<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ___)*
PRODUCTION OPERATORS CORP
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Name of Issuer)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Title of Class of Securities)
743080 10 3
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(CUSIP Number)
RONALD R. RANDALL, CAMCO INTERNATIONAL INC.
7030 ARDMORE, HOUSTON, TEXAS 77054, TEL. NO. (713) 747-4000
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
FEBRUARY 27, 1997
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Page 1 of 7 Pages
<PAGE> 2
<TABLE>
<S> <C> <C>
CUSIP NO. 743080 10 3 13 D Page 2 of 7 Pages
NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
1
Camco International Inc., a Delaware corporation.
ID# 13-3517570
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
2
(b) [ ]
SEC USE ONLY
3
SOURCE OF FUNDS
4 OO
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
5 [ ]
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
SOLE VOTING POWER
7
-0-
NUMBER OF SHARED VOTING POWER
SHARES 8
BENEFICIALLY 2,018,460 shares*
OWNED SOLE DISPOSITIVE POWER
BY EACH
REPORTING 9 -0-
PERSON
WITH SHARED DISPOSITIVE POWER
10 -0-
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
2,018,460 shares*
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12 [ ]
N/A
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13 19.0%*
TYPE OF REPORTING PERSON
14 CO
</TABLE>
* See Item 5 of this Schedule 13D.
Page 2 of 7 Pages
<PAGE> 3
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
ITEM 1. SECURITY AND ISSUER
The equity securities to which this statement relates are the common stock, par
value $1.00 per share (the "Common Stock"), of Production Operators Corp, a
Delaware corporation ("POC"). POC's principal executive offices are located at
One Piedmont Center, Suite 515, Atlanta, Georgia 30305.
ITEM 2. IDENTITY AND BACKGROUND
This statement is being filed by Camco International Inc., a Delaware
corporation ("Camco"). Camco is an international supplier of oilfield
equipment and services. The address of its principal business and its
principal office is 7030 Ardmore, Houston, Texas 77054. Attached to this
statement as Schedule I is a list of directors and executive officers of Camco
and the business address, citizenship and principal occupation or employment of
each director and executive officer (including the name, principal business and
address of any corporation or organization at which their employment is
conducted).
Except as noted on Schedule II hereto, during the last five years, neither
Camco nor any of the persons listed in Schedule I has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which Camco or any such person was or is
subject to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
On February 27, 1997, Camco and a wholly owned subsidiary of Camco entered
into an Agreement and Plan of Merger (the "Merger Agreement") with POC providing
for the acquisition by Camco of POC pursuant to an expected tax free merger (the
"Merger") in which each share of Common Stock will be exchanged for 1.30 shares
of Camco's common stock, $.01 par value ("Camco Common Stock"). Based on the
number of shares of Common Stock outstanding as of February 26, 1997, a total of
approximately 13,268,330 shares of Camco Common Stock would be issued in the
Merger. In addition, approximately 527,670 shares of Camco Common Stock would
be reserved for issuance by Camco for outstanding options under POC's benefit
plans.
As a condition to the execution of the Merger Agreement, Camco was
granted an irrevocable proxy (the "Proxy") from the holders of an aggregate of
2,018,460 shares of Common Stock listed on Schedule III hereto. Under the terms
of the Proxy, the holders have agreed and appointed Camco as the proxy for
such holders to vote each of such shares (i) in favor of the approval of the
Merger Agreement and the consummation of all other transactions contemplated by
the Merger Agreement, (ii) against any takeover proposal (as defined in the
Merger Agreement) involving POC, or any action or agreement that would result
in a breach of any covenant, representation or warranty or any other obligation
or agreement of POC under the Merger Agreement or which could result in any of
the conditions to POC's obligations under the Merger Agreement not being
fulfilled, and (iii) in favor of any other matter relating to consummation of
the transactions contemplated by the Merger Agreement. Under the terms of the
Proxy, the holders may exercise the right to vote their shares on matters not
covered by the Proxy.
Page 3 of 7 Pages
<PAGE> 4
ITEM 4. PURPOSE OF TRANSACTION
The purpose of the transaction is for Camco to acquire all of the
outstanding shares of POC. Following the close of the Merger, POC will be a
wholly owned subsidiary of Camco. As a result, following the Merger, (i) the
Board of Directors and officers of POC will be named by or at the direction of
Camco, (ii) POC's current dividend policy will be terminated, (iii) the Common
Stock will cease to be quoted on the Nasdaq Stock Market and registered under
the Securities Exchange Act of 1934 and (iv) the certificate of incorporation
of POC will be amended as provided in the Merger Agreement.
The Merger is subject to various conditions, including the receipt of all
required regulatory approvals and the expiration or termination of all waiting
periods (and extensions thereof) under the Hart-Scott-Rodino Act.
Except as described above or contemplated by the Merger Agreement, neither
Camco nor any of the persons named in Schedule I hereto has any current plans or
proposals with respect to (i) the acquisition or disposition of any securities
of POC, (ii) any extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving POC any of its subsidiaries, (iii) any
sale or transfer of a material amount of assets of POC or any of its
subsidiaries, (iv) any change in the present board of directors or management of
POC, including any plans or proposals to change the number or term of directors
or to fill any existing vacancies on the board, (v) any material change in the
present capitalization or dividend policy of POC, (vi) any other material change
in POC's business or corporate structure, (vii) any changes in the POC's
charter, bylaws or instruments corresponding thereto or other actions which may
impede the acquisition of control of POC by any person, (viii) causing a class
of securities of POC to be delisted from a national securities exchange or to
cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association, (ix) any class of equity securities
of POC becoming eligible for termination of registration pursuant to Section
12(g)(4) of the Securities Exchange Act of 1934, or (x) any action similar to
any of those enumerated above.
The foregoing description of the Merger Agreement and the Proxy is a
summary and is qualified in its entirety by reference to the Merger Agreement
and the Proxy filed as Exhibits 7.1 and 7.2, respectively, hereto, which are
incorporated into this Item 3 by reference.
Page 4 of 7 Pages
<PAGE> 5
ITEM 5. INTEREST IN SECURITIES OF ISSUER
(a) AMOUNT OF SHARES OWNED
As of the date of this statement, Camco may be deemed to
beneficially own an aggregate of 2,018,460 shares of Common
Stock. According to information contained in the Merger
Agreement, the shares of Common Stock that Camco may be deemed
to beneficially own represent 19.0% of the outstanding Common
Stock as of February 26, 1997.
To the knowledge of Camco, no person named in Schedule I under
Item 2 beneficially owned shares of the Common Stock as of
February 27, 1997.
(b) NUMBER OF SHARES AS TO WHICH CAMCO HAS:
Camco has shared power to vote the 2,018,460 shares of Common
Stock that it may be deemed to beneficially own. Camco has
the right under the Proxy to the following matters: (i) in
favor of the approval of the Merger Agreement and the
consummation of all other transactions contemplated by the
Merger Agreement, (ii) against any takeover proposal (as
defined in the Merger Agreement) involving POC, or any action
or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or
agreement of POC under the Merger Agreement or which could
result in any of the conditions to POC's obligations under the
Merger Agreement not being fulfilled, and (iii) in favor of
any other matter relating to consummation of the transactions
contemplated by the Merger Agreement. The record holders of
such shares have the right to vote such shares on all other
matters.
Camco has no power to dispose of 2,018,460 shares that it may
be deemed to beneficially own. The holders of the shares
subject to the Proxy, however, may not dispose of their shares
as long as the proxy is in effect. Such holders and the
number of shares of Common Stock they each beneficially own
are shown on Schedule III.
(c) Except as described in this Item 5, Camco has not effected any
transactions with respect to the Common Stock during the past
60 days.
To the knowledge of Camco, no person named in Schedule I under
Item 2 has effected any transactions with respect to Common
Stock during the past 60 days.
(d) The holders of the shares of Common Stock that Camco may be
deemed to beneficially own have the right to receive or the
power to direct the receipt of dividends from, or the proceeds
from the sale of, such shares of Common Stock. Camco does not
have the right to receive or the power to direct the receipt
of dividends from, or the proceeds from the sale of, any of
such shares of Common Stock.
(e) Not applicable.
Page 5 of 7 Pages
<PAGE> 6
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF ISSUER
Camco is a party to the Merger Agreement and Proxy described in Item 3 of
this Schedule 13D; such description is incorporated in this Item 6 by reference.
Such description is qualified in its entirety by reference to the Merger
Agreement and Proxy filed as Exhibits 7.1 and 7.2, respectively, to this
Schedule 13D and incorporated into this Item 6 by reference.
Under the terms of the Proxy, the stockholders listed on Schedule III have
agreed that during the term of the Proxy, such holders will not (i) sell,
transfer, pledge, grant a security interest in or lien on or otherwise dispose
of or encumber any of their shares, (ii) deposit any of their shares into a
voting trust, enter into a voting agreement or arrangement or grant any proxy
with respect to any of such shares, or (iii) enter into any contract, option or
other arrangement or undertaking with respect to the direct or indirect
acquisition or sale, assignment, transfer, pledge, grant of a security interest
in or lien on or other disposition of or encumbrance of their shares.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
7.1 Agreement and Plan of Merger dated as of February 27, 1997, by
and among Camco International Inc., Plane Acquisition Corp.
and Production Operators Corp.
7.2 Irrevocable Proxy dated February 27, 1997.
Page 6 of 7 Pages
<PAGE> 7
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: March 8, 1997 CAMCO INTERNATIONAL INC.
By: /s/ RONALD R. RANDALL
--------------------------------------
Ronald R. Randall
Vice President and
General Counsel
Page 7 of 7 Pages
<PAGE> 8
SCHEDULE I
(TO ITEM 2)
EXECUTIVE OFFICERS AND DIRECTORS OF CAMCO INTERNATIONAL INC.
The name, residence or business address, present principal occupation
or employment, and citizenship of each executive officer and director of Camco
International Inc. ("Camco") is set forth below.
<TABLE>
<CAPTION>
NAME AND POSITION RESIDENCE OR BUSINESS
WITH RESPECT TO CAMCO ADDRESS CITIZENSHIP
<S> <C> <C>
*Gary D. Nicholson 7030 Ardmore United States
Chairman of the Board, President and Houston, Texas 77054
Chief Executive Officer
*Herbert S. Yates 7030 Ardmore United States
Senior Vice President-Finance, Chief Houston, Texas 77054
Financial Officer and Treasurer
*Ronald R. Randall 7030 Ardmore United States
Vice President, General Counsel and Houston, Texas 77054
Secretary
*Thomas W. Everitt 7030 Ardmore United States
Vice President-Human Resources Houston, Texas 77054
*Bruce F. Longaker, Jr. 7030 Ardmore United States
Vice President-Finance and Corporate Houston, Texas 77054
Controller
*Merle C. Muckelroy 7030 Ardmore United States
President, Camco Products and Services Group Houston, Texas 77054
*Robert J. Caldwell 7030 Ardmore United Kingdom
President, Drilling Group Houston, Texas 77054
*Stephen D. Smith 7030 Ardmore United States
President, Reda Group Houston, Texas 77054
Hugh H. Goerner 6 Links Court United States
Director Austin, Texas 78738
William A. Krause 10 S. Briar Hollow Lane, #93 United States
Director Houston, Texas 77027
Robert L. Howard 5413 Sturbridge United States
Director Houston, Texas 77056
Charles P. Siess, Jr. 15375 Memorial Drive United States
Director Houston, Texas 77079
William J. Johnson 9545 Katy Freeway, #470 United States
Director Houston, Texas 77024
Gilbert H. Trausch 519 Fox Briar Lane United States
Director Sugar Land, Texas 77478
</TABLE>
_______________
* The principal occupation of the named person is the position set forth above.
Mr. Goerner is retired and resides at the address set forth above.
Mr. Krause is President of Krause, Inc. - Engineers & Architects, an
engineering and architectural firm at the address set forth above.
Mr. Howard is retired and resides at the address set forth above.
Mr. Siess is President, Chief Executive Officer and Chairman of the Board of
Cabot Oil and Gas Company, an energy company, at the address set forth above.
Mr. Johnson is an independent consultant in the oil and gas industry at the
address set forth above.
Mr. Tausch is retired and resides at the address set forth above.
I-1
<PAGE> 9
SCHEDULE II
(TO ITEM 2)
In early 1991, Camco and certain other drill bit manufacturers were
served with subpoenas by a federal grand jury in Houston, Texas. The subpoenas
were issued in connection with a Department of Justice investigation of drill
bit pricing practices. The investigation resulted in a one-count indictment of
Camco in 1993. In November 1993, Camco plead guilty pursuant to a negotiated
plea agreement with the Department of Justice and paid a fine of $575,000.
II-1
<PAGE> 10
SCHEDULE III
(TO ITEM 5)
<TABLE>
<CAPTION>
BENEFICIAL OWNER NUMBER OF SHARES
- ---------------- ----------------
<S> <C>
Carl W. Knobloch, Jr. Trust 899,914
Emily C. Knobloch Trust 206,400
Carla Knobloch 1969 Trust 100,000
Emily J. Knobloch 1969 Trust 100,000
Eleanor Knobloch 1969 Trust 100,000
Carla Knobloch 1980 Trust 100,624
Emily J. Knobloch 1981 Trust 100,000
Eleanor Knobloch 1982 Trust 100,000
Carl W. Knobloch II Trust 5,000
Ellen K. Steinmetz Trust 5,000
William R. Knobloch III Trust 5,000
Louise Knobloch 1983 Trust 201,000
Carl W. Knobloch 1971 Trust 22,500
William R. Knobloch 7/16/73 Trust 5,000
William R. Knobloch 39,024
Knobloch Family, L.P. 5,650
Sylvia K. Brown 6,486
Edward Brown 8,000
Susan Brown 8,862
</TABLE>
III-1
<PAGE> 11
INDEX TO EXHIBITS
7.1 Agreement and Plan of Merger dated as of February 27, 1997, by
and among Camco International Inc., Plane Acquisition Corp.
and Production Operators Corp.
7.2 Irrevocable Proxy dated February 27, 1997.
<PAGE> 1
EXHIBIT 7.1
AGREEMENT AND PLAN OF MERGER
By and Among
CAMCO INTERNATIONAL INC.
PLANE ACQUISITION CORP.
and
PRODUCTION OPERATORS CORP
February 27, 1997
<PAGE> 2
ARTICLE I
<TABLE>
<S> <C> <C>
THE MERGER . . . . . . . . . . . . . . 1
SECTION 1.1. The Merger . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Effective Time . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.3. Effects of the Merger . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.4. Certificate of Incorporation and By-laws . . . . . . . . . . 2
SECTION 1.5. Directors . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.6. Officers . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.7. Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES . . . . 3
SECTION 2.1. Effect on Capital Stock . . . . . . . . . . . . . . . . . . . 3
(a) Capital Stock of Sub . . . . . . . . . . . . . . . . . . . . 3
(b) Cancellation of Company and Parent Owned Stock . . . . . . . 3
(c) Conversion of Shares . . . . . . . . . . . . . . . . . . . . 3
(d) No Fractional Shares . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.2. Exchange of Certificates . . . . . . . . . . . . . . . . . . 4
(a) Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Payment of Merger Consideration . . . . . . . . . . . . . . 4
(c) Exchange Procedure . . . . . . . . . . . . . . . . . . . . . 4
(d) Distributions with Respect to Unexchanged Shares . . . . . . 5
(e) No Further Ownership Rights in Shares . . . . . . . . . . . 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES . . . . . . . . . 5
SECTION 3.1. Representations and Warranties of the Company . . . . . . . . 5
(a) Organization, Standing and Power . . . . . . . . . . . . . . 5
(b) Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . 6
(c) Capital Structure . . . . . . . . . . . . . . . . . . . . . 6
(d) Authority; Non-contravention . . . . . . . . . . . . . . . . 7
(e) SEC Documents . . . . . . . . . . . . . . . . . . . . . . . 8
(f) Information Supplied . . . . . . . . . . . . . . . . . . . . 8
(g) Absence of Certain Changes or Events . . . . . . . . . . . . 9
(h) State Takeover Statutes; Absence of Supermajority Provision 9
(i) Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(j) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 10
(k) Accounting Matters . . . . . . . . . . . . . . . . . . . . . 10
(l) Employee Benefit Matters . . . . . . . . . . . . . . . . . . 10
(m) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C> <C>
(n) No Excess Parachute Payments . . . . . . . . . . . . . . . . 12
(o) Environmental Matters . . . . . . . . . . . . . . . . . . . 12
(p) Compliance with Laws . . . . . . . . . . . . . . . . . . . . 12
(q) Material Contracts and Agreements . . . . . . . . . . . . . 13
(r) Title to Properties . . . . . . . . . . . . . . . . . . . . 14
(s) Intellectual Property . . . . . . . . . . . . . . . . . . . 14
(t) Labor Matters . . . . . . . . . . . . . . . . . . . . . . . 15
(v) Undisclosed Liabilities . . . . . . . . . . . . . . . . . . 15
(w) Opinion of Financial Advisor . . . . . . . . . . . . . . . . 15
(x) Board Recommendation . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.2. Representations and Warranties of Parent and Sub . . . . . . 16
(a) Organization; Standing and Power . . . . . . . . . . . . . . 16
(b) Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . 16
(c) Capital Structure . . . . . . . . . . . . . . . . . . . . . 16
(d) Authority; Non-contravention . . . . . . . . . . . . . . . . 17
(e) SEC Documents . . . . . . . . . . . . . . . . . . . . . . . 18
(f) Information Supplied . . . . . . . . . . . . . . . . . . . . 19
(g) Absence of Certain Changes or Events . . . . . . . . . . . . 19
(h) State Takeover Statutes; Absence of Supermajority Provision 19
(i) Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(j) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 20
(k) Accounting Matters . . . . . . . . . . . . . . . . . . . . . 20
(l) Employee Benefit Matters . . . . . . . . . . . . . . . . . . 20
(m) Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(n) Environmental Matters . . . . . . . . . . . . . . . . . . . 21
(o) Compliance with Laws . . . . . . . . . . . . . . . . . . . . 22
(p) Material Contracts and Agreements . . . . . . . . . . . . . 22
(q) Title to Properties . . . . . . . . . . . . . . . . . . . . 22
(r) Intellectual Property . . . . . . . . . . . . . . . . . . . 23
(s) Labor Matters . . . . . . . . . . . . . . . . . . . . . . . 23
(t) Undisclosed Liabilities . . . . . . . . . . . . . . . . . . 24
(u) Opinion of Financial Advisor . . . . . . . . . . . . . . . . 24
(v) Board Recommendation . . . . . . . . . . . . . . . . . . . . 24
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS . . . . . . . 24
SECTION 4.1. Conduct of Business . . . . . . . . . . . . . . . . . . . . . 24
(a) Ordinary Course . . . . . . . . . . . . . . . . . . . . . . 24
(b) Changes in Employment Arrangements . . . . . . . . . . . . . 27
(c) Severance . . . . . . . . . . . . . . . . . . . . . . . . . 27
(d) Other Actions . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 4.2. Conduct of Business of Parent and Sub . . . . . . . . . . . . 27
(a) Ordinary Course . . . . . . . . . . . . . . . . . . . . . . 27
(b) Other Actions . . . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>
-ii-
<PAGE> 4
ARTICLE V
<TABLE>
<S> <C>
ADDITIONAL AGREEMENTS . . . . . . . . . . . . 28
SECTION 5.1. Stockholder Approval; Preparation of Proxy Statement;
Preparation of Registration Statement . . . . . . . . . . . . . . . 28
SECTION 5.2. Letter of the Company's Accountants . . . . . . . . . . . . . 30
SECTION 5.3. Letter of Parent's Accountants . . . . . . . . . . . . . . . 30
SECTION 5.4. Access to Information . . . . . . . . . . . . . . . . . . . . 30
SECTION 5.5. Reasonable Efforts; Notification . . . . . . . . . . . . . . 30
SECTION 5.6. Employee Benefit Matters . . . . . . . . . . . . . . . . . . 32
SECTION 5.7. Indemnification . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.8. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.9. Public Announcements . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.10. Stockholder Litigation . . . . . . . . . . . . . . . . . . . 34
SECTION 5.11. Accounting Matters . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.12. Parent's Board of Directors . . . . . . . . . . . . . . . . 35
Section 5.13. Irrevocable Proxies . . . . . . . . . . . . . . . . . . . . 35
ARTICLE VI
CONDITIONS PRECEDENT . . . . . . . . . . . . 35
SECTION 6.1. Conditions to Each Party's Obligation to Effect the Merger . 35
(a) Stockholder Approval . . . . . . . . . . . . . . . . . . . . 35
(b) NYSE Listing . . . . . . . . . . . . . . . . . . . . . . . . 35
(c) HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(d) No Injunctions or Restraints . . . . . . . . . . . . . . . . 36
(e) Registration Statement Effectiveness . . . . . . . . . . . . 36
(f) Blue Sky Filings . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.2. Conditions of Parent and Sub . . . . . . . . . . . . . . . . 36
(a) Compliance . . . . . . . . . . . . . . . . . . . . . . . . . 36
(b) Certifications and Opinion . . . . . . . . . . . . . . . . . 36
(c) Representations and Warranties True . . . . . . . . . . . . 37
(d) Affiliate Letters . . . . . . . . . . . . . . . . . . . . . 37
(e) Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . 38
(f) Pooling Accounting . . . . . . . . . . . . . . . . . . . . . 38
(g) Consents, etc. . . . . . . . . . . . . . . . . . . . . . . . 38
(h) No Litigation . . . . . . . . . . . . . . . . . . . . . . . 38
(i) Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . 39
(j) No Material Adverse Change . . . . . . . . . . . . . . . . . 39
SECTION 6.3. Conditions of the Company . . . . . . . . . . . . . . . . . . 39
(a) Compliance . . . . . . . . . . . . . . . . . . . . . . . . . 39
(b) Certifications and Opinion . . . . . . . . . . . . . . . . . 39
(c) Representations and Warranties True . . . . . . . . . . . . 40
(d) Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . 40
</TABLE>
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<PAGE> 5
<TABLE>
<S> <C> <C>
(e) Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . 40
(f) No Material Adverse Change . . . . . . . . . . . . . . . . . 40
(g) Pooling Accounting . . . . . . . . . . . . . . . . . . . . . 41
(h) Consents, etc. . . . . . . . . . . . . . . . . . . . . . . . 41
(i) No Litigation . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER . . . . . . . . . 41
SECTION 7.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 7.2. Effect of Termination . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.3. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.4. Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.5. Procedure for Termination, Amendment, Extension or Waiver . . 42
ARTICLE VIII
SPECIAL PROVISIONS AS TO CERTAIN MATTERS . . . . . . . 43
SECTION 8.1. Takeover Defenses of the Company . . . . . . . . . . . . . . 43
SECTION 8.2. No Solicitation . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 8.3. Fee and Expense Reimbursements . . . . . . . . . . . . . . . 45
ARTICLE IX
GENERAL PROVISIONS . . . . . . . . . . . . 46
SECTION 9.1. Nonsurvival of Representations and Warranties . . . . . . . . 46
SECTION 9.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 9.3. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 9.4. Interpretation . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 9.5. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 9.6. Entire Agreement; No Third-Party Beneficiaries . . . . . . . 48
SECTION 9.7. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 9.8. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 9.9. Enforcement of the Agreement . . . . . . . . . . . . . . . . 48
SECTION 9.10. Severability . . . . . . . . . . . . . . . . . . . . . . . . 49
</TABLE>
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<PAGE> 6
AGREEMENT AND PLAN OF MERGER dated as of February 27, 1997, by
and among CAMCO INTERNATIONAL INC., a Delaware corporation ("Parent"),
PLANE ACQUISITION CORP., a Delaware corporation ("Sub") and wholly owned
subsidiary of Parent, and PRODUCTION OPERATORS CORP, a Delaware
corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved the acquisition of the Company by Parent on the terms and
subject to the conditions of this Agreement and Plan of Merger (this
"Agreement");
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved the merger of Sub with and into the Company (the
"Merger"), upon the terms and subject to the conditions of this Agreement,
whereby each issued and outstanding share of the Company's common stock, $1.00
par value (a "Share"), not owned by the Company, Parent, Sub or any wholly
owned subsidiary of the Company, Parent or Sub will be converted into 1.3
shares of Parent's common stock, $.01 par value (a "Parent Common"), including
the associated rights to purchase shares of Parent Common ("Rights" and
together with the Parent Common, "Parent Shares");
WHEREAS, for federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, for accounting purposes, it is intended that the Merger shall
be accounted for as a pooling of interests; and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties and agreements in connection with the Merger and
also to prescribe various conditions to the Merger;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties agree
as follows:
ARTICLE I
THE MERGER
SECTION 1.1. The Merger. Upon the terms and subject to the conditions
hereof and in accordance with the Delaware General Corporation Law (the
"DGCL"), Sub shall be merged with and into the Company at the Effective Time of
the Merger (as hereinafter defined). At the election of Parent, any direct
wholly owned subsidiary (as defined in Section 9.3) of Parent may be
substituted for Sub as a constituent corporation in the Merger. In such event,
the parties agree to execute an appropriate amendment to this Agreement in
order to reflect the foregoing. Following the Merger, the separate corporate
existence of Sub shall cease and the Company shall continue as the surviving
corporation (the "Surviving Corporation") and shall succeed to and assume all
the rights and obligations of Sub in accordance with the DGCL.
<PAGE> 7
SECTION 1.2. Effective Time. As soon as practicable following the
satisfaction or, to the extent permitted hereunder, waiver of the conditions
set forth in Article VI, the Surviving Corporation shall file the certificate
of merger required by the DGCL with respect to the Merger and other appropriate
documents (the "Certificate of Merger") executed in accordance with the
relevant provisions of the DGCL. The Merger shall become effective at such
time as the Certificate of Merger is duly filed with the Delaware Secretary of
State, or at such other time as Sub and the Company shall agree should be
specified in the Certificate of Merger (the time the Merger becomes effective
being the "Effective Time of the Merger"). The closing of the Merger (the
"Closing") shall take place at the offices of Fulbright & Jaworski L.L.P., in
Houston, Texas, on the date of the meetings of the Company's stockholders (the
"Company Stockholders Meeting") and of Parent's stockholders (the "Parent
Stockholders Meeting"), in each case, to approve the Merger, or, if any of the
conditions set forth in Article VI have not been satisfied, then as soon as
practicable thereafter, or at such other time and place or such other date as
Parent and the Company shall agree (the "Closing Date"). If such meetings are
not held or concluded on the same date, then the Closing Date shall be on the
date of the latter of such meetings.
SECTION 1.3. Effects of the Merger. The Merger shall have the effects
set forth in Section 259 of the DGCL. If at any time after the Effective Time
of the Merger, the Surviving Corporation shall consider or be advised that any
further assignments or assurances in law or otherwise are necessary or
desirable to vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation, all rights, title and interests in all real estate and other
property and all privileges, powers and franchises of the Company and Sub, the
Surviving Corporation and its proper officers and directors, in the name and on
behalf of the Company and Sub, shall execute and deliver all such proper deeds,
assignments and assurances in law and do all things necessary and proper to
vest, perfect or confirm title to such property or rights in the Surviving
Corporation and otherwise to carry out the purpose of this Agreement, and the
proper officers and directors of the Surviving Corporation are fully authorized
in the name of the Company or otherwise to take any and all such action.
SECTION 1.4. Certificate of Incorporation and By-laws. (a) The
Certificate of Incorporation of the Company, as in effect immediately prior to
the Effective Time of the Merger, shall be amended as of the Effective Time of
the Merger to read as set forth in Exhibit A hereto, and, as so amended, such
Certificate of Incorporation shall be the Certificate of Incorporation of the
Surviving Corporation until thereafter changed or amended as provided therein
or by applicable law.
(b) The By-laws of Sub as in effect immediately prior to the
Effective Time of the Merger shall be the By-laws of the Surviving Corporation
until thereafter changed or amended as provided therein or by applicable law.
SECTION 1.5. Directors. The directors of Sub immediately prior to the
Effective Time of the Merger shall be the directors of the Surviving
Corporation and shall hold office in accordance with the Certificate of
Incorporation and By-laws of the Surviving Corporation from the Effective Time
of the Merger until the earlier of their
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<PAGE> 8
resignation or removal or until their respective successors are duly elected
and qualified, as the case may be.
SECTION 1.6. Officers. The officers of the Company immediately prior
to the Effective Time of the Merger shall be the officers of the Surviving
Corporation and shall hold office in accordance with the Certificate of
Incorporation and By-laws of the Surviving Corporation from the Effective Time
of the Merger until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.
SECTION 1.7. Vacancies. If at the Effective Time of the Merger a
vacancy shall exist in the Board of Directors or in any of the offices of the
Surviving Corporation, such vacancy may thereafter be filled in the manner
provided by the DGCL and the Certificate of Incorporation and By-laws of the
Surviving Corporation.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION 2.1. Effect on Capital Stock. As of the Effective Time of the
Merger, by virtue of the Merger and without any action on the part of the
holder of any Shares:
(a) Capital Stock of Sub. Each issued and outstanding share of
common stock, $.01 par value, of Sub shall be converted into and become one
fully paid and nonassessable share of common stock, $.01 par value, of the
Surviving Corporation.
(b) Cancellation of Company and Parent Owned Stock. All Shares that
are owned by any wholly owned subsidiary of the Company and any Shares owned by
Parent, Sub or any other wholly owned subsidiary of Parent or Sub shall be
canceled and no consideration shall be delivered in exchange therefor.
(c) Conversion of Shares. Subject to Section 2.1(d), each issued and
outstanding Share shall be converted into the right to receive, upon the
surrender of the certificate formerly representing such Shares pursuant to
Section 2.2, 1.3 Parent Shares (the "Merger Consideration"). The ratio of
Parent Shares for each Share is herein referred to as the "Exchange Ratio".
(d) No Fractional Shares. No fractional Parent Shares shall be
issued in the Merger. All fractional Parent Shares that a holder of Shares
would otherwise be entitled to receive as a result of the Merger shall be
aggregated and if a fractional Parent Share results from such aggregation, such
holder shall be entitled to receive, in lieu thereof, an amount in cash
determined by multiplying the closing sale price per share of Parent Common on
the New York Stock Exchange ("NYSE") on the first trading day immediately
preceding the Effective Time of the Merger by the fraction of a Parent Share to
which such holder would otherwise have been entitled. Alternatively, Parent
and Sub shall have the option of instructing the Exchange Agent (as defined in
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<PAGE> 9
Section 2.2(a)) to aggregate all fractional Parent Shares, sell such Parent
Shares in the public market and distribute to holders of fractional Parent
Shares a pro rata portion of the proceeds of such sale. No such cash in lieu
of fractional Parent Shares shall be paid to any holder of fractional Parent
Shares until Certificates (as defined in Section 2.2(c)) are surrendered and
exchanged in accordance with Section 2.2(c).
SECTION 2.2. Exchange of Certificates. (a) Exchange Agent. Prior
to the Effective Time of the Merger, Parent shall engage The Bank of New York,
or such other bank or trust company reasonably acceptable to the Company, to
act as exchange agent (the "Exchange Agent") for the issue of the Merger
Consideration upon surrender of Certificates.
(b) Payment of Merger Consideration. Parent shall take all steps
necessary to enable and cause there to be provided to the Exchange Agent on a
timely basis, as and when needed after the Effective Time of the Merger,
certificates for the Parent Shares to be issued upon the conversion of the
Shares pursuant to Section 2.1. Parent or the Surviving Corporation shall
timely make available to the Exchange Agent any cash necessary to make payments
in lieu of fractional shares.
(c) Exchange Procedure. As soon as practicable after the Effective
Time of the Merger, the Exchange Agent shall mail to each holder of record of a
certificate or certificates that immediately prior to the Effective Time of the
Merger represented outstanding Shares (the "Certificates"), other than the
Company, Parent, Sub and any wholly owned subsidiary of the Company, Parent or
Sub, (i) a letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Exchange Agent and shall be in a form and
have such other provisions as Parent and Sub may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for the certificates representing the Parent Shares and any cash in lieu of a
fractional Parent Share. Upon surrender of a Certificate for cancellation to
the Exchange Agent or to such other agent or agents as may be appointed by the
Surviving Corporation, together with such letter of transmittal, duly executed,
and such other documents as may reasonably be required by the Exchange Agent,
the holder of such Certificate shall be entitled to receive in exchange
therefor a certificate or certificates representing the number of whole Parent
Shares into which the Shares theretofore represented by such Certificate shall
have been converted pursuant to Section 2.1 and any cash payable in lieu of a
fractional Parent Share, and the Certificate so surrendered shall forthwith be
canceled. If the Parent Shares are to be issued to a Person other than the
Person in whose name the Certificate so surrendered is registered, it shall be
a condition of exchange that such Certificate shall be properly endorsed or
otherwise in proper form for transfer and that the Person requesting such
exchange shall pay any transfer or other taxes required by reason of the
exchange to a Person other than the registered holder of such Certificate or
establish to the reasonable satisfaction of the Surviving Corporation that such
tax has been paid or is not applicable. Until surrendered as contemplated by
this Section 2.2, each Certificate shall be deemed at any time after the
Effective Time of the Merger to represent only the right to receive, upon
surrender of such Certificate, the number of Parent Shares and cash, if any, in
lieu of fractional Parent Shares into which the Shares theretofore represented
by such
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<PAGE> 10
Certificate shall have been converted pursuant to Section 2.1. The Exchange
Agent shall not be entitled to vote or exercise any rights of ownership with
respect to the Parent Shares held by it from time to time hereunder, except
that it shall receive and hold all dividends or other distributions paid or
distributed with respect thereto for the account of Persons entitled thereto.
(d) Distributions with Respect to Unexchanged Shares. No dividends
or other distributions declared or made after the Effective Time of the Merger
with respect to the Parent Shares with a record date after the Effective Time
of the Merger shall be paid to the holder of any unsurrendered Certificate with
respect to the Parent Shares represented thereby and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section 2.1(d)
until the holder of record of such Certificate shall surrender such
Certificate. Subject to the effect of applicable laws, following surrender of
any such Certificate, there shall be paid to the record holder of the
Certificates representing the Parent Shares issued in exchange therefor,
without interest, (i) at the time of such surrender, the amount of any cash
payable in lieu of a fractional Parent Share to which such holder is entitled
pursuant to Section 2.1(d) and the amount of dividends or other distributions
with a record date after the Effective Time of the Merger theretofore paid with
respect to such whole Parent Shares, as the case may be, and (ii) at the
appropriate payment date, the amount of dividends or other distributions with a
record date after the Effective Time of the Merger but prior to surrender and a
payment date subsequent to surrender payable with respect to such whole Parent
Shares.
(e) No Further Ownership Rights in Shares. All Parent Shares issued
upon the surrender of Certificates in accordance with the terms of this Article
II, together with any dividends payable thereon to the extent contemplated by
this Section 2.2, shall be deemed to have been exchanged and paid in full
satisfaction of all rights pertaining to the Shares theretofore represented by
such Certificates and there shall be no further registration of transfers on
the stock transfer books of the Surviving Corporation of the Shares that were
outstanding immediately prior to the Effective Time of the Merger. If, after
the Effective Time of the Merger, Certificates are presented to the Surviving
Corporation for any reason, they shall be canceled and exchanged as provided in
this Article II.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the Company. The
Company represents and warrants to, and agrees with, Parent and Sub as follows,
subject to any exceptions specified in the Disclosure Letter of the Company
provided to Parent on the date hereof (the "Company Disclosure Letter"):
(a) Organization, Standing and Power. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the requisite corporate power and authority to carry
on its business as now
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<PAGE> 11
being conducted. The Company is duly qualified to do business and is in good
standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification necessary,
other than in such jurisdictions where the failure to be so qualified to do
business or in good standing (individually, or in the aggregate) would not have
a Material Adverse Effect on the Company and its subsidiaries, taken as a
whole.
(b) Subsidiaries. The Company's subsidiaries that are corporations
are corporations duly organized, validly existing and in good standing under
the laws of their respective jurisdictions of incorporation and have the
requisite corporate power and authority to carry on their respective businesses
as they are now being conducted and to own, operate and lease the assets they
now own, operate or hold under lease. The Company's subsidiaries are duly
qualified to do business and are in good standing in each jurisdiction in which
the nature of their respective businesses or the ownership or leasing of their
respective properties makes such qualification necessary, other than in such
jurisdictions where the failure to be so qualified or in good standing would
not have a Material Adverse Effect on the Company and its subsidiaries, taken
as a whole. All the outstanding shares of capital stock of the Company's
subsidiaries that are corporations have been duly authorized and validly issued
and are fully paid and non-assessable and were not issued in violation of any
preemptive rights or other preferential rights of subscription or purchase of
any Person. Except as disclosed in the Company Disclosure Letter, all such
stock and ownership interests are owned of record and beneficially by the
Company or by a direct or indirect wholly owned subsidiary of the Company, free
and clear of all liens, pledges, security interests, charges, claims, rights of
third parties and other encumbrances of any kind or nature ("Liens"). Except
for the capital stock of, or ownership interests in, its subsidiaries, the
Company does not own, directly or indirectly, any capital stock, equity
interest or other ownership interest in any Person.
(c) Capital Structure. The authorized capital stock of the Company
consists of 15,000,000 shares of common stock, $1.00 par value ("Company Common
Stock"), and 500,000 shares of preferred stock, no par value ("Company
Preferred Stock"). At the close of business on February 26, 1997, (i)
10,206,403 Shares (excluding 52,498 Shares held in treasury) were issued and
outstanding, including 3,912 Shares subject to restricted stock awards granted
under the Company's 1992 Long-Term Incentive Plan, which had not yet vested,
(ii) 288,707 shares of Company Common Stock were reserved for issuance pursuant
to awards not yet granted under the Company's 1992 Long-Term Incentive Plan,
and (iii) 286,164 and 74,875 shares of Company Common Stock were reserved for
issuance pursuant to outstanding options granted under the Company's 1992 Long-
Term Incentive Plan and 1980 Long-Term Incentive Plan, respectively. Except as
set forth above, no shares of capital stock or other equity or voting
securities of the Company are reserved for issuance or outstanding. All
outstanding shares of capital stock of the Company are, and all such shares
issuable upon the exercise of stock options will be, validly issued, fully paid
and nonassessable and not subject to preemptive rights. No capital stock has
been issued by the Company since July 1, 1981, other than shares of Company
Common Stock issued pursuant to options outstanding on or prior to such date in
accordance with their terms at such date. Except for options outstanding under
the Company's 1992 Long-Term Incentive Plan and 1980 Long-Term
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<PAGE> 12
Incentive Plan (collectively, the "Company Stock Plans") as set forth above, as
of February 26, 1997, there were no outstanding or authorized securities,
options, warrants, calls, rights, commitments, preemptive rights, agreements,
arrangements or undertakings of any kind to which the Company or any of its
subsidiaries is a party, or by which any of them is bound, obligating the
Company or any of its subsidiaries to issue, deliver or sell, or cause to be
issued, delivered or sold, any shares of capital stock or other equity or
voting securities of, or other ownership interests in, the Company or of any of
its subsidiaries or obligating the Company or any of its subsidiaries to issue,
grant, extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking.
(d) Authority; Non-contravention. The Company has the requisite
corporate power and authority to enter into this Agreement and, subject to
approval of the Merger and this Agreement by the holders of a majority of the
outstanding Shares as of the record date for the Company Stockholders Meeting
present in person or represented by proxy ("Company Stockholder Approval"), to
consummate the transactions contemplated hereby and to take such actions, if
any, as shall have been taken with respect to the matters referred to in
Section 3.1(h). The execution and delivery of this Agreement by the Company
and the consummation by the Company of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of the
Company, subject to Company Stockholder Approval. This Agreement has been duly
and validly executed and delivered by the Company and constitutes 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
bankruptcy, insolvency, reorganization, moratorium or other similar laws or
judicial decisions now or hereafter in effect relating to creditors' rights
generally and (ii) the remedy of specific performance and injunctive relief may
be subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought. The execution and delivery of
this Agreement by the Company do not, and the consummation of the transactions
contemplated hereby and compliance with the provisions hereof will not,
conflict with, or result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of or "put" right with respect to any
obligation or to loss of a material benefit under, or result in the creation of
any Lien, upon any of the properties or assets of the Company or any of its
subsidiaries under, any provision of (i) the Certificate of Incorporation or
By-laws of the Company or any provision of the comparable organizational
documents of its subsidiaries, (ii) any loan or credit agreement, note, bond,
mortgage, indenture, lease, or other agreement, instrument, permit, concession,
franchise or license applicable to the Company or any of its subsidiaries or
their respective properties or assets or (iii) subject to governmental filing
and other matters referred to in the following sentence, any judgment, order,
decree, statute, law, ordinance, rule or regulation or arbitration award
applicable to the Company or any of its subsidiaries or their respective
properties or assets, other than, in the case of clause (ii), any such
conflicts, violations, defaults, rights or Liens that individually or in the
aggregate would not have a Material Adverse Effect on the Company and its
subsidiaries taken as a whole and would not materially impair the ability of
the Company to perform its obligations hereunder or prevent the consummation of
any of the transactions contemplated hereby. No consent, approval,
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<PAGE> 13
order or authorization of, or registration, declaration or filing with, any
court, administrative agency or commission or other governmental authority or
agency, domestic or foreign, including local authorities (a "Governmental
Entity"), is required by or with respect to the Company or any of its
subsidiaries in connection with the execution and delivery of this Agreement by
the Company or the consummation by the Company of the transactions contemplated
hereby, except for (i) the filing by the Company of a premerger notification
and report form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the "HSR Act"), (ii) the filing with the Securities and Exchange
Commission (the "SEC") of (A) a joint proxy statement relating to the Company
Stockholder Approval and Parent Stockholder Approval (as defined in Section
3.2(d)) (such proxy statement as amended or supplemented from time to time, the
"Proxy Statement") and (B) the Registration Statement (as defined in Section
5.1(b)) and (C) such reports under Section 13(a) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), as may be required in connection with
this Agreement and the transactions contemplated hereby, and (iii) the filing
of the Certificate of Merger with the Delaware Secretary of State with respect
to the Merger as provided in the DGCL and appropriate documents with the
relevant authorities of other states in which the Company is qualified to do
business and such other consents, approvals, orders, authorizations,
registrations, declarations and filings the failure of which to be obtained or
made would not have a Material Adverse Effect on the Company and its
subsidiaries, taken as a whole.
(e) SEC Documents. The Company has filed all required reports,
schedules, forms, statements and other documents with the SEC since September
30, 1994 (such documents, together with all exhibits and schedules thereto and
documents incorporated by reference therein, collectively referred to herein as
the "Company SEC Documents"). As of their respective dates, the Company SEC
Documents complied in all material respects with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act,
as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such Company SEC Documents, and none of the Company
SEC Documents contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading. The consolidated financial statements of the
Company included in the Company SEC Documents complied in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with
generally accepted accounting principles (except, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC) applied on a consistent basis
during the periods involved (except as may be indicated in the notes thereto)
and fairly present the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments and other
adjustments described therein).
(f) Information Supplied. None of the information supplied or to be
supplied by the Company for inclusion or incorporation by reference in (i) the
Registration Statement will, at the time the Registration Statement is filed
with the SEC, and at any
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<PAGE> 14
time it is amended or supplemented or at the time it becomes effective under
the Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, and (ii) the Proxy Statement will, at the
date the Proxy Statement is first mailed to the Company's stockholders and at
the time of the Company Stockholders 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,
as it relates to the Company Stockholders Meeting, will comply as to form in
all material respects with the requirements of the Exchange Act and the rules
and regulations thereunder, except that no representation or warranty is made
by the Company with respect to statements made or incorporated by reference
therein based on information supplied by Parent or Sub for inclusion or
incorporation by reference therein.
(g) Absence of Certain Changes or Events. Except as disclosed in the
Company SEC Documents, since September 30, 1996, the Company has conducted its
business only in the ordinary course consistent with past practice, and there
has not been (i) any material adverse change with respect to the Company, (ii)
any declaration, setting aside or payment of any dividend (whether in cash,
stock or property) with respect to any of the Company's capital stock, (iii)
(A) any granting by the Company or any of its subsidiaries to any executive
officer of the Company or any of its subsidiaries of any increase in
compensation, except in the ordinary course of business consistent with prior
practice or as was required under employment agreements in effect as of
September 30, 1996, (B) any granting by the Company or any of its subsidiaries
to any such executive officer of any increase in severance or termination pay,
except as was required under employment, severance or termination agreements in
effect as of September 30, 1996, or (C) any entry by the Company or any of its
subsidiaries into any employment, severance or termination agreement with any
such executive officer, (iv) any damage, destruction or loss, whether or not
covered by insurance, that has or reasonably could be expected to have a
Material Adverse Effect on the Company and its subsidiaries, taken as a whole
or (v) any change in accounting methods, principles or practices by the Company
materially affecting its assets, liabilities or business, except insofar as may
have been required by a change in generally accepted accounting principles.
(h) State Takeover Statutes; Absence of Supermajority Provision. The
Company has taken all action to assure that no state takeover statute or
similar statute or regulation, including, without limitation Section 203 of
the DGCL, shall apply to the Merger or any of the other transactions
contemplated hereby. Except for Company Stockholder Approval, no other
stockholder action on the part of the Company is required for approval of the
Merger, this Agreement and the transactions contemplated hereby. No provision
of the Company's Certificate of Incorporation or By-laws or other governing
instruments of its subsidiaries or the terms of any rights plan or other
takeover defense mechanism of the Company would, directly or indirectly,
restrict or impair the ability of Parent to vote, or otherwise to exercise the
rights of a stockholder with respect to, securities of the Company and its
subsidiaries that may be acquired or controlled by Parent or permit any
stockholder to acquire securities of the Company
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<PAGE> 15
on a basis not available to Parent in the event that Parent were to acquire
securities of the Company.
(i) Brokers. Except for Morgan Stanley & Co., Incorporated
("Morgan"), whose fees are to be paid by the Company, no broker, investment
banker or other Person is entitled to receive from the Company or any of its
subsidiaries any investment banking, brokerage or finder's fees in connection
with this Agreement or the transactions contemplated hereby, including any fee
for any opinion rendered by any investment banker. The engagement letter dated
June 12, 1996, between the Company and Morgan provided to Parent on or prior to
the date of this Agreement constitutes the entire understanding of the Company
and Morgan with respect to the matters referred to therein, and has not been
amended or modified, nor will it be amended or modified prior to the Effective
Time of the Merger.
(j) Litigation. Except as disclosed in the Company SEC Documents,
there is no claim, suit, action, proceeding or investigation pending or, to the
knowledge of the Company, threatened against or affecting the Company or any of
its subsidiaries that could reasonably be expected to have a Material Adverse
Effect on the Company and its subsidiaries, taken as a whole, or prevent,
hinder or materially delay the ability of the Company to consummate the
transactions contemplated by this Agreement, nor is there any judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator outstanding
against the Company or any of its subsidiaries having, or which, insofar as
reasonably can be foreseen, in the future could have, any such effect.
(k) Accounting Matters. Neither the Company nor, to the best of its
knowledge, any of its affiliates, has through the date of this Agreement taken
or agreed to take any action that (without giving effect to any action taken or
agreed to be taken by Parent or any of its affiliates) would prevent Parent
from accounting for the business combination to be effected by the Merger as a
pooling of interests.
(l) Employee Benefit Matters. As used in this Section 3.1(l), the
"Company" shall include the Company as defined in the preamble of this
Agreement and any member of a controlled group or affiliated service group, as
defined in Sections 414(b), (c), (m) and (o) of the Code, of which the Company
is a member. The Company Disclosure Letter contains a true and complete list
of each employee benefit plan as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and each other
material employee benefit plan or arrangement (the "Company Plans") which are
sponsored by, participated in or contributed to by or required to be
contributed to by the Company. Except for matters that would not in the
aggregate have a Material Adverse Effect on the Company and its subsidiaries
taken as a whole:
(i) The Company Plans are in substantial compliance with the
Code and ERISA, as they may be applicable;
(ii) With respect to any Company Plan subject to ERISA or the
Code, there has been no transaction described in Sections 406 or 407 of
ERISA or
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<PAGE> 16
Section 4975 of the Code unless exempt under Section 408 of ERISA or
Section 4975 of the Code;
(iii) All contributions or other amounts payable by the Company
with respect to the Company Plans have either been paid or accrued in
the Company's most recent financial statements included in the Company
SEC Documents;
(iv) To the Company's knowledge, there are no pending or
threatened or anticipated claims (other than routine claims for
benefits) by or on behalf of or against any Company Plan or related
trust;
(v) The Company has never maintained a pension plan that is or
was subject to the provisions of Title IV of ERISA or Section 412 of the
Code. The Company has never maintained, had an obligation to contribute
to, or incurred any liability with respect to a multiemployer pension
plan as defined in Section 3(37) of ERISA;
(vi) All Company Plans which are intended to qualify under
Section 401(a) of the Code have been submitted to and approved as
qualifying under Section 401(a) of the Code by the Internal Revenue
Service or the applicable remedial amendment period will not have ended
prior to the Effective Time;
(vii) Except as expressly provided in this Agreement or in
Section 3.1(l)(vii) of the Company Disclosure Letter and except for
stock options granted under the Company's 1980 and 1992 Long Term
Incentive Plans and supplemental benefits under the Company's
Supplemental Benefit Plan, the transactions contemplated by this
Agreement will not accelerate the time of payment or vesting, increase
the amount of compensation due or result in a severance payment for any
director, officer or employee or former director, officer or employee
(including any beneficiary) from the Company; and
(viii) With respect to any entity (whether or not incorporated)
that is both treated as a single employer together with the Company
under Section 414 of the Code and located outside of the United States,
any benefit plans maintained by it for the benefit of its directors,
officers, employees or former employees (or any of their beneficiaries)
are in compliance with applicable laws pertaining to such plans in the
jurisdiction of such entity.
(m) Taxes. Each of the Company and each of its subsidiaries, and any
consolidated, combined, unitary or aggregate group for Tax (as defined below)
purposes of which the Company or any of its subsidiaries is or has been a
member, has timely filed all Tax Returns (as defined below) required to be
filed by it on or before the Effective Time of the Merger and has timely paid
or deposited (or the Company has paid or deposited on its behalf) all Taxes
which are required to be paid or deposited on or before the Effective Time of
the Merger. Each of the Tax Returns filed by the Company or any of its
subsidiaries is accurate and complete in all material respects. The most
recent consolidated financial statements of the Company contained in the
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<PAGE> 17
filed Company SEC Documents reflect an adequate reserve for all Taxes payable
by the Company and its subsidiaries for all taxable periods and portions
thereof through the date of such financial statements whether or not shown as
being due on any Tax Returns. No deficiencies for any Taxes have been
proposed, asserted or assessed against the Company or any of its subsidiaries,
no requests for waivers of the time to assess any such Taxes have been granted
or are pending, and there are no tax liens upon any assets of the Company or
any of its subsidiaries. The Federal income Tax Returns of the Company and its
subsidiaries consolidated in such Tax Returns have been examined by the IRS
through the year ended September 30, 1995. There are no current examinations
of any Tax Return of the Company or any of its subsidiaries being conducted and
there are no settlements or any prior examinations which could reasonably be
expected to adversely affect any taxable period for which the statute of
limitations has not run. As used herein, "Tax" or "Taxes" shall mean all taxes
of any kind, including, without limitation, those on or measured by or referred
to as income, gross receipts, sales, use, ad valorem, franchise, profits,
license, withholding, payroll, employment, estimated, excise, severance, stamp,
occupation, premium, value added, property or windfall profits taxes, customs,
duties or similar fees, assessments or charges of any kind whatsoever, together
with any interest and any penalties, additions to tax or additional amounts
imposed by any Governmental Entity, domestic or foreign. As used herein, "Tax
Return" shall mean any return, report, statement or information required to be
filed with any Governmental Entity with respect to Taxes.
(n) No Excess Parachute Payments. Any amount that could be received
(whether in cash or property or the vesting of property) as a result of any of
the transactions contemplated by this Agreement by any employee, officer or
director of the Company or any of its affiliates who is a "disqualified
individual" (as such term is defined in proposed Treasury Regulation Section
1.280G-1) under any employment, severance or termination agreement, other
compensation arrangement or Company Benefit Plan currently in effect would not
be characterized as an "excess parachute payment" (as such term is defined in
Section 280G(b)(1) of the Code).
(o) Environmental Matters. Except as would not have a Material
Adverse Effect on the Company and its subsidiaries, taken as a whole, (i) the
business and operations of the Company and its subsidiaries are being conducted
in compliance with all limitations, restrictions, standards and requirements
established under all environmental laws, (ii) no facts or circumstances exist
that impose on the Company or any of its subsidiaries an obligation under
environmental laws to conduct any removal, remediation, or similar response
action, (iii) there is no obligation, undertaking or liability arising out of
or relating to environmental laws that the Company or any of its subsidiaries
has agreed to, assumed or retained, by contract or otherwise, or that has been
imposed on the Company or any of its subsidiaries by any writ, injunction,
decree, order or judgment, and (iv) there are no actions, suits, claims,
investigations, inquiries or proceedings pending or, to the Company's
knowledge, threatened against the Company or any of its subsidiaries that arise
out of or relate to environmental laws.
(p) Compliance with Laws. The Company and its subsidiaries hold all
required, necessary or applicable permits, licenses, variances, exemptions,
orders,
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<PAGE> 18
franchises and approvals of all Governmental Entities, except where the failure
to so hold would not have a Material Adverse Effect on the Company and its
subsidiaries, taken as a whole (the "Company Permits"). The Company and its
subsidiaries are in compliance with the terms of the Company Permits except
where the failure to so comply would not have a Material Adverse Effect on the
Company and its subsidiaries, taken as a whole. Neither the Company nor any of
its subsidiaries has violated or failed to comply with any statute, law,
ordinance, regulation, rule, permit or order of any Federal, state or local
government, domestic or foreign, or any Governmental Entity, any arbitration
award or any judgment, decree or order of any court or other Governmental
Entity, applicable to the Company or any of its subsidiaries or their
respective business, assets or operations, except for violations and failures
to comply that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company and its subsidiaries,
taken as a whole.
(q) Material Contracts and Agreements.
(i) All material contracts of the Company or its subsidiaries
have been included in the Company SEC Documents, except for those
contracts not required to be filed pursuant to the rules and regulations
of the SEC.
(ii) Section 3.1(q) of the Company Disclosure Letter sets forth
(x) a list of all written or oral contracts, agreements or arrangements
to which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries or any of their respective assets
is bound which would be required to be filed as exhibits to the
Company's Annual Report on Form 10-K for the year ending September 30,
1997, and (y) the following written and oral agreements, arrangements or
commitments (all such written and oral agreements, arrangements or
commitments as are required to be set forth in Section 3.1(q) of the
Company Disclosure Letter or filed as an exhibit to any Company SEC
Document, collectively, the "Designated Contracts"), and further
identifies each of the Designated Contracts which contain change in
control provisions:
(A) Each contract or agreement outside the ordinary course of
business to which the Company or any of its subsidiaries is a party
which involves an obligation or commitment to pay or be paid an amount
in excess of $1,000,000 per year;
(B) Each contract or agreement relating to the employment or
consulting which provides for annual compensation in excess of $100,000
and each severance, termination, confidentiality, non-competition or
indemnification agreement or arrangement with any of the directors,
officers, consultants or employees of the Company or any of its
subsidiaries;
(C) Each contract or agreement to which the Company or any of
its subsidiaries is a party limiting, in any material respect, the right
of the Company or any of its subsidiaries prior to the Effective Time,
or the Surviving Corporation or any of its subsidiaries or Affiliates at
or after the Effective Time,
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<PAGE> 19
(a) to engage in, or to compete with any Person in any business,
including each contract or agreement containing exclusivity provisions
restricting the geographical area in which, or the method by which, any
business may be conducted by the Company or any of its subsidiaries
prior to the Effective Time, or the Surviving Corporation or any of its
subsidiaries or Affiliates after the Effective Time or (b) to solicit
any customer or client; and
(D) All contracts and agreements between the Company or any of
its subsidiaries, and any Person controlling, controlled by or under
common control with the Company, other than subsidiaries of the Company.
(r) Title to Properties.
(i) Each of the Company and each of its subsidiaries has good
and defensible title to, or valid leasehold interests in, all its
properties and assets purported to be owned by it in the Company SEC
Documents, except for such as are no longer used or useful in the
conduct of its businesses or as have been disposed of in the ordinary
course of business and except for minor defects in title, easements,
restrictive covenants and similar encumbrances or impediments that, in
the aggregate, do not and will not materially interfere with its ability
to conduct its business as currently conducted or as reasonably expected
to be conducted. All such assets and properties, other than assets and
properties in which the Company or any of the subsidiaries has leasehold
interests, are free and clear of all Liens, other than those set forth
in the Company SEC Documents and except for minor Liens, that, in the
aggregate, do not and will not materially interfere with the ability of
the Company or any of its subsidiaries to conduct business as currently
conducted or as reasonably expected to be conducted.
(ii) Except as would not have a Material Adverse Effect on the
Company and its subsidiaries, taken as a whole, each of the Company and
each of its subsidiaries has complied in all material respects with the
terms of all leases to which it is a party and under which it is in
occupancy, and all such leases are in full force and effect. Each of
the Company and each of its subsidiaries enjoys peaceful and undisturbed
possession under all such leases.
(s) Intellectual Property. The Company and its subsidiaries own, or
are licensed or otherwise have the right to use, all patents, patent rights,
trademarks, trademark rights, trade names, trade name rights, service marks,
service mark rights, copyrights, technology, know how, processes and other
proprietary intellectual property rights and computer programs which are
material to the condition (financial or otherwise) or conduct of the business
and operations of the Company and its subsidiaries, taken as a whole. To the
Company's knowledge, (i) the use of such patents, patent rights, trademarks,
trademark rights, service marks, service mark rights, trade names, copyrights,
technology, know-how, processes and other proprietary intellectual property
rights and computer programs by the Company and its subsidiaries does not
infringe on the rights of any Person, subject to such claims and infringements
as do not, in the aggregate, give rise to any liability on the part of the
Company and
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<PAGE> 20
its subsidiaries which could have a Material Adverse Effect with respect to the
Company and its subsidiaries, taken as a whole, and (ii) no Person is
infringing on any right of the Company or any of its subsidiaries with respect
to any such patents, patent rights, trademarks, trademark rights, service
marks, service mark rights, trade names, copyrights, technology, know-how,
processes and other proprietary intellectual property rights and computer
programs. No claims are pending or, to the Company's knowledge, threatened
that the Company or any of its subsidiaries is infringing or otherwise
adversely affecting the rights of any Person with regard to any patent,
license, trademark, trade name, service mark, copyright or other intellectual
property right. To the Company's knowledge, no Person is infringing the rights
of the Company or any of its subsidiaries with respect to any patent, license,
trademark, trade name, service mark, copyright or other intellectual property
right.
(t) Labor Matters. There are no collective bargaining agreements or
other labor union agreements or understandings to which the Company or any of
its subsidiaries is a party or by which any of them is bound, nor is the
Company or any of its subsidiaries the subject of any proceeding asserting that
it or any subsidiary has committed an unfair labor practice or seeking to
compel it to bargain with any labor organization as to wages or conditions. To
the Company's knowledge, since September 30, 1996, neither the Company nor any
of its subsidiaries has encountered any labor union organizing activity, or had
any actual or threatened employee strikes, work stoppages, slowdowns or
lockouts.
(u) Insurance. There is no default by the Company or any of its
subsidiaries with respect to any provision contained in any insurance policy
maintained by the Company or any of its subsidiaries, and there has not been
any failure to give any notice or present any claim under any such policy in a
timely fashion or in the manner or detail required by the policy, except for
defaults or failures which, individually or in the aggregate, are not
reasonably likely to have a Material Adverse Effect on the Company and its
subsidiaries, taken as a whole.
(v) Undisclosed Liabilities. Except as set forth in the Company SEC
Documents, at the date of the most recent audited financial statements of the
Company included in the Company SEC Documents, neither the Company nor any of
its subsidiaries had, and since such date neither the Company nor any of such
subsidiaries has incurred (except in the ordinary course of business), any
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise), required by generally accepted accounting principles to be set
forth on a financial statement or in the notes thereto or which, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect on the Company and its subsidiaries, taken as a whole.
(w) Opinion of Financial Advisor. The Company has received the
opinion of Morgan dated the date of this Agreement, to the effect that the
Exchange Ratio is fair to the holders of the Shares from a financial point of
view, a signed copy of which opinion has been delivered to Parent.
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<PAGE> 21
(x) Board Recommendation. The Board of Directors of the Company, at
a meeting duly called and held, has by vote of those directors present (i)
determined that this Agreement and the transactions contemplated hereby,
including the Merger and the transactions contemplated thereby, are fair to and
in the best interests of the stockholders of the Company and (ii) resolved to
recommend that the holders of the Shares approve this Agreement, the Merger and
the transactions contemplated hereby and thereby.
SECTION 3.2. Representations and Warranties of Parent and Sub. Parent
and Sub represent and warrant to, and agree with, the Company as follows,
subject to any exceptions specified in the Disclosure Letter of Parent
previously provided to the Company (the "Parent Disclosure Letter"):
(a) Organization; Standing and Power. Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power and authority to carry on its
business as now being conducted. Parent is duly qualified to do business and
in good standing in each jurisdiction in which the nature of its business or
the ownership or leasing of its properties makes such qualification necessary,
other than in such jurisdictions where the failure to be so qualified to do
business (individually or in the aggregate) would not have a Material Adverse
Effect on Parent and its subsidiaries, taken as a whole.
(b) Subsidiaries. Parent's subsidiaries that are corporations are
corporations duly organized, validly existing and in good standing under the
laws of their respective jurisdictions of incorporation and have the requisite
corporate power and authority to carry on their respective businesses as they
are now being conducted and to own, operate and lease the assets they now own,
operate or hold under lease. Parent's subsidiaries are duly qualified to do
business and are in good standing in each jurisdiction in which the nature of
their respective businesses or the ownership or leasing of their respective
properties makes such qualification necessary, other than in jurisdictions
where the failure to be so qualified or in good standing would not have a
Material Adverse Effect on Parent and its subsidiaries, taken as a whole. All
the outstanding shares of capital stock of Parent's subsidiaries that are
corporations have been duly authorized and validly issued and are fully paid
and non-assessable and were not issued in violation of any preemptive rights or
other preferential rights of subscription or purchase of any Person. Except as
disclosed in the Parent Disclosure Letter, all such stock and ownership
interests are owned of record and beneficially by Parent or by a wholly-owned
subsidiary of Parent, free and clear of all Liens. Except for the capital
stock of, or ownership interests in, its subsidiaries, Parent does not own,
directly or indirectly, any capital stock, equity interest or other ownership
interest in any Person.
(c) Capital Structure. The authorized capital stock of Parent
consists of 100,000,000 shares of common stock, $.01 par value, and 10,000,000
shares of preferred stock, $.01 par value. At the close of business on
February 17, 1997, (i) 24,180,562 Parent Shares (excluding 1,251,973 Parent
Shares held in treasury) were issued and outstanding, including 204,420 Parent
Shares subject to restricted stock awards granted under Parent's Long-Term
Incentive Plan (of which 84,007 Parent Shares, which vest
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<PAGE> 22
based upon the completion of certain service criteria, had not yet vested and
120,413 Parent Shares were earned based upon certain performance criteria but
had not yet been issued), (ii) 368,779 shares of Parent Common were reserved
for issuance pursuant to awards not yet granted under Parent's Long-Term
Incentive Plan and Stock Option Plan for Nonemployee Directors, and (iii)
1,008,996 and 94,332 shares of Parent Common were reserved for issuance
pursuant to outstanding options granted under Parent's Long-Term Incentive Plan
and Stock Option Plan for Nonemployee Directors, respectively. Except as set
forth above, no shares of capital stock or other equity or voting securities of
Parent are reserved for issuance or outstanding. All outstanding shares of
capital stock of Parent are, and all such shares issuable upon the exercise of
options will be, validly issued, fully paid and nonassessable and not subject
to preemptive rights. No capital stock has been issued by Parent since January
1, 1994, other than Parent Shares issued pursuant to options outstanding on or
prior to such date in accordance with their terms at such date. Except for the
stock options described above, as of February 17, 1997, there were no
outstanding or authorized securities, options, warrants, calls, rights,
commitments, preemptive rights, agreements, arrangements or undertakings of any
kind to which Parent or any of its subsidiaries is a party, or by which any of
them is bound, obligating Parent or any of its subsidiaries to issue, deliver
or sell, or cause to be issued, delivered or sold, any shares of capital stock
or other equity or voting securities of, or other ownership interests in,
Parent or of any of its subsidiaries or obligating Parent or any of its
subsidiaries to issue, grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or undertaking. Prior
to the Effective Time of the Merger, Parent shall have taken all necessary
action to permit it to issue the number of Parent Shares to be required to be
issued pursuant to the terms of this Agreement. The Parent Common to be issued
pursuant to the terms of this Agreement will, when issued, be validly issued,
fully paid and nonassessable and not subject to preemptive rights. Such Parent
Common, together with any associated Rights, will, when issued, be registered
under the Securities Act and the Exchange Act and will, when issued, be listed
on the NYSE, subject to notice of official issuance.
(d) Authority; Non-contravention. Parent and Sub have the requisite
corporate power and authority to enter into this Agreement and, subject to
approval of the Merger and this Agreement by the holders of a majority of the
Parent Common present in person or represented by proxy at the Parent
Stockholder Meeting ("Parent Stockholder Approval"), to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Parent and Sub and the consummation by Parent and Sub of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Parent and Sub, subject to Parent Stockholder Approval. This
Agreement has been duly executed and delivered by Parent and Sub and
constitutes a valid and binding obligation of Parent and Sub, enforceable
against Parent and Sub in accordance with its terms, except that (i) such
enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws or judicial decisions now or hereafter in
effect relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought. Except as set forth in Section 3.2(d) of the Parent Disclosure
Letter, the execution and delivery of this Agreement by Parent and Sub do
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<PAGE> 23
not, and the consummation of the transactions contemplated hereby and
compliance with the provisions hereof will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
or "put" right with respect to any obligation or to loss of a material benefit
under, or result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of Parent or Sub or any of
their subsidiaries under, any provision of (i) the Certificate of Incorporation
or By-laws of Sub or of Parent or any comparable organizational documents of
their subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license applicable to Parent or Sub or any of their subsidiaries or their
respective properties or assets or (iii) subject to the governmental filings
and other matters referred to in the following sentence, any judgment, order,
decree, statute, law, ordinance, rule or regulation or arbitration account
applicable to Parent or Sub or any of their subsidiaries or their respective
properties or assets, other than, in the case of clause (ii), any such
conflicts, violations or defaults that individually or in the aggregate would
not have a Material Adverse Effect on Parent and its subsidiaries taken as a
whole and would not materially impair the ability of Parent and Sub to perform
their respective obligations hereunder or prevent the consummation of any of
the transactions contemplated hereby. No consent, approval, order or
authorization of, or registration, declaration or filing with, any Governmental
Entity is required by or with respect to Parent or Sub or any of their
subsidiaries in connection with the execution and delivery of this Agreement by
Parent and Sub or the consummation by Parent and Sub of the transactions
contemplated hereby, except for (i) the filing by Parent of a premerger
notification and report form under the HSR Act, (ii) the filing with the SEC of
(A) the Proxy Statement with respect to Parent Stockholder Approval and (B)
such reports under Section 13(a) of the Exchange Act as may be required in
connection with this Agreement and the transactions contemplated hereby, (iii)
the filing and effectiveness of the Registration Statement under the Securities
Act, and (iv) such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under the "takeover" or "blue sky"
laws of various states and such other consents, approvals, orders,
authorizations, registrations, declarations and filings the failure of which to
be obtained or made would not have a Material Adverse Effect on Parent and its
subsidiaries, taken as a whole.
(e) SEC Documents. Parent has filed all required reports, schedules,
forms, statements and other documents with the SEC since December 31, 1994
(such documents, together with all exhibits and schedules thereto and documents
incorporated by reference therein, collectively referred to herein as the
"Parent SEC Documents"). As of their respective dates, the Parent SEC
Documents complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such Parent SEC
Documents, and none of the Parent SEC Documents contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of Parent included in the Parent SEC Documents comply in
all material respects with applicable accounting requirements and the
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<PAGE> 24
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles (except,
in the case of unaudited statements, as permitted by Form 10-Q of the SEC)
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated financial
position of Parent and its consolidated subsidiaries as of the dates thereof
and the consolidated results of their operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-end
audit adjustments and other adjustments described therein).
(f) Information Supplied. None of the information supplied or to be
supplied by Parent for inclusion or incorporation by reference in (i) the
Registration Statement will, at the time the Registration Statement is filed
with the SEC, and at any time it is amended or supplemented or at the time it
becomes effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and (ii) the Proxy
Statement will, at the date the Proxy Statement is first mailed to the Parent's
stockholders and at the time of the Parent Stockholders 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, as it relates to the Parent Stockholder Meeting, will comply
as to form in all material respects with the requirements of the Exchange Act
and the rules and regulations thereunder, except that no representation or
warranty is made by Parent or Sub with respect to statements made or
incorporated by reference therein based on information supplied by the Company
for inclusion or incorporation by reference therein.
(g) Absence of Certain Changes or Events. Except as disclosed in the
Parent SEC Documents, since December 31, 1995, Parent has conducted its
business only in the ordinary course consistent with past practice, and there
has not been (i) any material adverse change with respect to Parent, (ii) any
declaration, setting aside or payment of any dividend (whether in cash, stock
or property) with respect to any of Parent's capital stock, (iii) any damage,
destruction or loss, whether or not covered by insurance, that has or
reasonably could be expected to have a Material Adverse Effect on Parent and
its subsidiaries, taken as a whole, or (iv) any change in accounting methods,
principles or practices by Parent materially affecting its assets, liabilities
or business, except insofar as may have been required by a change in generally
accepted accounting principles.
(h) State Takeover Statutes; Absence of Supermajority Provision.
Parent has taken all action to assure that no state takeover statute or similar
statute or regulation, including, without limitation Section 203 of the DGCL,
shall apply to the Merger or any of the other transactions contemplated hereby.
Except for the Parent Stockholder Approval, no other stockholder action on the
part of Parent is required for approval of the Merger, this Agreement and the
transactions contemplated hereby.
(i) Brokers. Except for Credit Suisse First Boston Corporation
("CSFB"), whose fees are to be paid by Parent, no broker, investment banker or
other Person, is
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entitled to receive from Parent or any of its subsidiaries any investment
banking, broker's, finder's or other similar fee or commission in connection
with the transactions contemplated by this Agreement, including any fee for any
opinion rendered by any investment banker.
(j) Litigation. Except as disclosed in the Parent SEC Documents,
there is no suit, action, proceeding or investigation pending or, to the
knowledge of Parent, threatened against or affecting Parent or any of its
subsidiaries that could reasonably be expected to have a Material Adverse
Effect on Parent and its subsidiaries, taken as a whole, or prevent, hinder or
materially delay the ability of Parent and its subsidiaries, taken as a whole,
to consummate the transactions contemplated by this Agreement, nor is there any
judgment, decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against Parent or any of its subsidiaries having, or
which, insofar as reasonably can be foreseen, in the future could have, any
such effect.
(k) Accounting Matters. Neither Parent nor, to the best of its
knowledge, any of its affiliates, has through the date of this Agreement taken
or agreed to take any action that (without giving effect to any action taken or
agreed to be taken by the Company or any of its affiliates) would prevent
Parent from accounting for the business combination to be effected by the
Merger as a pooling of interests.
(l) Employee Benefit Matters. As used in this Section 3.2(l),
"Parent" shall include Parent as defined in the preamble of this Agreement and
any member of a controlled group or affiliated service group, as defined in
Sections 414(b), (c), (m) and (o) of the Code, of which Parent is a member.
The Parent Disclosure Letter contains a true and complete list of each employee
benefit plan as defined in Section 3(3) of ERISA, and each other material
employee benefit plan or arrangement (the "Parent Plans") which are sponsored
by, participated in or contributed to by or required to be contributed to by
Parent. Except for matters that would not in the aggregate have a Material
Adverse Effect on Parent and its subsidiaries taken as a whole:
(i) The Parent Plans are in substantial compliance with the
Code and ERISA, as they may be applicable;
(ii) With respect to any Parent Plan subject to ERISA or the
Code, there has been no transaction described in Sections 406 or 407 of
ERISA or Section 4975 of the Code unless exempt under Section 408 of
ERISA or Section 4975 of the Code;
(iii) All contributions or other amounts payable by Parent with
respect to the Parent Plans have either been paid or accrued in the
Parent's most recent financial statements included in the Parent SEC
Documents;
(iv) To Parent's knowledge, there are no pending or threatened
or anticipated claims (other than routine claims for benefits) by or on
behalf of or against any Parent Plan or related trust;
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(v) Except as disclosed in Section 3.2(1) of the of the Parent
Disclosure Letter, Parent has not maintained a pension plan that is or
was subject to the provisions of Title IV of ERISA or Section 412 of the
Code. Except as disclosed in Section 3.2(1) of the of the Parent
Disclosure Letter, Parent has not maintained, had an obligation to
contribute to, or incurred any liability with respect to a multiemployer
pension plan as defined in Section 3(37) of ERISA;
(vi) All Parent Plans which are intended to qualify under
Section 401(a) of the Code have been submitted to and approved as
qualifying under Section 401(a) of the Code by the IRS or the applicable
remedial amendment period will not have ended prior to the Effective
Time;
(vii) Except as expressly provided in this Agreement, the
transactions contemplated by this Agreement will not accelerate the time
of payment or vesting, increase the amount of compensation due or result
in a severance payment for any director, officer or employee or former
director, officer or employee (including any beneficiary) from the
Parent; and
(viii) With respect to any entity (whether or not incorporated)
that is both treated as a single employer together with the Parent under
Section 414 of the Code and located outside of the United States, any
benefit plans maintained by it for the benefit of its directors,
officers, employees or former employees (or any of their beneficiaries)
are in compliance with applicable laws pertaining to such plans in the
jurisdiction of such entity.
(m) Taxes. Each of Parent and each of its subsidiaries, and any
consolidated, combined, unitary or aggregate group for Tax purposes of which
Parent or any of its subsidiaries is or has been a member, has timely filed all
Tax Returns required to be filed by it on or before the Effective Time of the
Merger and has timely paid or deposited (or Parent has paid or deposited on its
behalf) all Taxes which are required to be paid or deposited on or before the
Effective Time of the Merger. Each of the Tax Returns filed by Parent or any
of its subsidiaries is accurate and complete in all material respects. The
most recent consolidated financial statements of Parent contained in the filed
Parent SEC Documents reflect an adequate reserve for all Taxes payable by
Parent and its subsidiaries for all taxable periods and portions thereof
through the date of such financial statements whether or not shown as being due
on any Tax Returns. No deficiencies for any Taxes have been proposed, asserted
or assessed against Parent or any of its subsidiaries, no requests for waivers
of the time to assess any such Taxes have been granted or are pending, and
there are no tax liens upon any assets of Parent or any of its subsidiaries.
The Federal income Tax Returns of Parent and its subsidiaries consolidated in
such Tax Returns have been examined by the IRS through the year ended December
31, 1991. There are no current examinations of any Tax Return of Parent or any
of its subsidiaries being conducted and there are no settlements or any prior
examinations which could reasonably be expected to adversely affect any taxable
period for which the statute of limitations has not run.
(n) Environmental Matters. Except as would not have a Material
Adverse Effect on Parent and its subsidiaries, taken as a whole, (i) the
business and operations
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of Parent and its subsidiaries are being conducted in compliance with all
limitations, restrictions, standards and requirements established under all
environmental laws, (ii) no facts or circumstances exist that impose on Parent
or any of its subsidiaries an obligation under environmental laws to conduct
any removal, remediation, or similar response action, (iii) there is no
obligation, undertaking or liability arising out of or relating to
environmental laws that Parent or any of its subsidiaries has agreed to,
assumed or retained, by contract or otherwise, or that has been imposed on
Parent or any of its subsidiaries by any writ, injunction, decree, order or
judgment, and (iv) there are no actions, suits, claims, investigations,
inquiries or proceedings pending, or to Parent's knowledge, threatened against
Parent or any of its subsidiaries that arise out of or relate to environmental
laws.
(o) Compliance with Laws. Parent and its subsidiaries hold all
required, necessary or applicable permits, licenses, variances, exemptions,
orders, franchises and approvals of all Governmental Entities, except where the
failure to so hold would not have a Material Adverse Effect on Parent and its
subsidiaries, taken as a whole (the "Parent Permits"). Parent and its
subsidiaries are in compliance with the terms of Parent Permits except where
the failure to so comply would not have a Material Adverse Effect on Parent and
its subsidiaries, taken a whole. Neither Parent nor any of its subsidiaries
has violated or failed to comply with any statute, law, ordinance, regulation,
rule, permit or order of any Federal, state or local government, domestic or
foreign, or any Governmental Entity, any arbitration award or any judgment,
decree or order of any court or other Governmental Entity, applicable to Parent
or any of its subsidiaries or their respective business, assets or operations,
except for violations and failures to comply that could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on
Parent and its subsidiaries, taken as a whole.
(p) Material Contracts and Agreements.
(i) All material contracts of Parent or its subsidiaries have
been included in the SEC Documents, except for those contracts not
required to be filed pursuant to the rules and regulations of the SEC.
(ii) Section 3.2(p) of the Parent Disclosure Letter sets forth
a list of all written or oral contracts, agreements or arrangements to
which Parent or any of its subsidiaries is a party or by which Parent or
any of its subsidiaries or any of their respective assets is bound which
would be required to be filed as exhibits to Parent's Annual Report on
Form 10-K for the year ending December 31, 1997.
(q) Title to Properties.
(i) Each of Parent and each of its subsidiaries has good and
defensible title to, or valid leasehold interests in, all its properties
and assets purported to be owned by it in the Parent SEC Documents,
except for such as are no longer used or useful in the conduct of its
businesses or as have been disposed of in the ordinary course of
business and except for minor defects in title, easements, restrictive
covenants and similar encumbrances or impediments that, in the
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aggregate, do not and will not materially interfere with its ability to
conduct its business as currently conducted or as reasonably expected to
be conducted. All such assets and properties, other than assets and
properties in which Parent or any of the subsidiaries has leasehold
interests, are free and clear of all Liens, other than those set forth
in the Parent SEC Documents and except for minor Liens, that, in the
aggregate, do not and will not materially interfere with the ability of
Parent or any of its subsidiaries to conduct business as currently
conducted or as reasonably expected to be conducted.
(ii) Except as would not have a Material Adverse Effect on
Parent and its subsidiaries, taken as a whole, each of Parent and each
of its subsidiaries has complied in all material respects with the terms
of all leases to which it is a party and under which it is in occupancy,
and all such leases are in full force and effect. Each of Parent and
each of its subsidiaries enjoys peaceful and undisturbed possession
under all such leases.
(r) Intellectual Property. Parent and its subsidiaries own, or are
licensed or otherwise have the right to use, all patents, patent rights,
trademarks, trademark rights, trade names, trade name rights, service marks,
service mark rights, copyrights, technology, know how, processes and other
proprietary intellectual property rights and computer programs which are
material to the condition (financial or otherwise) or conduct of the business
and operations of Parent and its subsidiaries, taken as a whole. To Parent's
knowledge, (i) the use of such patents, patent rights, trademarks, trademark
rights, service marks, service mark rights, trade names, copyrights,
technology, know-how, processes and other proprietary intellectual property
rights and computer programs by Parent and its subsidiaries does not infringe
on the rights of any Person, subject to such claims and infringements as do
not, in the aggregate, give rise to any liability on the part of Parent and its
subsidiaries which could have a Material Adverse Effect with respect to Parent
and its subsidiaries, taken as a whole, and (ii) no Person is infringing on any
right of Parent or any of its subsidiaries with respect to any such patents,
patent rights, trademarks, trademark rights, service marks, service mark
rights, trade names, copyrights, technology, know-how, processes and other
proprietary intellectual property rights and computer programs. No claims are
pending or, to Parent's knowledge, threatened that Parent or any of its
subsidiaries is infringing or otherwise adversely affecting the rights of any
Person with regard to any patent, license, trademark, trade name, service mark,
copyright or other intellectual property right. To Parent's knowledge, no
Person is infringing the rights of Parent or any of its subsidiaries with
respect to any patent, license, trademark, trade name, service mark, copyright
or other intellectual property right.
(s) Labor Matters. Except as set forth in the Parent Disclosure
Letter, there are no collective bargaining agreements or other labor union
agreements or understandings to which Parent or any of its subsidiaries is a
party or by which any of them is bound, nor is Parent or any of its
subsidiaries the subject of any proceeding asserting that it or any subsidiary
has committed an unfair labor practice or seeking to compel it to bargain with
any labor organization as to wages or conditions. Except as set forth in the
Parent Disclosure Letter, to Parent's knowledge, since December 31, 1994,
neither Parent nor any of its subsidiaries has encountered any labor union
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organizing activity, or had any actual or threatened employee strikes, work
stoppages, slowdowns or lockouts.
(t) Undisclosed Liabilities. Except as set forth in the Parent SEC
Documents, at the date of the most recent audited financial statements of
Parent included in the Parent SEC Documents, neither Parent nor any of its
subsidiaries had, and since such date neither Parent nor any of such
subsidiaries has incurred (except in the ordinary course of business), any
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise), required by generally accepted accounting principles to be set
forth on a financial statement or in the notes thereto or which, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect on Parent and its subsidiaries, taken as a whole.
(u) Opinion of Financial Advisor. The Board of Directors of Parent
has received the opinion of CSFB, dated the date of this Agreement, to the
effect that, as of the date of this Agreement, the Exchange Ratio is fair to
the Parent from a financial point of view, a signed copy of which opinion will
be delivered to the Company as soon as practicable.
(v) Board Recommendation. The Board of Directors of Parent, at a
meeting duly called and held, has by vote of those directors present (i)
determined that this Agreement and the transactions contemplated hereby,
including the Merger and the transactions contemplated thereby, are fair to and
in the best interests of the stockholders of Parent, and (ii) resolved to
recommend that the holders of the Parent Shares approve the Merger and the
transactions contemplated thereby.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.1. Conduct of Business of the Company.
(a) Ordinary Course. During the period from the date of this
Agreement to the Effective Time of the Merger (except as otherwise specifically
contemplated by the terms of this Agreement), the Company shall and shall cause
its subsidiaries to carry on their respective businesses in the usual, regular
and ordinary course in substantially the same manner as heretofore conducted
and, to the extent consistent therewith, use all reasonable efforts to preserve
intact their current business organizations, keep available the services of
their current officers and employees and preserve their relationships with
customers, suppliers, licensors, licensees, distributors and others having
business dealings with them, in each case consistent with past practice, to the
end that their goodwill and ongoing businesses shall be unimpaired to the
fullest extent possible at the Effective Time of the Merger. Without limiting
the generality of the foregoing, and except as otherwise expressly contemplated
by this Agreement, the Company shall not, and shall not permit any of its
subsidiaries to:
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(i) (A) declare, set aside or pay any dividends on, or make
any other distributions in respect of, any of its capital stock, other
than (I) dividends and distributions by any direct or indirect wholly
owned subsidiary of the Company to the Company or a wholly owned
subsidiary of the Company or (II) regular quarterly cash dividends in an
amount not greater than $.07 per share declared or paid by the Company
consistent with past practices (provided that any such quarterly cash
dividend is declared and paid in coordination with the Parent's payment
of its regular dividend on the Parent Common so that, in respect of any
calendar quarter, the holders of the Company Common Stock (x) will
receive a dividend either in respect of their shares of Company Common
Stock or Parent Common issuable to them in the Merger and (y) will not
receive a dividend on both the Company Common Stock held by them and the
Parent Common issuable to them in the Merger), (B) split, combine or
reclassify any of its capital stock or issue or authorize the issuance
of any other securities in respect of, in lieu of or in substitution for
shares of its capital stock or (C) purchase, redeem or otherwise acquire
any shares of capital stock of the Company or any of its subsidiaries or
any other securities thereof or any rights, warrants or options to
acquire any such shares or other securities other than in connection
with the exercise of outstanding stock options and satisfaction of
withholding obligations under outstanding stock options and restricted
stock;
(ii) issue, deliver, sell, pledge or otherwise encumber any
shares of its capital stock, any other voting securities or any
securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities
other than, in the case of the Company, the issuance of shares of
Company Common Stock upon the exercise of stock options outstanding on
the date of this Agreement in accordance with their current terms;
(iii) amend its Certificate of Incorporation, By-laws or other
comparable charter or organizational document;
(iv) acquire or agree to acquire (A) by merging or
consolidating with, or by purchasing a substantial portion of the stock
or assets of, or by any other manner, any business or any corporation,
partnership, association, joint venture, limited liability company or
other entity or division thereof or (B) any assets that, in each case,
would be material, individually or in the aggregate, to the Company and
its subsidiaries taken as a whole, except purchases in the ordinary
course of business consistent with past practice;
(v) sell, lease, mortgage, pledge, grant a Lien on or
otherwise encumber or dispose of any of its properties or assets, except
(A) sales or leases in the ordinary course of business consistent with
past practice and (B) other immaterial transactions not in excess of
$2,000,000 in the aggregate;
(vi) (A) incur any indebtedness for borrowed money or guarantee
any such indebtedness of another Person, issue or sell any debt
securities or warrants or other rights to acquire any debt securities of
the Company or any
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of its subsidiaries, guarantee any debt securities of another Person,
enter into any "keep well" or other agreement to maintain any financial
statement condition of another Person or enter into any arrangement
having the economic effect of any of the foregoing, except for working
capital borrowings under currently existing revolving credit facilities
incurred in the ordinary course of business, or (B) make any loans,
advances or capital contributions to, or investments in, any other
Person that would be material, individually or in the aggregate, to the
Company and its subsidiaries taken as a whole, other than to the Company
or any direct or indirect wholly owned subsidiary of the Company;
(vii) make or incur any new capital expenditure (other than
purchases in the ordinary course of business), which, singly or in the
aggregate with all other expenditures, would exceed $2,000,000;
(viii) make any material election relating to Taxes or settle or
compromise any material Tax liability;
(ix) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business consistent with past practice or in
accordance with their terms, of liabilities reflected or reserved
against in, or contemplated by, the most recent consolidated financial
statements (or the notes thereto) of the Company included in the SEC
Documents or incurred in the ordinary course of business consistent with
past practice;
(x) waive the benefits of, or agree to modify in any manner,
any confidentiality, standstill or similar agreement to which the
Company or any of its subsidiaries is a party;
(xi) adopt a plan of complete or partial liquidation or
resolutions providing for or authorizing such a liquidation or a
dissolution, merger, consolidation, restructuring, recapitalization or
reorganization;
(xii) except as expressly permitted by this Agreement, enter
into any new collective bargaining agreement;
(xiii) change any material accounting principle used by it,
except as required by regulations promulgated by the SEC;
(xiv) settle or compromise any litigation (whether or not
commenced prior to the date of this Agreement) other than settlements or
compromises: (A) of litigation where the amount paid in settlement or
compromise does not exceed $100,000, or (B) in consultation and
cooperation with Parent, and, with respect to any such settlement, with
the prior written consent of Parent, which shall not be unreasonably
withheld;
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(xv) except for those contracts and agreements entered into in
the ordinary course of business with the consent of Parent, which
consent shall not be unreasonably withheld, enter into any contract or
agreement that if in existence on the date hereof would be required to
be listed in Section 3.1(q) of the Company Disclosure Letter; or
(xvi) authorize any of, or commit or agree to take any of, the
foregoing actions.
(b) Changes in Employment Arrangements. Neither the Company nor any
of its subsidiaries shall (except as may be required in order to give effect to
the requirements of Section 5.6) adopt or amend (except as may be required by
law) any bonus, profit sharing, compensation, stock option, pension,
retirement, deferred compensation, employment or other employee benefit plan,
agreement, trust, fund or other arrangement (including any Company Benefit
Plan) for the benefit or welfare of any employee, director or former director
or employee, increase the compensation or fringe benefits of any officer of the
Company or any of its subsidiaries, or, except as provided in an existing
Company Benefit Plan or in the ordinary course of business consistent with past
practice, increase the compensation or fringe benefits of any employee or
former employee or pay any benefit not required by any existing plan,
arrangement or agreement.
(c) Severance. Neither the Company nor any of its subsidiaries shall
grant any new or modified severance or termination arrangement or increase or
accelerate any benefits payable under its severance or termination pay policies
in effect on the date hereof.
(d) Other Actions. The Company shall not, and shall not permit any
of its subsidiaries to, take any action that would, or that could reasonably be
expected to, result in any of the representations and warranties of the Company
set forth in this Agreement becoming untrue.
SECTION 4.2. Conduct of Business of Parent and Sub.
(a) Ordinary Course. During the period from the date of this
Agreement to the Effective Time of the Merger (except as otherwise specifically
contemplated by the terms of this Agreement), Parent shall and shall cause each
of its "significant subsidiaries" (as that term is defined in the regulations
promulgated under the Exchange Act) to carry on their respective businesses in
the usual, regular and ordinary course in substantially the same manner as
heretofore conducted. Without limiting the generality of the foregoing, and
except as otherwise expressly contemplated by this Agreement, Parent shall not,
and shall not permit any of its significant subsidiaries to:
(i) (A) declare, set aside or pay any dividends on, or make
any other distributions in respect of, any of its capital stock, other
than (I) dividends and distributions by any direct or indirect wholly
owned subsidiary of Parent to Parent or a wholly owned subsidiary of
Parent or (II) regular quarterly cash dividends declared or paid by
Parent consistent with past practice, (B) split,
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combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock or (C) purchase, redeem or
otherwise acquire any shares of capital stock of Parent or any of its
subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities other than in
connection with exercise of outstanding stock options and satisfaction
of withholding obligations under outstanding stock options and
restricted stock;
(ii) issue, deliver, sell, pledge or otherwise encumber any
shares of its capital stock, any other voting securities or any
securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities
other than, in the case of Parent, (A) the issuance of Parent Shares
upon the exercise of stock options outstanding on the date of this
Agreement in accordance with their current terms, or (B) the issuance of
a number of Parent Shares, not to exceed 5% of the Parent Shares
currently outstanding, in connection with the acquisition of assets or
equity securities of other entities or businesses;
(iii) acquire or agree to acquire any business, corporation,
partnership, association, joint venture, limited liability company or
other entity or division thereof involving the payment of consideration
in excess of $200,000,000 without the consent of the Company, which
consent shall not be unreasonably withheld;
(iv) amend its Certificate of Incorporation, By-laws, or other
comparable charter or organizational document;
(v) adopt a plan of complete or partial liquidation or
resolutions providing for or authorizing such a liquidation or a
dissolution, merger, consolidation, restructuring, recapitalization or
reorganization;
(vi) change any material accounting principle used by it,
except as required by regulations promulgated by the SEC; or
(vii) authorize any of, or commit or agree to take any of, the
foregoing actions.
(b) Other Actions. Parent shall not, and shall not permit any of its
subsidiaries to, take any action that would, or that could reasonably be
expected to, result in any of the representations and warranties of Parent or
Sub set forth in this Agreement becoming untrue.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1. Stockholder Approval; Preparation of Proxy Statement;
Preparation of Registration Statement. (a) Each of the Company and Parent
shall, as soon as practicable following the execution and delivery of this
Agreement on dates to
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be agreed upon between Parent and the Company, which dates shall be set taking
into account the status of pending regulatory matters pertaining to the
transactions contemplated hereby, duly call, give notice of, convene and hold
the Company Stockholders Meeting and the Parent Stockholders Meeting,
respectively, for the purpose of approving the Merger, this Agreement and the
transactions contemplated hereby. Subject to the provisions of Sections 8.2(b)
and 8.3(b), each of the Company and Parent will, through its Board of
Directors, recommend to its stockholders the approval and adoption of the
Merger.
(b) Promptly following the date of this Agreement, the Company and
Parent shall prepare and file with the SEC the Proxy Statement, and Parent
shall prepare and file with the SEC a registration statement on Form S-4 (the
"Registration Statement"), in which the Proxy Statement will be included as a
prospectus. Each of the Company and Parent shall use its reasonable efforts as
promptly as practicable, subject to the setting of the date for the Company
Stockholders Meeting and Parent Stockholder Meeting as provided in Section
5.1(a), to have the Registration Statement declared effective under the
Securities Act as promptly as practicable after such filing. Each of the
Company and Parent will use its reasonable efforts to cause the Proxy Statement
to be mailed to the Company's stockholders and Parent's stockholders,
respectively, as promptly as practicable after the Registration Statement is
declared effective under the Securities Act. Parent shall also take such
reasonable actions (other than qualifying to do business in any jurisdiction in
which it is not now so qualified) as may be required to be taken under any
applicable state securities laws in connection with the issuance of Parent
Shares in the Merger, and the Company shall furnish all information concerning
the Company and the holders of the Shares and rights to acquire Shares pursuant
to the Company Stock Plans as may be reasonably requested in connection with
any such action. The Company and Parent will notify each other promptly of the
receipt of any written or oral comments from the SEC or its staff and of any
request by the SEC or its staff for amendments or supplements to the Proxy
Statement or for additional information and will supply each other with copies
of all correspondence between the Company or Parent, respectively, or any of
its representatives, on the one hand, and the SEC or its staff, on the other
hand, with respect to the Proxy Statement or the Merger.
(c) Parent agrees to use its best efforts to effect the listing on
the NYSE prior to the Effective Time of the Merger, upon official notice of
issuance, Parent Shares to be issued pursuant to the Merger.
(d) Parent agrees to cause all Shares, if any, owned by it or by Sub
or any other subsidiary of Parent to be voted in favor of the approval and
adoption of this Agreement. The Company agrees to cause all Parent Shares, if
any, owned by it or any of its subsidiaries to be voted in favor of the
approval and adoption of this Agreement.
(e) The Company will cause its transfer agent to make stock transfer
records relating to the Company available to the extent reasonably necessary to
effectuate the intent of this Agreement.
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SECTION 5.2. Letter of the Company's Accountants. The Company shall
use its best efforts to cause to be delivered to Parent a letter of Arthur
Andersen LLP, the Company's independent public accountants, dated a date within
two business days before the date on which the Registration Statement shall
become effective and addressed to Parent and customary in scope and substance
for letters delivered by independent public accountants in connection with
registration statements similar to the Registration Statement. In connection
with the Company's efforts to obtain such letter, if requested by Arthur
Andersen LLP, Parent shall provide a representation letter to Arthur Andersen
LLP complying with SAS 72, if then required.
SECTION 5.3. Letter of Parent's Accountants. Parent shall use its best
efforts to cause to be delivered to the Company a letter of Arthur Andersen
LLP, Parent's independent public accountants, dated a date within two business
days before the date on which the Registration Statement shall become effective
and addressed to the Company and customary in scope and substance for letters
delivered by independent public accountants in connection with registration
statements similar to the Registration Statement. In connection with Parent's
efforts to obtain such letter, if requested by Arthur Andersen LLP, the Company
shall provide a representation letter to Arthur Andersen LLP complying with SAS
72, if then required.
SECTION 5.4. Access to Information. Upon reasonable notice, the
Company and Parent shall each (and shall cause each of their respective
subsidiaries to) afford to the officers, employees, accountants, counsel and
other representatives of the other, access during normal business hours from
during the period from the date hereof to the Effective Time, to all of its
properties, books, contracts, commitments and records, and during such period,
each of the Company and Parent shall (and shall cause each of their respective
subsidiaries to) furnish promptly to the other (i) a copy of each report,
schedule, registration statement and other document filed or received by it
during such period pursuant to the requirements of the Exchange Act or the
Securities Act and (ii) all other information concerning its business,
properties and personnel as such other party may reasonably request. Each of
the Company and Parent agrees that it will not, and it will cause its
respective representatives not to, use any information obtained pursuant to
this Section 5.4 for any purpose unrelated to the consummation of the
transactions contemplated by this Agreement. The Confidentiality Agreement
dated August 13, 1996 (the "Company Confidentiality Agreement"), by and between
the Company and Parent shall apply with respect to information furnished by the
Company or its subsidiaries and the Company's representatives thereunder or
hereunder and any other activities contemplated thereby. The Confidentiality
Agreement dated August 13, 1996 (the "Parent Confidentiality Agreement"), by
and between the Company and Parent shall apply to the information furnished by
Parent or its subsidiaries and Parent's representatives thereunder or hereunder
and any other the activities contemplated thereby. The parties agree that this
Agreement and the transactions contemplated hereby shall not constitute a
violation of either the Company Confidentiality Agreement or Parent
Confidentiality Agreement.
SECTION 5.5. Reasonable Efforts; Notification. (a) Upon the terms and
subject to the conditions set forth in this Agreement, except to the extent
otherwise required by United States regulatory considerations and otherwise
provided in this Section 5.5,
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each of the parties agrees to use reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the
Merger, and the other transactions contemplated by this Agreement, including
(i) the obtaining of all necessary actions or nonactions, waivers, consents and
approvals from Governmental Entities and the making of all necessary
registrations and filings (including filings with Governmental Entities, if
any) and the taking of all reasonable steps as may be necessary to obtain an
approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity, (ii) the obtaining of all necessary consents, approvals or
waivers from third parties, (iii) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of the transactions contemplated hereby, including seeking to
have any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed and (iv) the execution and delivery of
any additional instruments (including any required supplemental indentures)
necessary to consummate the transactions contemplated by this Agreement. In
connection with and without limiting the foregoing, each of the Company and
Parent and its respective Board of Directors shall (i) take all action
necessary to ensure that no state takeover statute or similar statute or
regulation is or becomes applicable to the Merger, (ii) if any state takeover
statute or similar statute or regulation becomes applicable to the Merger, take
all action necessary to ensure that the Merger may be consummated as promptly
as practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on the Merger and (iii)
cooperate with each other in the arrangements for refinancing any indebtedness
of, or obtaining any necessary new financing for, the Company and the Surviving
Corporation.
(b) The Company shall give prompt notice to Parent, and Parent or Sub
shall give prompt notice to the Company, of (i) any representation or warranty
made by it contained in this Agreement becoming untrue or inaccurate in any
respect or (ii) the failure by it to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied
by it under this Agreement; provided, however, that no such notification shall
affect the representations or warranties or covenants or agreements of the
parties or the conditions to the obligations of the parties hereunder.
(c) (i) Each of the parties hereto shall file a premerger notification
and report form under the HSR Act with respect to the Merger as promptly as
reasonably possible following execution and delivery of this Agreement. Each
of the parties agrees to use reasonable efforts to promptly respond to any
request for additional information pursuant to Section (e)(1) of the HSR Act.
(ii) The Company will furnish to Parent and Sub copies of all
correspondence, filings or communications (or memoranda setting forth
the substance thereof (collectively, "Company HSR Documents")) between
the Company, or any of its respective representatives, on the one hand,
and any Governmental Entity, or members of the staff of such agency or
authority, on the other hand, with respect to this Agreement or the
Merger; provided,
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however, that (x) with respect to documents and other materials filed by
or on behalf of the Company with the Antitrust Division of the
Department of Justice, the Federal Trade Commission, or any state
attorneys general that are available for review by Parent and Sub,
copies will not be required to be provided to Parent and Sub and (y)
with respect to any Company HSR Documents (1) that contain any
information which, in the reasonable judgment of Vinson & Elkins L.L.P.,
should not be furnished to Parent or Sub because of antitrust
considerations or (2) relating to a request for additional information
pursuant to Section (e)(1) of the HSR Act, the obligation of the Company
to furnish any such Company HSR Documents to Parent and Sub shall be
satisfied by the delivery of such Company HSR Documents on a
confidential basis to Fulbright & Jaworski L.L.P. pursuant to a
confidentiality agreement in form and substance reasonably satisfactory
to Parent. Except as otherwise required by United States regulatory
considerations, Parent and Sub will furnish to the Company copies of all
correspondence, filings or communications (or memoranda setting forth
the substance thereof (collectively, "Parent HSR Documents")) between
Parent, Sub or any of their respective representatives, on the one hand,
and any Governmental Entity, or member of the staff of such agency or
authority, on the other hand, with respect to this Agreement or the
Merger; provided, however, that (x) with respect to documents and other
materials filed by or on behalf of Parent or Sub with the Antitrust
Division of the Department of Justice, the Federal Trade Commission, or
any state attorneys general that are available for review by the
Company, copies will not be required to be provided to the Company, and
(y) with respect to any Parent HSR Documents (1) that contain
information which, in the reasonable judgment of Fulbright & Jaworski
L.L.P., should not be furnished to the Company because of antitrust
considerations or (2) relating to a request for additional information
pursuant to Section (e)(1) of the HSR Act, the obligation of Parent and
Sub to furnish any such Parent HSR Documents to the Company shall be
satisfied by the delivery of such Parent HSR Documents on a confidential
basis to Vinson & Elkins L.L.P. pursuant to a confidentiality agreement
in form and substance reasonably satisfactory to the Company.
(iii) Nothing contained in this Agreement shall be construed so
as to require Parent, Sub or the Company, or any of their respective
subsidiaries or affiliates, to sell, license, dispose of, or hold
separate, or to operate in any specified manner, any assets or
businesses of Parent, Sub, the Company or the Surviving Corporation (or
to require Parent, Sub, the Company or any of their respective
subsidiaries or affiliates to agree to any of the foregoing). The
obligations of each party under Section 5.5(a) to use reasonable efforts
with respect to antitrust matters shall be limited to compliance with
the reporting provisions of the HSR Act and with its obligations under
this Section 5.5(c).
SECTION 5.6. Employee Benefit Matters. (a) On or prior to the Closing
Date, the Company shall take such action under the Company Stock Plans to
assure that options outstanding under the Company Stock Plans at the Effective
Time of the Merger shall no longer permit the holder thereof to purchase
Company Common Stock and, in lieu thereof, provide the holder thereof the right
to purchase, for the exercise
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price per share of Company Common Stock, 1.3 shares of Parent Common, subject
to adjustment as provided in the Company Stock Plans and further provided that
such substitute option comply with the applicable IRS regulations to preserve
the tax favored status of any incentive stock options. Parent agrees to assume
the obligations of the Company to issue such shares of Parent Common upon
exercise of such options and to use its best efforts to cause the shares of
Parent Common so issuable to be registered under the Securities Act. Parent
shall issue Parent Common in replacement of any restricted stock outstanding
under the Company Stock Plan at the Exchange Ratio.
(b) On or prior to the Closing Date, the Company shall cause its
Employee Stock Ownership Plan (the "ESOP") to be amended to substitute,
effective as the Effective Time of the Merger, the Parent Common as the
"Employer Securities" under the ESOP and to make such other changes and
modifications to the ESOP as Parent and the Company deem necessary and
advisable to permit the ESOP to continue in effect with respect to the
participating employees of the Company after the Merger without any
acceleration of vesting or distributions under the ESOP.
(c) Parent currently intends to cause the Company as the Surviving
Corporation to take such actions as are necessary so that after the Effective
Time of the Merger, employees of the Company and its subsidiaries remaining
with the Company after the Merger ("Continuing Employees") will be provided
with employee benefit plans, programs, policies and arrangements that are, in
the aggregate, no less favorable to such employees as those provided to such
employees as of the date hereof; provided that it is understood that Parent
shall have no obligation to issue shares of capital stock pursuant to any such
plan or to make additional contributions to the ESOP if such issuances or
contributions are not considered to be desirable by Parent. Parent currently
intends (i) to preserve and maintain with respect to such plans, programs and
arrangements, benefits and service credit accrued to the Continuing Employees
during employment with the Company and its subsidiaries prior to the Effective
Time of the Merger except to the extent that benefits may be duplicated and
(ii) to provide that Continuing Employees shall not be subject to preexisting
condition exclusions or waiting periods (except to the extent so subject prior
to the Effective Time of the Merger) and shall receive full credit for any
copayments and deductibles already incurred during the year in which the Merger
occurs under the comparable plan of the Company and its subsidiaries.
SECTION 5.7. Indemnification. (a) From and after the Effective Time
of the Merger, the Surviving Corporation and Parent shall indemnify and hold
harmless each person who is now, or has been at any time prior to the date
hereof or who becomes prior to the Effective Time of the Merger, an officer or
director of the Company or any of its subsidiaries (the "Indemnified Parties")
against (i) all losses, claims, damages, costs, expenses, liabilities or
judgments or amounts that are paid in settlement with the approval of the
indemnifying party (which approval shall not be unreasonably withheld) of, or
in connection with, any claim, action, suit, proceeding or investigation based
in whole or in part on, or arising in whole or in part out of, the fact that
such person is or was a director, officer or employee of the Company or any of
its subsidiaries, whether pertaining to any matter existing or occurring at or
prior to the Effective Time of the Merger and whether reasserted or claimed
prior to, or at or after, the Effective
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Time of the Merger ("Indemnified Liabilities"), and (ii) all Indemnified
Liabilities based in whole or in part on, or arising in whole or in part out
of, or pertaining to this Agreement or the transactions contemplated hereby, in
each case to the fullest extent provided under the law of their respective
states of incorporation, as applicable, to indemnify directors and officers.
Prior to the Effective Time of the Merger, the Company shall cause each person
eligible for indemnification pursuant to this Section 5.7(a) to execute and
deliver to Parent and any insurance company providing the insurance referred to
in Section 5.7(b), a writing confirming, among other matters that could
reasonably give rise to Indemnified Liabilities, in such form as may be
reasonably satisfactory to Parent and any such insurance company.
(b) The Surviving Corporation or Parent shall use reasonable efforts
to purchase and maintain for the benefit of the Indemnified Parties for a
period of five years after the Effective Time of the Merger directors and
officers liability insurance with respect to acts, omissions and other matters
occurring prior to the Effective Time of the Merger; provided, however, that
the Surviving Corporation may substitute therefor a "runoff" policy of
insurance ("Runoff Policy") having a term of three years following the
Effective Time of the Merger with comparable coverage. Notwithstanding the
foregoing, nether Parent nor the Surviving Corporation shall be required to
expend more than $400,000 in premiums for the aggregate five year-period to
obtain such coverage.
(c) The provisions of this Section 5.7 are intended to be for the
benefit of, and shall be enforceable by, the parties hereto and each
Indemnified Party, his heirs and his representatives.
SECTION 5.8. Fees and Expenses. Except as provided in Article VIII,
all fees and expenses incurred in connection with the Merger, this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such fees or expenses, whether or not the Merger is consummated.
SECTION 5.9. Public Announcements. Parent and Sub, on the one hand,
and the Company, on the other hand, will consult with each other before issuing
any press release or otherwise making any public statements with respect to the
transactions contemplated by this Agreement and shall not issue any such press
release or make any such public statement prior to such consultation, except
that each party may respond to questions from stockholders and may respond to
inquiries from financial analysts and media representatives in a manner
consistent with its past practice and each party may make such disclosure as
may be required by applicable law or by obligations pursuant to any listing
agreement with any national securities exchange without prior consultation to
the extent such consultation is not reasonably practicable. The parties agree
that the initial press release or releases to be issued in connection with the
execution of this Agreement shall be mutually agreed upon prior to the issuance
thereof.
SECTION 5.10. Stockholder Litigation. The Company shall give Parent
the opportunity to participate in the defense or settlement of any stockholder
litigation against the Company and its directors relating to the transactions
contemplated by this
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Agreement until the Effective Time of the Merger, and thereafter, shall give
Parent the opportunity to direct the defense of such litigation and, if Parent
so chooses to direct such litigation, Parent shall give the Company and its
directors an opportunity to participate in such litigation; provided, however,
that no settlement of litigation shall be agreed to without the consent of
Parent, the Company and its directors, which consent shall not be unreasonably
withheld.
SECTION 5.11. Accounting Matters. Neither the Company nor Parent shall
take or agree to take, nor shall they permit any of their respective affiliates
to take or agree to take, any action that would prevent Parent from accounting
for the business combination to be effected by the Merger as a pooling of
interests.
SECTION 5.12. Parent's Board of Directors. At the Effective Time of
the Merger, the directors of Parent shall elect one Person mutually agreed to
by the Chairman of the Board of Parent and the Chairman of the Board of the
Company to the Board of Directors of Parent. Such director shall be a Class
III Director of Parent and will serve until the annual meeting of Parent's
stockholders to be held in 1999. In addition, as of the Effective Time of the
Merger, the directors of Parent shall appoint Carl W. Knobloch to act as an
advisory non-voting director to the Board of Directors of Parent for a term
expiring at the annual meeting of Parent's stockholders in 2000, with full
rights to notice of and to attend all meetings of the Board of Directors, and
reimbursement of expenses attendant thereto, as if he were a director. At the
end of such three-year term, Mr. Knobloch shall be entitled to be considered by
the directors of Parent for election as a regular director of Parent.
Section 5.13. Irrevocable Proxies. On the date hereof, the holders of
at least an aggregate of 2,000,000 issued and outstanding shares of Company
Common Stock shall execute and deliver to Parent an irrevocable voting proxy in
the form of Exhibit B hereto (the "Irrevocable Proxies").
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger is
subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(a) Stockholder Approval. The Company Stockholder Approval and
Parent Stockholder Approval shall have been obtained.
(b) NYSE Listing. Parent Shares issuable to the Company's
stockholders pursuant to the Merger shall have been approved for listing on the
NYSE, subject to official notice of issuance.
(c) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or shall
have expired.
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(d) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect; provided, however, that the
parties hereto shall, subject to Section 5.5, use reasonable efforts to have
any such injunction, order, restraint or prohibition vacated.
(e) Registration Statement Effectiveness. The Registration Statement
shall be effective under the Securities Act on the Closing Date, and all
post-effective amendments filed shall have been declared effective or shall
have been withdrawn; and no stop-order suspending the effectiveness thereof
shall have been issued and no proceedings for that purpose shall have been
initiated or, to the knowledge of the parties, threatened by the SEC.
(f) Blue Sky Filings. There shall have been obtained any and all
material permits, approvals and consents of securities or "blue sky"
authorities of any jurisdiction that are necessary so that the consummation of
the Merger and the transactions contemplated thereby will be in compliance with
applicable laws, the failure to comply with which would have a Material Adverse
Effect on Parent and its subsidiaries, taken as a whole.
SECTION 6.2. Conditions of Parent and Sub. The obligation of Parent
and Sub to consummate the Merger are further subject to the satisfaction at the
Effective Time of the Merger, of the following conditions:
(a) Compliance. The agreements and covenants of the Company to be
complied with or performed on or before the Closing Date pursuant to the terms
hereof shall have been duly complied with or performed in all material respects
and Parent shall have received a certificate dated the Closing Date and
executed on behalf of the Company by the chief executive officer and the chief
financial officer of the Company to such effect.
(b) Certifications and Opinion. The Company shall have furnished
Parent with:
(i) a certified copy of a resolution or resolutions duly
adopted by the Board of Directors of the Company approving this
Agreement and consummation of the Merger and the transactions
contemplated hereby and directing the submission of the Merger to a vote
of the stockholders of the Company;
(ii) a certified copy of a resolution or resolutions duly
adopted by the holders of a majority of the outstanding Shares approving
the Merger and the transactions contemplated hereby;
(iii) a favorable opinion dated the Closing Date, in customary
form and substance, of Vinson & Elkins L.L.P., counsel for the Company,
dated the Closing Date to the effect that:
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(A) The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State
of Delaware and has corporate power to own its properties and
assets and to carry on its business as presently conducted and as
described in the Registration Statement;
(B) The Company has the requisite corporate power to
effect the Merger as contemplated by this Agreement; the
execution and delivery of this Agreement did not, and the
consummation of the Merger will not, violate any provision of the
Company's Certificate of Incorporation or By-Laws; and upon the
filing by the Surviving Corporation of the Certificate of Merger,
the Merger shall become effective;
(C) Each of the Company's U.S. subsidiaries is a
corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and
has corporate power to own its properties and assets and to carry
on its business as presently conducted; and
(D) The Board of Directors of the Company has taken all
action required by the DGCL and its Certificate of Incorporation
or its By-Laws to approve the Merger and to authorize the
execution and delivery of this Agreement and the transactions
contemplated hereby; the Board of Directors and the stockholders
of the Company have taken all action required by the DGCL and its
Certificate of Incorporation and By-Laws to authorize the Merger
in accordance with the terms of this Agreement; and this
Agreement is a valid and binding Agreement of the Company
enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws or judicial
decisions now or hereafter in effect relating to creditor's
rights generally or governing the availability of equitable
relief.
(c) Representations and Warranties True. The representations and
warranties of the Company contained in this Agreement (other than any
representations and warranties made as of a specific date) shall be true in all
material respects (except to the extent the representation or warranty is
already qualified by materiality, in which case it shall be true in all
respects) on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date, except as
contemplated or permitted by this Agreement, and Parent shall have received a
certificate to that effect dated the Closing Date and executed on behalf of the
Company by the chief executive officer and the chief financial officer of the
Company.
(d) Affiliate Letters. Parent shall have received from the Company a
list of such Persons, if any, that Parent, after discussions with counsel for
the Company, believes may be "affiliates" of the Company, within the meaning of
Rule 145 of the SEC pursuant to the Securities Act ("Affiliates"). The Company
shall deliver or cause to be
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delivered to Parent an undertaking by each Affiliate in form satisfactory to
Parent that (i) such Affiliate has no current plan or intention to sell,
exchange or otherwise dispose of the Parent Shares to be received by such
Affiliate pursuant to the Merger, (ii) no disposition will be made by such
Affiliate of any Parent Shares received or to be received pursuant to the
Merger until such time as final results of operations of Parent covering at
least 30 days of combined operations of Parent and the Company have been
published and (iii) no Parent Shares received or to be received by such
Affiliate pursuant to the Merger will be sold or disposed of except pursuant to
an effective registration statement under the Securities Act or in accordance
with the provisions of paragraph (d) of Rule 145 under the Securities Act or
another exemption from registration under the Securities Act.
(e) Tax Opinion. Parent shall have received an opinion of Fulbright
& Jaworski L.L.P., in form and substance satisfactory to Parent, to the effect
that for federal income tax purposes and conditioned upon certain
representations of managements of the Company and Parent as to certain
customary facts and circumstances regarding the Merger: (i) the Merger will
qualify as a "reorganization" within the meaning of Section 368(a) of the Code
and (ii) no gain or loss will be recognized by the Company, Sub or Parent as a
result of the Merger.
(f) Pooling Accounting. Parent and Company shall have received a
letter from Arthur Andersen LLP, in form and substance satisfactory to Parent
and Company, to the effect that the Merger should be accounted for as a pooling
of interests under generally accepted accounting principles and applicable
regulations of the SEC.
(g) Consents, etc. Parent shall have received evidence, in form and
substance reasonably satisfactory to it, that such licenses, permits, consents,
approvals, authorizations, qualifications and orders of governmental
authorities and other third parties as are necessary in connection with the
transactions contemplated hereby have been obtained, except such licenses,
permits, consents, approvals, authorizations, qualifications and orders which
are not, individually or in the aggregate, material to Parent or the Company or
the failure of which to have received would not (as compared to the situation
in which such license, permit, consent, approval, authorization, qualification
or order had been obtained) materially detract from the aggregate benefits to
Parent of the transactions reasonably contemplated hereby.
(h) No Litigation. There shall not be pending or threatened by any
Governmental Entity any suit, action or proceeding (or by any other Person any
suit, action or proceeding which has a reasonable likelihood of success), (i)
challenging or seeking to restrain or prohibit the consummation of the Merger
or any of the other transactions contemplated by this Agreement or seeking to
obtain from Parent or any of its subsidiaries any damages that are material in
relation to Parent and its subsidiaries taken as a whole, (ii) seeking to
prohibit or limit the ownership or operation by the Company, Parent or any of
their respective subsidiaries of any material portion of the business or assets
of the Company, Parent or any of their respective subsidiaries, to dispose of
or hold separate any material portion of the business or assets of the Company,
Parent or any of their respective subsidiaries, as a result of the Merger or
any of the other transactions contemplated by this Agreement,
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(iii) seeking to impose limitations on the ability of Parent or Sub to acquire
or hold, or exercise full rights of ownership as to any shares of Common Stock
of the Surviving Corporation, including, without limitation, the right to vote
the Common Stock of the Surviving Corporation on all matters properly presented
to the stockholders of the Surviving Corporation or (iv) seeking to prohibit
Parent or any of its subsidiaries from effectively controlling in any material
respect the business or operations of the Company or its subsidiaries.
(i) Fairness Opinion. CSFB will not have revoked or modified in a
materially adverse manner its opinion referred to in Section 3.2(u).
(j) No Material Adverse Change. There shall not have occurred any
material adverse change with respect to the Company since the date hereof.
SECTION 6.3. Conditions of the Company. The obligations of the Company
to consummate the Merger are further subject to the satisfaction at the
Effective Time of the Merger of the following conditions:
(a) Compliance. The agreements and covenants of Parent to be
complied with or performed on or before the Closing Date pursuant to the terms
hereof shall have been duly complied with or performed in all material respects
and the Company shall have received a certificate dated the Closing Date on
behalf of Parent by the chief executive officer and the chief financial officer
of Parent to such effect.
(b) Certifications and Opinion. Parent shall have furnished the
Company with:
(i) a certified copy of a resolution or resolutions duly
adopted by the Board of Directors or a duly authorized committee thereof
of Parent approving this Agreement and consummation of the Merger and
the transactions contemplated hereby, including the issuance, listing
and delivery of the Parent Shares pursuant hereto;
(ii) a certified copy of a resolution or resolutions duly
adopted by the holders of a majority of the Parent Shares present or
represented by proxy and entitled to vote at the Parent Stockholder
Meeting, approving the Merger and the transactions contemplated hereby;
(iii) a favorable opinion, dated the Closing Date, in customary
form and substance, of Fulbright & Jaworski L.L.P., counsel for Parent
to the effect that:
(A) Parent and the Sub are corporations duly
incorporated, validly existing and in good standing under the
laws of the State of Delaware and have corporate power to own
their properties and assets and to carry on their business as
presently conducted and as described in the Proxy Statement. Sub
has the requisite corporate power to merge with the Company as
contemplated by this Agreement and Parent has the requisite
corporate power to carry out its obligations under this
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Agreement. The execution and delivery of this Agreement did not,
and the consummation of the Merger will not, violate any provision
of Parent's or Sub's Certificate of Incorporation or By-Laws;
(B) Parent and Sub have taken all action required under
the DGCL, their Certificates of Incorporation or their By-Laws to
authorize such execution and delivery and the transactions
contemplated by this Agreement, including the Merger, in
accordance with the terms of this Agreement; and this Agreement
is a valid and binding agreement of Parent and Sub enforceable in
accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws or judicial decisions now or hereafter in
effect relating to creditor's rights generally or governing the
availability of equitable relief; and
(C) The Parent Shares to be issued pursuant to the
Merger have been duly authorized and, when issued and delivered
as contemplated hereby, will have been legally and validly issued
and will be fully paid and non-assessable and no stockholder of
Parent will have any preemptive right of subscription or purchase
in respect thereof under Delaware law or Parent's Certificate of
Incorporation or By-laws.
(c) Representations and Warranties True. The representations and
warranties of Parent contained in this Agreement (other than any
representations and warranties made as of a specific date) shall be true in all
material respects (except to the extent the representation or warranty is
already qualified by materiality, in which case it shall be true in all
respects) on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date, except as
contemplated or permitted by this Agreement, and the Company shall have
received a certificate to that effect dated the Closing Date and executed on
behalf of Parent by the chief executive officer and the chief financial officer
of Parent.
(d) Tax Opinion. The Company shall have received an opinion of
Vinson & Elkins L.L.P., in form and substance satisfactory to the Company, to
the effect that for federal income tax purposes and conditioned upon certain
representations of managements of the Company and Parent as to certain
customary facts and circumstances regarding the Merger: (i) the Merger will
qualify as a "reorganization" within the meaning of Section 368(a) of the Code;
(ii) each of the Company, Parent and Sub are parties to the reorganization
within the meaning of Section 368(b) of the Code; and (iii) no gain or loss
will be recognized by the stockholders of the Company upon the receipt by them
of Parent Shares in exchange for their Shares pursuant to the Merger.
(e) Fairness Opinion. Morgan shall not have revoked or modified in a
materially adverse manner its opinion referred to in Section 3.1(w).
(f) No Material Adverse Change. There shall not have occurred any
material adverse change with respect to Parent since the date hereof.
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(g) Pooling Accounting. Parent and Company shall have received a
letter from Arthur Andersen LLP, in form and substance satisfactory to Parent
and Company, to the effect that the Merger should be accounted for as a pooling
of interests under generally accepted accounting principles and applicable
regulations of the SEC.
(h) Consents, etc. The Company shall have received evidence, in form
and substance reasonably satisfactory to it, that such licenses, permits,
consents, approvals, authorizations, qualifications and orders of governmental
authorities and other third parties as are necessary by the Parent in
connection with the transactions contemplated hereby have been obtained, except
such licenses, permits, consents, approvals, authorizations, qualifications and
orders which are not, individually or in the aggregate, material to Parent and
its subsidiaries or the failure of which to have received would not (as
compared to the situation in which such license, permit, consent, approval,
authorization, qualification or order had been obtained) have a Material
Adverse Effect on the Parent and its subsidiaries taken as a whole, after
giving effect to the Merger.
(i) No Litigation. There shall not be pending or threatened by any
Governmental Entity any suit, action or proceeding challenging or seeking to
restrain or prohibit the consummation of the Merger or any of the other
transactions contemplated by this Agreement.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1. Termination. This Agreement may be terminated at any time
prior to the Effective Time of the Merger, whether before or after approval of
matters presented in connection with the Merger by the stockholders of the
Company:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if the stockholders of the Company fail to give any
required approval of the Merger and the transactions contemplated hereby
upon a vote at a duly held meeting of stockholders of the Company or at
any adjournment thereof;
(ii) if the stockholders of Parent fail to give any required
approval of the Merger and the transactions contemplated hereby upon a
vote at a duly held meeting of stockholders of Parent or at any
adjournment thereof;
(iii) if any court of competent jurisdiction or any
governmental, administrative or regulatory authority, agency or body
shall have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the Merger;
or
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(iv) if the Merger shall not have been consummated on or before
August 31, 1997, unless the failure to consummate the Merger is the
result of a material breach of this Agreement by the party seeking to
terminate this Agreement.
(c) by Parent or the Company to the extent permitted under Section
8.2 or 8.3;
(d) by Parent, if the Company breaches any of its representations or
warranties herein or fails to perform in any material respect any of its
covenants, agreements or obligations under this Agreement; and
(e) by the Company, if Parent or Sub breaches any of its
representations or warranties herein or fails to perform in any material
respect any of its covenants, agreements or obligations under this Agreement.
SECTION 7.2. Effect of Termination. In the event of termination of
this Agreement by either the Company or Parent as provided in Section 7.1, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Parent, Sub or the Company, other than the
confidentiality provisions of Section 5.4 and the provisions of Sections 5.8,
8.2, 8.3 and Article IX.
SECTION 7.3. Amendment. This Agreement may be amended by the parties
at any time before or after any required approval of matters presented in
connection with the Merger by the stockholders of the Company or Parent;
provided, however, that after any such approval, there shall be made no
amendment that by law requires further approval by such stockholders without
the further approval of such stockholders. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties.
SECTION 7.4. Extension; Waiver. At any time prior to the Effective
Time of the Merger, the parties may, to the extent legally allowed, (a) extend
the time for the performance of any of the obligations or the other acts of the
other parties, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto or (c) subject to
the proviso of Section 7.3, waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of such rights.
SECTION 7.5. Procedure for Termination, Amendment, Extension or Waiver.
A termination of this Agreement pursuant to Section 7.1, an amendment of this
Agreement pursuant to Section 7.3 or an extension or waiver pursuant to Section
7.4 shall, in order to be effective, require in the case of Parent, Sub or the
Company, action by its Board of Directors or the duly authorized designee of
its Board of Directors.
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ARTICLE VIII
SPECIAL PROVISIONS AS TO CERTAIN MATTERS
SECTION 8.1. Takeover Defenses of the Company. The Company agrees to
take such action with respect to any anti-takeover provisions in its charter or
afforded it by statute to the extent necessary to consummate the Merger on the
terms set forth in the Agreement.
SECTION 8.2. No Solicitation. (a) The Company shall not, nor shall it
permit any of its subsidiaries to, nor shall it authorize or permit any
officer, director or employee of or any investment banker, attorney or other
advisor, agent or representative of the Company or any of its subsidiaries to,
directly or indirectly, (i) solicit, initiate or encourage the submission of
any takeover proposal, (ii) enter into any agreement (other than
confidentiality and standstill agreements in accordance with the immediately
following proviso) with respect to any takeover proposal, or (iii) participate
in any discussions or negotiations regarding, or furnish to any Person any
information with respect to, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes, or may reasonably be
expected to lead to, any takeover proposal; provided, however, in the case of
this clause (iii), that prior to the vote of stockholders of the Company for
approval of the Merger (and not thereafter if the Merger is approved thereby)
to the extent required by the fiduciary obligations of the Board of Directors
of the Company, determined in good faith by a majority of the disinterested
members thereof based on the advice of outside counsel, the Company may, in
response to an unsolicited request therefor, furnish information to any Person
or "group" (within the meaning of Section 13(d)(3) of the Exchange Act)
pursuant to a confidentiality agreement on substantially the same terms as
provided in Section 5.4(b) hereof, including the standstill provisions thereof.
Without limiting the foregoing, it is understood that any violation of the
restrictions set forth in the preceding sentence by any officer, director or
employee of the Company or any of its subsidiaries or any investment banker,
attorney or other advisor, agent or representative of the Company, whether or
not such Person is purporting to act on behalf of the Company or otherwise,
shall be deemed to be a material breach of this Agreement by the Company. For
purposes of this Agreement, "takeover proposal" means (i) any proposal, other
than a proposal by Parent or any of its affiliates, for a merger or other
business combination involving the Company, (ii) any proposal or offer, other
than a proposal or offer by Parent or any of its affiliates, to acquire from
the Company or any of its affiliates in any manner, directly or indirectly, an
equity interest in the Company or any subsidiary, any voting securities of the
Company or any subsidiary or a material amount of the assets of the Company and
its subsidiaries, taken as a whole, or (iii) any proposal or offer, other than
a proposal or offer by Parent or any of its affiliates, to acquire from the
stockholders of the Company by tender offer, exchange offer or otherwise more
than 15% of the outstanding Shares.
(b) Neither the Board of Directors of the Company nor any committee
thereof shall, except in connection with the termination of this Agreement
pursuant to Sections 7.1 (a) or (b), (i) withdraw or modify, or propose to
withdraw or modify, in a manner adverse to Parent or Sub the approval or
recommendation by the Board of
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Directors of the Company or any such committee of this Agreement or the Merger
or take any action having such effect or (ii) approve or recommend, or propose
to approve or recommend, any takeover proposal. Notwithstanding the foregoing,
in the event the Board of Directors of the Company receives a takeover proposal
that, in the exercise of its fiduciary obligations (as determined in good faith
by a majority of the disinterested members thereof based on the advice of
outside counsel), it determines to be a superior proposal, the Board of
Directors may withdraw or modify its approval or recommendation of this
Agreement or the Merger and may (subject to the following sentence) terminate
this Agreement, in each case at any time after midnight on the third business
day following Parent's receipt of written notice (a "Notice of Superior
Proposal") advising Parent that the Board of Directors has received a takeover
proposal which it has determined to be a superior proposal, specifying the
material terms and conditions of such superior proposal (including the proposed
financing for such proposal and a copy of any documents conveying such
proposal) and identifying the Person making such superior proposal. The
Company may terminate this Agreement pursuant to the preceding sentence only if
the stockholders of the Company shall not yet have voted upon the Merger and
the Company shall have paid to Parent the Termination Fee. Any of the
foregoing to the contrary notwithstanding, the Company may engage in
discussions with any Person or group that has made an unsolicited takeover
proposal for the limited purpose of determining whether such proposal (as
opposed to any further negotiated proposal) is a superior proposal. Nothing
contained herein shall prohibit the Company from taking and disclosing to its
stockholders a position contemplated by Rule 14e-2(a) following Parent's
receipt of a Notice of Superior Proposal.
(c) In the event that the Board of Directors of the Company or any
committee thereof shall (i) withdraw or modify, or propose to withdraw or
modify, in a manner adverse to Parent or Sub the approval or recommendation by
the Board of Directors of the Company or any such committee of this Agreement
or the Merger or take any action having such effect or (ii) approve or
recommend, or propose to approve or recommend, any takeover proposal, Parent
may terminate this Agreement.
(d) For purposes of this Agreement, a "superior proposal" means any
bona fide takeover proposal to acquire, directly or indirectly, for
consideration consisting of cash, securities or a combination thereof, all of
the Shares then outstanding or all or substantially all the assets of the
Company, and otherwise on terms which a majority of the disinterested members
of the Board of Directors of the Company determines in its good faith
reasonable judgment (based on the written advice of a financial advisor of
nationally recognized reputation, a copy of which shall be provided to Parent)
to be more favorable to the Company's stockholders than the Merger.
(e) In addition to the obligations of the Company set forth in
paragraph (b), the Company shall promptly advise Parent orally and in writing
of any takeover proposal or any inquiry with respect to or which could lead to
any takeover proposal, the material terms and conditions of such inquiry or
takeover proposal (including the financing for such proposal and a copy of such
documents conveying such proposal), and the identity of the Person making any
such takeover proposal or inquiry. The
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Company will keep Parent fully informed of the status and details of any such
takeover proposal or inquiry.
SECTION 8.3. Fee and Expense Reimbursements.
(a) The Company agrees to pay Parent a fee in immediately available
funds of $15,000,000 (the "Termination Fee") promptly upon the termination of
the Agreement in the event this Agreement is terminated by Parent or the
Company pursuant to Section 7.1(c). The Termination Fee shall be payable
promptly upon termination of this Agreement in the event of a termination
pursuant to Section 7.1(c).
(b) In the event this Agreement is terminated for any reason other
than a material breach by Parent or Sub, the Company also agrees to pay to
Parent the Termination Fee if (i) after the date hereof and before the
termination of this Agreement, a takeover proposal shall have been made and
publicly announced by any Person or group of Persons (an "Acquiring Person"),
(ii) the stockholders of the Company shall not have approved the Merger and
(iii) after the date hereof and at or prior to six months after the date of
termination of this Agreement, the Acquiring Person or any affiliate of the
Acquiring Person shall have effected an Alternative Transaction (as defined
below). An Alternative Transaction shall mean (i) any merger or other business
combination involving the Company, (ii) any acquisition from the Company or any
subsidiary of 15% of the voting securities of the Company or any subsidiary or
a material amount of the assets of the Company and its subsidiaries, taken as a
whole, or (iii) any acquisition from the stockholders of the Company by tender
offer, exchange offer or otherwise more than 15% of the outstanding Shares.
The Termination Fee payable under this Section 8.3(b) shall be payable as a
condition to the consummation of the Alternative Transaction.
(c) In the event the Board of Directors of Parent receives a takeover
proposal involving Parent because of which, in the exercise of its fiduciary
obligations (as determined in good faith by a majority of the disinterested
members thereof based on advice of outside counsel), it determines it is
necessary to withdraw or modify its approval or recommendation of this
Agreement or the Merger, Parent may terminate this Agreement at any time after
midnight on the business day following notice of such determination is provided
to the Company by advising the Company that the Board of Directors has received
a takeover proposal which it has determined requires such action, specifying
the material terms and conditions of such proposal (including the proposed
financing for such proposal and a copy of any documents conveying such
proposal) and identifying the Person making such proposal. Parent may
terminate this Agreement pursuant to the preceding sentence only if the
stockholders of Parent shall not yet have voted upon the Merger and Parent
shall have paid to the Company the Parent Termination Fee (as hereinafter
defined). Parent agrees to pay the Company a fee in immediately available
funds of $15,000,000 (the "Parent Termination Fee") promptly upon (i) the
termination of this Agreement pursuant to the first sentence of this Section
8.3(c) or (ii) the stockholders of Parent not approving the Merger as a result
of a hostile takeover of the Parent after the date of this Agreement. For
purposes hereof, a "takeover proposal involving Parent" shall mean (i) any
proposal for a merger or other business combination involving the Parent, (ii)
any proposal or offer
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to acquire from the Parent or any of its affiliates in any manner, directly or
indirectly, an equity interest in the Parent or any subsidiary, any voting
securities of the Parent or any subsidiary or a material amount of the assets
of the Parent and its subsidiaries taken as a whole, or (iii) any proposal or
offer to acquire from the stockholders of Parent by tender offer, exchange
offer or otherwise, more than 15% of the Parent Common Stock.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1. Nonsurvival of Representations and Warranties. None of
the representations, warranties, covenants or agreements in this Agreement or
in any instrument delivered by the Company pursuant to this Agreement shall
survive the Effective Time of the Merger, except any covenant or agreement of
the parties which by its terms contemplates performance after the Effective
Time of the Merger.
SECTION 9.2. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally or by
facsimile or sent by overnight courier 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 Sub, to
Camco International Inc.
7030 Ardmore
Houston, Texas 77054
Telephone: (713) 749-5690
Facsimile: (713) 749-1620
Confirm: (713) 749-4000
Attention: Ronald R. Randall, General Counsel
with a copy to:
Fulbright & Jaworski L.L.P.
1301 McKinney, Suite 5100
Houston, Texas 77010-3095
Telephone: (713) 651-5151
Facsimile: (713) 651-5246
Confirm: (713) 651-5496
Attention: Curtis W. Huff, Esq.
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(b) if to the Company, to
Production Operators Corp
11302 Tanner Road
Houston, Texas 77041
Telephone: (713) 896-2506
Facsimile: (713) 896-2652
Confirm: (713) 466-0980
Attention: D. John Ogren
with a copy to:
Vinson & Elkins L.L.P. Alsup & Petty
2300 First City Tower and Three Allen Center
1001 Fannin Street 333 Clay Street, Suite 4930
Houston, Texas 77002-6760 Houston, Texas 77002
Telephone: (713) 758-2222 Telephone: (713) 739-1313
Facsimile: (713) 758-5160 Facsimile: (713) 739-7095
Confirm: (713) 758-2320 Confirm: (713) 739-1313
Attention: Robert H. Whilden, Esq. Richard C. Alsup
SECTION 9.3. Definitions. For purposes of this Agreement:
(a) an "affiliate" of any Person means another Person that directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, such first Person;
(b) "knowledge" means, with respect to any matter stated herein to be
"to the Company's knowledge," or similar language, the actual knowledge of the
Chairman of the Board, the Chief Executive Officer, President, any Vice
President or Chief Financial Officer of the Company, and with respect to any
matter stated herein to be "to Parent's knowledge," or similar language, the
actual knowledge of the Chairman of the Board, the Chief Executive Officer,
President, any Vice President, Chief Financial Officer or General Counsel of
Parent.
(c) "Material Adverse Effect" or "material adverse change" means,
when used in connection with any Person, any change or effect (or any
development that, insofar as can reasonably be foreseen, is likely to result in
any change or effect) that is materially adverse to the business, properties,
assets, condition (financial or otherwise) or results of operations of that
Person and its subsidiaries, taken as a whole.
(d) "Person" means an individual, corporation, partnership, joint
venture, limited liability company, association, trust, unincorporated
organization or other entity; and
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(e) a "subsidiary" means any corporation, partnership or other legal
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other Persons performing
similar functions are directly or indirectly owned by such Person.
SECTION 9.4. Interpretation. When a reference is made in this
Agreement to a Section, Exhibit or Schedule, such reference shall be to a
Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation".
SECTION 9.5. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
SECTION 9.6. Entire Agreement; No Third-Party Beneficiaries. This
Agreement (including the documents and instruments referred to herein) and the
Confidentiality Agreement (a) constitute the entire agreement and supersedes
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof and (b) except for the
provisions of Sections 5.6 and 5.7, are not intended to confer upon any Person
other than the parties any rights or remedies hereunder. The provisions of
Section 5.7 may be enforced by any Person intended to benefit thereunder in the
same manner as if such provisions constituted a binding contract between such
Person and each party to this Agreement, their successors and assigns.
SECTION 9.7. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts
of laws thereof.
SECTION 9.8. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that Sub may
assign, in its sole discretion, any of or all its rights, interests and
obligations under this Agreement to Parent or to any direct or indirect wholly
owned subsidiary of Parent, and such assignment shall relieve Sub of all of its
obligations hereunder. 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 9.9. Enforcement of the Agreement. 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. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States located
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in the State of Texas or in any other Texas state court, this being in addition
to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of any Federal or state court sitting in the Southern
District of Texas in the event any dispute between the parties hereto arises
out of this Agreement solely in connection with such a suit between the
parties, (b) 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 (c)
agrees that it will not bring any action relating to this Agreement in any
court other than a Federal or state court sitting in the State of Texas or in
the Southern District of Texas.
SECTION 9.10. Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions,
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
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<PAGE> 55
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
CAMCO INTERNATIONAL INC.
By /s/ Gary D. Nicholson
---------------------------------------
Gary D. Nicholson
Chairman of the Board, President
and Chief Executive Officer
PLANE ACQUISITION CORP.
By /s/ Gary D. Nicholson
---------------------------------------
Gary D. Nicholson
President
PRODUCTION OPERATORS CORP
By /s/ Carl W. Knobloch, Jr.
---------------------------------------
Carl W. Knobloch, Jr.
Chairman of the Board
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<PAGE> 56
EXHIBIT A
PRODUCTION OPERATORS CORP
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
The original Certificate of Incorporation of Production Operators Corp
(the "Corporation") was filed under the name "UNICAPITAL CORPORATION" on May 9,
1969, and was amended on December 8, 1980, to change the name to "Production
Operators Corp". On ____________, 1997, the Board of Directors and the sole
stockholder of the Corporation adopted resolutions authorizing the further
amendment and the restatement and integration of the provisions of the amended
Certificate of Incorporation of the Corporation and authorizing the filing of
this Amended and Restated Certificate of Incorporation, in accordance with
Sections 242 and 245 of the General Corporation Law of the State of Delaware.
This Amended and Restated Certificate of Incorporation amends and supersedes
the amended Certificate of Incorporation of the Corporation, as presently in
effect, in its entirety as follows:
First: The name of the Corporation is Production Operators Corp.
Second: The address of the Corporation's registered office in the State
of Delaware is Corporation Trust Center, 1209 Orange Street in the City of
Wilmington, County of New Castle. The name of the Corporation's registered
agent at such address is The Corporation Trust Company.
Third: The nature of the business and purpose to be conducted or
promoted by the Corporation is to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of the
State of Delaware.
Fourth: The total number of shares of stock that the Corporation shall
have authority to issue is One Thousand (1,000) shares of Common Stock, of the
par value of $.01 per share.
Fifth: The Corporation is to have perpetual existence.
Sixth: Election of directors need not be by written ballot unless the
by-laws of the Corporation shall so provide.
Seventh: All of the powers of the Corporation, insofar as the same may
be lawfully vested by this Amended and Restated Certificate of Incorporation in
the Board of Directors of the Corporation, are hereby conferred upon the Board
of Directors of the Corporation.
In furtherance and not in limitation of the foregoing provisions of this
Article Seventh, and for the purpose of the orderly management of the business
and the conduct of the affairs of the Corporation, the Board of Directors of
the Corporation shall have the power to adopt, amend or repeal from time to
time the by-laws of the Corporation, subject to the right of the stockholders
of the Corporation entitled to vote thereon to adopt, amend or repeal by-laws
of the Corporation.
<PAGE> 57
Eighth: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Amended and Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
IN WITNESS WHEREOF, the Company has caused this Amended and Restated
Certificate of Incorporation to be signed by _________________, its
____________, this ___ day of __________, 1997.
PRODUCTION OPERATORS CORP
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
<PAGE> 58
EXHIBIT B
IRREVOCABLE PROXY
This Irrevocable Proxy (this "Proxy") is entered into and delivered as
of February 27, 1997, by the undersigned stockholders of Production Operators
Corp, a Delaware corporation (the "Stockholders"), in favor of Camco
International Inc., a Delaware corporation ("Camco").
RECITALS
As of the date of this Proxy, each Stockholder owns beneficially and of
record such number of shares of common stock, par value $1.00 per share
("Company Common Stock"), of Production Operators Corp, a Delaware corporation
(the "Company"), as is set forth next to such Stockholder's name on the
signature page hereof. All such shares, together with any shares acquired by
any Stockholder prior to the termination of this Proxy, are sometimes referred
to herein as the "Shares".
On the date hereof, Camco, Plane Acquisition Corp., a Delaware
corporation and wholly owned subsidiary of Camco ("Mergersub"), and the Company
have entered into an Agreement and Plan of Merger, dated as of the date hereof
(as the same may be amended from time to time, the "Merger Agreement"), which
provides for the merger of Mergersub with and into the Company (the "Merger"),
with the Company continuing as the surviving corporation and a wholly owned
subsidiary of Camco.
Camco has required, in connection with its execution and delivery of the
Merger Agreement that each Stockholder grant Camco a proxy to vote such
Stockholder's Shares on the terms set forth below.
TERMS OF PROXY
In consideration of the mutual representations, warranties, covenants
and agreements set forth in the Merger Agreement and in order to induce Camco
to execute and deliver the Merger Agreement, and, in each case, to consummate
the transactions contemplated hereby, the parties hereto hereby agree as
follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER
Stockholder hereby represents and warrants to Camco as follows:
1.1 Authorization. Each Stockholder is either a [trust] [other
entity], validly existing [and in good standing] under the laws of its state of
formation or an individual residing in the United States. Each Stockholder has
the power and authority to execute and deliver this Proxy and to consummate the
transactions contemplated hereby. Each Stockholder has taken all necessary
actions to authorize the execution, delivery and performance of this Proxy and
the grant of the rights covered hereby. This Proxy has been duly executed and
delivered by and on behalf of each Stockholder and constitutes a legal, valid
and binding obligation of such Stockholder, enforceable against such
Stockholder in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and general equitable principles,
regardless of whether such enforceability is considered in a proceeding at law
or in equity.
<PAGE> 59
1.2 Title to Shares. Each Stockholder is the record and beneficial
owner of the Shares and owns the Shares free and clear of liens, claims,
charges, options or encumbrances or other rights of third parties of any kind
or any proxy or voting restriction other than that granted pursuant to this
Proxy.
ARTICLE II
TRANSFER AND VOTING OF SHARES
2.1 Restriction on Transfer of Shares. During the Term (as defined
below), no Stockholder shall (a) sell, transfer, pledge, grant a security
interest in or lien on or otherwise dispose of or encumber any of the Shares,
(b) deposit any of the Shares into a voting trust, enter into a voting
agreement or arrangement or grant any proxy with respect to any of the Shares,
or (c) enter into any contract, option or other arrangement or undertaking with
respect to the direct or indirect acquisition or sale, assignment, transfer,
pledge, grant of a security interest in or lien on or other disposition of or
encumbrance of the Shares.
2.2 Voting of Shares. Each Stockholder hereby irrevocably
constitutes and appoints Camco, or any nominee of Camco, with full power of
substitution, during and for the Term, as such Stockholder's true and lawful
attorney and proxy, for and in such Stockholder's name, place and stead, to
vote each of such Stockholder's Shares as its proxy, at every annual, special
or adjourned meeting of the stockholders of the Company (including the right to
sign its name (as stockholder) to any consent, certificate or other document
relating to the Company that the law of the State of Delaware may permit or
require) (i) in favor of the approval of the Merger Agreement and the
consummation of all other transactions contemplated by the Merger Agreement,
(ii) against any takeover proposal (as defined in the Merger Agreement)
involving the Company, or any action or agreement that would result in a breach
of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or which could result in
any of the conditions to the Company's obligations under the Merger Agreement
not being fulfilled, and (iii) in favor of any other matter relating to
consummation of the transactions contemplated by the Merger Agreement. Each
Stockholder further agrees to cause the Shares owned by such Stockholder
beneficially to be voted in accordance with the foregoing.
2.3 Further Assurances. Each Stockholder shall take such further
actions and execute such further documents and instruments as may reasonably be
requested by Camco to vest in Camco (or its designee) the power to vote such
Stockholder's Shares and carry out the provisions of this Proxy.
2.4 Term. The term of this Proxy (the "Term") shall commence on the
date hereof and shall remain valid until the earlier of (a) consummation of the
Merger, (b) termination of the Merger Agreement for any reason (other than
pursuant to Section 8.2(b) of the Merger Agreement), or (c) one year from the
date hereof. THIS PROXY IS IRREVOCABLE AND IS COUPLED WITH AN INTEREST.
ARTICLE III
GENERAL PROVISIONS
3.1 Severability. If any term or other provision of this Proxy is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Proxy shall nevertheless
remain in full force and effect. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced,
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<PAGE> 60
each Stockholder agrees to negotiate with Camco in good faith to modify this
Proxy so as to effect the original intent of the parties as closely as possible
to the fullest extent permitted by applicable law in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the extent
possible.
3.2 Entire Agreement. This Proxy constitutes the entire agreement of
the parties and supersedes all prior agreements and undertakings, both written
and oral, between the Stockholders and Camco, with respect to the subject
matter hereof.
3.3 Assignment. This Proxy shall be binding upon Stockholder and
such Stockholder's successors and assigns.
3.4 Parties in Interest. This Proxy shall be binding upon and inure
solely to the benefit of Camco, and nothing in this Proxy, express or implied,
is intended to or shall confer upon any other person any right, benefit or
remedy of any nature whatsoever under or by reason of this Proxy.
3.5 Specific Performance. Each Stockholder agrees that irreparable
damage would occur in the event any provision of this Proxy was not performed
in accordance with the terms hereof and that Camco shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at
law or in equity.
3.6 Governing Law, Jurisdiction. This Proxy shall be governed by,
and construed in accordance with the laws of the State of Delaware. Any legal
actions, suit or proceeding arising out of or relative to this Proxy shall be
instituted only in the state and federal courts situate in the States of Texas
and Delaware, and each Stockholder hereby waives any objection which it may now
or hereafter have to the laying of venue of such action, suit or proceeding in,
and hereby irrevocably submits to the jurisdiction of, any such court in any
such action, suit or proceeding. Any and all service of process and any other
notice in any such action, suit or proceeding shall be effective against each
Stockholder if given by mail, postage, prepaid, mailed to such Stockholder at
the Company's principal place of business.
3.7 Counterparts. This Proxy may be executed in one or more
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same instrument.
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<PAGE> 61
IN WITNESS WHEREOF, each Stockholder has caused this Proxy to be duly
executed and delivered as of the day and year first written above.
-------------------------------------
By:
----------------------------------
Number of Shares:
------------------
-------------------------------------
By:
----------------------------------
Number of Shares:
------------------
-------------------------------------
Number of Shares:
------------------
-------------------------------------
Number of Shares:
------------------
-------------------------------------
Number of Shares:
------------------
AGREED AND ACCEPTED:
CAMCO INTERNATIONAL INC.
By:
----------------------------------------
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<PAGE> 62
As permitted by Item 601(b)(2) of Regulation S-K, the Company has not
filed any schedules with this Exhibit No. 7.1. Listed below is a brief
description of the omitted schedules. The Company agrees to furnish
supplementally a copy of any of such omitted schedules to the Commission upon
request.
Schedules
3.1(b) Subsidiaries of POC
3.1(d) Authority; Non-contravention
3.1(g) Absence of Certain Changes or Events
3.1(l) Employee Benefit Matters
3.1(m) Taxes
3.1(n) No Excess Parachute Payments
3.1(q) Material Contracts and Agreements of POC
3.1(v) Undisclosed Liabilities of POC
3.2(b) Subsidiaries of Camco
3.2(d) Authority; Non-contravention
3.2(l) Employee Benefit Matters of Camco
3.2(p) Material Contracts and Agreements of Camco
3.2(s) Labor matters of Camco
<PAGE> 1
EXHIBIT 7.2
IRREVOCABLE PROXY
This Irrevocable Proxy (this "Proxy") is entered into and delivered as
of February 27, 1997, by the undersigned stockholders of Production Operators
Corp, a Delaware corporation (the "Stockholders"), in favor of Camco
International Inc., a Delaware corporation ("Camco").
RECITALS
As of the date of this Proxy, each Stockholder owns beneficially and
of record such number of shares of common stock, par value $1.00 per share
("Company Common Stock"), of Production Operators Corp, a Delaware corporation
(the "Company"), as is set forth next to such Stockholder's name on the
signature page hereof. All such shares, together with any shares acquired by
any Stockholder prior to the termination of this Proxy, are sometimes referred
to herein as the "Shares".
On the date hereof, Camco, Plane Acquisition Corp., a Delaware
corporation and wholly owned subsidiary of Camco ("Mergersub"), and the Company
have entered into an Agreement and Plan of Merger, dated as of the date hereof
(as the same may be amended from time to time, the "Merger Agreement"), which
provides for the merger of Mergersub with and into the Company (the "Merger"),
with the Company continuing as the surviving corporation and a wholly owned
subsidiary of Camco.
Camco has required, in connection with its execution and delivery of
the Merger Agreement that each Stockholder grant Camco a proxy to vote such
Stockholder's Shares on the terms set forth below.
TERMS OF PROXY
In consideration of the mutual representations, warranties, covenants
and agreements set forth in the Merger Agreement and in order to induce Camco
to execute and deliver the Merger Agreement, and, in each case, to consummate
the transactions contemplated hereby, the parties hereto hereby agree as
follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER
Stockholder hereby represents and warrants to Camco as follows:
1.1 Authorization. Each Stockholder is either a trust or other
entity, validly existing and in good standing under the laws of its state of
formation or an individual residing in the United States. Each Stockholder has
the power and authority to execute and deliver this Proxy and to consummate the
transactions contemplated hereby. Each Stockholder has taken all necessary
actions to authorize the execution, delivery and performance of this Proxy and
the grant of the rights covered hereby. This Proxy has been duly executed and
delivered by and on behalf of each Stockholder and constitutes a legal, valid
and binding obligation of such Stockholder, enforceable against such
Stockholder in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and general equitable principles,
regardless of whether such enforceability is considered in a proceeding at law
or in equity.
<PAGE> 2
1.2 Title to Shares. Each Stockholder is the record and beneficial
owner of the Shares and owns the Shares free and clear of liens, claims,
charges, options or encumbrances or other rights of third parties of any kind
or any proxy or voting restriction other than that granted pursuant to this
Proxy.
ARTICLE II
TRANSFER AND VOTING OF SHARES
2.1 Restriction on Transfer of Shares. During the Term (as defined
below), no Stockholder shall (a) sell, transfer, pledge, grant a security
interest in or lien on or otherwise dispose of or encumber any of the Shares,
(b) deposit any of the Shares into a voting trust, enter into a voting
agreement or arrangement or grant any proxy with respect to any of the Shares,
or (c) enter into any contract, option or other arrangement or undertaking with
respect to the direct or indirect acquisition or sale, assignment, transfer,
pledge, grant of a security interest in or lien on or other disposition of or
encumbrance of the Shares.
2.2 Voting of Shares. Each Stockholder hereby irrevocably
constitutes and appoints Camco, or any nominee of Camco, with full power of
substitution, during and for the Term, as such Stockholder's true and lawful
attorney and proxy, for and in such Stockholder's name, place and stead, to
vote each of such Stockholder's Shares as its proxy, at every annual, special
or adjourned meeting of the stockholders of the Company (including the right to
sign its name (as stockholder) to any consent, certificate or other document
relating to the Company that the law of the State of Delaware may permit or
require) (i) in favor of the approval of the Merger Agreement and the
consummation of all other transactions contemplated by the Merger Agreement,
(ii) against any takeover proposal (as defined in the Merger Agreement)
involving the Company, or any action or agreement that would result in a breach
of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or which could result in
any of the conditions to the Company's obligations under the Merger Agreement
not being fulfilled, and (iii) in favor of any other matter relating to
consummation of the transactions contemplated by the Merger Agreement. Each
Stockholder further agrees to cause the Shares owned by such Stockholder
beneficially to be voted in accordance with the foregoing.
2.3 Further Assurances. Each Stockholder shall take such further
actions and execute such further documents and instruments as may reasonably be
requested by Camco to vest in Camco (or its designee) the power to vote such
Stockholder's Shares and carry out the provisions of this Proxy.
2.4 Term. The term of this Proxy (the "Term") shall commence on
the date hereof and shall remain valid until the earlier of (a) consummation of
the Merger, (b) termination of the Merger Agreement for any reason (other than
pursuant to Section 8.2(b) of the Merger Agreement), or (c) one year from the
date hereof. THIS PROXY IS IRREVOCABLE AND IS COUPLED WITH AN INTEREST.
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<PAGE> 3
ARTICLE III
GENERAL PROVISIONS
3.1 Severability. If any term or other provision of this Proxy is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Proxy shall nevertheless
remain in full force and effect. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, each Stockholder
agrees to negotiate with Camco in good faith to modify this Proxy so as to
effect the original intent of the parties as closely as possible to the fullest
extent permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
3.2 Entire Agreement. This Proxy constitutes the entire agreement
of the parties and supersedes all prior agreements and undertakings, both
written and oral, between the Stockholders and Camco, with respect to the
subject matter hereof.
3.3 Assignment. This Proxy shall be binding upon Stockholder and
such Stockholder's successors and assigns.
3.4 Parties in Interest. This Proxy shall be binding upon and
inure solely to the benefit of Camco, and nothing in this Proxy, express or
implied, is intended to or shall confer upon any other person any right,
benefit or remedy of any nature whatsoever under or by reason of this Proxy.
3.5 Specific Performance. Each Stockholder agrees that irreparable
damage would occur in the event any provision of this Proxy was not performed
in accordance with the terms hereof and that Camco shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at
law or in equity.
3.6 Governing Law, Jurisdiction. This Proxy shall be governed by,
and construed in accordance with the laws of the State of Delaware. Any legal
actions, suit or proceeding arising out of or relative to this Proxy shall be
instituted only in the state and federal courts situate in the States of Texas
and Delaware, and each Stockholder hereby waives any objection which it may now
or hereafter have to the laying of venue of such action, suit or proceeding in,
and hereby irrevocably submits to the jurisdiction of, any such court in any
such action, suit or proceeding. Any and all service of process and any other
notice in any such action, suit or proceeding shall be effective against each
Stockholder if given by mail, postage, prepaid, mailed to such Stockholder at
the Company's principal place of business.
3.7 Counterparts. This Proxy may be executed in one or more
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same instrument.
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<PAGE> 4
IN WITNESS WHEREOF, each Stockholder has caused this Proxy to be duly
executed and delivered as of the day and year first written above.
<TABLE>
<S> <C>
CARL W. KNOBLOCH, JR. TRUST CARLA KNOBLOCH 1980 TRUST
Number of Shares: 899,914 Number of Shares: 100,624
By: /s/ Carl W. Knobloch, Jr. By: /s/ William R. Knobloch
--------------------------------- -------------------------------
Carl W. Knobloch, Jr., Trustee William R. Knobloch, Trustee
/s/ Emily C. Knobloch
---------------------------------
Emily C. Knobloch, Trustee EMILY J. KNOBLOCH 1981 TRUST
Number of Shares: 100,000
EMILY C. KNOBLOCH TRUST By: /s/ William R. Knobloch
Number of Shares: 206,400 -------------------------------
William R. Knobloch, Trustee
By: /s/ Carl W. Knobloch, Jr.
---------------------------------
Carl W. Knobloch, Jr., Trustee ELEANOR KNOBLOCH 1982 TRUST
Number of Shares: 100,000
/s/ Emily C. Knobloch
---------------------------------
Emily C. Knobloch, Trustee By: /s/ William R. Knobloch
-------------------------------
William R. Knobloch, Trustee
CARLA KNOBLOCH 1969 TRUST
Number of Shares: 100,000 CARL W. KNOBLOCH II TRUST
Number of Shares: 5,000
By: /s/ William R. Knobloch
---------------------------------
William R. Knobloch, Trustee By: /s/ Carl W. Knobloch, Jr.
-------------------------------
Carl W. Knobloch, Jr., Trustee
EMILY J. KNOBLOCH 1969 TRUST
Number of Shares: 100,000 ELLEN K. STEINMETZ TRUST
Number of Shares: 5,000
By: /s/ William R. Knobloch
---------------------------------
William R. Knobloch, Trustee By: /s/ Carl W. Knobloch, Jr.
-------------------------------
Carl W. Knobloch, Jr., Trustee
ELEANOR KNOBLOCH 1969 TRUST
Number of Shares: 100,000 WILLIAM R. KNOBLOCH III TRUST
Number of Shares: 5,000
By: /s/ William R. Knobloch
---------------------------------
William R. Knobloch, Trustee By: /s/ Carl W. Knobloch, Jr.
-------------------------------
Carl W. Knobloch, Jr., Trustee
</TABLE>
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<PAGE> 5
<TABLE>
<S> <C>
LOUISE KNOBLOCH 1983 TRUST KNOBLOCH FAMILY, L.P.
Number of Shares: 201,000 Number of Shares: 5,650
By: /s/ Carl W. Knobloch, Jr. By: /s/ William R. Knobloch
--------------------------------- -------------------------------
Carl W. Knobloch, Jr., Trustee William R. Knobloch, Jr., General
Partner
By: /s/ William R. Knobloch
---------------------------------
William R. Knobloch, Trustee
SYLVIA K. BROWN
Number of Shares: 6,486
CARL W. KNOBLOCH 1971 TRUST
Number of Shares: 22,500 By: /s/ William R. Knobloch
-------------------------------
William R. Knobloch, Trustee FBO
By: /s/ Carl W. Knobloch, Jr.
---------------------------------
Carl W. Knobloch, Jr., Trustee By: /s/ Emily C. Knobloch
-------------------------------
Emily C. Knobloch, Trustee FBO
By: /s/ William R. Knobloch
---------------------------------
William R. Knobloch, Trustee
EDWARD BROWN
Number of Shares: 8,000
WILLIAM R. KNOBLOCH 7/16/73 TRUST
Number of Shares: 5,000 By: /s/ William R. Knobloch
-------------------------------
William R. Knobloch, Trustee FBO
By: /s/ Carl W. Knobloch, Jr.
---------------------------------
Carl W. Knobloch, Jr., Trustee
SUSAN BROWN
By: /s/ Audrey Knobloch Number of Shares: 8,862
---------------------------------
Audrey Knobloch, Trustee
By: /s/ William R. Knobloch
-------------------------------
William R. Knobloch, Trustee FBO
WILLIAM R. KNOBLOCH
Number of Shares: 39,024
By: William R. Knobloch
---------------------------------
William R. Knobloch
AGREED AND ACCEPTED:
CAMCO INTERNATIONAL INC.
By: /s/ Ronald R. Randall
---------------------------------
Ronald R. Randall
Vice President and General Counsel
</TABLE>
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