Offer and Acquisition Agreement
between
CompX International Inc.,
and
Thomas Regout Holding N.V.
December 18, 1998
OFFER AND ACQUISITION AGREEMENT
This Offer and Acquisition Agreement (this "Agreement") is entered into as
of December 18, 1998, between CompX International Inc., a company validly
organized and existing under the laws of Delaware (the "Buyer") and Thomas
Regout Holding N.V., a company registered in The Netherlands ("TRH"). The Buyer
and TRH are referred to collectively herein as the "Parties."
This Agreement contemplates a transaction in which the Buyer or an
affiliate of the Buyer will offer to purchase from the shareholders of TRH all
of the outstanding capital stock of TRH in return for cash, subject to certain
conditions including the Minimum Condition (as defined below) (the "Offer") and
will purchase such stock if and to the extent that the Offer is accepted and the
conditions to the Offer are fulfilled or waived.
TRH has requested positive advice from its Works Council as to (i) the
Transactions (as defined below), including TRH's United States subsidiary
becoming part of the Buyer's North American operations following the Closing (as
defined below), (ii) the appointment to TRH's five member supervisory board of
three nominees of the Buyer following the Closing, (iii) the implementation of
the mitigated structure regime at TRH following the Closing, and (iv) the
adoption of certain amendments to TRH's profit sharing plan following the
Closing, including changing the applicable fiscal year to a calendar year; and
TRH's Works Council has consented to the execution of this Agreement subject to
its positive advice on such matters. In addition, TRH has consulted with the
labor unions involved concerning the Transactions to the satisfaction of the
Buyer and the labor unions have consented to the execution of this Agreement
subject to completion of such consultation. Further, three members of the
Supervisory Board of TRH have indicated that they will resign from the
Supervisory Board at or promptly following the Closing and the remaining two
members of the Supervisory Board of TRH have agreed to appoint three nominees of
the Buyer to the vacancies created by such resignations and to the terms and
conditions of a protocol with the Buyer concerning certain matters after the
Closing. TRH is entering into this Agreement for the sole purpose of
facilitating the purchase and sale of the outstanding stock of TRH on the terms
and subject to the conditions of this Agreement.
Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the terms, conditions and covenants herein
contained, the Parties agree as follows.
1. Definitions.
"Agreement" has the meaning set forth in the preface above.
"Bank" has the meaning set forth in section 2(b).
"Buyer" has the meaning set forth in the preface above.
"Closing" has the meaning set forth in section 3(a) below.
"Minimum Condition" means the condition to the Offer that Shareholders
holding at least 70% of the Shares accept the Offer.
"Offer" has the meaning set forth in the preface above.
"Offer Letter" means the Offer Letter, Conditions to the Offer, Acceptance
Notice and Letter from TRH recommending the Offer, substantially in the form
attached hereto as Exhibit A.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice, in all material respects.
"Party" has the meaning set forth in the preface above.
"Person" means an individual, a partnership, a corporation, an association,
a joint stock company, a trust, a joint venture, an unincorporated organization,
or a governmental or semi-governmental entity (or any department, agency, or
political subdivision thereof).
"Selling Shareholders" means the Shareholders who, in the aggregate, tender
their TRH shares for sale to the Buyer pursuant to the Offer Letter.
"Share" means any share of TRH common stock, par value NLG 500 per share,
or any share of TRH preferred stock, par value NLG 500 per share.
"Shareholders" means all of the shareholders of TRH.
"Subsidiary" means any corporation with respect to which a specified Person
(or a Subsidiary thereof) owns a majority of the common stock or has the power
to vote or direct the voting of sufficient securities to elect a majority of the
directors, including, with respect to TRH, Thomas Regout Nederland B.V., Thomas
Regout B.V. and Thomas Regout USA, Inc.
"Transactions" means the transactions contemplated by this Agreement and
the documents referred to in this Agreement, including, without limitation, the
Offer, the Buyer's payment of the purchase price to the Selling Shareholders,
and the Buyer's obtaining full legal title to the Shares held by the Selling
Shareholders as a result of such purchase.
"TRH" has the meaning set forth in the preface above.
2. Agreements of the Parties Prior to Closing. The Parties agree as
follows with respect to the period between the execution of this Agreement and
the Closing.
(a) Buyer's Offer. The Buyer will make the Offer to the Shareholders
substantially in the form of and pursuant to the terms of the Offer Letter.
Subject to the conditions set forth in the Offer Letter, the Buyer agrees
to buy any Shares duly tendered pursuant to and in compliance with the
Offer Letter at a price of NLG 12,250 per Share and to perform its other
obligations pursuant to the Offer Letter (including announcing on or prior
to January 29, 1999 whether the conditions to the Offer set forth as
exhibit A to the Offer Letter have been fulfilled or waived). Payment of
the purchase price shall be by wire transfer or delivery of other
immediately available funds to ABN/AMRO Bank N.V. Maastricht branch (the
"Bank"), and such funds shall be disbursed to each of the Selling
Shareholders by the Bank. The total amount of the purchase price if all
Shares are duly tendered shall equal NLG 98,000,000 in the aggregate.
(b) General. Each of the Parties will use its reasonable best efforts
to take all action and to do all things necessary, proper, or advisable in
order to consummate and make effective the Transactions. Without limiting
the generality of the foregoing, (i) the Buyer shall promptly duly execute
and deliver to TRH sufficient quantities of the Offer Letter, (ii) TRH
shall promptly duly execute its favorable recommendation of the Offer,
(iii) TRH shall promptly mail or arrange for the mailing of the Offer
Letter to each Shareholder, (iv) the Buyer and TRH shall jointly decide
whether to initiate any additional contacts with the Shareholders and who
should make such contact, and (v) promptly following the date upon which
the Minimum Condition has been fulfilled, TRH shall notify the Buyer that
such Minimum Condition has been fulfilled, and the Buyer shall promptly
thereafter notify TRH and the Shareholders as to whether the Offer will be
fulfilled. In addition, each of the Parties shall use reasonable best
efforts to obtain the positive advice of TRH's Works Council in connection
with the Transactions and shall cooperate in connection with TRH's
consultation with its labor unions in connection with the Transaction.
Furthermore, the Parties shall use reasonable best efforts to obtain the
letter agreements from the members of the Supervisory Board of TRH referred
to in the preamble to this Agreement.
(c) Notices and Consents. Prior to Closing, TRH will and will cause
each of its Subsidiaries to give any notices to third parties, and TRH will
and will cause each of its Subsidiaries to use its reasonable best efforts
to obtain any third party consents, that the Buyer may reasonably request
in connection with the Transactions. Each of the Parties will (and TRH will
cause each of its Subsidiaries to) give any notices to, make any filings
with, and use its reasonable best efforts to obtain any authorizations,
consents, and approvals of governments and governmental agencies required
in connection with the Transactions.
(d) Operation of Business. TRH will not engage and will not cause or
permit any of its Subsidiaries to engage in any practice, take any action,
or enter into any transaction outside the Ordinary Course of Business, and,
in connection therewith, TRH will and will cause each of its Subsidiaries
to use its reasonable best efforts to keep its business and properties
substantially intact, including its present operations, physical
facilities, working conditions, and relationships with lessors, licensors,
suppliers, customers, and employees. Without limiting the generality of the
foregoing, the Parties shall comply in all material respects with all
applicable laws, including any laws relating to the Transaction, and TRH
shall not and shall not cause or permit any of its Subsidiaries to declare,
set aside, or pay any dividend or make any distribution with respect to its
capital stock or redeem, purchase, or otherwise acquire any of its capital
stock (other than dividends previously set aside with respect to TRH's
fiscal year ended June 30, 1998 in the amount of NLG 310 per Share, NLG 70
of which has already been paid and NLG 240 of which is payable commencing
in January 1999). On or prior to December 31, 1998, TRH shall have (i)
accrued NLG 5,000,000 for the bonus to employees to be paid in connection
with the Transactions, and (ii) accrued an amount equal to TRH's reasonable
estimate of the pension accrual costs required by FASB 87, and
environmental remediation costs reasonably expected to be incurred. The
Buyer agrees that amounts accrued pursuant to the preceding sentence shall
not be deducted in computing TRH's earnings for purpose of TRH's profit
sharing plan.
(e) Full Access. TRH will permit, and TRH will cause each of its
Subsidiaries to permit, representatives of the Buyer to have reasonable
access to all premises, properties, personnel, books, records (including
tax records), contracts, and documents of or pertaining to each of TRH and
its Subsidiaries, subject to the existing Confidentiality Agreement dated
October 2, 1998 between TRH and the Buyer.
(f) Notice of Developments. TRH will give prompt written notice to
the Buyer of any material adverse development in its business, financial
condition or prospects of which the managing directors of TRH become aware
(excluding general market or economic conditions). Each Party will give
prompt written notice to the other of any material adverse development
causing a failure of any condition to the Closing to be met. No disclosure
by any Party pursuant to this section 2(f), however, shall be deemed to
prevent or cure any failure of any condition to the Closing or breach of
covenant.
(g) Exclusivity. None of TRH or its Subsidiaries, or any of their
directors, agents or other representatives, will (i) solicit, initiate,
encourage or assist in the submission of any inquiries, proposals or offers
from any corporation, partnership, person or other entity or group relating
to any public offering, acquisition or purchase of assets of, or any equity
interest in, TRH, any merger, consolidation or other business combination
involving any entity conducting any part of TRH's business, or any other
form of recapitalization transaction involving TRH, or (ii) participate in
any discussions or negotiations regarding the foregoing or furnish to any
person or entity any information concerning TRH or the transactions
contemplated by this Agreement. Should TRH or any of its Subsidiaries, or
any of their directors, agents or other representatives, receive any
inquiry, proposal or offer to enter into any transaction of the type
referred to in clauses (i) or (ii) above, TRH agrees to promptly inform the
Buyer.
(h) Disclosure. The statements and information provided by TRH to the
Buyer in connection with the Buyer's due diligence investigation of TRH and
its Subsidiaries do not contain any untrue statement of fact or omit to
state any fact necessary in order to make the statements and information
not misleading in all material respects.
(i) Waiver of Conditions. TRH agrees that the Buyer may waive any or
all of the conditions set forth in the Offer Letter, provided, however,
that the Buyer shall not waive the Minimum Condition without the consent of
TRH.
3. Closing.
(a) The Closing. Provided that the conditions to the Offer are
fulfilled or waived, the closing of the purchase and sale of the Shares
pursuant to the Offer Letter (the "Closing") shall take place at the
offices of the Bank in Maastricht, The Netherlands, commencing at 9:00 a.m.
local time on January 13, 1999 or such other time and date as the Buyer and
TRH may mutually determine. For tax and accounting purposes, the Closing
will be effective as of January 1, 1999, regardless of the actual date of
the Closing.
(b) Deliveries at the Closing. At the Closing, (i) the Bank will
deliver to the Buyer the Share certificates representing the Shares
tendered by each of the Selling Shareholders, (ii) TRH will deliver to the
Buyer a copy of the Selling Shareholders' duly executed acceptance notice,
and (iii) the Buyer will deliver to the Bank the amount specified in
section 2(a) above. The Bank will pay each Selling Shareholder the
consideration required to be paid to such Selling Shareholder pursuant to
the Offer.
4. Post Closing. The agreements and covenants contained in this
Agreement shall survive until the Closing. Following the Closing, no Party
shall have any remedy for breaches of any agreements or covenants of the other
Party contained in this Agreement, and the Parties specifically and irrevocably
waive any rights or claims they have or may have of whatever kind or nature at
any time related to this Agreement and the Transactions, including without
limitation any statutory, equitable or common law remedy or claim for judgments,
damages, penalties, fines, costs, amounts paid in settlement, losses, expenses,
or otherwise, and whether such claim is pursuant to any statute, charter
document, bylaw, agreement, or otherwise. Each Party specifically and
irrevocably waives any rights or claims the Party has or may have against the
other party or the officers, directors, managers or supervisory directors of the
other Party.
5. Termination.
(a) Termination of Agreement. The Parties may terminate this
Agreement as provided below:
(i) the Buyer and TRH may terminate this Agreement by mutual
written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement if the Buyer does not
complete the Offer pursuant to and in accordance with the Offer
Letter; and
(iii) TRH may terminate this Agreement by giving written notice
to the Buyer at any time after January 29, 1999 and prior to the
Closing if the Minimum Condition is not fulfilled and has not been
waived by TRH.
(b) Effect of Termination. If any Party terminates this Agreement
pursuant to section 5(a) above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other
Party (except for any liability of any Party then in breach).
6. Miscellaneous.
(a) Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement (in writing or orally)
relating to the subject matter of this Agreement prior to the Closing
without the prior written approval of the other Party; provided, however,
that any Party may make any public disclosure it believes in good faith is
required by applicable law or any listing or trading agreement concerning
its publicly-traded securities, in which case the Parties will consult in
relation to the content of such announcement before it is made. The
parties agree to cooperate with respect to announcements and presentations
to TRH's Works Council, management and labor unions so as to comply with
any required provisions of the provisions of the Works Council Act and the
SER Merger Code.
(b) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
(c) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or
among the Parties, written or oral, to the extent they related in any way
to the subject matter hereof.
(d) Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement
or any of its rights, interests, or obligations hereunder without the prior
written approval of the other Party; provided, however, that the Buyer may
(i) assign any or all of its rights and interests hereunder to one or more
of its affiliates and (ii) designate one or more of its affiliates to
perform its obligations hereunder (in any or all of which cases the Buyer
nonetheless shall remain responsible for the performance of all of its
obligations hereunder).
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and
then two business days after) it is sent by overnight courier, postage
prepaid, and addressed to the intended recipient as set forth below:
If to TRH:
Thomas Regout Holding N.V.
Industrieweg 40
6219 NR Maastricht
The Netherlands
Attention: Thomas Ammerdorffer
Copy to:
Loeff Claeys Verbeke
Apollolaan 15
1077 AB Amsterdam
The Netherlands
Attention: Annelies van der Pauw, advocaat
If to the Buyer:
CompX International. Inc.
16825 Northchase Drive
Suite 1200
Houston, Texas 77060
Attention: Joseph S. Compofelice
Copy to:
Bartlit Beck Herman Palenchar & Scott
511 Sixteenth Street, Suite 700
Denver, Colorado 80202
Attention: Thomas R. Stephens
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, messenger service, telecopy, ordinary
mail, or electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is received by the intended recipient. Any Party may change the address
to which notices, requests, demands, claims, and other communications hereunder
are to be delivered by giving the other Parties notice in the manner herein set
forth.
(h) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of The Netherlands.
(i) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in a writing specifically
referring to this Agreement and signed by each Party. No waiver by any Party of
any default, misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(j) Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) Expenses. Each of the Parties will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby. TRH agrees that none of TRH and its
Subsidiaries has borne or will bear any of the costs related to the Closing nor
any of the Selling Shareholders' costs and expenses (including any of their
legal fees and expenses) in connection with this Agreement or any of the
Transactions.
(l) Construction. The Parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any Netherlands, U.S. federal,
state and local, or foreign statute or law shall be deemed also to refer to all
rules and regulations promulgated thereunder, unless the context requires
otherwise. The word "including" shall mean including without limitation. The
Parties intend that each representation, warranty, and covenant contained herein
shall have independent significance. If any Party has breached any
representation, warranty, or covenant contained herein in any respect, the fact
that there exists another representation, warranty, or covenant relating to the
same subject matter (regardless of the relative levels of specificity) which the
Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty, or covenant.
(m) Incorporation of Exhibits. The Exhibit identified in this Agreement is
incorporated herein by reference and made a part hereof.
(n) Specific Performance. Each of the Parties acknowledges and agrees that
the other Parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Parties shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of The Netherlands having jurisdiction over the Parties and the matter
(subject to the provisions set forth in section 6(o) below), in addition to any
other remedy to which they may be entitled, at law or in equity.
(o) Submission to Jurisdiction. Each of the Parties submits to the
jurisdiction of any competent court sitting in The Netherlands, in any action or
proceeding arising out of or relating to this Agreement and agrees that all
claims in respect of the action or proceeding may be heard and determined in any
such court.
* * * * *
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
COMPX INTERNATIONAL INC.
By:/s/ Joseph S. Compofelice
-------------------------------------
Joseph S. Compofelice
Chairman and Chief Executive Officer
THOMAS REGOUT HOLDING N.V.
By:/s/ Thom Ammerdorffer
-------------------------------------
Thom Ammerdorffer
Title: President