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AGREEMENT AND PLAN OF MERGER
AMONG
PETROFINA S.A.,
PETROFINA DELAWARE, INCORPORATED,
NEW FINA, INC.
AND
FINA, INC.
Dated as of February 17, 1998
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TABLE OF CONTENTS
Page
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ARTICLE I
THE MERGER; CLOSING......................................................................................2
1.1 The Merger.............................................................................2
1.2 Effective Time.........................................................................2
1.3 Time and Place of Closing..............................................................2
1.4 Effect of the Merger...................................................................2
ARTICLE II
THE SURVIVING CORPORATION................................................................................2
2.1 Certificate of Incorporation. ........................................................2
2.2 By-laws. ..............................................................................3
2.3 Directors and Officers.................................................................3
ARTICLE III
CONVERSION OF SECURITIES; EXCHANGE.......................................................................3
3.1 Conversion of Securities...............................................................3
3.2 Mergeco Common Shares..................................................................4
3.3 Stock Options. .......................................................................4
3.4 Dissenting Shares. ...................................................................4
3.5 Exchange of Certificates...............................................................5
3.6 No Liability...........................................................................6
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................................................7
4.1 Organization...........................................................................7
4.2 Capitalization.........................................................................7
4.3 Authorization of this Agreement; Recommendation of Merger..............................8
4.4 Governmental Filings; No Conflicts.....................................................8
4.5 Disclosure and Financial Statements; No Undisclosed Liabilities........................9
4.6 Vote Required.........................................................................10
4.7 Opinion of Financial Advisor..........................................................10
4.8 Finders and Investment Bankers........................................................10
ARTICLE V
REPRESENTATIONS AND WARRANTIES REGARDING MERGECO........................................................10
5.1 Organization..........................................................................10
5.2 Capitalization........................................................................10
5.3 Authorization of this Agreement.......................................................11
5.4 Governmental Filings; No Violations...................................................11
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES REGARDING PDI............................................................12
6.1 Organization..........................................................................12
6.2 Capitalization........................................................................12
6.3 Authorization of this Agreement.......................................................12
6.4 Governmental Filings; No Violations...................................................12
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PARENT................................................................13
7.1 Organization..........................................................................13
7.2 Capitalization........................................................................13
7.3 Subsidiaries..........................................................................14
7.4 Authorization of this Agreement.......................................................14
7.5 Governmental Filings; No Violations...................................................14
7.6 Disclosure and Financial Statements; No Undisclosed Liabilities.......................15
7.7 Financial Ability to Perform..........................................................16
7.8 Finders and Investment Bankers........................................................16
7.9 No Foreign Withholding................................................................16
ARTICLE VIII
COVENANTS...............................................................................................16
8.1 Conduct of the Business of the Company. ..............................................16
8.2 Activities of Mergeco.................................................................17
8.3 Stockholders' Meeting.................................................................17
8.4 SEC Filings; Registration Statement...................................................17
8.5 Filings, Other Action.................................................................18
8.6 Public Announcements..................................................................18
8.7 NYSE Listing..........................................................................19
8.8 Warrant Agreement.....................................................................19
8.9 Further Action........................................................................19
8.10 Directors' and Officers' Indemnification and Insurance................................19
8.11 Transfer Taxes........................................................................20
8.12 DOL Application.......................................................................21
ARTICLE IX
CLOSING CONDITIONS......................................................................................21
9.1 Conditions to the Obligations of Each Party...........................................21
9.2 Conditions to the Obligations of Parent, PDI and Mergeco..............................21
9.3 Conditions to the Obligations of the Company..........................................22
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ARTICLE X
TERMINATION AND ABANDONMENT.............................................................................23
10.1 Termination...........................................................................23
10.2 Procedure and Effect of Termination...................................................23
ARTICLE XI
MISCELLANEOUS...........................................................................................24
11.1 Amendment and Modification............................................................24
11.2 Waiver of Compliance; Consents........................................................24
11.3 Non-Survival of Representations, Warranties and Agreements............................24
11.4 Notices...............................................................................25
11.5 Assignment; Parties in Interest.......................................................26
11.6 Expenses..............................................................................26
11.7 Specific Performance..................................................................26
11.8 Governing Law.........................................................................26
11.9 Counterparts..........................................................................26
11.10 Interpretation........................................................................26
11.11 Entire Agreement......................................................................27
INDEX OF DEFINED TERMS...........................................................................................29
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of February 17, 1998, among (i)
PetroFina S.A., a societe anonyme/naamloze vennootschap organized under the laws
of Belgium ("Parent"); (ii) New Fina, Inc., a Delaware corporation and an
indirect, wholly-owned subsidiary of Parent ("Mergeco"); (iii) Petrofina
Delaware, Incorporated, a Delaware corporation and an indirect, wholly-owned
subsidiary of Parent ("PDI"); and (iv) Fina, Inc., a Delaware corporation (the
"Company").
WHEREAS, Parent owns all of the capital stock of American Petrofina
Holding Company, a Delaware corporation ("APHC"), which owns all of the capital
stock of PDI (each of PDI and APHC are referred to hereinafter as a "Parent
Subsidiary," and together as the "Parent Subsidiaries"); and PDI owns an
aggregate of approximately 85% of the shares of Class A common stock, par value
$0.50 per share, and 100% of the shares of Class B common stock, par value $0.50
per share (collectively, the "Common Shares") of the Company;
WHEREAS, Parent has proposed to the Board of Directors of the Company
that Parent acquire through APHC and PDI the Common Shares not owned by PDI or
any other affiliate of Parent (the "Public Shares" and the holders thereof being
referred to as the "Public Shareholders");
WHEREAS, Parent desires to contribute the interest that it acquires in
the Public Shares to APHC and to cause APHC, in turn, to contribute such
interest to PDI;
WHEREAS, the Board of Directors of each of Parent and Mergeco believes
it is in the best interest of each of Parent and Mergeco and their respective
shareholders, and the Board of Directors of the Company believes it is in the
best interest of the Company and its shareholders, to consummate the merger of
Mergeco with and into the Company (the "Merger"), upon the terms and subject to
the conditions set forth in this Agreement;
WHEREAS, a Special Committee of the Board of Directors of the Company
(the "Special Committee"), has (i) determined that the Merger is fair to and in
the best interests of the Public Shareholders and (ii) recommended the approval
of this Agreement to the Board of Directors of the Company and the adoption of
this Agreement to the Public Shareholders; and
WHEREAS, the Boards of Directors of Parent, PDI, Mergeco and the
Company have approved this Agreement and approved the Merger upon the terms and
subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties and agreements herein contained, and intending to be
legally bound hereby, the parties agree as follows:
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ARTICLE I
THE MERGER; CLOSING
1.1 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the General Corporation Law of
the State of Delaware (the "Delaware Corporation Law" or "DGCL"), at the
Effective Time (as hereinafter defined), Mergeco shall be merged with and into
the Company. As a result of the Merger, the separate corporate existence of
Mergeco shall cease and the Company shall continue as the surviving corporation
of the Merger (the "Surviving Corporation").
1.2 Effective Time. As promptly as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in Article
IX, but in no event later than the Closing, the parties hereto shall cause the
Merger to be consummated by filing this Agreement or a certificate of merger or
certificate of ownership and merger (in either case, the "Certificate of
Merger") with the Secretary of State of the State of Delaware, in such form as
is required by, and executed in accordance with the relevant provisions of, the
Delaware Corporation Law and do any and all other lawful things necessary to
cause the Merger to become effective (the date and time of such filing being the
"Effective Time").
1.3 Time and Place of Closing. The closing of the Merger (the
"Closing") shall take place at the offices of Wilmer, Cutler & Pickering, 2445 M
Street, N.W., Washington, D.C. 20037, or such other place as the parties shall
agree, as soon as practicable following satisfaction or waiver of the conditions
set forth in Article IX. The date on which the Closing actually occurs is herein
referred to as the "Closing Date."
1.4 Effect of the Merger. At the Effective Time, the effect of the
Merger shall be as provided in the applicable provisions of the Delaware
Corporation Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all the property, rights, privileges, powers and
franchises of the Company and Mergeco shall vest in the Surviving Corporation,
and all debts, liabilities, obligations, restrictions, disabilities and duties
of the Company and Mergeco shall become the debts, liabilities, obligations,
restrictions, disabilities and duties of the Surviving Corporation.
ARTICLE II
THE SURVIVING CORPORATION
2.1 Certificate of Incorporation. At the Effective Time, the
Certificate of Incorporation of the Company shall be amended to read in its
entirety as the Certificate of Incorporation of Mergeco previously delivered to
the Company until thereafter amended as provided by the Delaware Corporation
Law; provided, however, that, at the Effective Time, Article I of the
Certificate of Incorporation of the Surviving Corporation shall be amended to
read as follows: "The name of the corporation is Fina, Inc."
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2.2 By-laws. At the Effective Time, the By-laws of Mergeco
previously delivered to the Company shall be the By-laws of the Surviving
Corporation until thereafter amended as provided by the Delaware Corporation
Law, the Certificate of Incorporation of the Surviving Corporation and such
By-laws.
2.3 Directors and Officers. The directors of Mergeco immediately
prior to the Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-laws of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time shall be the initial officers of
the Surviving Corporation, in each case until their respective successors are
duly elected or appointed and qualified.
ARTICLE III
CONVERSION OF SECURITIES; EXCHANGE
3.1 Conversion of Securities.
(a) Each Common Share issued and outstanding immediately
prior to the Effective Time (other than any Common Shares to be canceled
pursuant to Section 3.1(b) and any Dissenting Shares (as hereinafter defined)),
by virtue of the Merger and without any action on the part of the holder
thereof, shall be converted as of the Effective Time into the right to receive
(i) $60.00 in cash (the "Cash Consideration") and (ii) one warrant (a "Parent
Warrant") to purchase nine-tenths (0.9) of one American Depositary Share (a
"Parent ADS") (subject to adjustment from and after the date hereof as provided
in the Warrant Agreement), evidenced by an American Depositary Receipt (an
"ADR"), each Parent ADS representing one-tenth (0.1) of one ordinary voting
share, without nominal value, of Parent (each a "Parent Share"), with such
Parent Warrant to be substantially in the form annexed to the form of Warrant
Agreement (the "Warrant Agreement") attached hereto as Exhibit A and to have an
exercise price of $42.25 per Parent ADS (subject to adjustment as provided in
the Warrant Agreement) (the "Warrant Consideration"). The Cash Consideration
shall be payable without interest thereon, and the Cash Consideration and the
Warrant Consideration (collectively, the "Merger Consideration") shall be
payable to the holder of such Common Shares upon surrender of the certificate
representing such Common Shares.
(b) Each Common Share held in the treasury of the Company
and each Common Share issued and outstanding immediately prior to the Effective
Time which is then owned beneficially or of record by PDI, Parent or any direct
or indirect wholly-owned subsidiary of Parent shall, by virtue of the Merger and
without any action on the part of the holder thereof, be canceled and retired
and cease to exist, without any conversion thereof and no payment or
distribution shall be made with respect thereto.
(c) Subject to Section 3.4, at the Effective Time the
holders of certificates (the "Certificates") representing Common Shares shall
cease to have any rights as shareholders of the
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Company, except the right to receive the Merger Consideration specified in
Section 3.1(a) upon the surrender of the Certificates in accordance with Section
3.5 subject, however, to the Surviving Corporation's obligation to pay any
dividends with a record date prior to the Effective Time which have been
declared by the Company prior to the Effective Time and which remain unpaid at
the Effective Time.
3.2 Mergeco Common Shares. Each share of common stock, par value
$0.01 per share, of Mergeco issued and outstanding immediately prior to the
Effective Time (the "Mergeco Common Shares") shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into and
exchangeable for one fully paid and nonassessable common share, par value $0.01
per share ("Surviving Corporation Common Shares"), of the Surviving Corporation.
3.3 Stock Options. Immediately prior to the Effective Time, the
Company shall adopt resolutions and take all other actions as may be necessary
so that each outstanding Company Option (as defined in Section 4.2) whether or
not then exercisable, shall be canceled by the Company immediately prior to the
Effective Time, and each holder for each canceled Company Option (each, a
"Canceled Option") shall be entitled to receive, as soon as practicable after
the Effective Time, for each Canceled Option (i) an amount in cash equal to the
product of (a) the total number of Common Shares previously subject to the
Canceled Option and (b) the excess, if any, of the amount of Cash Consideration
over the exercise price per Common Share previously subject to such Canceled
Option, and (ii) a number of Parent Warrants equal to the total number of Common
Shares previously subject to such Canceled Option.
3.4 Dissenting Shares. Notwithstanding anything in this Agreement
to the contrary, if the holder of any Common Share shall have complied with the
provisions of Section 262 of the Delaware Corporation Law as to appraisal rights
with regard to that Common Share (a "Dissenting Share"), no such Dissenting
Share shall be deemed converted into and to represent the right to receive
Merger Consideration hereunder; and the holders of Dissenting Shares, if any,
shall be entitled to payment, solely from the Surviving Corporation, of the
appraised value of such Dissenting Shares to the extent permitted by and in
accordance with the provisions of Section 262 of the Delaware Corporation Law;
provided, however, that (i) if any holder of Dissenting Shares shall, under the
circumstances permitted by the Delaware Corporation Law, subsequently deliver a
written withdrawal of his or her demand for appraisal of such Dissenting Shares,
or (ii) if any holder fails to establish his or her entitlement to rights to
payment as provided in such Section 262, or (iii) if neither any holder of
Dissenting Shares nor the Surviving Corporation has filed a petition demanding a
determination of the value of all Dissenting Shares within the time provided in
such Section 262, such holder or holders (as the case may be) shall forfeit such
right to payment for such Dissenting Shares pursuant to such Section 262, and
the Common Shares of such holder or holders shall be deemed to be converted as
of the Effective Time into the right to receive the Merger Consideration in
accordance with the terms hereof. The Company shall give Parent (i) prompt
notice of any written demands for appraisal of any Common Shares, attempted
withdrawals of such demands, and any other instruments served
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pursuant to applicable law received by the Company relating to stockholders'
rights of appraisal and (ii) the opportunity to direct all negotiations and
proceedings with respect to demands for appraisal under the Delaware Corporation
Law. The Company shall not, except with the prior written consent of Parent,
voluntarily make any payment with respect to any demands for appraisals of
Common Shares, offer to settle any such demands or approve any withdrawal of any
such demands.
3.5 Exchange of Certificates.
(a) As soon as practicable after the execution and delivery
of this Agreement and, in any event, not less than five Trading Days prior to
the mailing to holders of Common Shares of the Registration Statement (as
defined in Section 8.4), Parent shall designate a bank or trust company (or such
other person or persons as shall be reasonably acceptable to Parent and the
Company) to act as exchange agent (the "Exchange Agent") in effecting the
exchange of Certificates that, prior to the Effective Time, represented Common
Shares (other than Certificates representing Common Shares to be canceled
pursuant to Section 3.1(b) or Dissenting Shares) for Merger Consideration
pursuant to Section 3.1(a) hereof. Promptly after the Effective Time, the
Surviving Corporation shall cause to be mailed to each person who was, at the
Effective Time, a holder of record of Common Shares entitled to receive the
Merger Consideration pursuant to Section 3.1(a) a form of letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon proper delivery of such Certificates
to the Exchange Agent) and instructions for use in effecting the surrender of
the Certificates pursuant to such letter of transmittal. Upon the surrender of
each such Certificate, together with such letter of transmittal duly completed
and validly executed in accordance with the instructions thereto, the Exchange
Agent shall pay the holder of such Certificate the Merger Consideration
multiplied by the number of Common Shares formerly represented by such
Certificate in exchange therefor, and such Certificate shall forthwith be
canceled. Until so surrendered and exchanged, each such Certificate (other than
Certificates representing Dissenting Shares or Common Shares to be canceled in
accordance with Section 3.1(b)) shall represent solely the right to receive
Merger Consideration. In the event any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
Parent, the posting by such person of a bond in customary form and amount as
indemnity against any claim that may be made against it with respect to such
Certificate, the Exchange Agent will issue in exchange for such lost, stolen or
destroyed Certificate the Merger Consideration, without any interest or
dividends or other payments thereon, otherwise deliverable upon due surrender of
any such Certificate pursuant to this Agreement.
(b) As of or promptly after the Effective Time, Parent shall
deposit the Warrant Consideration and deposit or cause to be deposited the Cash
Consideration, in trust with the Exchange Agent, for the benefit of the holders
of Common Shares, for exchange in accordance with this Article III.
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(c) The cash portion of the aggregate Merger Consideration
shall be invested by the Exchange Agent, as directed by and for the benefit of
the Surviving Corporation, provided that such investments shall be limited to
direct obligations of the United States of America, obligations for which the
full faith and credit of the United States of America is pledged to provide for
the payment of principal and interest, commercial paper rated of the highest
quality by Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's
Ratings Group, a division of McGraw-Hill, Inc. ("S&P"), and certificates of
deposit issued by a commercial bank whose long-term debt obligations are rated
at least A2 by Moody's or at least A by S&P, in each case having a maturity not
in excess of one year.
(d) Promptly following the date which is six months after
the Effective Time, the Exchange Agent shall deliver to the Surviving
Corporation all cash, Common Shares, Parent Warrants, Certificates and other
documents in its possession relating to the transactions described in this
Agreement, and the Exchange Agent's duties shall terminate. Thereafter, each
holder of a Certificate may surrender such Certificate to the Surviving
Corporation and (subject to applicable abandoned property, escheat and similar
laws and, in the case of Dissenting Shares, subject to applicable law) receive
in exchange therefor the applicable Merger Consideration, without any interest
or dividends or other payments thereon.
(e) After the Effective Time, there shall be no transfers on
the stock transfer books of the Surviving Corporation of Common Shares. If,
after the Effective Time, Certificates formerly representing Common Shares are
presented to the Surviving Corporation or the Exchange Agent, they shall be
canceled and (subject to applicable abandoned property, escheat and similar laws
and, in the case of Dissenting Shares, subject to applicable law) exchanged for
Merger Consideration, as provided in this Article III.
(f) Subject to and without derogation of the obligations of
Parent under Section 8 of the Warrant Agreement, the Surviving Corporation and
the Exchange Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder of
Common Shares and/or Company Options such amounts that the Surviving Corporation
or the Exchange Agent is required to deduct and withhold with respect to the
making of such payment under the United States Internal Revenue Code of 1986, as
amended (the "Code"), the rules and regulations promulgated thereunder or any
provision of state, or local or foreign tax law. To the extent there is
withholding imposed on the Merger Consideration, the full amount required to be
withheld shall be satisfied from the Cash Consideration. To the extent that
amounts are so withheld by the Surviving Corporation or the Exchange Agent, such
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the Common Shares and/or Company Options in respect of which
such deduction and withholding was made by the Surviving Corporation or the
Exchange Agent.
3.6 No Liability. Neither Parent nor the Surviving Corporation
shall be liable to any holder of Common Shares for any Merger Consideration in
respect of such shares (or dividends
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or distributions with respect thereto) delivered to a public official pursuant
to any applicable abandoned property, escheat or similar law.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Mergeco as follows:
4.1 Organization. Each of the Company and its subsidiaries (each,
a "Company Subsidiary") is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own, lease and operate its properties and to
conduct its business as now being conducted, except where the failure to be so
organized, existing and in good standing or to have such power and authority
would not, individually or in the aggregate, have, or reasonably be expected to
have, a material adverse effect on the business, financial condition,
properties, or results of operations of the Company and its subsidiaries taken
as a whole (a "Company Material Adverse Effect").
4.2 Capitalization. The authorized capital stock of the Company
consists of (i) 40,000,000 Common Shares divided into two classes of 38,000,000
Class A shares and 2,000,000 Class B shares, of which, on December 31, 1997,
there were 29,221,972 Class A shares issued and outstanding and 2,000,000 Class
B shares issued and outstanding and (ii) 4,000,000 shares of preferred stock,
par value $1.00 per share, of which, on December 31, 1997, there were no
preferred shares issued and outstanding. Except as set forth above, there are no
shares of capital stock of the Company authorized or, as of the date hereof,
issued or outstanding. All issued and outstanding Common Shares are duly
authorized, validly issued, fully paid and nonassessable. Each of the Company's
subsidiaries is listed in the Company's Annual Report on Form 10-K for the
fiscal year ending December 31, 1996 (the "1996 Form 10-K"), and except, as and
to the extent set forth in the 1996 Form 10-K, the Company owns directly or
indirectly all of the issued and outstanding capital stock of each of the
Company Subsidiaries, free and clear of all liens, pledges, security interests,
claims or other encumbrances. Except for options to purchase 32,400 Common
Shares issued pursuant to the Company's Employee Non-Qualified Stock Option Plan
(the "Plan"), there are not now, and, at the Effective Time there will not be,
any existing stock option or similar plans, or options, warrants, calls,
subscriptions, preemptive rights or other agreements or commitments whatsoever
obligating the Company or any Company Subsidiary to issue, transfer, deliver or
sell or cause to be issued, transferred, delivered or sold any additional shares
of capital stock of the Company or any Company Subsidiary, or obligating the
Company or any Company Subsidiary to grant, extend or enter into any such
agreement or commitment. (The options outstanding under the Plan are hereinafter
referred to as a "Company Option" and collectively, the "Company Options.")
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4.3 Authorization of this Agreement; Recommendation of Merger.
(a) The Company has all requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized and approved by the Company's Board of Directors and, except
for the adoption of this Agreement by the stockholders of the Company, no other
corporate proceedings on the part of the Company are necessary to authorize this
Agreement or consummate the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by the Company, and subject only to
adoption hereof by its stockholders (and assuming the due authorization,
execution and delivery hereof by Parent and Mergeco), this Agreement constitutes
a valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms.
(b) The Board of Directors of the Company (at a meeting duly
noticed, called and held on February 17, 1998 at which a quorum was present) has
determined that the Merger is fair to and in the best interests of the
stockholders of the Company and has resolved to recommend approval of the Merger
and adoption of this Agreement by the stockholders of the Company.
(c) At a meeting duly noticed, called and held on February
17, 1998, the Special Committee unanimously determined that the Merger is fair
to and in the best interests of the Public Shareholders, and has recommended the
approval of this Agreement to the Board of Directors of the Company and the
adoption of this Agreement to the Public Shareholders.
4.4 Governmental Filings; No Conflicts.
(a) Except for (i) filings required by the applicable
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the Securities Act of 1933, as amended (the "Securities Act"), (ii)
the filing and recordation of appropriate merger documents as required by the
DGCL and, if applicable, the laws of other states in which the Company is
qualified to do business, (iii) filings under securities or blue sky laws or
takeover statutes of the various states, (iv) the listing requirements of the
American Stock Exchange and (v) filings in connection with any applicable
transfer or other taxes in any applicable jurisdiction, no filing with, and no
permit, authorization, consent or approval of, any public body or authority is
necessary for the consummation by the Company of the transactions contemplated
by this Agreement, the failure to make or obtain which would, individually or in
the aggregate, have a Company Material Adverse Effect or materially adversely
affect the ability of the Company to perform its obligations hereunder or to
consummate the transactions contemplated hereby.
(b) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby, nor compliance by the
Company with any of the provisions hereof, will (i) conflict with or result in
any violation of any provision of
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the Certificate of Incorporation or By-Laws of the Company, (ii) result in a
violation or breach of, or constitute a default (or give rise to any right of
termination, cancellation or acceleration) under, any note, bond, mortgage,
indenture, license, agreement or other instrument or obligation to which the
Company or any Company Subsidiary is a party or by which any of them or any or
their properties or assets is bound or (iii) assuming the truth of the
representations and warranties of Parent and Mergeco contained herein and their
compliance with all agreements contained herein and assuming the due making or
obtaining of all filings, permits, authorizations, consents and approvals
referred to in the preceding sentence, violate any statute, rule, regulation,
order, injunction, writ or decree of any public body or authority by which the
Company or any Company Subsidiary or any of their respective assets or
properties is bound, excluding from the foregoing clauses (ii) and (iii)
violations, breaches, rights or defaults which, would not individually or in the
aggregate, have a Company Material Adverse Effect or materially adversely affect
the Company's ability perform its obligations hereunder or to consummate the
transactions contemplated hereby.
4.5 Disclosure and Financial Statements; No Undisclosed
Liabilities.
(a) The Company has filed all forms, reports and documents
with the Securities and Exchange Commission (the "SEC") since January 1, 1995,
required to be filed by it pursuant to the Securities Act and the Exchange Act
and the rules and regulations promulgated thereunder (collectively, the "Company
Disclosure Statements"), all of which have complied in all material respects
with all applicable requirements of the Securities Act and the Exchange Act and
the rules and regulations promulgated thereunder. As of the date of this
Agreement, none of such Company Disclosure Statements, at the time filed,
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) As of the date of this Agreement, the consolidated
balance sheets and the related statements of consolidated income, consolidated
cash flows and consolidated retained earnings (including the notes and schedules
thereto) of the Company and its consolidated subsidiaries contained or
incorporated by reference in the Company Disclosure Statements have been
prepared from, and are in accordance with, the books and records of the Company
and its consolidated subsidiaries, comply in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto, and present fairly the consolidated financial
position of the Company and its consolidated subsidiaries as of their respective
dates, and the consolidated results of their operations and their cash flows for
the periods presented therein, in conformity with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis, except as
otherwise noted therein, and subject in the case of quarterly financial
statements to normal year-end audit adjustments, and except that the quarterly
financial statements do not contain all of the footnote disclosures required by
GAAP.
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(c) As of the date of this Agreement, there is no liability
of the Company or any Company Subsidiary of any nature, whether absolute,
accrued, contingent or otherwise, which, individually or in the aggregate, would
have a Company Material Adverse Effect other than as disclosed in the Company
Disclosure Statements.
4.6 Vote Required. The affirmative vote of the holders of a
majority of the outstanding Common Shares is the only vote of the holders of any
class or series of capital stock of the Company necessary to adopt the Merger
Agreement under the DGCL.
4.7 Opinion of Financial Advisor. The Special Committee has
received the opinion of Goldman, Sachs & Co. ("Goldman Sachs") dated February
17, 1998 that, as of the date of such opinion, the Merger Consideration to be
received by the Public Shareholders pursuant to this Agreement is fair to the
Public Shareholders from a financial point of view.
4.8 Finders and Investment Bankers. No broker, investment banker
or other person is entitled to any broker's or finder's fee or similar
compensation in connection with this Agreement or the Merger based upon
arrangements made by the Company, except for Goldman Sachs whose fees shall be
paid by the Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES REGARDING MERGECO
Each of Parent and Mergeco represents and warrants to the Company as
follows:
5.1 Organization. Mergeco is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Mergeco
was formed solely for the purpose of engaging in the transactions contemplated
by this Agreement. As of the date hereof and the Effective Time, except for
obligations or liabilities incurred in connection with its incorporation or
organization and the transactions contemplated by this Agreement and, except for
this Agreement and any other agreements or arrangements contemplated by this
Agreement or in furtherance of the transactions contemplated hereby, Mergeco has
not and will not have incurred, directly or indirectly, through any subsidiary
or affiliate, any obligations or liabilities or engaged in any business
activities of any type or kind whatsoever or entered into any agreements or
arrangements with any person.
5.2 Capitalization. The authorized capital stock of Mergeco on
February 17, 1998 consisted of 1000 Mergeco Common Shares, of which there were
10 shares issued and outstanding, fully paid and nonassessable and owned by PDI
free and clear of all liens, claims and encumbrances. All of the Mergeco Common
Shares are entitled to vote on matters submitted to the stockholders of Mergeco.
Except as set forth above, there are no shares of capital stock of Mergeco
authorized, issued or outstanding. There are not now, and, at the Effective Time
there will not be, any existing stock option or similar plans or options,
warrants, calls, subscriptions, preemptive rights or other rights or other
agreements or commitments whatsoever obligating
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Mergeco or any of its subsidiaries to issue, transfer, deliver or sell or cause
to be issued, transferred, delivered or sold any additional shares of capital
stock of Mergeco, or obligating Mergeco to grant, extend or enter into any such
agreement or commitment.
5.3 Authorization of this Agreement. Mergeco has all requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized and approved by the Board of Directors of
Mergeco and by the shareholders of Mergeco, and no other corporate proceedings
on the part of Mergeco are necessary to authorize this Agreement or consummate
the transactions contemplated hereby (other than, with respect to the Merger,
the filing and recordation of appropriate merger documents as required by
Delaware Corporation Law). This Agreement has been duly and validly executed and
delivered by Mergeco and (assuming the due authorization, execution and delivery
hereof by the Company) constitutes a valid and binding agreement of Mergeco,
enforceable against Mergeco in accordance with its terms.
5.4 Governmental Filings; No Violations.
(a) Except for (i) filings required by the applicable
requirements of the Exchange Act and the Securities Act, (ii) the filing and
recordation of appropriate merger documents as required by the DGCL, (iii)
filings under securities or blue sky laws or takeover statutes of the various
states, and (iv) filings in connection with any applicable transfer or other
taxes in any applicable jurisdiction, no filing with, and no permit,
authorization, consent or approval of, any public body or authority is necessary
for the consummation by Mergeco of the transactions contemplated by this
Agreement, the failure to make or obtain which would, individually or in the
aggregate, materially adversely affect the ability of Mergeco to perform its
obligations hereunder or to consummate the transactions contemplated hereby.
(b) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby, nor compliance by
Mergeco with any of the provisions hereof, will (i) conflict with or result in
any violation of any provision of the Certificate of Incorporation or By-Laws of
Mergeco, (ii) result in a violation or breach of, or constitute a default (or
give rise to any right of termination, cancellation or acceleration) under, any
note, bond, mortgage, indenture, license, agreement or other instrument or
obligation to which Mergeco is a party or by which it or any of its properties
or assets is bound or (iii) assuming the truth of the representations and
warranties of the Company contained herein and its compliance with all
agreements contained herein and assuming the due making or obtaining of all
filings, permits, authorizations, consents and approvals referred to in the
preceding sentence, violate any statute, rule, regulation, order, injunction,
writ or decree of any public body or authority by which Mergeco or any of its
respective assets or properties is bound, excluding from the foregoing clauses
(ii) and (iii) violations, breaches, rights or defaults which would not,
individually or in the aggregate, materially adversely affect Mergeco's ability
perform its obligations hereunder or to consummate the transactions contemplated
hereby.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES REGARDING PDI
Each of Parent and PDI represents and warrants to the Company as
follows:
6.1 Organization. PDI is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to own, lease and operate its
properties and to conduct its business as now being conducted, except where the
failure to be so organized, existing and in good standing or to have such power
and authority would not, individually or in the aggregate, have, or reasonably
be executed to have, a material adverse effect on the business, financial
condition, properties or results of operations of Parent and its subsidiaries
taken as a whole (a "Parent Material Adverse Effect").
6.2 Capitalization. The authorized capital stock of PDI on
December 31, 1997 consisted of 250 shares of Class A Common Stock, par value
$1.00 and 750 shares of Class B Common Stock, par value $1.00 (collectively, the
"PDI Shares"), of which there were 1,000 shares issued and outstanding, fully
paid and nonassessable and owned by APHC free and clear of all liens, claims and
encumbrances. All of the PDI Shares are entitled to vote on matters submitted to
the shareholders of PDI. Except as set forth above, there are no shares of
capital stock of PDI authorized, issued or outstanding. There are not now, and,
at the Effective Time there will not be, any existing stock option or similar
plans or options, warrants, calls, subscriptions, preemptive rights or other
rights or other agreements or commitment whatsoever obligating PDI or any of its
subsidiaries to issue, transfer, deliver or sell or cause to be issued,
transferred, delivered or sold any additional shares of capital stock of PDI, or
obligating PDI to grant, extend or enter into any such agreement or commitment.
6.3 Authorization of this Agreement. PDI has all requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized and approved by the Board of Directors of PDI,
and no other corporate proceedings on the part of PDI are necessary to authorize
this Agreement or consummate the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by PDI and (assuming
the due authorization, execution and delivery hereof by the Company) constitutes
a valid and binding agreement of PDI, enforceable against PDI in accordance with
its terms.
6.4 Governmental Filings; No Violations.
(a) Except for (i) filings required by the applicable
requirements of the Exchange Act and the Securities Act, (ii) the filing and
recordation of appropriate merger documents as required by the DGCL and, if
applicable, the laws of other states in which PDI is
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qualified to do business, (iii) filings under securities or blue sky laws or
takeover statutes of the various states, and (iv) filings in connection with any
applicable transfer or other taxes in any applicable jurisdiction, no filing
with, and no permit, authorization, consent or approval of, any public body or
authority is necessary for the consummation by PDI of the transactions
contemplated by this Agreement, the failure to make or obtain which would,
individually or in the aggregate, materially adversely affect the ability of PDI
to perform its obligations hereunder or to consummate the transactions
contemplated hereby.
(b) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby, nor compliance by PDI
with any of the provisions hereof, will (i) conflict with or result in any
violation of any provision of the Certificate of Incorporation or By-Laws of
PDI, (ii) result in a violation or breach of, or constitute a default (or give
rise to any right of termination, cancellation or acceleration) under, any note,
bond, mortgage, indenture, license, agreement or other instrument or obligation
to which PDI is a party or by which it or any or its properties or assets is
bound or (iii) assuming the truth of the representations and warranties of the
Company contained herein and its compliance with all agreements contained herein
and assuming the due making or obtaining of all filings, permits,
authorizations, consents and approvals referred to in the preceding sentence,
violate any statute, rule, regulation, order, injunction, writ or decree of any
public body or authority by which PDI or any of its respective assets or
properties is bound, excluding from the foregoing clauses (ii) and (iii)
violations, breaches, rights or defaults which, would not individually or in the
aggregate, materially adversely affect PDI's ability perform its obligations
hereunder or to consummate the transactions contemplated hereby.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company as follows:
7.1 Organization. Parent is a societe anonyme/naamloze
vennootschap duly organized, validly existing and in good standing under the
laws of the Kingdom of Belgium and has all requisite corporate power and
authority to own, lease and operate its properties and to conduct its business
as now being conducted, except where the failure to be so organized, existing
and in good standing or to have such power and authority would not, individually
or in the aggregate, have a Parent Material Adverse Effect.
7.2 Capitalization. The subscribed capital of Parent is
43,605,279,966 Belgian Francs. As of December 31, 1997, there were 23,420,432,
ordinary voting shares, without nominal value, issued and outstanding. All such
issued and outstanding Parent Shares are duly authorized, validly issued, fully
paid, nonassessable and free of preemptive rights (other than the preferential
subscription rights described in Parent's Registration Statement on Form 20-F
filed with the SEC on August 25, 1997 (File No. 1-14672)). Since such date, no
additional shares of capital stock of Parent have been issued. Parent has no
outstanding bonds, debentures, notes or
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other obligations the holders of which have the right to vote (or which are
convertible into or exercisable for securities having the right to vote) with
the stockholders of Parent on any matter. Except as contemplated by this
Agreement and except for warrants to purchase 150,000 Parent Shares issued to
Parent employees, there are not at the date of this Agreement any existing
options, warrants, calls, subscriptions, convertible securities, or other
rights, agreements or commitments which obligate Parent or any Parent Subsidiary
to issue, transfer, deliver or sell any shares of capital stock of Parent or any
Parent Subsidiary, or obligating Parent or any Parent Subsidiary to grant,
extend or enter into any such agreement or commitment.
7.3 Subsidiaries. Each of the outstanding shares of capital stock
of each Parent Subsidiary is duly authorized, validly issued, fully paid and
nonassessable. Each of the outstanding shares of capital stock of each Parent
Subsidiary is owned, directly or indirectly, by Parent free and clear of all
liens, pledges, security interests, claims or other encumbrances other than
liens imposed by local law which are not material.
7.4 Authorization of this Agreement. Parent has all requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized and approved by the Board of Directors of
Parent, and no other corporate proceedings on the part of Parent are necessary
to authorize this Agreement or consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by Parent and,
constitutes a valid and binding agreement of Parent, enforceable against the
Parent in accordance with its terms.
7.5 Governmental Filings; No Violations.
(a) Except for (i) filings required by the applicable
requirements of the Exchange Act and the Securities Act, (ii) the filing and
recordation of appropriate merger documents as required by the DGCL, (iii)
filings under the securities or blue sky laws or takeover statutes of the
various states, (iv) filings required by the Belgian Commission on Banking and
Finance or the Brussels Stock Exchange, and (v) filings in connection with any
applicable transfer or other taxes in any applicable jurisdiction, no filing
with, and no permit, authorization, consent or approval of, any public body or
authority is necessary for the consummation by Parent of the transactions
contemplated by this Agreement, the failure to make or obtain which would,
individually or in the aggregate, have a Parent Material Adverse Effect or
materially adversely affect the ability of Parent to perform its obligations
hereunder or to consummate the transactions contemplated hereby.
(b) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby nor compliance by
Parent with any of the provisions hereof will (i) conflict with or result in any
violation of any provision of the statuts/statuten of Parent (ii) result in a
violation or breach of, or constitute a default (or give rise
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to any right of termination, cancellation or acceleration) under any note, bond,
mortgage, indenture, license, agreement or other obligation to which Parent is a
party, or by which it or any of its respective properties or assets is bound, or
(iii) assuming the truth of the representations and warranties of the Company
hereunder and its compliance with all agreements contained herein and assuming
the due making or obtaining of all filings, permits, authorizations, consents
and approvals referred to in the preceding sentence, violate any statute, rule,
regulation, order, injunction, writ or decree of any public body or authority by
which Parent, or any of its respective properties or assets is bound, excluding
from the foregoing clauses (ii) and (iii) violations, breaches, rights or
defaults which, would not, individually or in the aggregate, have a Parent
Material Adverse Effect or materially adversely affect the Parent's ability to
perform its obligations hereunder or to consummate the transactions contemplated
hereby.
7.6 Disclosure and Financial Statements; No Undisclosed
Liabilities.
(a) Since September 2, 1997, Parent has filed all forms,
reports and documents with the SEC required to be filed by it pursuant to the
Securities Act and the Exchange Act, and the rules and regulations promulgated
thereunder (collectively, the "Parent Disclosure Statements"), all of which have
complied in all material respects with all applicable requirements of the
Securities Act and the Exchange Act and the rules and regulations promulgated
thereunder. As of the date of this Agreement, none of such Parent Disclosure
Statements, at the time filed, 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. Prior to September 2, 1997, Parent was not
required to make filings under the Securities Act or Exchange Act, except for
filings pursuant to Rule 12g3-2(b) promulgated under the Exchange Act.
(b) As of the date of this Agreement, the consolidated
balance sheets and the related statements of consolidated income, consolidated
cash flows and consolidated retained earnings (including the notes and schedules
thereto) of Parent and its consolidated subsidiaries contained in the Parent's
Registration Statement filed on Form 20-F (File No. 1-14672), have been prepared
from, and are in accordance with, the books and records of Parent and its
consolidated subsidiaries, comply in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto, and present fairly the consolidated financial position of
Parent and its consolidated subsidiaries as of their respective dates, and the
consolidated results of their operations and their cash flows for the periods
presented therein, in conformity with GAAP applied on a consistent basis, except
as otherwise noted therein.
(c) As of the date of this Agreement, there is no liability
of Parent or any subsidiary of Parent of any nature, whether absolute, accrued,
contingent or otherwise, which, individually or in the aggregate, would have a
Parent Material Adverse Effect, other than as disclosed in the Parent Disclosure
Statements.
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7.7 Financial Ability to Perform. Parent presently has, and at the
Effective Time will have, cash funds available sufficient to consummate the
transactions contemplated by this Agreement and to perform its obligations under
this Agreement.
7.8 Finders and Investment Bankers. No broker, investment banker
or other person is entitled to any broker's or finder's fee or similar
compensation in connection with this Agreement or the Merger based upon
arrangements made by Parent, except for Morgan, Stanley & Co., Incorporated
whose fees shall be paid by Parent.
7.9 No Foreign Withholding. There is no law, rule or regulation of
any taxing authority or other governmental entity outside the United States that
would require Parent, the Surviving Corporation or the Exchange Agent to deduct
from or withhold any portion of the Merger Consideration.
ARTICLE VIII
COVENANTS
8.1 Conduct of the Business of the Company.
(a) Prior to the Effective Time, unless Parent shall
otherwise consent in writing (it being understood that Parent must act in good
faith whenever it withholds such consent), the Company shall, and shall cause
the Company Subsidiaries to, carry on their respective businesses only in the
ordinary course and consistent with past practice and, to the extent consistent
therewith and with the specific terms of this Agreement, use all commercially
reasonable efforts to preserve intact their current business organizations, keep
available the services of their current employees and preserve their
relationships with customers, suppliers and others having business dealings with
them.
(b) During the period from the date of this Agreement to the
Effective Time, the Company shall not declare, set aside or pay any dividend or
other distribution (whether in cash, stock or property or any combination
thereof) in respect of its capital stock, or agree to do any of the foregoing;
provided, however, that the Company shall declare and pay regular quarterly
dividends of $.80 per Common Share.
(c) Notwithstanding anything herein to the contrary, the
Board of Directors of the Company shall amend the Phantom Share Plan of the
Company (the "Phantom Plan") to (i) convert each Phantom Share (as defined in
the Phantom Plan) credited under the Phantom Plan to a cash amount equal to the
value of the Merger Consideration as of the Closing Date, as determined in good
faith by the Board of Directors of the Company, (ii) provide that future amounts
earned under the Phantom Plan shall be credited in cash instead of Phantom
Shares and (iii) provide that cash amounts credited to the accounts of
participants in the Phantom Plan shall be credited with a reasonable rate of
interest (as determined in good faith by the Board of Directors of the Company)
until distributed in accordance with the terms of the Phantom Plan.
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8.2 Activities of Mergeco. From the date of this Agreement to the
Effective Time, Mergeco will not conduct any business or engage in any
activities of any nature other than activities in connection with this Agreement
or the transactions contemplated hereby.
8.3 Stockholders' Meeting. The Company will take all action
necessary in accordance with applicable law and its Certificate of Incorporation
and By-laws to convene a meeting of its stockholders as promptly as practicable
to consider and vote upon the adoption of this Agreement. The Company shall take
all lawful action to solicit such adoption, including, without limitation,
timely mailing the Proxy Statement/Prospectus (as defined in Section 8.4). In
the Proxy Statement/Prospectus the Board of Directors of the Company and the
Special Committee shall recommend adoption of this Agreement, subject to their
respective fiduciary duties as advised by independent counsel. At such meeting,
Parent shall cause all Common Shares then owned by it and its subsidiaries
(including PDI) to be voted in favor of the adoption of this Agreement.
8.4 SEC Filings; Registration Statement.
(a) Parent, PDI, Mergeco and the Company shall timely file
with the SEC a Schedule 13E-3 (the "Schedule 13E-3") with respect to the Merger
and disseminate to Public Shareholders such information as is required by Rule
13e-3 under the Exchange Act.
(b) Parent and the Company shall cooperate and promptly
prepare and Parent shall file with the SEC as soon as practicable a Registration
Statement on Form F-4 (the "Registration Statement") under the Securities Act,
with respect to Parent Warrants issuable in the Merger and Parent Shares
represented by the Parent ADSs issuable upon exercise of the Parent Warrants, a
portion of which Registration Statement shall also serve as the proxy statement
with respect to the meeting of the stockholders of the Company in connection
with the Merger and the prospectus with respect to such Registration Statement
(the "Proxy Statement/Prospectus"). The Company shall file the Proxy
Statement/Prospectus with the SEC as soon as practicable.
(c) The respective parties will cause the Schedule 13E-3,
the Proxy Statement/Prospectus and the Registration Statement to comply as to
form in all material respects with the applicable provisions of the Securities
Act, the Exchange Act and the rules and regulations thereunder. Parent shall use
all reasonable efforts, and the Company will cooperate with Parent, to have the
Registration Statement declared effective by the SEC as promptly as practicable
and to keep the Registration Statement effective as long as is necessary to
consummate the Merger. Parent and the Company shall, as promptly as practicable,
provide copies to each other of any written comments received from the SEC with
respect to the Schedule 13E-3 and Registration Statement and advise each other
of any verbal comments with respect to the Schedule 13E-3 and Registration
Statement received from the SEC. Parent shall use its best efforts to obtain,
prior to the effective date of the Registration Statement, all
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necessary state securities law or "Blue Sky" permits or approvals required to
carry out the transactions contemplated by this Agreement and will pay all
expenses incident thereto. Parent agrees that the Proxy Statement/Prospectus and
each amendment or supplement thereto at the time of mailing thereof and at the
time of the meeting of stockholders of the Company, and the Schedule 13E-3 and
each amendment or supplement thereto, at the time it is filed and the
Registration Statement, at the time it becomes effective, will not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the foregoing shall not apply to the extent that any such untrue statements
of a material fact or omission to state a material fact was made by Parent in
reliance upon and in conformity with written information concerning the Company
furnished to Parent by the Company specifically for inclusion in the Proxy
Statement/Prospectus, Schedule 13E-3 or Registration Statement. The Company
agrees that the written information concerning the Company provided by it
specifically for inclusion in the Proxy Statement/Prospectus and each amendment
or supplement thereto, at the time of mailing thereof and at the time of the
meeting of stockholders of the Company, and the written information concerning
the Company provided by the Company specifically for inclusion in the Schedule
13E-3 and each amendment or supplement thereto, at the time it is filed, and the
written information concerning the Company provided by it specifically for
inclusion in the Registration Statement, at the time it becomes effective, will
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. No
amendment or supplement to the Registration Statement will be made by Parent or
the Company without the approval of the other party. Parent will advise the
Company, promptly after it receives notice thereof, of the time when the
Registration Statement has become effective.
8.5 Filings, Other Action. Subject to the terms and conditions
herein provided, the Company and Parent shall: (a) use all reasonable efforts to
cooperate with one another in (i) determining which filings are required to be
made prior to the Effective Time, and which consents, approvals, permits or
authorizations are required to be obtained prior to the Effective Time from
governmental or regulatory authorities of the United States, the several states
and foreign jurisdictions in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby and (ii)
timely making all such filings and timely seeking all such consents, approvals,
permits or authorizations; and (b) use all reasonable efforts to take, or cause
to be taken, all other action and do, or cause to be done, all other things
necessary, proper or appropriate to consummate and make effective the
transactions contemplated by this Agreement.
8.6 Public Announcements. Parent and the Company will (i) consult
with each other before issuing any press release or otherwise making any public
statements with respect to the Merger, this Agreement and the transactions
contemplated hereby and (ii) not issue any such press release or make any such
public statement prior to such consultation, except as may be required by law or
by obligations pursuant to any listing agreement with any securities exchange.
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8.7 NYSE Listing. Parent agrees that it will use its best efforts
to cause the Parent Warrants and Parent ADSs issuable upon the exercise of the
Parent Warrants to be listed on the New York Stock Exchange ("NYSE"). To the
extent that the Parent Warrants or such Parent ADSs cannot be listed on the
NYSE, Parent shall use its best efforts to cause them to be listed on the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ").
8.8 Warrant Agreement. Prior to the Effective Time, Parent shall
execute and deliver the Warrant Agreement and cause the Warrant Agent (as
defined in the Warrant Agreement) to execute and deliver the Warrant Agreement,
with no changes from the form attached as Exhibit A hereto that are adverse in
any material respect to the holders of Common Shares.
8.9 Further Action. Each party hereto shall, subject to the
fulfillment at or before the Effective Time of each of the conditions of
performance set forth herein or the waiver thereof, perform such further acts
and execute such documents as may be reasonably required to effect the Merger.
8.10 Directors' and Officers' Indemnification and Insurance.
(a) The By-laws of the Surviving Corporation shall contain
provisions no less favorable with respect to indemnification and exculpation
than are set forth in Article 11 of the Certificate of Incorporation of the
Company, which provisions shall not be amended, repealed or otherwise modified
for a period of six years from the Effective Time in any manner that would
affect adversely the rights thereunder of individuals who at or prior to the
Effective Time were directors, officers, employees, fiduciaries or agents of the
Company, unless such modification shall be required by law.
(b) The Company shall, to the fullest extent permitted under
applicable law and regardless of whether the Merger becomes effective, indemnify
and hold harmless, and, after the Effective Time, the Surviving Corporation
shall, to the fullest extent permitted under applicable law, indemnify and hold
harmless, each present and former director, officer, employee, fiduciary and
agent of the Company and each Subsidiary and each fiduciary and agent of each
such director and officer (collectively, the "Indemnified Parties") against all
costs and expenses (including attorneys' fees), judgments, fines, losses,
claims, damages, liabilities and settlement amounts paid in connection with any
claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), whether civil, criminal, administrative or
investigative, arising out of or pertaining to any action or omission in their
capacity as an officer, director, employee, fiduciary or agent, whether
occurring before or after the Effective Time, until the expiration of the
statute of limitations relating thereto (and shall pay any expenses in advance
of the final disposition of such action or proceeding to each Indemnified Party
to the fullest extent permitted under Delaware Corporation Law, upon receipt
from the Indemnified Party to whom expenses are advanced of any undertaking to
repay such advances required under Delaware Corporation Law). In the event of
any such claim, action, suit, proceeding or
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investigation, (i) the Company or the Surviving Corporation, as the case may be,
shall pay the reasonable fees and expenses of counsel selected by the
Indemnified Parties, which counsel shall be reasonably satisfactory to the
Company or the Surviving Corporation, promptly after statements therefor are
received and (ii) the Company and the Surviving Corporation shall cooperate in
the defense of any such matter; provided, however, that neither the Company nor
the Surviving Corporation shall be liable for any settlement effected without
its written consent (which consent shall not be unreasonably withheld); and
provided, further, that neither the Company nor the Surviving Corporation shall
be obligated pursuant to this Section 8.10 (b) to pay the fees and expenses of
more than one counsel (plus appropriate local counsel) for all Indemnified
Parties in any single action except (x) that the persons who served as directors
of the Company who were not designees of Parent shall be entitled to retain one
additional counsel (plus appropriate local counsel) to represent them at the
expense of the Company or the Surviving Corporation, and (y) to the extent that
two or more of such Indemnified Parties shall have conflicting interests in the
outcome of such action, in which case such additional counsel (including local
counsel) as may be required to avoid any such conflict or likely conflict may be
retained by the Indemnified Parties at the expense of the Company or the
Surviving Corporation; and provided further that, in the event that any claim
for indemnification is asserted or made within the period prior to the
expiration of the applicable statute of limitations, all rights to
indemnification in respect of such claim shall continue until the disposition of
such claim.
(c) The Surviving Corporation shall use its reasonable
efforts to maintain in effect for six years from the Effective Time, the current
directors' and officers' liability insurance policies maintained by the Company,
or policies of at least the same coverage containing terms and conditions which
are not materially less favorable, with respect to matters occurring prior to
the Effective Time; provided, however, that in no event shall the Surviving
Corporation be required to expend pursuant to this Section 8.10(c) more than an
amount per year equal to 200% of current annual premiums paid by the Company for
such insurance. In the event that, but for the proviso to the immediately
preceding sentence, the Surviving Corporation would be required to expend more
than 200% of current annual premiums, the Surviving Corporation shall obtain the
maximum amount of such insurance obtainable by payment of annual premiums equal
to 200% of current annual premiums.
(d) In the event the Company or the Surviving Corporation or
any of their respective successors or assigns (i) consolidates with or merges
into any other person and shall not be the continuing or surviving corporation
or entity of such consolidation or merger or (ii) transfers all or substantially
all of its properties and assets to any person, then, and in each such case,
proper provision shall be made so that the successors and assigns of the Company
or the Surviving Corporation, as the case may be, or at Parent's option, Parent,
shall assume the obligations set forth in this Section 8.10.
8.11 Transfer Taxes. The Surviving Corporation shall pay any
transfer taxes (including any interest and penalties thereon and additions
thereto) payable in connection with
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the Merger and shall be responsible for the preparation and filing of any
required tax returns, declarations, reports, schedules, terms and information
returns with respect to such taxes.
8.12 DOL Application. On or before the Closing Date, the Company
shall submit an application (the "Application") to the United States Department
of Labor (the "DOL") for exemption from the application of Section 406(a)(2) and
407(a) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), to the receipt, holding, exercise and disposition of the Warrant
Consideration by the Company's Capital Accumulation Plan (the "CAP"). The
parties hereto agree not to withdraw the Application prior to a final decision
thereon by the DOL and to use their best efforts to cause the Application to be
approved by the DOL. During the pendency of the Application, one or more
fiduciaries independent of the Company and its affiliates (which shall include
participants in the CAP with respect to their own account balances) shall make
all decisions regarding the holding, disposition or exercise of the Warrant
Consideration by the CAP based solely on the best interest of participants and
beneficiaries thereunder (which participants and beneficiaries shall be intended
third part beneficiaries of this Section 8.12).
ARTICLE IX
CLOSING CONDITIONS
9.1 Conditions to the Obligations of Each Party. The respective
obligations of each party hereto to effect the Merger shall be subject to the
satisfaction or waiver, at or prior to the Effective Time, of the following
conditions:
(a) this Agreement shall have been adopted by the
affirmative vote of the holders of the requisite number of Common Shares in
accordance with the Certificate of Incorporation and By-Laws of the Company and
the DGCL;
(b) no statute, rule, regulation, temporary, preliminary or
permanent order or injunction shall have been promulgated, enacted, entered,
enforced or deemed applicable to the Merger or performance under this Agreement,
by any state, federal or foreign government or governmental authority or court
or governmental agency of competent jurisdiction and remain in effect that
prohibits the consummation of the Merger; and
(c) the Registration Statement shall have become effective
and shall be effective at the Effective Time, and no stop order suspending
effectiveness of the Registration Statement shall have been issued, and no
action, suit, proceeding or investigation by the SEC to suspend the
effectiveness thereof shall have been initiated and be continuing.
9.2 Conditions to the Obligations of Parent, PDI and Mergeco. The
obligations of Parent, PDI and Mergeco pursuant to this Agreement to consummate
the Merger are also subject to the satisfaction or waiver, at or prior to the
Effective Time, of the following additional conditions:
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(a) the representations and warranties of the Company
contained herein shall be true and correct in all respects (in the case of any
representation or warranty containing any materiality qualification) or in all
material respects (in the case of any representation or warranty without any
materiality qualification) as of the date of this Agreement and as of the
Closing with the same effect as though all such representations and warranties
had been made as of Closing, except (i) for any such representations and
warranties made as of a specified date, which shall be true and correct in all
respects (in the case of any representation or warranty containing any
materiality qualification) or in all material respects (in the case of any
representation or warranty without any materiality qualification) as of such
date, or (ii) as expressly contemplated by this Agreement, and Parent shall have
received from the Company's President and Chief Financial Officer an officers'
certificate to this effect; and
(b) each and all of the covenants and agreements of the
Company to be performed and complied with pursuant to this Agreement prior to
the Closing shall have been duly performed and complied with in all material
respects, and Parent shall have received from the Company's President and Chief
Financial Officer an officers' certificate to this effect.
9.3 Conditions to the Obligations of the Company. The obligation
of the Company pursuant to this Agreement to consummate the Merger is also
subject to the satisfaction or waiver, at or prior to the Effective Time, of the
following additional conditions:
(a) the representations and warranties of Parent, PDI and
Mergeco contained herein shall be true and correct in all respects (in the case
of any representation or warranty containing any materiality qualification) or
in all material respects (in the case of any representation or warranty without
any materiality qualification) as of the date of this Agreement and as of the
Closing with the same effect as though all such representations and warranties
had been made as of Closing, except (i) for any such representations and
warranties made as of a specified date, which shall be true and correct as of
such date, or (ii) as expressly contemplated by this Agreement, and the Company
shall have received from Parent, PDI and Mergeco officers' certificates to this
effect;
(b) each and all of the covenants and agreements of Parent
and Mergeco to be performed and complied with pursuant to this Agreement prior
to the Closing shall have been duly performed and complied with in all material
respects, and the Company shall have received from Parent and Mergeco officers'
certificates to this effect;
(c) the Warrant Agreement shall have been executed and
delivered;
(d) the Parent Warrants issuable to the Company's
stockholders as contemplated by this Agreement, and the Parent ADSs issuable
upon exercise of the Parent Warrants, shall have been approved for listing on
the NYSE or NASDAQ, subject to official notice of issuance; and
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(e) a Registration Statement on Form F-6 under the
Securities Act with respect to the Parent ADSs covered by the Parent Warrants
shall be effective, and no stop order suspending effectiveness of such
Registration Statement shall have been issued.
ARTICLE X
TERMINATION AND ABANDONMENT
10.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval by the
stockholders of the Company:
(a) by mutual written consent duly authorized by the Board
of Directors of Parent and the Special Committee on behalf of the Board of
Directors of the Company;
(b) by either Parent or the Special Committee on behalf of
the Company if the Effective Time shall not have occurred on or before September
30, 1998 (the "Termination Date"); provided, however, that the right to
terminate this Agreement under this Section 10.1(b) shall not be available to
any party whose failure to fulfill any obligation under this Agreement has been
the cause of, or resulted in, the failure of the Effective Time to occur on or
before such date;
(c) by either Parent or the Special Committee on behalf of
the Company, if any court of competent jurisdiction in the United States or
other governmental agency of competent jurisdiction shall have issued an order,
decree or ruling or taken any other action permanently restraining, enjoining or
otherwise prohibiting the Merger, and such order, decree, ruling or other action
shall have become final and non-appealable;
(d) by the Special Committee, on behalf of the Company, at
any time, if any of the conditions set forth in Section 9.3(a) or (b) shall not
be satisfied at such time and (i) such condition is incapable of being satisfied
prior to the Termination Date or (ii) Parent and the Parent Subsidiaries are not
using their best efforts to cure the breach resulting in such condition not
being satisfied in as timely a manner as practicable; or
(e) by Parent, at any time, if any of the conditions set
forth in Section 9.3(a) or (b) shall not be satisfied at such time and (i) such
condition is incapable of being satisfied prior to the Termination Date or (ii)
the Special Committee or the Company are not using their best efforts to cure
the breach resulting in such condition not being satisfied in as timely a manner
as practicable.
10.2 Procedure and Effect of Termination. In the event of
termination of this Agreement by either Parent or the Company pursuant to
Section 10.1, written notice thereof shall forthwith be given to the other
parties hereto, and this Agreement shall terminate and the Merger shall be
abandoned, without further action by any of the parties hereto. Mergeco and PDI
agree
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that any termination by Parent shall be conclusively binding upon them, whether
given expressly on their behalf or not, and the Company shall have no further
obligation with respect to them. If this Agreement is terminated pursuant to
Section 10.1, this Agreement shall forthwith become void, and there shall be no
liability on the part of any party hereto, except as set forth in Section 11.3.
Nothing herein shall relieve any party from liability for any breach hereof.
ARTICLE XI
MISCELLANEOUS
11.1 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified or supplemented only by written agreement of
Parent, PDI, Mergeco and the Company at any time prior to the Effective Time
with respect to any of the terms contained herein; provided, that (i) after this
Agreement is adopted by the Company's stockholders pursuant to Section 8.3, no
such amendment or modification shall be made that reduces the amount or changes
the form of the Merger Consideration or otherwise materially and adversely
affects the rights of the Public Shareholders hereunder, without the further
approval of the holders of at least a majority of the outstanding Common Shares
and (ii) the approval of the Special Committee shall be required for any
amendment, modification or supplementing of this Agreement, any extension by the
Company of the time for the performance of any obligations or other acts of
Parent, PDI or Mergeco and any waiver of any of the Company's rights under this
Agreement.
11.2 Waiver of Compliance; Consents. Any failure of Parent, PDI or
Mergeco on the one hand, or the Company, on the other hand, to comply with any
obligation, covenant, agreement or condition herein may be waived by the Company
(subject to the approval of the Special Committee as set forth in Section
11.1(ii)) or Parent, respectively, only by a written instrument signed by the
party granting such waiver, but such waiver shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. Any determination by
the Company as to the existence of any such failure on the part of Parent, PDI
or Mergeco shall be made by the Special Committee on behalf of the Company.
Whenever this Agreement requires or permits consent by or on behalf of any party
hereto, such consent shall be given in writing in a manner consistent with the
requirements for a waiver of compliance as set forth in Section 11.1(ii) and
this Section 11.2. Mergeco hereby agrees that any consent or waiver of
compliance given by Parent shall be conclusively binding upon it, whether given
expressly on its behalf or not.
11.3 Non-Survival of Representations, Warranties and Agreements.
The representations, warranties and agreements in this Agreement shall terminate
at the Effective Time or upon the termination of this Agreement pursuant to
Section 10.1, as the case may be, except that (i) the agreements set forth in
Articles III and XI and Sections 8.9, 8.10 and 8.11 shall survive the Effective
Time indefinitely and (ii) the agreements set forth in Article XI and Section
10.2 shall survive the termination of this Agreement indefinitely.
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11.4 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if (i) delivered personally or by
overnight courier, (ii) mailed by registered or certified mail, return receipt
requested, postage prepaid, or (iii) transmitted by telecopy, and in each case,
addressed to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice; provided that notices of a
change of address shall be effective only upon receipt thereto):
(a) if to Parent, PDI or Mergeco to
PetroFina S.A.
52 rue de l'Industrie
B-1040 Brussels, Belgium
Telecopy: 32-2-288-3610
Attention: Secretary General
with a required copy to:
Wilmer, Cutler & Pickering
2445 M Street, NW
Washington, D.C. 20037
Telecopy: 202-663-6363
Attention: Richard W. Cass
(b) if to the Company, to:
Fina, Inc.
8350 North Central Expressway
Dallas, Texas 75206
Telecopy: 214-750-2570
Attention: Cullen M. Godfrey
with a required copy to:
Special Committee of the Board of Directors of Fina, Inc.
c/o Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
Telecopy: (212)474-3700
Attention: Allen Finkelson
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Any notice so addressed shall be deemed to be given (x) three business days
after being mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid and (y) upon delivery, if transmitted by hand
delivery, overnight courier or telecopy.
11.5 Assignment; Parties in Interest. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto without the prior written consent of the
other parties. Except for Sections 3.3, 8.10 and 8.12, which are intended to be
for the benefit of the holders of Company Options, Indemnified Parties and the
participants and beneficiaries of the CAP, respectively, this Agreement is not
intended to confer upon any other person except the parties any rights or
remedies under or by reason of this Agreement.
11.6 Expenses. Whether or not the Merger is consummated, all costs
and expenses incurred in connection with the Merger, this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses; provided, however, that the allocable share of each of Parent and the
Company for all expenses related to printing, filing and mailing the proxy
statement contained in the Registration Statement and all SEC and other
regulatory filing fees incurred in connection with the Schedule 13E-3 and the
Registration Statement shall be one-half.
11.7 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or equity.
11.8 Governing Law. This Agreement shall be governed by the laws of
the State of Delaware (regardless of the laws that might otherwise govern under
applicable principles of conflicts of law) as to all matters, including but not
limited to matters of validity, construction, effect, performance and remedies.
11.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.10 Interpretation. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement. As used in this Agreement, (i) the term
"person" shall mean and include an individual, a partnership, a joint venture, a
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corporation, a limited, liability company, a trust, an unincorporated
organization and a government or any department or agency thereof; (ii) the
terms "affiliate" and "associate" shall have the meanings set forth in Rule
12b-2 of the General Rules and Regulations promulgated under the Exchange Act;
and (iii) the term "subsidiary" of any specified corporation shall mean any
corporation of which the outstanding securities having ordinary voting power to
elect a majority of the board of directors are directly or indirectly owned by
such specified corporation.
11.11 Entire Agreement. This Agreement, including the schedules and
exhibits hereto, embodies the entire agreement and understanding of the parties
hereto in respect of the subject matter contained herein and supersedes all
prior agreements and the understandings between the parties with respect to such
subject matter.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, Parent, PDI, Mergeco, and the Company have caused
this Agreement to be signed, by their respective duly authorized officers or
directly, as of the date first above written.
PETROFINA S.A.
By: /s/ Francois Cornelis
------------------------------------------
Name: Francois Cornelis
Title: Chief Executive Officer and Managing
Director
/s/ Michel-Marc Delcommune
------------------------------------------
Name: Michel-Marc Delcommune
Title: Executive Director, Corporate
Finance - Insurance
PETROFINA DELAWARE, INCORPORATED
By: /s/ Geoffroy Petit
------------------------------------------
Name: Geoffroy Petit
Title: Vice President, Administration and
Finance
NEW FINA, INC.
By: /s/ Francois Cornelis
------------------------------------------
Name: Francois Cornelis
Title: President
FINA, INC.
By: /s/ Ron W. Haddock
------------------------------------------
Name: Ron W. Haddock
Title: President and Chief Executive Officer
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INDEX OF DEFINED TERMS
(Not Part of This Agreement)
Location of Definition
----------------------
1996 Form 10-K..............................................................................7
ADR.........................................................................................3
APHC........................................................................................1
Application................................................................................21
Canceled Option.............................................................................4
CAP........................................................................................21
Cash Consideration..........................................................................3
Certificate of Merger.......................................................................2
Certificates................................................................................3
Closing.....................................................................................2
Closing Date................................................................................2
Code........................................................................................6
Common Shares...............................................................................1
Company.....................................................................................1
Company Disclosure Statements...............................................................9
Company Material Adverse Effect.............................................................7
Company Option..............................................................................7
Company Options.............................................................................7
Company Subsidiary..........................................................................7
Delaware Corporation Law....................................................................2
DGCL........................................................................................2
Dissenting Share............................................................................4
DOL........................................................................................21
Effective Time..............................................................................2
ERISA......................................................................................21
Exchange Act................................................................................8
Exchange Agent..............................................................................5
GAAP........................................................................................9
Goldman Sachs..............................................................................10
Mergeco.....................................................................................1
Mergeco Common Shares.......................................................................4
Merger......................................................................................1
Merger Consideration........................................................................3
Moody's.....................................................................................6
NASDAQ.....................................................................................19
NYSE.......................................................................................19
Parent......................................................................................1
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Parent ADS..................................................................................3
Parent Disclosure Statements...............................................................15
Parent Material Adverse Effect.............................................................12
Parent Share................................................................................3
Parent Subsidiaries.........................................................................1
Parent Subsidiary...........................................................................1
Parent Warrant..............................................................................3
PDI.........................................................................................1
PDI Shares.................................................................................12
Phantom Plan...............................................................................16
Plan........................................................................................7
Proxy Statement/Prospectus.................................................................17
Public Shareholders.........................................................................1
Public Shares...............................................................................1
Registration Statement.....................................................................17
S&P.........................................................................................6
Schedule 13E-3.............................................................................17
SEC.........................................................................................9
Securities Act..............................................................................8
Special Committee...........................................................................1
Surviving Corporation.......................................................................2
Surviving Corporation Common Shares.........................................................4
Termination Date...........................................................................23
Warrant Agreement...........................................................................3
Warrant Consideration.......................................................................3
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