against or
relating to it or any of its subsidiaries or any of their respective assets
before any court or governmental or regulatory authority or body or arbitration
tribunal or (ii) outstanding judgment, order, writ, injunction or decree, or
application, request or motion therefor, of any court, governmental agency or
arbitration tribunal in a proceeding to which Parent or any of its subsidiaries
is a party, except any such claim, action, suit or proceeding or judgment,
order, writ, injunction, decree, application, request or motion which would
not, individually or in the aggregate, materially impair the ability of Parent
or Merger Sub to perform their respective obligations hereunder or prevent the
consummation of any of the transactions contemplated hereby.
SECTION 4.05 Proxy Statement. If a Proxy Statement is required for
---------------
consummation of the Merger under applicable law, none of the information to be
supplied by Parent or Merger Sub for
-20-
inclusion or incorporation by reference in such Proxy Statement at the time of
its mailing to stockholders of Company and at the time of its stockholders
meeting, will contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein not misleading.
SECTION 4.06 State Antitakeover Statutes. No "business combination,"
---------------------------
"moratorium," "control share" or other state antitakeover statute or regulation
(x) prohibits or restricts the ability of Parent or Merger Sub to perform their
respective obligations under this Agreement or their ability to consummate the
transactions contemplated hereby, (y) would have the effect of invalidating or
voiding this Agreement, or any material provision hereof, or (z) would subject
Company to any material impediment or condition in connection with the exercise
of any of its rights under this Agreement.
SECTION 4.07 Broker's Fees. Except for the engagement of Lazard Freres &
-------------
Co. by Parent, neither Parent nor any of its subsidiaries or any of their
respective directors or officers has employed any broker, finder or financial
advisor or incurred any liability for any broker's fees, commissions, or
financial advisory or finder's fees in connection with any of the transactions
contemplated by this Agreement.
SECTION 4.08 Fairness Opinion. Parent has received the opinion of Lazard
----------------
Freres & Co. LLC to the effect that, as of May 5, 1995, the consideration
payable to Company's stockholders pursuant to the Offer and the Merger is fair
to Parent's stockholders from a financial point of view.
SECTION 4.09 Capitalization of Merger Sub. The authorized capital stock
----------------------------
of Merger Sub consists of 1,000 shares of its common stock, $.01 par value per
share. 1,000 such shares are outstanding and owned beneficially and of record
by Parent. All such outstanding shares were duly authorized and validly issued
and are fully paid and nonassessable. There are no outstanding options,
warrants or other rights to acquire any capital stock of Merger Sub.
ARTICLE V
COVENANTS
SECTION 5.01 Conduct of Business of Company. Except as contemplated by
------------------------------
this Agreement or as expressly agreed to in writing by Parent, during the
period from the date of this Agreement to the Effective Time, each of Company
and its subsidiaries will conduct its operations according to its ordinary
course of business
-21-
consistent with past practice, and will use all commercially reasonable
efforts to preserve intact its business organization, to keep available the
services of its officers and employees and to maintain satisfactory
relationships with suppliers, distributors, customers and others having
business relationships with it and will take no action which would materially
adversely affect the ability of the Parties to consummate the transactions
contemplated by this Agreement. Without limiting the generality of the
foregoing, and except as otherwise expressly provided in this Agreement, prior
to the Effective Time, Company will not nor will it permit any of its
subsidiaries to, without the prior written consent of Parent:
(a) amend its certificate of incorporation or by-laws;
(b) authorize for issuance, issue, sell, deliver, grant any options for,
or otherwise agree or commit to issue, sell or deliver any shares of any class
of its capital stock or any securities convertible into shares of any class of
its capital stock, except pursuant to and in accordance with the terms of
currently outstanding options;
(c) split, combine or reclassify any shares of its capital stock, declare,
set aside or pay any dividend or other distribution (whether in cash, stock or
property or any combination thereof) in respect of its capital stock or
purchase, redeem or otherwise acquire any shares of its own capital stock or
that of any of its subsidiaries;
(d) except in the ordinary course of business, consistent with past
practices (i) create, incur, assume, maintain or permit to exist any long-term
debt or any short-term debt for borrowed money other than under existing lines
of credit or replacements thereof, (ii) assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise) for
the obligations of any person other than its subsidiaries, or (iii) make any
loans, advances or capital contributions to, or investments in, any person
other than its subsidiaries, except pursuant to existing commitments;
(e) except as otherwise expressly contemplated by this Agreement or as set
forth in Schedule 5.01 of the Disclosure Statement, (i) increase in any manner
the compensation of any of its directors, officers or other employees; (ii) pay
or agree to pay any pension, retirement allowance or other employee benefit not
required, or enter into or agree to enter into any agreement or arrangement
with such director, officer or employee, whether past or present, relating to
any such pension, retirement allowance or other employee benefit except as
required under currently existing agreements, plans or arrangements; (iii)
grant any severance or termination pay to, or enter into any employment or
severance
-22-
agreement with, any of its directors, officers or other employees; or (iv)
except as may be required to comply with applicable law, become obligated
(other than pursuant to any new or renewed collective bargaining agreement)
under any new pension plan, welfare plan, multi-employer plan, employee benefit
plan, benefit arrangement, or similar plan or arrangement, which was not in
existence on the date hereof, including any bonus, incentive, deferred
compensation, stock purchase, stock option, stock appreciation right, group
insurance, severance pay, retirement or other benefit plan, agreement or
arrangement, or employment or consulting agreement with or for the benefit of
any person, or amend any of such plans or any of such agreements in existence
on the date hereof;
(f) except as otherwise expressly contemplated by this Agreement, enter
into any other material agreements, commitments or contracts, except
agreements, commitments or contracts for the purchase, sale or lease of goods
or services in the ordinary course of business, consistent with past practices;
(g) except in the ordinary course of business, consistent with past
practices, or as contemplated by this Agreement, authorize, recommend, propose
or announce an intention to authorize, recommend or propose, or enter into, any
agreement in principle or any agreement with respect to any plan of liquidation
or dissolution, any acquisition of a material amount of assets or securities,
any sale, transfer, lease, license, pledge, mortgage, or other disposition or
encumbrance of a material amount of assets or securities or any material change
in its capitalization, or any entry into a material contract or any amendment
or modification of any material contract or any release or relinquishment of
any material contract rights;
(h) knowingly undertake any act, or suffer to exist any condition,
causing any insurance policy naming it as a beneficiary or a loss payee to be
canceled or terminated, except in the ordinary course of business and
consistent with past practice and following written notice to Parent;
(i) enter into any hedging, option, derivative or other similar
transaction, except in the ordinary course of business and consistent with past
practices and following written notice to Parent; or
(j) agree to do any of the foregoing.
SECTION 5.02 Acquisitions. Prior to the Effective Time, Company shall
------------
keep Parent advised of the status of all discussions and negotiations
concerning possible acquisitions and divestitures of any corporations or
businesses by Company and Company agrees
-23-
that without the prior written consent of Parent it shall not make, or agree to
make, any acquisition which requires the issuance of shares of capital stock of
Company or any security convertible into, exchangeable for or exercisable for
shares of such capital stock.
SECTION 5.03 Acquisition Proposals. Parent and Merger Sub acknowledge
---------------------
that Company has had discussions with potential acquirors of Company and has
provided such potential acquirors with information (including non-public
information) concerning Company. Company represents and warrants, to, and
covenants and agrees with, Parent and Merger Sub that neither Company nor any
of its subsidiaries has any agreement, arrangement or understanding with any
such potential acquiror that would be violated by reason of the execution,
delivery and consummation of this Agreement. Company also agrees that from and
after the date hereof and until the earlier of the consummation of the Merger
or the termination of this Agreement, it shall, and shall cause its
subsidiaries and shall use its best efforts to cause the officers, directors,
investment bankers and attorneys of Company and its subsidiaries to, (a)
discontinue the solicitation of potential acquirors of Company and not solicit
(or authorize any person to solicit), directly or indirectly, any further
inquiries, proposals or offers from any person relating to any acquisition or
purchase of all or substantially all the assets of, or any equity interest in,
or any merger, consolidation or business combination with, Company or any of
its subsidiaries (the foregoing being referred to as an "Acquisition
Transaction"), (b) not enter into any agreement with respect to any Acquisition
Transaction, and (c) except in the event that there is an unsolicited written
proposal for an Acquisition Transaction from a bona fide third party, and then
---- ----
only if (i) three business days' written notice shall have been given to
Parent; and (ii) (A) such proposal is not expressed as subject to the
arrangement of financing, (B) Company's Board of Directors shall have been
advised in writing by its investment banker that such third party appears to be
financially capable of consummating an Acquisition Transaction that would yield
a higher value to the Company's stockholders than will the Offer and the
Merger, (C) Company's Board of Directors shall have been advised, by the
written opinion of outside counsel to Company, that any failure to so act would
constitute a breach of the fiduciary responsibilities of the Board of Directors
to the stockholders of Company and (D) the Board of Directors, after weighing
such advice, determines that taking such action is more likely than not to lead
to an Acquisition Transaction with such third party that would yield a higher
value to Company's stockholders than will the Offer and the Merger and that
failing to so act would constitute a breach of the Board's fiduciary duties,
not elicit any discussions of, participate in any negotiations regarding,
cooperate with, facilitate or encourage an Acquisition Transaction or furnish
to
-24-
any other person any non-public information concerning Company in connection
therewith. Company shall immediately notify Parent if any proposal or offer
with respect to an Acquisition Transaction is received by Company and
communicate to Parent the terms of any such proposal or offer.
SECTION 5.04 Access to Information. (a) From the date of this Agreement
---------------------
until the Effective Time, Company will give Parent and its authorized
representatives (including counsel, environmental and other consultants,
financial advisors, accountants and auditors) reasonable access during normal
business hours to all facilities, personnel and operations and to all books and
records of it and its subsidiaries, will permit Parent to make such inspections
as it may reasonably require and will cause its officers and those of its
subsidiaries to furnish Parent with such financial and operating data and other
information with respect to its business and properties as Parent may from time
to time reasonably request; provided, however, that access to intellectual
property and other proprietary information of third parties (including, without
limitation, Silcon A/S) and information access to which is otherwise restricted
by agreements with joint venture partners or other third parties shall be
withheld from Parent and such representatives except to the extent disclosure
thereof is specifically authorized in writing by any such third party.
(b) Each of the Parties will hold and will cause all of the employees and
representatives of such Party and its subsidiaries to hold in strict confidence
pursuant to the Confidentiality Agreement dated April 13, 1995 between Parent
and The Chicago Corporation on behalf of Company (the "Confidentiality
Agreement") all documents and information furnished to the other in connection
with the transactions contemplated by this Agreement as if each such employee
or representative were a party thereto.
SECTION 5.05 Proxy Statement and Stockholders Meeting. (a) If required
----------------------------------------
by applicable law, Company shall file the Proxy Statement with the SEC promptly
following Merger Sub's purchase of Shares in the Offer satisfying the Minimum
Condition. Parent shall promptly furnish to Company all information, and take
such other actions, as may reasonably be requested in connection with the Proxy
Statement. The Proxy Statement shall state that the Board of Directors of the
Company has, subject to the applicable provisions of this Agreement, (i)
approved the Offer and the Merger and (ii) determined that the Offer and the
Merger taken together are fair and in the best interest of the stockholders of
Company.
(b) Company agrees that the Proxy Statement and each amendment or
supplement thereto, at the time of mailing thereof and at the time of the
meeting of stockholders of Company, will not include any untrue statement of a
material fact or omit to state a material
-25-
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
provided, however, that the foregoing shall not apply to the extent that any
such untrue statement of a material fact or omission to state a material fact
was made by Company in reliance upon and in conformity with written information
concerning Parent to be furnished by it specifically for use in the Proxy
Statement. Parent agrees that none of the information to be furnished in
writing to Company specifically for use in the Proxy Statement and each
amendment or supplement thereto, at the time of mailing thereof and at the time
of the meeting of stockholders of Company, will include any untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. If at any time prior to the Effective
Time any event shall occur which is required to be described in the Proxy
Statement, such event shall be so described, and an amendment or supplement
shall be promptly filed with the SEC and, as required by law, disseminated to
the stockholders of Company. Company will advise Parent and Merger Sub
promptly after it receives notice thereof, of any comments by the SEC on the
Proxy Statement and the responses thereto and of any requests by the SEC for
additional information.
(c) If required by applicable law, Company shall call the Special
Meeting, to be held as promptly as practicable in accordance with applicable
law for the purpose of voting upon the adoption of this Agreement and the
approval of the Merger.
SECTION 5.06 Board Recommendation. Company shall, through its Board of
--------------------
Directors, recommend to its stockholders approval of the Offer, the Merger and
the other transactions contemplated by this Agreement; provided, however, that
such Board of Directors may withdraw, modify or change its recommendations to
Company's stockholders in the event that there is an unsolicited written
proposal for an Acquisition Transaction from a bona fide third party, and then
---- ----
only if (i) three business days' written notice shall have been given to
Parent; and (ii) (A) such proposal is not expressed as subject to the
arrangement of financing, (B) Company's Board of Directors shall have been
advised in writing by its investment banker that such third party appears to be
financially capable of consummating an Acquisition Transaction that would yield
a higher value to Company's stockholders than will the Offer and the Merger,
(C) the Company's Board of Directors shall have been advised, by the written
opinion of outside counsel to Company, that any failure to so act would
constitute a breach of the fiduciary responsibilities of the Board of Directors
to the stockholders of Company and (D) the Board of Directors, after weighing
such advice, determines that taking such action is more likely than not to lead
to an Acquisition Transaction with such third party that would
-26-
yield a higher value to Company's stockholders than will the Offer and the
Merger and that failing to so act would constitute a breach of the Board's
fiduciary duties. Subject to the foregoing, Company shall use all commercially
reasonable efforts to solicit from its stockholders proxies in favor of such
matters.
SECTION 5.07 Reasonable Efforts; Other Actions. Subject to the terms and
---------------------------------
conditions herein provided and applicable law, the Parties shall use all
commercially reasonable efforts promptly to take, or cause to be taken, all
other actions and do, or cause to be done, all other things necessary, proper
or appropriate under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement, including, without
limitation, (i) the filing of Notification and Report Forms under the HSR Act
with the Federal Trade Commission (the "FTC") and the Antitrust Division of the
Department of Justice (the "Antitrust Division") and using their reasonable
best efforts to respond as promptly as practicable to all inquiries received
from the FTC or the Antitrust Division for additional information or
documentation, (ii) the obtaining of all necessary consents, approvals or
waivers under its material contracts, and (iii) the lifting of any legal bar to
the Merger.
SECTION 5.08 Public Announcements. Before issuing any press release or
--------------------
otherwise making any public statements with respect to transactions
contemplated by this Agreement, Parent and Company will consult with each other
as to its form and substance and shall not issue any such press release or make
any such public statement prior to such consultation, except as may be required
by law.
SECTION 5.09 Notification of Certain Matters. Each of Company and Parent
-------------------------------
shall give prompt notice to the other of (i) any notice of, or other
communication relating to, a default or event which, with notice or lapse of
time or both, would become a default, received by it or any of its subsidiaries
subsequent to the date of this Agreement and prior to the Effective Time, under
any contract material to the financial condition, properties, businesses or
results of operations of Company and its subsidiaries taken as a whole to which
it or any of its subsidiaries is a party or is subject, and (ii) any notice or
other communication from any third party alleging that the consent of such
third party is or may be required in connection with the transactions
contemplated by this Agreement.
SECTION 5.10 Indemnification. (a) Parent shall, and shall cause the
---------------
Surviving Corporation to, indemnify, defend and hold harmless the present and
former officers, directors, employees and agents of Company and its
subsidiaries against all losses, claims, damages, expenses or liabilities
arising out of actions or omissions or alleged actions or omissions occurring
at or prior to
-27-
the Effective Time to the same extent and on the same terms and conditions
(including with respect to advancement of expenses) provided for in Company's
Certificate of Incorporation and By-Laws and agreements in effect at the date
hereof.
(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 of at least the same coverage and amounts
containing terms and conditions which are no less advantageous) with respect to
claims arising from facts or events which occurred before the Effective Time.
(c) The provisions of this Section 5.10 are intended to be for the benefit
of, and shall be enforceable by, each indemnified party hereunder, his or her
heirs and his or her representatives.
SECTION 5.11 Expenses. Except as set forth in Section 10.05, the Parties
--------
shall bear their respective expenses incurred in connection with the
transactions contemplated by this Agreement, including, without limitation, the
preparation, execution and performance of this Agreement and the transactions
contemplated hereby, and all fees and expenses of their respective investment
bankers, finders, brokers, agents, representatives, counsel and accountants.
ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF THE PARTIES
The respective obligations of each Party to effect the transactions
contemplated by this Agreement shall be subject to the fulfillment at or prior
to the Closing of each of the following conditions:
SECTION 6.01 Stockholder Approval. If required by applicable law, the
--------------------
requisite vote of the stockholders of Company necessary to consummate the
Merger shall have been obtained.
SECTION 6.02 Consents and Approvals. All necessary consents and
----------------------
approvals of any United States or any other governmental authority or any other
third party required for the consummation of the transactions contemplated by
this Agreement shall have been obtained, except for such consents and approvals
the failure to obtain which individually or in the aggregate would not have a
Material Adverse Effect; and any waiting period applicable to the consummation
of the Offer and the Merger under the HSR Act shall have expired or been
terminated.
-28-
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER SUB
The obligations of Parent and Merger Sub to effect the transactions
contemplated by this Agreement and to perform their other obligations to be
performed at or subsequent to the Closing shall be subject to the fulfillment
at or prior to the Closing of the following additional conditions, any one or
more of which may be waived by Parent:
SECTION 7.01 Representations and Warranties True. The representations
-----------------------------------
and warranties of Company contained herein (without regard to any materiality
exceptions contained therein) shall be true and correct on the date of this
Agreement and at and on the Closing Date as though such representations and
warranties were made at and on such date, except for such untruths or
inaccuracies which would not, individually or in the aggregate, have a Material
Adverse Effect.
SECTION 7.02 Performance. Company shall have performed and complied in
-----------
all material respects with all agreements, obligations and conditions required
by this Agreement to be performed or complied with by it on or prior to the
Closing Date.
SECTION 7.03 Certificates. Company shall furnish such certificates of
------------
appropriate officers and directors to evidence compliance with the conditions
set forth in Sections 7.01 and 7.02 as may be reasonably requested by Parent.
SECTION 7.04 Certain Proceedings. No writ, order, decree or injunction
-------------------
of a court of competent jurisdiction or governmental entity shall be in effect
against any of the Parties, and no proceedings therefor shall have been
threatened or commenced by any governmental entity, which prohibits or
restricts the consummation of the Offer or the Merger or would otherwise
restrict the Surviving Corporation's exercise of full rights to own and operate
its business in a manner which would have a Material Adverse Effect.
SECTION 7.05 Material Adverse Change. There shall not have occurred
-----------------------
since the date of this Agreement any material adverse change in the business,
operations, assets, financial condition or results of operations of Company and
its subsidiaries taken as a whole.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF COMPANY
The obligation of Company under this Agreement to effect the transactions
contemplated by this Agreement shall be subject to the fulfillment on or before
the Closing Date of each of the following
-29-
additional conditions, any one or more or which may be waived by Company:
SECTION 8.01 Representations and Warranties True. The representations
-----------------------------------
and warranties of Parent and Merger Sub contained herein (without regard to any
materiality exceptions contained therein) shall be true and correct on the date
of this Agreement and at and on the Closing Date as though such representations
and warranties were made at and on such date, except for such untruths or
inaccuracies which would not, individually or in the aggregate, impair their
ability to consummate the transactions contemplated by this Agreement.
SECTION 8.02 Performance. Parent and Merger Sub shall have each
-----------
performed and complied in all material respects with all agreements,
obligations and conditions required by this Agreement to be performed or
complied with by either of them on or prior to the Closing Date.
SECTION 8.03 Certificates. Parent and Merger Sub shall furnish such
------------
certificates of their respective officers to evidence compliance with the
conditions set forth in Sections 8.01 and 8.02 as may be reasonably requested
by Company.
SECTION 8.04 Certain Proceedings. No writ, order, decree or injunction
-------------------
of a court of competent jurisdiction or governmental entity shall be in effect
against any of the Parties, and no proceedings therefor shall have been
threatened or commenced by any governmental entity, which prohibits or
restricts the consummation of the Merger.
ARTICLE IX
CLOSING
SECTION 9.01 Time and Place. Subject to the provisions of Articles VI,
--------------
VII, VIII and X, the closing of the Merger (the "Closing") shall take place at
the offices of Cahill Gordon & Reindel, as soon as practicable but in no event
later than 9:30 A.M., local time, on the later of (x) the day of the Special
Meeting provided for in Section 2.10, if required by law, or (y) the day on
which the last of the conditions set forth in Articles VI, VII and VIII shall
have been satisfied or waived by the Party or Parties entitled to the benefit
of such conditions, or at such other place, at such other time or on such other
date as Parent and Company may mutually agree. The date on which the Closing
actually occurs is herein referred to as the "Closing Date."
SECTION 9.02 Filings at the Closing. Subject to the provisions of
----------------------
Articles VI, VII, VIII and X, the Parties shall cause to be executed and filed
at the Closing the Certificate of Merger and shall cause the Certificate of
Merger to be recorded in accordance with the applicable provisions of the DGCL
and shall
-30-
take any and all other lawful actions and do any and all other lawful things
necessary to cause the Merger to become effective.
ARTICLE X
TERMINATION AND ABANDONMENT
SECTION 10.01 Termination. This Agreement may be terminated at any time
-----------
prior to the Effective Time, whether before or after approval by the
stockholders of Company:
(a) by mutual consent of the Boards of Directors of Parent and Company;
(b) by either Parent or Company if, without a breach of this Agreement by
such terminating party, the Merger shall not have been consummated on or before
December 31, 1995, which date may be extended by mutual written consent of the
Parties;
(c) by either Parent or Company, if any court of competent jurisdiction in
the United States or other governmental body in the United States shall have
issued an order (other than a temporary restraining order), decree or ruling or
taken any other action restraining, enjoining or otherwise prohibiting the
Offer or the Merger, and such order, decree, ruling or other action shall have
become final and nonappealable; provided that the Party seeking to terminate
this Agreement shall have used all commercially reasonable efforts to remove or
lift such order, decree or ruling; or
(d) by either Parent and Merger Sub or Company, if no Shares shall have
been purchased pursuant to the Offer on or before September 30, 1995.
(e) by either Parent and Merger Sub or Company, if the Offer is
terminated in accordance with its terms without the purchase of any Shares.
SECTION 10.02 Termination by Parent. This Agreement may be terminated
---------------------
and the transactions contemplated hereby abandoned by action of the Board of
Directors of Parent, at any time prior to the Effective Time, before or after
the approval by the stockholders of Company, if (a) Company shall have failed
to comply in any material respect with any of the covenants or agreements
contained in Articles I, II and V of this Agreement to be complied with or
performed by Company at or prior to such date of termination, (b) there exists
a breach or breaches of any representation or warranty of Company contained in
this Agreement such that the closing condition set forth in Section 7.01 would
not be satisfied as of the Closing Date; provided, however, that if
-31-
such breach or breaches are capable of being cured prior to the Effective Time,
such breaches shall not have been cured by the earlier of December 31, 1995 or
20 days following delivery to Company of written notice of such breach or
breaches, (c) the Board of Directors of Company shall have exercised their
rights under Section 5.03(c) hereof, or (d) the Board of Directors of Company
shall, at the time of a bona fide offer concerning an Acquisition Transaction
made after the date of this Agreement, have exercised their rights under
Section 5.06 hereof to withdraw, modify or change their recommendation to
stockholders with respect to the Offer, the Merger and the other transactions
contemplated by this Agreement.
SECTION 10.03 Termination by Company. This Agreement may be terminated
----------------------
and the transactions contemplated hereby abandoned at any time prior to the
Effective Time, before or after the approval by the stockholders of Company, by
action of the Board of the Directors of Company, if (a) Parent or Merger Sub
shall have failed to comply in any material respect with any of their
respective covenants or agreements contained in Articles I, II and V of this
Agreement to be complied with or performed by Parent or Merger Sub at or prior
to such date of termination, (b) there exists a breach or breaches of any
representation or warranty of Parent or Merger Sub contained in this Agreement
such that the closing condition set forth in Section 8.01 would not be
satisfied as of the Closing Date; provided, however, that if such breach or
breaches are capable of being cured prior to the Effective Time, such breaches
shall not have been cured by the earlier of December 31, 1995 or 20 days
following delivery to Parent of written notice of such breach or breaches, or
(c) the Board of Directors of Company shall, at the time of a bona fide offer
concerning an Acquisition Transaction made after the date of this Agreement,
have exercised their rights under Section 5.06 hereof to withdraw, modify or
change their recommendation to stockholders with respect to the Offer, the
Merger and the other transactions contemplated by this Agreement.
SECTION 10.04 Procedure for Termination. In the event of termination of
-------------------------
this Agreement and abandonment of the transactions contemplated hereby by
Parent or Company pursuant to this Article X, written notice thereof shall
forthwith be given to the other.
SECTION 10.05 Effect of Termination and Abandonment. (a) In the event of
-------------------------------------
termination of this Agreement and abandonment of the transactions contemplated
hereby pursuant to this Article X, no Party (or any of its respective directors
or officers) shall have any liability or further obligation to any other Party
to this Agreement, except as provided in this Section 10.05 and Section 5.04(b)
hereof and provided that nothing herein shall relieve any party from liability
for any breach of this Agreement.
-32-
(b) If this Agreement is terminated pursuant to this Article X (other
than pursuant to Section 10.03(a) or (b)) and after the date hereof and prior
to such termination a third party shall have made a bona fide offer concerning
an Acquisition Transaction that would yield a higher value to Company's
stockholders than the Offer and Merger, Company shall within two business days
pay Parent by wire transfer of immediately available funds to an account
specified by Parent up to $4 million to reimburse Parent for its documented
fees and expenses directly related to this Agreement and the transactions
contemplated hereby. If this Agreement is terminated by Parent pursuant to
Section 10.02(d) or by Company pursuant to 10.03(c), Company shall within two
business days pay to Parent by wire transfer of immediately available funds to
an account specified by Parent an additional fee of $6 million. If such
additional fee has not already become payable and within twelve months after
the date hereof Company enters into a definitive agreement for an Acquisition
Transaction or an Acquisition Transaction is effected, and if after the date of
this Agreement and prior to its termination pursuant to this Article X, a third
party shall have proposed an Acquisition Transaction to the Company or its
stockholders that would yield a higher value to Company's stockholders than the
Offer and the Merger, then Company, concurrently with and as a condition to
entering into any definitive agreement for an Acquisition Transaction or any
Acquisition Transaction being effected within twelve months after the date
hereof, shall pay Parent by wire transfer of immediately available funds to an
account specified by Parent, an additional fee of $6 million; provided that no
such additional fee shall be payable in the event this Agreement shall have
been terminated pursuant to Section 10.03(a) or 10.03(b).
(c) So long as Company is not in breach or default under any covenant,
condition, representation or warranty herein, in the event of a termination of
this Agreement by Company pursuant to Section 10.03 (a) or (b), then Parent
shall promptly pay Company by wire transfer of immediately available funds to
an account specified by Company up to $4 million to reimburse Company for all
documented fees and expenses incurred by Company (including the fees and
expenses of counsel, accountants, consultants and advisors) directly related to
this Agreement and the transactions contemplated hereby.
ARTICLE XI
DEFINITIONS
SECTION 11.01 Terms Defined in the Agreement. The following capitalized
------------------------------
terms used herein shall have the meanings ascribed in the indicated sections.
-33-
Acquisition Transaction 5.03
Agreement Preamble
Antitrust Division 5.07
Applicable Environmental Standards 3.12
Balance Sheet 3.05
Certificate of Merger 2.02
Certificates 2.08
Closing 9.01
Closing Date 9.01
Company Preamble
Company Common Stock Recitals
Company Plans 3.02
Company Preferred Stock 3.02
Company Shares 3.02
Confidentiality Agreement 5.04
Constituent Corporations Preamble
DGCL 2.01
Disclosure Statement 1.02
Dissenting Shares 2.06
Effective Time 2.02
Employee Pension Benefit Plans 3.15
ERISA 3.15
ERISA Affiliates 3.15
Exchange Act 1.01
FTC 5.07
HSR Act 3.04
Interim Balance Sheet 3.05
Material Adverse Effect 3.01
Merger Recitals
Merger Consideration 2.06
Merger Sub Preamble
Minimum Condition 1.01
Offer Recitals
Offer Documents 1.01
person 12.10
Parent Preamble
Parties Preamble
Paying Agent 2.08
Pension Benefit Plans 3.15
Per Share Amount Recitals
Person 12.10
Proxy Statement 2.10
Schedule 14D-9 1.02
SEC 1.01
Securities Act 3.05
Shares Recitals
Significant Subsidiary 3.01
Special Meeting 2.10
subsidiary 12.10
Surviving Corporation 2.01
-34-
Welfare Plans 3.15
ARTICLE XII
MISCELLANEOUS
SECTION 12.01 Amendment and Modification. Subject to applicable law,
--------------------------
this Agreement may be amended, modified or supplemented only by written
agreement of the Parties at any time prior to the Effective Time with respect
to any of the terms contained herein; provided, however, that, after this
Agreement is adopted by the stockholders of Company, no such amendment or
modification shall reduce the amount or change the form of the Merger
Consideration or in any way adversely affect the rights of the holders of
Company Common Stock without the further approval of such holders; and,
provided, further, that from and after the date that Parent's designees to the
Board of Directors of Company constitute a majority of the Board of Directors
of Company and prior to consummation of the Merger, any amendment or
modification of this Agreement and any material deviation in the performance of
this Agreement shall require the approval of a majority of the members of the
Board of Directors, if any, who are not designees or affiliates of Parent.
SECTION 12.02 Waiver of Compliance; Consents. Any failure of Parent and
------------------------------
Merger Sub or Company to comply with any obligation, covenant, agreement or
condition herein may be waived only by a written instrument signed by the Party
granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf
of any party hereto, such consent shall be given in writing in a manner
consistent with the requirements for a waiver of compliance as set forth in
this Section 12.02.
SECTION 12.03 Survivability; Investigations. The respective
-----------------------------
representations and warranties of the Parties contained herein or in any
certificates or other documents delivered prior to or at the Closing shall not
be deemed waived or otherwise affected by any investigation made by any party
hereto and shall not survive the Closing. This Section 12.03 shall have no
effect upon any other obligation of any of the Parties hereto, whether to be
performed before or after the Closing Date.
SECTION 12.04 Reasonable Efforts. Subject to the terms and conditions
------------------
herein provided, and applicable law, the Parties each agree to use all
commercially reasonable efforts to take, or cause to be taken, all action, and
to do, or cause to be done, all things necessary, proper and advisable under
applicable laws and
-35-
regulations to consummate and make effective the transactions contemplated by
this Agreement.
SECTION 12.05 Notices. All notices and other communications hereunder
-------
shall be in writing and shall be delivered personally, by next-day courier or
mailed by registered or certified mail (return receipt requested), first class
postage prepaid, or telecopied with confirmation of receipt, to the Parties at
the addresses specified below (or at such other address for a Party as shall be
specified by like notice; provided that notices of a change of address shall be
effective only upon receipt thereof). Any such notice shall be effective upon
receipt, if personally delivered or telecopied, one day after delivery to a
courier for next-day delivery, or three days after mailing, if deposited in the
U.S mail, first class postage prepaid.
(a) if to Company, to
Best Power Technology, Incorporated
P.O. Box 280
Route 80
Necedah, Wisconsin 54646-9899
Telecopy: (608) 565-3483
Attention: Dennis E. Burke,
Executive Vice President
with a copy to:
Michael Best & Friedrich
135 South LaSalle Street
Suite 1610
Chicago, Illinois 60603
Telecopy: (312) 845-5828
Attention: Thomas C. Judge, Esq.
(b) if to Parent or Merger Sub, to
General Signal Corporation
One High Ridge Park
P.O. Box 10010
Stamford, Connecticut 06904
Telecopy: (203) 329-4314
Attention: Edgar J. Smith, Jr., Esq.,
General Counsel
-36-
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Telecopy: (212) 269-5420
Attention: W. Leslie Duffy, Esq.
SECTION 12.06 Assignment. This Agreement and all of the provisions
----------
hereof shall be binding upon and inure to the benefit of the Parties and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the Parties without the prior written consent of the other Parties, nor is this
Agreement intended to confer any rights or remedies hereunder upon any other
person except the parties hereto and, with respect to Section 5.10, the
officers, directors and employees of Company.
SECTION 12.07 Governing Law. Except as the laws of the State of Delaware
-------------
are by their terms applicable, this Agreement shall be governed by the laws of
the State of New York (regardless of the laws that might otherwise govern under
applicable New York principles of conflicts of law) as to all matters,
including but not limited to matters of validity, construction, effect,
performance and remedies.
SECTION 12.08 Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 12.09 Severability. In case any one or more of the provisions
------------
contained in this Agreement should be invalid, illegal or unenforceable in any
respect against a Party, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby and such invalidity, illegality or unenforceability shall only
apply as to such Party in the specific jurisdiction where such judgment shall
be made.
SECTION 12.10 Interpretation. The article and section headings contained
--------------
in this Agreement are solely for the purpose of reference, are not part of the
agreement of the Parties and shall not in any way affect the meaning or
interpretation of this Agreement. This Agreement has been negotiated by the
Parties and is their mutual product; accordingly, no rule of strict
construction against Company shall be applied in the interpretation of this
Agreement. As used in this Agreement, (i) the term "person" shall mean and
include an individual, a partnership, a joint venture, a corporation, a
limited liability company, a trust,
-37-
an unincorporated organization and a government or any department or agency
thereof; and (ii) the term "subsidiary" of any specified corporation shall mean
any corporation of which a majority of the outstanding securities having
ordinary voting power to elect a majority of the board of directors are,
directly or indirectly, owned by such specified corporation or any other person
of which a majority of the equity interests therein are directly or indirectly,
owned by such specified corporation.
SECTION 12.11 Guarantee. Parent hereby guarantees the due and punctual
---------
performance by Merger Sub of all of Merger Sub's obligations in connection with
the Merger and the other matters contemplated by this Agreement.
SECTION 12.12 Entire Agreement. This Agreement, including the schedules
----------------
and exhibits hereto and the documents and instruments referred to herein and
therein, embodies the entire agreement and understanding of the parties hereto
in respect of the subject matter contained herein and supersedes all prior
agreements and the understandings between the parties with respect to such
subject matter, except for the Confidentiality Agreement, which shall remain in
full force and effect. There are no representations, promises, warranties,
covenants, or undertakings, other than those expressly set forth or referred to
herein and therein.
IN WITNESS WHEREOF, PARENT, MERGER SUB and COMPANY have caused this
Agreement to be signed by their respective duly authorized officers as of the
date first above written.
GENERAL SIGNAL CORPORATION
By: /s/ Philip A. Goodrich
--------------------------
Philip A. Goodrich
Vice President-Corporate Development
G.S. NEWCO, INC.
By: /s/ Edgar J. Smith, Jr.
----------------------------
Edgar J. Smith, Jr.
Vice President
BEST POWER TECHNOLOGY, INCORPORATED
By: /s/ Paul F. Koeppe
--------------------------
Paul F. Koeppe
Chairman, Executive Committee
-38-
ANNEX A
to Agreement
and Plan of
Merger
CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer and in addition to (and
not in limitation of) Merger Sub's rights to extend and amend the Offer at any
time in its sole discretion, and in addition to the Minimum Condition, Merger
Sub shall not be required to accept for payment or pay for any tendered shares
of Company Common Stock, and may postpone the acceptance for payment of or
payment for tendered shares of Company Common Stock and may terminate or amend
the Offer if, at or before the acceptance of such shares of Company Common
Stock for payment or the payment therefor pursuant to the Offer, any material
litigation with respect to the Offer or the Merger shall not have been finally
settled, dismissed or withdrawn, or any of the following shall occur and be
continuing:
(a) there shall be any pending action or proceeding, or any statute,
rule, regulation, legislation, interpretation, judgment, order or
injunction shall be proposed, sought, enacted, promulgated, entered,
enforced, amended or made applicable to Merger Sub or any of its
affiliates or to the Offer or the Merger by or before any domestic or
foreign government or governmental, regulatory or administrative authority
or agency or by or before any court or tribunal, domestic or foreign (i)
challenging the acquisition by Merger Sub or any affiliate of Merger Sub,
in whole or in part, of the shares of Company Common Stock, seeking,
directly or indirectly, to restrain, delay, prohibit or make more costly
the making or consummation of the Offer or the Merger or seeking to obtain
any damages or otherwise, directly or indirectly, relating to the
transactions contemplated by the Offer or the Merger, (ii) seeking to
prohibit, restrict or limit the ownership or operation by Merger Sub or
any of its affiliates of all or any portion of its or Company's business
or assets, or to compel Merger Sub or any of its affiliates to dispose of
or hold separate all or any portion of its or Company's business or assets
as a result of the Offer or the Merger, (iii) making the purchase of, or
payment for, some or all of the shares of Company Common Stock illegal,
(iv) resulting in a material delay in the ability of Merger Sub to accept
for payment or pay for some or all of the shares of Company Common Stock,
(v) seeking to impose limitations on the ability of Merger Sub or any of
its affiliates effectively to acquire, hold or exercise rights of
ownership of any shares of Company Common Stock now owned or hereafter
purchased or to be purchased, including, without limitation, the right to
vote, or act by consent with respect to, such shares of Company Common
Stock on any matter properly presented to the shareholders of Company,
(vi) imposing any limitations on the
A-1
ability of Merger Sub or any of its affiliates effectively to control in
any material respect the business and operations of Company, (vii) seeking
or causing any material diminution in the benefits expected to be derived
by Merger Sub or any of its affiliates as a result of the Offer or the
Merger, or (viii) which otherwise would materially and adversely affect
Company and its subsidiaries taken as a whole;
(b) any change (or any development involving a prospective change)
shall have occurred or be threatened in connection with the business,
assets, liabilities, capitalization, shareholders' equity, financial
condition, licenses, franchises, results of operations or prospects of
Company or any of its subsidiaries which would be materially adverse to
Company and its subsidiaries taken as a whole, or Merger Sub shall have
become aware of any fact that would have material adverse significance
with respect to Company and its subsidiaries taken as a whole;
(c) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities
exchange, or on NASDAQ or otherwise in the over-the-counter market, (ii)
the declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States, (iii) the commencement of a war,
armed hostilities or other international or national calamity directly or
indirectly involving the United States, (iv) any material limitation
(whether or not mandatory) by any governmental authority or agency, or any
other event which would significantly affect the extension of credit by
banks or other lending institutions in the United States, (v) an aggregate
decline since May 9, 1995 of 15% or more in the Standard & Poor's 500
Index, (vi) any imposition of currency controls in the United States or a
material change in exchange rates or a suspension of, or material
limitation on, the markets therefor, or (vii) in the case of any of the
foregoing existing at the time of commencement of the Offer, any material
worsening or acceleration thereof;
(d) Merger Sub or any of its affiliates shall have reached an
agreement or understanding with Company providing for amendment or
termination of the Offer;
(e) it shall have been publicly disclosed after the date of the
Agreement or Merger Sub shall have learned that (i) any person (including
Company or any of its subsidiaries or affiliates), entity or "group" (as
defined in Section 13(d)(3) of the Exchange Act) shall have acquired or
proposed to acquire more than 15% of any class or series of capital stock
of Company (including the Shares) or its subsidiaries or shall have been
granted any option or right to acquire more than 15% of any class or
series of capital stock of Company (including the Shares) or its
subsidiaries, other than acquisitions of Shares for bona fide arbitrage
positions, or (ii) any such person, entity or group which has publicly
disclosed any such ownership of or right to acquire more than 15% of any
class or
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series of capital stock of Company (including the Shares) or its
subsidiaries prior to May 1, 1995 shall after the date of the Agreement
have acquired or proposed to acquire additional shares of any class or
series of capital stock of Company (including the Shares) or its
subsidiaries constituting more than 1% of such class or series or shall
have been granted any option or right to acquire more than 1% of such
class or series of capital stock of Company (including the Shares) or its
subsidiaries or (iii) any group shall have been formed which beneficially
owns more than 15% of any class or series of capital stock of Company
(including the Shares) or its subsidiaries;
(f) Company shall have failed to comply in any material respect with
its obligations and covenants contained in the Agreement, or the
representations and warranties (without regard to any references to
materiality or Material Adverse Effect contained in any such
representations or warranties) made by Company in the Agreement shall have
failed to be true and correct on the date of the Merger Agreement and of
the expiration of the Offer as though such representations and warranties
had been made at and on such dates, except for such failures which,
individually or in the aggregate, would not have a Material Adverse Effect
and which, individually or in the aggregate, would not materially
adversely affect the rights of Parent and Merger Sub to consummate the
transactions contemplated by the Merger Agreement; or
(g) The Merger Agreement shall be terminated in accordance with its
terms.
The foregoing conditions are for the sole benefit of Merger Sub and may be
asserted by Merger Sub or any of its affiliates or may be waived in whole or in
part at any time or from time to time in its sole discretion. The failure to
exercise any of the foregoing rights shall not be deemed a waiver of any right,
and each right shall be deemed a continuing right which may be asserted at any
time and from time to time for so long as such right exists.
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