As filed with the Securities and Exchange Commission on November 27, 1998
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) November 24, 1998
-------------------------------
UNION CAMP CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
Virginia
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(State or Other Jurisdiction of Incorporation)
001-04001 13-5652423
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(Commission File Number) (IRS Employer Identification No.)
1600 Valley Road, Wayne, New Jersey 07470
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(Address of Principal Executive Offices) (Zip Code)
(973) 628-2000
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
Page 1
Exhibit Index on Page 4
<PAGE>
Item 1. Changes in Control of Registrant
On November 24, 1998, Union Camp Corporation, a Virginia corporation
("UC"), announced that it had entered into an Agreement and Plan of Merger (the
"Merger Agreement"), among UC, International Paper Company, a New York
corporation ("IP"), and Maple Acquisition, Inc., a Delaware corporation
("MergerSub").
Pursuant to the terms of the Merger Agreement, MergerSub will merge
with and into UC, with UC being the surviving corporation (the "Merger"). Each
share of UC common stock, par value $1.00 per share ("UC Common Shares") (other
than UC Common Shares and Rights (as defined below) owned by IP and its
subsidiaries or held in UC's treasury), together with the rights (the "Rights")
attached thereto and issued pursuant to the Amended and Restated Rights
Agreement, dated as of June 25, 1996, between UC and The Bank of New York, a New
York banking corporation, as Rights Agent (the "Rights Agreement"), will be
converted into the right to receive a number of shares of IP common stock, par
value $1.00 per share ("IP Common Shares") equal to the Exchange Ratio.
"Exchange Ratio" means the number obtained by dividing 71.00 by the Average IP
Share Price (defined as the per share closing price of IP Common Shares for 10
randomly chosen days out of the 20 trading days prior to the closing of the
Merger); provided that (i) if the Average IP Share Price is less than $43.70,
the Exchange Ratio will be 1.6247 and (ii) if the Average IP Share Price is
greater than $48.30, the Exchange Ratio will be 1.4700.
Each option to acquire UC Common Shares will be converted into the
right to purchase IP Common Shares.
The Merger is subject to certain regulatory approvals as well as to
adoption of the Merger Agreement by the shareholders of UC and approval of the
issuance of IP Common Shares and the authorization of an increase in the number
of authorized shares of IP Common Shares pursuant to the Merger Agreement by the
holders of IP Common Shares.
The preceding is qualified in its entirety by reference to the Merger
Agreement, which is attached hereto as an Exhibit and which is incorporated
herein by reference.
In connection with the Merger, IP and UC jointly issued a press
release, a copy of which is attached hereto as Exhibit 99 and is specifically
incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) See "Index to Exhibits" on page 4.
Page 2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UNION CAMP CORPORATION
Dated: November 27, 1998 By: /s/ Dirk R. Soutendijk
------------------------------------------
Name: Dirk R. Soutendijk
Title: Vice President, General
Counsel, and Secretary
Page 3
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INDEX TO EXHIBITS
Exhibit No. Exhibit
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2.1 Agreement and Plan of Merger, dated as of November 24, 1998,
among Union Camp Corporation, a Virginia corporation,
International Paper Company, a New York corporation, and
Maple Acquisition, Inc., a Delaware corporation.
99 Press Release, dated November 24, 1998.
Page 4
AGREEMENT AND PLAN OF MERGER
dated as of
November 24, 1998
among
UNION CAMP CORPORATION,
INTERNATIONAL PAPER COMPANY
and
MAPLE ACQUISITION, INC.
<PAGE>
TABLE OF CONTENTS
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PAGE
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ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.....................................................1
ARTICLE 2
THE MERGER
SECTION 2.01. The Merger......................................................6
SECTION 2.02. Organizational Documents........................................7
SECTION 2.03. Directors and Officers..........................................7
ARTICLE 3
CONVERSION OF SECURITIES AND RELATED MATTERS
SECTION 3.01. Conversion of Capital Stock.....................................8
SECTION 3.02. Exchange Ratio; Fractional Shares; Adjustments..................8
SECTION 3.03. Exchange of Certificates........................................9
SECTION 3.04. UCC Stock Options..............................................12
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF UCC
SECTION 4.01. Corporate Existence and Power..................................13
SECTION 4.02. Corporate Authorization........................................13
SECTION 4.03. Governmental Authorization.....................................14
SECTION 4.04. Non-Contravention..............................................14
SECTION 4.05. Capitalization.................................................15
SECTION 4.06. Subsidiaries...................................................15
SECTION 4.07. UCC SEC Documents..............................................16
SECTION 4.08. Financial Statements; No Material Undisclosed Liabilities......17
SECTION 4.09. Information to Be Supplied.....................................17
SECTION 4.10. Absence of Certain Changes.....................................18
SECTION 4.11. Litigation.....................................................18
SECTION 4.12. Taxes..........................................................18
SECTION 4.13. Employee Benefits..............................................19
SECTION 4.14. Compliance with Laws; Licenses, Permits and
Registrations...............................................20
SECTION 4.15. Title to Properties............................................20
SECTION 4.16. Intellectual Property..........................................21
SECTION 4.17. Environmental Matters..........................................21
SECTION 4.18. Finders' Fees; Opinions of Financial Advisor...................22
SECTION 4.19. Required Vote; Board Approval..................................22
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PAGE
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SECTION 4.20. State Takeover Statutes; Rights Agreement......................22
SECTION 4.21. Pooling Matters; Tax Treatment.................................23
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF IP
SECTION 5.01. Corporate Existence and Power..................................23
SECTION 5.02. Corporate Authorization........................................24
SECTION 5.03. Governmental Authorization.....................................24
SECTION 5.04. Non-Contravention..............................................24
SECTION 5.05. Capitalization of IP and MergerSub.............................25
SECTION 5.06. IP SEC Documents...............................................26
SECTION 5.07. Financial Statements; No Material Undisclosed Liabilities......26
SECTION 5.08. Information to Be Supplied.....................................27
SECTION 5.09. Absence of Certain Changes.....................................27
SECTION 5.10. Litigation.....................................................27
SECTION 5.11. Taxes..........................................................27
SECTION 5.12. Compliance with Laws; Licenses, Permits and
Registrations...............................................28
SECTION 5.13. Title to Properties............................................28
SECTION 5.14. Intellectual Property..........................................29
SECTION 5.15. Environmental Matters..........................................29
SECTION 5.16. Finders' Fees..................................................29
SECTION 5.17. Required Vote; Board Recommendation............................29
SECTION 5.18. Pooling Matters................................................30
ARTICLE 6
COVENANTS OF UCC
SECTION 6.01. UCC Interim Operations.........................................30
SECTION 6.02. Shareholder Meeting............................................33
SECTION 6.03. Acquisition Proposals; Board Recommendation....................34
SECTION 6.04. Transfer Taxes.................................................35
ARTICLE 7
COVENANTS OF IP
SECTION 7.01. IP Interim Operations..........................................36
SECTION 7.02. Shareholder Meeting; Board Recommendation......................37
SECTION 7.03. Director and Officer Liability.................................37
SECTION 7.04. Employee Benefits..............................................39
SECTION 7.05. Stock Exchange Listing.........................................40
SECTION 7.06. Conduct of MergerSub...........................................40
ii
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PAGE
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ARTICLE 8
COVENANTS OF IP AND UCC
SECTION 8.01. Reasonable Best Efforts........................................41
SECTION 8.02. Certain Filings; Cooperation in Receipt of Consents............41
SECTION 8.03. Public Announcements...........................................42
SECTION 8.04. Access to Information; Notification of Certain Matters.........43
SECTION 8.05. Further Assurances.............................................43
SECTION 8.06. Tax and Accounting Treatment...................................44
SECTION 8.07. Affiliate Letters..............................................44
SECTION 8.08. Confidentiality................................................44
SECTION 8.09. IP Standstill..................................................45
SECTION 8.10. ASR 135........................................................47
SECTION 8.11. Integration Committee..........................................47
ARTICLE 9
CONDITIONS TO THE MERGER
SECTION 9.01. Conditions to the Obligations of Each Party....................47
SECTION 9.02. Conditions to the Obligations of UCC...........................48
SECTION 9.03. Conditions to the Obligations of IP and MergerSub..............49
ARTICLE 10
TERMINATION
SECTION 10.01. Termination...................................................50
SECTION 10.02. Effect of Termination.........................................51
SECTION 10.03. Fees and Expenses.............................................51
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Notices.......................................................53
SECTION 11.02. Survival of Representations, Warranties and Covenants
after the Effective Time....................................54
SECTION 11.03. Amendments; No Waivers........................................54
SECTION 11.04. Successors and Assigns........................................55
SECTION 11.05. Governing Law.................................................55
SECTION 11.06. Counterparts; Effectiveness; Third Party Beneficiaries........55
SECTION 11.07. Jurisdiction..................................................55
SECTION 11.08. Waiver of Jury Trial..........................................56
SECTION 11.09. Enforcement...................................................56
SECTION 11.10. Entire Agreement..............................................56
iii
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EXHIBITS
Exhibit A-1 -- Affiliate's Letter Relating to Pooling (UCC)
Exhibit A-2 -- Affiliate's Letter Relating to Pooling (IP)
Exhibit A-3 -- Affiliate's Letter Relating to the Securities Act (UCC)
Exhibit B -- Tax Representations of UCC
Exhibit C -- Tax Representations of IP and MergerSub
SCHEDULES
UCC Disclosure Schedule
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of November 24, 1998 among Union
Camp Corporation, a Virginia corporation ("UCC"), International Paper Company, a
New York corporation ("IP"), and Maple Acquisition, Inc., a Delaware corporation
and a wholly owned IP Subsidiary ("MergerSub").
RECITALS
WHEREAS, the Boards of Directors of UCC and IP each have determined
that a business combination between UCC and IP is advisable and in the best
interests of their respective companies and shareholders and presents an
opportunity for their respective companies to achieve long-term strategic and
financial benefits, and accordingly have agreed to effect the merger provided
for herein upon the terms and subject to the conditions set forth herein;
WHEREAS, the parties hereto intend that the merger provided for herein
shall qualify for U.S. federal income tax purposes as a reorganization (a "368
Reorganization") within the meaning of Section 368(a) of the U.S. Internal
Revenue Code of 1986, as amended (together with the rules and regulations
promulgated thereunder, the "Code");
WHEREAS, the parties hereto intend that the merger provided for herein
be accounted for as a "pooling-of-interests" for financial reporting purposes;
and
WHEREAS, by resolutions duly adopted, the respective Boards of
Directors of UCC, IP and MergerSub have approved and adopted this Agreement and
the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, and
intending to be legally bound, the parties hereto agree as follows:
ARTICLE 1 DEFINITIONS
SECTION 1.01. Definitions. (a) As used herein, the following terms have
the following meanings:
<PAGE>
"Acquisition Proposal" means any offer or proposal for, or indication
of interest in, a merger, consolidation, share exchange, business combination,
reorganization, recapitalization, liquidation, dissolution or other similar
transaction involving, or any purchase of 15% or more of the assets or any class
of equity securities of, UCC or any Significant Subsidiary of UCC, other than
the transactions contemplated by this Agreement.
"Affiliate" means, with respect to any Person, any other Person,
directly or indirectly, controlling, controlled by, or under common control
with, such Person. For purposes of this definition, the term "control"
(including the correlative terms "controlling", "controlled by" and "under
common control with") means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract, or otherwise.
"Business Day" means any day other than a Saturday, Sunday or one on
which banks are authorized by law to close in New York, New York.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Governmental Entity" means any federal, state or local governmental
authority, any transgovernmental authority or any court, administrative or
regulatory agency or commission or other governmental authority or agency,
domestic or foreign.
"IP Balance Sheet" means IP's consolidated balance sheet included in
the IP 10-K relating to its fiscal year ended on December 31, 1997.
"IP Common Share" means one share of common stock of IP, par value
$1.00 per share.
"IP SEC Documents" means (i) IP's annual reports on Form 10-K for its
fiscal years ended December 31, 1996 and December 31, 1997 (the "IP 10-Ks"),
(ii) IP's quarterly reports on Form 10-Q (the "IP 10-Qs") for its fiscal
quarters ended September 30, June 30 and March 31, of fiscal years 1997 and
1998, (iii) IP's proxy or information statements relating to meetings of, or
actions taken without a meeting by, IP's shareholders held since December 31,
1996, and (iv) all other reports filings, registration statements and other
documents filed by it with the SEC since December 31, 1996.
2
<PAGE>
"knowledge" means, with respect to the matter in question, if any of
the executive officers of UCC or IP, as the case may be, has actual knowledge of
such matter.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
provided, however, that the term "Lien" shall not include (i) liens for water
and sewer charges and current taxes not yet due and payable or being contested
in good faith and (ii) mechanics', carriers', workers', repairers',
materialmen's, warehousemen's and other similar liens arising or incurred in the
ordinary course of business.
"Material Adverse Effect" means a material adverse effect on the
financial condition, business or results of operations of a Person and its
Subsidiaries, taken as a whole, but shall exclude any material adverse effect
arising out of any change or development relating to (i) U.S. or global economic
or industry conditions, (ii) changes in U.S. or global financial markets or
conditions, (iii) any generally applicable change in law, rule or regulation or
GAAP or interpretation of any thereof and/or (iv) the announcement of this
Agreement or the transactions contemplated hereby. "IP Material Adverse Effect"
means a Material Adverse Effect in respect of IP and "UCC Material Adverse
Effect" means a Material Adverse Effect in respect of UCC.
"NYSE" means The New York Stock Exchange.
"Person" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization, including any Governmental Entity.
"Proxy Statement/Prospectus" means the joint proxy statement/
prospectus included in the Registration Statement relating to the UCC
Shareholder Meeting and the IP Shareholder Meeting, together with any amendments
or supplements thereto.
"Registration Statement" means the Registration Statement on Form S-4
registering under the Securities Act the IP Common Shares issuable in connection
with the Merger.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
3
<PAGE>
"Significant Subsidiary" means any Subsidiary that constitutes a
"significant subsidiary" of such Person within the meaning of Rule 1-02 of
Regulation S-X of the Exchange Act.
"Subsidiary" means, with respect to any Person, any corporation or
other 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.
"IP Subsidiary" means a Subsidiary of IP and "UCC Subsidiary" means a Subsidiary
of UCC.
"Superior Proposal" means a bona fide, written Acquisition Proposal for
at least a majority of the outstanding UCC Common Shares that is on terms that a
majority of UCC's Board of Directors determines in good faith (after
consultation with an investment bank of nationally recognized reputation and
UCC's outside counsel) (i) would result in a transaction, if consummated, that
is more favorable to UCC's shareholders (in their capacities as shareholders),
from a financial point of view (taking into account, among other things, all
legal, financial, regulatory and other aspects of the proposal and the identity
of the offeror) than the transactions contemplated hereby (after giving effect
to any revised proposal made by or on behalf of IP prior to the end of the
five-Business-Day-period referred to in Section 6.03(d)) and (ii) is reasonably
capable of being consummated.
"UCC Balance Sheet" means UCC's consolidated balance sheet included in
the UCC 10-K relating to its fiscal year ended on December 31, 1997.
"UCC Common Share" means one share of common stock of UCC, $1.00 par
value per share.
"UCC SEC Documents" means (i) the annual reports on Form 10-K of UCC
(the "UCC 10-Ks") and Bush Boake Allen Inc., a Virginia corporation ("BBA"), for
their respective fiscal years ended December 31, 1996 and December 31, 1997,
(ii) the quarterly reports on Form 10-Q of UCC (the "UCC 10-Qs") and BBA for
their respective fiscal quarters ended September 30, June 30 and March 31 of
fiscal years 1997 and 1998, (iii) UCC's and BBA's proxy or information
statements relating to meetings of, or actions taken without a meeting by, the
UCC shareholders and the BBA shareholders, respectively, held since December 31,
1996, and (iv) all other reports filings, registration statements and other
documents filed by UCC and BBA with the SEC since December 31, 1996; provided
that, for the purposes of the representations and warranties made by UCC in
Section 4.07 only, the term "UCC SEC Documents" shall not be deemed to include
any reports, statements, filings or documents filed with the SEC by BBA.
4
<PAGE>
"Virginia Code" means the Virginia Stock Corporation Act, as amended.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Terms Section
----- -------
Advance Notice 7.04(b)
Articles of Merger 2.01(b)
Average IP Share Price 3.01(a)
BBA 1.01(a)
Certificates 3.03(a)
Closing 2.01(d)
Code Recitals
Commission 2.01(b)
Effective Time 2.01(b)
End Date 10.01(b)(i)
Environmental Laws 4.17(b)
ERISA 4.13(a)
ERISA Affiliate 4.13(a)
Escrow Account 3.03(h)
Escrow Agent 3.03(h)
Escrow Agreement 3.03(h)
Exchange Agent 3.03(a)
Exchange Fund 3.03(a)
Exchange Ratio 3.02(a)
GAAP 4.08(a)
HSR Act 4.03(b)
Indemnified Parties 7.03(b)
IP Preamble
IP Cumulative Preferred 5.05(a)
IP Intellectual Property 5.14
IP Material Adverse Effect 1.01(a)
IP Recommendation 7.02
IP Returns 5.11
IP Securities 5.05(b)
IP Serial Preferred 5.05(a)
IP Shareholder Approval 5.17(a)
IP Shareholder Meeting 7.02
IP Subsidiary 1.01(a)
IP 10-Ks 1.01(a)
IP 10-Qs 1.01(a)
Merger 2.01(a)
MergerSub Common Share 3.01(a)
<PAGE>
Terms Section
----- -------
Merger Consideration 3.01(b)
MergerSub Preamble
Multiemployer Plan 4.13(b)
Random Trading Days 3.01(a)
Retirement Plan 4.13(b)
Rights 3.01(b)
Rights Agreement 3.01(b)
RSPP 7.04(c)
Stock Unit Plan 7.04(c)
Surviving Corporation 2.01(a)
Termination Fee 10.03(b)
Third Party Acquisition Event 10.03(c)
368 Reorganization Recitals
Transfer Taxes 6.04
UCC Preamble
UCC Employee Plans 4.13(a)
UCC Intellectual Property 4.16
UCC Material Adverse Effect 1.01(a)
UCC Option 3.04(a)
UCC Recommendation 6.02
UCC Returns 4.12
UCC Securities 4.05(b)
UCC Shareholder Approval 4.19(a)
UCC Shareholder Meeting 6.02
UCC Subsidiary 1.01(a)
UCC 10-Ks 1.01(a)
UCC 10-Qs 1.01(a)
ARTICLE 2
THE MERGER
SECTION 2.01. The Merger. (a) At the Effective Time, MergerSub shall be
merged (the "Merger") with and into UCC in accordance with the terms and
conditions of this Agreement and of the Virginia Code, at which time the
separate existence of MergerSub shall cease and UCC shall continue its
existence. In its capacity as the corporation surviving the Merger, this
Agreement sometimes refers to UCC as the "Surviving Corporation".
(b) As soon as practicable after satisfaction or, to the extent
permitted hereby, waiver of all conditions to the Merger set forth herein, UCC
and MergerSub will file articles of merger (the "Articles of Merger") with the
State
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Corporation Commission of the Commonwealth of Virginia (the "Commission") and
make all other filings or recordings required by the Virginia Code in connection
with the Merger. The "Effective Time" shall be the date and time that the
Certificate of Merger is issued by the Commission in respect of the Merger
(unless otherwise agreed upon by the parties and specified in the Articles of
Merger, in which case, subject to Section 13.1-606 of the Virginia Code, the
Effective Time shall be the date and time so specified).
(c) From and after the Effective Time, the Merger shall have the
effects set forth in Section 13.1-721 of the Virginia Code.
(d) The closing of the Merger (the "Closing") shall be held at the
offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York, NY (or such
other place as agreed by the parties) on a date to be specified by the parties,
which shall be no later than the second Business Day after satisfaction or, to
the extent permitted hereby, waiver of the conditions set forth in Article 9,
unless the parties hereto agree to another date.
SECTION 2.02. Organizational Documents. The Articles of Merger shall
provide that at the Effective Time (i) MergerSub's articles of incorporation in
effect immediately prior to the Effective Time shall be the Surviving
Corporation's articles of incorporation, provided that the Surviving Corporation
shall retain its current name and (ii) MergerSub's bylaws in effect immediately
prior to the Effective Time shall be the Surviving Corporation's bylaws, in each
case until amended in accordance with applicable law.
SECTION 2.03. Directors and Officers. (a) IP agrees to take all
necessary actions so that, on the second Business Day after the Effective Time,
IP's Board of Directors shall include W. Craig McClelland and two individuals
who are serving on UCC's Board of Directors as of the date hereof. The parties
hereto understand and agree that such two individuals must be reasonably
acceptable to the nominating committee of IP's Board of Directors, in its sole
discretion. The three individuals elected to IP's Board of Directors as
contemplated by this Section 2.03 shall be apportioned equally among the three
classes of IP's Board of Directors.
(b) From and after the Effective Time (until successors are duly
elected or appointed and qualified), (i) MergerSub's directors at the Effective
Time shall be the Surviving Corporation's directors and (ii) UCC's officers
immediately prior to the Effective Time shall be the Surviving Corporation's
officers.
7
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ARTICLE 3
CONVERSION OF SECURITIES AND RELATED MATTERS
SECTION 3.01. Conversion of Capital Stock. At the Effective Time, by
virtue of the Merger:
(a) Each share of common stock of MergerSub (each, a "MergerSub Common
Share") outstanding immediately prior to the Effective Time shall be converted
into and become one share of common stock of the Surviving Corporation.
(b) Except as otherwise provided in Section 3.02(b), each UCC Common
Share outstanding immediately prior to the Effective Time, together with the
rights ("Rights") attached thereto and issued pursuant to the Amended and
Restated Rights Agreement dated as of June 25, 1996, between UCC and The Bank of
New York, as Rights Agent (the "Rights Agreement"), shall be converted into the
right to receive a number of IP Common Shares equal to the Exchange Ratio. This
Agreement shall refer to the IP Common Shares required to be issued pursuant to
this Section 3.01(b), together with any cash payments required to be made in
lieu of fractional IP Common Shares, collectively as the "Merger Consideration."
(c) Each UCC Common Share held by UCC as treasury stock or owned by IP
or any IP Subsidiary immediately prior to the Effective Time shall be canceled,
and no payment shall be made in respect thereof.
SECTION 3.02. Exchange Ratio; Fractional Shares; Adjustments. (a) The
"Exchange Ratio" (as the same may be adjusted pursuant to Section 3.02(c)) shall
be determined by dividing 71.00 by the Average IP Share Price, provided that,
(i) if the Average IP Share Price is less than $43.70, the Exchange Ratio shall
be 1.6247 and (ii) if the Average IP Share Price is greater than $48.30, the
Exchange Ratio shall be 1.4700.
For purposes of this Agreement, (i) "Average IP Share Price" means the
average last sales price per IP Common Share on the NYSE Composite Tape for the
Random Trading Days and (ii) "Random Trading Days" means the ten trading days
selected by lot out of the twenty trading days ending on and including the fifth
trading day preceding the Effective Time. The Random Trading Days shall be
selected by lot by IP and UCC at 5:00 p.m. New York time on the second trading
day preceding the Effective Time.
(b) No fractional IP Common Shares shall be issued in the Merger. All
fractional IP Common Shares that a holder of any UCC Common Shares would
8
<PAGE>
otherwise be entitled to receive as a result of the Merger shall be aggregated.
If a fractional IP Common Share results from such aggregation, the holder shall
be entitled to receive, in lieu thereof, a cash amount, without interest,
determined by multiplying the Average IP Share Price by the fraction of an IP
Common Share to which such holder would otherwise have been entitled. As
promptly as practicable after the determination of the amount of cash, if any,
to be paid to holders of fractional share interests, the Exchange Agent (as
hereinafter defined) shall so notify IP, and IP shall deposit such amount with
the Exchange Agent and shall cause the Exchange Agent to forward payments to
such holders of fractional share interests, subject to and in accordance with
the terms of Section 3.03.
(c) If at any time during the period between the date of this Agreement
and the Effective Time, any change in the outstanding shares of capital stock of
IP or securities convertible or exchangeable into capital stock of IP shall
occur, including by reason of any reclassification, recapitalization, stock
split or combination, exchange or readjustment of shares, or any dividend or
distribution thereon (other than regular quarterly cash dividends) or a record
date with respect to any of the foregoing shall occur during such period, the
number of IP Common Shares constituting part of the Merger Consideration shall
be appropriately adjusted to provide to the holders of the IP Common Shares and
the UCC Common Shares the same economic effect as contemplated by this Agreement
prior to the consummation of such event.
SECTION 3.03. Exchange of Certificates.
(a) Exchange Agent. Promptly after the date hereof, IP shall appoint a
bank or trust company reasonably acceptable to UCC as an agent (the "Exchange
Agent") for the benefit of holders of UCC Common Shares for the purpose of
exchanging, pursuant to this Article 3, certificates ("Certificates") that
immediately prior to the Effective Time represented outstanding UCC Common
Shares which were converted into the right to receive the Merger Consideration.
IP will make available to the Exchange Agent, as needed, the Merger
Consideration, together with any dividends or distributions with respect
thereto, if any, to be paid in respect of UCC Common Shares pursuant to this
Article 3 (the "Exchange Fund"), and except as contemplated by Section 3.03(f)
or Section 3.03(g) hereof, the Exchange Fund shall not be used for any other
purpose.
(b) Exchange Procedures. As promptly as practicable after the Effective
Time, IP shall send, or will cause the Exchange Agent to send, to each holder of
record of a Certificate or Certificates a letter of transmittal and instructions
(which shall be in customary form and specify that delivery shall be effected,
and risk of loss and title shall pass, only upon delivery of the Certificates to
the Exchange Agent), for use in the exchange contemplated by this Section 3.03.
Upon
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<PAGE>
surrender of a Certificate to the Exchange Agent, together with a duly executed
letter of transmittal, the holder of such Certificate shall be entitled to
receive in exchange therefor the Merger Consideration and unpaid dividends and
distributions thereon, if any, as provided in this Article 3 in respect of the
UCC Common Shares represented by such Certificate (after giving effect to any
required withholding tax). Until surrendered as contemplated by this Section
3.03, each Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive the Merger Consideration and unpaid
dividends and distributions thereon, if any, as provided in this Article 3. If
any portion of the Merger Consideration is to be paid to a Person other than the
Person in whose name the Certificate is registered, it shall be a condition to
such payment that the Certificate so surrendered shall be properly endorsed or
otherwise be in proper form for transfer and that the Person requesting such
payment shall pay to the Exchange Agent any transfer or other taxes required as
a result of such payment to a Person other than the registered holder of such
Certificate or establish to the satisfaction of the Exchange Agent that such tax
has been paid or is not payable. If any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed and, if required by
IP, the posting by such Person of a bond, in such reasonable amount as IP may
direct, as indemnity against any claim that may be made against it with respect
to such Certificate, the Exchange Agent will deliver in exchange for such lost,
stolen or destroyed Certificate, the proper amount of the Merger Consideration,
together with any unpaid dividends and distributions on any such IP Common
Shares, as contemplated by this Article 3.
(c) Distributions with Respect to Unexchanged Shares. Whenever a
dividend or other distribution is declared by IP in respect of the IP Common
Shares, the record date for which is at or after the Effective Time, that
declaration shall include dividends or other distributions in respect of all IP
Common Shares issuable pursuant to this Agreement. No dividends or other
distributions declared or made after the Effective Time with respect to IP
Common Shares constituting part of the Merger Consideration shall be paid to the
holder of any unsurrendered Certificate, and no cash payment in lieu of
fractional shares shall be paid to any such holder, until such Certificate is
surrendered as provided in this Section 3.03. Following such surrender, there
shall be paid, without interest, to the Person in whose name the IP Common
Shares have been registered (i) at the time of such surrender, the amount of
dividends or other distributions with a record date after the Effective Time
previously paid or payable on the date of such surrender with respect to such
whole IP Common Shares, less the amount of any withholding taxes that may be
required thereon, and (ii) at the appropriate payment date subsequent to
surrender, the amount of dividends or other distributions with a record date
after the Effective Time but prior to surrender and a payment date
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subsequent to surrender payable with respect to such whole IP Common Shares,
less the amount of any withholding taxes which may be required thereon.
(d) No Further Ownership Rights in UCC Common Shares. All IP Common
Shares issued upon surrender of Certificates in accordance with the terms hereof
(including any cash paid pursuant to this Article 3) shall be deemed to have
been issued in full satisfaction of all rights pertaining to such UCC Common
Shares represented thereby, and, as of the Effective Time, the stock transfer
books of UCC shall be closed and there shall be no further registration of
transfers on UCC's stock transfer books of UCC Common Shares outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation for any reason, they
shall be canceled and exchanged as provided in this Section 3.03.
(e) Return of Merger Consideration. Upon demand by IP, the Exchange
Agent shall deliver to IP any portion of the Merger Consideration made available
to the Exchange Agent pursuant to this Section 3.03 that remains undistributed
to holders of UCC Common Shares one year after the Effective Time. Holders of
Certificates who have not complied with this Section 3.03 prior to such demand
shall thereafter look only to IP for payment of any claim to the Merger
Consideration and dividends or distributions, if any, in respect thereof.
(f) No Liability. None of IP, the Surviving Corporation or the Exchange
Agent shall be liable to any Person in respect of any UCC Common Shares (or
dividends or distributions with respect thereto) for any amounts paid to a
public official pursuant to any applicable abandoned property, escheat or
similar law. Any amounts remaining unclaimed by any holder of UCC Common Shares
immediately prior to such time when such amounts would otherwise escheat to or
become the property of any Governmental Entity, shall, to the extent permitted
by applicable laws, become the property of IP, free and clear of all claims or
interest of any Person previously entitled thereto.
(g) Withholding Rights. Each of the Surviving Corporation and IP shall
be entitled to deduct and withhold from the Merger Consideration (and any
dividends or distributions thereon) otherwise payable hereunder to any Person
such amounts as it is required to deduct and withhold with respect to the making
of such payment under any provision of federal, state, local or foreign income
tax law. To the extent that the Surviving Corporation or IP so withholds those
amounts, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of UCC Common Shares in respect of
which such deduction and withholding was made by the Surviving Corporation or
IP, as the case may be.
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(h) Tax Escrow. Pursuant to an escrow agreement (the "Escrow
Agreement") to be entered into by UCC with an escrow agent (the "Escrow Agent")
selected mutually by UCC and IP, UCC shall, immediately prior to the Effective
Time, deposit in an account (the "Escrow Account") with the Escrow Agent funds
sufficient in the aggregate to pay any Transfer Taxes (as defined herein)
attributable to the Merger. Upon certification by UCC, these funds will be
released from the Escrow Account, (i) to pay any Transfer Taxes that become
payable under any applicable state, local, foreign or provincial law, or (ii) to
UCC, upon UCC's reasonable determination and certification that UCC's
obligations in respect of the amounts specified above in this Section 3.03(h)
have at such time been fully satisfied. The Escrow Agreement shall permit the
Escrow Agent to invest the funds in the Escrow Account as directed by UCC. The
Escrow Agreement shall be, in form and substance, reasonably acceptable to IP.
SECTION 3.04. UCC Stock Options. (a) At the Effective Time, each option
to purchase UCC Common Shares (each, a "UCC Option") outstanding under any stock
option or compensation plan or arrangement of UCC, whether or not vested or
exercisable, shall be deemed to constitute an option to acquire, on the same
terms and conditions as were applicable under such UCC Option, the same number
of IP Common Shares as the holder of such UCC Option would have been entitled to
receive pursuant to this Agreement had such holder exercised such UCC Option in
full immediately prior to the Effective Time (rounded up to the nearest whole
number), at a price per share (rounded down to the nearest whole cent) equal to
(x) the aggregate exercise price for the UCC Common Shares otherwise purchasable
pursuant to such UCC Option divided by (y) the number of full IP Common Shares
deemed purchasable pursuant to such UCC Option in accordance with the foregoing.
The parties hereto agree that this Section 3.04 shall be interpreted in a manner
that is consistent with the Merger being treated as a "pooling of interests" as
described in the first sentence of Section 4.21(a).
(b) Prior to the Effective Time, UCC shall take all actions (including,
if appropriate, amending the terms of UCC's stock option or compensation plans
or arrangements) that are necessary to give effect to the transactions
contemplated by Sections 3.04(a).
(c) Effective at the Effective Time, IP shall assume each UCC Option in
accordance with the terms of the relevant stock option plan or compensation
arrangement under which it was issued and the stock option agreement by which it
is evidenced. At or prior to the Effective Time, IP shall take all corporate
action necessary to reserve for issuance a sufficient number of IP Common Shares
for delivery upon exercise of the UCC Options assumed by it in accordance with
this Section 3.04(c). As soon as practicable after the Effective Time, IP shall
file a registration statement on Form S-3 or Form S-8, as the case may be (or
any
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successor or other appropriate forms), or another appropriate form (or shall
cause such UCC Option to be deemed to be an option issued pursuant to an IP
stock option or compensation plan for which a sufficient number of IP Common
Shares have previously been registered pursuant to an appropriate registration
form) with respect to the IP Common Shares subject to such UCC Options, and
shall use its reasonable best efforts to maintain the effectiveness of such
registration statement(s) (and maintain the current status of the prospectus(es)
contained therein) for so long as such UCC Options remain outstanding.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF UCC
Except as disclosed in (i) the UCC Disclosure Schedule attached hereto
(which disclosure schedule shall make a specific reference to the particular
Section or subsection of this Agreement to which exception is being taken but
once made shall be deemed made for all purposes of the UCC Disclosure Schedule)
or (ii) the UCC SEC Documents filed or made prior to the date hereof, UCC
represents and warrants to IP that:
SECTION 4.01. Corporate Existence and Power. UCC is a corporation duly
incorporated, validly existing and in good standing under the laws of the
Commonwealth of Virginia, and has all corporate powers required to carry on its
business as now conducted. UCC is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the character of
the property owned or leased by it or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified,
individually or in the aggregate, would not be reasonably likely to have a UCC
Material Adverse Effect. UCC has heretofore made available to IP true and
complete copies of UCC's articles of incorporation and bylaws as currently in
effect.
SECTION 4.02. Corporate Authorization. The execution, delivery and
performance by UCC of this Agreement and the consummation by UCC of the
transactions contemplated hereby are within UCC's corporate powers and, except
for the UCC Shareholder Approval (as defined herein), have been duly authorized
by all necessary corporate action. Assuming that this Agreement constitutes the
valid and binding obligation of IP and MergerSub, this Agreement constitutes a
valid and binding agreement of UCC, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and similar laws,
now or hereafter in effect, relating to or affecting creditors' rights and
remedies and to general principles of equity.
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SECTION 4.03. Governmental Authorization. The execution, delivery and
performance by UCC of this Agreement and the consummation by UCC of the
transactions contemplated hereby require no action by or in respect of, or
filing with, any Governmental Entity other than (a) the filing of (i) an
articles of merger in accordance with the Virginia Code, (ii) a certificate of
merger in accordance with the Delaware General Corporation Law, and (iii)
appropriate documents with the relevant authorities of other states or
jurisdictions in which UCC or any UCC Subsidiary is qualified to do business;
(b) compliance with any applicable requirements of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the "HSR Act"); (c) compliance with, and the
filing (if necessary) of a notification with the European Commission under,
Council Regulation (EEC) No. 4064/89 and any other foreign filings or approvals;
(d) compliance with any applicable requirements of the Securities Act and the
Exchange Act; (e) such as may be required under any applicable state securities
or blue sky laws; (f) such as may be required under the New Jersey Industrial
Site Recovery Act and the regulations promulgated thereunder; (g) such as may be
required under the Connecticut Hazardous Waste Establishment Transfer Act and
the rules and regulations promulgated thereunder; and (h) such other consents,
approvals, actions, orders, authorizations, registrations, declarations and
filings which, if not obtained or made, would not, individually or in the
aggregate, (x) be reasonably likely to have a UCC Material Adverse Effect or
(assuming for this purpose that the Effective Time had occurred) an IP Material
Adverse Effect, or (y) prevent or materially impair the ability of UCC to
consummate the transactions contemplated by this Agreement.
SECTION 4.04. Non-Contravention. The execution, delivery and
performance by UCC of this Agreement and the consummation by UCC of the
transactions contemplated hereby do not and will not (a) contravene or conflict
with UCC's articles of incorporation or bylaws, (b) assuming compliance with the
matters referred to in Section 4.03, contravene or conflict with or constitute a
violation of any provision of any law, regulation, judgment, injunction, order
or decree binding upon or applicable to UCC or any UCC Subsidiary, (c)
constitute a default under or give rise to a right of termination, cancellation
or acceleration of any right or obligation of UCC or any UCC Subsidiary or to a
loss of any benefit or status to which UCC or any UCC Subsidiary is entitled
under any provision of any agreement, contract or other instrument binding upon
UCC or any UCC Subsidiary or any license, franchise, permit or other similar
authorization held by UCC or any UCC Subsidiary, or (d) result in the creation
or imposition of any Lien on any asset of UCC or any UCC Subsidiary other than,
in the case of each of (b), (c) and (d), any such items that would not,
individually or in the aggregate (x) be reasonably likely to have a UCC Material
Adverse Effect or (y) prevent or materially impair the ability of UCC to
consummate the transactions contemplated by this Agreement.
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SECTION 4.05. Capitalization. (a) The authorized capital stock of UCC
consists of 125,000,000 UCC Common Shares and 1,000,000 shares of preferred
stock, par value $1.00 per share (of which 125,000 have been designated Series A
Junior Participating Preferred Stock and reserved for issuance upon exercise of
the Rights). As of November 20, 1998, there were outstanding (x) 69,196,486 UCC
Common Shares, (y) no shares of UCC preferred stock and (z) (as of November 23,
1998) stock options to purchase an aggregate of 5,151,216 UCC Common Shares (of
which options to purchase an aggregate of 3,272,911 UCC Common Shares were
exercisable) and approximately 15,000 stock units outstanding under the Stock
Unit Plan (as defined in Section 7.04(c)). All outstanding shares of capital
stock of UCC have been duly authorized and validly issued and are fully paid and
nonassessable.
(b) As of the date hereof, except (i) as set forth in this Section
4.05, (ii) the Rights and (iii) for changes since November 20, 1998 resulting
from the exercise of stock options or the conversion of stock units and dividend
equivalents thereon outstanding on such date, there are no outstanding (x)
shares of capital stock or other voting securities of UCC, (y) securities of UCC
convertible into or exchangeable for shares of capital stock or voting
securities of UCC, and (z) options or other rights to acquire from UCC, and no
obligation of UCC to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of UCC
(the items in clauses (x), (y) and (z) being referred to collectively as the
"UCC Securities"). There are no outstanding obligations of UCC or any UCC
Subsidiary to repurchase, redeem or otherwise acquire any UCC Securities.
SECTION 4.06. Subsidiaries. (a) Each Significant Subsidiary of UCC is a
corporation duly incorporated or an entity duly organized, and is validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization, has all powers and authority and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted and is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, in each case with such exceptions as,
individually or in the aggregate, would not be reasonably likely to have, a UCC
Material Adverse Effect. The UCC Disclosure Schedule sets forth a list of all
Significant Subsidiaries of UCC and their respective jurisdictions of
incorporation or organization and identifies UCC's (direct or indirect)
percentage equity ownership interest therein.
(b) All of the outstanding shares of capital stock of, or other
ownership interest in, each Significant Subsidiary of UCC has been validly
issued and is fully paid and nonassessable. All of the outstanding capital stock
of, or other
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ownership interest, which is owned, directly or indirectly, by UCC in, each of
its Significant Subsidiaries is owned free and clear of any Lien and free of any
other limitation or restriction (including any limitation or restriction on the
right to vote, sell or otherwise dispose of such capital stock or other
ownership interests) with such exceptions as, individually or in the aggregate,
would not be reasonably likely to have, a UCC Material Adverse Effect. There are
no outstanding (i) securities of UCC or any of its Significant Subsidiaries
convertible into or exchangeable or exercisable for shares of capital stock or
other voting securities or ownership interests in any of its Significant
Subsidiaries, (ii) options, warrants or other rights to acquire from UCC or any
of its Significant Subsidiaries, and no other obligation of UCC or any of its
Significant Subsidiaries to issue, any capital stock, voting securities or other
ownership interests in, or any securities convertible into or exchangeable or
exercisable for any capital stock, voting securities or ownership interests in,
any of its Significant Subsidiaries or (iii) obligations of UCC or any of its
Significant Subsidiaries to repurchase, redeem or otherwise acquire any
outstanding securities of any of its Significant Subsidiaries or any capital
stock of, or other ownership interests in, any of its Significant Subsidiaries.
SECTION 4.07. UCC SEC Documents. (a) UCC has made available to IP the
UCC SEC Documents. UCC has filed all reports, filings, registration statements
and other documents required to be filed by it with the SEC since December 31,
1996. No UCC Subsidiary is required to file any form, report, registration
statement or prospectus or other document with the SEC.
(b) As of its filing date, each UCC SEC Document complied as to form in
all material respects with the applicable requirements of the Securities Act
and/or the Exchange Act, as the case may be.
(c) No UCC SEC Document filed pursuant to the Exchange Act contained,
as of its filing date, any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading. No
UCC SEC Document, as amended or supplemented, if applicable, filed pursuant to
the Securities Act contained, as of the date such document or amendment became
effective, any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading.
SECTION 4.08. Financial Statements; No Material Undisclosed
Liabilities. (a) The audited consolidated financial statements and unaudited
consolidated interim financial statements of UCC included in the UCC 10-Ks and
the UCC 10-Qs fairly present in all material respects, in conformity with
generally accepted
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accounting principles applied on a consistent basis ("GAAP") (except as may be
indicated in the notes thereto), the consolidated financial position of UCC and
its consolidated Subsidiaries as of the dates thereof and their consolidated
results of operations and changes in financial position for the periods then
ended (subject to normal year-end adjustments in the case of any unaudited
interim financial statements).
(b) There are no liabilities of UCC or any UCC Subsidiary of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, in each case, that are required by GAAP to be set forth on a
consolidated balance sheet of UCC, other than:
(i) liabilities or obligations disclosed or provided for in the
UCC Balance Sheet or disclosed in the notes thereto;
(ii) liabilities or obligations under this Agreement or incurred
in connection with the transactions contemplated hereby; and
(iii) other liabilities or obligations, which, individually or in
the aggregate, would not be reasonably likely to have a UCC Material
Adverse Effect.
SECTION 4.09. Information to Be Supplied. (a) The information to be
supplied by UCC expressly for inclusion or incorporation by reference in the
Proxy Statement/Prospectus will (i) in the case of the Registration Statement,
at the time it becomes effective, not 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 not misleading and (ii) in the
case of the remainder of the Proxy Statement/Prospectus, at the time of the
mailing thereof, at the time of the UCC Shareholder Meeting and at the time of
the IP Shareholder Meeting, not 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/Prospectus will comply (with
respect to information relating to UCC) as to form in all material respects with
the provisions of the Securities Act and the Exchange Act.
(b) Notwithstanding the foregoing, UCC makes no representation or
warranty with respect to any statements made or incorporated by reference in the
Proxy Statement/Prospectus based on information supplied by IP or MergerSub.
SECTION 4.10. Absence of Certain Changes. Since December 31, 1997,
except as otherwise expressly contemplated by this Agreement, UCC and the
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UCC Subsidiaries have conducted their business in the ordinary course consistent
with past practice and there has not been (a) any damage, destruction or other
casualty loss (whether or not covered by insurance) affecting the business or
assets of UCC or any UCC Subsidiary that, individually or in the aggregate, has
had or would be reasonably likely to have a UCC Material Adverse Effect or (b)
any action, event, occurrence, development or state of circumstances or facts
that, individually or in the aggregate, has had or would be reasonably likely to
have a UCC Material Adverse Effect.
SECTION 4.11. Litigation. There is no action, suit, investigation,
arbitration or proceeding pending against, or to the knowledge of UCC threatened
against, UCC or any UCC Subsidiary or any of their respective assets or
properties before any arbitrator or Governmental Entity that, individually or in
the aggregate, would be reasonably likely to have, a UCC Material Adverse
Effect.
SECTION 4.12. Taxes. Except as set forth in the UCC Balance Sheet
(including the notes thereto), (i) all tax returns, statements, reports and
forms (collectively, the "UCC Returns") required to be filed with any taxing
authority by, or with respect to, UCC and the UCC Subsidiaries have been filed
in accordance with all applicable laws; (ii) UCC and the UCC Subsidiaries have
timely paid all taxes shown as due and payable on the UCC Returns that have been
so filed, and, as of the time of filing, the UCC Returns correctly reflected the
facts regarding the income, business, assets, operations, activities and the
status of UCC and the UCC Subsidiaries (other than taxes which are being
contested in good faith and for which adequate reserves are reflected on the UCC
Balance Sheet); (iii) UCC and the UCC Subsidiaries have made provision for all
taxes payable by them for which no UCC Return has yet been filed; (iv) the
charges, accruals and reserves for taxes with respect to UCC and its
Subsidiaries reflected on the UCC Balance Sheet are adequate under GAAP to cover
the tax liabilities accruing through the date thereof; (v) there is no action,
suit, proceeding, audit or claim now proposed or pending against or with respect
to UCC or any of the UCC Subsidiaries in respect of any tax where there is a
reasonable possibility of a materially adverse determination; and (vi) neither
UCC nor any of the UCC Subsidiaries has been a member of an affiliated,
consolidated, combined or unitary group other than one of which UCC was the
common parent.
SECTION 4.13. Employee Benefits. (a) Schedule 4.13(a) of the UCC
Disclosure Schedule contains a correct and complete list identifying each
material "employee benefit plan", as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974 ("ERISA"), each employment, severance or
similar contract, plan, arrangement or policy and each other plan or arrangement
(written or oral) providing for compensation, bonuses, profit-sharing, stock
option or other stock related rights or other forms of incentive or deferred
compensation, vacation
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benefits, insurance coverage (including any self-insured arrangements), health
or medical benefits, disability benefits, workers' compensation, supplemental
unemployment benefits, severance benefits and post-employment or retirement
benefits (including compensation, pension, health, medical or life insurance
benefits) which is maintained, administered or contributed to by UCC or any
ERISA Affiliate (as defined below) and covers any employee or former employee of
UCC or any UCC Subsidiary. Copies of such plans (and, if applicable, related
trust agreements) and all amendments thereto and written interpretations thereof
have been furnished, or will be made available upon request, to IP together with
the most recent annual report (Form 5500 including, if applicable, Schedule B
thereto) prepared in connection with any such plan. Such plans are referred to
collectively herein as the "UCC Employee Plans". For purposes of this Section
4.13, "ERISA Affiliate" of any Person means any other Person which, together
with such Person, would be treated as a single employer under Section 414 of the
Code.
(b) Schedule 4.13(b) of the UCC Disclosure Schedule separately
identifies each UCC Employee Plan that constitutes a "multiemployer plan", as
defined in Section 3(37) of ERISA (a "Multiemployer Plan"), or any other plan
subject to Title IV of ERISA (a "Retirement Plan"). No "accumulated funding
deficiency", as defined in Section 412 of the Code, has been incurred with
respect to any UCC Employee Plan which is a Retirement Plan, whether or not
waived. To the knowledge of UCC, no condition exists and no event has occurred
that would be reasonably likely to constitute grounds for termination of any UCC
Employee Plan which is a Retirement Plan or, with respect to any UCC Employee
Plan which is a Multiemployer Plan, presents a material risk of a complete or
partial withdrawal under Title IV of ERISA and neither UCC nor any of its ERISA
Affiliates has incurred any liability under Title IV of ERISA arising in
connection with the termination of, or complete or partial withdrawal from, any
plan covered or previously covered by Title IV of ERISA that would be reasonably
likely to have a UCC Material Adverse Effect. To the knowledge of UCC, nothing
has been done or omitted to be done and no transaction or holding of any asset
under or in connection with any UCC Employee Plan has occurred that will make
UCC or any UCC Subsidiary, or any officer or director of UCC or any UCC
Subsidiary, subject to any liability under Title I of ERISA or liable for any
tax pursuant to Section 4975 of the Code (assuming the taxable period of any
such transaction expired as of the date hereof) that would be reasonably likely
to have a UCC Material Adverse Effect.
(c) Each UCC Employee Plan which is intended to be qualified under
Section 401(a) of the Code is so qualified and has been so qualified during the
period from its adoption to date, and each trust forming a part thereof is
exempt from tax pursuant to Section 501(a) of the Code. UCC has furnished, or
will make
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available upon request, to IP copies of the most recent Internal Revenue Service
determination letters with respect to each such UCC Employee Plan. Each UCC
Employee Plan has been maintained in substantial compliance with its terms and
with the requirements prescribed by any and all statutes, orders, rules and
regulations, including but not limited to ERISA and the Code, which are
applicable to such UCC Employee Plan.
(d) There is no contract, agreement, plan or arrangement covering any
employee or former employee of UCC that, individually or collectively, would be
reasonably likely to give rise to the payment of any amount that would not be
deductible pursuant to the terms of Sections 162(m) or 280G of the Code.
(e) Except as disclosed in writing to IP prior to the date hereof,
there has been no amendment to, written interpretation or announcement (whether
or not written) relating to, or change in employee participation or coverage
under, any UCC Employee Plan which would increase materially the expense of
maintaining such UCC Employee Plan above the level of the expense incurred in
respect thereof for the fiscal year ended December 31, 1997.
SECTION 4.14. Compliance with Laws; Licenses, Permits and
Registrations. (a) To the knowledge of UCC, neither UCC nor any UCC Subsidiary
is in violation of, or has violated, any applicable provisions of any laws,
statutes, ordinances, regulations, judgments, injunctions, orders or consent
decrees, except for any such violations which, individually or in the aggregate,
would not be reasonably likely to have a UCC Material Adverse Effect.
(b) Each of UCC and the UCC Subsidiaries has all permits, licenses,
approvals, authorizations of and registrations with and under all federal,
state, local and foreign laws, and from all Governmental Entities required by
UCC and the UCC Subsidiaries to carry on their respective businesses as
currently conducted, except where the failure to have any such permits,
licenses, approvals, authorizations or registrations, individually or in the
aggregate, would not be reasonably likely to have a UCC Material Adverse Effect.
SECTION 4.15. Title to Properties. (a) UCC and each UCC Subsidiary have
good and marketable title to, or valid leasehold interests in, all their
properties and assets except for such as are no longer used or useful in the
conduct of their businesses or as have been disposed of in the ordinary course
of business and except for defects in title, easements, restrictive covenants
and similar Liens, encumbrances or impediments that, in the aggregate, do not
materially interfere with the ability of UCC and its Subsidiaries to conduct
their business, taken as a whole, as currently conducted. All such assets and
properties, other than assets and properties in which UCC or any UCC Subsidiary
has leasehold interests, are
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free and clear of all Liens, except for Liens that, in the aggregate, do not and
will not materially interfere with the ability of UCC and the UCC Subsidiaries
to conduct their business, taken as a whole, as currently conducted.
(b) Except as would not be reasonably likely, individually or in the
aggregate, to have a UCC Material Adverse Effect, (i) UCC and each UCC
Subsidiary are in compliance with the terms of all leases to which they are a
party and under which they are in occupancy, and all such leases are in full
force and effect and (ii) UCC and each UCC Subsidiary enjoy peaceful and
undisturbed possession under all such leases.
SECTION 4.16. Intellectual Property. Except as would not be reasonably
likely to have a UCC Material Adverse Effect, individually or in the aggregate,
UCC and the UCC Subsidiaries own or have a valid license to use each trademark,
service mark, trade name, mask work, invention, patent, trade secret, copyright,
know-how (including any registrations or applications for registration of any of
the foregoing) or any other similar type of proprietary intellectual property
right (collectively, the "UCC Intellectual Property") necessary to carry on the
business of UCC and the UCC Subsidiaries, taken as a whole, as currently
conducted. To the knowledge of UCC, neither UCC nor any UCC Subsidiary has
received any written notice of infringement of or challenge to, and, to UCC's
knowledge, there are no claims pending with respect to the rights of others to
the use of, any UCC Intellectual Property that, in any such case, individually
or in the aggregate, would be reasonably likely to have a UCC Material Adverse
Effect.
SECTION 4.17. Environmental Matters. (a) With such exceptions as,
individually or in the aggregate, would not be reasonably likely to have a UCC
Material Adverse Effect, to the knowledge of UCC, (i) no written notice,
notification, demand, request for information, citations, summons, complaint or
order has been received by, and no investigation, action, claim, suit,
proceeding or review is pending or threatened by any Person against, UCC or any
UCC Subsidiary, with respect to any applicable Environmental Law and (ii) UCC
and the UCC Subsidiaries are and have been in compliance with all applicable
Environmental Laws.
(b) For purposes of this Section 4.17 and Section 5.15, the term
"Environmental Laws" means any federal, state, local and foreign statutes, laws
(including, without limitation, common law), judicial decisions, regulations,
ordinances, rules, judgments, orders, codes, injunctions, permits or
governmental agreements relating to human health and safety, the environment or
to pollutants, contaminants, wastes, or chemicals.
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SECTION 4.18. Finders' Fees; Opinions of Financial Advisor. (a) Except
for Goldman, Sachs & Co., there is no investment banker, broker, finder or other
intermediary which has been retained by, or is authorized to act on behalf of,
UCC or any UCC Subsidiary who might be entitled to any fee or commission from IP
or any of its Affiliates upon consummation of the transactions contemplated by
this Agreement.
(b) UCC has received the opinion of Goldman, Sachs & Co., dated as of
the date hereof, to the effect that, as of such date, the Exchange Ratio is fair
to the holders of UCC Common Shares (other than IP and any IP Subsidiary) from a
financial point of view.
SECTION 4.19. Required Vote; Board Approval. (a) The only vote of the
holders of any class or series of capital stock of UCC required by law, rule or
regulation to approve this Agreement, the Merger and/or any of the other
transactions contemplated hereby is the affirmative vote (the "UCC Shareholder
Approval") of the holders of more than two-thirds of the outstanding UCC Common
Shares in favor of the adoption of this Agreement and the Merger.
(b) UCC's Board of Directors has unanimously (a) determined that this
Agreement and the transactions contemplated hereby, including the Merger, are in
the best interests of UCC and its shareholders, (b) approved this Agreement and
the transactions contemplated hereby and (c) resolved to recommend to such
shareholders that they vote in favor of adopting and approving this Agreement
and the Merger in accordance with the terms hereof.
SECTION 4.20. State Takeover Statutes; Rights Agreement. (a) UCC has
taken all actions required to be taken by it in order to exempt this Agreement
and the transactions contemplated hereby from the provisions of Sections
13.1-725 through 13.1-728 and 13.1-728.1 through 13.1-728.9 of the Virginia
Code, and accordingly, such Sections do not apply to the Merger or any of such
transactions. No other "control share acquisition", "fair price" or other
anti-takeover laws or regulations enacted under state or federal laws in the
United States apply to this Agreement or any of the transactions contemplated
hereby.
(b) UCC has taken all action necessary to (i) render the Rights
inapplicable to the Merger and the other transactions contemplated by this
Agreement and (ii) ensure that (A) neither IP, MergerSub nor any of their
Affiliates will become an Acquiring Person (as defined in the Rights Agreement)
as a result of the transactions contemplated hereby and (B) neither a
Distribution Date nor an Acquisition Date (each as defined in the Rights
Agreement) shall occur by reason of the approval or execution of this Agreement,
the
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announcement or consummation of the Merger or the announcement or consummation
of any of the other transactions contemplated by this Agreement.
SECTION 4.21. Pooling Matters; Tax Treatment. (a) UCC intends that the
Merger be accounted for under the "pooling of interests" method under the
requirements of Opinion No. 16 (Business Combinations) of the Accounting
Principles Board of the American Institute of Certified Public Accountants, the
Financial Accounting Standards Board, and the rules and regulations of the SEC.
UCC will request a letter addressed to it from PricewaterhouseCoopers LLP dated
as of a date prior to the Effective Time, and (if and when obtained) a copy of
it will be delivered to IP. Such letter shall state that PricewaterhouseCoopers
LLP believes that UCC is a pooling candidate for purposes of the transactions
contemplated hereby.
(b) Neither UCC nor any of its Affiliates has taken or agreed to take
any action or is aware of any fact or circumstance that would prevent the Merger
from qualifying (i) for "pooling of interests" accounting treatment as described
in Section 4.21(a) above or (ii) as a 368 Reorganization.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF IP
Except as disclosed in the IP SEC Documents filed or made prior to the
date hereof, IP represents and warrants to UCC that:
SECTION 5.01. Corporate Existence and Power. Each of IP and MergerSub
is a corporation duly incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation and has all corporate powers
required to carry on its business as now conducted. IP is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where the character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified would not, individually or in the aggregate, be reasonably likely to
have an IP Material Adverse Effect. IP has heretofore made available to UCC true
and complete copies of IP's restated certificate of incorporation and bylaws as
currently in effect. Since the date of its incorporation, MergerSub has not
engaged in any activities other than in connection with or as contemplated by
this Agreement.
SECTION 5.02. Corporate Authorization. The execution, delivery and
performance by IP and MergerSub of this Agreement and the consummation by IP
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and MergerSub of the transactions contemplated hereby are within the corporate
powers of IP and MergerSub and, except for the IP Shareholder Approval, have
been duly authorized by all necessary corporate action. Assuming that this
Agreement constitutes the valid and binding obligation of UCC, this Agreement
constitutes a valid and binding agreement of each of IP and MergerSub,
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and similar laws, now or hereafter in effect,
relating to or affecting creditors' rights and remedies and to general
principles of equity.
SECTION 5.03. Governmental Authorization. The execution, delivery and
performance by IP and MergerSub of this Agreement and the consummation by IP and
MergerSub of the transactions contemplated hereby require no action by or in
respect of, or filing with, any Governmental Entity other than (a) those set
forth in clauses (a) through (g) of Section 4.03 and (b) such other consents,
approvals, actions, orders, authorizations, registrations, declarations and
filings which, if not obtained or made, would not, individually or in the
aggregate, (i) be reasonably likely to have an IP Material Adverse Effect or
(assuming for this purpose that the Effective Time had occurred) a UCC Material
Adverse Effect, or (ii) prevent or materially impair the ability of IP and
MergerSub to consummate the transactions contemplated by this Agreement.
SECTION 5.04. Non-Contravention. The execution, delivery and
performance by IP and MergerSub of this Agreement and the consummation by IP and
MergerSub of the transactions contemplated hereby do not and will not (a)
contravene or conflict with the restated certificate of incorporation or bylaws
of IP or the articles of incorporation or bylaws of MergerSub, (b) assuming
compliance with the matters referred to in Section 5.03, contravene or conflict
with any provision of law, regulation, judgment, injunction, order or decree
binding upon or applicable to IP or any IP Subsidiary, (c) constitute a default
under or give rise to a right of termination, cancellation or acceleration of
any right or obligation of IP or any IP Subsidiary or to a loss of any benefit
or status to which IP or any IP Subsidiary is entitled under any provision of
any agreement, contract or other instrument binding upon IP or any IP Subsidiary
or any license, franchise, permit or other similar authorization held by IP or
any IP Subsidiary, or (d) result in the creation or imposition of any Lien on
any asset of IP or any IP Subsidiary other than, in the case of each of (b), (c)
and (d), any such items that would not, individually or in the aggregate, (x) be
reasonably likely to have an IP Material Adverse Effect or (y) prevent or
materially impair the ability of IP or MergerSub to consummate the transactions
contemplated by this Agreement.
SECTION 5.05. Capitalization of IP and MergerSub. (a) The authorized
capital stock of IP consists of 400,000,000 IP Common Shares, 400,000 shares of
Cumulative $1.00 Preferred Stock, no par value per share ("IP Cumulative
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Preferred") and 8,750,000 shares of Serial Preferred Stock, $1.00 par value per
share (the "IP Serial Preferred"). As of September 30, 1998, there were
outstanding (i) 307,306,313 IP Common Shares and 15,696 shares of IP Cumulative
Preferred and (ii) stock options to purchase an aggregate of 12,097,455 IP
Common Shares (of which options to purchase an aggregate of 5,777,178 IP Common
Shares were vested and exercisable). In addition, approximately 8,332,000 IP
Common Shares were reserved for issuance upon the conversion of the
IP-Obligated-Mandatory-Redeemable-Preferred securities of a Subsidiary trust of
IP. All outstanding shares of capital stock of IP have been duly authorized and
validly issued and are fully paid and nonassessable.
(b) As of the date hereof, except as set forth in this Section 5.05 and
except for changes since September 30, 1998 resulting from the exercise of stock
options outstanding on such date, there are no outstanding (i) shares of capital
stock or other voting securities of IP, (ii) securities of IP convertible into
or exchangeable for shares of capital stock or voting securities of IP, and
(iii) options or other rights to acquire from IP, and no obligation of IP to
issue, any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of IP (the items in clauses
(i), (ii) and (iii) being referred to collectively as the "IP Securities").
There are no outstanding obligations of IP or any IP Subsidiary to repurchase,
redeem or otherwise acquire any IP Securities.
(c) The IP Common Shares to be issued as part of the Merger
Consideration have been duly authorized and, when issued and delivered in
accordance with the terms of this Agreement, will have been validly issued,
fully paid and nonassessable and free of any preemptive or other similar right.
(d) The authorized capital stock of MergerSub consists solely of 100
MergerSub Common Shares, of which, as of the date hereof, 100 were issued and
outstanding. All outstanding MergerSub Common Shares have been duly authorized
and validly issued and are fully paid and nonassessable, free of any preemptive
or other similar right.
SECTION 5.06. IP SEC Documents. (a) IP has made available to UCC the IP
SEC Documents. IP has filed all reports, filings, registration statements and
other documents required to be filed by it with the SEC since December 31, 1996.
No IP Subsidiary is at present required to file any form, report, registration
statement or prospectus or other document with the SEC.
(b) As of its filing date, each IP SEC Document complied as to form in
all material respects with the applicable requirements of the Securities Act
and/or the Exchange Act, as the case may be.
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(c) No IP SEC Document filed pursuant to the Exchange Act contained, as
of its filing date, any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. No IP SEC
Document, as amended or supplemented, if applicable, filed pursuant to the
Securities Act as of the date such document or amendment became effective
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading.
SECTION 5.07. Financial Statements; No Material Undisclosed
Liabilities. (a) The audited consolidated financial statements and unaudited
consolidated interim financial statements of IP included in the IP 10-Ks and the
IP 10-Qs fairly present in all material respects, in conformity with GAAP
(except as may be indicated in the notes thereto), the consolidated financial
position of IP and its consolidated Subsidiaries as of the dates thereof and
their consolidated results of operations and changes in financial position for
the periods then ended (subject to normal year-end adjustments in the case of
any unaudited interim financial statements).
(b) There are no liabilities of IP or any IP Subsidiary of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise that are required by GAAP to be set forth on a consolidated balance
sheet of IP, other than:
(i) liabilities or obligations disclosed or provided for in the IP
Balance Sheet (including the notes thereto);
(ii) liabilities or obligations under this Agreement or incurred
in connection with the transactions contemplated hereby; and
(iii) other liabilities or obligations, which, individually or in
the aggregate, would not be reasonably likely to have an IP Material
Adverse Effect.
SECTION 5.08. Information to Be Supplied. (a) The information to be
supplied by IP expressly for inclusion or incorporation by reference in the
Proxy Statement/Prospectus will (i) in the case of the Registration Statement,
at the time it becomes effective, not 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 not misleading and (ii) in the
case of the remainder of the Proxy Statement/Prospectus, at the time of the
mailing thereof, at the time of the UCC Shareholder Meeting and at the time of
the IP Shareholder Meeting, not
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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/Prospectus will comply (with respect to
information relating to IP) as to form in all material respects with the
provisions of the Securities Act and the Exchange Act.
(b) Notwithstanding the foregoing, IP makes no representation or
warranty with respect to any statements made or incorporated by reference in the
Proxy Statement/Prospectus with respect to information supplied by UCC.
SECTION 5.09. Absence of Certain Changes. Since December 31, 1997,
except as otherwise expressly contemplated by this Agreement, IP and the IP
Subsidiaries have conducted their business in the ordinary course consistent
with past practice and there has not been (a) any damage, destruction or other
casualty loss (whether or not covered by insurance) affecting the business or
assets of IP or any IP Subsidiary that, individually or in the aggregate, has
had or would be reasonably likely to have an IP Material Adverse Effect or (b)
any action, event, occurrence, development or state of circumstances or facts
that, individually or in the aggregate, has had or would be reasonably likely to
have an IP Material Adverse Effect.
SECTION 5.10. Litigation. There is no action, suit, investigation,
arbitration or proceeding pending against, or to the knowledge of IP threatened
against, IP or any IP Subsidiary or any of their respective assets or properties
before any arbitrator or Governmental Entity that, individually or in the
aggregate, would be reasonably likely to have an IP Material Adverse Effect.
SECTION 5.11. Taxes. Except as set forth in the IP Balance Sheet
(including the notes thereto), (i) all tax returns, statements, reports and
forms (collectively, the "IP Returns") required to be filed with any taxing
authority by, or with respect to, IP and the IP Subsidiaries have been filed in
accordance with all applicable laws; (ii) IP and the IP Subsidiaries have timely
paid all taxes shown as due and payable on the IP Returns that have been so
filed, and, as of the time of filing, the IP Returns correctly reflected the
facts regarding the income, business, assets, operations, activities and the
status of IP and the IP Subsidiaries (other than taxes which are being contested
in good faith and for which adequate reserves are reflected on the IP Balance
Sheet); (iii) IP and the IP Subsidiaries have made provision for all taxes
payable by them for which no IP Return has yet been filed; (iv) the charges,
accruals and reserves for taxes with respect to IP and its Subsidiaries
reflected on the IP Balance Sheet are adequate under GAAP to cover the tax
liabilities accruing through the date thereof; (v) there is no action, suit,
proceeding, audit or claim now proposed or pending against or with respect
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to IP or any of the IP Subsidiaries in respect of any tax where there is a
reasonable possibility of a materially adverse determination; and (vi) neither
IP nor any of the IP Subsidiaries has been a member of an affiliated,
consolidated, combined or unitary group other than one of which IP was the
common parent.
SECTION 5.12. Compliance with Laws; Licenses, Permits and
Registrations. (a) To the knowledge of IP, neither IP nor any IP Subsidiary is
in violation of, or has violated, any applicable provisions of any laws,
statutes, ordinances, regulations, judgments, injunctions, orders or consent
decrees, except for any such violations which, individually or in the aggregate,
would not be reasonably likely to have, an IP Material Adverse Effect.
(b) Each of IP and the IP Subsidiaries has all permits, licenses,
approvals, authorizations of and registrations with and under all federal,
state, local and foreign laws, and from all Governmental Entities required by IP
and the IP Subsidiaries to carry on their respective businesses as currently
conducted, except where the failure to have any such permits, licenses,
approvals, authorizations or registrations, individually or in the aggregate,
would not be reasonably likely to have an IP Material Adverse Effect.
SECTION 5.13. Title to Properties. (a) IP and each IP Subsidiary have
good and marketable title to, or valid leasehold interests in, all their
properties and assets except for such as are no longer used or useful in the
conduct of their businesses or as have been disposed of in the ordinary course
of business and except for defects in title, easements, restrictive covenants
and similar Liens, encumbrances or impediments that, in the aggregate, do not
materially interfere with the ability of IP and the IP Subsidiaries to conduct
their business, taken as a whole, as currently conducted. All such assets and
properties, other than assets and properties in which IP or any IP Subsidiary
has leasehold interests, are free and clear of all Liens, except for Liens that,
in the aggregate, do not and will not materially interfere with the ability of
IP and the IP Subsidiaries to conduct their business, taken as a whole, as
currently conducted.
(b) Except as would not be reasonably likely, individually or in the
aggregate, to have an IP Material Adverse Effect, (i) IP and each IP Subsidiary
are in compliance with the terms of all leases to which they are a party and
under which they are in occupancy, and all such leases are in full force and
effect and (ii) IP and each IP Subsidiary enjoy peaceful and undisturbed
possession under all such leases.
SECTION 5.14. Intellectual Property. Except as would not be reasonably
likely to have an IP Material Adverse Effect, individually or in the aggregate,
IP and the IP Subsidiaries own or have a valid license to use each trademark,
service
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mark, trade name, mask work, invention, patent, trade secret, copyright,
know-how (including any registrations or applications for registration of any of
the foregoing) or any other similar type of proprietary intellectual property
right (collectively, the "IP Intellectual Property") necessary to carry on the
business of IP and the IP Subsidiaries, taken as a whole, as currently
conducted. To the knowledge of IP, neither IP nor any IP Subsidiary has received
any written notice of infringement of or challenge to, and, to IP's knowledge,
there are no claims pending with respect to the rights of others to the use of,
any IP Intellectual Property that, in either case, individually or in the
aggregate, would be reasonably likely to have an IP Material Adverse Effect.
SECTION 5.15. Environmental Matters. With such exceptions as,
individually or in the aggregate, would not be reasonably likely to have an IP
Material Adverse Effect, to the knowledge of IP, (i) no written notice,
notification, demand, request for information, citations, summons, complaint or
order has been received by, and no investigation, action, claim, suit,
proceeding or review is pending or threatened by any Person against, IP or any
IP Subsidiary, with respect to any applicable Environmental Law and (ii) IP and
the IP Subsidiaries are and have been in compliance with all applicable
Environmental Laws.
SECTION 5.16. Finders' Fees. Except for Credit Suisse First Boston,
whose fees will be paid by IP, there is no investment banker, broker, finder or
other intermediary who might be entitled to any fee or commission from IP or any
of its Affiliates upon consummation of the transactions contemplated by this
Agreement.
SECTION 5.17. Required Vote; Board Recommendation. (a) The only votes
of the holders of any class or series of capital stock of IP required by law,
rule or regulation to approve this Agreement, the Merger and/or any of the other
transactions contemplated hereby are the affirmative vote of the holders of a
majority of (i) the IP Common Shares present and voting at the IP Shareholder
Meeting (as defined in Section 7.02) in favor of the issuance of the IP Common
Shares pursuant to the Merger and (ii) all outstanding shares entitled to vote
thereon at the IP Shareholder Meeting in favor of an amendment to IP's restated
certificate of incorporation to increase the number of authorized IP Common
Shares (the approvals described in clauses (i) and (ii) are collectively
referred to herein as the "IP Shareholder Approval").
(b) IP's Board of Directors has unanimously (i) determined that this
Agreement and the transactions contemplated hereby, including the Merger and the
issuance of the IP Common Shares pursuant to the Merger, are in the best
interests of IP and its shareholders, (ii) approved this Agreement, and the
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transactions contemplated hereby and (iii) resolved to recommend to such
shareholders that they vote in favor of (x) the issuance of the IP Common Shares
pursuant to the Merger and (y) an amendment to IP's restated certificate of
incorporation to increase the number of authorized IP Common Shares, in
accordance with the terms hereof.
SECTION 5.18. Pooling Matters. Neither IP nor any of its Affiliates has
taken or agreed to take any action or is aware of any fact or circumstance that
would prevent the Merger from qualifying (i) for "pooling of interests"
accounting treatment as described in the first sentence of Section 4.21(a) or
(ii) as a 368 Reorganization. IP will request a letter addressed to it from
Arthur Andersen LLP dated as of a date prior to the Effective Time, and (if and
when such letter is obtained) a copy will be delivered to UCC. Such letter shall
state that Arthur Andersen LLP believes that the Merger should be accounted for
as a "pooling of interests" as described in the first sentence of Section
4.21(a).
ARTICLE 6
COVENANTS OF UCC
UCC agrees that:
SECTION 6.01. UCC Interim Operations. Except as set forth in the UCC
Disclosure Schedule or as otherwise expressly contemplated hereby, without the
prior consent of IP (which consent shall not be unreasonably withheld or
delayed), from the date hereof until the Effective Time, UCC shall, and shall
cause each of the UCC Subsidiaries to, conduct their business in all material
respects in the ordinary course consistent with past practice and shall use
commercially reasonable efforts to (i) preserve intact its present business
organization, (ii) maintain in effect all material foreign, federal, state and
local licenses, approvals and authorizations, including, without limitation, all
material licenses and permits that are required for UCC or any UCC Subsidiary to
carry on its business and (iii) preserve existing relationships with its
material customers, lenders, suppliers and others having material business
relationships with it. Without limiting the generality of the foregoing, except
as set forth in the UCC Disclosure Schedule or as otherwise expressly
contemplated by this Agreement, from the date hereof until the Effective Time,
without the prior consent of IP (which consent shall not be unreasonably
withheld or delayed), UCC shall not, nor shall it permit any UCC Subsidiary to:
(a) amend UCC's articles of incorporation or by-laws;
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(b) split, combine or reclassify any shares of capital stock of UCC or
any less-than-wholly-owned UCC Subsidiary or declare, set aside or pay any
dividend or other distribution (whether in cash, stock or property or any
combination thereof) in respect of its capital stock, or redeem, repurchase or
otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of
its securities or any securities of any UCC Subsidiary, except (i) for regular
quarterly cash dividends (having customary record and payment dates, not in
excess of $0.45 per UCC Common Share, and (ii) for regular dividends by
less-than-wholly-owned UCC Subsidiaries on a pro rata basis to the equity owners
thereof or (iii) pursuant to the existing terms of any UCC Employee Plan;
(c) (i) issue, deliver or sell, or authorize the issuance, delivery or
sale of, any shares of its capital stock of any class or any securities
convertible into or exercisable for, or any rights, warrants or options to
acquire, any such capital stock or any such convertible securities, other than
in connection with the UCC Employee Plans or benefit plans or arrangements
existing on the date hereof and covering the members of UCC's Board of
Directors, (A) the issuance of UCC Common Shares upon the exercise of stock
options in accordance with their present terms and (B) the granting of options
to acquire UCC Common Shares in the ordinary course of business consistent with
past practice or (ii) amend in any material respect any material term of any
outstanding security of UCC or any UCC Subsidiary;
(d) other than in connection with transactions permitted by Section
6.01(e), incur any capital expenditures or any obligations or liabilities in
respect thereof, except for those (i) contemplated by the capital expenditure
budgets for UCC and the UCC Subsidiaries made available to IP, (ii) incurred in
the ordinary course of business of UCC and the UCC Subsidiaries or (iii) not
otherwise described in clauses (i) and/or (ii) which, in the aggregate, do not
exceed $10 million;
(e) acquire (whether pursuant to merger, stock or asset purchase or
otherwise) in one transaction or series of related transactions (i) any assets
(including any equity interests) having a fair market value in excess of $10
million, or (ii) all or substantially all of the equity interests of any Person
or any business or division of any Person having a fair market value in excess
of $5 million;
(f) sell, lease, encumber or otherwise dispose of any assets, other
than (i) sales in the ordinary course of business consistent with past practice,
(ii) equipment and property no longer used in the operation of UCC's business
and (iii) assets related to discontinued operations of UCC or any UCC
Subsidiary;
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(g) incur (which shall not be deemed to include entering into credit
agreements, lines of credit or similar arrangements until UCC or any UCC
Subsidiary becomes liable with respect to any indebtedness for borrowed money or
guarantees thereof under such arrangements) any indebtedness for borrowed money
or guarantee any such indebtedness or issue or sell any debt securities or
warrants or rights to acquire any debt securities of UCC or any UCC Subsidiary
or guarantee any debt securities of others, except in the ordinary course of
business consistent with past practice (which shall include, without limitation,
borrowings under UCC's existing credit agreements and overnight borrowings);
(h) (i) enter into any agreement or arrangement that limits or
otherwise restricts UCC, any UCC Subsidiary or any of their respective
Affiliates or any successor thereto or that would, after the Effective Time,
limit or restrict UCC, any UCC Subsidiary, the Surviving Corporation, IP, any IP
Subsidiary or any of their respective Affiliates, from engaging or competing in
any line of business or in any location, which agreement or arrangement would be
material to the business of UCC and the UCC Subsidiaries or the business of IP
and the IP Subsidiaries (assuming the Merger had taken place), in either case
taken as a whole or (ii) except in the ordinary course of business, amend,
modify or terminate any material contract, agreement or arrangement of UCC or
any UCC Subsidiary or otherwise waive, release or assign any material rights,
claims or benefits of UCC or any UCC Subsidiary thereunder;
(i) (i) except in the ordinary course of business consistent with past
practice or as required by law or an existing agreement, increase the amount of
compensation of any director or executive officer or make any increase in or
commitment to increase any employee benefits, (ii) except as required by law, an
agreement existing on the date hereof or UCC severance policy as of the date
hereof, grant any severance or termination pay to any director, officer or
employee of UCC or any UCC Subsidiary, (iii) adopt any additional employee
benefit plan or, except in the ordinary course of business, make any
contribution to any existing such plan or (iv) except as may be required by law,
amend in any material respect any UCC Employee Plan;
(j) change UCC's (x) methods of accounting in effect at September 30,
1998, except as required by changes in GAAP or by Regulation S-X of the Exchange
Act, as concurred in by its independent public accountants or (y) fiscal year;
(k) (i) settle, or propose to settle, any litigation, investigation,
arbitration, proceeding or other claim that is material to the business of UCC
and the UCC Subsidiaries, taken as a whole, other than the payment, discharge or
satisfaction, in the ordinary course of business consistent with past practice
of
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liabilities (x) recognized or disclosed in the most recent consolidated
financial statements (or the notes thereto) of UCC included in the UCC SEC
Documents or (y) incurred since the date of such financial statements in the
ordinary course of business consistent with past practice, or (ii) other than in
the ordinary course of business consistent with past practice, make any tax
election or enter into any settlement or compromise of any tax liability that in
either case is material to the business of UCC and the UCC Subsidiaries, taken
as a whole; or
(l) agree, resolve or commit to do any of the foregoing;
provided that the limitations set forth in clauses 6.01(a) through 6.01(l) shall
not apply to any action, transaction or event occurring exclusively between UCC
and any wholly-owned UCC Subsidiary or between any wholly-owned UCC
Subsidiaries.
SECTION 6.02. Shareholder Meeting. UCC shall cause a meeting of its
shareholders (the "UCC Shareholder Meeting") to be duly called and held as soon
as reasonably practicable for the purpose of obtaining the UCC Shareholder
Approval. Unless otherwise required by its fiduciary duties (as determined in
good faith by a majority of its members on the basis of the written advice of
its outside legal counsel), (i) UCC's Board of Directors shall recommend
approval and adoption by its shareholders of this Agreement (the "UCC
Recommendation"), (ii) neither UCC's Board of Directors nor any committee
thereof shall amend, modify, withdraw, condition or qualify the UCC
Recommendation in a manner adverse to IP or take any action or make any
statement inconsistent with the UCC Recommendation and (iii) UCC shall take all
lawful action to solicit the UCC Shareholder Approval.
SECTION 6.03. Acquisition Proposals; Board Recommendation. (a) UCC
agrees that it shall not, nor shall it permit any UCC Subsidiary to, nor shall
it authorize or knowingly permit any officer, director, employee, investment
banker, attorney, accountant, agent or other advisor or representative of UCC or
any UCC Subsidiary, directly or indirectly, to (i) solicit, initiate or
knowingly facilitate or encourage the submission of any Acquisition Proposal,
(ii) participate in any discussions or negotiations regarding, or furnish to any
Person any information with respect to, or take any other action knowingly to
facilitate any inquiries or the making of any proposal that constitutes, or may
be reasonably expected to lead to, any Acquisition Proposal, (iii) grant any
waiver or release under any standstill or similar agreement with respect to any
class of UCC's equity securities or (iv) enter into any agreement with respect
to any Acquisition Proposal, other than in the manner contemplated by Section
6.03(d); provided, however, that UCC may take any action(s) described in the
foregoing clauses (i), (ii), (iii), or (iv) in respect of any Person, but only
if (A) such Person delivers a bona fide written Acquisition
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Proposal that, in the reasonable judgment of UCC's Board of Directors (after
consultation with an investment bank of nationally recognized reputation) could
be reasonably likely to lead to the delivery to UCC of a Superior Proposal and
(B) UCC's Board of Directors determines in good faith, on the basis of written
advice from its outside legal counsel, that it is required to take such
action(s) in order to comply with its fiduciary duties under applicable law;
provided, further, that, (x) prior to UCC taking any such action(s) in respect
of such Person, such Person shall have entered into a confidentiality agreement
with UCC on customary terms, and UCC shall provide the notice contemplated by
Section 6.03(c) and (y) UCC shall not enter into any agreement with respect to
any Acquisition Proposal without first complying with Section 6.03(d). Without
limiting the foregoing, it is understood that any violation of the restrictions
set forth in the preceding sentence by any officer, director, investment banker,
attorney, accountant, agent or other advisor or representative of UCC or any UCC
Subsidiary, whether or not such individual is purporting to act on behalf of UCC
or any UCC Subsidiary or otherwise, shall be deemed to be a breach of this
Section 6.03 by UCC. UCC shall cease and cause to be terminated immediately all
existing discussions or negotiations with any Persons conducted heretofore with
respect to, or that could be reasonably expected to lead to, any Acquisition
Proposal.
(b) Unless UCC's Board of Directors has previously withdrawn, or is
concurrently therewith withdrawing, the UCC Recommendation in accordance with
Section 6.02, neither UCC's Board of Directors nor any committee thereof shall
recommend any Acquisition Proposal to UCC shareholders. Notwithstanding the
foregoing, nothing contained in this Section 6.03(b) or elsewhere in this
Agreement shall prevent UCC's Board of Directors from complying with Rule 14e-2
under the 1934 Act with respect to any Acquisition Proposal or making any
disclosure required by applicable law.
(c) UCC shall notify IP promptly (but in no event later than 24 hours)
after receipt by UCC or any UCC Subsidiary (or any of their respective
directors, officers, agents or advisors), of any Acquisition Proposal or any
negotiations, discussions or contacts concerning, or any request for nonpublic
information or for access to the properties, books or records of UCC or any UCC
Subsidiary or any request for a waiver or release under any standstill or
similar agreement, by any Person that has made an Acquisition Proposal. Such
notice to IP shall be made orally and in writing and shall indicate the identity
of the offeror and the terms and conditions of such proposal, inquiry, contact
or request. UCC shall keep IP informed, on a reasonably current basis, of the
status and details (including amendments or proposed amendments) of any such
Acquisition Proposal or request and the status of any negotiations or
discussions.
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(d) Pursuant to the terms of Section 10.01, either IP or UCC may
terminate this Agreement if UCC's Board of Directors shall have determined,
pursuant to the terms of this Section 6.03, (i) to approve or recommend an
Acquisition Proposal after concluding that such Acquisition Proposal constitutes
a Superior Proposal and (ii) to enter into a binding agreement concerning such
Acquisition Proposal; provided that UCC may not exercise its right to terminate
under this Section 6.03(d) and Section 10.01(c)(iii) (and may not enter into a
binding written agreement with respect to such an Acquisition Proposal) unless
(1) UCC shall have provided to IP at least five Business Days' prior written
notice that its Board of Directors has authorized and intends to terminate this
Agreement pursuant to this Section 6.03(d) and Section 10.01(c)(iii), specifying
the material terms and conditions of such Acquisition Proposal and providing the
most current version of the agreement relating thereto, if any, (2) IP does not
make, within five Business Days of receiving such notice, an offer such that a
majority of UCC's Board of Directors determines that (A) the foregoing
Acquisition Proposal no longer constitutes a Superior Proposal or (B) its
fiduciary duties no longer require it to take such action(s), and (3) on or
prior to such termination, UCC shall have paid to IP the Termination Fee (as
defined in Section 10.03(b)); provided, further, that IP may exercise its right
to terminate under this Section 6.03(d) and Section 10.01(d)(iii) five Business
Days after receiving the notice contemplated by this Section 6.03(d). In
connection with the foregoing, UCC agrees that it will (x) not enter into a
binding agreement with respect to such an Acquisition Proposal until at least
the sixth Business Day after it has provided the notice to IP required hereby,
(y) negotiate in good faith with IP, and consider in good faith any offer made
by IP, during that period and (z) notify IP promptly if its intention to enter
into such an agreement shall change at any time after such notification.
SECTION 6.04. Transfer Taxes. All state, local, foreign or provincial
sales, use, real property transfer, stock transfer or similar taxes (including
any interest or penalties with respect thereto) attributable to the Merger
(collectively, the "Transfer Taxes") shall be timely paid by UCC, which
payments, if any, shall be made from the Escrow Account as and if required by
3.03(h).
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ARTICLE 7
COVENANTS OF IP
IP agrees that:
SECTION 7.01. IP Interim Operations. Except as set forth in the IP
Disclosure Schedule or as otherwise expressly contemplated hereby, without the
prior consent of UCC (which consent shall not be unreasonably withheld or
delayed), from the date hereof until the Effective Time, IP shall and shall
cause each of the IP Subsidiaries to, conduct their business in all material
respects in the ordinary course consistent with past practice and shall use
commercially reasonable efforts to (i) preserve intact its present business
organization, (ii) maintain in effect all material foreign, federal, state and
local licenses, approvals and authorizations, including, without limitation, all
material licenses and permits that are required for IP or any IP Subsidiary to
carry on its business and (iii) preserve existing relationships with its
material customers, lenders, suppliers and others having material business
relationships with it. Without limiting the generality of the foregoing, except
as otherwise expressly contemplated by this Agreement, from the date hereof
until the Effective Time, without the prior consent of UCC (which consent shall
not be unreasonably withheld or delayed), IP shall not, not shall it permit any
IP Subsidiary to:
(a) make any amendment to IP's restated certificate of incorporation
that changes any material term or provision of the IP Common Shares;
(b) make any material changes to MergerSub's certificate of
incorporation;
(c) engage in any material repurchase at a premium, recapitalization,
restructuring or reorganization with respect to IP's capital stock, including,
without limitation, by way of any extraordinary dividend on, or other
extraordinary distributions with respect to, IP's capital stock;
(d) acquire by merging or consolidating with, or by purchasing a
substantial portion of the assets of or equity in, or by any other manner, any
Person or any business or division thereof, or otherwise acquire any assets,
unless IP concludes in good faith that such acquisition or the entering into of
a definitive agreement relating to or the consummation of such transaction would
not (i) impose any material delay in the obtaining of, or significantly increase
the risk of not obtaining, any authorizations, consents, orders, declarations or
approvals of any Governmental Entity necessary to consummate the Merger or the
expiration or termination of any applicable waiting period, (ii) significantly
increase the risk of any Governmental Entity entering an order prohibiting the
consummation of
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the Merger or (iii) significantly increase the risk of not being able to remove
any such order on appeal or otherwise; or
(e) agree, resolve or otherwise commit to do any of the foregoing.
SECTION 7.02. Shareholder Meeting; Board Recommendation. IP shall cause
a meeting of its shareholders (the "IP Shareholder Meeting") to be duly called
and held as soon as reasonably practicable for the purpose of obtaining the IP
Shareholder Approval. Unless otherwise required by its fiduciary duties (as
determined in good faith by a majority of its members on the basis of the
written advice of its outside legal counsel), (i) IP's Board of Directors shall
recommend (the "IP Recommendation") approval and adoption by its shareholders of
(x) the issuance of IP Common Shares pursuant to the Merger and (y) an amendment
to IP's restated certificate of incorporation to increase the number of
authorized IP Common Shares, (ii) neither IP's Board of Directors nor any
committee thereof shall amend, modify, withdraw, condition or qualify the IP
Recommendation in a manner adverse to UCC or take any action or make any
statement inconsistent with the IP Recommendation and (iii) IP shall take all
lawful action to solicit the IP Shareholder Approval.
SECTION 7.03. Director and Officer Liability. (a) IP and the Surviving
Corporation agree that the indemnification obligations set forth in UCC's
articles of incorporation, as amended, and UCC's bylaws, in each case as of the
date of this Agreement, shall survive the Merger and shall not be amended,
repealed or otherwise modified for a period of six years after the Effective
Time in any manner that would adversely affect the rights thereunder of the
individuals who on or prior to the Effective Time were directors, officers,
employees or agents of UCC or the UCC Subsidiaries.
(b) To the fullest extent permitted under applicable law and regardless
of whether the Merger becomes effective, UCC shall indemnify and hold harmless,
and, after the Effective Time, IP shall, and shall cause the Surviving
Corporation to, indemnify and hold harmless, to the fullest extent permitted
under applicable law, each present and former director or officer of UCC and
each UCC Subsidiary and each such person who served at the request of UCC or any
UCC Subsidiary as a director, officer, trustee, partner or fiduciary of another
Person, pension or other employee benefit plan or enterprise (collectively, the
"Indemnified Parties") against all costs and expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages, liabilities and
settlement amounts paid in connection with any claim, action, suit, proceeding
or investigation (whether arising before or after the Effective Time), whether
civil, administrative or investigative, arising out of or pertaining to any
action or omission in their capacity as an officer or director, in each case
occurring before the Effective Time
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(including the transactions contemplated by this Agreement). Without limiting
the foregoing, in the event of any such claim, action, suit, proceeding or
investigation, (i) UCC or IP and the Surviving Corporation, as the case may be,
shall pay the reasonable fees and expenses of one counsel selected by each
Indemnified Party, which one counsel shall be reasonably satisfactory to UCC or
to IP and the Surviving Corporation, as the case may be, promptly after
statements therefor are received (unless the Surviving Corporation shall elect
to defend such action) and (ii) UCC or IP and the Surviving Corporation, as
applicable, shall cooperate in the defense of any such matter; provided,
however, that neither UCC nor IP or the Surviving Corporation shall be liable
for any settlement effected without its prior written consent (which consent
shall not be unreasonably withheld).
(c) For six years from the Effective Time, the Surviving Corporation
shall provide to UCC's current directors and officers liability insurance
protection of the same kind and scope as that provided by UCC's directors' and
officers' liability insurance policies as of the date hereof; provided, however,
that in no event shall the Surviving Corporation be required to expend in any
one year an amount in excess of 200% of the annual premiums currently paid by
UCC for such insurance; and, provided, further, that if the annual premiums of
such insurance coverage exceed such amount, the Surviving Corporation shall be
obligated to obtain a policy with the greatest coverage available for a cost not
exceeding such amount.
(d) If UCC or the Surviving Corporation or any of their respective
successors or assigns (i) consolidates with or merges into any other person or
shall not be the continuing or surviving corporation or entity in such
consolidation or merger or (ii) transfers all or substantially all its
properties and assets to any Person, then, and in each case, proper provision
shall be made so that the successors and assigns of UCC or the Surviving
Corporation, as the case may be, honor the indemnification obligations set forth
in this Section 7.03.
(e) The obligations of UCC, the Surviving Corporation, and IP under
this Section 7.03 shall not be terminated or modified in such a manner as to
adversely affect any director, officer, employee, agent or other person to whom
this Section 7.03 applies without the consent of such affected director,
officer, employees, agents or other persons (it being expressly agreed that each
such director, officer, employee, agent or other person to whom this Section
7.03 applies shall be third-party beneficiaries of this Section 7.03).
SECTION 7.04. Employee Benefits. (a) During the period commencing on
the Effective Time and ending on the first anniversary thereof, IP shall provide
(or shall cause the Surviving Corporation to provide) employees of UCC and the
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UCC Subsidiaries with salary and benefits under employee benefit plans that are
no less favorable in the aggregate than those currently provided by UCC and the
UCC Subsidiaries to such employees (including, without limitation, benefits
pursuant to qualified and nonqualified retirement plans, savings plans, medical,
dental, disability and life insurance plans and programs, deferred compensation
arrangements, bonus and incentive compensation plans, and retiree benefit plans,
policies and arrangements). For purposes of any employee benefit plan or
arrangement maintained by IP, the Surviving Corporation or any IP Subsidiary, IP
shall recognize (or cause to be recognized) service with UCC and the UCC
Subsidiaries and any predecessor entities (and any other service credited by UCC
under similar benefit plans) for all purposes (including, without limitation,
for vesting, eligibility to participate, severance, and benefit accrual,
provided, however, that solely to the extent necessary to avoid duplication of
benefits, amounts payable under employee benefit plans provided by IP, the
Surviving Corporation or an IP Subsidiary may be reduced by amounts payable
under similar UCC Employee Plans with respect to the same periods of service).
Any benefits accrued by employees of UCC or any UCC Subsidiary prior to the
Effective Time under any defined benefit pension plan of UCC or any UCC
Subsidiary that employ a final average pay formula shall be calculated based on
such employees' final average pay with IP, the Surviving Corporation or any IP
Subsidiary or other Affiliate employing such employees. From and after the
Effective Time, IP shall, and shall cause the IP Subsidiaries to, waive any
pre-existing condition limitations and credit any deductibles and out-of-pocket
expenses that are applicable and/or covered under the UCC Employee Plans, and
are incurred by the employees and their beneficiaries during the portion of the
calendar year prior to participation in the benefit plans provided by IP, the
Surviving Corporations and the IP Subsidiaries. The provisions of this Section
7.04 shall not create in any employee or former employee of UCC or any UCC
Subsidiary any rights to employment or continued employment with IP or UCC or
any of their respective Subsidiaries or Affiliates.
(b) IP shall, and shall cause the Surviving Corporation and the IP
Subsidiaries to, provide at least 30 days' advance written notice of termination
of employment ("Advance Notice") of any employees or former employees of UCC or
any UCC Subsidiary.
(c) (i) Notwithstanding anything to the contrary in UCC's Deferred
Stock Unit Plan for Outside Directors (the "Stock Unit Plan"), the amounts
payable to participants pursuant to Section 9(c) of the Stock Unit Plan shall be
paid in IP Common Shares. The number of IP Common Shares payable to any
participant in the Stock Unit Plan shall be an amount equal to (i) the number of
stock units credited to such participant's account under the Stock Unit Plan
immediately prior to the Closing Date multiplied by (ii) the Exchange Ratio; and
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(ii) Notwithstanding anything to the contrary in UCC's Restricted
Stock Performance Plan (the "RSPP"), any amounts payable to
participants pursuant to Article X of the RSPP shall be paid in IP
Common Shares. The number of IP Common Shares payable to any
participant in the RSPP shall be an amount equal to (i) the amount
payable to such participant determined in accordance with Article X of
the RSPP, divided by (ii) the Average IP Share Price;
provided that, in the case of each of clauses (c)(i) and (c)(ii) of this Section
7.04, UCC shall take any necessary steps to obtain the consent of each
participant under both the Stock Unit Plan and the RSPP to the matters
contemplated by such respective clauses.
(d) From and after the Effective Time, subject to Section 7.04(c), IP
shall honor, and shall cause the Surviving Corporation and the IP Subsidiaries
to honor, in accordance with its terms, UCC's severance programs in effect as of
the Closing Date (including, without limitation, the Severance Policy for Key
Employees, the Severance Policy for Certain Bonus Eligible Employees and the
Severance Policy for Salaried Employees), and each existing UCC employment,
change of control, severance and termination agreement between UCC or any UCC
Subsidiary, and any officer, director or employee of UCC or any UCC Subsidiary,
including without limitation all legal and contractual obligations pursuant to
existing benefit compensation plans of UCC in effect as of the Effective Time
(including any UCC employee benefit plan providing for payments or other
obligations as a result of a change in control of UCC).
SECTION 7.05. Stock Exchange Listing. IP shall use its best efforts to
cause the IP Common Shares to be issued in connection with the Merger to be
listed on the NYSE, subject to official notice of issuance.
SECTION 7.06. Conduct of MergerSub. IP will take all action necessary
to cause MergerSub to perform its obligations under this Agreement and to
consummate the Merger on the terms and conditions set forth in this Agreement.
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ARTICLE 8
COVENANTS OF IP AND UCC
The parties hereto agree that:
SECTION 8.01. Reasonable Best Efforts. Subject to the terms and
conditions hereof, each party will use reasonable best efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate the
transactions contemplated by this Agreement as promptly as practicable; provided
that, for these purposes, reasonable best efforts of UCC, the Surviving
Corporation, IP and/or MergerSub shall be deemed to include (i) offering to
enter into, and entering into, any settlement, undertaking, consent decree,
stipulation or agreement or agreeing to any order regarding antitrust matters in
connection with any objections of any Governmental Entity to the transactions
contemplated hereby and (ii) offering to divest to others and/or hold separate,
and divesting or otherwise holding separate (including by establishing a trust
or otherwise), or taking any other action (or otherwise agreeing to do any of
the foregoing) with respect to, any portion of its and/or its Subsidiaries'
business, assets or properties, other than any such action pursuant to clause(s)
(i) and/or (ii) requiring any divestiture, holding separate (including by
establishing a trust or otherwise) or sale (by whatever means) of (or any
agreement to do any of the foregoing) any of the facilities described in Section
8.01 of the UCC Disclosure Schedule.
SECTION 8.02. Certain Filings; Cooperation in Receipt of Consents. (a)
Promptly after the date hereof, IP and UCC shall prepare and IP shall file with
the SEC the Registration Statement, in which the Proxy Statement/Prospectus will
be included as IP's prospectus. Each of UCC and IP shall use all reasonable
efforts to have the Registration Statement declared effective under the
Securities Act as promptly as practicable after such filing and to keep the
Registration Statement effective as long as is necessary to consummate the
Merger. Each of UCC and IP shall mail the Proxy Statement/Prospectus to their
respective shareholders as promptly as practicable after the Registration
Statement is declared effective under the Securities Act and, if necessary,
after the Proxy Statement/Prospectus shall have been so mailed, promptly
circulate amended, supplemental or supplemented proxy material, and, if required
in connection therewith, resolicit proxies. IP shall also take any action
required to be taken under any applicable state securities or blue sky laws in
connection with the issuance of IP Common Shares in the Merger.
(b) No amendment or supplement to the Proxy Statement/Prospectus will
be made by UCC or IP without the approval of the other party, which will not be
unreasonably withheld or delayed. Each party will advise the other party,
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promptly after it receives notice thereof, of the time when the Registration
Statement has become effective or any supplement or amendment has been filed,
the issuance of any stop order, the suspension of the qualification of the IP
Common Shares issuable in connection with the Merger for offering or sale in any
jurisdiction, or any request by the SEC for amendment of the Proxy
Statement/Prospectus or comments thereon and responses thereto or requests by
the SEC for additional information. If at any time prior to the Effective Time,
UCC or IP discovers any information relating to either party, or any of their
respective Affiliates, officers or directors, that should be set forth in an
amendment or supplement to the Proxy Statement/Prospectus, so that such document
would not include any misstatement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, the party that
discovers such information shall promptly notify the other parties hereto and an
appropriate amendment or supplement describing such information shall be
promptly filed with the SEC and, to the extent required by law or regulation,
disseminated to the shareholders of UCC and IP.
(c) UCC and IP shall cooperate with one another in (i) determining
whether any other action by or in respect of, or filing with, any Governmental
Entity is required, or any actions, consents, approvals or waivers are required
to be obtained from parties to any material contracts, in connection with the
consummation of the transactions contemplated hereby, (ii) seeking any such
other actions, consents, approvals or waivers or making any such filings,
furnishing information required in connection therewith and seeking promptly to
obtain any such actions, consents, approvals or waivers and (iii) setting a
mutually acceptable date for the UCC Shareholder Meeting and the IP Shareholder
Meeting, so as to enable them to occur, to the extent practicable, on the same
date. Each party shall permit the other party to review any communication given
by it to, and consult with each other in advance of any meeting or conference
with, any Governmental Entity or, in connection with any proceeding by a private
party, with any other Person, and to the extent permitted by the applicable
Governmental Entity or other Person, give the other party the opportunity to
attend and participate in such meetings and conferences, in each case in
connection with the transactions contemplated hereby.
SECTION 8.03. Public Announcements. The parties shall consult with each
other before issuing any press release or making any public statement with
respect to this Agreement and the transactions contemplated hereby and, except
as may be required by applicable law or any listing agreement with any national
securities exchange, will not issue any such press release or make any such
public statement prior to such consultation.
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SECTION 8.04. Access to Information; Notification of Certain Matters.
(a) From the date hereof until the Effective Time and subject to applicable law,
UCC and IP shall (i) give to the other party, its counsel, financial advisors,
auditors and other authorized representatives reasonable access to the offices,
properties, books and records of such party, (ii) furnish or make available to
the other party, its counsel, financial advisors, auditors and other authorized
representatives such financial and operating data and other information as such
Persons may reasonably request and (iii) instruct its employees, counsel,
financial advisors, auditors and other authorized representatives to cooperate
with the reasonable requests of the other party in its investigation. Any
investigation pursuant to this Section shall be conducted in such manner as not
to interfere unreasonably with the conduct of the business of the other party.
Unless otherwise required by law, each of UCC and IP will hold, and will cause
its respective officers, employees, counsel, financial advisors, auditors and
other authorized representatives to hold, any nonpublic information obtained in
any such investigation in confidence in accordance with Section 8.08. No
information or knowledge obtained in any investigation pursuant to this Section
8.04 shall affect or be deemed to modify any representation or warranty made by
any party hereunder.
(b) Each party hereto shall give prompt notice to each other party
hereto of:
(i) any communication received by such party from, or given by
such party to, any Governmental Entity in connection with any of the
transactions contemplated hereby; and
(ii) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge, threatened against, relating to or
involving or otherwise affecting such party or any of its Subsidiaries
that, if pending on the date of this Agreement, would have been
required to have been disclosed pursuant to Section 4.11, 4.12, 4.13,
4.14, 4.18 or 5.10, as the case may be, or that relate to the
consummation of the transactions contemplated by this Agreement
provided, however, that the delivery of any notice pursuant to this Section
8.04(b) shall not limit or otherwise affect the remedies available hereunder to
the party receiving such notice.
SECTION 8.05. Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of UCC or MergerSub, any deeds,
bills of sale, assignments or assurances and to take and do, in the name and on
behalf of UCC or MergerSub, any other actions and things to vest, perfect or
confirm of
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record or otherwise in the Surviving Corporation any and all right, title and
interest in, to and under any of the rights, properties or assets of UCC
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger.
SECTION 8.06. Tax and Accounting Treatment. (a) Prior to the Effective
Time, each party shall use its best efforts to cause the Merger to qualify as a
368 Reorganization, and will not take any action reasonably likely to cause the
Merger not so to qualify. IP shall not take, or cause the Surviving Corporation
to take, any action after the Effective Time reasonably likely to cause the
Merger not to qualify as a 368 Reorganization.
(b) Each party will use its best efforts to cause the Merger to qualify
for "pooling of interest" accounting treatment as described in Section 4.21(a),
and will not take any action reasonably likely to cause the Merger not so to
qualify.
(c) Each party shall use its best efforts to obtain the opinions
referred to in Sections 9.01(f) and 9.02(b).
SECTION 8.07. Affiliate Letters. (a) UCC shall use its best efforts to
deliver to IP, within 45 days of the date hereof, a letter agreement
substantially in the form of Exhibit A-1 hereto executed by each Person who may
be deemed to be an "affiliate" of UCC under the Securities Act.
(b) IP shall use its best efforts to obtain, within 45 days of the date
hereof, a letter agreement substantially in the form of Exhibit A-2 hereto
executed by each Person who may be deemed to be an "affiliate" of IP under the
Securities Act.
(c) Within 30 days following the date hereof, UCC shall cause to be
delivered to IP a letter identifying, to the best of UCC's knowledge, all
Persons who may be deemed to be "affiliates" of UCC for purposes of Rule 145(c)
under the Securities Act. UCC shall use commercially reasonable efforts to cause
each such Person who is so identified to deliver to IP on or prior to the
Effective Time a letter agreement substantially in the form of Exhibit A-3 to
this Agreement.
SECTION 8.08. Confidentiality. Prior to the Effective Time and after
any termination of this Agreement each party hereto will hold, and will use its
best efforts to cause its officers, directors, employees, accountants, counsel,
consultants, advisors and agents to hold, in confidence, unless compelled to
disclose by judicial or administrative process or by other requirements of law,
all confidential documents and information concerning the other parties hereto
and the Subsidiaries furnished to such party in connection with the transactions
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contemplated by this Agreement, except to the extent that such information can
be shown to have been (a) previously known on a nonconfidential basis by such
party, (b) in the public domain through no fault of such party or (c) later
lawfully acquired by such party from sources other than any of the other parties
hereto; provided that such party may disclose such information to its officers,
directors, employees, accountants, counsel, consultants, advisors and agents in
connection with the transactions contemplated by this Agreement so long as such
Persons are informed by such party of the confidential nature of such
information and are directed by such party to treat such information
confidentially. Each party hereto's obligation to hold any such information in
confidence shall be satisfied if it exercises the same care with respect to such
information as it would take to preserve the confidentiality of its own similar
information. If this Agreement is terminated, each party hereto will, and will
use its best efforts to cause its officers, directors, employees, accountants,
counsel, consultants, advisors and agents to, destroy or deliver to the party
from whom such material was obtained, upon request, all documents and other
materials, and all copies thereof, obtained by such party or on its behalf from
any such other parties in connection with this Agreement that are subject to
such confidence.
SECTION 8.09. IP Standstill. If this Agreement is terminated, then, for
two years after the date of such termination, IP and each of its successors or
assigns will not, and will cause its Affiliates not to:
(i) acquire, offer or propose or otherwise seek to acquire, or
agree to acquire, directly or indirectly, by merger, purchase or
otherwise, beneficial ownership of any assets or in excess of 1% of any
class of securities of UCC or its Affiliates or any direct rights or
options to acquire (through purchase, exchange, conversion or
otherwise) any assets or in excess of 1% of any class of securities of
UCC or its Affiliates;
(ii) make, or in any way participate in, directly or indirectly,
any "solicitation" of "proxies" (as such terms are defined in Rule
14a-1 of Regulation 14A promulgated by the SEC as of the date hereof,
disregarding clause (iv) of Rule 14a-1(1)(2), but including any
solicitation exempted pursuant to Rule 14a-2(b)(1) to vote (including
by the execution of actions by written consent), or seek to advise,
encourage or influence any person or entity with respect to the voting
of, any voting securities of UCC;
(iii) call, or in any way participate in a call for, any meeting
of shareholders of UCC (or take any action with respect to shareholders
acting by written consent);
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(iv) form, join or in any way participate in a "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) with respect to any
voting securities of UCC; or
(v) otherwise act to control or influence, or seek to control or
influence, UCC or the management, Board of Directors, policies or
affairs of UCC, including without limitation, (A) making any offer or
proposal to acquire any securities or assets of UCC or any of its
Affiliates or soliciting or proposing to effect or negotiate any form
of business combination, restructuring, recapitalization or other
extraordinary transaction involving UCC, its Affiliates or any of their
respective securities or assets, (B) seeking board representation or
the removal of any directors or a change in the composition or size of
the Board of Directors of UCC, (C) making any request to amend or waive
any provision of this Section 8.09, (D) disclosing any intent, purpose,
plan or proposal with respect to matters covered by this Section 8.09
or UCC, its Affiliates or the boards of directors, management, policies
or affairs or securities or assets of UCC or its Affiliates that is
inconsistent with this Section 8.09, including an intent, purpose, plan
or proposal that is conditioned on, or would require, waiver,
amendment, nullification or invalidation of any provision of this
Section 8.09, or take any action that could require UCC or any of its
Affiliates to make any public disclosure relating to any such intent,
purpose, plan, proposal or condition, or (E) assisting, advising or
encouraging any person with respect to, or seeking to do, any of the
foregoing;
provided, however, that this Section 8.09 shall not apply if UCC does not pay
any portion of the Termination Fee when due or if IP terminates this Agreement
as a result of a willful breach of this Agreement by UCC; provided, further,
that, if this Section 8.09 is effective against IP (and each of its successors
and their respective Affiliates) during any such two-year period after the date
of any such termination, and either (x) UCC shall have entered into an agreement
with respect to any transaction that constitutes an Acquisition Proposal
(assuming for this purpose that this Agreement had been effective at such time)
for at least a majority of either the voting securities of UCC then outstanding
or the assets of UCC and the UCC Subsidiaries, taken as a whole or (y) any
Person or "group" (as defined in Section 13(d)(3) of the Exchange Act) (other
than UCC or any of its Affiliates (excluding, for this purpose, UCC's management
acting independently of UCC)) shall have commenced any tender or exchange offer
that constitutes an Acquisition Proposal (assuming for this purpose that this
Agreement had been effective at such time) for at least a majority of the voting
securities of UCC then outstanding which offer is recommended by UCC's Board of
Directors to its shareholders, then at the time of the public announcement of
such agreement or of the commencement of such offer, as applicable, this Section
8.09 shall terminate
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and have no further force or effect and there shall be no rights, liabilities or
obligations under this Section 8.09 on the part of IP, UCC, MergerSub, or any of
their respective officers, directors, shareholders, agents or Affiliates.
SECTION 8.10. ASR 135. IP shall use its best efforts to publish as
promptly as reasonably practical, but in no event later than 90 days after the
end of the first month after the Effective Time in which there are at least 30
days of post-Merger combined operations (which month may be the month in which
the Effective Time occurs), combined sales and net income figures as
contemplated by and in accordance with the terms of SEC Accounting Series
Release No. 135.
SECTION 8.11. Integration Committee. IP recognizes that UCC has a
talented group of officers and employees that will be important to the future
growth of the combined companies. In recognition of the foregoing, promptly
after the date hereof, IP will establish an Integration Committee composed of
senior executive officers of both IP and UCC, as selected by IP's Chairman, who
will have direct access to him and will be responsible for proposing
alternatives and recommendations to him regarding the matters and issues arising
in connection with the integration of the two companies and their respective
businesses, assets and organizations (including, without limitation, matters
arising in connection with the matters contemplated by Section 7.04).
ARTICLE 9
CONDITIONS TO THE MERGER
SECTION 9.01. Conditions to the Obligations of Each Party. The
obligations of UCC, IP and MergerSub to consummate the Merger are subject to the
satisfaction of the following conditions:
(a) each of the UCC Shareholder Approval and the IP Shareholder
Approval shall have been obtained.
(b) the IP Common Shares to be issued in the Merger shall have been
authorized for listing on the NYSE, subject to official notice of issuance.
(c) (i) the Proxy Statement/Prospectus shall have become effective in
accordance with the provisions of the Securities Act, no stop order suspending
the effectiveness of the Proxy Statement/Prospectus shall have been issued by
the SEC and no proceedings for that purpose shall have been initiated by the SEC
and not concluded or withdrawn and (ii) all state securities or blue sky
authorizations
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necessary to carry out the transactions contemplated hereby shall have been
obtained and be in effect;
(d) (i) any applicable waiting period under the HSR Act relating to the
Merger shall have expired or been earlier terminated and (ii) if required by
applicable law, the parties shall have received a decision from the European
Commission under Regulation 4064/89 that the proposed Merger and any matters
arising therefrom fall within either Article 6.1(a) or Article 6.1(b) of such
Regulation and that, in any event, the Merger will not be referred to any
competent authority or dealt with by the European Commission pursuant to Article
9.3 of such Regulation;
(e) no Governmental Entity of competent authority or jurisdiction shall
have issued any order, injunction or decree, or taken any other action, which
permanently restrains, enjoins or otherwise prohibits the consummation of the
Merger;
(f) (i) IP shall have received a letter from Arthur Andersen LLP dated
as of the Closing Date and addressed to IP, stating that Arthur Andersen LLP
believes that the acquisition of UCC by IP should be treated as a "pooling of
interests" in conformity with GAAP as described in Accounting Principles Board
Opinion No. 16 and applicable rules and regulations of the SEC and such letter
shall not have been withdrawn or modified in any material respect and (ii) UCC
shall have received a letter from PricewaterhouseCoopers LLP dated as of the
Closing Date and addressed to UCC, stating that PricewaterhouseCoopers LLP
believes that UCC is a pooling candidate for purposes of the transactions
contemplated in conformity with GAAP as described in Accounting Principles Board
Opinion No. 16 and applicable rules and regulations of the SEC and such letter
shall not have been withdrawn or modified in any material respect.
SECTION 9.02. Conditions to the Obligations of UCC. The obligations of
UCC to consummate the Merger are subject to the satisfaction of the following
further conditions:
(a) (i) IP and MergerSub each shall have performed in all material
respects all of its obligations hereunder required to be performed by it at or
prior to the time of the filing of the Articles of Merger, (ii) (A) the
representations and warranties of IP contained in this Agreement that are
qualified by reference to an IP Material Adverse Effect shall be true and
correct when made and at and as of the time of filing the Articles of Merger, as
if made at and as of such time and (B) all other representations and warranties
of IP shall have been true and correct when made and at and as of the time of
the filing of the Articles of Merger as if made at and as of such time, except
for such inaccuracies as are not reasonably
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likely, individually or in the aggregate, to have an IP Material Adverse Effect,
and (iii) UCC shall have received a certificate signed by the Chief Executive
Officer or Chief Financial Officer of IP to the foregoing effect;
(b) UCC shall have received an opinion of Sullivan & Cromwell in form
and substance reasonably satisfactory to UCC, on the basis of certain facts,
representations and assumptions set forth in such opinion, dated as of the date
of the filing of the Articles of Merger, to the effect that the Merger will be
treated for federal income tax purposes as a 368 Reorganization and that each of
IP, MergerSub and UCC will be a party to the reorganization within the meaning
of Section 368(b) of the Code. In rendering such opinion, such counsel shall be
entitled to rely upon representations of officers of UCC and IP substantially to
the effect of Exhibits B and C hereto respectively, with such modifications as
shall be reasonably necessary; and
(c) The parties shall have obtained or made all consents, approvals,
actions, orders, authorizations, registrations, declarations, announcements and
filings contemplated by Sections 4.03 and 5.03 which if not obtained or made (i)
would render consummation of the Merger illegal or (ii) (assuming the Effective
Time had occurred) would be reasonably likely to have an IP Material Adverse
Effect.
SECTION 9.03. Conditions to the Obligations of IP and MergerSub. The
obligations of IP and MergerSub to consummate the Merger are subject to the
satisfaction of the following further conditions:
(a) (i) UCC shall have performed in all material respects all of its
obligations hereunder required to be performed by it at or prior to the
Effective Time, (ii) (A) the representations and warranties of UCC contained in
this Agreement that are qualified by reference to a UCC Material Adverse Effect
shall be true and correct when made and at and as of the time of the filing of
the Articles of Merger, as if made at and as of such time and (B) all other
representations and warranties of UCC shall have been true and correct when made
and at and as of the time of filing of the Articles of Merger, as if made as of
such time, except for such inaccuracies as are not reasonably likely,
individually or in the aggregate, to have a UCC Material Adverse Effect, and
(iii) IP shall have received a certificate signed by the Chief Executive
Officer, President or Chief Financial Officer of UCC to the foregoing effect;
and
(b) The parties shall have obtained or made all consents, approvals,
actions, orders, authorizations, registrations, declarations, announcements and
filings contemplated by Sections 4.03 and 5.03 which if not obtained or made (i)
would render consummation of the Merger illegal or (ii) (assuming the Effective
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Time had occurred) would be reasonably likely to have an IP Material Adverse
Effect or a UCC Material Adverse Effect.
ARTICLE 10
TERMINATION
SECTION 10.01. Termination. This Agreement may be terminated at any
time prior to the Effective Time by written notice by the terminating party to
the other party (except if such termination is pursuant to Section 10.01(a)),
whether before or after the UCC Shareholder Approval and/or the IP Shareholder
Approval shall have been obtained:
(a) by mutual written agreement of IP and UCC.
(b) by either IP or UCC, if
(i) the Merger shall not have been consummated by September 30,
1999 (the "End Date"); provided, however, that the right to terminate
this Agreement under this Section 10.01(b)(i) shall not be available to
any party whose breach of any provision of this Agreement has resulted
in the failure of the Merger to occur on or before the End Date;
(ii) there shall be any law or regulation that makes consummation
of the Merger illegal or otherwise prohibited or any judgment,
injunction, order or decree of any Governmental Entity having competent
jurisdiction enjoining UCC, IP or MergerSub from consummating the
Merger is entered and such judgment, injunction, judgment or order
shall have become final and nonappealable and, prior to such
termination, the parties shall have used reasonable best efforts to
resist, resolve or lift, as applicable, such law, regulation, judgment,
injunction, order or decree;
(iii) at the IP Shareholder Meeting (including any adjournment or
postponement thereof), the IP Shareholder Approval shall not have been
obtained; or
(iv) at the UCC Shareholder Meeting (including any adjournment or
postponement thereof), the UCC Shareholder Approval shall not have been
obtained.
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(c) by UCC, (i) if IP's Board of Directors shall have amended,
modified, withdrawn, conditioned or qualified the IP Recommendation in a manner
adverse to UCC; (ii) if a breach of any representation, warranty, covenant or
agreement on the part of IP or MergerSub set forth in this Agreement shall have
occurred which would cause the condition set forth in Section 9.02(a) not to be
satisfied, and such condition shall be incapable of being satisfied by the End
Date; or (iii) as contemplated by Section 6.03(d).
(d) by IP, (i) if UCC's Board of Directors shall have (A) amended,
modified, withdrawn, conditioned or qualified the UCC Recommendation in a manner
adverse to IP and/or (B) recommended any Acquisition Proposal to UCC's
shareholders; (ii) if there shall have occurred a willful and material breach of
Section 6.03 by UCC, any UCC Subsidiary or any of their respective officers,
directors, employees, advisors or other agents; (iii) pursuant to the terms of
Section 6.03(d); or (iv) if a breach of or failure to perform any
representation, warranty, covenant or agreement on the part of UCC set forth in
this Agreement shall have occurred which would cause the condition set forth in
Section 9.03(a) not to be satisfied, and such condition is incapable of being
satisfied by the End Date.
SECTION 10.02. Effect of Termination. If this Agreement is terminated
pursuant to Section 10.01 (including any such termination by way of Section
6.03(d)), there shall be no liability or obligation on the part of IP, UCC,
MergerSub, or any of their respective officers, directors, shareholders, agents
or Affiliates, except as set forth in Section 10.03 which (without limiting in
any respect the respective rights and obligations of the parties set forth in
Section 11.09 prior to any termination in accordance with the terms of this
Agreement) shall be the sole and exclusive remedy of the parties hereto in the
event of such termination; provided that the provisions of Sections 8.08, 8.09
(except as noted therein and, solely in connection with Section 8.09, Section
11.09), 10.02, 10.03, 11.01, 11.04, 11.05, 11.07, 11.08 and 11.10 of this
Agreement shall remain in full force and effect and survive any termination of
this Agreement.
SECTION 10.03. Fees and Expenses. (a) Except as set forth in this
Section 10.03, all fees and expenses incurred in connection herewith and the
transactions contemplated hereby shall be paid by the party incurring such
expenses, whether or not the Merger is consummated.
(b) If this Agreement is terminated pursuant to Section 10.01(c)(iii),
Section 10.01(d)(i)(B), Section 10.01(d)(ii) or Section 10.01(d)(iv) (but only
if the failure to satisfy the condition specified therein results from a willful
breach by UCC of any of its representations, warranties, covenants or agreements
contained herein), UCC shall (i) pay to IP a termination fee equal to $150
million (the
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"Termination Fee") and (ii) reimburse IP for its actual, documented out-of-
pocket expenses incurred to third parties in connection with the transactions
contemplated hereby not to exceed $10 million.
(c) If this Agreement is terminated by either party pursuant to Section
10.01(b)(iv) and (x) prior to the UCC Shareholder Meeting, any Person or "group"
(as defined in Section 13(d)(3) of the Securities Act) shall have publicly
announced an intention (whether or not conditional) to make an Acquisition
Proposal and (y) concurrently with or within 12 months after such termination, a
Third Party Acquisition Event occurs with the party that had publicly announced
such Acquisition Proposal or any Affiliate thereof, UCC shall (i) (A) pay to IP
50% of the Termination Fee within one Business Day of the entering into of any
agreement constituting such a Third Party Acquisition Event and (B) reimburse IP
at such time for IP's actual, documented out-of-pocket expenses incurred to
third parties in connection with the transactions contemplated hereby not to
exceed $10 million and (ii) within one Business Day of any consummation of the
transaction contemplated by such Third Party Acquisition Event (including any
revisions or amendments thereto) pay to IP 50% of the Termination Fee.
A "Third Party Acquisition Event" means (i) the consummation of an
Acquisition Proposal involving the purchase of a majority of either the equity
securities of UCC or of the consolidated assets of UCC and the UCC Subsidiaries,
taken as a whole, or any such transaction that, if it had been proposed prior to
the termination of this Agreement would have constituted an Acquisition Proposal
or (ii) the entering into by UCC or any of the UCC Subsidiaries of a definitive
agreement with respect to any such transaction.
(d) If this Agreement is terminated pursuant to Section 10.01(d)(i)(A),
(i) UCC shall (A) pay to IP 50% of the Termination Fee and (B) reimburse IP for
IP's actual, documented out-of-pocket expenses incurred to third parties in
connection with the transaction contemplated by this Agreement not to exceed $10
million and (ii) if concurrently with or within 12 months after such termination
a Third Party Acquisition Event occurs, then UCC shall pay to IP 50% of the
Termination Fee within one Business Day of the consummation of the transaction
contemplated by such Third Party Acquisition Event.
(e) If this Agreement is terminated pursuant to Section 10.01(b)(iii)
or 10.01(c)(ii) (but only if the failure to satisfy the condition specified
therein results from a willful breach by IP or MergerSub of any of its
representations, warranties, covenants or agreements contained herein), IP shall
(i) pay to UCC the Termination Fee and (ii) reimburse UCC for its actual,
documented out-of-pocket expenses incurred to third parties in connection with
the transactions contemplated hereby not to exceed $10 million.
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(f) If this Agreement is terminated pursuant to Section 10.01(c)(i),
then IP shall (i) pay to UCC 50% of the Termination Fee and (ii) reimburse UCC
for UCC's actual, documented out-of-pocket expenses incurred to third parties in
connection with the transactions contemplated by this Agreement not to exceed
$10 million.
(g) Any payment of the Termination Fee (and reimbursement of expenses)
pursuant to this Section 10.03 shall be made within one Business Day after
termination of this Agreement (or as otherwise expressly set forth in this
Agreement). If one party fails to pay to (or reimburse) the other promptly any
fee or expense due hereunder (including the Termination Fee), the defaulting
party shall pay the costs and expenses (including legal fees and expenses) in
connection with any action, including the filing of any lawsuit or other legal
action, taken to collect payment, together with interest on the amount of any
unpaid fee and/or expense at the publicly announced prime rate of Citibank, N.A.
from the date such fee was required to be paid to the date it is paid.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Notices. Except as otherwise expressly set forth in
Section 6.03(c), all notices, requests and other communications to any party
hereunder shall be in writing (including facsimile or similar writing) and shall
be given,
if to IP or MergerSub, to:
International Paper Company
Two Manhattanville Road
Purchase, NY 10577
Attention: William B. Lytton
Facsimile: (914) 397-1909
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with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Attention: Dennis S. Hersch
Facsimile: (212) 450-4800
if to UCC, to:
Union Camp Corporation
1600 Valley Road
Wayne, NJ 07470
Attention: Dirk R. Soutendijk
Facsimile: (973) 628-2640
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
Attention: James C. Morphy
Facsimile: (212) 558-3588
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. Each such notice, request
or other communication shall be effective (a) if given by facsimile, when such
facsimile is transmitted to the facsimile number specified in this Section and
the appropriate facsimile confirmation is received or (b) if given by any other
means, when delivered at the address specified in this Section.
SECTION 11.02. Survival of Representations, Warranties and Covenants
after the Effective Time. The representations and warranties contained herein
and in any certificate or other writing delivered pursuant hereto shall not
survive the Effective Time or the termination of this Agreement. The covenants
contained in Articles 2 and 3 and Sections 6.04, 7.03, 7.04, 8.10, 8.11, 11.02,
11.04, 11.05, 11.06, 11.07 and 11.10 shall survive the Effective Time.
SECTION 11.03. Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived prior to the Effective Time if, and only if,
such amendment or waiver is in writing and signed, in the case of an amendment,
by UCC, IP and MergerSub or in the case of a waiver, by the party against whom
the waiver is to be effective; provided that (i) after the UCC Shareholder
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Approval, no such amendment or waiver shall, without the further approval of
such shareholders, be made that would require such approval under any applicable
law, rule or regulation and (ii) after the IP Shareholder Approval, no such
amendment or waiver shall, without the further approval of such shareholders, be
made that would require such approval under any applicable law, rule or
regulation.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 11.04. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto, except that IP or MergerSub may
transfer or assign to any wholly owned IP Subsidiary the right to enter into the
transactions contemplated by this Agreement, provided that no such assignment
shall be permitted if it would delay or impede the Merger or any of the other
transactions contemplated by this Agreement, and any such transfer or assignment
will not relieve IP or MergerSub of its obligations hereunder. Any purported
assignment in violation hereof shall be null and void.
SECTION 11.05. Governing Law. Except to the extent that the laws of the
State of New York, the Commonwealth of Virginia, the State of Delaware or any
other jurisdiction are mandatorily applicable to the matters arising under or in
connection with this Agreement, this Agreement shall be construed in accordance
with and governed by the internal laws of the State of New York.
SECTION 11.06. Counterparts; Effectiveness; Third Party Beneficiaries.
This Agreement may be signed in any number of counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Agreement shall become effective when each
party hereto shall have received counterparts hereof signed by all of the other
parties hereto. Except as set forth in Sections 3.04, 7.03 and 7.04(b), no
provision of this Agreement is intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder.
SECTION 11.07. Jurisdiction. Except as otherwise expressly provided in
this Agreement, the parties hereto agree that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection
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with, this Agreement or the transactions contemplated hereby shall be brought in
the United States District Court for the Southern District of New York or any
other New York State court sitting in New York City, and each of the parties
hereby consents to the exclusive jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 11.01 shall be deemed
effective service of process on such party.
SECTION 11.08. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 11.09. Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly agreed that
the parties shall be entitled to specific performance of the terms hereof, this
being in addition to any other remedy to which they are entitled at law or in
equity.
SECTION 11.10. Entire Agreement. This Agreement (together with the
exhibits and schedules hereto) constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
UNION CAMP CORPORATION
By: /s/ W. Craig McClelland
---------------------------------------
Name: W. Craig McClelland
Title: Chairman and Chief Executive
Officer
INTERNATIONAL PAPER COMPANY
By: /s/ James P. Melican
---------------------------------------
Name: James P. Melican
Title: Executive Vice President
MAPLE ACQUISITION, INC.
By: /s/ James P. Melican
---------------------------------------
Name: James P. Melican
Title: President
INTERNATIONAL PAPER, UNION CAMP CORPORATION
ANNOUNCE MERGER
November 24, 1998
PURCHASE, N.Y. - International Paper (NYSE:IP) and Union Camp Corporation
(NYSE:UCC) announced today they have agreed to merge in a tax-free stock for
stock exchange. Union Camp and International Paper are diversified forest
products companies with $4.4 billion and $20.1 billion respectively in 1997 net
sales. The transaction, which is valued at $6.6 billion including assumption of
debt, is subject to approval by International Paper and Union Camp shareholders
as well as by regulatory agencies. It is expected to close at the end of the
first quarter of next year.
In the merger, which both companies' boards of directors have unanimously
approved, each outstanding share of Union Camp will be exchanged for
International Paper shares having a value of $71, subject to certain adjustments
described in the table below. The merger is expected to be accounted for as a
pooling of interests and is expected to be accretive to International Paper's
earnings in the first full year of operations.
"This is a unique opportunity to combine two great companies with low cost, high
quality assets and long traditions of customer service. In addition, cost
savings resulting from this combination will create significant value for
shareholders. Union Camp's expertise in marketing and manufacturing quality
products will add value to the combined enterprise -- offering substantial
opportunities for growth and success," said W. Craig McClelland, Union Camp's
Chairman and Chief Executive Officer.
"It's a perfect fit," stated John T. Dillon, Chairman and Chief Executive
Officer of International Paper. "By merging, we're teaming two world-class
companies in the paper, packaging, and related forest products businesses. This
combination will allow us to be even more competitive in the global marketplace
and better serve our customers."
The merger is expected to result in $300 million in cost savings through a
combination of reductions in overhead, process improvements, facility
rationalization, purchasing and logistics savings.
Three members of Union Camp's board of directors, including McClelland and two
members to be named, will join International Paper's board when the transaction
closes. McClelland, who turns age 65 in April, 1999, was scheduled to retire
from Union Camp at that time. Dillon will continue to serve as Chairman and
Chief Executive Officer of International Paper. Upon completion of the merger,
Union Camp shareholders will own approximately 25% and International Paper
shareholders will own approximately 75% of the combined company.
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Union Camp Corporation (www.unioncamp.com), based in Wayne, New Jersey, is a
leading manufacturer of paper, packaging, chemicals and wood products and ranks
among the nation's 200 largest industrial firms. Union Camp employs nearly
18,000 worldwide at operations in 40 countries.
International Paper (www.internationalpaper.com), in its 100th year of
operation, is a worldwide producer of printing papers, packaging and forest
products. The company also operates building materials and specialty businesses
in global markets, as well as a broadly based distribution network.
Headquartered in Purchase, N.Y., International Paper has operations in 30
countries, employs more than 80,000 people and exports its products to more than
130 nations.
Statements in this press release that are not historical are forward-looking
statements which are subject to risks and uncertainties that could cause actual
results to differ materially. The expected increases in profitability and
reduction in costs are subject to risks and uncertainties including general
economic conditions, fluctuation in supply and demand, operating rates and
competitive pricing pressures.
-2-
<PAGE>
<TABLE>
<CAPTION>
Table 1
Calculation of Exchange Ratio of
International Paper per Union Camp Co. Share
International Paper Average Exchange Ratio of IP Shares
Share Price at Closing per Union Camp Share Value per Union Camp Share
- ----------------------------------- ----------------------------------- ------------------------------------
<S> <C> <C>
Less than $43.70 Fixed at 1.6247 1.6247 times IP price
$43.70 - $48.30 Exchange Ratio changes $71
to maintain $71
Greater than $48.70 Fixed at 1.4700 1.4700 times IP price
</TABLE>
-3-
