Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
by and among
THOMAS & BETTS CORPORATION,
T&B ACQUISITION II CORP.
and
THE LAMSON & SESSIONS CO.
dated as of
August 15, 2007
TABLE OF CONTENTS
Page
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ARTICLE I
THE MERGER
Section 1.1 The Merger..............................................................................1
Section 1.2 Closing.................................................................................1
Section 1.3 Effective Time..........................................................................1
Section 1.4 Effect of the Merger....................................................................2
Section 1.5 Articles of Incorporation; Code of Regulations..........................................2
Section 1.6 Directors and Officers of the Surviving Corporation.....................................2
ARTICLE II
EFFECT OF THE MERGER ON CAPITAL STOCK
Section 2.1 Effect on Capital Stock.................................................................2
Section 2.2 Payment; Surrender of Shares; Stock Transfer Books......................................3
Section 2.3 Treatment of Stock Plans................................................................5
Section 2.4 Dissenting Shares.......................................................................6
Section 2.5 Subsequent Actions......................................................................7
Section 2.6 Adjustments.............................................................................7
Section 2.7 Lost Certificates.......................................................................7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1 Organization............................................................................7
Section 3.2 Authorization; Validity of Agreement; Company Action....................................8
Section 3.3 Consents and Approvals; No Violations...................................................9
Section 3.4 Capitalization..........................................................................9
Section 3.5 SEC Reports and Financial Statements...................................................10
Section 3.6 Absence of Certain Changes.............................................................12
Section 3.7 No Undisclosed Material Liabilities....................................................12
Section 3.8 Compliance with Laws and Court Orders..................................................12
Section 3.9 Material Contracts.....................................................................13
Section 3.10 Information Supplied...................................................................14
Section 3.11 Litigation.............................................................................14
Section 3.12 Labor Matters..........................................................................15
Section 3.13 Employee Compensation and Benefit Plans; ERISA.........................................15
Section 3.14 Properties.............................................................................17
Section 3.15 Intellectual Property..................................................................18
Section 3.16 Environmental Laws.....................................................................19
Section 3.17 Taxes..................................................................................20
Section 3.18 Opinion of Financial Advisor...........................................................21
Section 3.19 Brokers or Finders.....................................................................21
Section 3.20 State Takeover Statutes................................................................21
Section 3.21 The Company Rights Agreement...........................................................21
Section 3.22 No Other Representations or Warranties.................................................21
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUB
Section 4.1 Organization...........................................................................22
Section 4.2 Authorization; Validity of Agreement; Necessary Action.................................22
Section 4.3 Consents and Approvals; No Violations..................................................22
Section 4.4 Ownership of Common Stock..............................................................23
Section 4.5 Information Supplied...................................................................23
Section 4.6 Financing..............................................................................23
Section 4.7 No Prior Activities....................................................................23
Section 4.8 Disclaimer of Warranties...............................................................23
ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company......................................................24
Section 5.2 No Solicitation by the Company.........................................................26
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Preparation of Proxy Statement.........................................................28
Section 6.2 Shareholders Meeting...................................................................29
Section 6.3 Commercially Reasonable Efforts........................................................29
Section 6.4 Notification of Certain Matters........................................................30
Section 6.5 Access; Confidentiality................................................................31
Section 6.6 Publicity..............................................................................31
Section 6.7 Indemnification; Directors' and Officers' Insurance....................................31
Section 6.8 Merger Sub Compliance..................................................................33
Section 6.9 Employee Matters.......................................................................33
Section 6.10 Repayment of Indebtedness..............................................................34
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions to Each Party's Obligation to Effect the Merger.............................34
Section 7.2 Conditions to Obligations of Parent and Merger Sub.....................................34
Section 7.3 Conditions to Obligations of the Company...............................................35
Section 7.4 Frustration of Closing Conditions......................................................36
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ARTICLE VIII
TERMINATION
Section 8.1 Termination............................................................................36
Section 8.2 Effect of Termination..................................................................37
ARTICLE IX
MISCELLANEOUS
Section 9.1 Amendment and Modification.............................................................39
Section 9.2 Non-survival of Representations and Warranties.........................................39
Section 9.3 Expenses...............................................................................39
Section 9.4 Notices................................................................................39
Section 9.5 Counterparts...........................................................................40
Section 9.6 Entire Agreement; No Third Party Beneficiaries.........................................41
Section 9.7 Severability...........................................................................41
Section 9.8 Governing Law..........................................................................41
Section 9.9 Assignment.............................................................................41
Section 9.10 Consent to Jurisdiction................................................................41
Section 9.11 Specific Enforcement...................................................................42
ARTICLE X
DEFINITIONS; INTERPRETATION
Section 10.1 Cross References.......................................................................42
Section 10.2 Certain Terms Defined..................................................................44
Section 10.3 Other Definitional and Interpretative Provisions.......................................48
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SCHEDULES
Company Disclosure Letter Sections
Section 3.1.......Organization
Section 3.3.......Consents and Approvals; No Violations
Section 3.4.......Capitalization
Section 3.5.......SEC Reports and Financial Statements
Section 3.6.......Absence of Certain Changes
Section 3.7.......Undisclosed Material Liabilities
Section 3.8.......Compliance with Laws and Court Orders
Section 3.9.......Material Contracts
Section 3.11......Litigation
Section 3.12......Labor Matters
Section 3.13......Employee Compensation and Benefit Plans; ERISA
Section 3.14......Properties
Section 3.15......Intellectual Property
Section 3.16......Environmental Laws
Section 3.17......Taxes
Section 5.1.......Interim Operations
Section 6.7.......D&O Insurance
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
August 15, 2007, by and among Thomas & Betts Corporation, a Tennessee
corporation ("Parent"); T&B Acquisition II Corp., an Ohio corporation and a
wholly owned subsidiary of Parent ("Merger Sub"), and The Lamson & Sessions Co.,
an Ohio corporation (the "Company").
RECITALS
WHEREAS, the respective Boards of Directors of Parent, Merger
Sub and the Company each have approved, and deem it advisable and in the best
interests of their respective shareholders to consummate, the acquisition of the
Company by Parent by means of a merger of Merger Sub with and into the Company
upon the terms and subject to the conditions set forth in this Agreement,
whereby each issued and outstanding common share (collectively, the "Shares"),
without par value, of the Company (collectively, the "Common Stock"), other than
Dissenting Shares and any shares of Common Stock owned by Parent or any of its
Subsidiaries or held in the treasury of the Company, will be converted into the
right to receive the Merger Consideration; and
WHEREAS, Parent, Merger Sub and the Company desire to make
certain representations, warranties, covenants and agreements specified herein
in connection with the Merger and to prescribe certain conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing and the
mutual representations, warranties, covenants and agreements set forth in this
Agreement, the receipt and sufficiency of which are hereby acknowledged, upon
the terms and subject to the conditions of this Agreement, the parties to this
Agreement agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. At the Effective Time, Merger Sub will
be merged with and into the Company (the "Merger"), whereupon the separate
corporate existence of Merger Sub will cease and the Company will continue as
the surviving corporation. The Company as the surviving corporation after the
Merger is referred to in this Agreement as the "Surviving Corporation."
Section 1.2 Closing. The closing of the Merger (the "Closing")
shall take place on a date to be specified by the parties, which shall be no
later than the fifth Business Day after the satisfaction or waiver of all of the
conditions set forth in Article VII (the "Closing Date"), at the offices of
Jones Day, North Point, 901 Lakeside Avenue, Cleveland, Ohio 44114, unless
another date or place is agreed to in writing by the parties to this Agreement.
Section 1.3 Effective Time. The parties to this Agreement
shall cause a certificate of merger to be executed and filed on the Closing Date
(or on such other date as Parent and the Company may agree), with the Secretary
of State of the State of Ohio in such form as required by, and executed in
accordance with, the relevant provisions of Ohio Law. The Merger will become
effective at the time the certificate of merger is duly filed with the Secretary
of State of the State of Ohio or such time as is agreed upon by the parties and
specified in the certificate of merger (such time is referred to in this
Agreement as the "Effective Time").
Section 1.4 Effect of the Merger. At the Effective Time, the
effect of the Merger will be as provided in the applicable provisions of Ohio
Law. Without limiting the generality of the foregoing, and subject to the
foregoing, at the Effective Time all the assets, property, rights, privileges,
immunities, powers, franchises and authority of the Company and Merger Sub will
vest in the Surviving Corporation and all debts, liabilities and duties of the
Company and Merger Sub will become the debts, liabilities and duties of the
Surviving Corporation.
Section 1.5 Articles of Incorporation; Code of Regulations.
(a) At the Effective Time, the Articles of Incorporation of
Merger Sub, as in effect immediately before the Effective Time, will be the
Articles of Incorporation of the Surviving Corporation, except that the
corporate name of Merger Sub shall at the Effective Time be changed to the
corporate name of the Company, until the Articles of Incorporation of the
Surviving Corporation are thereafter further amended as provided by Law and such
Articles of Incorporation.
(b) At the Effective Time, the Code of Regulations of Merger
Sub, as in effect immediately before the Effective Time, will be the Code of
Regulations of the Surviving Corporation until thereafter amended as provided by
Law, the Articles of Incorporation of the Surviving Corporation and such Code of
Regulations.
Section 1.6 Directors and Officers of the Surviving
Corporation. The directors of Merger Sub immediately before the Effective Time
will be the initial directors of the Surviving Corporation and the officers of
Merger Sub immediately before the Effective Time will be the initial officers of
the Surviving Corporation, in each case until their successors are duly elected
or appointed and qualified or until their earlier death, resignation or removal
in accordance with the Articles of Incorporation and the Code of Regulations of
the Surviving Corporation.
ARTICLE II
EFFECT OF THE MERGER ON CAPITAL STOCK
Section 2.1 Effect on Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of Parent, Merger Sub,
the Company or the holder of Shares or securities of Parent or Merger Sub:
(a) At the Effective Time each Share issued and outstanding
immediately before the Effective Time (other than any Shares to be cancelled
pursuant to Section 2.1(b) and any Dissenting Shares) will be cancelled and
extinguished and be converted into the right to receive $27.00 in cash payable
to the holder of such Share, without interest (the "Merger Consideration"), upon
(i) surrender of the certificate formerly representing such Share (a
"Certificate") in the manner provided in Section 2.2 or (ii) in the case of an
uncertificated Share which immediately prior to the Effective Time was
registered to a holder on the stock transfer books of the Company (an
"Uncertificated Share"), transfer of such Uncertificated Share in the manner
provided in Section 2.2. All such Shares, when so converted at the Effective
Time, will no longer be outstanding and will be automatically cancelled, retired
and cease to exist. As of the Effective Time each holder of a Certificate or an
Uncertificated Share will cease to have any rights with respect to such Shares,
except the right to receive the Merger Consideration for such Shares upon the
surrender or transfer of such Certificate or Uncertificated Shares in accordance
with Section 2.2, without interest.
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(b) Each Share held in the treasury of the Company and each
Share owned by Parent or any direct or indirect wholly owned Subsidiary of
Parent immediately before the Effective Time will be cancelled and extinguished,
and no payment or other consideration will be made with respect to such Shares.
(c) Each share of common stock, without par value, of Merger
Sub issued and outstanding immediately before the Effective Time will thereafter
represent one validly issued, fully paid and nonassessable share of common
stock, without par value, of the Surviving Corporation.
Section 2.2 Payment; Surrender of Shares; Stock Transfer
Books.
(a) Before the Effective Time, Merger Sub shall designate the
Company's transfer agent or another bank or trust company reasonably acceptable
to the Company to act as agent for the holders of Shares in connection with the
Merger (the "Paying Agent") to receive the funds necessary to make the payments
contemplated by Section 2.1(a). At the Effective Time, Parent or Merger Sub
shall deposit, or cause to be deposited, in trust with the Paying Agent in a
separate account for the benefit of holders of Shares (the "Payment Fund") the
aggregate consideration to which such holders shall be entitled at the Effective
Time pursuant to Section 2.1(a). If for any reason the cash in the Payment Fund
shall be insufficient to fully satisfy all of the payment obligations to be made
in cash by the Paying Agent hereunder, Parent shall promptly deposit cash into
the Payment Fund in an amount which is equal to the deficiency in the amount of
cash required to fully satisfy such cash payment obligations. The Paying Agent
shall invest the funds provided by Parent in the manner specified by Parent, and
interest payable thereon shall be solely for the account of Parent or the
Surviving Corporation.
(b) As soon as reasonably practicable after the Effective Time
and in any event not later than two Business Days following the Effective Time,
Parent shall cause the Paying Agent to mail to each holder of record of Shares
whose shares were converted into the right to receive the Merger Consideration
pursuant to Section 2.1(a) (i) a letter of transmittal (which must specify that
delivery will be effected, and risk of loss and title to the Certificates or
Uncertificated Shares will pass, only upon delivery or transfer, as applicable,
to the Paying Agent and will be in such form and have such other provisions as
the Company and Merger Sub may reasonably agree) and (ii) instructions for use
in surrendering Certificates or Uncertificated Shares in exchange for the Merger
Consideration. Each holder of a Certificate, Certificates or Uncertificated
Shares may thereafter until the first anniversary of the Effective Time
surrender such Certificate, Certificates or Uncertificated Shares to the Paying
Agent under cover of the letter of transmittal, as agent for such holder. Upon
(A) delivery of a properly completed letter of transmittal and the surrender of
Certificates or (B) receipt of an "agent's message" by the Paying Agent (or such
other evidence, if any, of transfer as the Paying Agent may reasonably request)
in the case of a book-entry transfer of Uncertificated Shares, in each case, on
or before the first anniversary of the Effective Time, Merger Sub shall cause
the Paying Agent to pay the holder of such Certificates or Uncertificated
Shares, in exchange for the Certificates or Uncertificated Shares, cash in an
amount equal to the Merger Consideration in respect of the Shares represented by
such Certificate or such Uncertificated Shares, without interest. Until so
surrendered, each Certificate or Uncertificated Share (other than Certificates
and Uncertificated Shares representing Dissenting Shares and Certificates and
Uncertificated Shares representing Shares held by Parent or any direct or
indirect wholly owned Subsidiary of Parent or in the treasury of the Company)
will represent solely the right to receive the aggregate Merger Consideration
relating to the Shares represented by such Certificates or Uncertificated
Shares, without interest.
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(c) If payment of the Merger Consideration in respect of
cancelled Shares is to be made to a Person other than the Person in whose name a
surrendered Certificate or transferred Uncertificated Share is registered, it
will be a condition to such payment that (i) either the Certificate so
surrendered will be properly endorsed or otherwise be in proper form for
transfer or such Uncertificated Share shall be properly transferred and (ii)
that the Person requesting such payment shall have paid any transfer and other
taxes required by reason of such payment in a name other than that of the
registered holder of the Certificate or Uncertificated Share surrendered or
shall have established to the satisfaction of Merger Sub or the Paying Agent
that such tax either has been paid or is not applicable. The Merger
Consideration paid upon the surrender for exchange of Certificates or
Uncertificated Shares in accordance with the terms of this Article II will be
deemed to have been paid in full satisfaction of all rights pertaining to the
Shares theretofore represented by such Certificates or such Uncertificated
Shares, subject, however to the Surviving Corporation's obligation to pay any
unpaid cash dividends with a record date prior to the Effective Time that have
been properly declared by the Company on such Shares in accordance with the
terms of this Agreement.
(d) At the Effective Time, the stock transfer books of the
Company will be closed and there will not be any further registration of
transfers of any shares of the Company's capital stock thereafter on the records
of the Company. From and after the Effective Time, the holders of Certificates
or Uncertificated Shares will cease to have any rights with respect to such
Shares, except as otherwise provided for in this Agreement or by applicable Law.
If, after the Effective Time, Certificates or Uncertificated Shares are
presented to the Surviving Corporation, they will be cancelled and exchanged for
Merger Consideration as provided in this Article II. No interest will accrue or
be paid on any cash payable upon the surrender of a Certificate or Certificates
or transfer of Uncertificated Shares which immediately before the Effective Time
represented outstanding Shares.
(e) Promptly following the date which is one year after the
Effective Time, the Surviving Corporation will be entitled to require the Paying
Agent to deliver to it any cash (including any interest received with respect to
such cash), Certificates and other documents in its possession relating to the
transactions contemplated hereby (the "Transactions"), which had been made
available to the Paying Agent and which have not been disbursed to holders of
Certificates or Uncertificated Shares, and thereafter such holders will be
entitled to look to the Surviving Corporation (subject to abandoned property,
escheat or similar Laws) only as general creditors of the Surviving Corporation
with respect to the Merger Consideration payable upon due surrender of their
Certificates or Uncertificated Shares, without any interest on such Merger
Consideration. Notwithstanding the foregoing, neither the Surviving Corporation
nor the Paying Agent will be liable to any holder of a Certificate or
Uncertificated Share for Merger Consideration delivered to a public official
pursuant to any applicable abandoned property, escheat or similar Law. Any
amounts remaining unclaimed by any such holders of shares of Company Stock three
years after the Effective Time (or such earlier date, immediately prior to such
time when the amounts would otherwise escheat to or become property of any
Governmental Authority) shall become, to the extent permitted by applicable Law,
the property of Parent free and clear of any claims or interest of any Person
previously entitled thereto.
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(f) The Merger Consideration paid in the Merger will be net to
the holder of Shares in cash, subject to reduction only for withholding of any
applicable federal, state, local or foreign taxes or, as set forth in Section
2.2(c), stock transfer taxes payable by such holder. If the Surviving
Corporation or Parent, as the case may be, so withholds amounts, such amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of the shares of Company Stock in respect of which the Surviving
Corporation or Parent, as the case may be, made such deduction and withholding.
Section 2.3 Treatment of Stock Plans.
(a) At the Effective Time each holder of a then-outstanding
option (the "Options") to purchase Shares under the Stock Plans will be entitled
to receive, in settlement thereof, for each Share subject to such Option, a cash
payment equal to the product of (i) the excess, if any, of the sum of (x) the
Merger Consideration plus (y) any cash dividends declared by the Company in
accordance with Section 5.1 (such dividends together with the Merger
Consideration, the "Equity Consideration") (or, if greater in the case of the
Company's 1988 Incentive Equity Performance Plan, the "Change in Control Price,"
as defined therein) over the per share exercise price of the Options and (ii)
the number of Shares subject to such holder's Options not previously exercised,
whether or not then vested and exercisable.
(b) At the Effective Time, each holder of a then-outstanding
stock appreciation right (a "SAR") with respect to Shares under the Stock Plans
will be entitled to receive, in settlement thereof, for each Share subject to
such SAR a cash payment equal to the product of (i) the excess, if any, of the
Equity Consideration over the base price per Share under the SAR and (ii) the
number of Shares subject to such holders' SARs not previously exercised, whether
or not then vested and exercisable.
(c) Each outstanding unvested restricted share issued pursuant
to a Stock Plan (each, a "Restricted Share") shall, at the Effective Time, be
vested and no longer subject to restrictions and will be canceled and be
converted into, and become the right to receive, the Merger Consideration, which
shall be payable in accordance with Section 2.1(a).
(d) All amounts payable pursuant to this Section 2.3 shall be
subject to any required withholding of federal, state, local or foreign taxes
and shall be paid without interest. If the Surviving Corporation or Parent, as
the case may be, so withholds amounts, such amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the applicable
Options, SARs or Restricted Shares in respect of which the Surviving Corporation
or Parent, as the case may be, made such deduction and withholding.
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(e) Prior to the Effective Time, the Company shall use its
reasonable best efforts to obtain all necessary consents or releases from the
holders of Options, SARs and Restricted Shares under the Stock Plans and take
all such other lawful action as may be necessary (which include, but are not
limited to, satisfying the requirements of Rule 16b-3(e) promulgated under the
Exchange Act, without incurring any liability in connection therewith) to
provide for and give effect to the transactions contemplated by this Section
2.3; provided, that notwithstanding any other provision of this Section 2.3,
payment may be withheld in respect of any Option, SAR or Restricted Share until
such necessary consents are obtained. Except as otherwise agreed to in writing
by the parties, (i) the Stock Plans will terminate as of the Effective Time and
(ii) the Company shall use its reasonable best efforts to assure that following
the Effective Time, no participant in the Stock Plans shall have any right under
the Stock Plans to acquire the capital stock of the Company or the Surviving
Corporation.
(f) Prior to the Effective Time, the Company shall use its
reasonable best efforts to cause the Transactions, and any other dispositions of
equity interests of the Company (including derivative securities) in connection
with this Agreement by each individual who is subject to the reporting
requirements of Section 16(a) of the Exchange Act to be approved by the Board of
Directors of the Company (the "Company Board") or a committee of two or more
non-employee directors of the Company (as such term is defined in Rule 16b-3
promulgated under the Exchange Act). Such approval shall specify: (A) the name
of each officer or director, (B) the number of securities to be disposed of for
each named person, and (C) that the approval is granted for purposes of
exempting the transaction under Rule 16b-3 promulgated under the Exchange Act.
Section 2.4 Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the
contrary, any Shares held by a holder who has demanded and perfected his, her or
its demand for appraisal of his, her or its Shares in accordance with Ohio Law
(including but not limited to Section 1701.85 of Ohio Law) and as of the
Effective Time has neither effectively withdrawn nor lost his, her or its right
to such appraisal ("Dissenting Shares"), will not be converted into or represent
a right to receive cash pursuant to Section 2.1(a), but the holder of the
Dissenting Shares will be entitled to only such rights as are granted to holders
of Dissenting Shares by Ohio Law.
(b) Notwithstanding the provisions of Section 2.4(a), if any
holder of Shares who demands appraisal of his, her or its Shares under Ohio Law
effectively withdraws or loses (through failure to perfect or otherwise) his,
her or its right to appraisal, then as of the Effective Time or the occurrence
of such event, whichever later occurs, such holder's Shares will automatically
be converted into and represent only the right to receive the Merger
Consideration as provided in Section 2.1(a), without interest thereon, upon
surrender of the Certificate or Certificates representing such Shares or
transfer of Uncertificated Shares pursuant to Section 2.2.
(c) The Company shall give Parent prompt notice of any written
demands for appraisal or payment of the fair value of any Shares, withdrawals of
such demands, and any other instruments served pursuant to Ohio Law received by
the Company, and Parent shall have the right to direct all negotiations and
proceedings with respect to such demands. The Company shall not voluntarily make
any payment with respect to any demands for appraisal and shall not, except with
the prior written consent of Parent, settle or offer to settle any such demands.
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Section 2.5 Subsequent Actions. If, at any time after the
Effective Time, the Surviving Corporation shall consider or be advised that any
deeds, bills of sale, assignments, assurances or any other actions or things are
necessary or desirable to vest, perfect or confirm of record or otherwise in the
Surviving Corporation, its right, title or interest in, to or under any of the
rights, properties or assets of either of the Company or Merger Sub acquired or
to be acquired by the Surviving Corporation as a result of, or in connection
with, the Merger or otherwise to carry out this Agreement, the officers and
directors of the Surviving Corporation shall be authorized to execute and
deliver, in the name and on behalf of either the Company or Merger Sub, all such
deeds, bills of sale, assignments and assurances and to take and do, in the name
and on behalf of each of such corporations or otherwise, all such other actions
and things as may be necessary or desirable to vest, perfect or confirm any and
all right, title and interest in, to and under such rights, properties or assets
in the Surviving Corporation or otherwise to carry out this Agreement.
Section 2.6 Adjustments. If, during the period between the
date hereof and the Effective Time, any change in the outstanding Shares shall
occur, by reason of any reclassification, recapitalization, stock split or
combination, exchange or readjustment of shares, or any stock dividend thereon
with a record date during such period, or pursuant to the Company Rights
Agreement, but excluding any change that results from any exercise of Options,
the Merger Consideration, and any dividends permitted to be declared by the
Company prior to the Effective Time pursuant to Section 5.1, shall be
appropriately adjusted.
Section 2.7 Lost Certificates. If 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 the Surviving Corporation, the posting by such Person of a bond, in
such reasonable amount as the Surviving Corporation may direct, as indemnity
against any claim that may be made against it with respect to such Certificate,
the Paying Agent will pay, in exchange for such lost, stolen or destroyed
Certificate, the Merger Consideration to be paid in respect of the Shares
represented by such Certificate, as contemplated by this Article II.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as disclosed in the corresponding section of the letter
from the Company, dated the date hereof, addressed to Merger Sub and Parent (the
"Company Disclosure Letter") (or in a different section of the Company
Disclosure Letter where the applicability of such disclosure to the applicable
Section of this Agreement is readily apparent on its face), the Company
represents and warrants to Parent and Merger Sub as follows:
Section 3.1 Organization.
(a) Each of the Company and its Subsidiaries is a corporation,
partnership or other entity duly organized, validly existing and in good
standing under the Laws of the jurisdiction of its incorporation or
organization. Each of the Company and its Subsidiaries has all requisite
corporate or other power and authority and all necessary governmental approvals
to own, lease and operate its properties and to carry on its business as now
being conducted, except where the failure to be so organized, existing and in
good standing or to have such power, authority and governmental approvals has
not had and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. The Company has heretofore furnished or
otherwise made available to Parent a complete and correct copy of the Amended
Articles of Incorporation and the Amended Code of Regulations of the Company,
each as currently in effect.
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(b) Section 3.1(b) of the Company Disclosure Letter sets forth
a true and complete list of all of the Company's Subsidiaries and their
jurisdictions of organization. The Company and each of its Subsidiaries is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such qualification or licensing necessary,
except where the failure to be so duly qualified or licensed and in good
standing has not had and would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect. None of the Company or any of
its Subsidiaries owns any equity interest in any corporation or other Person.
Section 3.2 Authorization; Validity of Agreement; Company
Action.
(a) The Company has full corporate power and authority to
execute and deliver this Agreement and to consummate the Transactions. The
execution, delivery and performance by the Company of this Agreement, and the
consummation by it of the Transactions, have been duly and validly authorized by
the Company Board, and no other corporate action on the part of the Company is
necessary to authorize the execution and delivery by the Company of this
Agreement and the consummation by it of the Transactions, except for the
affirmative vote of the holders of two-thirds of the outstanding Shares as
contemplated by Section 6.2. This Agreement has been duly executed and delivered
by the Company and, assuming due and valid authorization, execution and delivery
of this Agreement by Parent and Merger Sub, is a valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, except
that (i) such enforcement may be subject to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar Laws, now or hereafter
in effect, affecting creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(b) Assuming the accuracy of the representation and warranty
in Section 4.4, the affirmative vote of the holders of two-thirds of the
outstanding Shares is the only vote of the holders of any class or series of the
Company's capital stock that is necessary to approve the Merger or the
Transactions and approve and adopt this Agreement.
(c) At a meeting duly called and held, the Company Board
unanimously (i) determined that this Agreement and the transactions contemplated
hereby are fair to and in the best interests of the Company's shareholders and
has declared this Agreement advisable, (ii) approved this Agreement and the
Transactions, (iii) resolved (subject to Section 5.2) to recommend adoption of
this Agreement by its shareholders (such recommendation, the "Company Board
Recommendation") and (iv) approved and adopted an amendment to the Company
Rights Agreement to render the Company Rights inapplicable to the Merger, this
Agreement and the Transactions contemplated hereby (a copy of which amendment
was provided to Parent by the Company prior to the date of this Agreement).
-8-
Section 3.3 Consents and Approvals; No Violations. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, (i) the Exchange Act, (ii) the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and (iii) the filing of the certificate of merger, none of the execution,
delivery or performance of this Agreement by the Company, the consummation by
the Company of the Transactions or compliance by the Company with any of the
provisions of this Agreement will (a) contravene or conflict with or result in
any breach of any provision of the Amended Articles of Incorporation or the
Amended Code of Regulations of the Company or similar organizational documents
of any of the Company's Subsidiaries, (b) require any filing with or any other
action by or in respect of, or permit, authorization, consent or approval of,
any domestic, foreign, federal, state or local court, arbitral tribunal,
administrative agency or commission or other governmental, regulatory or
administrative authority, department or agency (a "Governmental Entity"), (c)
require any consent or other action by any Person under, result in a violation
or breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration or the loss of any benefit to which the Company or
any of its Subsidiaries is entitled) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license, permit,
approval, contract, agreement or other instrument or obligation to which the
Company or any of its Subsidiaries is a party or by which any of them or any of
their properties or assets may be bound (the "Company Agreements"), (d) result
in the creation or imposition of any Lien on any asset of the Company or any of
its Subsidiaries or (e) contravene, conflict with or violate or breach any Order
or Law applicable to the Company, any of its Subsidiaries or any of their
properties or assets, except in the case of clauses (b), (c), (d) or (e) where
failure to obtain such permits, authorizations, consents or approvals or to make
such filings or take such actions, or where such violations, breaches or
defaults would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
Section 3.4 Capitalization.
(a) The authorized capital stock of the Company consists of
1,200,000 shares of serial preferred stock, par value of $10.00 per share (the
"Preferred Stock"), 3,000,000 shares of serial preference stock, without par
value (the "Preference Stock"), and 40,000,000 shares of Common Stock, without
par value. As of August 14, 2007, (i) no shares of Preferred Stock were issued
and outstanding, (ii) no shares of Preference Stock were issued and outstanding,
(iii) 15,849,201 Shares and Restricted Shares (including shares of restricted
stock and shares of performance accelerated restricted stock) (in the aggregate)
were outstanding, (iv) no shares of Common Stock were issued and held in the
treasury of the Company and (v) 581,097 shares of Common Stock are reserved for
issuance under the Stock Plans in respect of outstanding and future awards.
Section 3.4(a) of the Company Disclosure Letter discloses as of August 14, 2007
(A) the number of shares subject to each outstanding Option, including with
respect to each such Option the holder, date of grant, exercise price, vesting
schedule and number of Shares subject thereto, (B) the number of Restricted
Shares, including with respect to each such share and unit the holder, date of
grant and vesting schedule, and (C) the number of SARs, including with respect
to each such SAR, the holder, date of grant, exercise price, vesting schedule
and number of Shares to which it relates. All the outstanding shares of Common
Stock are, and all shares of Common Stock which may be issued pursuant to the
exercise of outstanding Options will be, when issued in accordance with the
terms of the Options, duly authorized, validly issued, fully paid and
non-assessable. Except as set forth in this Section 3.4(a) and for changes
resulting from the exercise of the Options outstanding as of the date hereof and
as provided in the Rights Agreement, dated September 8, 1998 and as amended on
May 5, 2005, by and between the Company and National City Bank (the "Company
Rights Agreement"), there are no issued, reserved for issuance or outstanding
(v) shares of capital stock or other voting securities of the Company, (w)
securities of the Company or any of its Subsidiaries convertible into or
exchangeable for shares of capital stock or other voting securities of or other
ownership interest in the Company or any of its Subsidiaries, (x) existing
options, warrants, calls, preemptive rights, subscription or other rights,
agreements, arrangements or commitments of any character, relating to the issued
or unissued capital stock of the Company or any of its Subsidiaries, obligating
the Company or any of its Subsidiaries to issue, transfer or sell or cause to be
issued, transferred or sold any shares of capital stock or other equity interest
in the Company or any of its Subsidiaries or securities convertible into or
exchangeable for such share or equity interests, or obligating the Company or
any of its Subsidiaries to grant, extend or enter into any such option, warrant,
call, subscription or other right, agreement, arrangement or commitment, (y)
restricted shares, stock appreciation rights, performance units, contingent
value rights, "phantom" stock or similar securities or rights that are
derivative of, or provide economic benefits based, directly or indirectly, on
the value or price of, any capital stock of, or other voting securities of or
ownership interests in, the Company or any of its Subsidiaries (the items in
clauses (v) though (y) being referred to collectively as the "Company
Securities") or (z) outstanding contractual obligations of the Company or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any Company
Securities or to provide funds to make any investment (in the form of a loan,
capital contribution or otherwise) in any Subsidiary or any other entity. No
Subsidiary of the Company owns any Shares.
-9-
(b) All of the outstanding shares of capital stock or other
equity interest of each of the Subsidiaries are beneficially and of record owned
by the Company, directly or indirectly, and all such shares have been validly
issued and are fully paid and nonassessable and are owned by either the Company
or one of its Subsidiaries free and clear of all liens, charges, security
interests, options, claims, mortgages, pledges or other encumbrances and
restrictions of any nature whatsoever.
(c) There are no voting trusts or other agreements or
understandings to which the Company or any of its Subsidiaries is a party with
respect to the voting of the capital stock of the Company or any of the
Subsidiaries.
Section 3.5 SEC Reports and Financial Statements. (a) The
Company has filed with or furnished to the SEC, and has made available to
Parent, true and complete copies of all forms, reports, schedules, statements,
prospectuses, registration statements and other documents required to be filed
or furnished by it since January 1, 2005, under the Exchange Act or the
Securities Act of 1933, as amended (the "Securities Act") (as such documents
have been amended prior to the date hereof since the time of their filing,
collectively, the "Company SEC Documents"). As of their respective dates or, if
amended prior to the date hereof, as of the date of the last such amendment
prior to the date hereof, the Company SEC Documents, including any financial
statements or schedules included therein (A) did not, and each Company SEC
Document filed after the date hereof will not, contain any untrue statement of a
material fact or omit to state a material fact required to be stated in the
Company SEC Documents or necessary in order to make the statements in the
Company SEC Documents, in light of the circumstances under which they were made,
not misleading and (B) complied, and each Company SEC Document filed after the
date hereof will comply, in all material respects with the applicable
requirements of the Exchange Act or the Securities Act, as the case may be, and
the applicable rules and regulations of the SEC under the Exchange Act or the
Securities Act, as the case may be. None of the Company's Subsidiaries are
required to file any forms, reports, schedules, statements, prospectuses,
registration statements or other documents with the SEC. Each of the
consolidated financial statements included or incorporated by reference in the
Company SEC Documents (the "Financial Statements") (w) has been prepared from,
and is in accordance with, the books and records of the Company and its
consolidated Subsidiaries, (x) complies in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect to such requirements, (y) has been prepared in accordance with
United States generally accepted accounting principles ("GAAP"), in all material
respects, applied on a consistent basis during the periods involved (except as
may be indicated in the Financial Statements or in the notes to the Financial
Statements and subject, in the case of unaudited statements, to normal year-end
audit adjustments and the absence of footnote disclosure) and (z) fairly
presents in accordance with GAAP, in all material respects, the consolidated
financial position and the consolidated results of operations and cash flows
(and changes in financial position, if any) of the Company and its consolidated
Subsidiaries as of the date and for the periods referred to in the Financial
Statements.
-10-
(b) The Company has established and maintains disclosure
controls and procedures (as defined in Rule 13a-15 under the Exchange Act). Such
disclosure controls and procedures are designed to ensure that material
information relating to the Company, including its consolidated Subsidiaries, is
made known to the Company's principal executive officer and its principal
financial officer by others within those entities, particularly during the
periods in which the periodic reports required under the Exchange Act are being
prepared. Such disclosure controls and procedures are effective in timely
alerting the Company's principal executive officer and principal financial
officer to material information required to be included in the Company's
periodic reports required under the Exchange Act.
(c) Since January 1, 2005, the Company and its Subsidiaries
have established and maintained a system of internal control over financial
reporting (as defined in Rule 13a-15 under the Exchange Act) ("internal
controls" ). Such internal controls are sufficient to provide reasonable
assurance regarding the reliability of the Company's financial reporting and the
preparation of Company financial statements for external purposes in accordance
with GAAP. The Company has disclosed, based on its most recent evaluation of
internal controls prior to the date hereof, to the Company's auditors and audit
committee (x) any significant deficiencies and material weaknesses in the design
or operation of internal controls which are reasonably likely to adversely
affect the Company's ability to record, process, summarize and report financial
information and (y) any fraud, whether or not material, that involves management
or other employees who have a significant role in internal controls.
(d) There are no outstanding loans or other extensions of
credit made by the Company or any of its Subsidiaries to any executive officer
(as defined in Rule 3b-7 under the Exchange Act) or director of the Company. The
Company has not, since the enactment of the Sarbanes-Oxley Act, taken any action
prohibited by Section 402 of the Sarbanes-Oxley Act.
(e) Each of the principal executive officer and principal
financial officer of the Company (or each former principal executive officer and
principal financial officer of the Company, as applicable) has made all
certifications required by Rule 13a-14 and 15d-14 under the Exchange Act and
Sections 302 and 906 of the Sarbanes-Oxley Act and any related rules and
regulations promulgated by the SEC and the New York Stock Exchange, and the
statements contained in any such certifications are complete and correct. For
purposes of this Agreement, "principal executive officer" and "principal
financial officer" shall have the meanings given to such terms in the
Sarbanes-Oxley Act.
-11-
(f) Except as disclosed in the Company SEC Documents, since
December 31, 2004, there has been no transaction, or series of similar
transactions, agreements, arrangements or understandings, nor are there any
proposed transactions as of the date of this Agreement, or series of similar
transactions, agreements, arrangements or understandings to which the Company or
any of its Subsidiaries was or is to be a party, that would be required to be
disclosed under Item 404 of Regulation S-K promulgated under the Securities Act.
Section 3.5(f) of the Company Disclosure Letter describes, and the Company has
delivered to Parent copies of the documentation creating or governing, all
securitization transactions and other off-balance sheet arrangements (as defined
in Item 303 of Regulation S-K of the SEC) that existed or were effected by the
Company or its Subsidiaries since December 31, 2003.
Section 3.6 Absence of Certain Changes. Since December 31,
2006, (a) the Company and its Subsidiaries have conducted their respective
businesses only in the ordinary course of business consistent with past
practices, (b) there has not occurred any event, occurrence, circumstance,
change or effect (including the incurrence of any liabilities of any nature,
whether or not accrued, contingent or otherwise) that has had or would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect and (c) neither the Company nor any of its Subsidiaries has taken
any actions that if taken after the date of this Agreement would be prohibited
by Section 5.1.
Section 3.7 No Undisclosed Material Liabilities. There are no
liabilities or obligations of the Company or any of its Subsidiaries of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, and there is no existing condition, situation or set of circumstances
that could reasonably be expected to result in such a liability or obligation,
other than (i) liabilities or obligations disclosed and provided for in the
balance sheet included in the Financial Statements included in the Company's
Annual Report on Form 10-K dated as of December 31, 2006 or in the notes
thereto, and (ii) liabilities or obligations incurred in the ordinary course of
business consistent with past practices since December 31, 2006 or as expressly
contemplated by this Agreement in each case that have not had and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company.
Section 3.8 Compliance with Laws and Court Orders. The Company
and each of its Subsidiaries is and, since January 1, 2004, has been in
compliance with, and to the Knowledge of the Company is not under investigation
with respect to and has not been threatened to be charged with or given notice
of any violation of, any applicable Law or Order, except for failures to comply
or violations that have not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. The Company and its
Subsidiaries hold all governmental licenses, authorizations, permits, consents,
approvals, variances, exemptions and orders necessary for the operation of the
businesses of the Company and its Subsidiaries, taken as a whole (the "Company
Permits"), except where such failure would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. The Company and
each of its Subsidiaries is and, since January 1, 2004, has been in compliance
with the terms of the Company Permits, except for failures to comply or
violations that have not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
-12-
Section 3.9 Material Contracts. (a) Neither the Company nor
any Subsidiary is a party to or bound by:
(i) any lease or sublease of personal property providing for
annual rentals of $100,000 or more;
(ii) any agreement or series of related agreements for the
purchase or sale of materials, supplies, goods, services, equipment or other
assets that either (A) has a term of greater than one (1) year or (B) provides
for either (1) annual payments by or to the Company and its Subsidiaries of
$100,000 or more or (2) aggregate payments by or to the Company and its
Subsidiaries of $500,000 or more;
(iii) any partnership, joint venture or other similar
agreement or arrangement;
(iv) any agreement relating to the acquisition or disposition
of any business or any material amount of assets outside the ordinary course of
business or securities of any Person (whether by merger, sale of stock, sale of
assets or otherwise);
(v) any agreement relating to Indebtedness (in either case,
whether incurred, assumed, guaranteed or secured by any asset), except any such
agreement (A) with an aggregate outstanding principal amount not exceeding
$250,000 and which may be prepaid on not more than 30 days' notice without the
payment of any penalty and (B) entered into subsequent to the date of this
Agreement as permitted by Section 5.1;
(vi) any agreement that (A) limits the freedom of the Company
or any of its Subsidiaries to engage or compete in any line of business or with
any Person or in any area or which would so limit the freedom of the Company or
any of its Affiliates or, to the Knowledge of the Company, Parent or any of its
Affiliates after the Effective Time or (B) contains exclusivity, "most favored
nation" or similar obligations or restrictions that are binding on the Company
or any of its Subsidiaries or, to the Knowledge of the Company, that would be
binding on Parent or its Affiliates after the Effective Time;
(vii) any material agreement relating to any interest rate,
currency or commodity hedging, and other material risk management or derivative
arrangements;
(viii) any agreement or series of related agreements involving
payments by or to the Company or any of its Subsidiaries that requires consent
of or notice to a third party in the event of or with respect to the Merger,
including in order to avoid a breach or termination of, a loss of benefit under,
or triggering a price adjustment, right of renegotiation or other remedy under,
any such agreement;
(ix) any agreement with a Related Party;
(x) any other agreement, commitment, arrangement or plan not
made in the ordinary course of business that is material to the Company and the
Subsidiaries, taken as a whole.
-13-
(b) Each agreement, contract, plan, lease, arrangement or
commitment disclosed or required to be disclosed pursuant to Section 3.9(a) or
Section 3.15(a)(ii) (the "Material Contracts") is a valid and binding agreement
of the Company or a Subsidiary, as the case may be, and is in full force and
effect, and none of the Company, any Subsidiary or, to the Knowledge of the
Company, any other party thereto is in default or breach in any material respect
under the terms of any such agreement, contract, plan, lease, arrangement or
commitment, except for such defaults or breaches that have not had and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. To the Knowledge of the Company, no event or circumstance has
occurred that, with notice or lapse of time or both, would constitute any event
of default thereunder except for such events or circumstances that have not had
and would not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect. True and complete copies of each such agreement,
contract, plan, lease, arrangement or commitment (including all amendments,
modifications, extensions and renewals thereto and waivers thereunder) have made
available to Parent prior to the date hereof.
Section 3.10 Information Supplied. Neither the proxy statement
relating to the Special Meeting (such proxy statement, as amended or
supplemented from time to time, the "Proxy Statement") will, at the date it is
first mailed to the Company's shareholders or at the time of the Special
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. The Proxy Statement will comply as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations
thereunder. Notwithstanding anything to the contrary in this Section 3.10, no
representation or warranty is made by the Company with respect to information
contained or incorporated by reference therein supplied by or on behalf of
Parent or Merger Sub specifically for inclusion or incorporation by reference in
the Proxy Statement.
Section 3.11 Litigation. Except as set forth in the Annual
Report on Form 10-K, dated as of December 31, 2006, there are no Actions pending
or, to the Knowledge of the Company, threatened against the Company or any of
its Subsidiaries or any of their respective officers, directors or employees in
such capacity, or, to the Knowledge of the Company, any other Person for whom
the Company or any of such Subsidiary may be liable or any of their respective
properties that, if determined or resolved adversely in accordance with the
plaintiff's demands, would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect or seeks to prevent, enjoin, alter or
materially delay the Transactions. The Company is not a party or subject to or
in default under any Order or, to the Knowledge of the Company, investigation by
any Governmental Entity involving, the Company or any of its Subsidiaries that
has had or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect or result in a material impairment in the
ability of the Company to consummate the Transactions.
Section 3.12 Labor Matters. (a) Section 3.12(a) of the Company
Disclosure Letter contains a true and accurate list of all collective bargaining
and other labor union contracts to which the Company or any of its Subsidiaries
is party or is bound. Except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, neither the Company
nor any of its Subsidiaries has received written notice during the past two
years of the intent of any Governmental Entity responsible for the enforcement
of labor, employment, occupational health and safety or workplace safety and
insurance/workers compensation Laws to conduct an investigation of or affecting
the Company and, to the Knowledge of the Company, no such investigation is in
progress. Except as would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect, (i) there are no labor disputes,
strikes or work stoppages or other controversies against the Company or any of
its Subsidiaries pending, or to the Knowledge of the Company, threatened, and
(ii) each of the Company and its Subsidiaries has withheld all amounts required
by applicable Law or by agreement to be withheld from the wages, salaries and
other payments to employees, and none of the Company and its Subsidiaries is
liable for any arrears of wages or any Taxes or any penalty for failure to
comply with any of the foregoing.
-14-
Section 3.13 Employee Compensation and Benefit Plans; ERISA.
(a) Section 3.13(a) of the Company Disclosure Letter sets
forth a correct and complete list of each "employee benefit plan" (within the
meaning of Section 3(3) of ERISA but excluding any plan that is a "multiemployer
plan," as defined in Section 3(37) of ERISA ("Multiemployer Plan")) and each
other director and employee plan, program, agreement or arrangement, vacation or
sick pay policy, fringe benefit plan, compensation, severance or employment
agreement, stock bonus, stock purchase, stock option, restricted stock, stock
appreciation right or other equity-based plan, and bonus or other incentive
compensation or salary continuation plan or policy, whether formal or informal,
oral or written, contributed to, sponsored or maintained by or with respect to
which the Company or any Subsidiary of the Company has any liability (contingent
or otherwise) as of the date hereof for the benefit of any current, former or
retired employee, officer, consultant, independent contractor or director of the
Company or any Subsidiary of the Company (such plans, programs, policies,
agreements and arrangements, collectively, being the "Company Plans").
(b) With respect to each Company Plan, the Company has made
available to Parent a current, accurate and complete copy thereof (or, if a plan
is not written, a written description thereof) and, to the extent applicable,
(i) any related trust or custodial agreement or other funding instrument, (ii)
the most recent determination letter, if any, received from the Internal Revenue
Service (the "IRS"), (iii) any current summary plan description or employee
handbook, (iv) for the most recent year (A) the Form 5500 and attached
schedules, (B) audited financial statements, and (C) actuarial valuation
reports, if any, and (v) copies of any correspondence from the IRS, SEC, Pension
Benefit Guaranty Corporation or Department of Labor (or any agency thereof)
relating to any compliance issues with respect to any Company Plan.
(c) Except as would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect, each Company Plan
has been established and is being administered in accordance with its terms and
in compliance with the applicable provisions of ERISA, the Internal Revenue Code
of 1986, as amended (the "Code"), and other Law.
(d) No Company Plan is a Multiemployer Plan, and neither the
Company, its Subsidiaries nor any member of their "Controlled Group" (defined as
any organization which is a member of a controlled group of organizations within
the meaning of Sections 414(b), (c), (m) or (o) of the Code) has within the past
six years sponsored or contributed to, or has or had any liability or obligation
in respect of, any Multiemployer Plan.
-15-
(e) Except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, no Actions (other
than routine claims for benefits in the ordinary course) are pending or, to the
Knowledge of the Company, threatened with respect to any Company Plan.
(f) Except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, neither the Company
nor any Subsidiary of the Company has incurred any liability under Title IV of
ERISA that has not been satisfied in full.
(g) Except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, (i) each Company
Plan which is intended to be qualified under Section 401(a) of the Code is so
qualified and has received a determination letter to that effect from the IRS
and, to the Knowledge of the Company, no circumstances exist which would
reasonably be expected to materially adversely affect such qualification or
exemption; (ii) no event has occurred and no condition exists that would subject
the Company or its Subsidiaries, either directly or by reason of their
affiliation with any member of their Controlled Group to any tax, fine, lien,
penalty or other liability imposed by ERISA, the Code or other Law, rules or
regulations; and (iii) no "prohibited transaction" (as such term is defined in
Section 406 or ERISA and Section 4975 of the Code) or "accumulated funding
deficiency" (as such term is defined in Section 302 of ERISA and Section 412 of
the Code (whether or not waived)) has occurred with respect to any Company Plan.
(h) With respect to each of the Company Plans that is subject
to Title IV of ERISA, the assets of each such Company Plan are at least equal in
value to the present value of the accrued benefits (vested and unvested) of the
participants in such Company Plan on a termination and projected benefit
obligation basis, based on the actuarial methods and assumptions indicated in
the most recent applicable actuarial valuation reports.
(i) No Company Plan exists that, as a result of the execution
of this Agreement or the transactions contemplated by this Agreement (whether
alone or in connection with any subsequent event(s)), could result in (i) the
payment to any employee or director of the Company or any of its Subsidiaries of
any money or other property (other than pursuant to Sections 2.2 or 2.3 of this
Agreement); (ii) the provision of any benefits or other rights to any employee
or director of the Company or any of its Subsidiaries; or (iii) the increase,
acceleration or provision of any payments, benefits or other rights to any
employee of the Company or any of its Subsidiaries that could result in the
Company's loss of a deduction under Section 280G of the Code with respect to any
such payment, benefit or other right.
(j) Section 3.13(j) of the Company Disclosure Letter sets
forth a correct and complete list of each Company Plan that is maintained
outside the jurisdiction of the United States or covers any employee of the
Company or any of its Subsidiaries residing or working outside the United States
(any such Company Plans set forth in Section 3.13(j) of the Company Disclosure
Letter, "Foreign Benefit Plans"). With respect to any Foreign Benefit Plans,
except as would not reasonably be expected to have a Material Adverse Effect,
(i) all Foreign Benefit Plans have been established, maintained and administered
in compliance with their terms and all applicable Law of any controlling
Governmental Entity; (ii) all Foreign Benefit Plans that are required to be
funded are fully funded, and with respect to all other Foreign Benefit Plans,
adequate reserves therefor have been established on the accounting statements of
the applicable Company or Subsidiary entity; and (iii) no liability or
obligation of the Company or its Subsidiaries exists with respect to such
Foreign Benefit Plans that has not been disclosed in Section 3.13(j) of the
Company Disclosure Letter.
-16-
Section 3.14 Properties.
(a) Section 3.14(a) of the Company Disclosure Letter contains
a true and complete list of all real property owned by the Company or any
Subsidiary of the Company (the "Owned Real Property").
(b) Section 3.14(b) of the Company Disclosure Letter contains
a true and complete list of all real property leased or subleased (whether as
tenant or subtenant) by the Company or any Subsidiary of the Company (including
the improvements thereon, the "Leased Real Property").
(c) Except as would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the continued use
or occupancy of the applicable Owned Real Property or Leased Real Property in
the conduct of the business currently conducted thereon, the Company or one of
its Subsidiaries has good fee simple title to all Owned Real Property and valid
leasehold estates in all Leased Real Property free and clear of all
Encumbrances, except Permitted Encumbrances. Except as would not reasonably be
expected to have, individually or in the aggregate, a material adverse effect on
the continued use or occupancy of the applicable Owned Real Property or Leased
Real Property in the conduct of the business currently conducted thereon, the
Company or one of its Subsidiaries has exclusive possession of each Leased Real
Property and Owned Real Property, other than any occupancy rights granted to
third-party owners, tenants or licensees pursuant to agreements with respect to
such real property entered in the ordinary course of business, none of which
has, individually or in the aggregate a material adverse effect on the continued
use or occupancy of the applicable Owned Real Property or Leased Real Property
in the conduct of the business currently conducted thereon.
(d) The Company has delivered or made available to Parent, (i)
with respect to each Owned Real Property, true and complete copies of the
vesting deed/s, the most recent title insurance policy, title opinion or other
evidence of title held by the owner of such Owned Real Property, all of the
title exception documents disclosed therein, and the most recent survey of such
Owned Real Property held by such owner; and (ii) with respect to each Leased
Real Property, true and complete copies of the applicable lease or sublease, all
amendments, extensions, supplements and other modifications thereof, any
subordination, non-disturbance and attornment agreement or similar agreement
relating thereto, any title insurance policy, title opinion or other evidence of
title held by the lessee or sublessee of such Leased Real Property, all of the
title exception documents disclosed therein, and any survey of such Leased Real
Property held by such lessee or sublessee.
(e) Except as would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the continued use
or occupancy of the applicable Owned Real Property or Leased Real Property in
the conduct of the business currently conducted thereon, (i) each lease for the
Leased Real Property is in full force and effect and is valid and enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar Laws
relating to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at Law), and (ii)
there is no default under any lease for the Leased Property either by the
Company or its Subsidiaries or, to the Company's Knowledge, by any other party
thereto, and no event has occurred that, with the lapse of time or the giving of
notice or both, would constitute a default by the Company or its Subsidiaries
thereunder.
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(f) Except as would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the continued use
or occupancy of the applicable Owned Real Property or Leased Real Property in
the conduct of the business currently conducted thereon, (i) there are no
pending or, to the Company's Knowledge, threatened condemnation or eminent
domain proceedings that affect any Owned Real Property or Leased Real Property,
and (ii) the Company has not received any written notice of the intention of any
Governmental Entity or other Person to take any Owned Real Property or Leased
Real Property.
(g) Except as has not had or would not, individually or in the
aggregate a material adverse effect on the continued use or occupancy of the
applicable Owned Real Property or Leased Real Property, the plants, buildings,
structures and equipment comprising the Owned Real Properties and Leased Real
Properties have no material defects, are in such operating condition and repair
as is adequate to conduct the business as currently conducted and have been
reasonably maintained consistent with standards generally followed in the
industry (giving due account to the age and length of use of same, ordinary wear
and tear excepted), are adequate and suitable for their current uses.
Section 3.15 Intellectual Property. (a) Section 3.15 of the
Company Disclosure Letter lists all (i) registrations and applications for
Intellectual Property owned by the Company or one of its Subsidiaries and
material to the Company's business, and (ii) agreements (excluding licenses for
commercial off the shelf computer software that are generally available on
nondiscriminatory pricing terms) to which the Company or any of its Subsidiaries
is a party or otherwise bound and pursuant to which the Company or any of its
Subsidiaries (x) obtains the right to use, or a covenant not to be sued under,
any Intellectual Property right or (y) grants the right to use, or a covenant
not to be sued under, any Intellectual Property right, and in each case,
material to the Company's business.
(b) Except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, (i) the Company or
one of its Subsidiaries owns all right, title, and interest in, or has the right
to use, pursuant to a license or otherwise, in each case, free and clear of all
Encumbrances except Permitted Encumbrances, all Intellectual Property required
to operate the Company's business as presently conducted (the "Company
Intellectual Property"); (ii) as of the date hereof, the Company has not
received any written notice of any actual or threatened Actions alleging a
violation, misappropriation or infringement of the Intellectual Property of any
other Person, except for any of the foregoing that have since been resolved;
(iii) the operation of the business of the Company as currently conducted does
not violate, misappropriate or infringe the Intellectual Property of any other
Person; (iv) to the Company's Knowledge, no other Person has challenged,
violated, misappropriated or infringed any Intellectual Property owned by the
Company or one of its Subsidiaries; (v) to the Company's Knowledge, the
consummation of the transactions contemplated by this Agreement will not alter,
encumber, impair or extinguish any Intellectual Property right of the Company or
any of its Subsidiaries or impair the right of Parent to develop, use, sell,
license or dispose of, or to bring any action for the infringement of, any
Intellectual Property right of the Company or any of its Subsidiaries; and (vi)
the IT Assets operate and perform in all material respects in a manner that
permits the Company and its Subsidiaries to conduct their respective businesses
as currently conducted and to the knowledge of the Company, no Person has gained
unauthorized access to the IT Assets.
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Section 3.16 Environmental Laws.
(a) (i) Each of the Company and its Subsidiaries complies and
has complied, in all material respects, with all applicable Environmental Laws,
and each possesses and complies, and has in the past five years complied, in all
material respects, with all applicable Environmental Permits required to operate
or own its assets and business as it currently does; (ii) there are no, and
there have not been any, Materials of Environmental Concern in, at, on, from or
under any property currently or formerly owned, leased or operated by the
Company, its Subsidiaries or their respective predecessors that have resulted in
or are reasonably likely to result in a material liability (whether accrued,
contingent, absolute, determined, determinable or otherwise) of the Company or
any of its Subsidiaries, (iii) neither the Company nor any Subsidiary has
received any notification, request for information, citation or order, no
complaint has been filed and no penalty has been assessed, in each case,
relating to the Company or any Subsidiary and relating to any Environmental Law
or Materials of Environmental Concern except, with respect to any such
notification, request for information, citation, order, complaint or penalty
that would not reasonably be expected to result in a material liability (whether
accrued, contingent, absolute, determined, determinable or otherwise) of the
Company or any of its Subsidiaries, (iv) there are no material liabilities
(whether accrued, contingent, absolute, determined, determinable or otherwise)
of the Company or any of its Subsidiary of any kind whatsoever, arising under or
relating to any Environmental Law and there is no existing condition, situation
or set of circumstances that could reasonably be expected to result in any such
material liability and (v) no property now or previously owned, leased or
operated by the Company or any Subsidiary nor any property to which the Company
or any Subsidiary has, directly or indirectly, transported or arranged for the
transportation of any Material of Environmental Concern is listed or, to the
Company's Knowledge, proposed for listing, on the National Priorities List
promulgated pursuant to CERCLA, or CERCLIS (as defined in CERCLA), or on any
similar federal, state or foreign list of sites requiring investigation or clean
up, which listing or proposed listing would reasonably be expected to result in
a material liability (whether accrued, contingent, absolute, determined,
determinable or otherwise) to the Company or any of its Subsidiaries.
(b) There are no Actions arising under Environmental Laws or
relating to Materials of Environmental Concern pending or, to the Company's
Knowledge, threatened against the Company which would reasonably be expected to
result in a material liability (whether accrued, contingent, absolute,
determined, determinable or otherwise) to the Company or any of its
Subsidiaries.
(c) None of the Company, any current or former Subsidiary or
any predecessor of any of the foregoing has mined, manufactured, sold, produced,
marketed, installed or distributed asbestos or asbestos-containing products of
any kind. (d) Section 3.16(d) of the Company Disclosure Letter contains a true
and complete list of all real property or facilities currently or historically
owned, leased or operated by the Company or any of its Subsidiaries.
(e) There has been no written environmental investigation,
study, audit, test, review or other analysis conducted of which the Company or
any Subsidiary has possession or control in relation to the current or prior
business of the Company or any Subsidiary or any property currently or
previously owned, leased or operated by the Company or any Subsidiary and
relating to any material liability (whether accrued, contingent, absolute,
determined, determinable or otherwise) to the Company or any of its Subsidiaries
which has not been delivered to Parent prior to the date hereof.
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(f) Notwithstanding anything herein to the contrary, there are
no liabilities (whether accrued, contingent, absolute, determined, determinable
or otherwise) or costs of the Company or any of its Subsidiaries of any kind
whatsoever, arising under or relating to any Environmental Law (including with
respect to any matter disclosed in the Company Disclosure Letter), which
liabilities in the aggregate would reasonably be expected to cost in excess of
$40,000,000 (treating, for purposes of calculating this aggregate cost, any
reserves or insurance as being zero and not existing) to correct, investigate,
remove, defend, remediate or otherwise address.
(g) Notwithstanding any other representations and warranties
in this Agreement, the representations and warranties in this Section 3.16 are
the only representations and warranties in this Agreement with respect to
Environmental Laws or Environmental Permits.
Section 3.17 Taxes.
(a) The Company and each of its Subsidiaries has timely filed
all material Tax Returns that it was required to file and has paid all Taxes
shown thereon as due and owing. All such Tax Returns were correct and complete
in all material respects.
(b) Neither the Company nor any of its Subsidiaries has agreed
to any extension or waiver of the statute of limitations applicable to any
material Tax Return, or agreed to any extension of time with respect to a
material Tax assessment or deficiency, which period (after giving effect to such
extension or waiver) has not yet expired.
(c) Neither the Company nor any of its Subsidiaries is a party
to any Tax allocation or sharing agreement.
(d) Each of the Company and its Subsidiaries has withheld and
remitted all Taxes required to have been withheld and remitted under applicable
Law in connection with any amounts paid or owing to any employee, independent
contractor, creditor, shareholder, member or other third party.
(e) There are no Encumbrances for unpaid Taxes on the assets
of the Company or the Subsidiaries, except Encumbrances for current Taxes not
yet due and payable.
(f) There is no Action pending or, to the Company's Knowledge,
threatened against the Company or any of its Subsidiaries in respect of any
material Tax.
(g) Neither the Company nor any of its Subsidiaries (i) has
been a member of an affiliated group of corporations within the meaning of
Section 1504 of the Code (other than a group the common parent of which is the
Company) or (ii) has any liability for Taxes of any Person (other than the
Company and its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any
similar provision of state, local or foreign Law), as a transferee or successor,
by contract or otherwise.
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(h) During the two-year period ending on the date hereof,
neither the Company nor any of its Subsidiaries was a distributing corporation
or a controlled corporation in a transaction intended to be governed by Section
355 of the Code.
Section 3.18 Opinion of Financial Advisor. The Company has
received the opinion of Perella Weinberg Partners LP dated the date of this
Agreement, to the effect that, as of such date, the Equity Consideration to be
received in the Merger by the Company's shareholders is fair to the Company's
shareholders from a financial point of view. A copy of such opinion has been
delivered to Parent and Merger Sub.
Section 3.19 Brokers or Finders. Except for Perella Weinberg
Partners LP and Brown Gibbons Lang & Company, a copy of whose engagement letters
have been provided to Parent and Merger Sub prior to the date hereof, no agent,
broker, investment banker, financial advisor or other firm or Person is or will
be entitled to any brokers' or finder's fee or any other commission or similar
fee from the Company or any of its Subsidiaries in connection with any of the
Transactions.
Section 3.20 State Takeover Statutes. No "moratorium," "fair
price," "control share acquisition" or other similar anti-takeover provisions of
Ohio Law or other U.S. state or federal Law are applicable to the Transactions.
Section 3.21 The Company Rights Agreement. The Company Rights
Agreement has been amended to provide that (i) it shall expire immediately prior
to the Effective Time, (ii) neither Parent nor any of its Affiliates shall
become an Acquiring Person (as defined in the Company Rights Agreement) as a
result of the execution of this Agreement or consummation of the Transactions
pursuant to the terms of this Agreement and (iii) a Triggering Event (as defined
in the Company Rights Agreement) shall not be deemed to have occurred as a
result of (x) the consummation of the Merger, (y) the execution of this
Agreement, or (z) the consummation of the other Transactions, or any of the
foregoing in combination; provided, however, that if for any reason this
Agreement is terminated and the Merger is abandoned, then such amendments shall
be of no further force and effect and the Company Rights Agreement will remain
exactly the same as it existed immediately prior to the execution of the
amendment to the Company Rights Agreement effecting such amendments.
Section 3.22 No Other Representations or Warranties. Except
for the representations and warranties contained in this Article III, neither
the Company nor any other Person makes any other express or implied
representation or warranty on behalf of the Company or any of its Affiliates,
and for the avoidance of doubt, neither the Company nor any of its Affiliates
makes any express or implied representation or warranty with respect to
"Information" as defined in the Confidentiality Agreement, dated March 23, 2007,
between the Company and Parent (the "Confidentiality Agreement").
ARTICLE IV
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REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUB
Parent and Merger Sub, jointly and severally, represent and
warrant to the Company as follows:
Section 4.1 Organization. Each of Parent and Merger Sub is a
corporation duly organized, validly existing and in good standing under the Laws
of the jurisdiction of its incorporation or organization and has all requisite
corporate or other power and authority and all necessary governmental approvals
to own, lease and operate its properties and to carry on its business as now
being conducted, except where the failure to be so organized, existing and in
good standing or to have such power, authority and governmental approvals would
not reasonably be expected to have a material adverse effect on the ability of
Parent and Merger Sub to consummate the Merger and the other Transactions.
Parent owns all of the issued and outstanding capital stock of the Merger Sub.
Section 4.2 Authorization; Validity of Agreement; Necessary
Action. Each of Parent and Merger Sub has full corporate power and authority to
execute and deliver this Agreement and to consummate the Transactions. The
execution, delivery and performance by Parent and Merger Sub of this Agreement
and the consummation of the Transactions have been duly and validly authorized
by the respective boards of directors of Parent and Merger Sub and by Parent as
the sole shareholder of Merger Sub, and no other corporate action on the part of
Parent or Merger Sub is necessary to authorize the execution and delivery by
Parent and Merger Sub of this Agreement and the consummation of the
Transactions. This Agreement has been duly executed and delivered by Parent and
Merger Sub and, assuming due and valid authorization, execution and delivery of
this Agreement by the Company, is a valid and binding obligation of each of
Parent and Merger Sub enforceable against each of them in accordance with its
terms, except that (a) such enforcement may be subject to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar Laws, now or hereafter
in effect, affecting creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
Section 4.3 Consents and Approvals; No Violations. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, (i) the Exchange Act, (ii) the HSR
Act and (iii) the filing of the certificate of merger, none of the execution,
delivery or performance of this Agreement by Parent or Merger Sub, the
consummation by Parent or Merger Sub of the Transactions or compliance by Parent
or Merger Sub with any of the provisions of this Agreement will (a) contravene
or conflict with or result in any breach of any provision of the respective
Articles of Incorporation, Code of Regulations or other similar organizational
documents of Parent or Merger Sub, (b) require any filing with or any other
action by or in respect of, or permit, authorization, consent or approval of,
any Governmental Entity, (c) require any consent or other action by any Person
under, result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration or the loss of any benefit to which
Parent or Merger Sub is entitled) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license, permit,
approval, contract, agreement or other instrument or obligation to which Parent
or any of its Subsidiaries (including Merger Sub) is a party or by which any of
them or any of their respective properties or assets may be bound, (d) result in
the creation or imposition of any Lien on any asset of Parent or Merger Sub or
(e) contravene, conflict with or violate or breach any Order or Law applicable
to Parent, any of its Subsidiaries (including Merger Sub) or any of their
properties or assets, except in the case of clause (b), (c), (d) or (e)where
failure to obtain such permits, authorizations, consents or approvals or to make
such filings, or where such violations, breaches or defaults would not,
individually or in the aggregate, have a material adverse effect on the ability
of Parent and Merger Sub to consummate the Merger and the other Transactions.
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Section 4.4 Ownership of Common Stock. Parent, Merger Sub and
Parent Affiliates collectively own as of the date of this Agreement and
collectively will own as of the record date of the Special Meeting (as may be
changed by the Company) less than five percent of the Common Stock. For purposes
of this Section 4.4, "Parent Affiliates" means any individuals, joint ventures,
estates, trusts, partnerships or corporations, which, directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or is under
common control with, Parent or Merger Sub, together with their officers and
directors and any beneficial owners, directly or indirectly, of ten percent or
more of any class of equity securities of Parent or Merger Sub or their
affiliates.
Section 4.5 Information Supplied. None of the information
supplied or to be supplied by or on behalf of Parent or Merger Sub specifically
for inclusion or incorporation by reference in the Proxy Statement will, at the
date it is first mailed to the Company's shareholders or at the time of the
Special Meeting contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are made,
not misleading.
Section 4.6 Financing. Parent and Merger Sub will have at the
Effective Time sufficient cash, available lines of credit or other sources of
immediately available funds available to finance the aggregate Merger
Consideration pursuant to this Agreement.
Section 4.7 No Prior Activities. Except for obligations or
liabilities incurred in connection with its incorporation or organization or the
negotiation and consummation of this Agreement and the transactions contemplated
hereby (including any financing), Merger Sub has not incurred any obligations or
liabilities, and has not engaged in any business or activities of any type or
kind whatsoever or entered into any agreements or arrangements with any Person
or entity.
Section 4.8 Disclaimer of Warranties. Parent and Merger Sub
acknowledge that neither the Company nor any Person has made any express or
implied representation or warranty on behalf of the Company or any of its
Affiliates as to the accuracy or completeness of any information regarding the
Company provided to Parent and Merger Sub, except as expressly set forth in
Article III, and Parent and Merger Sub further agree that the Company shall not
have or be subject to any liability to Parent, Merger Sub or any other Person
resulting from the distribution to Parent and Merger Sub, or Parent's or Merger
Sub's use of, any such information, including, without limitation, the
"Information," as defined in the Confidentiality Agreement, except to the extent
expressly set forth in Article III.
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ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company. From and after
the date hereof, except (a) as expressly contemplated by this Agreement, (b) as
set forth on Section 5.1 of the Company Disclosure Letter, (c) as required by
Law, or (d) as consented to in writing by Parent after the date of this
Agreement and prior to the Effective Time, which consent shall not be
unreasonably withheld or delayed:
(i) the Company shall, and shall cause its
Subsidiaries to, conduct business only in the ordinary course
of business consistent with past practice and use its
reasonable best efforts to (A) preserve its business
organization, (B) maintain in effect all of its foreign,
federal, state and local licenses, permits, consents,
franchises, approvals and authorizations, (C) keep available
the services of its directors, officers and employees and (D)
preserve intact and maintain its existing relations with its
customers, suppliers, employees, creditors and others having
material business relationships with it;
(ii) the Company will not (and will not
permit any Subsidiary to) amend its (or their) Amended
Articles of Incorporation or Amended Code of Regulations or
any similar governing documents;
(iii) neither the Company nor any of its
Subsidiaries will (A) declare, set aside or pay any dividend
or other distribution payable in cash, stock or property or
otherwise with respect to its capital stock or other
securities; (B) issue, sell, transfer, pledge, dispose of or
encumber or agree to issue, sell, transfer, pledge, dispose of
or encumber any Company Securities, other than Shares reserved
for issuance pursuant to the Company Rights Agreement in
accordance with the terms thereof or Shares reserved for
issuance on the date of this Agreement pursuant to the
exercise of Options outstanding on the date of this Agreement,
(C) split, combine or reclassify, or amend the terms of, the
outstanding Shares or any outstanding capital stock or other
securities of any of the Subsidiaries of the Company or (D)
redeem, purchase or otherwise acquire, or offer to redeem,
purchase or otherwise acquire, directly or indirectly, any
Company Securities;
(iv) except as required under the terms of
any Company Plan, the Company and its Subsidiaries will not
(A) make any change in the compensation or fringe benefits
payable or to become payable to any of its officers,
directors, employees, agents, consultants (other than general
increases in wages to employees who are not officers,
directors or Affiliates of the Company in the ordinary course
of business consistent with past practice) or Persons
providing management services, (B) enter into or amend any
employment, severance, consulting, termination or other
agreement or Company Plan or (C) make any loans to any of its
officers, directors, employees, Affiliates, agents or
consultants or make any change in its existing borrowing or
lending arrangements for or on behalf of any of such Persons
pursuant to a Company Plan or otherwise;
(v) except as required under the terms of
any Company Plan, the Company and its Subsidiaries will not
(A) pay or make any accrual or arrangement for payment of any
pension, retirement allowance or other employee benefit
pursuant to any existing plan, agreement or arrangement to any
officer, director, employee or Affiliate of the Company or any
of its Subsidiaries, whether past or present, (B) pay or agree
to pay or make any accrual or arrangement for payment to any
officer, director, employee or Affiliate of the Company or any
of its Subsidiaries, whether past or present, of any amount
relating to unused vacation days, or (C) adopt or pay, grant,
issue, accelerate or accrue salary or other payments or
benefits pursuant to any Company Plan, agreement or
arrangement, or any employment or consulting agreement with or
for the benefit of any director, officer, employee, agent or
consultant of the Company or any of its Subsidiaries, whether
past or present;
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(vi) neither the Company nor any of its
Subsidiaries will (A) create, incur, assume, or suffer to
exist any Indebtedness other than current trade payables in
the ordinary course of business consistent with past
practices, (B) assume, guarantee, endorse or otherwise become
liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other Person, or (C)
make any loans, advances or capital contributions to, or
investments in, any other Person (other than investments or
contributions in wholly owned Subsidiaries in the ordinary
course of business and in amount and on terms consistent with
past practices);
(vii) neither the Company nor any of its
Subsidiaries will (A) enter into, amend or modify in any
material respect or terminate any lease or sublease for real
property or any Material Contract or any contract that would
be a Material Contact if entered into prior to the date hereof
other than with respect to any agreement that is or would have
been a Material Contract pursuant to clauses (vi) or (viii) of
Section 3.9 in the ordinary course consistent with past
practices or (B) otherwise waive, release or assign any
material rights, claims or benefits of the Company or any of
its Subsidiaries;
(viii) neither the Company nor any of its
Subsidiaries will settle, or offer or propose to settle, (A)
any material Action involving or against the Company or any of
its Subsidiaries, (B) any shareholder litigation or dispute
against the Company or any of its officers or directors or (C)
any Action that relates to the Transactions;
(ix) neither the Company nor any of its
Subsidiaries will make or authorize any capital expenditure;
(x) neither the Company nor any of its
Subsidiaries will pay, discharge, waive or satisfy any rights,
claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than
the payment, discharge, waiver or satisfaction of any such
rights, claims, liabilities or obligations, in the ordinary
course of business and consistent with past practice, or
claims, liabilities or obligations reflected or reserved
against in, or contemplated by, the Financial Statements (or
the notes to the Financial Statements);
(xi) neither the Company nor any of its
Subsidiaries will (A) change any material tax election, (B)
change any of the accounting methods or accounting principles
or practices used by it unless required by GAAP or Law, (C)
settle or enter into any closing agreement with respect to any
material Tax claim or assessment or (D) consent to any
material Tax claim or assessment or any waiver of the statute
of limitations for any such claim or assessment;
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(xii) neither the Company nor any of its
Subsidiaries will adopt (A) a plan of complete or partial
liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization (other
than this Agreement) or (B) acquire (by merger, consolidation,
acquisition of stock or assets or otherwise), transfer, lease,
license, sell, mortgage, pledge, dispose of or encumber any
assets, securities, properties, interests or businesses, other
than, in either case, supplies and inventory in the ordinary
course of business and consistent with past practice;
(xiii) neither the Company nor any of its
Subsidiaries will willfully take any action that would make
any representation or warranty of the Company hereunder
inaccurate in any material respect at, or as of any time
before, the Effective Time; and
(xiv) neither the Company nor any of its
Subsidiaries will enter into an agreement, contract,
commitment or arrangement to do any of the foregoing, or to
authorize, recommend, propose or announce an intention to do
any of the foregoing.
Section 5.2 No Solicitation by the Company.
(a) From and after the date of this Agreement, the Company
shall not, nor shall it permit any of its Subsidiaries to, nor shall it
authorize or permit any officer, director, employee, investment banker,
attorney, accountant or other agent or advisor or representative (collectively,
the "Representatives") of, the Company or any of its Subsidiaries to, directly
or indirectly, (i) solicit, initiate or take any action to encourage or
facilitate the submission of any Company Takeover Proposal, (ii) enter into any
agreement with respect to any Company Takeover Proposal, (iii) other than
informing persons of the existence of this Section 5.2, enter into or
participate in any discussions or negotiations with, provide any information
regarding the Company or its Subsidiaries or afford access to the business,
properties, assets, books or records of the Company or any of its Subsidiaries
to, or otherwise cooperate with or assist, any third party that that is seeking
to make or has made a Company Takeover Proposal or (iv) grant any waiver or
release under any standstill or similar agreement, or under the Company Rights
Plan, with respect to any class of equity securities of the Company or any of
its Subsidiaries; provided, however, that prior to the receipt of Shareholder
Approval, in response to a bona fide written Company Takeover Proposal made
after the date hereof that was not solicited by the Company, any of its
Subsidiary or any Representative of the Company or its Subsidiaries, if the
Company Board determines in good faith after consultation with outside legal
counsel and its financial advisor, that (A) such Company Takeover Proposal is
reasonably likely to lead to a Company Superior Proposal, and (B) failing to
take any such action would be inconsistent with the fiduciary duties of the
Company Board, the Company and the Representatives of the Company may (after
entering into an Acceptable Confidentiality Agreement) provide any non-public
information regarding the Company to the third party making such Company
Takeover Proposal (provided that all such information (to the extent that such
information has not been previously provided or made available to Parent) is
provided or made available to Parent, as the case may be, prior to or
substantially concurrently with the time it is provided or made available to
such third party) or engage in any negotiations or substantive discussions with
such Person regarding such Company Takeover Proposal. The Company shall, and
shall cause each of its Subsidiaries to, immediately cease and cause to be
terminated any existing activities, discussions or negotiations by the Company,
any Subsidiary of the Company or any Representative of the Company, with any
parties conducted heretofore with respect to any of the foregoing and shall use
its reasonable best efforts to cause any such party (or its agents or advisors)
in possession of confidential information about the Company or any of its
Subsidiaries that was furnished by or on behalf of the Company, its Subsidiaries
or any of their respective Representatives to return or destroy all such
information.
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(b) Neither the Company Board nor any committee thereof
shall (i) withdraw or modify, or propose publicly to withdraw or modify, in a
manner adverse to Parent or Merger Sub, the Company Board Recommendation or (ii)
approve or recommend, or propose publicly to approve or recommend, any Company
Takeover Proposal (the actions set forth in clauses (i) and (ii), an "Adverse
Recommendation Change" ). Notwithstanding the foregoing, at any time after the
date hereof and prior to the Shareholder Approval, in response to a Company
Superior Proposal made after the date hereof which was not solicited by the
Company, any of its Subsidiaries, or any of their Representatives, the Company
Board may (x) terminate this Agreement pursuant to and subject to compliance
with Section 8.1(c)(i) and cause the Company to enter into an agreement with
respect to such Company Superior Proposal, and/or (y) make an Adverse
Recommendation Change, but only if, in the case of clauses (x) and (y), (1) the
Company Board determines in good faith, after consultation with outside legal
counsel and its financial advisor, that failing to take any such action would be
inconsistent with the fiduciary duties of the Company Board, (2) the Company
shall have provided Parent with written notice at least four Business Days
before making an Adverse Recommendation Change or terminating this Agreement and
attaching the most current version of all relevant proposed transaction
agreements and other material documents (and a description of all material terms
and conditions thereof (including the identity of the party making such Company
Superior Proposal), (3) the Company causes its financial and legal advisors to,
during such four Business Day period, negotiate with Parent and Merger Sub in
good faith (to the extent Parent and Merger Sub desire to negotiate) to make
such adjustments in the terms and conditions of this Agreement so that such
Company Takeover Proposal ceases to constitute a Company Superior Proposal, and
(4) Parent does not make, during such four Business Day period, an offer that is
at least as favorable in the aggregate to the shareholder of the Company as such
Company Superior Proposal. In the event of any material revisions to the
applicable Company Superior Proposal, the Company shall be required to deliver a
new written notice to Parent and Merger Sub and to comply with the requirements
of this Section 5.2(b) with respect to such new written notice (to the extent so
required), except that the Notice Period shall be reduced to three Business
Days.
(c) The Company shall promptly (and in no event later than two
business days) advise Parent orally and in writing of the receipt of any Company
Takeover Proposal and of the material terms of and the identity of the Person
making any such Company Takeover Proposal, and shall keep Parent reasonably
informed, on a current basis, of any changes thereto. The Company shall promptly
advise Parent orally and in writing of the commencement of any discussions with
any third party or its representatives regarding a Company Takeover Proposal by
such third party.
(d) Nothing contained in this Section 5.2 or in Section 6.6
shall prohibit the Company or the Company Board from taking and disclosing to
its shareholders a position contemplated by Rule 14e-2(a) or Rule 14d-9
promulgated under the Exchange Act or from making any other disclosure to the
Company's shareholders if, in the Company Board's determination in good faith
after consultation with outside legal counsel, the failure so to disclose would
be inconsistent with its obligations under applicable Law; provided, that such
requirement will in no way eliminate or modify the effect that any action
pursuant to such requirement would otherwise have under this Agreement.
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ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Preparation of Proxy Statement.
(a) As soon as reasonably practicable after the date of this
Agreement, the Company shall file with the SEC the Proxy Statement. The Company
will use reasonable best efforts to cause the Proxy Statement to be cleared by
the SEC and disseminated to the holders of the Shares, as and to the extent
required by applicable federal securities Laws. Subject to Section 5.2, the
Proxy Statement will contain the Company Board Recommendation.
(b) Parent and Merger Sub will provide for inclusion or
incorporation by reference in the Proxy Statement information reasonably
requested by the Company. The Company shall promptly furnish the preliminary
Proxy Statement and the definitive Proxy Statement, and any amendments or
supplements thereto, to Parent and give Parent and its legal counsel a
reasonable opportunity to review and comment on such preliminary Proxy
Statement, or amendment or supplement thereto, prior to filing with the SEC, and
the Company shall consider in good faith all comments of Parent in connection
therewith. In addition, the Company will provide Merger Sub and its counsel, in
writing, with any comments, whether written or oral, that the Company or its
counsel may receive from time to time from the SEC or its staff with respect to
the Proxy Statement promptly after the receipt of such comments or other
communications, and the opportunity to review and comment on such comments.
(c) Each of the Company, Parent and Merger Sub agrees to
promptly (i) correct any information provided by it for use in the Proxy
Statement if and to the extent that such information shall have become false or
misleading in any material respect and (ii) supplement the information provided
by it specifically for use in the Proxy Statement to include any information
that shall become necessary in order to make the statements in the Proxy
Statement, in light of the circumstances under which they were made, not
misleading. The Company further agrees to cause the Proxy Statement as so
corrected or supplemented to be filed with the SEC and to be disseminated to the
holders of the Shares, in each case, as and to the extent required by applicable
federal securities Laws.
Section 6.2 Shareholders Meeting.
(a) The Company shall, as soon as practicable after the date
of this Agreement, in accordance with applicable Law, (i) duly call, give notice
of, convene and hold a special meeting of its shareholders (the "Special
Meeting") for the purpose of considering and taking action upon the approval of
the Merger and the adoption of this Agreement, (ii) use its reasonable best
efforts to obtain the Shareholder Approval and (iii) otherwise comply with all
legal requirements applicable to such meeting.
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(b) Parent shall vote, or cause to be voted, all of the Shares
then owned by it, Merger Sub or any of its other Subsidiaries and Affiliates in
favor of the approval of the Merger and the approval and adoption of this
Agreement.
Section 6.3 Commercially Reasonable Efforts.
(a) Prior to the Closing, Parent, Merger Sub and the Company
shall use their respective commercially reasonable efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, all things necessary,
proper or advisable under any applicable Laws to consummate and make effective
in the most expeditious manner possible the Transactions as promptly as
practicable including, but not limited to, (i) the preparation and filing of all
forms, registrations and notices required to be filed to consummate the
Transactions, (ii) the satisfaction of the other parties' conditions to
consummating the Transactions, (iii) using commercially reasonable efforts
necessary to obtain (and will cooperate with each other in obtaining) any
consent, authorization, Order or approval of, or any exemption by, any third
party, including any Governmental Entity (which actions shall include furnishing
all information required under the HSR Act and in connection with approvals of
or filings with any other Governmental Entity) required to be obtained or made
by Parent, Merger Sub, the Company or any of their Subsidiaries in connection
with the Transactions or the taking of any action contemplated by the
Transactions or by this Agreement, (iv) the execution and delivery of any
additional instruments necessary to consummate the Transactions and to fully
carry out the purposes of this Agreement. Additionally, each of Parent and the
Company shall use its commercially reasonable efforts to fulfill all conditions
precedent to the Merger and shall not take any action after the date of this
Agreement that would reasonably be expected to materially delay the obtaining
of, or result in not obtaining, any permission, approval or consent from any
Governmental Entity necessary to be obtained prior to Closing.
(b) Prior to the Closing, each party shall promptly consult
with the other parties to this Agreement with respect to, provide any necessary
information with respect to and provide the other parties (or their counsel)
copies of, all filings made by such party with any Governmental Entity or any
other information supplied by such party to a Governmental Entity in connection
with this Agreement and the Transactions. Each party to this Agreement shall
promptly inform the other parties to this Agreement of any communication from
(i) any Governmental Entity regarding any of the Transactions or (ii) any Person
alleging that the consent of such Person may be required in connection with the
Transactions. If any party to this Agreement or any Affiliate of such parties
receives a request for additional information or documentary material from any
Governmental Entity with respect to the Transactions, then such party will
endeavor in good faith to make, or cause to be made, as soon as reasonably
practicable and after consultation with the other parties to this Agreement, an
appropriate response in compliance with such request. To the extent that
transfers of any permits, authorizations or approvals issued by any Governmental
Entity are required as a result of the execution of this Agreement or the
consummation of the Transactions, the Company shall use its commercially
reasonable efforts to effect such transfers.
(c) In furtherance and not in limitation of the foregoing, the
Company and Parent shall as promptly as practicable, but in any event no later
than ten Business Days after the date of this Agreement, file notifications
under the HSR Act and to respond, as promptly as practicable, to any inquiries
received from the Federal Trade Commission and the Antitrust Division of the
Department of Justice for additional information or documentation and to
respond, as promptly as practicable, to all inquiries and requests received from
any state Attorney General or other Governmental Entity in connection with
antitrust matters.
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(d) Each of Parent and the Company shall use commercially
reasonable efforts to resolve such objections, if any, as may be asserted by any
Governmental Entity with respect to the transactions contemplated by this
Agreement under the HSR Act, the Sherman Act, as amended, the Clayton Act, as
amended, the Federal Trade Commission Act, as amended, and any other United
States federal or state or foreign Laws that are designed to prohibit, restrict
or regulate actions having the purpose or effect of monopolization or restraint
of trade (collectively, "Antitrust Laws"). In connection therewith, if any
Action is instituted (or threatened to be instituted) challenging any of the
Transactions as violative of any Antitrust Laws, each of Parent and the Company
shall cooperate and use all commercially reasonable efforts vigorously to
contest and resist any such Action, and to have vacated, lifted, reversed, or
overturned any decree, judgment, injunction or other order whether temporary,
preliminary or permanent, that is in effect and that prohibits, prevents, or
restricts consummation of the Merger or any other Transactions, including by
vigorously pursuing all available avenues of administrative and judicial appeal
unless, by mutual agreement, Parent and the Company decide that litigation is
not in their respective best interests. Each of Parent and the Company shall use
all commercially reasonable efforts to take such action as may be required to
cause the expiration of the notice periods under the HSR Act or other Antitrust
Laws with respect to the Transactions as promptly as possible after the
execution of this Agreement. Notwithstanding the foregoing or any other
provision of this Agreement, nothing in this Section 6.3(d) shall limit the
right of any party hereto to terminate this Agreement pursuant to Section 8.1,
so long as such party hereto has, up to the time of termination, complied in all
material respects with its obligations under this Section 6.3(d).
Notwithstanding anything to the contrary in this Agreement, the parties hereto
understand and agree that commercially reasonable efforts of any party hereto
shall not require, and no other provision in this Agreement shall be construed
as requiring, (i) the entry into any settlement, undertaking, consent decree,
stipulation or agreement with any Governmental Entity in connection with the
transactions contemplated hereby or (ii) divesting or otherwise holding separate
(including by establishing a trust or otherwise), granting a license, or taking
any other action (or otherwise agreeing to do any of the foregoing ) with
respect to any of Parent's, the Company's, or the Surviving Corporation's
subsidiaries or any of their respective Affiliates' businesses, assets or
properties.
Section 6.4 Notification of Certain Matters. Subject to
applicable Law, the Company shall give prompt notice to Merger Sub and Parent
and Merger Sub shall give prompt notice to the Company of (a) the occurrence or
non-occurrence of any event whose occurrence or non-occurrence would be likely
to cause either any representation or warranty contained in this Agreement to be
untrue or inaccurate in any material respect at any time from the date of this
Agreement to the Effective Time or any condition to the Merger to be unsatisfied
on the Effective Time and (b) any material failure of the Company, Merger Sub or
Parent, as the case may be, or any officer, director, employee, agent or
representative of the Company, Merger Sub or Parent as applicable, to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement; provided, however, that the delivery of
any notice pursuant to this Section 6.4 or Section 6.3(b) shall not limit or
otherwise affect the remedies available under this Agreement to the party
receiving such notice.
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Section 6.5 Access; Confidentiality. Subject to the
Confidentiality Agreement and applicable Law relating to the sharing of
information, the Company agrees to (i) provide Parent and its Representatives,
from time to time prior to the earlier of the Effective Time or the termination
of this Agreement, such information and access to its offices, properties,
employees and books and records (including, without limitation, for the purposes
of conducting Phase I or Phase II environmental site assessments or other
environmental investigations; provided, Parent shall not conduct Phase II
investigations at the Company's facility in Kent, Ohio) with respect to, or
access to the offices, properties, books and records of, the Company and its
Subsidiaries or their respective businesses, financial condition and operations
as Parent shall reasonably request and (ii) instruct its and its Subsidiaries
employees, counsel, financial advisors, auditors and other representatives to
cooperate with Parent in its investigation. Parent shall, and shall cause
Parent's Affiliates and Representatives to hold any non-public information
received from the other, directly or indirectly, in accordance with the
Confidentiality Agreement. The Company shall and shall cause its Subsidiaries to
make available to Parent all written environmental investigations, studies,
audits, tests, reviews or other analyses in their possession or control relating
to the current or prior business of the Company or any Subsidiary or any
property currently or previously owned, leased or operated by the Company or any
Subsidiary upon Parent's request for the same.
Section 6.6 Publicity. So long as this Agreement is in effect,
neither the Company, Parent nor any of their respective Affiliates shall issue
or cause the publication of any press release or other announcement with respect
to this Agreement or the Transactions without the prior consultation of the
other party, except as such party reasonably believes, after receiving the
advice of outside counsel and after informing all other parties to this
Agreement, another form of press release may be required by Law or by any
listing agreement with a national securities exchange or trading market.
Section 6.7 Indemnification; Directors' and Officers'
Insurance.
(a) For six years after the Effective Time, the Surviving
Corporation shall, and Parent shall cause the Surviving Corporation to, to the
fullest extent permitted under Ohio Law, indemnify and hold harmless each
present and former director and officer of the Company and its Subsidiaries and
each such individual who served at the request of the Company or its
Subsidiaries as a director, officer, trustee, partner, fiduciary, employee or
agent of another corporation, partnership, joint venture, trust, pension or
other employee benefit plan or enterprise (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, administrative or
investigative, based on the fact that such individual is or was serving at the
request of the Company or its Subsidiaries and arising out of or pertaining to
any action or omission occurring at or before the Effective Time (including the
Transactions). The Surviving Corporation shall be entitled to assume the defense
of any such claim, action, suit, investigation or proceeding with counsel
reasonably satisfactory to the Indemnified Party. If the Surviving Corporation
elects not to assume such defense or counsel for the Indemnified Party advises
that there are issues that raise conflicts of interest between the Surviving
Corporation, the Indemnified Party may retain separate counsel reasonably
satisfactory to the Surviving Corporation, and the Surviving Corporation shall
pay the fees and expenses of such counsel for the Indemnified Party promptly as
statements therefor are received; provided, however, that the Surviving
Corporation shall not be liable for any settlement effected without its consent
(which consent shall not be unreasonably withheld or delayed).
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(b) The Surviving Corporation shall, and Parent shall cause
the Surviving Corporation to, provide, for a period of not less than six years
after the Effective Time, the Company's current directors and officers (as
defined to mean those persons insured under such policy) with an insurance and
indemnification policy that provides coverage for events occurring at or prior
to the Effective Time (the "D&O Insurance") that is no less favorable than the
existing policy or, if substantially equivalent insurance coverage is
unavailable, the best available coverage; provided, however, that the Surviving
Corporation shall not be required to pay an annual premium for the D&O Insurance
in excess of 300 percent of the aggregate annual premiums paid by the Company
for such insurance in 2007, through the date of this Agreement on an annualized
basis (the "D&O Premium"), but in such case shall purchase as much of such
coverage as possible for such amount; and provided, further, however, that at
Parent's option in lieu of the foregoing insurance coverage, the Surviving
Corporation may purchase "tail" insurance coverage that provides coverage
identical in all material respects to the coverage described above and such
purchases do not result in any gaps or lapses in coverage with respect to
matters occurring prior to the Effective Time.
(c) The Articles of Incorporation and Code of Regulations of
the Surviving Corporation shall contain the provisions with respect to
indemnification set forth in the Amended Code of Regulations of the Company,
which provisions shall not be amended, modified or otherwise repealed for a
period of six years from the Effective Time in any manner that would adversely
affect the rights thereunder as of the Effective Time of any individual who at
the Effective Time is a director, officer, employee or agent of the Company or
is or previously was serving at the request of the Company or its Subsidiaries
as a director, trustee, officer, member, manager, employee or agent of another
corporation, partnership, joint venture, trust, limited liability company,
pension or other employee benefit plan or other enterprise, unless such
modification is required after the Effective Time by law and then only to the
minimum extent required by such law.
(d) The rights of each Indemnified Party under this Section
6.7 shall be in addition to any rights such individual may have under the
Amended Articles of Incorporation and Amended Code of Regulations (or other
governing documents) of the Company or any of its Subsidiaries, under Ohio Law
or any other applicable Laws or under any agreement of any Indemnified Party
with the Company or any of its Subsidiaries provided to Parent prior to the date
hereof. The rights of each Indemnified Party under this Section 6.7 shall
survive consummation of the Merger and are intended to benefit, and shall be
enforceable by, each Indemnified Party.
(e) In the event that the Parent or Surviving Corporation or
any of their respective successors or assigns (i) consolidates with or merges
into any other Person and is not the continuing or surviving corporation or
entity of such consolidation or merger or (ii) transfers or conveys all or
substantially all of its properties and assets to any Person, then, and in each
such case, proper provision will be made so that the successors and assigns of
the Surviving Corporation assume the obligations set forth in this Section 6.7.
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Section 6.8 Merger Sub Compliance. Parent shall cause Merger
Sub to comply with all of its obligations under or related to this Agreement.
Section 6.9 Employee Matters.
(a) Benefits. From and after the Effective Time and until the
first anniversary of the Effective Time, Parent shall, or shall cause the
Surviving Corporation or one of its other Subsidiaries to, maintain in effect
Parent Plans which provide benefits which are not less favorable in the
aggregate to the benefits provided by the Company Plans other than any Company
Plans that are equity compensation plans or arrangements.
(b) Eligibility. With respect to any Parent Plan in which any
employee of the Company or any of its Subsidiaries first becomes eligible to
participate on or after the Effective Time, Parent shall: (i) waive all
pre-existing conditions, exclusions and waiting periods with respect to
participation and coverage requirements applicable to each such employee and his
or her eligible dependents under such Parent Plan, except to the extent such
pre-existing conditions, exclusions or waiting periods applied immediately prior
thereto under the analogous Company Plan; (ii) provide such employee and his or
her eligible dependents with credit for any co-payments and deductibles paid
prior to becoming eligible to participate in such Parent Plan under the
analogous Company Plan (to the same extent that such credit was given under such
Company Plan) in satisfying any applicable deductible or annual or lifetime
maximum out-of-pocket requirements under such Parent Plan; and (iii) recognize
all service of such employee with the Company and its Subsidiaries and
predecessors (including recognition of all prior service with any entity
(including any such Subsidiary prior to its becoming a Subsidiary of the
Company) that was recognized by the Company (or any such Subsidiary) prior to
the date hereof in the ordinary course of administering its (or such
Subsidiary's) employee benefits), for purposes of eligibility to participate in
and vesting in benefits under such Parent Plan, to the extent that such service
was recognized for such purpose under the analogous Company Plan.
(c) Employees Subject to Collective Bargaining.
Notwithstanding anything to the contrary herein, the provisions of this Section
6.9 shall not apply with respect to the terms and conditions of employment or
compensation or employee benefits of any employees of the Company, Parent and
any of their Subsidiaries who are represented by labor unions or similar
collective bargaining entities, which will be governed by the applicable
collective bargaining agreements.
(d) No Third Party Beneficiaries. This Section 6.9 is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder. Regardless of anything else contained herein, the parties
hereto do not intend for this Agreement to amend any Company Plans, Parent Plans
or arrangements or create any rights or obligations except between the parties
to this Agreement.
Section 6.10 Repayment of Indebtedness.
(a) On or immediately prior to the Effective Time, the Company
shall deliver to Parent copies of payoff letters (subject to delivery of funds
as arranged by Parent), in commercially reasonable form, from the administration
agent under the Third Amended and Restated Credit Agreement dated as of November
20, 2006 among the Company, the lenders, National City Bank and JPMorgan Chase
Bank, N.A., as Co-Syndication Agents, LaSalle Bank National Association, as
Documentation Agent and Bank of Montreal, as Administrative Agent and releases
for any liens thereunder.
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(b) Prior to Closing, the Company shall, and shall cause its
Subsidiaries and their respective Representatives to, cooperate and take such
actions that Parent may reasonably request in connection with (i) the Company's
industrial development revenue bonds and/or (ii) the substitution or replacement
of the letters of credit related thereto.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions to Each Party's Obligation to Effect
the Merger. The respective obligation of each party to effect the Merger shall
be subject to the satisfaction on or prior to the Closing Date of each of the
following conditions, any and all of which may be waived in whole or in part by
the Company, Parent and Merger Sub, as the case may be, to the extent permitted
by applicable Law:
(a) Shareholder Approval. The Merger and this Agreement shall
have been adopted by the requisite vote of the holders of the Shares (the
"Shareholder Approval").
(b) HSR Act. The waiting period (including any extension
thereof) applicable to the consummation of the Merger under the HSR Act shall
have expired or been terminated.
(c) No Injunctions or Restraints. No Order or Law, entered,
enacted, promulgated, enforced or issued by any court of competent jurisdiction,
or any other Governmental Entity, or other legal restraint or prohibition
(collectively, "Restraints") shall be in effect preventing the consummation of
the Merger.
Section 7.2 Conditions to Obligations of Parent and Merger
Sub. The obligation of Parent and Merger Sub to effect the Merger is further
subject to the satisfaction or waiver by Parent of the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in (i) Sections 3.1, 3.2, 3.4, 3.16(f),
3.18, 3.19, 3.20 and 3.21, shall be true and correct as of the date of this
agreement and as of the Effective Time as if made at and as of such time and
(ii) Article III, other than those to which clause (i) above applies, shall be
true and correct (disregarding for purposes of this Section 7.2(a) any
materiality or Material Adverse Effect qualification contained therein) as of
the Effective Time as though made at and as of such time (or, if made as of a
specific date, at and as of such date), except in the case of this clause (ii)
where the failure to be so true and correct has not had and would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect.
(b) Performance of Obligations of the Company. The Company
shall have performed in all material respects (or with respect to any obligation
or agreement qualified by materiality or Material Adverse Effect, in all
respects) all obligations and agreements, and complied in all material respects
(or with respect to any covenant qualified by materiality, in all respects) with
all covenants, contained in this Agreement to be performed or complied with by
it prior to or on the Closing Date.
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(c) Officer's Certificate. The Company shall have furnished
Parent with a certificate dated the Closing Date signed on its behalf by an
executive officer to the effect that the conditions set forth in Section 7.2(a)
and Section 7.2(b) have been satisfied.
(d) There shall not have been instituted or pending any action
or proceeding by any Governmental Entity (i) challenging or seeking to make
illegal, to delay materially or otherwise directly or indirectly to restrain or
prohibit the consummation of the Merger or the other Transactions, (ii) seeking
to restrain or prohibit Parent's, Merger Sub's or any of Parent's other
Affiliates' (x) ability effectively to exercise full rights of ownership of the
Shares, including the right to vote any Shares acquired or owned by Parent,
Merger Sub or any of Parent's other Affiliates following the Effective Time on
all matters properly presented to the Company's shareholders or (y) ownership or
operation (or that of its respective Subsidiaries or Affiliates) of all or any
portion of the business or assets of the Company and its Subsidiaries or of
Parent and its Subsidiaries, (iii) seeking to compel Parent or any of its
Subsidiaries or Affiliates to dispose of or hold separate any portion of the
business or assets of the Company, any of the Company's Subsidiaries, Parent or
any of its Subsidiaries or (iv) that otherwise would reasonably be expected to
have a Material Adverse Effect.
(e) There shall not have occurred or been discovered any
change, event, occurrence or development which, individually or in the
aggregate, has or would reasonably be expected to have a Material Adverse
Effect.
Section 7.3 Conditions to Obligations of the Company. The
obligation of the Company to effect the Merger is further subject to the
satisfaction or waiver of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Parent and Merger Sub contained in this Agreement shall be true
and correct at and as of the Closing (without regard to any qualifications
therein as to materiality or material adverse effect), as though made at and as
of such time (or, if made as of a specific date, at and as of such date), except
for such failures to be true and correct as would not reasonably be expected to
prevent or materially delay the consummation of the Merger.
(b) Performance of Obligations of Parent and Merger Sub. Each
of Parent and Merger Sub shall have performed in all material respects (or with
respect to any obligation or agreement qualified by materiality or material
adverse effect, in all respects) all obligations and agreements, and complied in
all material respects with all covenants, contained in this Agreement to be
performed or complied with by it prior to or on the Closing Date.
(c) Officer's Certificate. Each of Parent and Merger Sub shall
have furnished the Company with a certificate dated the Closing Date signed on
its behalf by an executive officer to the effect that the conditions set forth
in Section 7.3(a) and Section 7.3(b) have been satisfied.
Section 7.4 Frustration of Closing Conditions. Neither Parent
or Merger Sub nor the Company may rely on the failure of any condition set forth
in Section 7.1, Section 7.2 or Section 7.3, as the case may be, to be satisfied
to excuse it from its obligations hereunder if such failure was caused by such
party's failure to comply with its obligations to consummate the Merger and the
other transactions contemplated by this Agreement, as required by and subject to
Section 6.3.
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ARTICLE VIII
TERMINATION
Section 8.1 Termination. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time
(notwithstanding any Shareholder Approval):
(a) by mutual written consent of Parent, Sub and the Company;
(b) by either Parent or the Company if:
(i) the Merger has not been consummated on
or before January 31, 2008 (the "Outside Date"); provided,
however, that the right to terminate this Agreement pursuant
to this Section 8.1(b)(i) shall not be available to any party
whose breach of any provision of this Agreement results in the
failure of the Merger to be consummated by such time; provided
further, however, that, if, on the Outside Date, either of the
conditions to the Closing set forth in Section 7.1(b) or
Section 7.1(c) shall not have been fulfilled but all other
conditions to the Closing either have been fulfilled or are
then capable of being fulfilled, then the Outside Date shall,
without any action on the part of the parties hereto, be
extended to April 30, 2008, and such date shall become the
Outside Date for purposes of this Agreement;
(ii) a Restraint which, in the case of an
Order, is final and nonappealable, shall have been issued or
come into effect restraining or otherwise prohibiting
consummation of the Merger or any of the other Transactions;
provided, however, that the party seeking to terminate this
Agreement pursuant to this Section 8.1(b)(ii) shall have used
its commercially reasonable efforts to prevent the entry of
such permanent injunction, including by satisfying its
obligations under Section 6.3; or
(iii) if the Special Meeting (including any
adjournments and postponements thereof) shall have concluded
without the Shareholder Approval having been obtained.
(c) by the Company, if prior to receipt of
the Shareholder Approval:
(i) the Company Board authorizes the
Company, subject to complying with the terms of this
Agreement, to enter into a written agreement concerning a
Company Superior Proposal, provided, that concurrently with
such termination the Company pays the Termination Fee payable
pursuant to Section 8.2(b) ; or
(ii) a breach of any representation or
warranty or failure to perform any covenant or agreement on
the part of Parent or Merger Sub set forth in this Agreement
shall have occurred that would cause the condition set forth
in Section 7.3(c) not to be satisfied, and such condition is
incapable of being satisfied by the Outside Date.
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(d) by Parent, if:
(i) (A) the Company Board shall have made an
Adverse Recommendation Change or (B) the Company shall have
willfully and materially breached (directly or indirectly
through any Subsidiary or Representative) Section 5.2 or
Section 6.2(a); or
(ii) a breach of any representation or
warranty or failure to perform any covenant or agreement on
the part of the Company set forth in this Agreement shall have
occurred that would cause the condition set forth in Section
7.2(c) not to be satisfied, and such condition is incapable of
being satisfied by the Outside Date.
Section 8.2 Effect of Termination.
(a) If this Agreement is terminated pursuant
to Section 8.1, this Agreement shall become void and of no
effect with no liability on the part of any party (or any
shareholder, director, officer, employee, agent, consultant or
representative of such party) to the other party hereto;
provided, however, that if such termination shall result from
the willful (i) failure of either party to fulfill a condition
to the performance of the obligations of the other party or
(ii) failure of either party to perform a covenant hereof,
such party shall be liable for any and all liabilities and
damages incurred or suffered by the other party as a result of
such failure or breach; provided, however, further, that the
provisions of Section 6.6, this Section 8.2, Article IX (other
than Section 9.11) and Article X of this Agreement and the
provisions of the Confidentiality Agreement shall survive such
termination.
(b) If this Agreement is terminated by
Parent pursuant to the provisions of Section 8.1(d)(i) or by
the Company pursuant to the provisions of Section 8.1(c)(i)
the Company will pay to Parent a fee equal to $15 million (the
"Termination Fee") in immediately available funds concurrently
with such termination.
(c) If this Agreement is terminated by the
Company or Parent pursuant to the provisions of Section
8.1(b)(i)Section 8.1(b)(iii) but (in the case of this Section
8.2(c)) only if (A) prior to the Special Meeting a bona fide
Company Takeover Proposal shall have been made to the Company
or shall have been made directly to the holders of any class
of capital stock of the Company generally or shall have
otherwise become publicly known and shall not have been
withdrawn prior to the time of the Special Meeting and (B)
within 12 months following the date of such termination, (1)
the Company merges with or into, or is acquired, directly or
indirectly, by merger or otherwise by, a third party; (2) a
third party, directly or indirectly, acquires in one or more
related transactions more than 50% of the consolidated assets
of the Company; (3) a third party, directly or indirectly,
acquires in one or more related transactions more than 50% of
the outstanding Shares or voting Securities of one or more of
the Company's Subsidiaries whose net revenue, net income or
assets, individually or in the aggregate, constitute 50% or
more of the consolidated net revenue, net income or assets, as
applicable, of the Company; or (4) the Company or any of its
Subsidiaries shall have entered into any contract or agreement
providing for any of the actions described in any of the
immediately preceding clauses (1) through (3) then, in each
case, the Company shall pay the Company Termination Fee (less
the amount of any Parent Expenses previously paid) to Parent
as promptly as reasonably practicable (and in any event within
two business days of the applicable event described in clauses
(1) through (4) hereof), payable by wire transfer of same day
funds.
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(d) If this Agreement is terminated by
Parent or the Company pursuant to the provisions of Section
8.1(b)(iii) (or could have been terminated under such section)
under circumstances in which the Termination Fee is not then
payable pursuant to Section 8.2(c), then the Company shall pay
as directed by Parent in writing as promptly as possible (but
in any event within two Business Days) following receipt of an
invoice therefor all of Parent's and Merger Sub's actual and
reasonably documented out-of-pocket fees and expenses
(including reasonable legal fees and expenses) incurred by
Parent, Merger Sub and their respective Affiliates on or prior
to the termination of this Agreement in connection with the
Transactions, which amount shall not be greater than $ 5
million ("Parent Expenses"); provided, that the existence of
circumstances which could require the Termination Fee
subsequently to become payable pursuant to Section 8.2(c)
shall not relieve the Company of its obligations to pay the
Parent Expenses pursuant to this Section 8.2(d); and provided,
further, that the payment by the Company of Parent Expenses
pursuant to this Section 8.2(d) shall not relieve the Company
of any subsequent obligation to pay the Termination Fee
pursuant to Section 8.2(c) except to the extent indicated in
such Section 8.2(c).
(e) If this Agreement is terminated by
Parent or the Company pursuant to the second proviso to
Section 8.1(b)(i) or, with respect to a Restraint arising
under applicable Antitrust Laws, Section 8.1(b)(ii) and at the
time of any such termination (i) all of the conditions set
forth in Article VII have been satisfied or waived or are then
capable of being satisfied except for any of the conditions
set forth in Section 7.1(b), Section 7.1(c) (with respect to a
Restraint arising under applicable Antitrust Laws), or Section
7.2(e) (with respect to any action or proceeding under
applicable Antitrust Laws) and (ii) the Company is not then in
breach of its representations, warranties, covenants or
agreements under this Agreement, then Parent shall promptly,
but in no event later than two business days after the date of
such termination, pay the Company a fee of $4 million in
immediately available funds to an account designated in
writing to Parent by the Company.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Amendment and Modification. Subject to applicable
Law, this Agreement may be amended, modified, waived or supplemented in any and
all respects, whether before or after any vote of the shareholders of the
Company and Merger Sub contemplated by this Agreement, by written agreement of
the parties to this Agreement, by action taken by their respective boards of
directors or equivalent governing bodies, at any time prior to the Effective
Time with respect to any of the terms contained in this Agreement; provided,
however, that after Shareholder Approval, no such amendment, modification or
supplement, shall make any change that would require shareholder approval under
Ohio Law, without the further approval of the Company's shareholders.
Section 9.2 Non-survival of Representations and Warranties.
None of the representations and warranties in this Agreement or in any schedule,
instrument or other document delivered pursuant to this Agreement shall survive
the Effective Time.
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Section 9.3 Expenses. Except as otherwise provided herein, all
fees, costs and expenses (including all legal, accounting, broker, finder or
investment banker fees) incurred in connection with this Agreement and the
Transactions are to be paid by the party incurring such fees, costs and
expenses. Section 9.4 Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed given if delivered personally,
sent by facsimile transmission (which is electronically confirmed), mailed by
first class registered or certified mail, postage prepaid or sent by a
nationally recognized overnight courier service, such as FedEx, to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice):
(a) if to Parent or Merger Sub, to:
Thomas & Betts Corporation
8155 T&B Blvd.
Memphis, TN 38125
Attention: Chairman and CEO
Telephone No.: (901) 252-1324
Facsimile No.: (901) 252-5249
with a copy to:
Thomas & Betts Corporation
8155 T&B Blvd.
Memphis, TN 38125
Attention: Vice President - General Counsel
Telephone No.: (901) 252-1475
Facsimile No.: (901) 252-5877
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Attention: Paul R. Kingsley, Esq.
Michael K. Davis, Esq.
Telephone No.: 212-450-4000
Facsimile No.: 212-450-3800
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(b) if to the Company, to:
The Lamson & Sessions Co.
25701 Science Park Drive
Cleveland, Ohio 44122
Attention: Michael J. Merriman, Jr.,
Chief Executive Officer
Telephone No.: (216) 464-3400
Facsimile No.: (216) 464-1455
with a copy to:
Jones Day
901 Lakeside Avenue
Cleveland, Ohio 44114
Attention: Christopher J. Hewitt, Esq.
Telephone No.: (216) 586-3939
Facsimile No.: (216) 579-0212
Section 9.5 Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received a
counterpart hereof signed by all of the other parties hereto. Until and unless
each party has received a counterpart hereof signed by the other party hereto,
this Agreement shall have no effect and no party shall have any right or
obligation hereunder (whether by virtue of any other oral or written agreement
or other communication).
Section 9.6 Entire Agreement; No Third Party Beneficiaries.
This Agreement (including the schedules and annexes to this Agreement) and the
Confidentiality Agreement (a) constitute the entire agreement and supersede all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter of this Agreement and (b) other than as
provided in Section 6.7 is not intended to confer upon any Person other than the
parties to this Agreement any rights or remedies under this Agreement.
Section 9.7 Severability. Any term or provision of this
Agreement that is held by a court of competent jurisdiction or other
Governmental Entity to be invalid, void or unenforceable in any situation in any
jurisdiction shall not affect the validity or enforceability of the remaining
terms and provisions of this Agreement or the validity or enforceability of the
offending term or provision in any other situation or in any other jurisdiction.
If the final judgment of a court of competent jurisdiction or other Governmental
Entity declares that any term or provision of this Agreement is invalid, void or
unenforceable, the parties agree that the court asking such determination shall
have the power to reduce the scope, duration, area or applicability of the term
or provision, to delete specific words or phrases, or to replace any invalid,
void or unenforceable term or provision with a term or provision that is valid
and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision.
Section 9.8 Governing Law. This Agreement shall be governed by
and construed in accordance with the Laws of the State of Delaware (other than
with respect to matters relating to fiduciary duties of the Company Board, the
Merger and any other matters governed by Ohio Law, with respect to which Ohio
Law shall apply) without giving effect to the principles of conflicts of law of
the Laws of the State of Delaware.
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Section 9.9 Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned by any
of the parties to this Agreement (whether by operation of Law or otherwise)
without the prior written consent of the other parties, except that Merger Sub
may assign, in its sole discretion, any or all of its rights, interests and
obligations under this Agreement to Parent or to any direct or indirect wholly
owned Subsidiary of Parent. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and assigns.
Section 9.10 Consent to Jurisdiction.
(a) Each of the parties hereto (i) irrevocably consents to
submit itself to the exclusive personal jurisdiction of the state and federal
courts of the State of Delaware (and the appropriate appellate courts therefrom)
in the event that any dispute arises out of this Agreement or any of the
Transactions, (ii) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court
and (iii) agrees that it will not bring any action relating to or based on this
Agreement or any of the Transactions in any other court.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE
AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE EITHER OF SUCH WAIVERS, (II) IT UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF SUCH WAIVERS, (III) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (IV)
IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.10(b).
Section 9.11 Specific Enforcement. The parties agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. The parties accordingly agree that the parties will be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement in any
federal court located in the State of Delaware or an Delaware state court, this
being in addition to any other remedy to which they are entitled at law or in
equity.
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ARTICLE X
DEFINITIONS; INTERPRETATION
Section 10.1 Cross References. Each of the following terms is
defined in the section set forth opposite such term.
Defined Term Section
------------ -------
Adverse Recommendation Change..................................................................5.2(b)
Agreement....................................................................................Preamble
Antitrust Laws.................................................................................6.3(d)
Certificate....................................................................................2.1(a)
Closing...........................................................................................1.2
Closing Date......................................................................................1.2
Code..........................................................................................3.13(c)
Common Stock.................................................................................Recitals
Company......................................................................................Preamble
Company Agreements................................................................................3.3
Company Board.....................................................................................2.3
Company Board Recommendation...................................................................3.2(c)
Company Disclosure Letter........................................................Article III Preamble
Company Intellectual Property.................................................................3.15(b)
Company Permits...................................................................................3.8
Company Plans.................................................................................3.13(a)
Company Rights Agreement.......................................................................3.4(a)
Company SEC Documents..........................................................................3.5(a)
Company Securities.............................................................................3.4(a)
Confidentiality Agreement........................................................................3.22
Controlled Group..............................................................................3.13(d)
D&O Insurance..................................................................................6.7(b)
D&O Premium....................................................................................6.7(b)
Dissenting Shares..............................................................................2.4(a)
Effective Time....................................................................................1.3
Financial Statements...........................................................................3.5(a)
Foreign Benefit Plans.........................................................................3.13(j)
GAAP...........................................................................................3.5(a)
Governmental Entity...............................................................................3.3
HSR Act...........................................................................................3.3
Indemnified Parties............................................................................6.7(a)
internal controls..............................................................................3.5(c)
IRS...........................................................................................3.13(b)
Leased Real Property..........................................................................3.14(b)
Material Contracts.............................................................................3.9(b)
Merger............................................................................................1.1
Merger Consideration...........................................................................2.1(a)
Merger Sub...................................................................................Preamble
Multiemployer Plan............................................................................3.13(a)
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Options........................................................................................2.3(a)
Outside Date................................................................................8.1(b)(i)
Owned Real Property...........................................................................3.14(a)
Parent.......................................................................................Preamble
Parent Affiliates.................................................................................4.4
Parent Expense........................................................................Section 8.2(d)
Paying Agent...................................................................................2.2(a)
Payment Fund...................................................................................2.2(a)
Preference Stock...............................................................................3.4(a)
Preferred Stock................................................................................3.4(a)
Proxy Statement..................................................................................3.10
Representatives................................................................................5.2(a)
Restraints.....................................................................................7.1(c)
Restricted Share...............................................................................2.3(b)
SAR............................................................................................2.3(a)
Securities Act.................................................................................3.5(a)
Shareholder Approval..........................................................................7.1(a)
Shares.......................................................................................Recitals
Special Meeting................................................................................6.2(a)
Surviving Corporation.............................................................................1.1
Termination Fee................................................................................8.2(b)
Transactions...................................................................................2.2(a)
Uncertificated Share...........................................................................2.1(a)
Section 10.2......Certain Terms Defined. The following terms shall have the
meanings set forth below for purposes of this Agreement:
"Acceptable Confidentiality Agreement" means a confidentiality agreement
with terms (including, for the avoidance of doubt, a standstill provision) no
less favorable to the Company than those contained in the Confidentiality
Agreement.
"Action" means any claim, action, arbitration, suit, proceeding or
investigation by or before any Governmental Entity or arbitrator.
"Affiliates" has the meaning set forth in Rule 12b-2 of the Exchange Act.
"Business Day" means any day other than a Saturday, Sunday or a day on
which banks in New York, New York are authorized or obligated by Law or
executive Order to close.
"Company Superior Proposal" means a bona fide unsolicited written Company
Takeover Proposal (which definition shall be read, for this purpose, without the
word "inquiry"), for at least a majority of the outstanding Shares or 50% or
more of the consolidated assets of the Company and for which the financing, if a
cash transaction (whether in whole or in part) is then fully committed, that the
Company Board determines in good faith, after consultation with outside legal
counsel and its financial advisor and taking into account all legal, financial
and regulatory and other aspects of the Company Takeover Proposal (including,
among other things, any termination fees, expense reimbursement and conditions
to closing), the person making the Company Takeover Proposal and all relevant
material terms of such Company Takeover Proposal, this Agreement (including any
changes to this Agreement proposed by Parent in response to a Company Takeover
Proposal), is more favorable from a financial point of view to the shareholders
of the Company than the Merger and the other transactions contemplated by this
Agreement
"Company Takeover Proposal" means (i) any inquiry, proposal or offer for a
merger, consolidation, share exchange, reorganization, recapitalization,
liquidation, dissolution business combination or other similar transaction
involving the Company or any of its Subsidiaries (in the case of its
Subsidiaries, only to the extent such subsidiaries represent more than 20% of
the consolidated assets of the Company), (ii) any inquiry, proposal or offer to
acquire in any manner, directly or indirectly, more than 20% of the outstanding
Common Stock or other voting securities of the Company, (iii) any inquiry,
proposal or offer to acquire in any manner, directly or indirectly, assets of
the Company or its Subsidiaries representing more than 20% of the consolidated
assets of the Company, in each case, other than the transactions contemplated by
this Agreement, or (iv) any inquiry, proposal or offer in relation to any tender
offer (including a self-tender offer) or exchange offer that, if consummated,
would result in such Third Party's beneficially owning 20% or more of any class
of equity or voting securities of the Company or any of its Subsidiaries whose
assets, individually or in the aggregate, constitute more than 20% of the
consolidated assets of the Company.
"Encumbrance" means any security interest, pledge, mortgage, lien, charge,
hypothecation, option to purchase or lease or otherwise acquire any interest,
conditional sales agreement, adverse claim of ownership or use, title defect,
easement, right of way, or other encumbrance of any kind.
"Environmental Laws" means all Laws, permits or agreements with any Person
relating to the environment, including the ambient air, soil, surface water or
groundwater, relating to the effect of the environment on human health or
relating to pollutants, contaminants, wastes or chemicals or any toxic,
radioactive, ignitable, corrosive, reactive or otherwise hazardous substances,
wastes or materials.
"Environmental Permits" means all permits, licenses, registrations,
franchises, certificates, approvals and other authorizations required under
applicable Environmental Laws.
"ERISA" means the Employment Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
"Indebtedness" of any Person means (a) all indebtedness for borrowed money
or for the deferred purchase price of property or services (other than current
trade liabilities incurred in the ordinary course of business of business and
payable in accordance with customary practices), (b) any other indebtedness
which is evidenced by a note, bond, debenture or similar instrument, (c) all
obligations under financing leases, (d) all obligations in respect of
acceptances issued or created, (e) all liabilities secured by any lien on any
property and (f) all guarantee obligations.
"Intellectual Property" means United States or foreign intellectual
property, including (i) patents and patent applications, together with all
reissues, continuations, continuations-in-part, divisionals, extensions and
reexaminations thereof, (ii) trademarks, service marks, logos, trade names,
corporate names, Internet domain names, trade dress, including all goodwill
associated therewith, and all applications, registrations and renewals in
connection therewith, (iii) copyrights and copyrightable works and all
applications and registrations in connection with any of the foregoing, (iv)
inventions and discoveries (whether patentable or not), industrial designs,
trade secrets, confidential information and know-how, (v) computer software
(including databases and related documentation), (vi) moral and economic rights
of authors and inventors, (vii) publicity rights and privacy rights and (viii)
all other proprietary rights whether now known or hereafter recognized in any
jurisdiction.
"IT Assets" means computers, computer software, firmware, middleware,
servers, workstations, routers, hubs, switches, data communications lines, and
all other information technology equipment, and all associated documentation
owned by the Company or its Subsidiaries or licensed or leased by the Company or
its Subsidiaries pursuant to written agreement (excluding any public networks).
"Knowledge" means (i) with respect to Parent, the actual knowledge, after
reasonable inquiry, of the executive officers of Parent and (ii) with respect to
the Company, the actual knowledge, after reasonable inquiry of the following
executive officers of the Company: Michael J. Merriman, Jr., James J. Abel, Lori
L. Spencer, Donald A. Gutierrez, Norman E. Sutterer, Carl O. Brondel, Eileen E.
Clancy, Andrew J. Patterson and James A. Rajecki.
"Law" means any federal, state, local, provincial, municipal or foreign law
(including common law), statute, code, ordinance, decree, order, judgment,
treaty, requirement, injunction, judicial decisions, regulation, rule or other
similar requirement of any Governmental Entity.
"Material Adverse Effect" means a material adverse effect on (i) the
business, assets, financial condition or results of operations of the Company
and its Subsidiaries, taken as a whole (other than to the extent resulting from
(A) general changes in the industries in which the Company and its Subsidiaries
operate, (B) changes in general legal, regulatory, political, business,
economic, financial or securities market conditions in the United States or
elsewhere (including fluctuations, in and of themselves, in the price of the
Shares (it being understood that any fact, development, event, circumstance or
change underlying such fluctuations may constitute or contribute to a Material
Adverse Effect)), (C) changes that can be shown to be proximately caused by the
negotiation, execution or the announcement of this Agreement, or the
consummation of any Transaction (including the Merger), including the impact
thereof on relationships, contractual or otherwise, with customers, suppliers,
distributors, or employees, (D) acts of war, insurrection, sabotage or
terrorism, (E) changes in GAAP or the accounting rules or regulations of the
SEC, (F) the effect of incurring out-of-pocket expenses in connection with
negotiating, entering into, performing or consummating the Transactions or (G)
the failure, in and of itself, by the Company to meet any internal or published
projections, forecasts or revenue or earnings predictions for any period ending
on or after the date of this Agreement (it being understood that any fact,
development, event, circumstance or change underlying such failure may
constitute or contribute to a Material Adverse Effect), so long as, in the case
of clauses (A), (B), (D), or (E), the effects on the Company and its
Subsidiaries is not disproportionate to that on other companies in the
industries in which the Company and its Subsidiaries operate) or (ii) the
ability of the Company to timely perform its obligations under this Agreement or
consummate the Transactions.
"Materials of Environmental Concern" means any pollutant, contaminant,
waste or chemical or any hazardous, acutely hazardous, or toxic substance or
waste defined or regulated as such under Environmental Laws, including the
federal Comprehensive Environmental Response, Compensation and Liability Act of
1980 ("CERCLA") and the federal Resource Conservation and Recovery Act, each, as
amended, including, without limitation, asbestos and asbestos-containing
materials.
"Ohio Law" means the Ohio General Corporation Law.
"Order" means any order, judgment, ruling, determination, injunction,
assessment, award, decree, writ or other similar requirement of any Governmental
Entity.
"Parent Plan" means each "employee benefit plan" (within the meaning of
Section 3(3) of ERISA but excluding any Multiemployer Plan) and each other
material director and employee plan, program, agreement or arrangement, vacation
or sick pay policy, fringe benefit plan, compensation, severance or employment
agreement, stock bonus, stock purchase, stock option, restricted stock, stock
appreciation right or other equity-based plan, and bonus or other incentive
compensation or salary continuation plan or policy contributed to, sponsored or
maintained by Parent or Merger Sub or, after the Effective Time, the Surviving
Corporation.
"Permitted Encumbrances" means: (i) Encumbrances that relate to Taxes,
assessments and governmental charges or levies imposed upon the Company that are
not yet due and payable or that are being contested in good faith by appropriate
proceedings, (ii) Encumbrances imposed by Law that relate to obligations that
are not yet due and have arisen in the ordinary course of business, (iii)
pledges or deposits to secure obligations under workers' compensation Laws or
similar legislation or to secure public or statutory obligations, (iv)
mechanics', carriers', workers', repairers' and similar Encumbrances imposed
upon the Company arising or incurred in the ordinary course of business, (v)
Encumbrances that relate to zoning, entitlement and other land use and
environmental Laws, (vi) other imperfections or irregularities in title,
charges, easements, survey exceptions, leases, subleases, license agreements and
other occupancy agreements, reciprocal easement agreements, restrictions and
other customary encumbrances on title to or use of real property, (vii) utility
easements for electricity, gas, water, sanitary sewer, surface water drainage or
other general easements granted to Governmental Entities in the ordinary course
of developing or operating any Site, (viii) any Laws affecting any Site, (ix)
any utility company rights, easements or franchises for electricity, water,
steam, gas, telephone or other service or the right to use and maintain poles,
lines, wires, cables, pipes, boxes and other fixtures and facilities in, over,
under and upon any of the Sites, (x) any encroachments of stoops, areas, cellar
steps, trim and cornices, if any, upon any street or highway; provided, however,
that in the case of clauses (i) through (v), appropriate reserves for the
matters referred to in said clauses as required pursuant to GAAP have been
established on the most recent financial statements included in the Company SEC
Documents; and provided, further, that in the case of clauses (v) through (x),
none of the matters referred to in said clauses, individually or in the
aggregate, materially adversely affect the continued use or occupancy of the
property to which they relate in the conduct of the business currently conducted
thereon, (xi) as to any Leased Real Property, any Encumbrance affecting the
interest of the lessor thereof, and (xii) any matters disclosed in reports
delivered or made available to Parent by the Company prior to the date of this
Agreement.
"Person" means a natural person, sole proprietorship, partnership,
corporation, limited liability company, business trust, joint stock company,
trust, unincorporated society or association, joint venture, Governmental Entity
or other legal entity or organization.
"Related Party" means (A) any director or officer of the Company or any of
its Subsidiaries, (B) any record or beneficial owner of 5% or more of the voting
securities of the Company or (C) any Affiliate, "associates" or members of the
"immediate family" (as such terms are respectively defined in Rule 12b-2 and
Rule 16a-1 of the Exchange Act) of any such director, officer or owner.
"SEC" means the United States Securities and Exchange Commission.
"Site" means each location where the Company or any Subsidiary of the
Company conducts business, including each Owned Real Property and Leased Real
Property.
"Stock Plans" means, collectively, the Company's 1988 Incentive Equity
Performance Plan (as amended and restated as of February 26, 1998 and as amended
as of January 1, 2000 and as of October 19, 2000), 1998 Incentive Equity Plan
(as amended and restated as of April 30, 2004), 1998 Incentive Equity Plan (as
amended and restated as of April 28, 2006), Nonemployee Directors Stock Option
Plan (as amended and restated as of July 19, 2001), Deferred Compensation Plan
for Non-Employee Directors (as amended and restated as of April 30, 2004),
Deferred Compensation Plan for Executive Officers (as amended and restated as of
October 18, 2001) and Nonqualified Deferred Compensation Plan (Post-2004) (as
amended as of February 15, 2007).
"Subsidiary" means, with respect to any party, any foreign or domestic
corporation or other organization, whether incorporated or unincorporated, of
which (a) such party or any other Subsidiary of such party is a general partner
(excluding such partnerships where such party or any Subsidiary of such party
does not have a majority of the voting interest in such partnership) or (b) at
least a majority of the securities or other equity interests having by their
terms ordinary voting power to elect a majority of the directors or others
performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such party or by
any one or more of such party's Subsidiaries, or by such party and one or more
of its Subsidiaries.
"Tax" or "Taxes" means all federal, state, local and foreign taxes,
payments due under any applicable abandoned property, escheat, or similar Laws
and other assessments of a similar nature (whether imposed directly or through
withholding), including any interest, additions to tax, or penalties applicable
thereto.
"Tax Return" or "Tax Returns" means all federal, state, local and foreign
tax returns, declarations, statements, reports, schedules, forms and information
returns and any amended tax return related to Taxes.
Section 10.3......Other Definitional and Interpretative
Provisions. The words "hereof," "herein" and "hereunder" and words of like
import used in this Agreement shall refer to this Agreement as a whole and not
to any particular provision of this Agreement. Terms defined in the singular in
this Agreement shall also include the plural and vice versa. The captions and
headings herein are included for convenience of reference only and shall be
ignored in the construction or interpretation hereof. References to Articles,
Sections, Exhibits and Schedules are to Articles, Sections, Exhibits and
Schedules of this Agreement unless otherwise specified. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation," whether or not they are
in fact followed by those words or words of like import. The phrases "the date
of this Agreement," "the date hereof" and phrases of similar import, unless the
context otherwise requires, shall be deemed to refer to the date set forth in
the Preamble. The parties hereto have participated jointly in the negotiation
and drafting of this Agreement. If any ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto, 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.
[Signatures on Following Page.]
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have
caused this Agreement and Plan of Merger to be signed by their respective
officers thereunto duly authorized as of the date first written above.
THOMAS & BETTS CORPORATION
By:
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Name:
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Title:
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T&B ACQUISITION II CORP.
By:
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Name:
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Title:
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THE LAMSON & SESSIONS CO.
By:
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Name:
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Title:
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