EXHIBIT 2
EXECUTION COPY
AGREEMENT AND PLAN OF REORGANIZATION
AMONG
NORTHERN TRUST CORPORATION,
HAZLEHURST MERGER CORPORATION,
HAZLEHURST & ASSOCIATES, INC.
AND
THE PRINCIPAL STOCKHOLDERS OF HAZLEHURST & ASSOCIATES, INC.
DATED AS OF DECEMBER 12, 1993
TABLE OF CONTENTS
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PAGE
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AGREEMENT AND PLAN OF REORGANIZATION..................................... 1
ARTICLE I................................................................ 1
MERGER AGREEMENT; CLOSING........................................... 1
1.1 Merger Agreement............................................. 1
1.2 Effective Date............................................... 2
1.3 Determination of Number of Shares of NTC Common Stock........ 2
1.4 Closing Date................................................. 2
1.5 Actions at Closing........................................... 2
ARTICLE II............................................................... 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE PRINCIPAL
STOCKHOLDERS................................................... 3
2.1 Organization and Existence of the Company.................... 3
2.2 Organizational Documents; Minutes and Stock Records.......... 3
2.3 Capitalization of the Company................................ 3
2.4 Ownership of the Common Stock of the Company................. 4
2.5 Authorization of Transactions and Agreements................. 4
2.6 Financial Statements......................................... 4
2.7 Undisclosed Liabilities...................................... 4
2.8 Properties and Assets........................................ 5
2.9 Insurance.................................................... 5
2.10 Litigation and Compliance with Laws.......................... 5
2.11 Significant Contracts........................................ 6
2.12 No Defaults.................................................. 6
2.13 Taxes........................................................ 6
2.14 Employee Benefit Plans....................................... 7
2.15 Environmental Liabilities.................................... 8
2.16 No Material Adverse Changes.................................. 9
2.17 Conduct of Business in Normal Course......................... 9
2.18 Change in Business Relationships............................. 9
2.19 Brokers' and Finders' Fees................................... 9
2.20 No Omissions................................................. 9
ARTICLE III 9
REPRESENTATION AND WARRANTIES OF NTC AND MERGER CO.................. 9
3.1 Organization and Existence of NTC and Merger Co.............. 9
3.2 Capitalization............................................... 10
3.3 Authorization of Transactions and Agreements................. 10
3.4 SEC Filings and Financial Statements......................... 10
3.5 Brokers' and Finders' Fees................................... 11
3.6 No Adverse Changes; Conduct of Business in Normal Course..... 11
ARTICLE IV............................................................... 11
ADDITIONAL AGREEMENTS............................................... 11
4.1 Conduct of Business.......................................... 11
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4.2 Access to Information......................................... 12
4.3 Stockholders Meeting; Proxy Statement......................... 12
4.4 Regulatory Approval........................................... 13
4.5 Registration Statement........................................ 13
4.6 Information to be Included in Proxy Statement and Registration
Statement................................................... 13
4.7 Affiliate Letters............................................. 14
4.8 Merger Co. Stockholder Approval............................... 14
4.9 Board of Directors' Notices and Minutes....................... 14
4.10 Best Efforts.................................................. 14
4.11 Software Licensing Agreement.................................. 14
4.12 Company Option................................................ 15
4.13 Business Relations and Publicity.............................. 15
4.14 No Conduct Inconsistent with this Agreement................... 15
4.15 Untrue Representations and Warranties......................... 15
4.16 Indemnification by Stockholders............................... 15
ARTICLE V................................................................. 16
CONDITIONS PRECEDENT TO OBLIGATIONS OF NTC AND MERGER CO............. 16
5.1 Representations and Warranties; Performance of Agreements..... 16
5.2 Closing Certificate........................................... 16
5.3 Regulatory Approvals.......................................... 16
5.4 Approval of Merger and Delivery of Merger Agreement........... 16
5.5 Effectiveness of the Registration Statement and Approval for
Listing..................................................... 16
5.6 No Litigation................................................. 16
5.7 Audt.......................................................... 17
5.8 Opinion of Counsel............................................ 17
5.9 No Material Adverse Changes................................... 18
5.10 Pooling of Interests Comfort Letter........................... 18
5.11 Affiliate Letters............................................. 18
5.12 Consents and Permissions...................................... 18
5.13 Comfort Letter................................................ 19
5.14 Employment Agreements......................................... 19
5.15 Stock Options and Stockholders Agreement...................... 19
5.16 Indemnification by Stockholders............................... 19
5.17 Other Documents............................................... 19
ARTICLE VI................................................................ 19
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND THE PRINCIPAL
STOCKHOLDERS.................................................... 19
6.1 Representations and Warranties; Performance of Agreements..... 19
6.2 Closing Certificate........................................... 20
6.3 Regulatory Approvals.......................................... 20
6.4 Approval of Merger and Delivery of Merger Agreement........... 20
6.5 Effectiveness of the Registration Statement................... 20
6.6 No Litigation................................................. 20
6.7 Opinion of Counsel............................................ 20
6.8 Tax Opinion................................................... 21
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6.9 No Adverse Changes............................................ 22
6.10 Comfort Letter................................................ 22
6.11 Employment Agreements......................................... 22
6.12 Other Documents............................................... 22
ARTICLE VII............................................................... 22
SURVIVAL OF REPRESENTATIONS AND INDEMNITY........................... 22
7.1 Survival of Representations................................... 22
7.2 Indemnification............................................... 22
7.3 Indemnification............................................... 23
ARTICLE VIII.............................................................. 24
GENERAL............................................................. 24
8.1 Further Assurances............................................ 24
8.2 Expenses...................................................... 24
8.3 Termination................................................... 24
8.4 Confidential Information...................................... 24
8.5 Non-Assignment................................................ 25
8.6 Notices....................................................... 25
8.7 Specific Performance.......................................... 26
8.8 Counterparts.................................................. 26
8.9 Entire Agreement.............................................. 26
8.10 Severability.................................................. 26
8.11 Governing Law................................................. 26
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is entered
into as of the 12th day of December, 1993, by and among NORTHERN TRUST
CORPORATION, a Delaware corporation ("NTC"), HAZLEHURST MERGER CORPORATION, a
Delaware corporation, the shares of which are all owned directly or indirectly
by NTC ("Merger Co."), HAZLEHURST & ASSOCIATES, INC., a Delaware corporation
(the "Company"), and those stockholders of the Company whose names appear on the
signature page hereto (collectively, the "Principal Stockholders").
WHEREAS, this Agreement provides for the merger of Merger Co. with and into
the Company (the "Merger") and the conversion pursuant to the Merger of all
outstanding shares of common stock of the Company into shares of common stock of
NTC, all in accordance with the terms and conditions of the Merger Agreement (as
hereinafter defined); and
WHEREAS, the Principal Stockholders and the respective Boards of Directors
of the parties hereto deem the Merger desirable and in the best interests of the
parties and their respective stockholders; and
WHEREAS, the parties hereto desire and intend that the Merger qualify as a
reorganization in accordance with Sections 368(a)(1)(A) and 368(a)(2)(E) of the
Internal Revenue Code of 1986, as amended (the "Code");
NOW THEREFORE, the parties hereby covenant and agree as follows:
ARTICLE I
MERGER AGREEMENT; CLOSING
1.1 MERGER AGREEMENT. The Company and Merger Co. each agree to authorize,
approve and execute a merger agreement, substantially in the form attached as
Exhibit A hereto (the "Merger Agreement"), in accordance with and subject to the
terms, provisions and conditions of this Agreement, pursuant to which Merger Co.
shall be merged with and into the Company, the separate corporate existence of
Merger Co. shall cease, and the Company shall be the surviving corporation. As
set forth more fully in the Merger Agreement, pursuant to the Merger:
(a) the certificate of incorporation of the Company, as in effect
immediately prior to the Effective Date, shall be, from and after the
Effective Date, the certificate of incorporation of the surviving corporation;
(b) the by-laws of Merger Co., as in effect immediately prior to the
Effective Date, shall be, from and after the Effective Date, the by-laws of the
surviving corporation;
(c) the directors of Merger Co., immediately prior to the Effective Date,
and Mr. James G. Pope shall be, from and after the Effective Date, the directors
of the surviving corporation; and
(d) the officers of the Company, immediately prior to the Effective Date,
and Dennis Sain shall be, from and after the Effective Date, the officers of the
surviving corporation.
1.2 EFFECTIVE DATE. The Merger shall be effective on a date, mutually
agreed upon by the parties and specified in a certificate of merger to be filed
with the Secretary of State of the State of Delaware (the "Effective Date"),
which date shall be on or after the date of filing of the properly executed
certificate of merger with the Secretary of State of the State of Delaware in
the manner provided for by the applicable laws of the State of Delaware.
1.3 DETERMINATION OF NUMBER OF SHARES OF NTC COMMON STOCK. Subject to
the consummation of the Merger in accordance with the terms and provisions of
this Agreement and the Merger Agreement, all validly issued and outstanding
shares of Common Stock of the Company (as hereinafter defined) on the Effective
Date shall be converted, by virtue of the Merger, into such number of shares of
common stock of NTC as shall have a market value equal to $22,500,000,
determined on the basis of the unweighted average of the last-sale prices for
the common stock of NTC, as reported by the National Association of Securities
Dealers Automated Quotations ("NASDAQ") for the twenty trading days ending on
the fifth trading day preceding the Closing (the "Closing Date Value"), but not
more than 681,818, nor less than 468,750, unless the Company shall so elect
pursuant to Section 4.12 hereof (before giving effect to the payment of cash in
lieu of fractional shares or to any reduction in the number of shares issuable
in the Merger as a result of the exercise of appraisal rights), shares of common
stock of NTC. On or before the Effective Date, NTC shall authorize the issuance
of and shall make available to Merger Co. a sufficient number of shares of
common stock of NTC to enable Merger Co. to deliver, if and when required, the
number of shares of common stock of NTC that the stockholders of the Company
shall be entitled to receive as provided in this Agreement and the Merger
Agreement. As provided in the Merger Agreement, no fractional shares of common
stock of NTC shall be issued in the Merger, and cash shall be paid in lieu of
fractional shares.
1.4 CLOSING DATE. The consummation of the transactions contemplated by
this Agreement and the Merger Agreement shall take place at a closing (the
"Closing") to be held on a date which shall be mutually agreed upon by the
parties (the "Closing Date"), which date shall be on the last day of the month
in which all of the conditions to the Merger set forth in Sections 5.3 and 5.4
have been satisfied. In the event that any litigation of the type contemplated
by Sections 5.6 or 6.6 is filed, NTC or the Company may postpone the Closing by
written notice until such approvals have been obtained or such motion, appeal or
litigation is resolved, but in no event shall such Closing be postponed beyond
the close of business on June 30, 1994.
1.5 ACTIONS AT CLOSING. At the Closing, the parties shall (i) exchange
the various documents contemplated hereby, and (ii) cause a certificate of
merger to be filed with the Secretary of State of the State of Delaware, as
provided by the statutes of the State of Delaware. Upon verification that the
Merger has become effective as provided by the statutes of the State of
Delaware, NTC and the Company shall take all actions provided for in the Merger
Agreement for delivery of common stock of NTC in exchange for the Common Stock
of the Company. The Closing shall take place at 10:00 o'clock a.m., local time,
on the Closing Date at the offices of Schiff Hardin & Waite, 7200 Sears Tower,
Chicago, Illinois 60606, or at such other place upon which the parties may
agree.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
AND THE PRINCIPAL STOCKHOLDERS
This Agreement is entered into by NTC and Merger Co. upon the
understanding, and the Company and the Principal Stockholders jointly and
severally, with the exception of Section 2.4 hereof which is given severally by
each Principal Stockholder as to his shares, represent and warrant, that the
following statements are true and correct on the date of this Agreement,
subject, however, to exceptions and disclosures to be made by the Company and
the Principal Stockholders in the Disclosure Schedule and any other schedules to
this Agreement to be delivered to NTC on or before January 15, 1994. It is
acknowledged that NTC shall have the right by written notice to terminate on or
before February 15, 1994, its obligations under this Merger Agreement and all
related documents, without the requirement to enter into the Software Licensing
Agreement described in Section 4.11 hereof, in the event that the disclosures in
the Disclosure Schedule contain disclosures not already known to NTC which
constitute a material adverse change in the business, income, operations,
assets, liabilities, financial condition, or prospects of the Company or the
value of this proposed transaction to NTC. To the best knowledge of the
Principal Stockholders, on the date of this Agreement there are no material
liabilities of the type required to be disclosed under the terms of this
Agreement that have not been previously disclosed to NTC, or disclosed, reserved
against, or accrued for in the Financial Statements (as hereinafter defined);
provided, however, that this separate representation shall lapse and be of no
further affect in the event NTC does not exercise its right to terminate based
on the Disclosure Schedule.
2.1 ORGANIZATION AND EXISTENCE OF THE COMPANY. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, has the corporate power to own its properties and to
carry on its business as it is now being conducted, and is duly qualified and in
good standing as a foreign corporation in each jurisdiction where the location
and character of its properties and the business conducted by it require such
qualification. The Company has no subsidiaries.
2.2 ORGANIZATIONAL DOCUMENTS; MINUTES AND STOCK RECORDS. The Company has
furnished NTC with copies of the certificate of incorporation and the by-laws of
the Company, in each case as amended to the date hereof, and with such other
documents relating to the authority of the Company to conduct its business as
NTC has requested. All such documents are complete and correct. The stock
register and minute books of the Company are complete and correct in all
material respects and accurately reflect all meetings, consents, and other
actions of the organizers, incorporators, stockholders, board of directors, and
committees of the board of directors of the Company and all transactions in the
capital stock of the Company occurring since its initial organization.
2.3 CAPITALIZATION OF THE COMPANY. The authorized capital stock of the
Company consists of 169,500 shares of common stock, par value $0.0125 per share
(the "Common Stock of the Company"), of which 19,500 shares are designated as
Class A Common Stock, 16,350 of which are issued and outstanding, and 150,000
shares are designated as Class B Common Stock, 85,351 of which are issued and
outstanding. The issued and outstanding shares of Common Stock of the Company
have been duly and validly authorized and issued, are fully paid and
nonassessable, and are free of preemptive rights. Except for rights of NTC and
Merger Co. under this Agreement and the shares of Common Stock of the Company to
be issued prior to the Closing under the Company's bonus plan in an amount which
shall not cause the total issued and outstanding shares
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of the Company's common stock to exceed 105,000 shares (the "Bonus Plan
Shares"), there are no options, agreements, contracts, or other rights in
existence to purchase or acquire from the Company any shares of capital stock of
the Company, whether now or hereafter authorized or issued.
2.4 OWNERSHIP OF THE COMMON STOCK OF THE COMPANY. Each Principal
Stockholder represents and warrants separately that he is the record and
beneficial owner of the number of shares of Common Stock of the Company set
forth opposite his name on the signature page hereto and that he holds his
shares of Common Stock of the Company free and clear of any lien, encumbrance,
mortgage, pledge, security interest, or charge of any kind and has full power
and authority to transfer those shares pursuant to this Agreement and to take
all other steps necessary to complete the Merger.
2.5 AUTHORIZATION OF TRANSACTIONS AND AGREEMENTS. The execution,
delivery and performance of this Agreement have been duly authorized by the
board of directors of the Company in accordance with the certificate of
incorporation and by-laws of the Company and governing Delaware law. This
Agreement constitutes the legal, valid, and binding obligations of the Company
and the Principal Stockholders, enforceable against the Company and the
Principal Stockholders in accordance with its terms. The Merger Agreement will
constitute the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms. Subject to such approval by
the stockholders of the Company as may be required by the laws of the State of
Delaware and the certificate of incorporation and by-laws of the Company, the
Company has the corporate power to execute, deliver and perform this Agreement
and the Merger Agreement and to consummate the transactions herein and therein
contemplated, and such execution, delivery and performance do not violate any
provisions of the certificate of incorporation or by-laws of the Company or any
agreement to which the Company is a party or by which the Company is otherwise
bound. Except for the approval of the stockholders of the Company referred to
in Sections 5.4 and 6.4 hereof, no consent of any regulatory authority or other
person is required to be obtained by the Company in order to permit consummation
of the Merger.
2.6 FINANCIAL STATEMENTS. The Company has furnished NTC with true and
complete copies of the following financial statements (the "Financial
Statements"): (a) unaudited balance sheets of the Company as at December 31,
1992 and 1991 and the related statements of income and retained earnings for the
years then ended, together with the notes thereto, and (b) an unaudited interim
balance sheet of the Company as at September 30, 1993 and related statements of
income and retained earnings for the nine-month period then ended. Each of the
Financial Statements referred to in clauses (a) and (b) of this Section 2.6 has
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis and presents fairly the financial position of the
Company at the dates shown and the results of its operations and changes in
financial position for the periods then ended. The interim Financial Statements
of the Company as at, and for, the period ending September 30, 1993, include all
adjustments necessary for a fair presentation of the financial position of the
Company and the results of its operations for the interim period presented,
subject to normal, recurring year-end adjustments that are not material and the
omission of footnote disclosure.
2.7 UNDISCLOSED LIABILITIES. The Company has no liabilities, whether
accrued, absolute, contingent, or otherwise, existing or arising out of any
transaction or state of facts existing on or prior to the date hereof, except
(a) as and to the extent disclosed, reflected or reserved against in the
Financial Statements; (b) as and to the extent arising under contracts,
commitments,
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transactions, or circumstances identified in the schedules provided for herein,
excluding any liabilities for breaches; (c) as and to the extent incurred in the
ordinary course of business since September 30, 1993, and (d) liabilities, not
material in the aggregate and incurred in the ordinary course of business,
which, under generally accepted accounting principles, would not be required to
be reflected on a balance sheet prepared as of the date hereof. Any liabilities
incurred in connection with judicial, administrative or arbitration proceedings
or claims against the Company shall not be deemed to be incurred in the ordinary
course of business.
2.8 PROPERTIES AND ASSETS. The Schedule of Real Property sets forth a
complete and correct description of all real property owned or leased by the
Company. The Company owns, or has a valid right to use or a leasehold interest
in, all real property used by it in the conduct of its business as such business
has been or are now being conducted. Except as otherwise disclosed on the
Schedule of Real Property, the Company's ownership or leasehold interest in such
property is subject to no mortgage, pledge, lien, option, conditional sale
agreement, encumbrance, security interest, title exception or restriction or
claim or charge of any kind. All material certificates, licenses and permits
required for the lawful use and occupancy of any real property by the Company
have been obtained and are in full force and effect. The Schedule of Tangible
Personal Property which sets forth a complete and correct description of all
material personal property owned by the Company or used by the Company in the
conduct of its business. Except as otherwise disclosed on the Schedule of
Tangible Personal Property, all of said assets are owned free and clear of any
liens, claims, encumbrances, or rights of others and all of said assets are in
good working condition, normal wear and tear excepted. The assets reflected in
the most recent of the Financial Statements or identified in this Agreement or
in the schedules provided for herein include (a) all of the assets owned by the
Company, except for those subsequently disposed of by the Company for fair value
in the ordinary course of business, and (2) all of the assets used or intended
for use by the Company in the conduct of its business.
2.9 INSURANCE. The Schedule of Insurance sets forth a complete and
correct list of all policies of insurance in which the Company is named as an
insured party, which otherwise relate to or cover any assets, properties,
premises, operations or personnel of the Company or which is owned or carried by
the Company. The Company has in full force and effect policies of insurance
issued by reputable insurance companies against loss or damage of the kinds and
in the amounts identified in the policy summaries, and all premiums and costs
with respect thereto are set forth in the Schedule of Insurance. There has been
no notice given by any party of interest in or to any such policies claiming any
breach or violation of any provisions thereof, disclaiming or denying coverage
thereof or canceling or threatening cancellation of any such insurance
contracts.
2.10 LITIGATION AND COMPLIANCE WITH LAWS. The Company and its directors,
officers, and employees, in connection with their activities on behalf of the
Company, are in compliance in all material respects with all laws and
regulations of all governmental agencies and self-regulatory agencies having
jurisdiction over the business of the Company or the activities of such persons.
Except as set forth in the Schedule of Litigation, there are no claims, actions,
suits, or proceedings pending or, to the best knowledge of the Principal
Stockholders and Company, threatened or affecting the Company or any of its
officers, directors or employees (in their capacities as such), at law or in
equity, or before any federal, state, municipal, or other governmental authority
or any arbitrator or arbitration panel, whether by contract or otherwise, and
there is no decree, judgment, order or arbitration award of any kind in
existence against or restraining the Company or any of its officers, directors
or employees from taking any action of any kind in connection with the business
of the Company.
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2.11 SIGNIFICANT CONTRACTS. The Company has furnished to NTC a Schedule
of Significant Contracts, together with true and complete copies of the
documents referred to in the Schedule, which completely and accurately describes
every contract, commitment, or arrangement (whether written or oral) of a
material nature (or that assumes materiality because of its continuing nature)
under which the Company is obligated on the date hereof, including the
following:
(a) All consulting arrangements, and contracts for professional, advisory,
and other services, including contracts under which the Company performs
services for others whereunder the total future payments on an annual basis are,
in each instance, more than $50,000;
(b) All leases of real estate or personal property, other than leases of
personal property whereunder total future rentals are, in each instance, less
than $50,000;
(c) All contracts, commitments and agreements for the acquisition,
development or disposition of real or personal property other than conditional
sales contracts and security agreements whereunder total future payments are, in
each instance, less than $50,000;
(d) All contracts relating to the employment, engagement, compensation or
termination of directors, officers, employees, or agents of the Company and all
bonus, pension, retirement, profit sharing, stock option, stock purchase, stock
appreciation, insurance or similar plans or arrangements for the benefit of any
employees, officers or directors of the Company, including all Benefit Plans as
defined in Section 2.14;
(e) All loans, loan commitments, letters of credit or other financial
accommodations arrangements or evidences of indebtedness, including
modifications or amendments thereof, extended to or for the benefit of the
Company;
(f) All union and other labor contracts; and
(g) All other material contracts, made other than in the usual or ordinary
course of business of the Company, to which the Company is a party or under
which the Company is obligated.
2.12 NO DEFAULTS. The Company has fulfilled and taken all action
reasonably necessary to date to enable it to fulfill, when due, all of its
material obligations under all contracts, commitments and arrangements to which
it is a party. There are no defaults under any such contracts, commitments and
arrangements, and no events have occurred that, with the lapse of time or the
election of any other party, will become defaults by the Company. No breach or
default by any other party under such contracts, commitments or arrangements has
occurred or, to the Principal Stockholders' or the Company's knowledge, is
threatened that will or could impair the ability of the Company to enforce any
of its rights thereunder in any material respect.
2.13 TAXES. All federal, state and local income, franchise, excise, real
and personal property, employment and other material tax reports, returns,
declarations and information statements (collectively, the "Returns") required
to be filed in connection with the Company's business and operations have been
timely filed, all information included in such Returns is accurate in all
material respects and all taxes shown as payable by the Company on such Returns
have been paid when due, including, without limitation, income, withholding,
payroll, sales and use and real and personal property taxes. All Returns
covering periods through the fiscal year ended
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December 31, 1992, have been filed and adequate provisions for taxes (including
any penalties and interest) have been made on the books of the Company and on
the most recent Financial Statements. The Principal Stockholders and, to the
best knowledge of the Company and the Principal Stockholders, the other
stockholders of the Company have properly included, and paid, or received an
extension of time in accordance with applicable law for the filing of returns
relating to, all applicable taxes with respect to their distributive shares of
the Company's income in respect of such Returns. There are no pending tax
audits of the Company or any of its stockholders who own in excess of 2% of the
shares of Common Stock of the Company relating to the Company's business and
operations and neither the Company or any of its stockholders who own in excess
of 2% of the shares of Common Stock of the Company has given any waiver or
extension (that continues in effect) of any period of limitation governing the
time of assessment or collection of any such taxes, nor has the Company or any
of the Principal Stockholders received any notice of any proposed deficiency
relating to the Company's business and operations for any duty, tax, assessment
or governmental charge, and there are no pending claims with respect thereto.
2.14 EMPLOYEE BENEFIT PLANS.
(a) The Schedule of Significant Contracts sets forth a complete and
accurate list of each employee benefit plan within the meaning of Section 3(3)
of ERISA (the "ERISA Plans"), each compensation, consulting, employment or
collective bargaining agreement, and each stock option, stock purchase, stock
appreciation right, life, health, disability or other insurance or benefit,
bonus, deferred or incentive compensation, severance or separation, profit
sharing, retirement, or other employee benefit plan, practice, policy or
arrangement of any kind, oral or written, covering employees or former employees
of the Company which the Company or any ERISA Affiliate (as defined below) of
the Company maintains or contributes to (or maintained or contributed to since
January 1, 1987) or to which the Company or any ERISA Affiliate of the Company
is a party or by which it is otherwise bound (collectively, together with the
ERISA Plans, the "Benefit Plans"). No Benefit Plan is a "defined benefit plan"
(as defined in Section 414(j) of the Code). The term "ERISA Affiliate" shall
mean with respect to any person, any trade or business (whether or not
incorporated) which, (i) together with such person, is under "common control" as
described in Section 414(c) of the Code and the Consolidated Omnibus Budget
Reconciliation Act and regulations or interpretations thereunder, or (ii) is a
member of a "controlled group," as defined in Section 414(b) of the Code, which
includes such person.
(b) The Company has not entered into and does not maintain any Benefit
Plan which includes any change of control provisions which would cause an
increase or acceleration of benefits or benefit entitlements to employees or
former employees of the Company or any other increase in the liabilities of the
Company under such Benefit Plan as a result of the transactions contemplated by
this Agreement.
(c) Neither the Company nor any ERISA Affiliate of the Company maintains
or has ever maintained or participates or has ever participated in a
multiemployer plan within the meaning of Section 3(37) of ERISA. Neither the
Company nor any ERISA Affiliate of the Company nor any director or employee of
any of the foregoing, nor any fiduciary of any ERISA Plan has engaged in any
transaction in violation of Section 406 of ERISA or any "prohibited transaction"
(as defined in Section 4975(c)(1) of the Code) for which no exemption exists
under Section 408(b) of ERISA or Section 4975(d) of the Code in connection with
such ERISA Plan. Neither the Company nor any ERISA Affiliate of the Company
provides or has ever provided medical benefits to former employees, except as
required by Section 601 of ERISA.
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(d) Each ERISA Plan that is intended to qualify under Section 401 and
related provisions of the Code is the subject of a determination letter from the
Internal Revenue Service to the effect that it is so qualified under the Code
and that its related funding instrument is tax-exempt under Section 501 of the
Code.
(e) Except as provided in Schedule 2.14, each Benefit Plan is, and since
its inception, has been administered in material compliance with its terms and
with all applicable laws, rules and regulations governing such Benefit Plan,
including, without limitation, the rules and regulations promulgated by the
Department of Labor, the PBGC and the Internal Revenue Service under ERISA, the
Code or any other applicable law. None of the Company or any fiduciary with
respect to any Benefit Plan has breached any of the responsibilities,
obligations or duties imposed on it by ERISA.
(f) There is no litigation, claim or assessment pending or, to the best
knowledge of the Principal Stockholders and the Company, threatened by, on
behalf of, or against any of the Benefit Plans or against the administrators or
trustees or other fiduciaries of any of the Benefit Plans that alleges a
violation of applicable state or federal law. To the best knowledge of the
Principal Stockholders and Company, there is no basis for any such litigation,
claim or assessment.
(g) All accrued contributions and other payments to be made by the Company
to any Benefit Plan through the date hereof have been made or reserves adequate
for such purposes have been set aside therefor and reflected in the Financial
Statements. The Company is not in default in performing any of its contractual
obligations under any of the Benefit Plans or any related trust agreement or
insurance contract. There are no outstanding liabilities with respect to any
Benefit Plan other than liabilities for benefits to be paid to participants in
such Benefit Plan and their beneficiaries in accordance with the terms of such
Benefit Plan.
2.15 ENVIRONMENTAL LIABILITIES. The Company is in compliance in all
material respects with all applicable federal, state, county and municipal laws,
regulations, authorizations, licenses, approvals, permits and orders relating to
air, water, soil, solid waste management, Hazardous Substances (as defined
below), or the protection of health or the environment (collectively, the
"Environmental Laws"). There are no claims, actions, suits or proceedings
pending or, to the best knowledge of the Principal Stockholders and the Company,
threatened against, or involving, the Company under any of the Environmental
Laws (whether by reason of any failure to comply with any of the Environmental
Laws or otherwise). No decree, judgment or order of any kind under any of the
Environmental Laws has been entered against the Company. There has not been a
Release on any property owned or leased by the Company of any Hazardous
Substance, and neither the Company nor the Principal Stockholders has received
any notification from any governmental entity that as to any property owned or
leased by the Company or any business and activities conducted on any such
property, there exists or has occurred a violation of applicable environmental
laws or potential liability for Release of Hazardous Substances. For purposes
of this Section 2.15, "Hazardous Substance" shall mean a hazardous or toxic
substance (as defined under the Comprehensive Environmental Response,
Compensation and Liability Act, as amended) and petroleum, including crude oil
or any fraction thereof, but excluding underground crude oil in its natural
unrefined state, prior to its initial extraction, and "Release" shall mean any
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping or other disposal in any amount into or onto the
air, ground or surface water, land, or other parts of the environment, however
caused.
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2.16 NO MATERIAL ADVERSE CHANGES. Other than as specifically disclosed
in this Agreement, the Financial Statements, the schedules delivered pursuant to
this Agreement or the documents referred to in this Agreement as having been
delivered to NTC, or as otherwise heretofore disclosed in writing to NTC by the
Company, there has not occurred (1) any material adverse change since September
30, 1993 in the business, income, operations, assets, liabilities, financial
condition, or prospects of the Company, or (2) any condition (other than general
economic or competitive conditions), event, circumstance, fact, or other
occurrence, whether occurring before or since September 30, 1993 that may
reasonably be expected to have or result in such a material adverse change
(collectively, a "Company Material Adverse Change").
2.17 CONDUCT OF BUSINESS IN NORMAL COURSE. Since September 30, 1993, the
business of the Company has been conducted only in the ordinary and usual course
consistent with past practice and with the restrictions set forth in Section 4.1
(as though such restrictions had been in force and effect throughout such
period).
2.18 CHANGE IN BUSINESS RELATIONSHIPS. Neither the Company nor the
Principal Stockholders have notice or reason to believe, whether on account of
the transactions contemplated by this Agreement or otherwise, that (a) any
customer, agent, representative or supplier of the Company intends to
discontinue, diminish or change its relationship with the Company, the effect of
which would be material to the business of the Company, or (b) any executive
officer or key employee of the Company intends to terminate or substantially
alter the terms of his or her employment.
2.19 BROKERS' AND FINDERS' FEES. The Company has not incurred any
liability for brokerage commissions, finders' fees, or like compensation with
respect to the transactions contemplated hereunder.
2.20 NO OMISSIONS. None of the Statements of Essential Facts contained
in Article II and none of the representations, warranties and covenants of the
Company or the Principal Stockholders contained herein or in the schedules
provided for herein or in the Financial Statements is false or misleading in any
material respect or omits to state a fact herein or therein necessary to make
such statements not misleading in any material respect.
ARTICLE III
REPRESENTATION AND WARRANTIES OF NTC AND MERGER CO.
This Agreement is entered into by the Company and the Principal
Stockholders upon the understanding, and NTC and Merger Co. jointly and
severally represent and warrant, that the following statements are true and
correct on the date of this Agreement.
3.1 ORGANIZATION AND EXISTENCE OF NTC AND MERGER CO. NTC and Merger Co.
are corporations duly organized, validly existing and in good standing under the
laws of the State of Delaware. Each of NTC and Merger Co. has the corporate
power to own its own properties and to carry on its business as it is now being
conducted, and each is duly qualified and in good standing as a foreign
corporation in each jurisdiction where the location and character of its
properties and the business conducted by it require such qualification.
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3.2 CAPITALIZATION.
(a) The authorized capital stock of NTC consists of (a) 140,000,000
shares of common stock, par value $1.66 2/3 per share, of which 53,142,573
shares were issued and out-standing as of November 30, 1993, and (b) 10,000,000
shares of Preferred Stock, of which 51,200 shares are issued and outstanding;
(b) The authorized capital stock of Merger Co. consists of 1,000 shares of
common stock, par value $1.00 per share, all of which are issued and
outstanding and are owned of record and beneficially by NTC; and
(c) The shares of common stock of NTC deliverable pursuant to this
Agreement and the Merger Agreement will be duly authorized and, upon issuance
and delivery in accordance with the terms hereof and thereof, will be validly
issued, fully paid, and nonassessable, with no liability attaching to the
ownership thereof arising from NTC or Merger Co., and such shares will have been
registered under the Securities Act of 1933 (the "Securities Act") and approved
for listing on the NASDAQ National Market System.
3.3 AUTHORIZATION OF TRANSACTIONS AND AGREEMENTS. The execution,
delivery, and performance of this Agreement have been duly authorized by the
boards of directors of NTC and Merger Co. in accordance with their respective
certificates of incorporation and by-laws and governing statutes. This
Agreement constitutes, and the Merger Agreement will constitute, the legal,
valid and binding obligations of NTC and Merger Co., enforceable against each of
them in accordance with their respective terms. Approval thereof by the
stockholders of NTC is not required by law or by the rules of the National
Association of Securities Dealers, Inc. (the "NASD"). Both NTC and Merger Co.
have the corporate power to execute, deliver and perform this Agreement and the
Merger Agreement and to consummate the transactions herein and therein
contemplated, and such execution, delivery and performance do not violate any
provisions of the respective certificates of incorporation or by-laws of NTC or
Merger Co., or any agreement to which either NTC or Merger Co. is a party or by
which either NTC or Merger Co. is otherwise bound. Except for the regulatory
approval referred to in Section 4.4 hereof, approval of the sole stockholder of
Merger Co. referred to in Section 4.8 hereof, the registration of the offer and
sale of the common stock of NTC to be issued pursuant to the Merger under the
Securities Act, the registration or qualification of the common stock of NTC
under any applicable state securities or "blue sky" laws, and the filing with
the NASD of prior notice of the issuance of additional shares of common stock of
NTC, no consent of any governmental authority or other person is required to be
obtained, and no prior notice to any governmental authority or other person is
required to be given, by NTC or Merger Co. in order to permit consummation of
the Merger.
3.4 SEC FILINGS AND FINANCIAL STATEMENTS.
(a) NTC has heretofore delivered to the Company copies of NTC's (a) Annual
Report on Form 10-K for the fiscal year ended December 31, 1992, (ii) 1992
Annual Report to Shareholders, (iii) Quarterly Reports on Form 10-Q for the
fiscal quarters ended June 30, 1993 and September 30, 1993, and (iv) all other
reports, registration statements and other documents filed by NTC with the
Securities and Exchange Commission (the "Commission") since December 31, 1992
(collectively, the "NTC Filings"). Since December 31, 1992, NTC has timely
filed all reports, registration statements and other documents required to be
filed with the Commission under the rules and regulations of the Commission, and
all such reports, registration statements and other
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documents have complied in all material respects, as of their respective filing
dates and effective dates, as the case may be, with all applicable requirements
of the Securities Act or the Securities Exchange Act of 1934 (the "Exchange
Act"). As of their respective filing and effective dates, none of such reports,
registration statements or other documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) The audited consolidated financial statements and unaudited interim
financial statements of NTC contained or incorporated by reference in the NTC
Filings have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis, and, together with the notes thereto,
present fairly the consolidated financial position of NTC and its subsidiaries
at the dates shown and the consolidated results of their operations, changes in
stockholders' equity and cash flows for the periods then ended. The unaudited
interim financial statements as at, and for, the periods ending June 30, 1993
and September 30, 1993 include all adjustments necessary for a fair presentation
of the financial position of NTC and its subsidiaries and the results of their
respective operations for the interim periods presented, subject to normal,
recurring year-end adjustments and the omission of footnote disclosure.
3.5 BROKERS' AND FINDERS' FEES. Neither NTC nor Merger Co. has incurred
any brokerage commissions, finders' fees or like compensation with respect to
the transactions contemplated hereby.
3.6 NO ADVERSE CHANGES; CONDUCT OF BUSINESS IN NORMAL COURSE. Other than
as specifically disclosed in this Agreement, the NTC Filings or any other
documents referred to in this Agreement as having been delivered to the Company,
there has not occurred (1) any material adverse change since September 30, 1993
in the business, income, operations, assets, liabilities, financial condition or
prospects of NTC, or (2) any condition (other than general economic or
competitive conditions), event, circumstance, fact or other occurrence, whether
occurring before or since September 30, 1993, that may reasonably be expected to
have or result in such a material adverse change. Since September 30, 1993 the
business of NTC has been conducted only in the ordinary and usual course
consistent with past practice or in a manner approved by the appropriate
regulatory authorities.
ARTICLE IV
ADDITIONAL AGREEMENTS
4.1 CONDUCT OF BUSINESS. Except as otherwise contemplated in this
Agreement, the Company shall conduct its business in the usual and ordinary
course consistent with past practice. Without limiting the foregoing, except as
otherwise contemplated in this Agreement or with the prior written consent of
NTC, (a) no change shall be made in the certificate of incorporation or by-laws
of the Company; (b) no change shall be made in the capitalization of the Company
or in the number of issued and outstanding shares of the Company, except for any
Company repurchases of shares of Common Stock of the Company pursuant to the
terms of the Stockholder Agreement dated July 31, 1987, and for the issuance of
the Bonus Plan Shares; (c) the compensation or benefits of officers or key
employees of the Company shall not be increased and no bonuses shall be paid
except for normal and customary increases made or bonuses paid or accrued or
booked on or before September 30, 1993 in accordance with past practices; (d)
except
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for a normal year-end dividend of $880,000 in the aggregate, no dividends or
other distributions shall be declared or paid by the Company;(e) the Company
shall use its best efforts to maintain its present insurance coverage in respect
to its properties and business; (f) no significant changes shall be made in the
general nature of the business conducted by the Company; (g) no employment,
consulting, or other similar agreements shall be entered into by the Company
that are not terminable by the Company on 30 days' notice or less without
penalty or obligation, except for contracts with existing or new clients of the
Company and normal maintenance contracts of the Company entered into in the
ordinary course consistent with past practice; (h) the Company shall not take
any action that would result in a termination, partial termination, curtailment,
discontinuance of a Benefit Plan or merger of any Benefit Plan into another plan
or trust; (i) the stockholders owning in excess of 2% of the shares of Common
Stock of the Company shall file all Returns in a timely manner and shall not
make any application for or consent to any extension of time for filing any
Return or any extension of the period of limitations applicable thereto; (j) the
Company shall not make any expenditure for fixed assets in excess of $125,000
for any single item, or $500,000 in the aggregate, or enter into leases of fixed
assets having an annual rental in excess of $100,000; (k) the Company shall not
incur any liabilities or obligations, make any commitments or disbursements,
acquire or dispose of any property or asset, make any contract or agreement, or
engage in any transaction except in the ordinary course consistent with past
practices; (l) the Company shall not do or fail to do anything that will cause a
breach of, or default under, any contract, agreement, commitment, obligation,
appointment, plan, trust or other arrangement to which the Company is a party or
by which the Company is otherwise bound; and (m) no changes of a material nature
shall be made in the Company's accounting procedures, methods, policies or
practices or the manner in which the Company maintains its records.
4.2 ACCESS TO INFORMATION. To the extent permissible under law, the
Company and the Principal Stockholders shall (a) give NTC and its
representatives full access to further information (including, but not limited
to, records, files, correspondence, tax work papers and audit work papers) with
respect to the Company (but specifically excluding any individual tax returns of
the Company's stockholders); and (b) furnish to NTC and its representatives, as
soon as they become available, all month-end balance sheets and profit and loss
statements of the Company, internal and external audit reports of the Company
and such other reports relating to the Company that NTC may reasonably request.
NTC shall use such information solely for the purpose of conducting business,
legal and financial reviews of the Company and for such other purposes as may be
related to this Agreement. NTC shall maintain the confidentiality of all such
information (other than information which is in the public domain or otherwise
ascertainable from public or outside sources) except to the extent that
disclosure is required by judicial process or governmental or regulatory
authorities in which case NTC shall give the Company and the Principal
Stockholders prompt notice in order that they may seek to obtain a protective
order. Pending the Closing, representatives of NTC shall be given full access
to the Company's business activities and afforded the opportunity to observe its
business activities and consult with its directors and officers regarding the
same on an ongoing basis.
4.3 STOCKHOLDERS MEETING; PROXY STATEMENT. As soon as practicable after
the Registration Statement is declared effective, and in no event later than
March 7, 1994, the Company shall call and hold a special meeting of the
stockholders of the Company (the "Stockholders Meeting") to act upon and
consider the Merger and the Merger Agreement in accordance with the certificate
of incorporation and by-laws of the Company and applicable Delaware law. Prior
to the Stockholders Meeting, the Company will prepare and distribute to its
stockholders a definitive proxy statement (the "Proxy Statement") that will
comprise part of the Registration Statement (as defined
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in Section 4.5 hereof). The Proxy Statement shall contain (a) such information
as is required to be included in the Registration Statement and (b) such
additional information as NTC deems reasonably necessary so that the Proxy
Statement may be included as part of the Registration Statement. NTC shall
furnish to the Company such information relating to it and its affiliates and
the transactions contemplated in this Agreement and the Merger Agreement and
such further information as may be necessary or as may be reasonably requested
by the Company for use in the Proxy Statement. The Company shall furnish NTC
and its counsel with a copy of the Proxy Statement in advance of mailing and a
reasonable time prior to the proposed date on which the Registration Statement
is to be filed with the Commission, and the Company shall make such changes to
the Proxy Statement as NTC deems necessary to permit the Proxy Statement to be
included in the Registration Statement. The Company shall not mail or otherwise
furnish or publish to its stockholders any proxy solicitation material or other
material relating to the Merger or the Merger Agreement that might constitute a
"prospectus" within the meaning of the Securities Act other than the Proxy
Statement. The Company, acting through its board of directors, shall recommend
to the stockholders of the Company that they vote their shares in favor of the
Merger and the Merger Agreement and shall reflect such recommendation in the
Proxy Statement. The Company shall take all lawful action to solicit proxies
for and otherwise obtain stockholder approval of the Merger and Merger
Agreement. The Principal Stockholders agree to vote their shares in favor of
the Merger at the meeting and any adjournment thereof.
4.4 REGULATORY APPROVAL. NTC and Merger Co. will, as soon as
practicable, file with the Federal Reserve Board an application for, and use
their best efforts to obtain, approval of the transactions contemplated by this
Agreement and the Merger Agreement under the Bank Holding Company Act of 1956,
as amended, upon such terms and conditions as are satisfactory to NTC. The
Company and the Principal Stockholders shall cooperate fully in the process of
obtaining such approval.
4.5 REGISTRATION STATEMENT. As soon as reasonably practicable after the
date hereof, NTC shall prepare and file with the Commission a Registration
Statement registering under the Securities Act the offer and sale of the shares
of common stock of NTC to be issued in the Merger (the "Registration
Statement"). NTC shall use its best efforts to have the Registration Statement
declared effective and shall maintain such effectiveness until immediately after
the Effective Date. The Company shall cooperate with NTC in the preparation,
filing and process of securing the effectiveness of the Registration Statement
and shall furnish to NTC such information relating to it and its affiliates and
the transactions contemplated in this Agreement and the Merger Agreement and
such further and supplemental information as may be necessary or as may be
reasonably requested by NTC for use in the Registration Statement. NTC will use
its best efforts to obtain all necessary blue sky permits and approvals required
to permit the issuance of common stock of NTC in the Merger and to obtain
approval for listing the shares of common stock of NTC to be issued in the
Merger on the NASDAQ National Market System.
4.6 INFORMATION TO BE INCLUDED IN PROXY STATEMENT AND REGISTRATION
STATEMENT. None of the information furnished by NTC, Merger Co. or the Company
for inclusion in the Registration Statement, the Proxy Statement, or any other
document filed with the Commission or any state securities commission, at the
respective times at which such documents are filed with the Commission or such
state securities commission or, in the case of the Registration Statement, when
it becomes effective, or in the case of the Proxy Statement, when mailed or at
the time of the Stockholders Meeting, shall be false or misleading with respect
to any material fact or shall omit
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to state any material fact necessary in order to make the statements therein, in
light of the circumstances in which they were made, not misleading.
4.7 AFFILIATE LETTERS. The Company shall provide NTC with such
information as may be reasonably necessary to determine the identity of those
persons who may be deemed to be "affiliates" of the Company within the meaning
of Rule 145 (or any successor rule) promulgated by the Commission under the
Securities Act or within the meaning of Commission Staff Accounting Bulletin No.
65 (interpreting certain requirements for treating a business combination as a
pooling of interests) and a list of those persons whom the Company believes may
be deemed to be affiliates. Within 45 days of the execution of this Agreement,
the Company will obtain and deliver to NTC affiliate letters, substantially in
the form of Exhibit B to this Agreement, from each of the directors, principal
officers, or holders of five percent or more of the outstanding shares of the
Common Stock of the Company and from any persons who, in the opinion of counsel
for NTC, may be deemed to be affiliates within the meaning of Rule 145 or
Commission Staff Accounting Bulletin No. 65.
4.8 MERGER CO. STOCKHOLDER APPROVAL. NTC, as the owner of all of the
outstanding shares of capital stock of Merger Co., shall cause this Agreement,
the Merger Agreement and the transactions contemplated herein and therein to be
approved by the sole stockholder of Merger Co. in accordance with the laws of
the State of Delaware.
4.9 BOARD OF DIRECTORS' NOTICES AND MINUTES. To the extent permissible
under law, the Company shall promptly transmit to NTC copies of all notices,
minutes, consents and other materials that the Company provides to its
directors, except for legal advice and for deliberations and information as to
this proposed transaction. NTC agrees to hold all such information in
confidence and trust and to act in a fiduciary manner with respect to such
information.
4.10 BEST EFFORTS. The parties hereto shall use their best efforts in
good faith to satisfy the various conditions to Closing and to consummate the
Merger as soon as practicable. None of the parties hereto will intentionally
take or intentionally permit to be taken any action that would be in breach of
the terms or provisions of this Agreement or that would cause any of the
representations contained herein to be or become untrue.
4.11 SOFTWARE LICENSING AGREEMENT. In the event that notwithstanding
Section 4.10 hereof any of the various conditions to closing shall fail to be
satisfied by June 30, 1994 (or such later date agreed to by the Boards of
Directors of NTC and the Company) and provided such failure is not the result of
a Company Material Adverse Change, the parties will, in lieu of consummating the
Agreement upon the terms contemplated herein, enter into a Software Licensing
Agreement pursuant to which the Company will lease all of the software it uses
in the conduct of its business to NTC and will provide the expertise necessary
to operate such software for a period of five years from the date of such
agreement at an annual minimum cost of $1,500,000. During such period, the
parties will continue to use their best efforts to consummate the acquisition of
the Company by NTC upon mutually agreeable terms. In the event the parties
enter into a Software Licensing Agreement as described in this Section 4.11, the
Company will grant NTC a right of first refusal to acquire the Company in the
event it receives a third party acquisition offer upon terms substantially
similar to those set forth in such third party offer. NTC represents that it
needs no regulatory approval or other consent or authorization not already
obtained to enter into the Software Licensing Agreement.
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4.12 COMPANY OPTION. Notwithstanding Section 1.3 hereof, in the event
the Closing Date Value shall be less than $33 per share, the Company may elect
for the Company's stockholders to receive in the aggregate such number of shares
of NTC common stock as shall have a market value equal to $22,500,000, derived
by using a valuation of NTC's common stock of $33 per share. In the event the
Closing Date Value shall be more than $48 per share, the Company may elect for
the Company's stockholders to receive in the aggregate such number of shares of
NTC common stock as shall have a market value equal to $22,500,000, derived by
using the Closing Date Value, notwithstanding that it is in excess of $48 per
share.
4.13 BUSINESS RELATIONS AND PUBLICITY. The Company and the Principal
Stockholders will use their best efforts to preserve the reputation and
relationship of the Company with suppliers, clients, customers, employees, and
others having business relations with the Company. No press release or other
communication in connection with or relating to this Agreement or the
transactions contemplated hereby (other than communications with appropriate
regulatory authorities) shall be issued or made except as mutually agreed upon;
provided that NTC, after consultation with the Company and the Principal
Stockholders, may make such disclosures concerning the transactions provided for
herein as NTC believes are required by the Exchange Act.
4.14 NO CONDUCT INCONSISTENT WITH THIS AGREEMENT. The Company and the
Principal Stockholders shall not (a) offer or sell, or negotiate with or
entertain any proposals from any other person for any such offer or sale of, any
shares of the capital stock of the Company, or (b) negotiate with or entertain
any proposals from any other person for any other transaction wherein the
business or substantially all of the properties of the Company would be
acquired, directly or indirectly, by any party other than NTC or a subsidiary of
NTC, except, in each case, (i) upon the termination of this Agreement pursuant
to Section 8.3, (ii) with the prior written consent of NTC, or (iii) pursuant to
a written direction from any regulatory authority.
4.15 UNTRUE REPRESENTATIONS AND WARRANTIES. During the term of this
Agreement, if any party becomes aware of any facts or of the occurrence or
impending occurrence of an event which would cause one or more of the
representations and warranties of such party contained in this Agreement to be
or become untrue as of the Closing Date then:
(a) such party shall immediately give detailed written notice thereof to
the other party; and
(b) such party shall use reasonable efforts to change such facts or events
to make such representations and warranties true, unless the same shall have
been waived in writing by the other party.
4.16 INDEMNIFICATION BY STOCKHOLDERS. The Company will use its best
efforts to obtain by December 31, 1993 the signatures of stockholders of the
Company owning such number of shares as will, when added to the total number of
shares owned by the Principal Stockholders, equal at least 90% of the issued and
outstanding shares of Common Stock of the Company, committing such stockholders
to be bound by 7.2 hereof.
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ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF NTC AND MERGER CO.
Unless the conditions are waived by NTC or Merger Co., all obligations of
NTC and Merger Co. under this Agreement are subject to the fulfillment, on or
prior to the Closing, of each of the following conditions:
5.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. The
representations and warranties contained in Article II of this Agreement and any
representations or warranties of the Company and the Principal Stockholders
contained herein or in any documents, certificates, or schedules delivered by,
or on behalf of, the Company to NTC pursuant to this Agreement shall be true and
correct in all material respects at the Closing as though made on the Closing
Date, in each case to the reasonable satisfaction of NTC, and the Company and
the Principal Stockholders shall have performed all agreements herein required
to be performed by it on or prior to the Closing.
5.2 CLOSING CERTIFICATE. NTC shall have received a certificate signed by
the Principal Stockholders and the Chief Executive Officer of the Company and
dated as of the Closing Date, certifying in such detail as NTC may reasonably
request as to the fulfillment of the conditions to the obligations of NTC and
Merger Co. as set forth in this Agreement and required to be fulfilled by the
Company on or before the Closing.
5.3 REGULATORY APPROVALS. NTC and Merger Co. shall have duly obtained
the approval of the Federal Reserve Board referred to in Section 4.4 upon such
terms and conditions as are satisfactory to NTC, and there shall be no motion
for rehearing or appeal from such approval or commencement of any suit or action
seeking to enjoin the transactions provided for herein or to obtain substantial
damages in respect of them.
5.4 APPROVAL OF MERGER AND DELIVERY OF MERGER AGREEMENT. The Merger
Agreement and the transactions contemplated therein shall have been approved by
the vote of the stockholders of the Company at a meeting called and held in
accordance with the laws of the State of Delaware and the certificate of
incorporation and by-laws of the Company. The proper officers of the Company
shall have executed and delivered to Merger Co. copies of the Merger Agreement
and of the certificate of merger, in form suitable for filing with the Secretary
of State of the State of Delaware, and shall have executed and delivered all
such other certificates, statements, or instruments as may be necessary or
appropriate to effect such filings. Not more than 10% of the shares of the
Common Stock of the Company shall be subject to exercises of appraisal rights by
the holders thereof in accordance with Section 262 of the Delaware General
Corporation Law (the "DGCL").
5.5 EFFECTIVENESS OF THE REGISTRATION STATEMENT AND APPROVAL FOR LISTING.
The Registration Statement shall have become effective with respect to the
shares of common stock of NTC to be issued in the Merger, and no stop order
suspending the effectiveness of such Registration Statement shall have been
issued and no proceeding for that purpose shall have been instituted or
threatened.The shares of NTC common stock to be issued in the Merger shall have
been approved for listing on the NASDAQ National Market System.
5.6 NO LITIGATION. No suit or other action shall have been instituted or
threatened seeking to enjoin the consummation of the transactions contemplated
herein or in the
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Merger Agreement or to obtain other relief in connection with this Agreement,
the Merger Agreement or the transactions contemplated herein or therein that NTC
believes, in good faith and with the advice of counsel, makes it undesirable or
inadvisable to consummate the Merger by reason of the probability that the
proceeding would result in the issuance of an order enjoining the Merger or in a
determination that the Company has failed to comply with applicable legal
requirements of a material nature in connection with the Merger or actions
preparatory thereto or would have a material adverse effect on the future
conduct of the business of the Company.
5.7 AUDIT. NTC and Arthur Andersen & Co. shall have had an adequate
opportunity to conduct such a review or examination of the financial condition,
assets, liabilities, results of operation and business of the Company as NTC
shall deem prudent, and such review or examination shall not have disclosed
matters that are inconsistent in any material respect with the representations
and warranties of the Company and the Principal Stockholders contained in this
Agreement.
5.8 OPINION OF COUNSEL. NTC shall have received the opinion of Alston &
Bird, counsel for the Company, dated as of the Closing Date, and in form
satisfactory to NTC and its counsel, to the effect that:
(a) The Company is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Delaware, has the corporate power
to own its own properties and to carry on its business as it is now being
conducted, and is duly qualified and in good standing as a foreign corporation
in the States of Georgia and Washington. To the best knowledge of such counsel,
the Company has no subsidiaries.
(b) The authorized capital stock of the Company consists of 169,500 shares
of common stock, par value $0.0125 per share, of which 19,500 shares are
designated as Class A Common Stock, 16,350 of which are issued and outstanding,
and 150,000 shares are designated as Class B Common Stock, 85,351 of which are
issued and outstanding. The issued and outstanding shares of Common Stock of
the Company have been duly and validly authorized and issued, are fully paid and
nonassessable, and are free of preemptive rights. Except for rights of NTC and
Merger Co. under this Agreement, or matters disclosed herein, to the best
knowledge of such counsel, there are no options, agreements, contracts, or other
rights in existence to purchase or acquire from the Company any shares of
capital stock of the Company, whether now or hereafter authorized or issued.
(c) The execution, delivery and performance of this Agreement and the
Merger Agreement, and the transactions contemplated herein and therein, have
been duly authorized by the board of directors of the Company and, in the case
of the Merger Agreement, by the stockholders of the Company, these being the
only corporate authorizations required under the Company's certificate of
incorporation and by-laws and the laws of the State of Delaware. This Agreement
and the Merger Agreement constitute the legal, valid, and binding obligations of
the Company enforceable against the Company in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium,
or similar laws affecting creditors generally and to general principles of
equity.
(d) The execution, delivery and performance of this Agreement and the
Merger Agreement do not violate any provisions of the certificate of
incorporation or by-laws of the Company, any provision of applicable law or the
regulations thereunder or, to the best knowledge
-17-
of such counsel, any contract or agreement to which the Company is a party or by
which the Company is otherwise bound that would prohibit consummation of the
transactions contemplated by this Agreement and the Merger Agreement in the
manner herein and therein contemplated.
(e) To the best knowledge of such counsel, there are no claims, actions,
suits, or proceedings pending or threatened against the Company, at law or in
equity, or before any federal, state, municipal, or other governmental
authority, or before any arbitrator or arbitration panel, whether by contract or
otherwise, or any decrees, judgments, or orders of any kind in existence en-
joining or restraining the Company or any of its directors, officers, or
employees from taking action of any kind in connection with the business of the
Company.
(f) There are no actions, suits, or proceedings, pending or, to the best
knowledge of such counsel after reasonable investigation, threatened against the
Company to enjoin consummation of the Merger of the Company and Merger Co. or to
obtain other relief in connection with this Agreement or the transactions
contemplated hereby.
(g) No facts have come to the attention of such counsel that lead it to
believe that the Proxy Statement, at the time of mailing to the stockholders of
the Company, at the date of the Stockholders Meeting or at the time the
Registration Statement became effective, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
In rendering its opinion, such counsel may rely as to matters of fact upon
such certificates of the officers of the Company or governmental officials as
such counsel deems appropriate.
5.9 NO MATERIAL ADVERSE CHANGES. There shall not have occurred since the
date of this Agreement any Company Material Adverse Change.
5.10 POOLING OF INTERESTS COMFORT LETTER. NTC shall have received a
letter from Arthur Andersen & Co., in form satisfactory to NTC, approving the
accounting treatment of the Merger as a "pooling of interests" in accordance
with generally accepted accounting principles as of a date not more than five
business days prior to the Closing Date.
5.11 AFFILIATE LETTERS. Not later than 45 days following the date of
execution of this Agreement, NTC shall have received affiliate letters,
substantially in the form attached hereto as Exhibit B, from each of the
directors, principal officers, or holders of five percent or more of the
outstanding shares of the Common Stock of the Company and from any persons who,
in the opinion of counsel for NTC, may be deemed to be "affiliates" within the
meaning of Rule 145 under the Securities Act or Commission Staff Accounting
Bulletin No. 65, pursuant to which such affiliates shall agree, among other
things, not to make any sale, transfer or other disposition of (a) shares of
capital stock of the Company or NTC within 30 days prior to the Merger, and (b)
shares of common stock of NTC issued in the Merger prior to the publication by
NTC of the financial results of the combined operations of NTC and the Company
covering a period of at least 30 days after the Merger.
5.12 CONSENTS AND PERMISSIONS. The Company shall have obtained all such
written consents, permissions and approvals as are required under any
agreements, contracts,
-18-
appointments, indentures, plans, trusts or other arrangements with third parties
required to effect the transactions contemplated by this Agreement and the
Merger Agreement.
5.13 COMFORT LETTER. NTC shall have received from Price Waterhouse & Co.
"comfort letters" dated the date of mailing of the Proxy Statement and the
Effective Date, covering matters customary to transactions such as the Merger
and in form and substance reasonably satisfactory to NTC.
5.14 EMPLOYMENT AGREEMENTS. The Company shall have entered into
Employment Agreements with Messrs. James G. Pope, R. David Parsons, David M.
Gladstone, and any other person mutually agreed to by NTC and the Company,
substantially in the form attached hereto as Exhibit C and dated as of the
Closing Date. On the Closing Date, each of such persons shall each be active in
the management of the Company and capable of performing their duties under their
respective Employment Agreements.
5.15 STOCK OPTIONS AND STOCKHOLDERS AGREEMENT. All options, agreements,
contracts and other rights to purchase or acquire from the Company any shares of
capital stock of the Company that are unexercised as of the date of this
Agreement shall have been cancelled on terms satisfactory to NTC. The
Stockholders Agreement dated July 31, 1987 shall have been terminated to the
extent necessary to consummate the transactions contemplated hereby.
5.16 INDEMNIFICATION BY STOCKHOLDERS. The Company shall have obtained
the signatures of stockholders of the Company owning such number of shares as
will, when added to the total number of shares owned by the Principal
Stockholders, equal at least 90% of the issued and outstanding shares of Common
Stock of the Company, committing such stockholders to be bound by 7.2 hereof.
5.17 OTHER DOCUMENTS. NTC shall have received at the Closing such other
customary documents, certificates, or instruments as it may have reasonably
requested evidencing compliance by the Company and the Principal Stockholders
with the terms and conditions of this Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
COMPANY AND THE PRINCIPAL STOCKHOLDERS
Unless the conditions are waived by the Company and the Principal
Stockholders, all obligations of the Company and the Principal Stockholders
under this Agreement are subject to the fulfillment, on or prior to the Closing,
of each of the following conditions:
6.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. The
representations and warranties contained in Article III of this Agreement and
any representations or warranties of either NTC or Merger Co. contained herein
or in any documents, certificates, or schedules delivered by them or on their
behalf to the Company pursuant to this Agreement shall be true and correct in
all material respects at the Closing as though made on the Closing Date, in each
case to the reasonable satisfaction of the Company and the Principal
Stockholders, and NTC and Merger Co. shall have performed all agreements herein
required to be performed by them on or prior to the Closing.
-19-
6.2 CLOSING CERTIFICATE. The Company and the Principal Stockholders
shall have received certificates signed by the Chairman, President and Chief
Executive Officer, a Senior Executive Vice President, an Executive Vice
President or a Senior Vice President of NTC and by the President and any Vice
President of Merger Co., each dated as of the Closing Date, certifying in such
detail as the Company and the Principal Stockholders may reasonably request, as
to the ful-fillment of the conditions to the obligations of the Company and the
Principal Stockholders as set forth in this Agreement.
6.3 REGULATORY APPROVALS. NTC and Merger Co. shall have duly obtained
the approval of the Federal Reserve Board referred to in Section 4.4 and there
shall be no motion for rehearing or appeal from such approval or commencement of
any suit or action seeking to enjoin the transactions provided for herein or to
obtain substantial damages in respect of them.
6.4 APPROVAL OF MERGER AND DELIVERY OF MERGER AGREEMENT. The Merger
Agreement and the transactions contemplated therein shall have been approved by
the stockholders of the Company and the sole stockholder of Merger Co. in
accordance with the laws of the State of Delaware and the certificates of
incorporation and by-laws of the Company and Merger Co., respectively. The
proper officers of Merger Co. and, in the case of the Merger Agreement, NTC,
shall have executed and delivered to the Company, copies of the Merger Agreement
and the certificate of merger, in form suitable for filing with the Secretary of
State of the State of Delaware and shall have executed and delivered all such
other certificates, statements, or instruments as may be necessary or
appropriate to effect such a filing.
6.5 EFFECTIVENESS OF THE REGISTRATION STATEMENT AND APPROVAL FOR LISTING.
The Registration Statement shall have become effective with respect to the
shares of common stock of NTC to be issued in the Merger, and no stop order
suspending the effectiveness of such Registration Statement shall have been
issued and no proceeding for that purpose shall have been instituted or
threatened. The shares of NTC common stock to be issued in the Merger shall
have been approved for listing on the NASDAQ National Market System.
6.6 NO LITIGATION. No suit or other action shall have been instituted or
threatened seeking to enjoin the consummation of the transactions contemplated
hereby or to obtain other relief in connection with this Agreement or the
transactions contemplated hereby that the Company believes, in good faith and
with the advice of counsel, makes it undesirable or inadvisable to consummate
the Merger by reason of the probability that the proceeding would result in the
issuance of an order enjoining the Merger or in a determination that NTC or
Merger Co. has failed to comply with applicable legal requirements of a material
nature in connection with the Merger or actions preparatory thereto or would
have a material adverse effect on the future conduct of business of NTC, Merger
Co. or the Company.
6.7 OPINION OF COUNSEL. The Principal Stockholders and the Company shall
have received the opinion of Schiff Hardin & Waite, counsel for NTC, dated as of
the Closing Date, and in form satisfactory to the Principal Stockholders and the
Company and its counsel to the effect that:
(a) NTC and Merger Co. are corporations duly organized, validly existing
and in good standing under the laws of the State of Delaware. Each of NTC and
Merger Co. has the corporate power to own its own properties and to carry on its
business as it is now being conducted.
-20-
(b) The shares of common stock of NTC deliverable pursuant to this
Agreement and the Merger Agreement will be duly authorized and, upon issuance
and delivery in accordance with the terms hereof and thereof, will be validly
issued, fully paid, and nonassessable, with no liability attaching to the
ownership thereof arising from NTC or Merger Co., and such shares will have been
registered under the Securities Act.
(c) The execution, delivery and performance of this Agreement, the Merger
Agreement and the transactions contemplated herein and therein have been duly
authorized by the boards of directors of NTC and Merger Co. and by the sole
stockholder of Merger Co., these being the only corporate authorizations
required under NTC's or Merger Co.'s respective certificates of incorporation
and by-laws and the laws of the State of Delaware. This Agreement and the
Merger Agreement constitute the legal, valid, and binding obligations of NTC and
Merger Co. enforceable against each of them in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium,
or similar laws affecting creditors generally and to general principles of
equity.
(d) The execution, delivery and performance of this Agreement and the
Merger Agreement do not violate any provisions of the certificates of
incorporation or by-laws of NTC or Merger Co. or, to the best of such counsel's
knowledge after reasonable investigation, of any contract or agreement to which
NTC or Merger Co. is a party or by which either is otherwise bound that would
prohibit consummation of the transactions contemplated by this Agreement and the
Merger Agreement in the manner herein and therein contemplated.
(e) To the best knowledge of such counsel, there are no claims, actions,
suits, or proceedings, pending or threatened against NTC or Merger Co., at law
or in equity, or before any federal, state, municipal, or other governmental
authority, or any decrees, judgments, or orders of any kind that are in
existence enjoining or restraining NTC or Merger Co. or any of their respective
directors, officers, or employees from taking action of any kind in connection
with the transactions contemplated hereby.
(f) There are no actions, suits, or proceedings, pending or, to the best
knowledge of such counsel after reasonable investigation, threatened against NTC
or Merger Co., to enjoin consummation of the Merger or to obtain other relief in
connection with this Agreement, the Merger Agreement or the transactions
contemplated herein or therein.
(g) No facts have come to the attention of such counsel that lead it to
believe that the Registration Statement, at the time it became effective,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading.
In rendering its opinion, such counsel may rely as to any of the matters
listed above upon an opinion of the General Counsel of NTC, which shall be
addressed to and delivered to the Company and the Principal Stockholders at the
Closing, and may rely as to matters of fact upon such certificates of the
officers of NTC or governmental officials as such counsel deems appropriate.
6.8 TAX OPINION. The Company and the Principal Stockholders shall have
received the opinion of Alston & Bird to the effect that the Merger will
constitute a reorganization within the meaning of Section 368 of the Internal
Revenue Code and that no income, gain or loss will be recognized by the
stockholders of the Company to the extent that they receive solely
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common stock, which opinion shall be based on such written representations from
the Company and its advisors as Alston & Bird shall reasonably require as to
factual matters of the Company.
6.9 NO ADVERSE CHANGES. There shall not have occurred since the date of
this Agreement (a) any material adverse change in the business, income,
operations, assets, liabilities, financial condition, or prospects of NTC, or
(2) any condition (other than general economic or competitive conditions),
event, circumstances, fact, or other occurrence that may reasonably be expected
to have or result in such a material adverse change.
6.10 COMFORT LETTER. The Company shall have received from Arthur
Andersen & Co. "comfort letters" dated the date of mailing of the Proxy
Statement and the Effective Date, covering matters customary to transactions
such as the Merger and in form and substance reasonably satisfactory to the
Company.
6.11 EMPLOYMENT AGREEMENTS. The Company shall have entered into
Employment Agreements with Messrs. Pope, Parsons, Gladstone and any other person
mutually agreed to by NTC and the Company, substantially in the form attached
hereto as Exhibit C and dated as of the Closing Date. On the Closing Date, each
of such persons shall each be active in the management of the Company and
capable of performing their duties under their respective Employment Agreements.
6.12 OTHER DOCUMENTS. The Company and the Principal Stockholders shall
have received at the Closing all such other customary documents, certificates,
or instruments as it may have reasonably requested evidencing compliance by NTC
and Merger Co. with the terms and conditions of this Agreement.
ARTICLE VII
SURVIVAL OF REPRESENTATIONS AND INDEMNITY
7.1 SURVIVAL OF REPRESENTATIONS. All statements, representations,
warranties, and agreements made by the parties hereto shall survive the Closing
for a period of one year thereafter. Any investigation by any party to be
indemnified on account of breach or incorrectness of such statements,
representations, warranties and agreements shall not be a defense to a claim of
indemnification.
7.2 INDEMNIFICATION. The Principal Stockholders shall jointly and
severally (except as to Section 2.4 which is only given severally) indemnify NTC
and the Company against and hold them harmless from (1) any and all losses,
liabilities, claims, demands, deficiencies, causes of action, or suits (the
"Claims") arising out of or resulting from any breach or incorrectness of any of
the statements, representations, warranties, or agreements of the Company or the
Principal Stockholders contained in this Agreement or in any documents,
certificates, schedules, or exhibits delivered to NTC by it or them or on its or
their behalf, or (2) the reasonable expenses or costs incurred by NTC or the
Company, including reasonable attorneys fees, in connection with investigating,
attempting to correct, or defending against Claimsasserted against NTC or the
Company for which NTC or the Company is entitled to indemnity pursuant to the
foregoing provisions. NTC shall give prompt notice in writing to each of the
Principal Stockholders of the facts and circumstances giving rise to any Claims
by NTC for indemnification under this Section, and the Principal Stockholders
shall not be liable under this Section 7.2 unless a Claim has been
-22-
asserted by a written notice which is served on any of the Principal
Stockholders prior to the expiration of the applicable representation or
warranty as set forth in Section 7.1 hereof. Subject to the limitations of any
contract of insurance and such conditions as NTC shall determine to be
reasonably necessary for the protection of the interests of NTC and the Company,
NTC shall tender to the Principal Stockholders the opportunity to manage and
control any defense against any such Claim. The assumption of management and
control shall not, itself, constitute any admission by the Principal
Stockholders of liability to NTC or the Company or to any other entity. NTC and
the Company shall cooperate reasonably with the Principal Stockholders in the
conduct of any such defense. NTC and the Company agree to apply to any Claim
any insurance proceeds received by them and applicable to such Claim; provided
that nothing shall impair the right of NTC to proceed with an indemnification
claim as provided in this Article VII for the full amount of the Claim; provided
further that the Principal Stockholders will be reimbursed for any portion of
the Claim paid by them hereunder for which the Company subsequently receives
insurance proceeds. In the event a Claim hereunder results in a tax benefit to
the indemnified party, the indemnifying party shall be entitled to a credit
against any liability thereunder in the amount by which federal and state income
taxes of the indemnified party shall be reduced by reason of any deduction or
adjustment allowed the indemnified party for any payment, settlement or
satisfaction of such Claim; provided such tax benefit takes into account any
additional federal and state income taxes payable by the indemnified party in
respect of any indemnification payments hereunder. Notwithstanding anything to
the contrary contained in the foregoing, neither NTC nor the Company shall be
entitled to ndemnification under this Article VII until the aggregate amount of
liability suffered by NTC or the Company with respect to which NTC or the
Company is entitled to be indemnified under this Article VII exceeds $500,000,
whereupon NTC and the Company shall be entitled to indemnification hereunder for
the aggregate of all liabilities suffered in excess of $500,000. The obligation
of the Principal Stockholders to indemnify NTC or the Company pursuant to this
Section 7.2 shall not exceed in the aggregate $8,000,000.
7.3 INDEMNIFICATION. NTC shall indemnify the Principal Stockholders
against and hold them harmless from (1) any and all losses, liabilities, claims,
demands, deficiencies, causes of action, or suits (the "Claims") arising out of
or resulting from any breach or incorrectness of any of the statements,
representations, warranties, or agreements of NTC or Merger Co. contained in
this Agreement or in any documents, certificates, schedules, or exhibits
delivered to the Company and the Principal Stockholders by NTC or on its behalf,
or (2) the reasonable expenses or costs incurred by the Principal Stockholders,
including reasonable attorneys fees, in connection with investigating,
attempting to correct, or defending against Claimsasserted against the Principal
Stockholders for which the Principal Stockholders are entitled to indemnity
pursuant to the foregoing provisions. The Principal Stockholders shall give
prompt notice in writing to NTC of the facts and circumstances giving rise to
any Claims by the Principal Stockholders for indemnification under this Section
and NTC shall not be liable under this Section 7.3 unless a Claim has been
asserted by a written notice which is served on NTC prior to the expiration of
the applicable representation or warranty as set forth in Section 7.1 hereof.
Subject to the limitations of any contract of insurance and such conditions as
the Principal Stockholders shall determine to be reasonably necessary for the
protection of their interests, the Principal Stockholders shall tender to NTC
the opportunity to manage and control any defense against any such Claim. The
assumption of management and control shall not, itself, constitute any admission
by NTC of liability to their Principal Stockholders or to any other entity. The
Principal Stockholders shall cooperate reasonably with NTC in the conduct of any
such defense. The Principal Stockholders agree to apply to any Claim any
insurance proceeds received by them and applicable to such Claim; provided that
nothing shall impair the right of the Principal Stockholders to proceed with an
indemnification claim
-23-
as provided in this Article VII for the full amount of the Claim; provided
further that NTC will be reimbursed for any portion of the Claim paid by it
hereunder for which any of the Principal Stockholders subsequently receives
insurance proceeds. In the event a Claim hereunder results in a tax benefit to
the indemnified party, the indemnifying party shall be entitled to a credit
against any liability thereunder in the amount by which federal and state income
taxes of the indemnified party shall be reduced by reason of any deduction or
adjustment allowed the indemnified party for any payment, settlement or
satisfaction of such Claim; provided such tax benefit takes into account any
additional federal and state income taxes payable by the indemnified party in
respect of any indemnification payments hereunder. Notwithstanding anything to
the contrary contained in the foregoing, the Principal Stockholders shall not be
entitled to indemnification under this Article VII until the aggregate amount of
liability suffered by the Principal Stockholders with respect to which the
Principal Stockholders are entitled to be indemnified under this Article VII
exceeds $500,000, whereupon the Principal Stockholders shall be entitled to
indemnification hereunder for the aggregate of all liabilities suffered in
excess of $500,000. The obligation of NTC to indemnify the Principal
Stockholders pursuant to this Section 7.3 shall not exceed in the aggregate
$8,000,000.
ARTICLE VIII
GENERAL
8.1 FURTHER ASSURANCES. The parties hereto agree that at any time and
from time to time after the Closing each party will cause to be executed and
delivered to the other party such further instruments or documents as any other
party may reasonably require to give effect to the transactions contemplated
hereunder.
8.2 EXPENSES. The parties hereto shall each bear their respective costs
and expenses incurred in the consummation of this transaction.
8.3 TERMINATION. This Agreement may be terminated (a) at any time by
written agreement among NTC, the Principal Stockholders and the Company, (b)
automatically if the Closing has not occurred by June 30, 1994 (or such later
date agreed to by the boards of directors of NTC and the Company), as a result
of the failure to satisfy any conditions to NTC's obligation to close, which
failure is the result of a Company Material Adverse Change, (c) automatically
upon the parties entering into a Software Licensing Agreement as contemplated by
Section 4.11 hereof, (d) subject to Section 4.12 hereof, by the Company if the
Closing Date Value of the common stock of NTC shall be less than $33 per share,
and (e) subject to Section 4.12 hereof, by NTC if the Closing Date Value of the
common stock of NTC shall be greater than $48 per share. Termination of this
Agreement shall not serve to relieve a party of responsibility or obligation, if
any, for any breaches of this Agreement occurring prior to such termination.
Any termination of this Agreement under this Section 8.3 shall not affect any
rights accrued prior to such termination.
8.4 CONFIDENTIAL INFORMATION. The parties hereto each covenant that, in
the event the transactions contemplated by this Agreement are not consummated,
each such party will keep in strict confidence and return all documents
containing any information concerning the properties, business, and assets of
each other party that may have been obtained in the course of negotiations or
examination of the affairs of each other party either prior or subsequent to the
execution of this Agreement (other than such information as shall be in the
public domain or other-wise ascertainable from public or outside sources),
except to the extent that disclosure is required by judicial process or
governmental or regulatory authorities.
-24-
8.5 NON-ASSIGNMENT. This Agreement shall not be assignable by any party
without the written consent of the other parties. Notwithstanding the
foregoing, NTC or Merger Co. may assign its rights hereunder to a wholly-owned
subsidiary or affiliate of NTC, but no such assignment shall relieve NTC of any
of its obligations hereunder. Subject to the foregoing, this Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the parties hereto.
8.6 NOTICES. All notices, requests, demands, and other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been given (a) when delivered in person, (b) on the business day in which it is
sent and received by facsimile, (c) the third business day after being deposited
in the United States mail, registered or certified mail (return receipt
requested), or (d) the first business day after being deposited with Federal
Express or any other recognized national overnight courier service, in each case
addressed as follows:
(i) If to the Company or the Principal Stockholders addressed to:
Hazlehurst & Associates, Inc.
400 Perimeter Center Terrace
Suite 850
Atlanta, Georgia 30346
Attention: James G. Pope, President
Telecopy: (404) 512-6230
with a copy to:
Alston & Bird
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3429
Attention: Alex Patterson
Telecopy: (404) 881-7777
(ii) If to NTC or Merger Co., addressed to:
NORTHERN TRUST CORPORATION
50 South LaSalle Street
Chicago, Illinois 60675
Attention: Peter L. Rossiter
Executive Vice President, General Counsel and
Secretary
Telecopy: (312) 630-1596
-25-
with a copy to:
Gary L. Mowder
SCHIFF HARDIN & WAITE
7200 Sears Tower
Chicago, Illinois 60606
Telecopy: (312) 258-5600
8.7 SPECIFIC PERFORMANCE. The parties agree that there is no adequate
remedy at law for breach of the obligations contained in this Agreement and
agree that such obligations shall be enforceable by specific performance and
injunctive relief, without the need to post bond, in the event of such breach.
8.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts with the same effect as if the signatures to each counterpart were
upon the same instrument.
8.9 ENTIRE AGREEMENT. This Agreement, the schedules and agreements
delivered pursuant hereto set forth the entire understanding of the parties and
supersede all prior agreements, arrangements, and communications, whether oral
or written, and this Agreement shall not be modified or amended other than by
written agreement of the parties hereto. Captions appearing in this Agreement
are for convenience only and shall not be deemed to explain, limit, or amplify
the provisions hereof.
8.10 SEVERABILITY. In the event that a court of competent jurisdiction
shall finally determine that any provision of this Agreement or any portion
thereof is unlawful or unenforceable, such provision or portion thereof shall be
deemed to be severed from this Agreement, and every other provision and portion
thereof that is not invalidated by such determination shall remain in full force
and effect. To the extent that a provision is deemed unenforceable by virtue of
its scope but may be made enforceable by limitation thereof, such provision
shall be enforceable to the fullest extent permitted under the laws and public
policies of the state whose laws are deemed to govern enforceability.
8.11 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to the
conflicts of laws principles thereof.
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IN WITNESS WHEREOF, Northern Trust Corporation, Hazlehurst Merger
Corporation, Hazlehurst & Associates, Inc. and the Principal Stockholders have
executed this Agreement and Plan of Reorganization as of the day and year first
written above.
NORTHERN TRUST CORPORATION HAZLEHURST & ASSOCIATES, INC.
a Delaware Corporation a Delaware Corporation
By: /s/ William A. Osborne By: /s/ James G. Pope
------------------------- ----------------------------
Title: President Title: President
---------------------- -------------------------
HAZLEHURST MERGER CORPORATION
a Delaware Corporation
By: /s/ Jeffrey H. Wessel
-------------------------
Title: President
----------------------
PRINCIPAL STOCKHOLDERS OF NUMBER OF SHARES OWNED
HAZLEHURST & ASSOCIATES, INC.
/s/ David M. Gladstone 26,490
---------------------------- ------------
David M. Gladstone
/s/ R. David Parsons 26,490
---------------------------- ------------
R. David Parsons
/s/ James G. Pope 26,490
---------------------------- ------------
James G. Pope
ADDITIONAL SIGNATURE PAGE FOR AGREEMENT AND PLAN OF
REORGANIZATION DATED AS OF DECEMBER 12, 1993
The undersigned stockholders of the Company are executing this Agreement and
Plan of Reorganization for the sole purpose of stating their agreement to be
liable under and bound by Section 7.2 hereof as though they were also Principal
Stockholders, and further each of the undersigned represents that he is the
owner of the number of shares of the Company set forth beneath his signature.
/s/ T. Ray McKinney
-------------------------
T. RAY MCKINNEY
No. Shares Owned: 5401
----
Address: 8420 Lazy Oaks Court
Dunwoody, Georgia 30350
/s/ Cynthia Jeness
-------------------------
CYNTHIA JENESS
No. Shares Owned: 5300
----
Address: 329 Robin Hood Road
Atlanta, Georgia 30309
/s/ Barry J. Young
-------------------------
BARRY J. YOUNG
No. Shares Owned: 2000
----
Address: 5546 Asheforde Way
Marietta, Georgia 30068
/s/ Joe W. Sullivan, Jr.
-------------------------
JOE W. SULLIVAN, JR.
No. Shares Owned: 1167
----
Address: 457 Michael Drive
Alpharetta, Georgia 30201
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
NORTHERN TRUST CORPORATION
HAZLEHURST MERGER CORPORATION
AND
HAZLEHURST & ASSOCIATES, INC.
AGREEMENT AND PLAN OF MERGER (hereinafter called this "Merger Agreement"),
dated as of ___________, 1994, by and among Northern Trust Corporation, a
Delaware corporation ("NTC"), Hazlehurst Merger Corporation, a Delaware
corporation, the shares of which are all owned directly or indirectly by NTC
("Merger Co."), and Hazlehurst & Associates, Inc., a Delaware corporation (the
"Company") (Merger Co. and the Company sometimes being hereinafter collectively
referred to as the "Constituent Corporations").
RECITALS
WHEREAS, the respective Boards of Directors of NTC, Merger Co., and the
Company deem the merger of the Merger Co. with and into the Company as provided
herein (the "Merger") and in an Agreement and Plan of Reorganization dated as of
December 12, 1993, among the parties hereto and certain stockholders of the
Company (the "Reorganization Agreement") advisable and in the best interests of
their respective corporations and stockholders; and the respective Boards of
Directors of NTC, Merger Co. and the Company, by resolutions duly adopted, have
approved this Merger Agreement and the Merger, and the Company has directed that
it be submitted to its stockholders for adoption; and
WHEREAS, the parties hereto desire and intend that the Merger qualify as a
reorganization in accordance with Sections 368(a)(1)(A) and 368(a)(2)(E) of the
Internal Revenue Code of 1986, as amended.
AGREEMENTS
NOW, THEREFORE, in order to prescribe (a) the terms and conditions of the
Merger, (b) the mode of carrying the same into effect, (c) the manner and basis
of converting and exchanging the shares of common stock, par value $0.0125 per
share, of the Company (the "Company Common Stock") into and for shares of common
stock, par value $1.662/3 per share, of NTC ("NTC Common Stock"), and (d) such
other details and provisions as are deemed necessary or desirable; and in
consideration of the premises and the mutual covenants and agreements herein
contained, the parties hereto hereby agree, subject to the terms and conditions
hereinafter set forth, as follows:
ARTICLE I
THE MERGER; EFFECTIVE TIME
1.1 The Merger. Subject to the terms and conditions of the Reorganization
Agreement, at the Effective Time (as defined in Section 1.2) Merger Co. shall be
merged with and into the Company and the separate corporate existence of Merger
Co. shall thereupon cease. The
Company shall be the surviving corporation in the Merger (sometimes hereinafter
referred to as the "Surviving Corporation") and shall continue to be governed by
the laws of the State of Delaware, and the separate corporate existence of the
Company with all its rights, privileges, immunities and franchises shall
continue unaffected by the Merger. The Merger shall have the effects specified
in the General Corporation Law of the State of Delaware (the "DGCL").
1.2 Effective Time. The effective time of the Merger (the "Effective
Time") shall be the time and date on which a certificate of merger meeting the
requirements of Section 252 of the DGCL is filed with the Secretary of State of
the State of Delaware which filing shall take place as soon as practicable
following fulfillment or waiver of the conditions specified in the
Reorganization Agreement.
1.3 Subsequent Actions. If, at any time after the Effective 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 Merger 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, 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 or under
such rights, properties or assets in the Surviving Corporation or otherwise to
carry out this Merger Agreement.
ARTICLE II
CERTIFICATE OF INCORPORATION AND BY-LAWS
OF THE SURVIVING CORPORATION
2.1 Certificate of Incorporation. The Certificate of Incorporation of the
Company, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation, until duly amended in
accordance with the terms thereof and the DGCL.
2.2 By-Laws. The By-laws of Merger Co., as in effect immediately prior to
the Effective Time, shall be the By-Laws of the Surviving Corporation until duly
amended in accordance with the terms thereof and the DGCL.
ARTICLE III
OFFICERS AND DIRECTORS
OF THE SURVIVING CORPORATION
3.1 Directors. The directors of Merger Co. immediately prior to the
Effective Time, and Mr. James G. Pope, shall be, from and after the Effective
Time, the directors of the Surviving Corporation until their respective
successors shall have been duly elected or appointed and qualified or until
their earlier death, resignation or removal in accordance with the Surviving
Corporation's Certificate of Incorporation and By-Laws.
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3.2 Officers. The officers of the Company immediately prior to the
Effective Time, and Dennis Sain, shall be, from and after the Effective Time,
the officers of the Surviving Corporation until their respective successors
shall have been duly elected or appointed and qualified or until their earlier
death, resignation or removal in accordance with the Surviving Corporation's
Certificate of Incorporation and By-Laws.
ARTICLE IV
CONVERSION OR CANCELLATION OF
SHARES IN THE MERGER
4.1 Conversion or Cancellation of Shares. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
share of common stock, par value $1.00 per share, of Merger Co. (the "Merger Co.
Common Stock") or any share of Company Common Stock, the following shall occur:
(a) Each issued and outstanding share of Merger Co. Common Stock shall at
the Effective Time be converted into one share of stock, par value $.0125 per
share, of the Surviving Corporation.
(b) All validly issued and outstanding shares of Company Common Stock at
the Effective Time shall be converted, by virtue of the Merger, into the
right to receive such number of shares of NTC Common Stock as shall have a
market value equal to $22,500,000 determined on the basis of the unweighted
average of the last-sale prices for the NTC Common Stock, as reported by the
National Association of Securities Dealers Automated Quotation System for the
twenty (20) trading days ending on the fifth trading day preceding the
Effective Time (the "Closing Date Value"), but not more than 681,818 nor
fewer than 468,750 shares (unless the Company shall so elect pursuant to
Section 4.12 of the Reorganization Agreement) of NTC Common Stock (before
giving effect to the payment of cash in lieu of fractional shares or to any
reduction in the number of shares issuable in the Merger as a result of
appraisal rights). Each share of Company Common Stock shall be converted
into the right to receive that number of shares of NTC Common Stock equal to
the quotient obtained by dividing the total number of shares of NTC Common
Stock issuable in the Merger, determined in accordance with the preceding
sentence, by the total number of shares of Company Common Stock outstanding
as of the Effective Time. Any holder of shares of Company Common Stock who
is entitled under this paragraph to receive a fraction of a share of NTC
Common Stock shall receive in lieu thereof cash in an amount equal to the
product obtained by multiplying such fraction times the Closing Date Value.
Notwithstanding the foregoing and subject to Section 4.12 of the
Reorganization Agreement, the Merger may be abandoned by the Company if the
Closing Date Value of the NTC Common Stock is less than $33 per share, and
the Merger may be abandoned by NTC if the Closing Date Value of the NTC
Common Stock is greater than $48 per share.
(c) Each share of Company Common Stock held by the Company as treasury
stock shall be canceled and shall cease to exist, and no consideration
shall be paid or delivered in exchange thereof under this Merger
Agreement; and
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(d) Each issued and outstanding share of Company Common Stock, the holders
of which have validly demanded appraisal rights pursuant to Section 262 of
the DGCL ("Section 262"), and shall not have effectively withdrawn or lost
such right to receive an appraisal of his or her shares of Company Common
Stock, shall not be converted into or represent a right to receive the
consideration hereunder, but the holder thereof shall be entitled only to
such rights as are granted by Section 262. Each stockholder who becomes
entitled, pursuant to the provisions of Section 262, to payment for his or
her shares of Company Common Stock, shall receive payment therefor from the
Surviving Corporation (but only after the amount thereof shall have been
agreed upon or finally determined pursuant to such provisions), and such
Company Common Stock shall be canceled.
(e) If any holder of shares of Company Common Stock who demands appraisal
under Section 262 shall effectively withdraw or lose (through failure to
perfect or otherwise) his or her appraisal rights at or prior to the vote on
this Merger Agreement taken at the special meeting of the Company's
stockholders to be called for such purpose each such share of Company Common
Stock shall be converted into the consideration hereinabove provided.
ARTICLE V
SURRENDER OF AND PAYMENT FOR SHARES
OF COMPANY COMMON STOCK
5.1 At or prior to the end of the first business day after the day of the
Effective Time, the Company shall deliver to NTC a list setting forth all
holders of record of the Company Common Stock (the "Final Stockholder List").
As soon as practicable after receipt of the Final Stockholder List, an exchange
agent to be appointed by NTC (the "Exchange Agent") shall send or cause to be
sent to each holder of record of each certificate (each "Company Certificate")
evidencing shares of Company Common Stock, other than shares of Company Common
Stock which are to be canceled pursuant to Section 4.1(c) or this Merger
Agreement or of which the holder has asserted dissenters' rights pursuant to
Section 262, (i) a form letter of transmittal which shall specify that delivery
shall be effected, and risk of loss of, and title to, each Company Certificate
shall pass, only upon delivery of such Company Certificate (or of a lost
certificate affidavit in a form reasonably acceptable to NTC) to the Exchange
Agent, and (ii) instructions for use in effecting the surrender of such Company
Certificates in exchange for certificates evidencing the number of shares of NTC
Common Stock and cash in lieu of fractional shares, if any, to which the holder
of a Company Certificate is entitled under Section 4.1(b) of this Merger
Agreement. Upon surrender of each Company Certificate to the Exchange Agent for
cancellation (or receipt by the Exchange Agent of a lost certificate bond in a
form reasonably acceptable to NTC), together with a duly executed copy of the
letter of transmittal, the holder of each Company Certificate shall be entitled
to receive in exchange therefor cash in lieu of fractional shares, if any, and a
certificate or certificates evidencing the number of shares of NTC Common Stock
to which the holder of such Company Certificate is entitled under Section 4.1(b)
of this Merger Agreement, and each Company Certificate so surrendered shall
forthwith be canceled. All payments of cash shall be made by check drawn to the
order of the holder of record or other person specified in the letter of
transmittal in accordance with the requirements thereof.
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5.2 Until a Company Certificate is surrendered and exchanged, each such
outstanding Company Certificate shall for all purposes evidence the right to
receive the number of shares of NTC Common Stock and cash in lieu of fractional
shares, if any, to which the holder of such Company Certificate is entitled
under Section 4.1(b) of this Merger Agreement. Whenever a dividend is declared
by NTC on NTC Common Stock after the Effective Time, the declaration shall
include dividends on all shares of NTC Common Stock issuable under this Merger
Agreement but no former stockholder of the Company will be entitled to receive
his or her distribution of such dividends until physical exchange of his or her
Company Certificates pursuant to Article V of this Merger Agreement shall have
been effected. Upon physical exchange of his or her Company Certificate, any
such person shall be entitled to receive from NTC an amount equal to all such
dividends (without interest thereon and less the amount of taxes, if any, which
may have been imposed or paid thereon) declared, and for which the payment has
occurred, on the shares of NTC Common Stock issued in exchange for the shares of
Company Common Stock evidenced by such Company Certificate, subject to any
applicable abandoned property or similar laws.
5.3 As of the Effective Time, there shall be no further registration or
transfers on the stock transfer books of the Company of those shares of Company
Common Stock which were outstanding immediately prior to the Effective Time.
If, after the Effective Time, Company Certificates representing such shares are
presented to NTC or the Surviving Corporation, such Company Certificates shall
be canceled and exchanged for certificates representing shares of NTC Common
Stock and any cash in lieu of fractional shares as provided in this Merger
Agreement.
5.4 If any certificates representing shares of NTC Common Stock are to be
issued in the name of, or any cash in lieu of fractional shares is to be paid
to, a person (the "Transferee") other than the holder of record of the Company
Certificate surrendered in exchange therefor, it shall be a condition of the
issuance or payment thereof that the Company Certificate so surrendered shall be
properly endorsed, accompanied by any documents required to evidence and effect
the transfer of the Company Common Stock to the Transferee and otherwise be in
proper form for such transfer, and that the person requesting such exchange
shall pay to the Exchange Agent any transfer or other taxes required by reason
of such transfer or shall establish to the satisfaction of the Exchange Agent
that such tax has been paid or is not applicable.
ARTICLE VI
TERMINATION
6.1 Automatic Termination. This Agreement shall be automatically
terminated if the Reorganization Agreement is validly terminated pursuant to the
provisions thereof. This Agreement may not be terminated except in accordance
with the foregoing sentence.
6.2 Effect of Termination. If terminated as provided in Section 6.1, this
Agreement shall forthwith become wholly void and of no further force and effect.
ARTICLE VII
MISCELLANEOUS
7.1 Modification or Amendment. Subject to the applicable provisions of
the DGCL and the provisions of the Reorganization Agreement, the parties hereto
may modify or
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amend this Merger Agreement, by written agreement executed and delivered by duly
authorized officers of the respective parties.
7.2 Counterparts. For the convenience of the parties hereto, this Merger
Agreement may be executed in any number of counterparts, each such counterpart
being deemed to be an original instrument, and all such counterparts shall
together constitute the same agreement.
7.3 Governing Law. This Merger Agreement shall be governed by, and
construed and enforced in accordance with, the internal laws of the State of
Delaware without giving effect to the conflict of laws principles thereof.
IN WITNESS WHEREOF, this Merger Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto on the date
first hereinabove written.
NORTHERN TRUST CORPORATION
ATTEST:
By: ____________________________
________________________________
HAZLEHURST MERGER CORPORATION
ATTEST:
By: ____________________________
________________________________
HAZLEHURST & ASSOCIATES, INC.
ATTEST:
By: _____________________________
________________________________
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EXHIBIT B
[FORM OF AFFILIATE LETTER]
_______________, 1994
Northern Trust Corporation
50 South LaSalle Street
Chicago, IL 60675
Ladies and Gentlemen:
Reference is made to the Agreement and Plan of Reorganization dated as of
December ___, 1993, by and among Northern Trust Corporation, a Delaware
corporation ("NTC"), Hazlehurst Merger Corporation, a Delaware corporation
("Merger Co."), and Hazlehurst & Associates, Inc., a Delaware corporation (the
"Company"), which provides that Merger Co. will be merged with and into the
Company (the "Merger") and the outstanding shares of common stock of the Company
("Company Common Stock") will be converted into shares of common stock of NTC
("NTC Common Stock").
The undersigned has been advised that the issuance of shares of NTC Common
Stock to the undersigned in connection with the Merger will be registered with
the Securities and Exchange Commission (the "SEC") under the Securities Act of
1933, as amended (the "Securities Act"), on a Registration Statement on Form S-4
and that such registration will not cover any resale or other disposition of NTC
Common Stock. The undersigned also has been advised that the undersigned may be
deemed to be an affiliate of the Company within the meaning of Rule 145 of the
rules and regulations of the SEC under the Securities Act and that the shares of
NTC Common Stock acquired by the undersigned in connection with the Merger may
only be disposed of in conformity with the provisions hereof.
The undersigned represents and warrants to and agrees with NTC as follows:
(a) The undersigned shall not sell, exchange, transfer or otherwise
dispose of any shares of NTC Common Stock received in the Merger except (i)
at such time as a registration statement under the Securities Act covering
sales of such NTC Common Stock is effective, (ii) within the limits, and in
accordance with the applicable provisions of, Rule 145 under the Securities
Act, or (iii) in a transaction which, in the opinion of counsel
satisfactory to NTC or as described in a "no-action" or interpretive letter
from the staff of the SEC, is not required to be registered under the
Securities Act. The undersigned acknowledges and agrees that NTC is under
no obligation to register the sale, transfer or other disposition of NTC
Common Stock by the undersigned or on his or her behalf, or to take any
other action necessary to make an exemption from registration available.
B-1
Northern Trust Corporation
________________, 1994
Page 2
(b) Notwithstanding the foregoing, the undersigned shall not sell, or in
any other way reduce his or her risk relative to, any shares of Company
Common Stock or of NTC Common Stock during the period commencing thirty
days prior to the effective date of the Merger and ending on the date on
which financial results covering at least thirty days of post-Merger
combined operations of NTC and the Company have been published within the
meaning of Section 201.01 of the SEC's Codification of Financial Reporting
Policies.
(c) NTC shall not be bound by any attempted sale of any shares of NTC
Common Stock by the undersigned, and NTC's transfer agent shall be given an
appropriate stop transfer order and shall not be required to register any
such attempted sale, unless the sale has been effected in compliance with
the terms of this Letter Agreement. There will be placed on the
certificate representing the shares of NTC Common Stock issued to the
undersigned in the Merger, or any substitutions therefor, a restrictive
legend stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS
OF RULE 145(d), PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT
COMPLIANCE WITH SAID RULE AND SECURITIES EXCHANGE COMMISSION ACCOUNTING
RELEASES 130 AND 135."
(d) The provisions of paragraphs (a), (b) and (c) hereof shall also
apply to any securities which may be paid as a dividend or otherwise
distributed on or with respect to, or issued or delivered in exchange or
substitution for, shares of NTC Common Stock received in the Merger by the
undersigned.
(e) The undersigned has the capacity to enter into this Letter
Agreement and to make the representations, warranties and agreements
herein, and to perform the obligations of the undersigned hereunder. This
Letter Agreement constitutes a valid and binding obligation of the
undersigned, enforceable against the undersigned in accordance with its
terms. This Letter Agreement shall be binding upon, and enforceable
against, administrators, executors, personal representatives, heirs,
legatees and devisees of the undersigned, and any pledgee holding as
collateral any shares of NTC Common Stock issued to the undersigned in the
Merger.
NTC agrees that the stop transfer instructions and legend referred to in
paragraph (c) hereof will be promptly removed upon (i) the sale, exchange,
transfer or other disposition of the NTC Common Stock received in the Merger in
full compliance with the provisions of this Letter Agreement or (ii) two years
after the date hereof, provided that, in the latter case, the undersigned is not
an affiliate of NTC. NTC further agrees that, promptly after publication of the
financial
B-2
Northern Trust Corporation
________________, 1994
Page 3
results referred to in paragraph (b) above, the portion of such legend
referencing Accounting Series Releases 130 and 135 shall be removed.
This Letter Agreement shall terminate concurrently with any termination of
the Agreement in accordance with its terms.
Very truly yours,
______________________________
[Name]
Agreed to and accepted this
___ day of ___________, 1994.
NORTHERN TRUST CORPORATION
By: ___________________________
Title: ________________________
B-3