SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
BENCHMARQ MICROELECTRONICS, INC.
(Name of Issuer)
Common Stock, par value $.001 per share
(Title of Class of Securities)
00 00816031
(CUSIP Number of Class of Securities)
Allan R. Campbell, Esq.
Unitrode Corporation
7 Continental Boulevard
Merrimack, New Hampshire 03054
(603)424-2410
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
Copy to:
Margaret A. Brown, Esq.
Skadden, Arps, Slate, Meagher & Flom, LLP
One Beacon St., 31st Floor
Boston, MA 02108-3194
(617) 573-4800
March 2, 1998
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Statement because of
Rule 13d-1(b)(3) or (4), check the following:
( )
Check the following box if a fee is being paid with this Statement:
( )
CUSIP No. 13D
0000816031
(1) NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
UNITRODE CORPORATION
042271186
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) ( )
(3) SEC USE ONLY
(4) SOURCE OF FUNDS*
WC/00
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
( )
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
MARYLAND
: (7) SOLE VOTING POWER
:
: 955,1581
:
NUMBER OF SHARES : (8) SHARED VOTING POWER
BENEFICIALLY OWNED BY :
EACH REPORTING PERSON WITH : 1,460,6092
:
: (9) SOLE DISPOSITIVE POWER
: 955,1581
:
: (10) SHARED DISPOSITIVE POWER
: 1,460,6092
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,415,767 1 AND 2
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES* ( )
N/A
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
APPROXIMATELY 29.9%3
(14) TYPE OF REPORTING PERSON*
CO
______________________________________________________
* SEE INSTRUCTIONS BEFORE FILLING OUT!
1 955,158 of the shares of Issuer common stock covered by this report
are purchasable by the Reporting Person upon exercise of an option
granted to the Reporting Person as of March 2, 1998, and described in
Item 4 of this report. Prior to the exercise of the option, the
Reporting Person is not entitled to any rights as a stockholder of
Issuer as to the shares covered by the option. The option may only be
exercised upon the happening of certain events referred to in Item 4,
none of which has occurred as of the date hereof. The Reporting
Person expressly disclaims beneficial ownership of any of the shares
of common stock of Issuer which are purchasable by the Reporting
Person upon exercise of the option until such time as the Reporting
Person purchases any such shares upon any such exercise. The number
of shares indicated represents 13.4% of the total outstanding shares
of common stock of Issuer as of March 2, 1998, excluding shares
issuable upon exercise of the option.
2 1,460,609 of the shares of the Issuer common stock covered by this
report are subject to a Voting Agreement entered into by certain
stockholders of the Issuer with the Reporting Person pursuant to which
such stockholders have agreed to vote all of the shares beneficially
owned by such stockholders in favor of certain matters, including
without limitation the proposed merger of Merrimack Corporation, a
wholly owned subsidiary of the Reporting Person, with and into the
Issuer, and against, among other things, any action or agreement that
could reasonably be executed to result, directly or indirectly, in a
breach in any material respect of any covenant, representation or
warranty or any obligation of the Issuer under the Agreement and Plan
of Merger dated as of March 2, 1998 between the Issuer, Merrimack
Corporation and the Reporting Person described in Item 3 hereof. The
Reporting Person expressly disclaims beneficial ownership of any of
the shares of Issuer common stock covered by the Voting Agreement.
The number of shares indicated represents approximately 20.6% of the
outstanding shares of common stock of the Issuer as of March 2, 1998,
excluding the shares issuable upon exercise of the Option (as
described above).
3 After giving effect to the exercise of the option as described herein.
ITEM 1. SECURITY AND ISSUER.
This statement on Schedule 13D (the "Schedule 13D") relates to
the common stock, par value $.001 per share (the "Shares" or the "Issuer
Common Stock"), of BENCHMARQ Microelectronics, Inc., a Delaware corporation
(the "Issuer"). The principal executive office of the Issuer is located at
17919 Waterview Parkway, Dallas, Texas 75252.
The information set forth in the Exhibits hereto is hereby
expressly incorporated herein by reference and the responses to each item
of this Schedule 13D are qualified in their entirety by the provisions of
such Exhibits.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(c) This Schedule 13D is filed by Unitrode Corporation, a
Maryland corporation (the "Reporting Person").
The business address of the Reporting Person is 7 Continental
Boulevard, Merrimack, New Hampshire 03054. The principal business of the
Reporting Person is the design and manufacture of analog/linear integrated
circuits.
To the best of the Reporting Person's knowledge as of the date
hereof, the name, business address, present principal occupation or
employment, name, principal business and address of any corporation or
other organization in which such employment is conducted, and citizenship
of each executive officer and director of the Reporting Person is set forth
in Schedule I hereto. The information contained in Schedule I is
incorporated herein by reference.
(d)-(e) During the last five years, neither the Reporting Person
nor, to the best knowledge of the Reporting Person, any of the executive
officers or directors of the Reporting Person, has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors),
or been a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as a result of such proceeding was or is
subject to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, Federal or State
securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The Reporting Person entered into an Agreement and Plan of Merger
dated as of March 2, 1998 by and among the Reporting Person, Merrimack
Corporation, a Delaware corporation and wholly owned subsidiary of the
Reporting Person ("Merger Sub"), and the Issuer (the "Merger Agreement"),
providing for the merger (the "Merger") of the Merger Sub with and into the
Issuer with the Issuer as the surviving corporation, pursuant to which each
outstanding Share will be converted into the right to receive shares of
common stock, par value $0.01 per share, of the Reporting Person (the
"Reporting Person Common Stock") and one associated preferred stock
purchase right (a "Right") issued in accordance with the Rights Agreement
(the "Rights Agreement"), dated as of May 2, 1990, as amended from time to
time, between the Reporting Person and the First National Bank of Boston
(references to shares of the Reporting Person Common Stock issuable in the
Merger are deemed to include the associated Rights). The Merger is subject
to the approval of the Merger by the Issuer's stockholders, the approval by
the Reporting Person's stockholders of the issuance of Reporting Person
Common Stock in the Merger, the expiration of the applicable waiting period
under the Hart-Scott- Rodino Antitrust Improvements Act of 1976, as
amended, and any other required regulatory approvals, and the satisfaction
or waiver of certain other conditions as more fully described in the Merger
Agreement. The foregoing summary of the Merger and the Merger Agreement is
qualified in its entirety by reference to the Merger Agreement, a copy of
which is included as Exhibit 1 to this Schedule 13D and is incorporated
herein in its entirety by reference.
As a further inducement for the Reporting Person to enter into
the Merger Agreement and in consideration thereof, Issuer and the Reporting
Person entered into that certain Stock Option Agreement (the "Option
Agreement"), dated as of March 2, 1998, whereby Issuer granted to the
Reporting Person an option (the "Option") to purchase, under certain
circumstances described therein, up to 955,158 Shares at a purchase price
per Share equal to $17.53, as adjusted as provided therein (the "Purchase
Price"). Based on the number of Shares outstanding on March 2, 1998, the
Option would be exercisable for approximately 13.4% of the outstanding
Shares, or approximately 10% of the Shares on a fully diluted basis after
giving effect to the exercise of the Option.
None of the Triggering Events (defined in Item 4 below)
permitting the exercise of the Option has occurred as of the date hereof.
In the event that the Option becomes exercisable and the Reporting Person
wishes to purchase the Shares subject thereto, the Reporting Person
anticipates that it would fund the exercise price with working capital or
through other financing sources available to the Reporting Person at the
time of exercise. See also Item 4 below.
As a further inducement for the Reporting Person to enter into
the Merger Agreement, Alan R. Schuele, Derrell C. Coker, L.J. Sevin, Harvey
B. Cash, Dietrich Erdmann, Jack Kilby and Charles H. Phipps, stockholders
of the Issuer (the "Stockholders") entered into a Voting Agreement (the
"Voting Agreement"), dated as of March 2, 1998, with the Reporting Person
whereby the Stockholders agreed to vote all of the Shares beneficially
owned by them in favor of certain matters, including without limitation,
the approval and adoption of the Merger Agreement, and against, among other
things, any action or agreement that could reasonably be expected to
result, directly or indirectly, in a breach in any material respect of any
covenant, representation or warranty or any obligation of the Issuer under
the Merger Agreement or the Option Agreement. The Reporting Person did not
pay additional consideration to any Stockholder in connection with the
execution and delivery of the Voting Agreement.
ITEM 4. PURPOSE OF THE TRANSACTION.
(a)-(j) The information set forth in Item 3 is hereby
incorporated herein by reference.
Pursuant to the Option Agreement, the Issuer has granted the
Reporting Person the Option, which, based on the number of Shares
outstanding on March 2, 1998, would be exercisable for approximately 13.4%
of the outstanding Shares, or approximately 10% of the Shares on a fully
diluted basis after giving effect to the exercise of the Option.
The Reporting Person may exercise the Option, in whole or in
part, at any time and from time to time following the occurrence of certain
events (each, a "Triggering Event"), provided that the Reporting Person
provides notice of such exercise in accordance with the Option Agreement.
A Triggering Event includes the following:
(i) any Person (as defined in the Merger Agreement) (other than
the Reporting Person or any subsidiary of the Reporting Person) shall
have commenced (as such term is defined in Rule 14d-2 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) or
shall have filed a registration statement under the Securities Act of
1933, as amended (the "Securities Act"), with respect to a tender
offer or exchange offer to purchase any shares of Issuer Common Stock
such that, upon consummation of such offer, such Person would own or
control 10% or more of the then outstanding Issuer Common Stock;
(ii) the Issuer or any subsidiary of the Issuer shall have
authorized, recommended, proposed or publicly announced an intention
to authorize, recommend or propose, or entered into, an agreement with
any Person (other than the Reporting Person or any subsidiary of the
Reporting Person) to (A) effect a merger, reorganization,
consolidation, share exchange or other business combination or similar
transaction involving the Issuer or any of its Significant
Subsidiaries (within the meaning of Rule 1-02 of Regulation S-X of the
Securities and Exchange Commission), (B) sell, lease or otherwise
dispose of assets of the Issuer or its subsidiaries representing 10%
or more of the consolidated assets of the Issuer other than in the
ordinary course of business or (C) issue, sell or otherwise dispose of
(including by way of merger, reorganization, consolidation, share
exchange or other business combination or any similar transaction)
securities (or options, rights or warrants to purchase, or securities
convertible into or exchangeable for, such securities) representing
10% or more of the voting power of the Issuer or any of its
Significant Subsidiaries; or
(iii) any Person (other than the Reporting Person or any
subsidiary of the Reporting Person or the Issuer or, in a fiduciary
capacity, any subsidiary of the Issuer) shall have, subsequent to the
date of the Option Agreement, acquired beneficial ownership (as such
term is defined in Rule 13d-3 under the Exchange Act) or the right to
acquire beneficial ownership of, or any "Group" (as such term is
defined under the Exchange Act) shall have been formed which
beneficially owns or has the right to acquire beneficial ownership of,
10% or more of the then outstanding Issuer Common Stock.
provided, that the Option will terminate either (i)immediately prior to the
Effective Time (as defined in the Merger Agreement) of the Merger; or (ii)
at the time of termination of the Merger Agreement (A) by the Issuer or the
Reporting Person pursuant to Subsection 9.1(d) of the Merger Agreement,
provided that the matter giving rise to the Order (as defined in the Merger
Agreement) providing the basis for termination under Subsection 9.1(d) of
the Merger Agreement shall not have been initiated by the Issuer or any
Person who initiates an Acquisition Proposal (as such item is defined in
the Merger Agreement), (B) by the Issuer pursuant to Subsection 9.1(c),
Subsection 9.1(h) or Subsection 9.1(j) of the Merger Agreement, (C) by
either the Issuer or the Reporting Person pursuant to Subsection 9.1(g) of
the Merger Agreement, (D) by both the Issuer and the Reporting Person
pursuant to Subsection 9.1(a) of the Merger Agreement, (E) by the Issuer or
the Reporting Person pursuant to Subsection 9.1(e) of the Merger Agreement
(if there then exists circumstances that would permit termination of the
Merger Agreement by the Issuer pursuant to Subsection 9.1(e) of the Merger
Agreement), (F) by the Reporting Person pursuant to Subsection 9.1(i)(i)
(if circumstances exist that would allow the Issuer to terminate the Merger
Agreement pursuant to Subsection 9.1(h) of the Merger Agreement) or (G) by
either party pursuant to any other provision of the Merger Agreement;
provided (in the case of subsection (G)) such termination occurs prior to
the occurrence of an Acquisition Proposal.
Upon the occurrence of certain events set forth in the Option
Agreement, the Issuer is required to repurchase the Option (the
"Repurchase") or to cause the Option to be converted into, or exchanged
for, an option of another corporation (the "Substitute Option"). In
addition, the Option Agreement grants certain registration rights (the
"Registration Rights") to the Reporting Person with respect to the Shares
represented by the Option. Also, under certain circumstances, the Issuer
is entitled to a right of first refusal (the "Right of First Refusal") if
the Reporting Person desires to sell all or any part of the Option or
Shares acquired by it pursuant thereto. Notwithstanding any other
provisions of the Option Agreement, the Total Profit (as defined therein)
which the Reporting Person may realize from the Option may not exceed
$7,278,000. The terms of such Repurchase, Substitute Option, Registration
Rights, Right of First Refusal and limitations on Total Profit are set
forth in the Option Agreement. The foregoing summary of the Option
Agreement is qualified in its entirety by reference to the copy of the
Option Agreement included as Exhibit 2 of this Schedule 13D and
incorporated herein in its entirety by reference.
Pursuant to the Voting Agreement, the Stockholders agreed to vote
all of the Shares beneficially owned by them in favor of certain matters,
including without limitation, the approval and adoption of the Merger
Agreement, and against, among other things, any action or agreement that
could reasonably be expected to result, directly or indirectly, in a breach
in any material respect of any covenant, representation or warranty or any
obligation of the Issuer under the Merger Agreement or the Option
Agreement. The Voting Agreement terminates upon the earlier to occur of
the Effective Time or the termination of the Merger Agreement. The name of
each Stockholder and the number of outstanding shares of Issuer Common
Stock held by each Stockholder are set forth on Schedule A to the Voting
Agreement which is incorporated herein by reference. The foregoing summary
of the Voting Agreement is qualified in its entirety by reference to the
copy of the Voting Agreement included as Exhibit 3 of this Schedule 13D and
incorporated herein in its entirety by reference.
The purpose of the Option Agreement and the Voting Agreement are
to facilitate consummation of the Merger.
Upon consummation of the Merger as contemplated by the Merger
Agreement, (a) a new subsidiary of the Reporting Person will be merged into
the Issuer, (b) the Board of Directors of the Issuer will be replaced by
the Board of Directors of Merger Sub, (c) the Certificate of Incorporation
and Bylaws of the Issuer will be replaced by the Certificate of
Incorporation and Bylaws of the Merger Sub, (d) the Shares will cease to be
authorized for listing on the Nasdaq National Market and (e) the Shares
will become eligible for termination of registration pursuant to Section
12(g)(4) of the Exchange Act.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b) The number of Shares covered by the Option is 955,158,
which constitutes approximately (i) 13.4% of Issuer Common Stock based on
the Shares issued and outstanding on March 2, 1998, or (ii) 10% of the
shares of Issuer Common Stock that would be outstanding after giving effect
to the exercise of the Option.
Prior to the exercise of the Option, the Reporting Person (i) is
not entitled to any rights as a stockholder of Issuer as to the Shares
covered by the option and (ii) disclaims any beneficial ownership of the
shares of Issuer Common Stock which are purchasable by the Reporting Person
upon exercise of the Option because the Option is exercisable only in the
limited circumstances referred to in Item 4 above, none of which has
occurred as of the date hereof. If the Option were exercised, the
Reporting Person would have the sole right to vote or to dispose of the
shares of Issuer Common Stock issued as a result of such exercise.
The number of Shares covered by the Voting Agreement is
1,460,609, which constitutes approximately 20.6% of the Issuer Common
Stock, based on the number of Shares outstanding as of March 2, 1998.
The Reporting Person (i) is not entitled to any rights as a
stockholder of Issuer as to the Shares covered by the Voting Agreement and
(ii) disclaims any beneficial ownership of the shares of Issuer Common
Stock which are by the Voting Agreement.
(c) Other than as set forth in this Item 5, to the best of the
Reporting Person's knowledge as of the date hereof (i) neither the
Reporting Person nor any subsidiary or affiliate of the Reporting Person
nor any of the Reporting Person's executive officers or directors,
beneficially owns any shares of Issuer Common Stock, and (ii) there have
been no transactions in the shares of Issuer Common Stock effected during
the past 60 days by the Reporting Person, nor to the best of the Reporting
Person's knowledge, by any subsidiary or affiliate of the Reporting Person
or any of the Reporting Person's executive officers of directors.
(d) No other person is known by the Reporting Person to have the
right to receive or the power to direct the receipt of dividends from, or
the proceeds from the sale of, the Issuer Common Stock obtainable by the
Reporting Person upon exercise of the Option.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Copies of the Merger Agreement, the Option Agreement and the Voting
Agreement are attached as Exhibits hereto and, to the best of the Reporting
Person's knowledge, there are at present no contracts, arrangements,
understandings or relationship (legal or otherwise) among the persons named
in Item 2 above and between any such persons and any person which respect
to any securities to the Issuer.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT DESCRIPTION
1 Agreement and Plan of Merger, dated as of March 2, 1998 by and
among Unitrode Corporation, Merrimack Corporation and BENCHMARQ
Microelectronics, Inc., without exhibits thereto.
2 Stock Option Agreement, dated as of March 2, 1998 by and between
Unitrode Corporation as "Grantee" and BENCHMARQ Microelectronics,
Inc. as "Issuer."
3 Voting Agreement, dated as of March 2, 1998, by and between
Unitrode Corporation and Alan R. Schuele, Derrell C. Coker, L.J.
Sevin, Harvey B. Cash, Dietrich Erdmann, Jack Kilby and Charles
H. Phipps.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that this statement is true, complete and correct.
UNITRODE CORPORATION
By: /s/ Robert J. Richardson
_________________________________
Name: Robert J. Richardson
Title: President and Chief Executive Officer
Dated: March 6, 1998
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF UNITRODE CORPORATION
The following table sets forth the name, business address and
present principal occupation or employment of each director and executive
officer of the Reporting Person. Each such person is a U.S. citizen, and
the business address of each such person is 7 Continental Boulevard,
Merrimack, New Hampshire 03054.
Name and Business Present Principal
Address Occupation
Peter A. Brooke Director of the Reporting Person
Kenneth Hecht Director of the Reporting Person
Louis E. Lataif Director of the Reporting Person
James T. Vanderslice Director of the Reporting Person
Robert L. Gable Director and Chairman of the Reporting Person
Robert J. Richardson Director, President and Chief Executive Officer of
the Reporting Person
Allan R. Campbell Senior Vice President and General Counsel of the
Reporting Person
S. Kelley MacDonald Vice President Corporate Communications of the
Reporting Person
Patrick J. Moquin Vice President Human Resources of the Reporting
Person
Cosmo S. Trapani Executive Vice President and Chief Financial
Officer of the Reporting Person
EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE
1 Agreement and Plan of Merger, dated as of March
2, 1998 by and among Unitrode Corporation,
Merrimack Corporation and BENCHMARQ
Microelectronics, Inc., without exhibits thereto.
2 Stock Option Agreement, dated as of March 2, 1998
by and between Unitrode Corporation as "Grantee"
and BENCHMARQ Microelectronics, Inc. as "Issuer."
3 Voting Agreement, dated as of March 2, 1998, by
and between Unitrode Corporation and Alan R.
Schuele, Derrell C. Coker, L.J. Sevin, Harvey B.
Cash, Dietrich Erdmann, Jack Kilby and Charles H.
Phipps.
EXHIBIT 1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
UNITRODE CORPORATION
MERRIMACK CORPORATION
AND
BENCHMARQ MICROELECTRONICS, INC.
MARCH 2, 1998
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1 Rules of Construction . . . . . . . . . . . . . . . 2
Section 1.2 Defined Terms. . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
TERMS OF MERGER
Section 2.1 Statutory Merger . . . . . . . . . . . . . . . . . 12
Section 2.2 Effective Time . . . . . . . . . . . . . . . . . . 13
Section 2.3 Effect of the Merger . . . . . . . . . . . . . . . 13
Section 2.4 Certificate of Incorporation; Bylaws. . . . . . . . 13
Section 2.5 Directors and Officers . . . . . . . . . . . . . . 13
ARTICLE III
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 3.1 Merger Consideration; Conversion and
Cancellation of Securities . . . . . . . . . . . 13
Section 3.2 Adjustments to the Exchange Ratio. . . . . . . . . 14
Section 3.3 Exchange of Certificates . . . . . . . . . . . . . 14
Section 3.4 Closing. . . . . . . . . . . . . . . . . . . . . . 17
Section 3.5 Stock Transfer Books . . . . . . . . . . . . . . . 17
Section 3.6 No Fractional Shares . . . . . . . . . . . . . . . 17
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.1 Organization and Qualification; Subsidiaries . . . 18
Section 4.2 Certificate of Incorporation; Bylaws . . . . . . . 18
Section 4.3 Capitalization . . . . . . . . . . . . . . . . . . 18
Section 4.4 Authorization of Agreement . . . . . . . . . . . . 20
Section 4.5 Approvals. . . . . . . . . . . . . . . . . . . . . 20
Section 4.6 No Violation . . . . . . . . . . . . . . . . . . . 20
Section 4.7 Reports. . . . . . . . . . . . . . . . . . . . . . 21
Section 4.8 No Material Adverse Effect; Conduct. . . . . . . . 22
Section 4.9 Title to Properties. . . . . . . . . . . . . . . . 22
Section 4.10 Certain Obligations . . . . . . . . . . . . . . . 23
Section 4.11 Permits; Compliance . . . . . . . . . . . . . . . 23
Section 4.12 Litigation; Compliance with Laws . . . . . . . . . 23
Section 4.13 Information in Disclosure Documents and
Registration Statement . . . . . . . . . . . . . 23
Section 4.14 Employee Plans; Collective Bargaining
Agreements . . . . . . . . . . . . . . . . . . . 24
Section 4.15 Taxes. . . . . . . . . . . . . . . . . . . . . . . 28
Section 4.16 Environmental Matters. . . . . . . . . . . . . . . 29
Section 4.17 Intellectual Propert . . . . . . . . . . . . . . . 29
Section 4.18 Insurance. . . . . . . . . . . . . . . . . . . . . 30
Section 4.19 Pooling; Tax Matters . . . . . . . . . . . . . . . 30
Section 4.20 Affiliates . . . . . . . . . . . . . . . . . . . . 30
Section 4.21 Brokers. . . . . . . . . . . . . . . . . . . . . . 30
Section 4.22 Opinion of Financial Advisor . . . . . . . . . . . 30
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Section 5.1 Organization and Qualification; Subsidiaries . . . 31
Section 5.2 Articles of Incorporation; Bylaws. . . . . . . . . 31
Section 5.3 Capitalization . . . . . . . . . . . . . . . . . . 31
Section 5.4 Authorization of Agreement . . . . . . . . . . . . 32
Section 5.5 Approvals. . . . . . . . . . . . . . . . . . . . . 33
Section 5.6 No Violation . . . . . . . . . . . . . . . . . . . 33
Section 5.7 Reports. . . . . . . . . . . . . . . . . . . . . . 34
Section 5.8 No Material Adverse Effect; Conduct. . . . . . . . 34
Section 5.9 Litigation; Compliance with Laws . . . . . . . . . 35
Section 5.10 Information in Disclosure Documents and
Registration Statement. . . . . . . . . . . . . 35
Section 5.11 Pooling; Tax Matters . . . . . . . . . . . . . . . 35
Section 5.12 Affiliates . . . . . . . . . . . . . . . . . . . . 36
Section 5.13 Brokers. . . . . . . . . . . . . . . . . . . . . . 36
Section 5.14 Opinion of Financial Advisor . . . . . . . . . . . 36
Section 5.15 Operations of Newco. . . . . . . . . . . . . . . . 36
Section 5.16 Proposal to Acquire the Acquiror . . . . . . . . . 36
ARTICLE VI
COVENANTS
Section 6.1 Affirmative Covenants. . . . . . . . . . . . . . . 36
Section 6.2 Negative Covenants . . . . . . . . . . . . . . . . 37
Section 6.3 No Solicitation. . . . . . . . . . . . . . . . . . 42
Section 6.4 Access and Information . . . . . . . . . . . . . . 42
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 Meeting of Stockholders. . . . . . . . . . . . . . 43
Section 7.2 Registration Statement; Proxy Statements . . . . . 44
Section 7.3 Appropriate Action; Consents; Filings. . . . . . . 45
Section 7.4 Affiliates; Pooling; Tax Treatment . . . . . . . . 47
Section 7.5 Public Announcements . . . . . . . . . . . . . . . 47
Section 7.6 Stock Exchange Listing . . . . . . . . . . . . . . 47
Section 7.7 Employee Benefit Plans . . . . . . . . . . . . . . 48
Section 7.8 Indemnification of Directors and Officers. . . . . 48
Section 7.9 Newco. . . . . . . . . . . . . . . . . . . . . . . 50
Section 7.10 Event Notices. . . . . . . . . . . . . . . . . . . 50
Section 7.11 Assumption of Obligations to Issue Stock . . . . . 50
Section 7.12 Real Estate Transfer Tax Returns . . . . . . . . . 51
Section 7.13 Acquiror's Board of Directors and Officers . . . . 51
ARTICLE VIII
CLOSING CONDITIONS
Section 8.1 Conditions to Obligations of Each Party
Under This Agreement . . . . . . . . . . . . . . 52
Section 8.2 Additional Conditions to Obligations of
the Acquiror Companies . . . . . . . . . . . . . 53
Section 8.3 Additional Conditions to Obligations of
the Company. . . . . . . . . . . . . . . . . . . 53
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
Section 9.1 Termination. . . . . . . . . . . . . . . . . . . . 54
Section 9.2 Effect of Termination. . . . . . . . . . . . . . . 56
Section 9.3 Amendment. . . . . . . . . . . . . . . . . . . . . 57
Section 9.4 Waiver . . . . . . . . . . . . . . . . . . . . . . 57
Section 9.5 Expenses . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Effectiveness of Representations, Warranties
and Agreements . . . . . . . . . . . . . . . . . 57
Section 10.2 Notices. . . . . . . . . . . . . . . . . . . . . . 58
Section 10.3 Headings . . . . . . . . . . . . . . . . . . . . . 59
Section 10.4 Severability . . . . . . . . . . . . . . . . . . . 59
Section 10.5 Entire Agreement . . . . . . . . . . . . . . . . . 59
Section 10.6 Assignment . . . . . . . . . . . . . . . . . . . . 59
Section 10.7 Parties in Interest . . . . . . . . . . . . . . . 59
Section 10.8 Failure or Indulgence Not Waiver; Remedies
Cumulative . . . . . . . . . . . . . . . . . . . 60
Section 10.9 Governing Law. . . . . . . . . . . . . . . . . . . 60
Section 10.10 Counterparts . . . . . . . . . . . . . . . . . . . 60
ANNEXES
Annex A Form of Voting Agreement
Annex B Stock Option Agreement
Annex C Affiliate's Agreement (BENCHMARQ Affiliates)
Annex D Affiliate's Agreement (Unitrode Affiliates)
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of March 2, 1998 is by and
among Unitrode Corporation, a Maryland corporation (the "Acquiror"),
Merrimack Corporation, a Delaware corporation and a wholly-owned subsidiary
of Acquiror ("Newco"), and BENCHMARQ Microelectronics, Inc., a Delaware
corporation (the "Company"). The Acquiror and Newco are sometimes referred
to herein as the "Acquiror Companies."
RECITALS:
The Board of Directors of the Company has determined that the business
combination to be effected by means of the Merger (as defined herein) is
consistent with and in furtherance of the long-term strategic interests of
the Company and is fair to, and in the best interests of, the Company and
its stockholders and has approved and adopted this Agreement (as defined
herein) and recommends approval and adoption of this Agreement by the
stockholders of the Company.
The Board of Directors of the Acquiror has determined that the
business combination to be effected by means of the Merger is consistent
with and in furtherance of the long-term strategic interests of the
Acquiror and in the best interests of, the Acquiror and its stockholders
and has approved this Agreement and recommends approval by the stockholders
of the Acquiror of the issuance of shares of the common stock, $.01 par
value, of the Acquiror (the "Acquiror Common Stock") contemplated by the
Merger.
The Board of Directors of Newco has determined that the business
combination to be effected by means of the Merger is advisable, and in the
best interests of, Newco and its stockholder and has approved and adopted
this Agreement. The stockholder of Newco has approved and adopted this
Agreement.
Concurrently with the execution and delivery of this Agreement, as an
essential condition and inducement to the willingness of the Acquiror and
Newco to enter into this Agreement, certain holders of common stock, par
value $.001 per share, of the Company ("Company Common Stock") have each
entered into a Voting Agreement (the "Voting Agreement") in the form
attached as Annex A dated as of the date hereof pursuant to which such
holders have agreed to vote their shares of Company Common Stock in the
manner set forth therein.
Concurrently with the execution and delivery of this Agreement, as an
essential condition and inducement to the willingness of the Acquiror and
Newco to enter into this Agreement, the Company has entered into a Stock
Option Agreement (the "Option Agreement") in the form attached hereto as
Annex B dated as of the date hereof granting the Acquiror an irrevocable
option to purchase up to 955,158 shares of the Company Common Stock on the
terms and subject to the conditions set forth therein.
Upon the terms and subject to the conditions of this Agreement and in
accordance with the Delaware General Corporation Law (the "DGCL"), Newco
will merge with and into the Company (the "Merger") and the Company will
continue as the surviving corporation (the "Surviving Corporation").
For U.S. federal income tax purposes, it is intended that the Merger
will qualify as a reorganization within the meaning of the provisions of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), and that this Agreement shall be, and is hereby, adopted as a plan
of reorganization for purposes of Section 368(a) of the Code.
The Merger is intended to be treated as a "pooling of interests" for
accounting purposes.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, and intending to be legally bound hereby the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Rules of Construction. Unless the context otherwise
requires, as used in this Agreement: (a) a term has the meaning ascribed
to it; (b) an accounting term not otherwise defined has the meaning
ascribed to it in accordance with GAAP as in effect from time to time; (c)
"or" is not exclusive unless the context requires otherwise; and (d)
"including" means "including without limitation".
Section 1.2 Defined Terms. For all purposes in this Agreement, the
following terms shall have the respective meanings set forth in this
Section 1.2 (such definitions to be equally applicable to both the singular
and plural forms of the terms herein defined).
"Acquiror Rights" will mean rights to purchase shares of the preferred
stock of the Acquiror pursuant to that certain Rights Agreement, between
Acquiror and The First National Bank of Boston dated as of May 2, 1990, and
as amended as of April 30, 1993.
"Acquiror Stock Options" will mean stock options granted pursuant to
the 1983 Stock Option Plan, the Amended and Restated 1986 Non-Employee
Director Option Plan and the 1992 Employee Stock Option Plan, as amended.
"Acquiror's Audited Consolidated Financial Statements" will mean the
consolidated balance sheets of the Acquiror and its Subsidiaries and the
related consolidated statements of income, stockholders equity and cash
flows, together with the notes thereto, all as audited by Coopers & Lybrand
L.L.P., independent accountants, under their report with respect thereto
dated February 27, 1997 and included in the Acquiror's Annual Report on
Form 10-K for the year ended January 31, 1997 filed with the Commission.
"Acquiror's Consolidated Balance Sheet" will mean the consolidated
balance sheet of the Acquiror as of January 31, 1997, included in the
Acquiror's Audited Consolidated Financial Statements.
"Acquiror's Consolidated Financial Statements" will mean the
Acquiror's Audited Consolidated Financial Statements and the Acquiror's
Unaudited Consolidated Financial Statements.
"Acquiror's Disclosure Letter" will mean a letter of even date
herewith delivered by the Acquiror to the Company with the execution of the
Agreement, which, among other things, will identify exceptions to the
Acquiror's representations and warranties contained in Article V by
specific section and subsection references.
"Acquiror's Stockholders' Meeting" shall have the meaning ascribed to
such term in Subsection 7.1(b) hereof.
"Acquiror's Unaudited Consolidated Financial Statements" will mean the
unaudited consolidated balance sheet of the Acquiror and its Subsidiaries
as of November 1, 1997 and the related consolidated statements of income,
stockholders equity and cash flows for the fiscal quarters ended October
31, 1996 and November 1, 1997, together with the notes thereto, included in
the Acquiror's Quarterly Report on Form 10-Q for the quarter ended November
1, 1997 filed with the Commission.
"Acquisition Proposal" will mean any offer, proposal or indication of
interest (other than by or with the Acquiror or any of its Subsidiaries):
(a) by any Person to commence (as such term is defined in Rule 14d-2
under the Exchange Act), or file a registration statement under the
Securities Act with respect to, a tender offer or exchange offer to
purchase any shares of Company Common Stock such that, upon consummation of
such offer, such Person would own or control more than 15% of the then
outstanding Company Common Stock; or
(b) relating to (A) a merger, reorganization, consolidation, share
exchange or other business combination or similar transaction involving the
Company or any of its Significant Subsidiaries, (B) a sale, lease,
exchange, mortgage, pledge, transfer or other disposition of assets of the
Company or its Subsidiaries representing 15% or more of the consolidated
assets of the Company, directly or indirectly, in one or a series of
transactions other than in the ordinary course of business; (C) an
issuance, sale or other acquisition or disposition of (including by way of
merger, consolidation, share exchange or any similar transaction)
securities (or options, rights or warrants to purchase, or securities
convertible into or exchangeable for, such securities) representing 15% or
more of the voting power of the Company or any of its Significant
Subsidiaries, directly or indirectly, in one or a series of transactions or
(D) a transaction in which any Person shall or would acquire beneficial
ownership (as such term is defined in Rule 13d-3 under the Exchange Act),
or the right to acquire beneficial ownership, or any "group" (as such term
is defined under the Exchange Act) shall have been formed which
beneficially owns or would own or has or would have the right to acquire
beneficial ownership, of 15% or more of the outstanding Company Common
Stock.
"Acquiror Acquisition Proposal" will mean any offer, proposal or
indication of interest (other than by or with the Company or any of its
Subsidiaries):
(a) by any Person to commence (as such term is defined in Rule 14d-2
under the Exchange Act), or file a registration statement under the
Securities Act with respect to, a tender offer or exchange offer to
purchase any shares of Acquiror Common Stock such that, upon consummation
of such offer, such Person would own or control more than 15% of the then
outstanding Acquiror Common Stock; or
(b) relating to (A) a merger, reorganization, consolidation, share
exchange or other business combination or similar transaction involving the
Acquiror or any of its Significant Subsidiaries, (B) a sale, lease,
exchange, mortgage, pledge, transfer or other disposition of assets of the
Acquiror or its Subsidiaries representing 15% or more of the consolidated
assets of the Acquiror, directly or indirectly, in one or a series of
transactions other than in the ordinary course of business; (C) an
issuance, sale or other acquisition or disposition of (including by way of
merger, consolidation, share exchange or any similar transaction)
securities (or options, rights or warrants to purchase, or securities
convertible into or exchangeable for, such securities) representing 15% or
more of the voting power of the Acquiror or any of its Significant
Subsidiaries, directly or indirectly, in one or a series of transactions or
(D) a transaction in which any person shall or would acquire beneficial
ownership (as such term is defined in Rule 13d-3 under the Exchange Act),
or the right to acquire beneficial ownership, or any "group" (as such term
is defined under the Exchange Act) shall have been formed which
beneficially owns or would own or has or would have the right to acquire
beneficial ownership, of 15% or more of the outstanding Acquiror Common
Stock.
"Affiliate" will, with respect to any Person, mean any other Person
that controls, is controlled by or is under common control with the former.
"Agreement" will mean this Agreement and Plan of Merger made and
entered into as of March 2, 1998 among Acquiror, Newco and the Company,
including any amendments hereto and each Annex hereto.
"Benefit Arrangement" will mean any employment, consulting, severance
or other similar contract, arrangement or policy and each plan, arrangement
(written or oral), program, agreement or commitment providing for insurance
coverage (including without limitation any self-insured arrangements),
workers' compensation, disability benefits, supplemental unemployment
benefits, vacation benefits, retirement benefits, life, health, disability
or accident benefits (including without limitation any "voluntary
employees' beneficiary association" as defined in section 501(c)(9) of the
Code providing for the same or other benefits) or for deferred
compensation, profit-sharing bonuses, stock options, restricted stock,
phantom stock, stock appreciation rights, stock purchases or other forms of
incentive compensation or post-retirement insurance, compensation or
benefits which (i) is not a Welfare Plan, Pension Plan or Multiemployer
Plan, (ii) is entered into, maintained, administered, contributed to or
required to be contributed to, as the case may be, by a specified Person,
and (iii) covers any employee or former employee of such Person.
"Benefit Continuation Period" will have the meaning ascribed to such
term in Subsection 7.7(b) hereof.
"Business Day" will mean any day other than a day on which banks in
the States of New Hampshire or Texas are authorized or obligated to be
closed.
"CERCLA" will mean the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980, as amended.
"Certificate of Merger" will have the meaning ascribed to such term in
Section 2.2 hereof.
"Closing" will mean a meeting, which will be held in accordance with
Section 3.3, of all Persons interested in the transactions contemplated by
the Agreement at which all documents deemed necessary by the parties to the
Agreement to evidence the fulfillment or waiver of all conditions precedent
to the consummation of the transactions contemplated by the Agreement are
executed and delivered.
"Closing Date" will mean the date of the Closing as determined
pursuant to Section 3.3.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, and the Regulations promulgated thereunder.
"Commission" will mean the Securities and Exchange Commission.
"Company Option Plans" will mean collectively the 1989 Stock Option
Plan and the 1995 Flexible Stock Option Plan.
"Company Stock Options" will mean options granted pursuant to the
Company Option Plans.
"Company Stockholders' Meeting" will have the meaning ascribed to such
term in Subsection 7.1(a).
"Company's Audited Consolidated Financial Statements" will mean the
consolidated balance sheets of the Company and its Subsidiaries and the
related consolidated statements of income, stockholders equity and cash
flows, together with the notes thereto, all as audited by Ernest & Young
L.L.P., independent accountants, under their report with respect thereto
dated February 18, 1997, and included in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996 filed with the
Commission.
"Company's Consolidated Balance Sheet" will mean the consolidated
balance sheet of the Company as of December 31, 1996, included in the
Company's Audited Consolidated Financial Statements.
"Company's Consolidated Financial Statements" will mean the Company's
Audited Consolidated Financial Statements and the Company's Unaudited
Consolidated Financial Statements.
"Company's Disclosure Letter" will mean a letter of even date herewith
delivered by the Company to the Acquiror Companies concurrently with the
execution of the Agreement, which, among other things, will identify
exceptions to the Company's representations and warranties contained in
Article IV by specific section and subsection references.
"Company's Unaudited Consolidated Financial Statements" will mean the
unaudited consolidated balance sheet of the Company and its Subsidiaries as
of September 30, 1997 and the related consolidated statements of income,
stockholders equity and cash flows for the three month periods and nine
month periods ended September 30, 1996 and September 30, 1997, together
with the notes thereto, included in the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1997 filed with the
Commission.
"control" (including the terms "controlled," "controlled by" and
"under common control with") will mean the possession, directly or
indirectly or as trustee or executor, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of stock or as trustee or executor, by contract or credit
arrangement or otherwise.
"Court" will mean any court or arbitration tribunal of the United
States or any domestic state, and any political subdivision thereof.
"Effective Time" will mean the date and time at which the Certificate
of Merger is filed with the Secretary of State of the State of Delaware in
accordance with Section 2.2.
"Employee Plans" will mean all Benefit Arrangements, Multiemployer
Plans, Pension Plans and Welfare Plans.
"Environmental Law" will mean any and all Laws of any Governmental
Authority pertaining to human health or the environment currently in effect
and applicable to a specified Person and its Subsidiaries, including
without limitation the Clean Air Act, as amended, CERCLA, the Federal Water
Pollution Control Act, as amended, the Occupational Safety and Health Act
of 1970, as amended, the RCRA, the Safe Drinking Water Act, as amended, the
Toxic Substances Control Act, as amended, the Emergency Planning and
Right-to-Know Act, as amended, the Hazardous Materials Transportation Act,
as amended, the Oil Pollution Act of 1990, as amended, any state or local
Laws implementing the foregoing federal Laws, and all other Laws pertaining
to the protection of human health and the environment (inclusive, in each
case, of all regulations issued thereunder). For purposes of the
Agreement, the terms "hazardous substance" and "release" have the meanings
specified in CERCLA; provided, however, that, to the extent the Laws of the
state or locality in which the property is located establish a meaning for
"hazardous substance" or "release" that is broader than that specified in
CERCLA, such broader meaning will apply within the jurisdiction of such
state or locality, and; provided further, however, the term "hazardous
substance" will include all dehydration and treating wastes, waste (or
spilled) oil, and waste (or spilled) petroleum products, and (to the extent
in excess of background levels) radioactive material, even if such are
specifically exempt from classification as hazardous substances pursuant to
CERCLA or RCRA or the analogous statutes of any jurisdiction applicable to
the specified Person or its Subsidiaries or any of their respective
properties or assets.
"ERISA" will mean the Employee Retirement Income Security Act of 1974,
as amended, and the Regulations promulgated thereunder.
"ERISA Affiliate" will mean any entity which is (or at any relevant
time was) a member of a "controlled group of corporations" with, under
"common control" with, or a member of an "affiliated service group" with a
specified Person, as such terms are defined in section 414(b), (c), (m) or
(o) of the Code.
"Exchange Act" will mean the Securities Exchange Act of 1934, as
amended, and the Regulations promulgated thereunder.
"Exchange Agent" will mean a bank or trust company organized under the
Laws of the United States of America or any of the states thereof and
having a net worth in excess of $100 million designated and appointed to
act in the capacities required thereof under Section 3.2.
"Exchange Fund" will mean the fund of Acquiror Common Stock (and the
associated Acquiror Rights), cash in lieu of fractional share interests and
dividends and distributions, if any, with respect to such shares of
Acquiror Common Stock established at the Exchange Agent pursuant to
Section 3.2.
"Exchange Ratio" will mean the ratio of conversion of Company Common
Stock into Acquiror Common Stock pursuant to the Merger as provided in the
first sentence of Subsection 3.1(a) as adjusted by Section 3.2.
"Expenses" will mean all reasonable out-of-pocket expenses (including
all fees and expenses of counsel, accountants, investment bankers, experts
and consultants to a party hereto and its affiliates) incurred by a party
or on its behalf in connection with or related to the authorization,
preparation, negotiation, execution and performance of this Agreement, the
preparation, printing, filing and mailing of the Registration Statement and
the Proxy Statement, the solicitation of stockholder approvals and all
other matters related to the consummation of the transactions contemplated
hereby.
"GAAP" will mean generally accepted accounting principles in the
United States consistently applied by a specified Person.
"Governmental Authority" will mean any governmental agency or
authority (other than a Court) of the United States or any domestic state,
and any political subdivision or agency thereof, and will include any
authority having governmental or quasi-governmental powers.
"HSR Act" will mean the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.
"Indemnification Agreements" will mean the following Indemnification
Agreements: (i) each of the Indemnification Agreements dated April 17, 1991
between the Company and each of (A) Reginald B. McHone, (B) Derrell Coker,
(C) Charles Phipps, (D) L.J. Sevin, (E) Harvey B. Cash, and (F) Dietrich
Erdmann; (ii) the Indemnification Agreement dated December 3, 1997 between
the Company and Alan R. Schuele; (iii) the Indemnification Agreement dated
June 30, 1995 between the Company and Jimmie C. Vernon; and (iv) each of
the Indemnification Agreements dated June 29, 1995 between the Company and
(A) William F. Davies, Jr., (B) R. Scott Schaefer, and (C) Jack Kilby.
"IRS" will mean the Internal Revenue Service.
"Knowledge" will mean, with respect to either the Company or the
Acquiror, the actual knowledge (without duty of inquiry) of any executive
officer or any member of the Board of Directors of such party.
"Law" will mean all laws, statutes, ordinances and Regulations of the
United States, any foreign country, or any domestic or foreign state, and
any political subdivision or agency thereof, including all decisions of
Courts having the effect of Law in each such jurisdiction.
"Lien" will mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any agreement to give any of the
foregoing), any conditional sale or other title retention agreement, any
lease in the nature thereof or the filing of or agreement to give any
financing statement under the Uniform Commercial Code of any jurisdiction.
"Material" will mean material to the condition (financial and other),
results of operations or business of a specified Person and its
Subsidiaries, if any, taken as a whole; provided, however, that, as used in
this definition the word "material" will have the meaning accorded thereto
in Section 11 of the Securities Act.
"Material Adverse Effect" will mean any change or effect that would be
material and adverse to the consolidated business, condition (financial or
other), operations, performance or properties (but excluding any
outstanding capital stock or other securities) of a specified Person and
its Subsidiaries, if any, taken as a whole; provided, however, that, as
used in this definition the word "material" will have the meaning accorded
thereto in Section 11 of the Securities Act.
"Material Contract" will mean each contract, lease, indenture,
agreement, arrangement or understanding, whether written or oral, to which
a specified Person or any of its Subsidiaries is a party or to which any of
the assets or operations of such specified Person or any of its
Subsidiaries is subject that is of a type that would be required to be
included as an exhibit to a registration statement on Form S-1 promulgated
under the Securities Act pursuant, in the case of the Company, to
Paragraph (2), (4) or (10) of Item 601(b) of Regulation S-K of the
Commission and, in the case of the Acquiror, to Paragraph (10) (other than
clause (iii) thereof) of Item 601(b) of Regulation S-K of the Commission if
such a registration statement were to be filed by such Person under the
Securities Act on the date of determination. Notwithstanding the
foregoing, such term will, in the case of the Company, include any of the
following contracts, agreements or commitments, whether oral or written:
(1) any collective bargaining agreement or other agreement with
any labor union;
(2) any agreement, contract or commitment with any other Person,
other than any agency or representation entered in the ordinary course
of business, containing any covenant limiting the freedom of such
specified Person or any of its Subsidiaries to engage in any line of
business or to compete with any other Person;
(3) any partnership, joint venture or profit sharing agreement
with any Person, which partnership, joint venture or profit sharing
agreement generated revenues during its most recently completed fiscal
year of $100,000 or more;
(4) any employment or consulting agreement, contract or
commitment between the Company or any of its Subsidiaries and any
employee, officer or director thereof (i) having more than one year to
run from the date hereof, (ii) providing for an obligation to pay or
accrue compensation of $100,000 or more per annum or (iii) providing
for the payment or accrual of any additional compensation upon a
change in control of such Person or any of its Subsidiaries or upon
any termination of such employment or consulting relationship
following a change in control of such Person or any of its
Subsidiaries; and
(5) any agency or representation agreement with any Person which
is not terminable by the Company or one of its Subsidiaries without
penalty upon not more than one year's notice.
"MGCL" will mean The Maryland General Corporation Law.
"Multiemployer Plan" will mean any "multiemployer plan," as defined in
Section 4001(a)(3) of ERISA, which (i) is (or was within the six (6) years
prior to the date of this Agreement) entered into, maintained,
administered, contributed to or required to be contributed to, as the case
may be, by a specified Person or any ERISA Affiliate of such Person, and
(ii) covers any employee or former employee of such Person or any ERISA
Affiliate of such Person.
"NYSE" will mean The New York Stock Exchange.
"Order" will mean any judgment, writ, injunction, order or decree of
any Court or Governmental Authority, federal, foreign, state or local.
"PBGC" will mean the Pension Benefit Guaranty Corporation.
"Pension Plan" will mean any "employee pension benefit plan" as
defined in Section 3(2) of ERISA (other than a Multiemployer Plan) which
(i) is (or was within the six (6) years prior to the date of this
Agreement) entered into, maintained, administered, contributed to or
required to be contributed to, as the case may be, by a specified Person or
any ERISA Affiliate of such Person, and (ii) covers any employee or former
employee of such Person or any ERISA Affiliate of such Person.
"Permit" will mean any and all permits, licenses, authorizations,
orders, certificates, registrations or other approvals granted by any
Governmental Authority.
"Permitted Encumbrances" will mean the following:
(1) liens for taxes, assessments and other governmental charges
not delinquent or which are currently being contested in good faith
by appropriate proceedings; provided that, in the latter case, the
specified Person or one of its Subsidiaries will have set aside on its
books adequate reserves with respect thereto;
(2) mechanics' and materialmen's liens not filed of record and
similar charges not delinquent or which are filed of record but are
being contested in good faith by appropriate proceedings; provided
that, in the latter case, the specified Person or one of its
Subsidiaries will have set aside on its books adequate reserves with
respect thereto;
(3) liens in respect of judgments or awards with respect to
which the specified Person or one of its Subsidiaries is in good faith
currently prosecuting an appeal or other proceeding for review and
with respect to which such Person or such Subsidiary has secured a
stay of execution pending such appeal or such proceeding for review;
provided that, such Person or such Subsidiary has set aside on its
books adequate reserves with respect thereto;
(4) easements, leases, reservations or other rights of others
in, or minor defects and irregularities in title to, property or
assets of a specified Person or any of its Subsidiaries; provided that
such easements, leases, reservations, rights, defects or
irregularities do not materially impair the use of such property or
assets for the purposes for which they are held;
(5) any lien or privilege vested in any lessor or licensor for
rent or other obligations of a specified Person or any of its
Subsidiaries thereunder so long as the payment of such rent or the
performance of such obligations is not delinquent; and
(6) encumbrances which secure deposits of public funds as
required by Law.
"Person" will mean an individual, partnership, limited liability
company, corporation, joint stock company, trust, estate, joint venture,
association or unincorporated organization, or any other form of business
or professional entity, but will not include a Governmental Authority.
"Pre-Closing Average Trading Price" will have the meaning ascribed to
such term in Subsection 3.2(a).
"Proxy Statement" will have the meaning ascribed to such term in
Section 4.13 hereof.
"RCRA" will mean the Resource Conservation and Recovery Act of 1976,
as amended.
"Registration Statement" will have the meaning ascribed to such term
in Section 4.13 hereof.
"Regulation" will mean any rule or regulation of any Governmental
Authority having the effect of Law.
"Reports" will mean, with respect to a specified Person, all reports,
registrations, filings and other documents and instruments required to be
filed by the specified Person or any of its Subsidiaries with any
Governmental Authority (other than the Commission).
"SEC Reports" will mean (i) all Annual Reports on Form 10-K
promulgated under the Exchange Act, (ii) all Quarterly Reports on Form 10-Q
promulgated under the Exchange Act, (iii) all proxy statements relating to
meetings of stockholders (whether annual or special), (iv) all Current
Reports on Form 8-K promulgated under the Exchange Act and (v) all other
reports, schedules, registration statements or other documents required to
be filed during a specified period by a Person with the Commission pursuant
to the Securities Act or the Exchange Act.
"Securities Act" will mean the Securities Act of 1933, as amended, and
the Regulations promulgated thereunder.
"Significant Subsidiary" will mean any Subsidiary of the Company or
Acquiror, as the case may be, that would constitute a Significant
Subsidiary of such party within the meaning of Rule 1-02 of Regulation S-X
of the Commission.
"Stockholders' Meetings" will have the meaning ascribed to such term
in Subsection 7.1(b) hereof.
A "Subsidiary" of a specified Person will be any corporation,
partnership, limited liability company, joint venture or other legal entity
of which the specified Person (either alone or through or together with any
other Subsidiary) owns, directly or indirectly, fifty percent (50%) or more
of the stock or other equity or partnership interests the holders of which
are generally entitled to vote for the election of the board of directors
or other governing body of such corporation, partnership, limited liability
company, joint venture or other legal entity.
"Surviving Corporation" will mean the Company as the corporation
surviving the Merger.
"Tax Returns" will mean any declaration, return, report, schedule,
certificate, statement or other similar document (including relating or
supporting information) required to be filed with a taxing authority, or
where none is required to be filed with a taxing authority, the statement
or other document issued by a taxing authority in connection with any Tax,
including, without limitation, any information return, claim for refund,
amended return or declaration of estimated Tax.
"Taxes" will mean any and all federal, state, local, foreign,
provincial, territorial or other taxes, imposts, tariffs, fees, levies or
other similar assessments or liabilities and other charges of any kind,
including income taxes, ad valorem taxes, excise taxes, withholding taxes,
stamp taxes or other taxes of or with respect to gross receipts, premiums,
real property, personal property, windfall profits, sales, use, transfers,
licensing, employment, social security, workers' compensation,
unemployment, payroll and franchises imposed by or under any Law; and such
terms will include any interest, fines, penalties, assessments or additions
to tax resulting from, attributable to or incurred in connection with any
such tax or any contest or dispute thereof.
"Terminating Acquiror Breach" shall have the meaning ascribed to such
term in Subsection 9.1(c) hereof.
"Terminating Company Breach" shall have the meaning ascribed to such
term in Subsection 9.1(b) hereof.
"Termination Date" shall have the meaning ascribed to such term in
Subsection 9.1(e) hereof.
"Welfare Plan" will mean any "employee welfare benefit plan" as
defined in Section 3(1) of ERISA, which (i) is entered into, maintained,
administered, contributed to or required to be contributed to, as the case
may be, by a specified Person or any ERISA Affiliate of such Person, and
(ii) covers any employee or former employee of such Person.
ARTICLE II
TERMS OF MERGER
Section 2.1 Statutory Merger. Subject to the terms and conditions
and in reliance upon the representations, warranties, covenants and
agreements contained herein, Newco will merge with and into the Company at
the Effective Time. The terms and conditions of the Merger and the mode of
carrying the same into effect will be as set forth in this Agreement. As a
result of the Merger, the separate corporate existence of Newco will cease
and the Company will continue as the Surviving Corporation and shall
succeed to and assume all of the rights and obligations of Newco in
accordance with the DGCL.
Section 2.2 Effective Time. As soon as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in
Article VIII hereof, the parties hereto will cause the Merger to be
consummated by filing a certificate of merger (the "Certificate of Merger")
with the Secretary of State of the State of Delaware, in such form as
required by, and executed in accordance with the relevant provisions of,
the DGCL.
Section 2.3 Effect of the Merger. At the Effective Time, the
effect of the Merger will be as provided in the applicable provisions of
the DGCL.
Section 2.4 Certificate of Incorporation; Bylaws. At the Effective
Time, the certificate of incorporation and the bylaws of Newco, as in
effect immediately prior to the Effective Time will be the certificate of
incorporation and the bylaws of the Surviving Corporation, except that from
and after the Effective Time Article I of the certificate of incorporation
will be read in its entirety as follows:
The name of the corporation is "BENCHMARQ Microelectronics, Inc."
Section 2.5 Directors and Officers. The directors of Newco
immediately prior to the Effective Time will be the directors of the
Surviving Corporation, each to hold office in accordance with the
certificate of incorporation and bylaws of the Surviving Corporation, and
the officers of the Company immediately prior to the Effective Time will be
the officers of the Surviving Corporation, in each case until their
respective successors are duly elected or appointed and qualified.
ARTICLE III
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 3.1 Merger Consideration; Conversion and Cancellation of
Securities. At the Effective Time, by virtue of the Merger and without any
action on the part of the Acquiror Companies, the Company or the holders of
any of the securities of the Company:
(a) Subject to the provisions of Section 3.2 hereof and the
other provisions of this Article III, each share of Company Common
Stock issued and outstanding immediately prior to the Effective Time
(excluding any Company Common Stock described in Subsection 3.1(c))
will be converted into the right to receive one (1) share of Acquiror
Common Stock (and the associated Acquiror Right) (as such ratio is
adjusted pursuant to Section 3.2, the "Exchange Ratio").
Notwithstanding the foregoing, if between the date of this Agreement
and the Effective Time the outstanding shares of the Acquiror Common
Stock or the Company Common Stock shall have been changed into a
different number of shares or a different class, by reason of any
stock dividend, subdivision, reclassification, recapitalization,
split, conversion, consolidation, combination or exchange of shares,
the Common Stock Exchange Ratio will be correspondingly adjusted to
reflect such stock dividend, subdivision, reclassification,
recapitalization, split, conversion, consolidation, combination or
exchange of shares.
(b) Subject to the other provisions of this Article III, all
shares of Company Common Stock will, upon conversion thereof into
shares of Acquiror Common Stock (and the associated Acquiror Rights)
at the Effective Time, cease to be outstanding and will automatically
be cancelled and retired, and each certificate previously evidencing
Company Common Stock outstanding immediately prior to the Effective
Time (other than Company Common Stock described in Subsection 3.1(c))
will thereafter be deemed, for all purposes other than the payment of
dividends or distributions, to represent that number of shares of
Acquiror Common Stock (and the associated Acquiror Rights) determined
pursuant to the Common Stock Exchange Ratio. The holders of
certificates previously evidencing Company Common Stock will cease to
have any rights with respect to such Company Common Stock except as
otherwise provided herein or by Law.
(c) Notwithstanding any provision of this Agreement to the
contrary, each share of Company Common Stock held in the treasury of
the Company and each share of Company Common Stock, if any, owned by
the Acquiror or any direct or indirect wholly-owned Subsidiary of the
Acquiror or of the Company immediately prior to the Effective Time
will be cancelled.
(d) Each share of common stock, par value $.01 per share, of
Newco issued and outstanding immediately prior to the Effective Time
shall be converted into and become one fully paid and nonassessable
share of common stock, par value $.01 per share, of the Surviving
Corporation.
Section 3.2 Adjustments to the Exchange Ratio. The Exchange Ratio
shall be subject to adjustment as follows:
(a) if the average of the mean high and low per share trading
prices on the NYSE of shares of Acquiror Common Stock (as reported for
the NYSE Composite Transactions in the Wall Street Journal) during the
20 consecutive trading days ending on the tenth day prior to the
Company Stockholders' Meeting (the "Pre-Closing Average Price") is
less than $16.00, then the Exchange Ratio shall be adjusted such that
each share of Company Common Stock is converted into the right to
receive a number of shares of Acquiror Common Stock (and the
associated Acquiror Rights) equal to the quotient obtained by
dividing (i) $16.00 by (ii) the Pre-Closing Average Price, provided,
however, that, the Exchange Ratio shall in no event be higher than
1.33; and
(b) if the Pre-Closing Average Price is greater than
$24.00, then the Exchange Ratio shall be adjusted such that each share
of Company Common Stock is converted into the right to receive a
number of shares of Acquiror Common Stock (and the associated Acquiror
Rights) equal to the quotient obtained by dividing (i) $24.00 by (ii)
the Pre-Closing Average Price.
Section 3.3 Exchange of Certificates.
(a) Exchange Fund. On the Closing Date, the Acquiror will
deposit, or cause to be deposited, with the Exchange Agent, for the
benefit of the former holders of Company Common Stock, for exchange in
accordance with this Article III, through the Exchange Agent,
(i) certificates evidencing a number of shares of Acquiror Common
Stock (and the associated Acquiror Rights) equal to the product of the
Exchange Ratio multiplied by the number of shares of Company Common
Stock issued and outstanding immediately prior to the Effective Time
(exclusive of any such shares to be cancelled pursuant to
Subsection 3.1(c)) and (ii) cash in an amount equal to any dividends
or other distributions declared in respect of such shares of Acquiror
Common Stock and having a record date after the Effective Time.
Thereafter, the Acquiror will deposit, or cause to be deposited, with
the Exchange Agent, for the benefit of any former holders of Company
Common Stock who have not yet surrendered their shares of Company
Common Stock for exchange, at the appropriate payment date, the amount
of dividends or other distributions, with a record date after the
Effective Time but prior to surrender, payable with respect to any
shares of Acquiror Common Stock remaining in the Exchange Fund on such
record date. The Exchange Agent will, pursuant to irrevocable
instructions from the Acquiror, deliver Acquiror Common Stock (and
associated Acquiror Rights) and any dividends or distributions related
thereto, in exchange for certificates theretofore evidencing Company
Common Stock surrendered to the Exchange Agent pursuant to
Subsection 3.3(c).
(b) Letter of Transmittal. Promptly after the Effective Time,
the Acquiror will cause the Exchange Agent to mail to each record
holder of a certificate or certificates representing Company Common
Stock immediately prior to the Effective Time (i) a letter of
transmittal which shall specify that delivery shall be effected, and
risk of loss and title to the certificates for Company Common Stock
shall pass, only upon delivery of the certificates for Company Common
Stock to the Exchange Agent and shall be in such form and have such
other provisions, including appropriate provisions with respect to
back-up withholding, as the Acquiror may reasonably specify, and (ii)
instructions for use in effecting the surrender of the certificates
for Company Common Stock. Upon surrender of a certificate for Company
Common Stock for cancellation to the Exchange Agent, together with
such letter of transmittal, duly executed and completed in accordance
with the instructions thereto, the holder thereof shall be entitled to
receive in exchange therefor that portion of the Exchange Fund which
such holder has the right to receive pursuant to the provisions of
this Article III, after giving effect to any required withholding tax,
and the certificate for Company Common Stock so surrendered shall
forthwith be cancelled. No interest will be paid or accrued on the
cash, if any, to be paid which is in the Exchange Fund as part of the
Exchange Ratio.
(c) Exchange Procedures. Promptly after the Effective Time, the
Exchange Agent will distribute to each former holder of Company Common
Stock, upon surrender to the Exchange Agent for cancellation of one or
more certificates, accompanied by a duly executed letter of
transmittal that theretofore evidenced shares of Company Common Stock,
certificates evidencing the appropriate number of shares of Acquiror
Common Stock (and the associated Acquiror Rights) into which such
shares of Company Common Stock were converted pursuant to the Merger
and any dividends or distributions related thereto. If shares of
Acquiror Common Stock (and the associated Acquiror Rights) are to be
issued to a Person other than the Person in whose name the surrendered
certificate or certificates are registered, it will be a condition of
issuance of the Acquiror Common Stock (and the associated Acquiror
Rights) that the surrendered certificate or certificates shall be
properly endorsed, with signatures guaranteed by a member firm of the
NYSE or a bank chartered under the Laws of the United States of
America, or otherwise in proper form for transfer and that the Person
requesting such payment shall pay any transfer or other taxes required
by reason of the issuance of Acquiror Common Stock (and the associated
Acquiror Rights) to a Person other than the registered holder of the
surrendered certificate or certificates or such Person shall establish
to the satisfaction of the Acquiror that any such tax has been paid or
is not applicable. Notwithstanding the foregoing, neither the
Exchange Agent nor any party hereto will be liable to any former
holder of Company Common Stock for any Acquiror Common Stock (and the
associated Acquiror Rights) or dividends or distributions thereon
delivered to a public official pursuant to any applicable escheat Law.
(d) Distributions with Respect to Unexchanged Shares of Company
Common Stock. No dividends or other distributions declared or made
with respect to Acquiror Common Stock with a record date on or after
the Effective Time will be paid to the holder of any certificate that
theretofore evidenced shares of Company Common Stock until the holder
of such certificate shall surrender such certificate. Subject to the
effect of any applicable escheat Law, following surrender of any such
certificate, there will be paid from the Exchange Fund to the holder
of the certificates evidencing whole shares of Acquiror Common Stock
(and the associated Acquiror Rights) issued in exchange therefor,
without interest, (i) promptly, the amount of dividends or other
distributions with a record date after the Effective Time theretofore
paid with respect to such whole shares of Acquiror Common Stock, and
(ii) at the appropriate payment date, the amount of dividends or other
distributions, with a record date after the Effective Time but prior
to surrender and a payment date occurring after surrender, payable
with respect to such whole shares of Acquiror Common Stock.
(e) Termination of Exchange Fund. Any portion of the Exchange
Fund which remains unclaimed by the former holders of Company Common
Stock for twelve months after the Effective Time will be delivered to
the Acquiror, upon demand, and any former holders of Company Common
Stock who have not theretofore complied with this Article III will,
subject to applicable abandoned property, escheat and other similar
Laws, thereafter look only to the Acquiror for the Acquiror Common
Stock (and associated Acquiror Rights) and any cash to which they are
entitled.
(f) Withholding of Tax. The Acquiror or the Exchange Agent will
be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any former holder of Company
Common Stock such amounts as the Acquiror (or any affiliate thereof)
or the Exchange Agent are required to deduct and withhold with respect
to the making of such payment under the Code, or any provision of
state, local or foreign tax Law. To the extent that amounts are so
withheld by the Acquiror or the Exchange Agent, such withheld amounts
will be treated for all purposes of this Agreement as having been paid
to the former holder of Company Common Stock in respect of which such
deduction and withholding were made by the Acquiror.
(g) Lost Certificates. If any certificate evidencing Company
Common Stock shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the Person claiming such
certificate to be lost, stolen or destroyed and, if required by the
Acquiror, the posting by such Person of a bond, in such reasonable
amount as the Acquiror may direct, as indemnity against claims that
may be made against it with respect to such certificate, the Exchange
Agent will issue in exchange for such lost, stolen or destroyed
certificate the Acquiror Common Stock (and associated Acquiror Rights)
to which the holder may be entitled pursuant to this Article III and
any dividends or other distributions to which the holder thereof may
be entitled pursuant to Subsection 3.3(d).
Section 3.4 Closing. The Closing will take place at the offices of
Skadden, Arps, Slate, Meagher & Flom LLP, One Beacon Street, Boston,
Massachusetts 02108, at 10:00 a.m. local time on the second Business Day
following the date on which the conditions to the Closing have been
satisfied or waived or at such other place, time and date as the parties
hereto may agree. At the conclusion of the Closing on the Closing Date,
the parties hereto will cause the Certificate of Merger to be filed with
the Secretary of State of the State of Delaware.
Section 3.5 Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company will be closed and there will be no further
registration of transfers of shares of Company Common Stock thereafter on
the records of the Company. If, after the Effective Time, certificates
representing Company Common Stock are presented to the Surviving
Corporation, they shall be cancelled and upon delivery of a duly executed
letter of transmittal exchanged for certificates representing Acquiror
Common Stock (and associated Acquiror Rights).
Section 3.6 No Fractional Shares. In the event the Exchange Ratio
is modified or changed in a manner that would result in the issuance of
fractional shares of Acquiror Common Stock, the parties nevertheless agree
that no fractional shares of Acquiror Common Stock shall be issued to the
holders of Company Common Stock. In lieu of any such fractional shares,
each holder of record of Company Common Stock at the Effective Time who but
for the provisions of this Section 3.6 would be entitled to receive a
fractional share of Acquiror Common Stock pursuant to the Merger shall be
paid cash, without any interest thereon, in an amount equal to the product
of such fraction multiplied by the closing sale price of one share of
Acquiror Common Stock on the NYSE on the day of the Effective Time, or, if
shares of Acquiror Common Stock are not so traded on such day, the closing
sale price of one such share on the next preceding day on which such share
was traded on the NYSE. For this purpose, shares of Company Common Stock
of any holder represented by two or more certificates may be aggregated,
and in no event shall any holder be paid an amount in respect of more than
one share of Acquiror Common Stock.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Acquiror Companies
that:
Section 4.1 Organization and Qualification; Subsidiaries. The
Company and each Subsidiary of the Company are legal entities duly
organized, validly existing and in good standing under the Laws of their
respective jurisdictions of incorporation or organization, have all
requisite power and authority to own, lease and operate their respective
properties and to carry on their business as it is now being conducted and
are duly qualified and in good standing to do business in each jurisdiction
in which the nature of the business conducted by them or the ownership or
leasing of their respective properties makes such qualification necessary,
other than any matters, including the failure to be so duly qualified and
in good standing, that would not individually or in the aggregate have a
Material Adverse Effect on the Company. Section 4.1 of the Company's
Disclosure Letter sets forth, as of the date of this Agreement, a true and
complete list of all the Company's directly or indirectly owned
Subsidiaries, together with (A) the jurisdiction of incorporation of each
Subsidiary and the percentage of each Subsidiary's outstanding capital
stock or other equity interests owned by the Company or another Subsidiary
of the Company, and (B) an indication of whether each such Subsidiary is a
Significant Subsidiary. Neither the Company nor any of its Subsidiaries
owns an equity interest in any partnership or joint venture arrangement or
other business entity that is Material to the Company.
Section 4.2 Certificate of Incorporation; Bylaws. The Company has
heretofore marked for identification and furnished to the Acquiror complete
and correct copies of the certificate of incorporation and the bylaws or
the equivalent organizational documents, in each case as amended or
restated to the date hereof, of the Company and each of its Subsidiaries.
Neither the Company nor any of its Subsidiaries is in violation of any of
the provisions of its certificate of incorporation or bylaws (or equivalent
organizational documents).
Section 4.3 Capitalization.
(a) The authorized capital stock of the Company consists of (i)
50,000,000 shares of Company Common Stock of which, as of February 27,
1998, 7,114,939 shares were issued and outstanding, all of which are
duly authorized, validly issued, fully paid and nonassessable and were
not issued in violation of the preemptive or similar rights of any
Person and (ii) 22,000,000 shares of Preferred Stock, par value $.01
per share, of which none is issued. Since February 27, 1998, the
Company has not issued any shares of the Company Common Stock except
pursuant to the exercise of outstanding Company Stock Options and
otherwise to the extent set forth in Subsection 4.3(a) of the
Company's Disclosure Letter. Except as set forth in Subsection 4.3(a)
of the Company's Disclosure Letter, since February 2, 1998, the
Company has not granted any options for, or other rights to purchase,
shares of the capital stock of the Company.
(b) Except as set forth in Subsection 4.3(b) of the Company's
Disclosure Letter or in the Company's Consolidated Financial
Statements, no shares of capital stock of the Company are reserved for
issuance, and there are no contracts, agreements, commitments or
arrangements obligating the Company (i) to offer, sell, issue, grant,
pledge, dispose of or encumber any shares of, or any options, warrants
or rights of any kind to acquire any shares of, or any securities that
are convertible into or exchangeable for any shares of, capital stock
of the Company, (ii) to redeem, purchase or acquire, or offer to
purchase or acquire, any outstanding shares of, or any outstanding
options, warrants or rights of any kind to acquire any shares of, or
any outstanding securities that are convertible into or exchangeable
for any shares of, capital stock of the Company or (iii) to grant any
Lien on any shares of capital stock of the Company.
(c) The authorized, issued and outstanding capital stock of, or
other equity interests in, each of the Company's Subsidiaries and the
names and addresses of the holders of record of the capital stock or
other equity interests of each such Subsidiary are set forth in
Subsection 4.3(c) of the Company's Disclosure Letter. Except as set
forth in Subsection 4.3(c) of the Company's Disclosure Letter, (i) the
issued and outstanding shares of capital stock of, or other equity
interests in, each of the Subsidiaries of the Company that are owned
by the Company or any of its Subsidiaries have been duly authorized
and are validly issued, and, with respect to capital stock, are fully
paid and nonassessable, and were not issued in violation of any
preemptive or similar rights of any Person; (ii) all such issued and
outstanding shares, or other equity interests, that are indicated as
owned by the Company or one of its Subsidiaries in Subsection 4.3(c)
of the Company's Disclosure Letter are owned (A) beneficially as set
forth therein and (B) free and clear of all Liens; (iii) no shares of
capital stock of, or other equity interests in, any Subsidiary of the
Company are reserved for issuance, and there are no contracts,
agreements, commitments or arrangements obligating the Company or any
of its Subsidiaries (A) to offer, sell, issue, grant, pledge, dispose
of or encumber any shares of capital stock of, or other equity
interests in, or any options, warrants or rights of any kind to
acquire any shares of capital stock of, or other equity interests in,
or any securities that are convertible into or exchangeable for any
shares of capital stock of, or other equity interests in, any of the
Subsidiaries of the Company or (B) to redeem, purchase or acquire, or
offer to purchase or acquire, any outstanding shares of capital stock
of, or other equity interests in, or any outstanding options, warrants
or rights of any kind to acquire any shares of capital stock of or
other equity interest in, or any outstanding securities that are
convertible into or exchangeable for, any shares of capital stock of,
or other equity interests in, any of the Subsidiaries of the Company
or (C) to grant any Lien on any outstanding shares of capital stock
of, or other equity interest in, any of the Subsidiaries of the
Company; except with respect to clause (i), (ii) or (iii) of this
Subsection 4.3(c) for such matters that would not, in the aggregate,
have a Material Adverse Effect on the Company.
(d) Except as set forth in Subsection 4.3(d) of the Company's
Disclosure Letter, there are no voting trusts, proxies or other
agreements, commitments or understandings of any character to which
the Company or any of its Subsidiaries or, to the Knowledge of the
Company, any third Person, is a party or by which the Company or any
of its Subsidiaries is bound with respect to the voting of any shares
of capital stock of the Company or any of its Subsidiaries or with
respect to the registration of the offering, sale or delivery of any
shares of capital stock of the Company or any of its Subsidiaries
under the Securities Act.
Section 4.4 Authorization of Agreement. The Company has all
requisite corporate power and authority to execute and deliver this
Agreement, the Option Agreement and each instrument required hereby to be
executed and delivered by it at the Closing, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated
hereby and thereby. The execution and delivery by the Company of this
Agreement, the Option Agreement and each instrument required hereby to be
executed and delivered by it at the Closing and the performance of its
obligations hereunder and thereunder have been duly and validly authorized
by all requisite corporate action on the part of the Company (other than,
with respect to the Merger, the approval and adoption of this Agreement by
the stockholders of the Company, which approval and adoption in accordance
with the DGCL and the Company's certificate of incorporation shall require
the affirmative vote of the holders of at least a majority of the
outstanding shares of Company Common Stock). This Agreement and the Option
Agreement have been duly executed and delivered by the Company and
(assuming due authorization, execution and delivery hereof by the Acquiror
Companies) constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, subject to
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally or to general
principles of equity.
Section 4.5 Approvals. Except for the applicable requirements, if
any, of (a) the Securities Act, (b) the Exchange Act, (c) state securities
or blue sky Laws, (d) the HSR Act, (e) the filing and recordation of
appropriate merger documents as required by the DGCL and (f) those Laws,
Regulations and Orders noncompliance with which would not have in the
aggregate a material adverse effect on the ability of the Company to
perform its obligations under this Agreement or the Option Agreement or a
Material Adverse Effect on the Company, no filing or registration with, no
waiting period imposed by and no Permit, Order, or consent of, any Court or
Governmental Authority is required under any Law, Regulation or Order
applicable to the Company or any of its Subsidiaries to permit the Company
to execute, deliver or perform this Agreement or the Option Agreement or
any instrument required hereby to be executed and delivered by it at the
Closing.
Section 4.6 No Violation. Assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting
periods imposed by and receipt of all Permits, Orders and consents of,
Courts or Governmental Authorities indicated as required in Section 4.5
hereof and receipt of the approval of the Merger by the stockholders of the
Company as required by the DGCL and except as set forth in Section 4.6 of
the Company's Disclosure Letter, neither the execution and delivery by the
Company of this Agreement, the Option Agreement or any instrument required
hereby to be executed and delivered by it at the Closing nor the
performance by the Company of its obligations hereunder or thereunder will
(a) violate or breach the terms of or cause a default under (i) any Law,
Regulation or Order applicable to the Company, (ii) the certificate of
incorporation or bylaws of the Company or (iii) any contract, note, bond,
mortgage, indenture, license, agreement or other instrument to which the
Company or any of its Subsidiaries is a party or by which it or any of its
properties or assets is bound, or (b) with the passage of time, the giving
of notice or the taking of any action by a third Person, have any of the
effects set forth in clause (a) of this Section 4.6, except in any such
case for any matters described in this Section 4.6 that would not in the
aggregate have a Material Adverse Effect upon the ability of the Company to
perform its obligations under this Agreement or the Option Agreement or a
Material Adverse Effect on the Company. Prior to the execution of this
Agreement, the Board of Directors of the Company has taken all requisite
action to cause this Agreement and the transactions contemplated hereby to
be exempt from the provisions of Section 203 of the DGCL.
Section 4.7 Reports.
(a) Since December 31, 1994, the Company and its Subsidiaries
have timely filed (i) all SEC Reports required to be filed with the
Commission and (ii) all other Reports required to be filed with any
other Governmental Authorities, including state securities
administrators, except where the failure to file any such Reports
would not in the aggregate have a Material Adverse Effect on the
Company. Such Reports, including all those filed after the date of
this Agreement and prior to the Effective Time, (i) were prepared in
all Material respects in accordance with the requirements of
applicable Law (including, with respect to the SEC Reports of the
Company, the Securities Act and the Exchange Act, as the case may be)
and (ii), in the case of SEC Reports, did not at the time they were
filed contain any untrue statement of a Material fact or omit to state
a Material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(b) The Company's Consolidated Financial Statements and any
consolidated financial statements of the Company (including any
related notes thereto) contained in any SEC Reports of the Company
filed with the Commission since December 31, 1994 (i) have been or
will have been prepared in accordance with the published Regulations
of the Commission and in accordance with GAAP consistently applied
during the periods involved, (except (A) to the extent required by
changes in GAAP and (B), with respect to SEC Reports of the Company
filed prior to the date of this Agreement, as may be indicated in the
notes thereto) and (ii) fairly present the consolidated financial
position of the Company and its Subsidiaries as of the respective
dates thereof and the consolidated results of their operations and
cash flows for the periods indicated (including, in the case of any
unaudited interim financial statements, reasonable estimates of normal
and recurring year-end adjustments).
(c) Except as set forth in Subsection 4.7(c) of the Company's
Disclosure Letter, there exist no liabilities or obligations of the
Company and its Subsidiaries that are Material to the Company, whether
accrued, absolute, contingent or threatened, which would be required
to be reflected, reserved for or disclosed under GAAP in consolidated
financial statements of the Company (including the notes thereto) as
of and for the period ended on the date of this representation and
warranty, other than (i) liabilities or obligations that are
adequately reflected, reserved for or disclosed in the Company's
Consolidated Financial Statements, (ii) liabilities or obligations
incurred in the ordinary course of business of the Company and its
Subsidiaries since September 30, 1997, and (iii) liabilities or
obligations the incurrence of which is not prohibited by
Subsection 6.2(a).
Section 4.8 No Material Adverse Effect; Conduct.
(a) Since December 31, 1996, (i) no event or events (other than
any event that is directly attributable to the prospect of
consummation of the Merger or is of general application to all or a
substantial portion of the Company's industry and other than any event
that is expressly subject to any other representation or warranty
contained in this Article IV) have, to the Knowledge of the Company,
occurred that, individually or in the aggregate, would constitute or
cause a Material Adverse Effect on the Company and (ii) there have not
been any change or changes in the business, condition (financial or
other), results of operations, properties, assets or liabilities of
the Company or its Subsidiaries which would have, in the aggregate, a
Material Adverse Effect on the Company.
(b) Except as disclosed in Subsection 4.8(b) of the Company's
Disclosure Letter, during the period from December 31, 1996 to the
date of this Agreement, neither the Company nor any of its
Subsidiaries has engaged in any conduct that is proscribed during the
period from the date of this Agreement to the Effective Time by
subsections (i) through (xiii) of Subsection 6.2(a) or agreed in
writing or otherwise during such period prior to the date of this
Agreement to engage in any such conduct.
Section 4.9 Title to Properties. The Company or its Subsidiaries,
individually or together, have good, valid and marketable title to or a
valid leasehold in, all of the properties and assets (real, personal and
mixed, tangible and intangible) that are necessary to the conduct of the
business of the Company as it is currently being conducted including,
without limitation, all of the properties and assets reflected in the
Company's Consolidated Balance Sheet, other than any properties or assets
that (i) have been sold or otherwise disposed of in the ordinary course of
business consistent with past practice or (ii) are not, individually or in
the aggregate, Material to the Company, free and clear of Liens, other than
(x) Liens the existence of which is reflected in the Company's Consolidated
Financial Statements and (y) Liens that, individually or in the aggregate,
are not Material to the Company. None of such properties are securities
pledged for interest rate swap, cap or floor contracts. The Company or its
Subsidiaries, individually or together, hold under valid lease agreements
all real and personal properties being held under capitalized leases, and
all real and personal property that is subject to operating leases, and
enjoy peaceful and undisturbed possession of such properties under such
leases, other than (i) any properties as to which such leases have expired
in accordance with their terms without any liability of any party thereto
and (ii) any properties that, individually or in the aggregate, are not
Material to the Company. Neither the Company nor any of its Subsidiaries
has received any written notice of any adverse claim to the title to any
properties owned by them or with respect to any lease under which any
properties are held by them, other than any claims that, individually or in
the aggregate, would not have a Material Adverse Effect on the Company.
Section 4.10 Certain Obligations. Section 4.10 of the Company's
Disclosure Letter contains a true and complete list of the Material
Contracts of the Company and its Subsidiaries. Except as set forth in
Section 4.10 of the Company's Disclosure Letter, all Material Contracts to
which the Company or any of its Subsidiaries is a party are in full force
and effect, the Company or the Subsidiary of the Company that is a party to
or bound by such Material Contract has performed its obligations thereunder
to date and, to the Knowledge of the Company, each other party thereto has
performed its obligations thereunder to date, other than any failure of any
such Material Contract to be in full force and effect or any nonperformance
thereof that would not have a Material Adverse Effect on the Company.
Section 4.11 Permits; Compliance. The Company and its Subsidiaries
have obtained all Permits that are necessary to carry on their businesses
as currently conducted, except for any such Permits which the failure to
possess, individually or in the aggregate, would not have a Material
Adverse Effect on the Company. Such Permits are in full force and effect,
have not been violated in any respect that would have a Material Adverse
Effect on the Company and, to the Knowledge of the Company, no suspension,
revocation or cancellation thereof has been threatened and there is no
action, proceeding or investigation pending or threatened regarding
suspension, revocation or cancellation of any of such Permits, except where
the suspension, revocation or cancellation of such Permits would not have a
Material Adverse Effect on the Company.
Section 4.12 Litigation; Compliance with Laws. There are no
actions, suits, investigations or proceedings (including any proceedings in
arbitration) pending or, to the Knowledge of the Company, threatened
against the Company or any of its Subsidiaries, at law or in equity, in any
Court or before or by any Governmental Authority, except actions, suits or
proceedings that (a) are set forth in Section 4.12 or any other Section of
the Company's Disclosure Letter or (b) in the aggregate, would not have a
Material Adverse Effect on the Company. There are no claims pending or, to
the Knowledge of the Company, threatened by any Persons against the Company
or any of its Subsidiaries for indemnification pursuant to any Law,
organizational document, contract or otherwise with respect to any action,
suit, investigation or proceeding pending in any Court or before or by any
Governmental Authority. Except as set forth in Section 4.12 of the
Company's Disclosure Letter, neither the Company nor any of its
Subsidiaries is subject to any written agreement, directive, memorandum of
understanding or Order with or by any Court or Governmental Authority
restricting its operation or requiring any Material actions. Except as set
forth in Section 4.12 of the Company's Disclosure Letter, the Company and
its Subsidiaries are in compliance with all applicable Laws and Regulations
and are not in default with respect to any Order applicable to the Company
or any of its Subsidiaries, except such events of noncompliance or defaults
that, individually or in the aggregate, would not have a Material Adverse
Effect on the Company.
Section 4.13 Information in Disclosure Documents and Registration
Statement. None of the information to be supplied by Company for inclusion
or incorporation by reference in the joint proxy statement to be
distributed in connection with the Acquiror and Company's respective
meetings of stockholders to vote upon this Agreement, (the "Proxy
Statement") or the registration statement on Form S-4 (such registration
statement, together with any amendments thereof or supplements thereto
being the "Registration Statement") to be filed by Acquiror with the SEC
will, in the case of the Registration Statement, at the time it becomes
effective and at the Effective Time, or, in the case of the Proxy Statement
or any amendments thereof or supplements thereto, at the time of the
mailing of the Proxy Statement and any amendments or supplements thereto
and at the time of the meetings of stockholders to be held in connection
with the Merger, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which
they are made, not misleading. The Proxy Statement will comply as to form
in all material respects with the provisions of the Exchange Act, and the
Regulations promulgated thereunder.
Section 4.14 Employee Plans; Collective Bargaining Agreements.
Except as set forth in Section 4.14 of the Company's Disclosure Letter, the
Company represents and warrants as follows:
(a) Pension Plans.
(i) No "accumulated funding deficiency" (for which an
excise tax is due or would be due in the absence of a waiver) as
defined in section 412 of the Code or as defined in Section
302(a)(2) of ERISA, whichever may apply, has been incurred with
respect to any Pension Plan of the Company or any ERISA Affiliate
thereof with respect to any plan year, whether or not waived.
Neither the Company nor any ERISA Affiliate thereof has failed to
pay when due any "required installment," within the meaning of
section 412(m) of the Code and Section 302(e) of ERISA, whichever
may apply, with respect to any such Pension Plan. Neither the
Company nor any ERISA Affiliate thereof is subject to any Lien
imposed under section 412(n) of the Code or Section 302(f) or
4068 of ERISA, whichever may apply, with respect to any such
Pension Plan. All "benefit liabilities" within the meaning of
Section 4001(a)(16) of ERISA, are fully funded as of the Closing
Date with respect to each such Pension Plan as determined on a
termination basis using the assumed interest rate set forth in
each Pension Plan.
(ii) Neither the Company nor any ERISA Affiliate thereof is
required to provide security to a Pension Plan under section
401(a)(29) of the Code.
(iii) Except as otherwise disclosed in Subsection
4.14(a) of the Company's Disclosure Letter, each Pension Plan of
the Company or any ERISA Affiliate thereof and each related trust
agreement, annuity contract or other funding instrument is
qualified and tax exempt under the provisions of Code sections
401(a) and 501(a), and each has been so determined by the IRS, or
application for such determination has been made and is currently
pending. Any such Pension Plan that has been terminated has
received a favorable determination letter from the IRS with
respect to its termination, or application for such determination
has been made and is currently pending.
(iv) Each Pension Plan of the Company or any ERISA Affiliate
thereof, related trust agreement, annuity contract or other
funding instrument is in Material compliance with its terms and,
both as to form and in operation, with the requirements
prescribed by any and all Laws which are applicable to such
Pension Plan, related trust agreement, annuity contract or other
funding instrument, including without limitation ERISA and the
Code.
(v) The Company or an ERISA Affiliate thereof has paid all
premiums (and interest charges and penalties for late payment, if
applicable) due to the PBGC with respect to each Pension Plan of
the Company or any ERISA Affiliate thereof which is covered by
Title IV of ERISA for each plan year thereof for which such
premiums are required. Neither the Company nor any ERISA
Affiliate thereof has engaged in, or is a successor or parent
corporation to an entity that has engaged in, a transaction which
is described in Section 4069 of ERISA. There has been no
unreported "reportable event" (as defined in Section 4043(b) of
ERISA and the PBGC regulations under such Section) requiring
notice to the PBGC with respect to any Pension Plan of the
Company or any ERISA Affiliate thereof. No filing has been made
by the Company or any ERISA Affiliate thereof with the PBGC, and
no proceeding has been commenced by the PBGC, to terminate any
Pension Plan of the Company or any ERISA Affiliate thereof. No
condition exists and no event has occurred that could constitute
grounds for the termination of any Pension Plan of the Company or
any ERISA Affiliate thereof by the PBGC, or which could
reasonably be expected to result in liability of the Company or
any ERISA Affiliate thereof to the PBGC with respect to any such
Pension Plan, other than liabilities for premium payments.
Neither the Company nor any ERISA Affiliate thereof has, at any
time, (1) ceased operations at a facility so as to become subject
to the provisions of Section 4062(e) of ERISA, (2) withdrawn as a
substantial employer so as to become subject to the provisions of
Section 4063 of ERISA, or (3) ceased making contributions to any
Pension Plan of the Company or any ERISA Affiliate thereof
subject to Section 4064(a) of ERISA to which the Company or any
ERISA Affiliate thereof made contributions during the six (6)
years prior to the date hereof.
(b) Multiemployer Plans. There are no Multiemployer Plans of
the Company or any ERISA Affiliate thereof, and neither the Company
nor any ERISA Affiliate thereof has ever maintained, contributed to,
or participated or agreed to participate in any Multiemployer Plan.
(c) Welfare Plans.
(i) Each Welfare Plan of the Company or any ERISA Affiliate
thereof is in Material compliance with its terms and, both as to
form and operation, with the requirements prescribed by any and
all Laws which are applicable to such Welfare Plan, including
without limitation ERISA and the Code.
(ii) An estimate of the liabilities of the Company and any
of its ERISA Affiliates for providing retiree life and medical
benefits coverage to active and retired employees of the Company
and any of its ERISA Affiliates has been made and is reflected on
the appropriate balance sheet and books and records according to
Statement of Financial Accounting Standards No. 106. The Company
or any ERISA Affiliate thereof has the right to modify or
terminate any Welfare Plans of the Company or any ERISA Affiliate
thereof that provide coverage or benefits for either or both
retired and active employees and/or their dependents and
beneficiaries.
(iii) Each Welfare Plan of the Company or any ERISA
Affiliate thereof which is a "group health plan," as defined in
Section 607(1) of ERISA, has been operated in material compliance
at all times with the provisions of Parts 6 and 7 of Title I,
Subtitle B of ERISA and sections 4980B and 9801 through 9806 of
the Code.
(iv) There are no Welfare Plans of the Company or any ERISA
Affiliate thereof which are self-insured "multiple employer
welfare arrangements" as such term is defined in Section 3(40) of
ERISA.
(d) Benefit Arrangements.
(i) Each Benefit Arrangement of the Company or any ERISA
Affiliate thereof is in Material compliance with its terms and
with the requirements prescribed by any and all Laws which are
applicable to such Benefit Arrangement, including without
limitation the Code.
(ii) Except as set forth in Subsection 4.14(d) of the
Company's Disclosure Letter, neither the Company nor any ERISA
Affiliate thereof is a party to or is bound by any severance
agreement, plan, or program (other than such an agreement, plan,
or program providing for payments of less than $50,000 in the
aggregate to all participants).
(iii) Each outstanding Company Stock Options not vested
or exercisable at the Effective Time shall, as a result of the
transactions contemplated hereby, automatically and without any
action by the Company or the Board of Directors of the Company,
become vested and exercisable at the Effective Time.
(e) Fiduciary Duties and Prohibited Transactions. Neither the
Company nor any ERISA Affiliate thereof has any liability with respect
to any transaction in violation of Sections 404 or 406 of ERISA or any
"prohibited transaction," as defined in section 4975(c)(1) of the
Code, for which no exemption exists under Section 408 of ERISA or
section 4975(c)(2) or (d) of the Code to which any Welfare Plan or
Pension Plan of the Company or any ERISA Affiliate thereof is subject.
To the Knowledge of the Company, neither the Company nor any ERISA
Affiliate thereof has participated in a violation of Part 4 of
Title I, Subtitle B of ERISA by any plan fiduciary of any Welfare Plan
or Pension Plan of the Company or any ERISA Affiliate thereof or has
any unpaid civil penalty under Section 502(1) of ERISA.
(f) Litigation. There is no Material action, Order or claim,
suit, litigation, proceeding, arbitral action, governmental audit or
investigation relating to or seeking benefits under any Employee Plan
of the Company or any ERISA Affiliate thereof that is pending or, to
the Knowledge of the Company, threatened or anticipated against the
Company or any ERISA Affiliate thereof other than routine claims for
benefits.
(g) Unpaid Contributions. Neither the Company nor any ERISA
Affiliate thereof has any liability for unpaid contributions with
respect to any Employee Plan of the Company or any ERISA Affiliate
thereof. The Company and all its ERISA Affiliates have made all
required contributions under each such Employee Plan or proper
accruals have been made and are reflected on the appropriate balance
sheet and books and records, including without limitation, any
accruals for vacation or sick leave which may be carried over from one
year to the next.
(h) Change of Control Payments. Except as otherwise disclosed
in Subsection 4.14(h) of the Company's Disclosure Letter, the
execution of this Agreement and the consummation of the transactions
contemplated hereby will not, either alone or in connection with
another event, result in any payment (whether of separation pay or
otherwise) becoming due from the Company or any ERISA Affiliate
thereof (under an Employee Plan of the Company or any ERISA Affiliate
thereof or otherwise) to any current or former employee or consultant
of the Company or any ERISA Affiliate thereof, or result in the
vesting, acceleration of payment or increase in the amount of any
benefit payable to or in respect of any such current or former
employee or consultant of the Company or any ERISA Affiliate thereof
(under an Employee Plan of the Company or any ERISA Affiliate thereof
or otherwise).
(i) Material Adverse Effects. With respect to Employee Plans of
the Company or any ERISA Affiliate thereof, no event has occurred and
there exists no condition or set of circumstances in connection with
which the Company or any ERISA Affiliate thereof could be subject to
any liability under the terms of such Employee Plans, ERISA, the Code,
or any other applicable Law, other than any condition or set of
circumstances that would not have a Material Adverse Effect on the
Company or any ERISA Affiliate thereof.
(j) Copies of Documentation. Included in Section 4.14(j) of the
Company Disclosure Letter is a list of all Employee Plans of the
Company. The Company has delivered pursuant to this Agreement a true
and complete set of copies of (i) all Employee Plans of the Company or
any ERISA Affiliate thereof (including without limitation, employment
agreements) and related trust agreements, annuity contracts or other
funding instruments as in effect immediately prior to the date hereof,
together with all amendments thereto which will become effective at a
later date; (ii) the latest IRS determination letter obtained with
respect to any such Employee Plan qualified or exempt under section
401 or 501 of the Code; (iii) Forms 5500 including all schedules,
attachments, and certified financial statements for the most recently
completed three fiscal years for each Employee Plan of the Company or
any ERISA Affiliate thereof required to file such form, together with
the most recent actuarial report, if any, prepared by the such
Employee's Plan's enrolled actuary; (iv) all summary plan descriptions
for each Employee Plan of the Company or any ERISA Affiliate thereof
required to prepare, file and distribute summary plan descriptions;
(v) all summaries furnished or made available to employees, officers
and directors of the Company or any ERISA Affiliate thereof of all
incentive compensation, other plans and fringe benefits for which a
summary plan description is not required; (vi) current registration
statements on Form S-8 and amendments thereto with respect to any
Employee Plan of the Company or any ERISA Affiliate thereof; (vii) the
notifications to employees of their rights under COBRA with respect to
each Welfare Plan of the Company or any ERISA Affiliate thereof
subject to COBRA; and (viii) the Indemnification Agreements.
(k) No collective bargaining agreement to which the Company or
any of its Subsidiaries is a party is currently in effect or is being
negotiated by the Company or any of its Subsidiaries. There is no
pending or, to the Knowledge of the Company, threatened labor dispute,
strike or work stoppage against the Company or any of its Subsidiaries
that would have a Material Adverse Effect on the Company. Neither the
Company or any of its Subsidiaries nor any representative or employee
of the Company or any of its Subsidiaries has in the United States
committed any unfair labor practices in connection with the operation
of the business of the Company and its Subsidiaries, and there is no
pending or, to the Knowledge of the Company, threatened charge or
complaint against the Company or any of its Subsidiaries by the
National Labor Relations Board or any comparable agency of any state
of the United States.
Section 4.15 Taxes. Except as set forth in Section 4.15 of the
Company's Disclosure Letter, all Tax Returns required to be filed by or on
behalf of the Company, each of its Subsidiaries, and each affiliated,
combined, consolidated or unitary group of which the Company or any of its
Subsidiaries is or has been a member have been timely filed, and all such
Tax Returns are true, complete and correct except to the extent any failure
to file, or any incompletions or inaccuracies in, filed Tax Returns would
not, individually or in the aggregate, have a Material Adverse Effect on
the Company (it being understood that the representations and warranties
made in this Section 4.15, to the extent that they relate to any group of
which the Company or any of its Subsidiaries were not the common parent,
are made to the Knowledge of the Company and its Subsidiaries). All Taxes
due and owing by or with respect to the Company or any Subsidiary of the
Company have been timely paid, or adequately reserved for, except to the
extent any failure to pay or reserve would not, individually or in the
aggregate, have a Material Adverse Effect on the Company. There is no
audit, examination, claimed deficiency, refund litigation, proposed
adjustment or matter in controversy regarding any Taxes due and owing by or
with respect to the Company or any Subsidiary of the Company that would,
individually or in the aggregate, have a Material Adverse Effect on the
Company. All assessments for Taxes due and owing by or with respect to the
Company or any Subsidiary of the Company with respect to completed and
settled examinations or concluded litigation have been paid. Prior to the
date of this Agreement, the Company has provided Acquiror with written
schedules setting forth (i) the taxable years of the Company for which the
statutes of limitations with respect to federal and Material state income
taxes have not expired and (ii) with respect to federal and Material state
income taxes, those years for which examinations have been completed, those
years for which examinations are presently being conducted, and those years
for which examinations have not yet been initiated. Except as set forth in
Section 4.15 of the Company's Disclosure Letter, none of the Company or any
of its Subsidiaries is a party to any agreement, contract, arrangement or
plan, whether written or oral, that has resulted or would result,
individually or in the aggregate, in the payment of any "excess parachute
payments" within the meaning of Section 280G of the Code. The Company and
each of its Subsidiaries have complied in all material respects with all
rules and Regulations relating to the payment and withholding of Taxes,
except to the extent any such failure to comply would not, individually or
in the aggregate, have a Material Adverse Effect on the Company. Neither
the Company nor any of its Subsidiaries (i) has waived any statutory period
of limitations in respect of its or their Taxes or Tax Returns or (ii) is a
party to, bound by, or has any obligation under any Tax sharing,
allocation, indemnity, or similar contract or arrangement.
Section 4.16 Environmental Matters. Except for matters disclosed in
Section 4.16 of the Company's Disclosure Letter and except for matters
that, individually or in the aggregate, would not have a Material Adverse
Effect on the Company, (a) the properties, operations and activities of the
Company and its Subsidiaries are in compliance with all applicable
Environmental Laws; (b) the Company and its Subsidiaries and the properties
and operations of the Company and its Subsidiaries are not subject to any
existing, pending or, to the Knowledge of the Company, threatened action,
suit, investigation, inquiry or proceeding by or before any Court or
Governmental Authority under any Environmental Law; (c) all Permits, if
any, required to be obtained or filed by the Company or any of its
Subsidiaries under any Environmental Law in connection with the business of
the Company and its Subsidiaries have been obtained or filed and are valid
and currently in full force and effect; (d) there has been no release of
any hazardous substance, pollutant or contaminant into the environment in
violation of applicable Environmental Laws by the Company or its
Subsidiaries or in connection with their properties or operations;
(e) there has been no exposure (attributable to the action of the Company
or its Subsidiaries) of any Person or property to any hazardous substance,
pollutant or contaminant in violation of applicable Environmental Laws in
connection with the properties, operations and activities of the Company
and its Subsidiaries; and (f) the Company and its Subsidiaries have made
available to the Acquiror all internal and external environmental audits,
studies and reports and all correspondence on substantial environmental
matters (in each case relevant to the Company or any of its Subsidiaries)
in the possession of the Company or its Subsidiaries.
Section 4.17 Intellectual Property. The Company or one or more of
its Subsidiaries own, or hold valid licenses under, or otherwise have the
right to use or sublicense, all foreign and domestic patents, trademarks
(common law and registered), trademark registration applications, service
marks (common law and registered), service mark registration applications,
trade names and copyrights, copyright applications, trade secrets, know-how
and other proprietary information as are necessary for the conduct of the
business of the Company and its Subsidiaries as currently conducted except
for any such intellectual property as to which the failure to own or hold
licenses would not in the aggregate have a Material Adverse Effect on the
Company. Except as set forth in Section 4.17 of the Company's Disclosure
Letter, neither the Company nor any of its Subsidiaries is currently in
receipt of any notice of infringement or notice of conflict with the
asserted rights of others in any patents, trademarks, service marks, trade
names, trade secrets, copyrights and other proprietary rights owned or held
by other Persons, except, in each case, for matters that would not in the
aggregate have a Material Adverse Effect on the Company. Neither the
execution and delivery of this Agreement nor consummation of the
transactions contemplated hereby will violate or breach the terms of or
cause any cancellation of any Material license held by the Company or any
of its Subsidiaries under any patent, trademark, service mark, trade name,
trade secret or copyright. Except as set forth in Section 4.17, of the
Company's Disclosure Letter, no claim of infringement of any patent,
copyright, trade secret, or other proprietary right is pending against the
Company.
Section 4.18 Insurance. The Company and its Subsidiaries own and
are beneficiaries under all such insurance policies/fidelity bonds
underwritten by reputable insurers/sureties that, as to risks insured,
coverages and related limits and deductibles, are customary in the
industries in which the Company and its Subsidiaries operate. To the
Knowledge of the Company, all such policies/bonds are in full force and
effect and all premiums due thereon have been paid. Section 4.18 of the
Company's Disclosure Letter sets forth a list, including the name of the
underwriter/surety, the risks insured, coverage and related limits and
deductibles, expiration dates and significant riders, of the principal
insurance policies/fidelity bonds currently maintained by the Company and
its Subsidiaries.
Section 4.19 Pooling; Tax Matters. To the Knowledge of the Company
after due investigation, neither the Company nor any of its Affiliates has
taken or agreed to take any action or failed to take any action that would
prevent (a) the Merger from being treated for financial accounting purposes
as a "pooling of interests" in accordance with GAAP and the Regulations and
interpretations of the Commission or (b) the Merger from constituting a
reorganization within the meaning of Section 368(a) of the Code.
Section 4.20 Affiliates. Section 4.20 of the Company's Disclosure
Letter contains a true and complete list of all Persons who, to the
Knowledge of the Company, may be deemed to be Affiliates of the Company,
excluding all its Subsidiaries but including all directors and executive
officers of the Company.
Section 4.21 Brokers. No broker, finder, investment banker or other
Person (other than Prudential Securities, Inc.) is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by
or on behalf of the Company. Prior to the date of this Agreement, the
Company has made available to the Acquiror a complete and correct copy of
all agreements between the Company and Prudential Securities, Inc. pursuant
to which such firm will be entitled to any payment relating to the
transactions contemplated by this Agreement.
Section 4.22 Opinion of Financial Advisor. The Board of Directors
of the Company has received the opinion of Prudential Securities, Inc., the
Company's financial advisor, substantially to the effect that the
consideration to be received by the holders of the Company Common Stock in
the Merger is fair to such holders from a financial point of view, a copy
of which has been provided to the Acquiror.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
The Acquiror Companies hereby represent and warrant to the Company
that:
Section 5.1 Organization and Qualification; Subsidiaries. The
Acquiror, Newco and each other Subsidiary of the Acquiror are legal
entities duly organized, validly existing and in good standing under the
Laws of their respective jurisdictions of incorporation or organization,
have all requisite power and authority to own, lease and operate their
respective properties and to carry on their business as it is now being
conducted and are duly qualified and in good standing to do business in
each jurisdiction in which the nature of the business conducted by them or
the ownership or leasing of their respective properties makes such
qualification necessary, other than any matters, including the failure to
be so duly qualified and in good standing, that would not individually or
in the aggregate have a Material Adverse Effect on the Acquiror.
Section 5.1 of the Acquiror's Disclosure Letter sets forth, as of the date
of this Agreement, a true and complete list of all Significant Subsidiaries
of the Acquiror, together with the jurisdiction of incorporation of each
such Subsidiary and the percentage of each such Subsidiary's outstanding
capital stock or other equity interests owned by the Acquiror or another
Subsidiary of the Acquiror. Neither the Acquiror, Newco nor any other
Subsidiary of the Acquiror owns an equity interest in any partnership or
joint venture arrangement or other business entity that is Material to the
Acquiror.
Section 5.2 Articles of Incorporation; Bylaws. The Acquiror has
heretofore marked for identification and furnished to the Company complete
and correct copies of the articles of incorporation and the bylaws or the
equivalent organizational documents, in each case as amended or restated to
the date hereof, of the Acquiror and each of its Significant Subsidiaries.
None of the Acquiror, Newco or any of the Acquiror's Significant
Subsidiaries is in violation of any of the provisions of its articles of
incorporation or bylaws (or equivalent organizational documents).
Section 5.3 Capitalization.
(a) The authorized capital stock of the Acquiror consists of
(i) 60,000,000 shares of Acquiror Common Stock of which as of February
25, 1998, 24,311,832 shares were issued and outstanding, all of which
are duly authorized, validly issued, fully paid and nonassessable and,
were not issued in violation of any preemptive or similar rights of
any Person, and (ii) 1,000,000 shares of Preferred Stock, par value
$.01 per share, of which none is issued. Since February 25, 1998, the
Acquiror as not issued any shares of Acquiror Common Stock, except
pursuant to the exercise of outstanding Acquiror Stock Options and
otherwise to the extent set forth in Subsection 5.3(a) of the
Acquiror's Disclosure Letter. Except as set forth in
Subsection 5.3(a) of the Acquiror's Disclosure Letter, since January
22, 1998, the Acquiror has not granted any options for, or other
rights to purchase, shares of the capital stock of the Acquiror.
(b) Except as set forth in Subsection 5.3(b) of the Acquiror's
Disclosure Letter or in the Acquiror's Consolidated Financial
Statements, no shares of capital stock of Acquiror are reserved for
issuance, and there are no contracts, agreements, commitments or
arrangements obligating the Acquiror (i) to offer, sell, issue, grant,
pledge, dispose of or encumber any shares of, or any options, warrants
or rights of any kind to acquire any shares of, or any securities that
are convertible into or exchangeable for any shares of, capital stock
of the Acquiror, (ii) to redeem, purchase or acquire, or offer to
purchase or acquire, any outstanding shares of, or any outstanding
options, warrants or rights of any kind to acquire any shares of, or
any outstanding securities that are convertible into or exchangeable
for any shares of, capital stock of the Acquiror or (iii) to grant any
Lien on any shares of capital stock of the Acquiror.
(c) (i) All the issued and outstanding shares of capital stock
of, or other equity interests in, each Subsidiary of the Acquiror are
owned by the Acquiror or one of its Subsidiaries, have been duly
authorized and are validly issued, and, with respect to capital stock,
are fully paid and nonassessable, and were not issued in violation of
any preemptive or similar rights of any Person; (ii) all such issued
and outstanding shares, or other equity interests, that are owned by
the Acquiror or one of its Subsidiaries are owned free and clear of
all Liens; (iii) no shares of capital stock of, or other equity
interests in, any Subsidiary of the Acquiror are reserved for
issuance, and there are no contracts, agreements, commitments or
arrangements obligating the Acquiror or any of its Subsidiaries (A) to
offer, sell, issue, grant, pledge, dispose of or encumber any shares
of capital stock of, or other equity interests in, or any options,
warrants or rights of any kind to acquire any shares of capital stock
of, or other equity interests in, or any securities that are
convertible into or exchangeable for any shares of capital stock of,
or other equity interests in, any of the Subsidiaries of the Acquiror
or (B) to redeem, purchase or acquire, or offer to purchase or
acquire, any outstanding shares of capital stock of, or other equity
interests in, or any outstanding options, warrants or rights of any
kind to acquire any shares of capital stock of or other equity
interest in, or any outstanding securities that are convertible into
or exchangeable for, any shares of capital stock of, or other equity
interests in, any of the Subsidiaries of the Acquiror or (C) to grant
any Lien on any outstanding shares of capital stock of, or other
equity interest in, any of the Subsidiaries of the Acquiror; except
with respect to clause (i), (ii) or (iii) of this Subsection 5.3(c)
for such matters that would not in the aggregate have a Material
Adverse Effect on the Acquiror.
(d) There are no voting trusts, proxies or other agreements,
commitments or understandings of any character to which the Acquiror
or any of its Significant Subsidiaries or, to the Knowledge of the
Acquiror, any third Person is a party or by which the Acquiror or any
of its Significant Subsidiaries is bound with respect to the voting of
any shares of capital stock of the Acquiror or any of its Significant
Subsidiaries.
Section 5.4 Authorization of Agreement. Each of the Acquiror
Companies has all requisite corporate power and authority to execute and
deliver this Agreement and each instrument required hereby to be executed
and delivered by it at the Closing, to perform its obligations hereunder
and thereunder and to consummate the transactions contemplated hereby and
thereby. The execution and delivery by the Acquiror Companies of this
Agreement and each instrument required hereby to be executed and delivered
by the Acquiror Companies at the Closing and the performance of their
respective obligations hereunder and thereunder have been duly and validly
authorized by all requisite corporate action (including stockholder action)
on the part of the Acquiror Companies (other than approval of the issuance
of shares of Acquiror Common Stock pursuant to this Agreement by the
Stockholders of the Acquiror, which approval and adoption shall require the
affirmative vote of the holders of not less than a majority of the shares
of Acquiror Common Stock present or represented at the Acquiror's
Stockholders' Meeting). This Agreement has been duly executed and
delivered by each of the Acquiror Companies and (assuming due
authorization, execution and delivery hereof by the Company) constitutes a
legal, valid and binding obligation of each of the Acquiror Companies,
enforceable against each of the Acquiror Companies in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereafter in effect relating to creditors' rights
general or to general principles of equity.
Section 5.5 Approvals. Except for the applicable requirements, if
any, of (a) the Securities Act, (b) the Exchange Act, (c) state securities
or blue sky Laws, (d) the HSR Act, (e) the NYSE, (f) the filing and
recordation of appropriate merger documents as required by the DGCL and
(g) those Laws, Regulations and Orders noncompliance with which would not
have in the aggregate a Material Adverse Effect on the ability of the
Acquiror or Newco to perform its obligations under this Agreement or a
Material Adverse Effect on the Acquiror, no filing or registration with, no
waiting period imposed by and no Permit, Order or consent of, any Court or
Governmental Authority is required under any Law, Regulation or Order
applicable to the Acquiror or any of its Subsidiaries to permit the
Acquiror or Newco to execute, deliver or perform this Agreement or any
instrument required hereby to be executed and delivered by it at the
Closing.
Section 5.6 No Violation. Assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting
periods imposed by and receipt of all Permits, Orders or consents of,
Courts or Governmental Authorities indicated as required in Section 5.5
hereof, neither the execution and delivery by the Acquiror or Newco of this
Agreement or any instrument required hereby to be executed and delivered by
the Acquiror or Newco at the Closing nor the performance by the Acquiror or
Newco of their respective obligations hereunder or thereunder will
(a) violate or breach the terms of or cause a default under (i) any Law,
Regulation or Order applicable to the Acquiror or Newco, (ii) the articles
of incorporation or bylaws of the Acquiror or Newco or (iii) any contract,
note, bond, mortgage, indenture, license, agreement or other instrument to
which the Acquiror or any of its Subsidiaries is a party or by which it or
any of its properties or assets is bound, or (b) with the passage of time,
the giving of notice or the taking of any action by a third Person, have
any of the effects set forth in clause (a) of this Section 5.6, except in
any such case for any matters described in this Section 5.6 that would not
have in the aggregate a Material Adverse Effect upon the ability of the
Acquiror or Newco to perform its obligations under this Agreement or a
Material Adverse Effect on the Acquiror. Prior to the execution of this
Agreement, the Board of Directors of the Acquiror has taken all requisite
actions to cause the transactions contemplated by this Agreement to be
exempt from the provisions of Section 3-601 et. seq. of the MGCL and to
ensure that the execution, delivery and performance of this Agreement by
the Acquiror will not cause any Acquiror Rights to become exercisable.
Section 5.7 Reports.
(a) Since January 31, 1994, the Acquiror and its Subsidiaries
have timely filed (i) all SEC Reports required to be filed with the
Commission and (ii) all other Reports required to be filed with any
other Governmental Authorities, including state securities
administrators except where the failure to file any such Reports
would not in the aggregate have a Material Adverse Effect on the
Acquiror. The Reports, including those filed after the date of this
Agreement and prior to the Effective Time, (i) were prepared in all
Material respects in accordance with the requirements of applicable
Law (including, with respect to the SEC Reports, the Securities Act
and the Exchange Act, as the case may be and (ii) in the case of SEC
Reports, did not at the time they were filed contain any untrue
statement of a Material fact or omit to state a Material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
(b) The Acquiror's Consolidated Financial Statements and any
consolidated financial statements of the Acquiror (including any
related notes thereto) contained in any SEC Reports of the Acquiror
filed with the Commission since January 31, 1994 (i) have been or will
have been prepared in accordance with the published Regulations of the
Commission and in accordance with GAAP consistently applied during the
periods involved (except (A) to the extent required by changes in GAAP
and (B), with respect to SEC Reports of the Acquiror filed prior to
the date of this Agreement, as may be indicated in the notes thereto),
and (ii) fairly present the consolidated financial position of the
Acquiror and its Subsidiaries as of the respective dates thereof and
the consolidated results of their operations and cash flows for the
periods indicated (including, in the case of any unaudited interim
financial statements, reasonable estimates of normal and recurring
year-end adjustments).
(c) There exist no liabilities or obligations of the Acquiror
and its Subsidiaries that are Material to the Acquiror, whether
accrued, absolute, contingent or threatened, which would be required
to be reflected, reserved for or disclosed under GAAP in consolidated
financial statements of the Acquiror (including the notes thereto) as
of and for the period ended on the date of this representation and
warranty, other than (i) liabilities or obligations that are
adequately reflected, reserved for or disclosed in the Acquiror's
Consolidated Financial Statements, (ii) liabilities or obligations
incurred in the ordinary course of business of the Acquiror and its
Subsidiaries since November 1, 1997, and (iii) liabilities or
obligations the incurrence of which are not prohibited by
Subsection 6.2(b) hereof.
Section 5.8 No Material Adverse Effect; Conduct.
(a) Since January 31, 1997, (i) no event or events (other than
any event that is directly attributable to the prospect of
consummation of the Merger or is of general application to all or a
substantial portion of the Acquiror's industry and other than any
event that is expressly subject to any other representation or
warranty contained in this Article V) have, to the Knowledge of the
Acquiror, occurred that, individually or in the aggregate, would
constitute or cause a Material Adverse Effect on the Acquiror and (ii)
there have not been any change or changes in the business condition
(financial or other), results of operations, properties, assets or
liabilities of the Acquiror or its Subsidiaries which would have in
the aggregate a Material Adverse Effect on the Acquiror.
(b) During the period from January 31, 1997 to the date of this
Agreement, neither the Acquiror nor any of its Subsidiaries has
engaged in any conduct that is proscribed during the period from the
date of this Agreement to the Effective Time by subsections (i)
through (viii) of Subsection 6.2(b) hereof or agreed in writing or
otherwise during such period prior to the date of this Agreement to
engage in any such conduct.
Section 5.9 Litigation; Compliance with Laws. There are no
actions, suits, investigations or proceedings (including any proceedings in
arbitration) pending or, to the Knowledge of the Acquiror, threatened
against the Acquiror or any of its Subsidiaries, at law or in equity, in
any Court or before or by any Governmental Authority, except actions, suits
or proceedings that (a) are set forth in Section 5.9 or any other Section
of the Acquiror's Disclosure Letter or (b) in the aggregate, would not
have a Material Adverse Effect on the Acquiror. Except as set forth in
Section 5.9 of the Acquiror's Disclosure Letter, neither the Acquiror nor
any of its Subsidiaries is subject to any written agreement, directive,
memorandum of understanding or Order with or by any Court or Governmental
Authority restricting its operation or requiring any Material actions.
Except as set forth in Section 5.9 of the Acquiror's Disclosure Letter, the
Acquiror and its Subsidiaries are in compliance with all applicable Laws
and Regulations and are not in default with respect to any Order applicable
to the Acquiror or any of its Subsidiaries, except such events of
noncompliance or defaults that, individually or in the aggregate, would not
have a Material Adverse Effect on the Acquiror.
Section 5.10 Information in Disclosure Documents and Registration
Statement. None of the information to be supplied by the Acquiror for
inclusion or incorporation by reference in the Proxy Statement or the
Registration Statement to be filed by Acquiror with the SEC will, in the
case of the Registration Statement, at the time it becomes effective and at
the Effective Time, or, in the case of the Proxy Statement or any
amendments thereof or supplements thereto, at the time of the mailing of
the Proxy Statement and any amendments or supplements thereto and at the
time of the meetings of stockholders to be held in connection with the
Merger, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
are made, not misleading. The Proxy Statement will comply as to form in
all material respects with the provisions of the Exchange Act, and the
Regulations promulgated thereunder. The Registration Statement will comply
as to form in all material respects with the provisions of the Securities
Act and the Regulations thereunder.
Section 5.11 Pooling; Tax Matters. To the Knowledge of the Acquiror
after due investigation, neither the Acquiror nor any of its Affiliates has
taken or agreed to take any action or failed to take any action that would
prevent (a) the Merger from being treated for financial accounting purposes
as a "pooling of interests" in accordance with GAAP and the Regulations and
interpretations of the Commission or (b) the Merger from constituting a
reorganization within the meaning of Section 368(a) of the Code.
Section 5.12 Affiliates. Section 5.12 of the Acquiror's Disclosure
Letter contains a true and complete list of all Persons who, to the
Knowledge of the Acquiror, may be deemed to be Affiliates of the Acquiror,
excluding all its Subsidiaries but including all directors and executive
officers of the Acquiror.
Section 5.13 Brokers. No broker, finder, investment banker or other
Person (other than Adams, Harkness & Hill, Inc.) is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by
or on behalf of the Acquiror.
Section 5.14 Opinion of Financial Advisor. The Board of Directors
of the Acquiror has received the opinion of Adams, Harkness & Hill, Inc.,
the Acquiror's financial advisor, substantially to the effect that the
consideration to be received by the holders of the Company Common Stock in
the Merger is fair to the Acquiror from a financial point of view, a copy
of which has been provided to the Company.
Section 5.15 Operations of Newco. Newco has been formed solely for
the purpose of engaging in the transactions contemplated hereby, has
engaged in no other business activities and has conducted its operations
only as contemplated hereby.
Section 5.16 Proposal to Acquire the Acquiror. As of the date
hereof, there is not pending any bona fide proposal received by the
Acquiror regarding any merger, consolidation, or reorganization of the
Acquiror with any other Person as a result of which less than a majority of
the combined voting power of the securities of the Person surviving such
transaction would be held immediately after such transaction by all the
holders of Acquiror Common Stock immediately prior to such transaction.
ARTICLE VI
COVENANTS
Section 6.1 Affirmative Covenants.
(a) Each of the Company and the Acquiror hereby covenants and
agrees that, prior to the Effective Time, unless otherwise expressly
contemplated by this Agreement or consented to in writing by the
other, it will and will cause its Subsidiaries to operate its business
in the usual and ordinary course consistent with past practice and use
all reasonable efforts to preserve substantially intact its business
organization, maintain its rights and franchises, retain the services
of its respective key employees and preserve the goodwill of those
having business relationships with it, including customers and
suppliers. The Company further covenants and agrees that prior to the
Effective Time, except as otherwise consented to in writing by the
Acquiror, it will and will cause its Subsidiaries to maintain and keep
its properties and assets in as good repair and condition as at
present, ordinary wear and tear excepted, and use all reasonable
efforts to keep in full force and effect insurance and bonds
comparable in amount and scope of coverage to that currently
maintained, except in each case for any matters that, individually or
in the aggregate, would not have a Material Adverse Effect on the
Company.
(b) Each of the Acquiror and Newco hereby covenants and agrees
that, at the Effective Time, the certificate of incorporation and
bylaws of Newco will contain indemnification provisions substantially
identical to those currently contained in Newco's certificate of
incorporation and bylaws.
Section 6.2 Negative Covenants.
(a) The Company covenants and agrees that, except as set forth
in Subsection 6.2(a) of the Company's Disclosure Letter or except as
expressly contemplated by this Agreement or otherwise consented to in
writing by the Acquiror, from the date of this Agreement until the
Effective Time, it will not do, and will not permit any of its
Subsidiaries to do, any of the following:
(i) (A) make any change in the compensation payable to or
to become payable to any of its directors, officers or employees,
except for changes in the ordinary course of business and
consistent with past practice; (B) grant any severance or
termination pay (other than pursuant to the normal severance
policy of the Company or its Subsidiaries as in effect on the
date of this Agreement) to, or enter into or amend any
employment, severance, termination or other similar agreement,
with, any director, officer or employee, either individually or
as part of a class of similarly situated Persons; (C) establish,
adopt or enter into any Employee Plan; (D) except as may be
required by applicable Law and actions that are not inconsistent
with the provisions of Section 7.8 of this Agreement, amend
(including the acceleration of vesting, waiving of performance
criteria or the adjustment of awards or any other actions
permitted upon a change in control of such party or a filing
under Section 13(d) or 14(d) of the Exchange Act with respect to
such party) any of the Employee Plans of such Person; or (E) make
any loans to any of its officers, directors or employees or make
any changes in its existing borrowing or lending arrangements for
or on behalf of any such Persons;
(ii) declare or to pay any dividend on, or to make any
other distribution in respect of, outstanding shares of capital
stock, except for dividends by a wholly-owned Subsidiary of the
Company to the Company or another wholly-owned Subsidiary of the
Company.
(iii) (A) redeem, purchase or acquire, or offer to
purchase or acquire, any outstanding shares of capital stock of,
or other equity interests in, or any securities that are
convertible into or exchangeable for any shares of capital stock
of, or other equity interests in, or any outstanding options,
warrants or rights of any kind to acquire any shares of capital
stock of, or other equity interests in, the Company or any of its
Subsidiaries; (B) effect any reorganization or recapitalization;
or (C) split, combine or reclassify any of the capital stock of,
or other equity interests in, the Company or any of its
Subsidiaries or issue or authorize or propose the issuance of any
other securities in respect of, in lieu of or in substitution
for, shares of such capital stock or such equity interests, other
than intercompany transfers among the Company and its
wholly-owned Subsidiaries or among such wholly-owned
Subsidiaries;
(iv) (A) offer, sell, issue or grant, or authorize the
offering, sale, issuance or grant, of any shares of capital stock
of, or other equity interests in, or any securities convertible
into or exchangeable for any shares of capital stock of, or other
equity interests in, or any options, warrants or rights of any
kind to acquire any shares of capital stock of, or other equity
interests in, the Company or any of its Subsidiaries, except for
unissued shares reserved for issuance upon the exercise of
outstanding employee stock options; (B) amend or otherwise modify
the terms (as in effect on the date of this Agreement) of any
outstanding options, warrants or rights of any kind to acquire
any shares of capital stock of, or other equity interests in, the
Company or any of its Subsidiaries the effect of which will be to
make such terms more favorable to the holders thereof (except as
may be required by ERISA or other applicable Laws); or (C) grant
any Lien with respect to any shares of capital stock of, or other
equity interests in, any Subsidiary of the Company;
(v) acquire or agree to acquire, by merging or
consolidating with, by purchasing an equity interest in or a
portion of the assets of, or in any other manner, any business or
any corporation, partnership, association or other business
organization or division thereof, or otherwise to acquire any
assets of any other Person (other than the purchase of assets
from suppliers or vendors in the ordinary course of business and
consistent with past practice);
(vi) sell, lease, exchange or otherwise dispose of, or to
grant any Lien (other than a Permitted Encumbrance) with respect
to, any of the assets of the Company or any of its Subsidiaries
that are Material to the Company or such Subsidiary, except for
dispositions of assets and inventories in the ordinary course of
business and consistent with past practice and dispositions of
assets and incurrence of purchase money Liens incurred in
connection with the original acquisition of assets and secured by
the assets acquired in an amount not to exceed $250,000 in the
aggregate;
(vii) adopt any amendments to its certificate of
incorporation or bylaws or other organizational documents;
(viii) (A) change any of its methods of accounting in
effect at December 31, 1996, except as may be required to comply
with GAAP, (B) make or rescind any election relating to Taxes
(other than any election that must be made periodically that is
made consistent with past practice), (C) settle or compromise any
claim, action, suit, litigation, proceeding, arbitration,
investigation, audit or controversy relating to Taxes (except
where the cost to the Company and its Subsidiaries of such
settlements or compromises, individually or in the aggregate,
does not exceed $250,000) or (D) change any of its methods of
reporting income or deductions for U.S. federal income tax
purposes from those employed in the preparation of the U.S.
federal income tax returns for the taxable year ending
December 31, 1996, except as may be required by Law;
(ix) incur, assume, guarantee, endorse or otherwise become
liable or responsible (whether directly, contingently or
otherwise) for any obligations for borrowed money or purchase
money indebtedness (other than purchase money indebtedness as to
which Liens may be granted as permitted by Subsection 6.2(a)(vi)
hereof) that are Material to the Company, whether or not
evidenced by a note, bond, debenture or similar instrument,
except drawings under credit/lease lines existing at the date of
this Agreement, or otherwise in the ordinary course of business
consistent with past practice (including purchase money
indebtedness as to which Liens may be granted pursuant to
Subsection 6.2(a)(vi) hereof);
(x) release any third Person from its obligations under any
existing standstill agreement relating to an Acquisition Proposal
(as defined herein) or otherwise under any confidentiality
agreement or similar agreement;
(xi) enter into any Material Contract with any third Person
(other than customers and vendors in the ordinary course of
business) which provides for an exclusive arrangement with that
third Person or is substantially more restrictive on the Company
or any of its Subsidiaries or substantially less advantageous to
the Company or any of its Subsidiaries than Material Contracts
existing on the date hereof;
(xii) propose, adopt, approve or implement any
stockholder rights plan or similar agreements, which could have
the effect of restricting, prohibiting, impeding or otherwise
affecting the consummation of the transactions contemplated by
this Agreement, the Voting Agreement or the Option Agreement, in
each case by the respective parties thereto;
(xiii) knowingly take or allow to be taken any action
which would jeopardize the treatment of the Acquiror's
acquisition of the Company as a pooling of interests for
accounting purposes or knowingly take any action that would
jeopardize qualification of the Merger as a reorganization within
the meaning of Section 368(a) of the Code; or
(xiv) agree in writing or otherwise to do any of the
foregoing.
(b) The Acquiror covenants and agrees that, except as set forth
in Subsection 6.2(b) of the Acquiror's Disclosure Letter or except as
expressly contemplated by this Agreement or otherwise consented to in
writing by the Company, from the date of this Agreement until the
Effective Time, it will not do, and will not permit any of its
Subsidiaries to do, any of the following:
(i) declare or to pay any dividend on, or to make any other
distribution in respect of, outstanding shares of capital stock,
except for dividends by a wholly-owned Subsidiary of such Person
to such Person or another wholly-owned Subsidiary of such Person;
(ii) (A) redeem, purchase or acquire, or offer to purchase
or acquire, any outstanding shares of capital stock of, or other
equity interests in, or any securities that are convertible into
or exchangeable for any shares of capital stock of, or other
equity interests in, or any outstanding options, warrants or
rights of any kind to acquire any shares of capital stock of, or
other equity interests in, the Acquiror or any of its
Subsidiaries (other than (1) any such acquisition by the Acquiror
or any of its wholly-owned Subsidiaries directly from any
wholly-owned Subsidiary of the Acquiror in exchange for capital
contributions or loans to such Subsidiary, (2) any repurchase,
forfeiture or retirement of shares of Acquiror Common Stock or
Acquiror Stock Options occurring pursuant to the terms (as in
effect on the date of this Agreement) of any existing Employee
Plan of the Acquiror or any of its Subsidiaries, (3) any periodic
purchase of Acquiror Common Stock for allocation to employees'
accounts occurring pursuant to the terms (as in effect on the
date of this Agreement) of any existing Employee Plan of the
Acquiror or any of its Subsidiaries and (4) any redemption,
purchase or acquisition by a Subsidiary of the Acquiror that
would not have a Material Adverse Effect on the Acquiror) or
(B) effect any reorganization or recapitalization other than any
reorganization or recapitalization that would not have a Material
Adverse Effect on the ability of the Acquiror to perform its
obligations under this Agreement;
(iii) offer, sell, issue or grant, or authorize the
offering, sale, issuance or grant, of any shares of capital stock
of, or other equity interests in, any securities convertible into
or exchangeable for any shares of capital stock of, or other
equity interests in, or any options, warrants or rights of any
kind to acquire any shares of capital stock of, or other equity
interests in, the Acquiror or any of its Subsidiaries, other than
issuances of Acquiror Common Stock (A) upon the exercise of
Acquiror Stock Options outstanding at the date of this Agreement
in accordance with the terms thereof (as in effect on the date of
this Agreement), (B) upon the expiration of any restrictions upon
issuance of any grant existing at the date of this Agreement of
restricted stock or stock bonus pursuant to the terms (as in
effect on the date of this Agreement) of any Employee Plan of the
Acquiror or any of its Subsidiaries, or (C) any periodic issuance
of shares of Acquiror Common Stock or Acquiror Stock Options
pursuant to the terms (as in effect on the date of this
Agreement) of any Employee Plan of the Acquiror or any of its
Subsidiaries, other than any such offer, sale, issuance or grant
that would not have a Material Adverse Effect on the Acquiror or
a Material Adverse Effect on the ability of the Acquiror to
perform its obligations under this Agreement;
(iv) acquire or agree to acquire, by merging or
consolidating with, by purchasing an equity interest in or a
portion of the assets of, or in any other manner, any business or
any corporation, partnership, association or other business
organization or division thereof, or otherwise to acquire any
assets of any other Person (other than the purchase of assets
from suppliers or vendors in the ordinary course of business and
consistent with past practice and acquisitions of equity
interests, assets and businesses that would not have a Material
Adverse Effect on the Acquiror or the ability of the Acquiror to
perform its obligations under this Agreement);
(v) sell, lease, exchange or otherwise dispose of, or grant
any Lien (other than a Permitted Encumbrance) with respect to,
any of the assets of the Acquiror or any of its Subsidiaries that
are Material to the Acquiror, except for dispositions of assets
in the ordinary course of business and consistent with past
practice and dispositions of assets and incurrences of Liens that
would not have a Material Adverse Effect on the Acquiror or the
ability of the Acquiror to perform its obligations under this
Agreement;
(vi) adopt any amendments to its charter or bylaws or other
organizational documents that would alter the terms of the
Acquiror's Common Stock or would have a Material Adverse Effect
on the Acquiror or the ability of the Acquiror or Newco to
perform its obligations under this Agreement;
(vii) incur, assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or
otherwise) for any obligations for borrowed money or purchase
money indebtedness (other than purchase money indebtedness as to
which Liens may be granted as permitted by Subsection 6.2(b)(v))
that are Material to the Acquiror, whether or not evidenced by a
note, bond, debenture or similar instrument, except drawings
under credit lines existing at the date of this Agreement,
obligations incurred in the ordinary course of business
consistent with past practice and obligations that would not have
a Material Adverse Effect on the ability of the Acquiror to
perform its obligations under this Agreement;
(viii) knowingly take or allow to be taken any action
which would jeopardize the treatment of the Acquiror's
acquisition of the Company as a pooling of interests for
accounting purposes or knowingly take any action that would
jeopardize qualification of the Merger as a reorganization within
the meaning of Section 368(a) of the Code; or
(ix) agree in writing or otherwise to do any of the
foregoing.
Section 6.3 No Solicitation. From the date of this Agreement until
the Effective Time or the termination of this Agreement pursuant to Article
IX hereof, the Company agrees that the Company and its Subsidiaries will
not, and will cause their respective officers, directors, employees, other
agents (including, without limitation, investment bankers, attorneys or
accountants) not to, directly or indirectly, (i) take any action to
solicit, initiate, encourage, enter into any agreement relating to or
otherwise facilitate any offer or proposal for, or any indication of
interest in an Acquisition Proposal, (ii) waive any provision of any
standstill or similar agreements entered into by the Company of its
Subsidiaries, or (iii) engage in or continue discussions or negotiations
with or otherwise facilitate any effort or attempt to make or implement an
Acquisition Proposal, or disclose any nonpublic information relating to the
Company or its Subsidiaries, respectively, or afford access to their
respective properties, books or records, to any Person that may be
considering making, or has made, an Acquisition Proposal. Notwithstanding
the foregoing, (i) nothing contained in this Section 6.3 will prohibit the
Board of Directors of the Company from (A) furnishing information to, or
entering into discussions or negotiations with, any Person in connection
with an unsolicited bona fide proposal in writing by such Person with
respect to an Acquisition Proposal, if, and only to the extent that (1) the
Board of Directors of the Company, after consulting with outside legal
counsel to the Company, determines in good faith that such action is
required for the Board of Directors of the Company to comply with its
fiduciary duties to stockholders imposed by Law and (2) prior to furnishing
such information to, or entering into discussions or negotiations with,
such Person, the Company provides written notice to the Acquiror to the
effect that it is furnishing information to, or entering into discussions
or negotiations with, such Person and the Company keeps Acquiror informed
of the status of the principal financial terms of any such negotiations or
discussions; or (B) complying with Rule 14e-2 promulgated under the
Exchange Act with regard to an Acquisition Proposal and (ii) taking the
actions contemplated by (i) above under the circumstances described therein
will not be deemed to be a breach of this Agreement.
Section 6.4 Access and Information. Each of the parties will, and
will cause its Subsidiaries to, (i) afford to the other party and its
officers, directors, employees, accountants, consultants, legal counsel,
agents and other representatives (collectively, the "Representatives")
reasonable access at reasonable times upon reasonable prior notice to the
officers, employees, agents, properties, offices and other facilities of
such party and its Subsidiaries and to their books and records and
(ii) furnish promptly to the other party and its Representatives such
information concerning the business, properties, contracts, records and
personnel of such party and its Subsidiaries (including financial,
operating and other data and information) as may be reasonably requested,
from time to time, by or on behalf of the other party. All information
obtained by the Acquiror or the Company pursuant to this Section 6.4 shall
be kept confidential in accordance with the Confidentiality Agreement dated
February 5, 1998, as the same has been amended to date, between the
Acquiror and the Company.
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 Meeting of Stockholders.
(a) The Company, acting through its Board of Directors, shall,
in accordance with the DGCL and its certificate of incorporation and
bylaws promptly and duly call, give notice of, convene and hold on the
same date and at the same time as the Acquiror's Stockholders' Meeting
(as defined herein), a special meeting of the Company's stockholders
to consider approval and adoption of this Agreement and the Merger
(the "Company Stockholders' Meeting"), and the Company shall consult
with the Acquiror in connection therewith. Except as may be otherwise
required for the Board of Directors of the Company to comply with its
fiduciary duties to stockholders imposed by Law as set forth in
Section 6.3 hereof, the Board of Directors of the Company shall
recommend approval and adoption of this Agreement and the transactions
contemplated hereby by the stockholders of the Company and include in
the Registration Statement and Proxy Statement a copy of such
recommendations. Except as the Board of Directors of the Company,
after consultation with outside legal counsel, shall determine in good
faith to be required to comply with its fiduciary duty to stockholders
imposed by law as set forth in Section 6.3, the Company shall use all
reasonable efforts to solicit from stockholders of the Company proxies
in favor of the approval and adoption of this Agreement and the Merger
and to secure the vote or consent of stockholders required by the DGCL
and its certificate of incorporation and bylaws to approve and adopt
this Agreement and the Merger.
(b) The Acquiror, acting through its Board of Directors, shall,
in accordance with the MGCL and its articles of incorporation and
bylaws promptly and duly call, give notice of, convene and hold, on
the same date and at the same time as the Company's Stockholders'
Meeting, a special meeting of the Acquiror's stockholders to consider
approval of the issuance of the shares of Acquiror Common Stock
contemplated by this Agreement (the "Acquiror's Stockholders'
Meeting", and together, with the Company Stockholders' Meeting, the
"Stockholders' Meetings") and the Acquiror shall consult with the
Company in connection therewith. Except as the Board of Directors of
the Acquiror, after consultation with outside legal counsel, shall
determine in good faith to be required to comply with its fiduciary
duty to stockholders imposed by Law, the Board of Directors of the
Acquiror shall recommend approval and adoption of this Agreement and
the transactions contemplated hereby by the stockholders of the
Acquiror and include in the Registration Statement and Proxy Statement
a copy of such recommendation. Except as the Board of Directors,
after consultation with outside legal counsel, shall determine in good
faith to be required to comply with its fiduciary duty to stockholders
imposed by Law, the Acquiror shall use all reasonable efforts to
solicit from stockholders of the Acquiror proxies in favor of the
issuance of such shares of Acquiror Common Stock and to secure the
vote or consent of stockholders required by the NYSE and its articles
of incorporation and bylaws to approve such issuance.
Section 7.2 Registration Statement; Proxy Statements.
(a) As promptly as practicable after the execution of this
Agreement, the Acquiror Companies will prepare and file with the
Commission the Registration Statement and Proxy Statement. Each of
the Acquiror Companies and the Company will use all reasonable efforts
to have or cause the Registration Statement to become effective as
promptly as practicable, and will take any action required to be taken
under any applicable federal or state securities Laws in connection
with the issuance of shares of Acquiror Common Stock in the Merger.
The Acquiror Companies will use all reasonable efforts to cause the
Registration Statement to remain effective through the Effective Time.
Each of the Acquiror Companies and the Company will furnish all
information concerning it and the holders of its capital stock as the
other may reasonably request in connection with such actions. As
promptly as practicable after the Registration Statement shall have
become effective, the Company and the Acquiror will each mail the
Proxy Statement to its respective stockholders entitled to notice of
and to vote at the Company Stockholders' Meeting or the Acquiror
Stockholders' Meeting, as applicable. Except as the Company's Board
of Directors may otherwise determine in good faith, after consultation
with outside counsel, to be necessary to comply with its fiduciary
duty to stockholders as imposed by Law, the Proxy Statement will
include the recommendation of the Company's Board of Directors in
favor of the Merger. Except as the Acquiror's Board of Directors may
otherwise determine in good faith, after consultation with outside
counsel, to be necessary to comply with its fiduciary duty to
stockholders as imposed by Law, the Proxy Statement will include the
recommendation of the Acquiror's Board of Directors in favor of the
issuance of shares of Acquiror Common Stock pursuant to the Merger.
Subject in each case to compliance with their fiduciary duties to
their stockholders, at the other's Stockholders' Meetings, each of the
Acquiror and the Company shall vote in favor of approval and adoption
of this Agreement or the issuance of Acquiror Common Stock in the
Merger, as applicable, all Acquiror Common Stock or Company Common
Stock, as the case may be, as to which it holds proxies at such time.
(b) If at any time prior to the Effective Time any event or
circumstance relating to the Company or any of its Affiliates, or its
or their respective officers or directors, should be discovered by the
Company that should be set forth in an amendment to the Registration
Statement or a supplement to the Proxy Statement, the Company will
promptly inform the Acquiror, and the Company will undertake to amend
or supplement the Proxy Statement accordingly.
(c) If at any time prior to the Effective Time any event or
circumstance relating to the Acquiror or any of its Affiliates, or to
their respective officers or directors, should be discovered by the
Acquiror that should be set forth in an amendment to the Registration
Statement or a supplement to the Proxy Statement, the Acquiror will
promptly inform the Company, and they will undertake to amend or
supplement the Registration Statement, the prospectus contained
therein and/or the Proxy Statement accordingly.
(d) No amendment or supplement to the Registration Statement or
the Proxy Statement will be made by the Acquiror or the Company
without prior consultation with the other party. The Acquiror and the
Company each will advise the other, 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 suspending the effectiveness of the Registration
Statement or the solicitation of proxies pursuant to the Proxy
Statement, the suspension of the qualification of the Acquiror Common
Stock issuable in connection with the Merger for offering or sale in
any jurisdiction, any request by the staff of the Commission for
amendment of the Registration Statement or the Proxy Statement, the
receipt from the staff of the Commission of comments thereon or any
request by the staff of the Commission for additional information with
respect thereto.
Section 7.3 Appropriate Action; Consents; Filings.
(a) The Company and the Acquiror will each use all reasonable
efforts (i) to take, or to cause to be taken, all appropriate action,
and to do, or to cause to be done, all things necessary, proper or
advisable under applicable Law or otherwise to consummate and make
effective the transactions contemplated by this Agreement, (ii) to
obtain from any Governmental Authorities any Permits or Orders
required to be obtained by the Acquiror or the Company or any of their
Subsidiaries in connection with the authorization, execution, delivery
and performance of this Agreement and the consummation of the
transactions contemplated hereby, including the Merger, (iii) to make
all necessary filings, and thereafter make any other required
submissions, with respect to this Agreement and the Merger required
under (A) the Securities Act and the Exchange Act, and any other
applicable federal or state securities Laws, (B) the HSR Act, and
(C) any other applicable Law; provided that the Acquiror and the
Company will cooperate with each other in connection with the making
of all such filings, including providing copies of all such documents
to the nonfiling party and its advisors prior to filings and, if
requested, will accept all reasonable additions, deletions or changes
suggested in connection therewith. The Company and the Acquiror will
furnish all information required for any application or other filing
to be made pursuant to any applicable Law or any applicable
Regulations of any Governmental Authority (including all information
required to be included in the Proxy Statement or the Registration
Statement) in connection with the transactions contemplated by this
Agreement.
(b) Each of the Company and the Acquiror will give prompt notice
to the other of (i) any notice or other communication from any Person
alleging that the consent of such Person is or may be required in
connection with the Merger, (ii) any notice or other communication
from any Governmental Authority in connection with the Merger,
(iii) any actions, suits, claims, investigations or proceedings
commenced or threatened in writing against, relating to or involving
or otherwise affecting the Company, the Acquiror or their respective
Subsidiaries that relate to the consummation of the Merger; (iv) the
occurrence of a default or event that, with notice or lapse of time or
both, will become a default under any Material Contract of the
Acquiror or Material Contract of the Company; and (v) any change that
is reasonably likely to have a Material Adverse Effect on the Company
or the Acquiror or is likely to delay or impede the ability of either
the Acquiror or the Company to consummate the transactions
contemplated by this Agreement or to fulfill their respective
obligations set forth herein.
(c) The Acquiror Companies and the Company agree to cooperate
and use all reasonable efforts vigorously to contest and resist any
action, including legislative, administrative or judicial action, and
to have vacated, lifted, reversed or overturned any Order (whether
temporary, preliminary or permanent) of any Court of Governmental
Authority that is in effect and that restricts, prevents or prohibits
the consummation of the Merger or any other transactions contemplated
by this Agreement. Each of the Acquiror Companies and the Company
also agree to take any and all actions, including the disposition of
assets or the withdrawal from doing business in particular
jurisdictions, required by any Court or Governmental Authority as a
condition to the granting of any Permit or Order necessary for the
consummation of the Merger or as may be required to avoid, lift,
vacate or reverse any legislative or judicial action which would
otherwise cause any condition to Closing not to be satisfied;
provided, however, that in no event will either party be required to
take, any action that would have an Material Adverse Effect on such
party.
(d) (i) Each of the Company and Acquiror will give (or will
cause their respective Subsidiaries to give) any notices to third
Persons, and use, and cause their respective Subsidiaries to use,
all reasonable efforts to obtain any consents from third Persons
(A) necessary, proper or advisable to consummate the transactions
contemplated by this Agreement, (B) otherwise required under any
contracts, licenses, leases or other agreements in connection
with the consummation of the transactions contemplated hereby or
(C) required to prevent a Material Adverse Effect on the Company
or the Acquiror from occurring prior to or after the Effective
Time.
(ii) If any party shall fail to obtain any consent from a
third Person described in Subsection 7.3(d)(i) above, such party
will use all reasonable efforts, and will take any such actions
reasonably requested by the other parties, to limit the adverse
effect upon the Company and Acquiror, their respective
Subsidiaries, and their respective businesses resulting, or which
would result after the Effective Time, from the failure to obtain
such consent.
Section 7.4 Affiliates; Pooling; Tax Treatment.
(a) The Company will use all reasonable efforts to obtain an
executed letter agreement substantially in the form of Annex C hereto
from (i) each Person identified in Section 4.20 of the Company's
Disclosure Letter within 15 days following the execution and delivery
of this Agreement and (ii) from any Person who may be deemed to have
become an Affiliate of the Company after the date of this Agreement
and prior to the Effective Time as soon as practicable after attaining
such status.
(b) The Acquiror will use all reasonable efforts to obtain an
executed letter agreement substantially in the form of Annex D hereto
from (i) each Person identified in Section 5.12 of the Acquiror's
Disclosure Letter within 15 days following the execution and delivery
of this Agreement and (ii) from any Person who may be deemed to have
become an Affiliate of the Acquiror after the date of this Agreement
and prior to the Effective Time as soon as practicable after attaining
such status.
(c) The Acquiror Companies will not be required to maintain the
effectiveness of the Registration Statement for the purpose of resale
by stockholders of the Company who may be Affiliates of the Company
pursuant to Rule 145 under the Securities Act.
(d) Each party hereto will use all reasonable efforts to cause
the Merger to be treated for financial accounting purposes as a
"pooling of interests" and will not take, and will use all reasonable
efforts to prevent any Affiliate of such party from taking, any
actions which could prevent the Merger from being treated for
financial accounting purposes as a "pooling of interests" under GAAP.
(e) The parties hereto intend that the Merger will qualify as a
reorganization within the meaning of Section 368(a) of the Code. Each
of the parties hereto shall, and shall cause its respective
Subsidiaries to, and shall use its reasonable best efforts to cause
the Merger to so qualify.
Section 7.5 Public Announcements. The parties will consult with
each other and will mutually agree upon any press release or public
announcement pertaining to the Merger and shall not issue any such press
release or make any such public announcement prior to such consultation and
agreement, except as may be required by applicable law or by obligations
pursuant to any listing agreement with any national securities exchange or
national automated quotation system, in which case the party proposing to
issue such press release or make such public announcement shall use
reasonable efforts to consult in good faith with the other party before
issuing any such press release or making any such public announcement.
Section 7.6 Stock Exchange Listing. The Acquiror will use all
reasonable efforts to cause the shares of Acquiror Common Stock (and the
associated Acquiror Rights) to be issued in the Merger to be approved for
listing (subject to official notice of issuance) on the NYSE prior to the
Effective Time. To the Knowledge of the Acquiror, there are no facts and
circumstances that would preclude the Acquiror Common Stock (and the
associated Acquiror Rights) to be issued in the Merger from being approved
for listing on the NYSE.
Section 7.7 Employee Benefit Plans.
(a) Except for obligations of the Company and its ERISA
Affiliates that are in violation of the provisions of Subsection
6.2(a) hereof, the Acquiror hereby acknowledges and agrees to honor
and to cause the Surviving Corporation and its Subsidiaries to honor
and perform all obligations of the Surviving Corporation and its
Subsidiaries (including COBRA obligations) under all Employee Plans
of the Company and its Subsidiaries, in accordance with their terms,
including without limitation, the Indemnification Agreements set forth
in Subsection 4.13 of the Company's Disclosure Letter.
(b) The Acquiror will cause the Surviving Corporation to
maintain through December 31, 1998 (the "Benefit Continuation
Period"), the Employee Plans of the Company and its Subsidiaries set
forth in Subsection 4.14(i) of the Company's Disclosure Letter,
substantially as in effect immediately prior to the Effective Time.
(c) From and after the Effective Time, including the Benefit
Continuation Period, the Acquiror will grant to all individuals who
are employed by the Company or its Subsidiaries on the Closing Date
credit for all their service prior to the Effective Time with the
Company and its Subsidiaries (and the respective predecessors of such
entities) under all Employee Plans of the Acquiror and its
Subsidiaries in which such employees will become eligible to
participate, as if such service was service with the Acquiror or any
Subsidiary thereof. With respect to individuals who are employed by
the Company or its Subsidiaries as of the Effective Time, Acquiror
will waive all actively-at-work requirements and pre-existing
condition limitations or exclusions under the Welfare Plans of the
Acquiror and its Subsidiaries which provide medical, dental, or vision
benefits or coverage (provided, however, that no such waiver will
apply to a pre-existing condition of any employee of the Company or
its Subsidiaries who was, as of the Effective Time, excluded from
participation in a similar Welfare Plan of the Company or its
Subsidiaries due to such pre-existing condition). Furthermore, any
covered expenses incurred on or before the Effective Time by an
employee (or a covered dependent thereof) of the Company or its
Subsidiaries under the Welfare Plans of the Company and its
Subsidiaries which provide medical, dental, or vision benefits or
coverage will be taken into account for purposes of satisfying any
applicable deductible, coinsurance, and out-of-pocket maximum
provisions under the Welfare Plans of the Acquiror and its
Subsidiaries.
Section 7.8 Indemnification of Directors and Officers.
(a) Until six (6) years from the Effective Time, the certificate
of incorporation and bylaws of the Surviving Corporation as in effect
immediately after the Effective Time will not be amended to reduce or
limit the rights of indemnity afforded to the present and former
directors and officers of the Company thereunder, to reduce or limit
the ability of the Company to indemnify such Persons, or to hinder,
delay or make more difficult the exercise of such rights of indemnity
or the ability to indemnify. The Surviving Corporation will at all
times exercise the powers granted to it by its certificate of
incorporation, its bylaws and applicable Law to indemnify to the
fullest extent possible the present and former directors, officers,
employees and agents of the Company against claims made against them
arising from their service in such capacities prior to the Effective
Time.
(b) If any claim or claims shall, subsequent to the Effective
Time and within six (6) years thereafter, be made against any present
or former director, officer, employee or agent of the Company based on
or arising out of the services of such Person prior to the Effective
Time in the capacity of such Person as a director, officer, employee
or agent of the Company, the provisions of Subsection 7.8(a) hereof
respecting the certificate of incorporation and bylaws of the
Surviving Corporation will continue in effect until the final
disposition of all such claims.
(c) The Acquiror hereby agrees after the Effective Time to
guarantee the payment of the Surviving Corporation's indemnification
obligations described in Subsection 7.8(a) hereof.
(d) Notwithstanding subsection (a), (b) or (c) of this
Section 7.8, the Acquiror and the Surviving Corporation will be
released from the obligations imposed by such subsection if the
Acquiror will assume the obligations of the Surviving Corporation
thereunder by operation of Law or otherwise. Notwithstanding anything
to the contrary in this Section 7.8, neither the Acquiror nor the
Surviving Corporation will be liable for any settlement effected
without its written consent, which will not be unreasonably withheld
or delayed.
(e) The Acquiror will cause to be maintained in effect until six
(6) years from the Effective Time the current policies of directors'
and officers' liability insurance maintained by the Company (or
substitute policies providing at least the same coverage and limits
and containing terms and conditions that are not materially less
advantageous) with respect to claims arising from facts or events
which occurred before the Effective Time; provided, however, that in
no event will the Acquiror or the Surviving Corporation be required to
expend more than two hundred percent (200%) of the current annual
premiums paid by the Company for such insurance; provided, further,
that, if the Acquiror or the Surviving Corporation is unable to obtain
insurance for any period for two hundred percent (200%) of the current
annual premiums, then the obligation of the Acquiror and the Surviving
Corporation pursuant hereto will be to obtain the best coverage
reasonably available under the circumstances subject to the foregoing
limitations on premiums.
(f) The provisions of this Section 7.8 are intended to be for
the benefit of, and will be enforceable by, each Person entitled to
indemnification hereunder and the heirs and representatives of such
Person.
(g) The Acquiror will not, and will not permit the Surviving
Corporation to, merge or consolidate with any other Person unless the
Surviving Corporation will ensure that the surviving or resulting
entity assumes the obligations imposed by subsections (a), (b), (c)
and (e) of this Section 7.8.
Section 7.9 Newco. Prior to the Effective Time, Newco will not
conduct any business or make any investments other than as specifically
contemplated by this Agreement and will not have any assets (other than the
minimum amount of cash required to be paid to Newco for the valid issuance
of its stock to the Acquiror). The Acquiror will take all action necessary
to cause Newco to perform its obligations under this Agreement and to
consummate the Merger on the terms and conditions set forth in this
Agreement.
Section 7.10 Event Notices. From and after the date of this
Agreement until the Effective Time, each party hereto will promptly notify
the other party hereto of (i) the occurrence or nonoccurrence of any event
the occurrence or nonoccurrence of which would be likely to cause any
condition to the obligations of such party to effect the Merger and the
other transactions contemplated by this Agreement not to be satisfied and
(ii) the failure of such party to comply with any covenant or agreement to
be complied with by it pursuant to this Agreement which would be likely to
result in any condition to the obligations of such party to effect the
Merger and the other transactions contemplated by this Agreement not to be
satisfied. No delivery of any notice pursuant to this Section 7.10 will
cure any breach of any representation or warranty of such party contained
in this Agreement or otherwise limit or affect the remedies available
hereunder to the party receiving such notice.
Section 7.11 Assumption of Obligations to Issue Stock.
(a) At the Effective Time, automatically and without any action
on the part of the holder thereof, each outstanding Company Stock
Option shall become an option to purchase that number of shares of
Acquiror Common Stock (and associated Acquiror Rights) obtained by
multiplying the number of shares of Company Common Stock issuable upon
the exercise of such option by the Exchange Ratio at an exercise price
per share equal to the per share exercise price of such option divided
by the Exchange Ratio and otherwise upon the same terms and conditions
as such outstanding options to purchase Company Common Stock;
provided, however, that in the case of any option to which Section 421
of the Code applies by reason of the qualifications under Section 422
or 423 of the Code, the exercise price, the number of shares
purchasable pursuant to such option and the terms and conditions of
exercise of such option shall be determined in a manner that complies
with Section 424(a) of the Code.
(b) On or prior to the Effective Time, the Company shall take or
cause to be taken all such actions, reasonably satisfactory to the
Acquiror, as may be necessary or desirable in order to authorize the
transactions contemplated by Subsection 7.11(a) hereof. Except as
provided in this Agreement or pursuant to the provisions of any
Company Option Plans or employee or director stock option agreement as
in effect on the date hereof, from the date hereof the Company will
not accelerate the vesting or exercisability of or otherwise modify
the terms and conditions applicable to the Company Stock Options.
(c) The Acquiror shall take all corporate actions necessary to
reserve for issuance a sufficient number of shares of Acquiror Common
Stock (and associated Acquiror Rights) for delivery upon exercise of
the Company Stock Options.
(d) As promptly as practicable after the Effective Time, the
Acquiror shall file one or more Registration Statements on Form S-8
(or any successor or other appropriate forms) with respect to the
shares of Acquiror Common Stock (and associated Acquiror Rights)
subject to the Company Stock Options and shall use its reasonable
efforts to maintain the effectiveness of such registration statement
or registration statements (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as such
options remain outstanding and to comply with applicable state
securities and blue sky laws.
Section 7.12 Real Estate Transfer Tax Returns. The Company shall
cooperate with the Acquiror and Newco in the preparation and filing of any
Tax Return required to be filed with any tax authority with respect to any
transfer or deemed transfer of the beneficial ownership of the Company's
real property, including supplying in a timely manner a complete list of
all real property interests held by the Company and any information with
respect to such property that is reasonably necessary to complete any such
Tax Return. The fair market value of any such real property shall be
determined by the Acquiror.
Section 7.13 Acquiror's Board of Directors and Officers. Acquiror
shall take all steps necessary to cause (i) the size of the Acquiror's
Board of Directors to be expanded to a number no larger than eight and (ii)
the appointment as of the Effective Time of L.J. Sevin, Dietrich Erdmann
and Alan R. Schuele to the Board of Directors of Acquiror, or any
substitute for such persons as shall be selected prior to the Effective
Time by the Company's Board of Directors and as shall be reasonably
acceptable to Acquiror, Acquiror shall use its best efforts to cause
Messrs. Sevin, Erdmann and Schuele to be nominated to the Acquiror's Board
of Directors at the Acquiror's next annual meeting and solicit, in good
faith and with reasonable diligence, proxies in support of such nomination.
At such annual meeting Mr. Sevin shall be nominated to term of office
expiring at the annual meeting of the Acquiror's stockholders to be held
in 1999. Mr. Erdmann shall be nominated to term of office expiring at the
annual meeting of the Acquiror's stockholders to be held in 2000 and Mr.
Schuele shall be nominated to term of office expiring at the annual meeting
of the Acquiror's stockholders to be held in 2001. Acquiror shall take all
steps necessary to cause the appointment as of the Effective Time of Mr.
Schuele to the office of President and Chief Operating Officer of Acquiror.
ARTICLE VIII
CLOSING CONDITIONS
Section 8.1 Conditions to Obligations of Each Party Under This
Agreement. The respective obligations of each party to effect the Merger
and the other transactions contemplated hereby will be subject to the
satisfaction at or prior to the Effective Time of the following conditions,
any or all of which may be waived by the party entitled to the benefit
thereof, in whole or in part, to the extent permitted by applicable Law:
(a) Effectiveness of the Registration Statement. The
Registration Statement shall have become effective in accordance with
the provisions of the Securities Act and no stop order suspending the
effectiveness of the Registration Statement shall be pending before or
threatened and no proceedings for that purpose shall be in effect by
the Commission.
(b) Stockholder Approval. This Agreement and the Merger shall
have been approved and adopted by the requisite vote of the
stockholders of the Company in accordance with the DGCL and the
certificate of incorporation and by-laws of the Company. The issuance
of shares of Acquiror Common Stock pursuant to this Agreement shall
have been approved by the requisite vote of the stockholders of the
Acquiror in accordance with the requirements of the NYSE and the
articles of incorporation and bylaws of the Acquiror.
(c) No Order. No Court or Governmental Authority having
jurisdiction over the Company or the Acquiror shall have enacted,
issued, promulgated, enforced or entered any Law, Regulation or Order
(whether temporary, preliminary or permanent) which is then in effect
and which has the effect of making the Merger illegal or otherwise
prohibiting consummation of the Merger.
(d) Regulatory Approvals. All approvals and consents of
applicable Courts or Governmental Authorities required to consummate
the Merger which the failure to obtain would have a Material Adverse
Effect on the Acquiror or the Surviving Corporation shall have been
received and all applicable waiting periods shall have expired or been
terminated.
(e) Stock Exchange Listing. The shares of Acquiror Common Stock
(and the associated Acquiror Rights) to be issued pursuant to the
Merger shall have been approved for listing, subject to official
notice of issuance, on the NYSE.
(f) Pooling of Interests. The Acquiror shall have been advised
in writing by Coopers & Lybrand L.L.P. as of the date upon which the
Effective Time is to occur that such firm concurs with the management
of Acquiror that there is no reason why the Merger cannot be treated
for financial accounting purposes as a "pooling of interests" under
GAAP. The Company shall have been advised in writing by Ernst & Young
L.L.P. as of the date upon which the Effective Time is to occur that
such firm concurs with the management of the Company that there is no
reason why the Merger cannot be treated for financial accounting
purposes as a "pooling of interests" under GAAP.
Section 8.2 Additional Conditions to Obligations of the Acquiror
Companies. The obligations of the Acquiror Companies to effect the Merger
and the other transactions contemplated hereby shall be subject to the
satisfaction at or prior to the Effective Time of the following additional
conditions, any or all of which may be waived by the Acquiror Companies, in
whole or in part, to the extent permitted by applicable Law:
(a) Representations and Warranties. Each of the representations
and warranties of the Company contained in this Agreement to the
extent it is qualified as to Material Adverse Effect shall be true and
correct and each such representation and warranty to the extent that
it is not so qualified shall be true and correct (without regard to
any other materiality qualification) such that the aggregate effect of
any inaccuracies in such representations and warranties will not have
a Material Adverse Effect on the Company, in each case as of the date
hereof and at and as of the Effective Time as if made at and as of
such time, except that those representations and warranties which
address matters only as of a particular date shall remain true and
correct as of such date. The Acquiror Companies shall have received a
certificate of the President and the Chief Financial Officer of the
Company, dated the date of the Effective Time, to such effect.
(b) Agreements and Covenants. The Company shall have performed
or complied in all respects with all agreements and covenants required
by this Agreement to be performed or complied with by it on or prior
to the Effective Time. The Acquiror Companies shall have received a
certificate of the President and the Chief Financial Officer of the
Company, dated the date of the Effective Time, to such effect.
(c) Tax Opinion. The Acquiror shall have received the opinion
of its tax counsel, Skadden, Arps, Slate, Meagher & Flom LLP, to the
effect that the Merger will qualify as a reorganization within the
meaning of Section 368(a) of the Code. The issuance of such opinion
shall be conditioned on the receipt by such tax counsel of
representation letters from each of the Acquiror, Newco and the
Company, in each case, in form and substance reasonably satisfactory
to Skadden, Arps, Slate, Meagher & Flom LLP. The specific provisions
of each such representation letter shall be in form and substance
reasonably satisfactory to such tax counsel, and each such
representation letter shall be dated on or before the date of such
opinion and shall not have been withdrawn or modified in any material
respect.
Section 8.3 Additional Conditions to Obligations of the Company.
The obligations of the Company to effect the Merger and the other
transactions contemplated hereby shall be subject to the satisfaction at or
prior to the Effective Time of the following additional conditions, any or
all of which may be waived by the Company, in whole or in part, to the
extent permitted by applicable Law:
(a) Representations and Warranties. Each of the representations
and warranties of the Acquiror Companies contained in this Agreement
to the extent it is qualified as to Material Adverse Effect shall be
true and correct and each such representation and warranty to the
extent that it is not so qualified shall be true and correct (without
regard to any other materiality qualification) such that the aggregate
effect of any inaccuracies in such representations and warranties will
not have a Material Adverse Effect on the Acquiror Companies, in each
case as of the date hereof and at and as of the Effective Time as if
made at and as of such time, except that those representations and
warranties which address matters only as of a particular date shall
remain true and correct as of such date. The Company shall have
received a certificate of the President and the Chief Financial
Officer of each of the Acquiror Companies, dated the date of the
Effective Time, to such effect.
(b) Agreements and Covenants. The Acquiror Companies shall have
performed or complied in all respects with all agreements and
covenants required by this Agreement to be performed or complied with
by them on or prior to the Effective Time. The Company shall have
received a certificate of the President and the Chief Financial
Officer of each of the Acquiror Companies, dated the date of the
Effective Time, to such effect.
(c) Tax Opinion. The Company shall have received the opinion of
its tax counsel, Winstead Sechrest & Minick P.C., to the effect that
the Merger will qualify as a reorganization within the meaning of
Section 368(a) of the Code. The issuance of such opinion shall be
conditioned on the receipt by such tax counsel of representation
letters from each of the Acquiror, Newco and the Company, in each
case, in form and substance reasonably satisfactory to Winstead
Sechrest & Minick P.C. The specific provisions of each such
representation letter shall be in form and substance reasonably
satisfactory to such tax counsel, and each such representation letter
shall be dated on or before the date of such opinion and shall not
have been withdrawn or modified in any material respect.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
Section 9.1 Termination. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after approval of this
Agreement and the Merger by the stockholders of the Company:
(a) by mutual consent of the Acquiror and the Company;
(b) by the Acquiror, upon a breach of any covenant or agreement
on the part of the Company set forth in this Agreement, or if any
representation or warranty of the Company shall have become untrue, in
either case such that the conditions set forth in Subsection 8.2(a) or
Subsection 8.2(b) would not be satisfied (a "Terminating Company
Breach"); provided that, if such Terminating Company Breach is curable
by the Company through the exercise of reasonable efforts, provided
the Company continues to exercise such reasonable efforts, the
Acquiror may not terminate this Agreement under this Subsection 9.1(b)
unless such Terminating Company Breach is not cured within 20 days
after written notice of such breach is given by the Acquiror to the
Company;
(c) by the Company, upon breach of any covenant or agreement on
the part of the Acquiror Companies set forth in this Agreement, or if
any representation or warranty of the Acquiror Companies shall have
become untrue, in either case such that the conditions set forth in
Subsection 8.3(a) or Subsection 8.3(b) would not be satisfied (a
"Terminating Acquiror Breach"); provided that, if such Terminating
Acquiror Breach is curable by the Acquiror Companies through the
exercise of their reasonable efforts, provided the Acquiror Companies
continue to exercise such reasonable efforts, the Company may not
terminate this Agreement under this Subsection 9.1(c) unless such
Terminating Acquiror Breach is not cured within 20 days after written
notice of such breach is given by the Company to the Acquiror;
(d) by either Acquiror or the Company, if there shall be any
Order which is final and nonappealable permanently enjoining,
restraining or prohibiting the consummation of the Merger, unless the
party relying on such Order has not complied with its obligations
under Section 7.3 hereof;
(e) by either Acquiror or the Company, if the Merger shall not
have been consummated before October 31, 1998; unless the party
seeking to terminate this Agreement has not complied with its
obligations under Section 7.3 hereof, provided, however, that the
right to terminate this Agreement under this Subsection 9.1(e) shall
not be available to any party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the
failure of the Effective Time to occur on or before the Termination
Date;
(f) by either Acquiror or the Company, if this Agreement shall
fail to receive the requisite vote for approval and adoption by the
stockholders of the Company at the Company Stockholders' Meeting;
(g) by either Acquiror or the Company if the issuance of
Acquiror Common Stock pursuant to this Agreement shall fail to receive
the requisite vote for approval by the stockholders of Acquiror at the
Acquiror's Stockholders' Meeting;
(h) by the Company, if the Pre-Closing Average Price is less
than $12.00 per share;
(i) by the Acquiror, if the Board of Directors of the Company
(i) fails to recommend approval and adoption of this Agreement and the
Merger by the stockholders of the Company or withdraws or modifies (or
publicly announces an intention to withdraw or modify) in any adverse
manner its approval or recommendation of this Agreement or the Merger;
(ii) makes any recommendation with respect to any Acquisition Proposal
other than a recommendation to reject such Acquisition Proposal; (iii)
takes any action prohibited by Section 6.3, or which would be
prohibited by Section 6.3 but for the second sentence thereof; (iv)
enters into any agreement relating to an Acquisition Proposal other
than this Agreement or the Option Agreement; or (v) resolves to do any
of the foregoing; and
(j) by the Company, if the Board of Directors of the Acquiror
fails to recommend approval of the issuance of shares of Acquiror
Common Stock pursuant to this Agreement by the stockholders of the
Acquiror or withdraws or modifies (or publicly announces an intention
to withdraw or modify) its approval and recommendation in a manner
materially adverse to the Company or shall have resolved to do any of
the foregoing;
The right of any party hereto to terminate this Agreement pursuant to
this Section 9.1 hereof will remain operative and in full force and effect
regardless of any investigation made by or on behalf of any party hereto,
any Person controlling any such party or any of their respective officers,
directors, representatives or agents, whether prior to or after the
execution of this Agreement.
Section 9.2 Effect of Termination.
(a) In the event of the termination of this Agreement pursuant
to Section 9.1, this Agreement will forthwith become void, and there
will be no liability on the part of the Acquiror Companies or the
Company or any of their respective officers or directors to the other
and all rights and obligations of any party hereto will cease, except
(i) as set forth in this Section 9.2 and in Section 10.1 hereof and
(ii) nothing herein will relieve any party from liability for any
breach of this Agreement.
(b) If this Agreement is terminated (i) by the Acquiror pursuant
to clause (i) of Subsection 9.1(i) hereof (except under circumstances
which would permit the Company to terminate this Agreement under
Subsection 9.1(h)); (ii) by the Acquiror pursuant to Subsection 9.1(i)
hereof under any circumstances other than those described in clause
(i) of this Subsection 9.2(b); (iii) by Acquiror or Company pursuant
to Subsection 9.1(f) hereof because of the failure to obtain the
required approval from the Company stockholders and at the time of
such termination or prior to the Company Stockholders' Meeting there
shall have been an Acquisition Proposal (whether or not such offer,
proposal, announcement or agreement shall have been rejected or shall
have been withdrawn prior to the time of such termination or of the
Company Stockholders' Meeting); or (iv) by Acquiror as a result of
Company's material breach of Section 7.3 or Subsection 7.1(a) hereof,
the Company shall promptly pay to Acquiror or the Company by wire
transfer of same day funds not later than two Business Days after the
date of such termination a termination fee of $4,528,000 (the
"Termination Fee") provided, however, that if this Agreement is
terminated by Acquiror or the Company pursuant to Subsection 9.1(f)
hereof under the circumstances described in Subsection 9.2(b)(ii)
hereof, and at the time of such termination the stockholders of the
Acquiror shall have failed to approve the issuance of Acquiror Common
Stock pursuant to this Agreement, the Acquiror shall not be entitled
to the Termination Fee.
(c) If this Agreement is terminated by the Company pursuant to
Subsection 9.1(i) hereof, and at the time of such termination there
shall have been an Acquiror Acquisition Proposal (whether or not such
offer, proposal, announcement or agreement shall have been rejected or
shall have been withdrawn prior to the time of such termination), and
the stockholders of Acquiror shall have failed to approve the issuance
of Acquiror Common Stock pursuant this Agreement, the Acquiror shall
promptly pay to the Company by wire transfer of same day funds not
later than two Business Days after the date of such termination a
termination fee of $2,000,000.
Section 9.3 Amendment. Subject to the requirements of Law, this
Agreement may be amended by the parties hereto by action taken by or on
behalf of their respective Boards of Directors at any time prior to the
Effective Time; provided, however, that, after approval of the Merger by
the stockholders of the Company, no amendment may be made which would
reduce the amount or change the type of consideration into which each share
of Company Common Stock will be converted pursuant to this Agreement upon
consummation of the Merger. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
Section 9.4 Waiver. At any time prior to the Effective Time, any
party hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other party hereto, (b) waive any
inaccuracies in the representations and warranties of the other party
contained herein or in any document delivered pursuant hereto and (c) waive
compliance by the other party with any of the agreements or conditions
contained herein. Any such extension or waiver will be valid only if set
forth in an instrument in writing signed by the party or parties to be
bound thereby. For purposes of this Section 9.4, the Acquiror Companies
will be deemed to be one party.
Section 9.5 Expenses. All Expenses incurred by the parties hereto
will be borne solely and entirely by the party which has incurred such
Expenses; provided, however, that the allocable share of the Acquiror
Companies as a group and the Company for all Expenses related to printing,
filing and mailing the Registration Statement and the Proxy Statement and
all Commission and other regulatory filing fees incurred in connection with
the Registration Statement and the Proxy Statement will be one-half each;
and provided, further, that the Acquiror may, at its option, pay any
Expenses of the Company that are solely and directly related to the Merger.
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Effectiveness of Representations, Warranties and
Agreements.
(a) Except as set forth in Subsection 10.1(b) of this Agreement,
the representations, warranties and agreements of each party hereto
will remain operative and in full force and effect regardless of any
investigation made by or on behalf of any other party hereto, any
Person controlling any such party or any of their officers, directors,
representatives or agents whether prior to or after the execution of
this Agreement.
(b) The representations, warranties and agreements in this
Agreement will terminate at the Effective Time or upon the termination
of this Agreement pursuant to Article IX hereof, except that the
agreements set forth in Articles II and III and Sections 7.7, 7.8,
7.11 and 7.13 hereof will survive the Effective Time and those set
forth in Sections 7.5 and 9.2 and Article X hereof will survive
termination.
Section 10.2 Notices. All notices and other communications given or
made pursuant hereto will be in writing and will be deemed to have been
duly given upon receipt, if delivered personally, mailed by registered or
certified mail (postage prepaid, return receipt requested) to the parties
at the following addresses or sent by electronic transmission to the
telecopier number specified below:
(a) If to any of the Acquiror Companies, to:
Unitrode Corporation
7 Continental Boulevard
Merrimack, New Hampshire 03054-4334
Attention: Allan R. Campbell, Esq.
Telecopier No.: (603) 429-8771
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street
Boston, Massachusetts 02108
Attention: Margaret A. Brown, Esq.
Telecopier No.: (617) 573-4822
(b) If to the Company, to:
BENCHMARQ Microelectronics, Inc.
17919 Waterview Parkway
Dallas, Texas 75252
Attention: Alan R. Schuele
Telecopier No.: (972) 437-9198
with a copy to:
Winstead Sechrest & Minick P.C
5400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
Attention: Robert E. Crawford, Jr., Esq.
Telecopier No.: (214) 745-5390
and
Brobeck Phleger & Harrison LLP
Spear Street Tower 26th Floor
One Market
San Francisco, CA 94105
Attention: Steve L. Camahort, Esq.
Telecopier No.: (415) 442-1010
or to such other address or telecopier number as any party may, from time
to time, designate in a written notice given in a like manner. Notice
given by telecopier will be deemed delivered on the day the sender receives
telecopier confirmation that such notice was received at the telecopier
number of the addressee. Notice given by mail as set out above will be
deemed delivered three days after the date the same is postmarked.
Section 10.3 Headings. The headings contained in this Agreement are
for reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement.
Section 10.4 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Agreement
will nevertheless remain in full force and effect so long as the economic
or legal substance of the transactions contemplated hereby is not affected
in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto will negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the extent possible.
Section 10.5 Entire Agreement. This Agreement (together with the
Voting Agreement and Option Agreement) constitutes the entire agreement of
the parties, and supersedes all prior agreements and undertakings (other
than that certain Mutual Confidentiality Agreement, dated as of February 5,
1998, executed by the Acquiror and the Company), both written and oral,
among the parties, with respect to the subject matter hereof.
Section 10.6 Assignment. This Agreement may not be assigned by
operation of Law or otherwise without the prior written consent of each of
the parties hereto.
Section 10.7 Parties in Interest. This Agreement will be binding
upon and inure solely to the benefit of each party hereto, and, other than
pursuant to Section 7.7, 7.8, 7.11 and 7.13 hereof, nothing in this
Agreement, express or implied, is intended to or will confer upon any other
Person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.
Section 10.8 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of any party hereto in the exercise of any
right hereunder will impair such right or be construed to be a waiver of,
or acquiescence in, any breach of any representation, warranty or agreement
herein, nor will any single or partial exercise of any such right preclude
other or further exercise thereof or of any other right. All rights and
remedies existing under this Agreement are cumulative to, and not exclusive
to, and not exclusive of, any rights or remedies otherwise available.
Section 10.9 Governing Law. THIS AGREEMENT AND THE AGREEMENTS,
INSTRUMENTS AND DOCUMENTS CONTEMPLATED HEREBY WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (EXCLUSIVE
OF CONFLICTS OF LAW PRINCIPLES). COURTS WITHIN THE STATE OF DELAWARE WILL
HAVE JURISDICTION OVER ANY AND ALL DISPUTES BETWEEN THE PARTIES HERETO,
WHETHER IN LAW OR EQUITY, ARISING OUT OF OR RELATING TO THIS AGREEMENT AND
THE AGREEMENTS, INSTRUMENTS AND DOCUMENTS CONTEMPLATED HEREBY. THE PARTIES
CONSENT TO AND AGREE TO SUBMIT TO THE JURISDICTION OF SUCH COURTS. EACH OF
THE PARTIES HEREBY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUCH DISPUTE, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY CLAIM THAT (I) SUCH
PARTY IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, (II)
SUCH PARTY AND SUCH PARTY'S PROPERTY IS IMMUNE FROM ANY LEGAL PROCESS
ISSUED BY SUCH COURTS OR (III) ANY LITIGATION COMMENCED IN SUCH COURTS IS
BROUGHT IN AN INCONVENIENT FORUM.
Section 10.10 Counterparts. This Agreement may be executed in
multiple counterparts, and by the different parties hereto in separate
counterparts, each of which when executed will be deemed to be an original
but all of which taken together will constitute one and the same agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
UNITRODE CORPORATION
By: /s/ Robert J. Richardson
_______________________________
Name: Robert J. Richardson
Title: President and Chief
Executive Officer
MERRIMACK CORPORATION
By: /s/ Robert J. Richardson
_______________________________
Name: Robert J. Richardson
Title: President and Chief
Executive Officer
BENCHMARQ MICROELECTRONICS, INC.
By: /s/ Alan R. Schuele
_______________________________
Name: Alan R. Schuele
Title: President and Chief
Executive Officer
EXHIBIT 2
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT (this "Agreement"), dated as of March
2, 1998, between Unitrode Corporation, a Maryland corporation
("Grantee"), and BENCHMARQ Microelectronics, Inc., a Delaware corporation
(the "Company").
WHEREAS, the Company, Grantee and Merrimack Corporation, a
Delaware corporation and a wholly owned subsidiary of Grantee ("Newco"),
have contemporaneously with the execution of this Agreement, entered into
an Agreement and Plan of Merger dated March 2, 1998 (the "Merger
Agreement") which provides, among other things, that Newco shall be
merged with and into the Company pursuant to the terms and conditions
thereof; and
WHEREAS, as an essential condition and inducement to
Grantee's entering into the Merger Agreement and in consideration
therefor, the Company has agreed to grant Grantee the Option (as
hereinafter defined);
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein and in the Merger
Agreement, and intending to be legally bound hereby, the parties hereby
agree as follows:
1. GRANT OF OPTION. The Company hereby grants to Grantee an
unconditional, irrevocable option (the "Option") to purchase, subject to
the terms hereof, 955,158 shares (such shares being referred to herein as
the "Option Shares") of fully paid and nonassessable common stock, par
value $.001 per share, of the Company ("Company Common Stock"), equal to
approximately ten percent (10%) of the number of shares of Company Common
Stock issued and outstanding (on a fully diluted basis after giving
effect to the exercise of the Option) as of the date hereof at a purchase
price of $17.53 per share of Company Common Stock, as adjusted in
accordance with the provisions of Section 8 (such price, as adjusted if
applicable, the "Option Price").
2. (a) EXERCISE OF OPTION. Grantee may exercise the Option,
in whole or part, and from time to time, if, but only if, a Triggering
Event (as hereinafter defined) shall have occurred prior to the
occurrence of an Option Termination Event (as hereinafter defined),
provided that Grantee shall have sent the written notice of such exercise
(as provided in Subsection 2(e) on or prior to the last date of the one
(1) year period following such Triggering Event (the "Option Expiration
Date").
(b) OPTION TERMINATION EVENTS. The term "Option Termination
Event" shall mean any of the following events:
(i) the Effective Time (as defined in the Merger
Agreement); or
(ii) termination of the Merger Agreement (A) by either
party pursuant to Subsection 9.1(d) of the Merger Agreement,
provided that the matter giving rise to the Order (as defined in
the Merger Agreement) providing the basis for termination under
Subsection 9.1(d) of the Merger Agreement shall not have been
initiated by the Company or any Person who initiates an Acquisition
Proposal (as such item is defined in the Merger Agreement), (B) by
the Company pursuant to Subsection 9.1(c), Subsection 9.1(h) or
Subsection 9.1(j) of the Merger Agreement, (C) by either the
Company or the Grantee pursuant to Subsection 9.1(g) of the Merger
Agreement, (D) by both parties pursuant to Subsection 9.1(a) of the
Merger Agreement, (E) by the Company or the Grantee pursuant to
Subsection 9.1(e) of the Merger Agreement (if there then exists
circumstances that would permit termination of the Merger Agreement
by the Company pursuant to Subsection 9.1(e) of the Merger
Agreement), (F) by the Acquiror pursuant to Subsection 9.1(i)(i)
(if circumstances exist that would allow the Company to terminate
the Merger Agreement pursuant to Subsection 9.1(h) of the Merger
Agreement) or (G) by either party pursuant to any other provision
of the Merger Agreement; provided (in the case of this Subsection
2(b)(ii)(G)) such termination occurs prior to the occurrence of an
Acquisition Proposal.
(c) TRIGGERING EVENTS. The term "Triggering Event" shall mean
the occurrence (after the date hereof) of any of the following events:
(i) any Person (other than the Grantee or any
Subsidiary of the Grantee) shall have commenced (as such term is
defined in Rule 14d-2 under the Exchange Act) or shall have filed a
registration statement under the Securities Act with respect to a
tender offer or exchange offer to purchase any shares of Company
Common Stock such that, upon consummation of such offer, such
Person would own or control 10% or more of the then outstanding
Company Common Stock;
(ii) the Company or any Subsidiary of the Company shall
have authorized, recommended, proposed or publicly announced an
intention to authorize, recommend or propose, or entered into, an
agreement with any Person (other than the Grantee or any Subsidiary
of the Grantee) to (A) effect a merger, reorganization,
consolidation, share exchange or other business combination or
similar transaction involving the Company or any of its Significant
Subsidiaries, (B) sell, lease or otherwise dispose of assets of the
Company or its Subsidiaries representing 10% or more of the
consolidated assets of the Company other than in the ordinary
course of business or (C) issue, sell or otherwise dispose of
(including by way of merger, reorganization, consolidation, share
exchange or other business combination or any similar transaction)
securities (or options, rights or warrants to purchase, or
securities convertible into or exchangeable for, such securities)
representing 10% or more of the voting power of the Company or any
of its Significant Subsidiaries; or
(iii) any Person (other than the Grantee or any
Subsidiary of the Grantee or the Company or, in a fiduciary
capacity, any Subsidiary of the Company) shall have,
subsequent to the date of this Agreement, acquired beneficial
ownership (as such term is defined in Rule 13d-3 under the Exchange
Act) or the right to acquire beneficial ownership of, or any
"Group" (as such term is defined under the Exchange Act) shall have
been formed which beneficially owns or has the right to acquire
beneficial ownership of, 10% or more of the then outstanding
Company Common Stock.
(d) NOTICE OF TRIGGERING EVENT. The Company shall notify
Grantee in writing as promptly as practicable, and in any event within 24
hours, of the occurrence of any Triggering Event, it being understood
that the giving of such notice by the Company shall not be a condition to
the right of Grantee to exercise the Option or for a Triggering Event to
have occurred.
(e) NOTICE OF EXERCISE; CLOSING. In the event that Grantee is
entitled to and wishes to exercise the Option, it shall send to the
Company a written notice (such notice being herein referred to as an
"Exercise Notice" and the date of issuance of an Exercise Notice being
herein referred to as the "Notice Date") specifying (i) the total number
of shares (or other Option Securities (as hereinafter defined)) it will
purchase pursuant to such exercise and (ii) a place and date not earlier
than three (3) Business Days nor later than forty (40) Business Days from
the Notice Date for the closing of such purchase (the "Option Closing
Date"); provided, that if the closing of the purchase and sale pursuant
to the Option (the "Option Closing") cannot be consummated, by reason of
any applicable Order, the period of time that otherwise would run
pursuant to this sentence shall run instead from the date on which such
restriction on consummation has expired or been terminated; and provided
further, without limiting the foregoing, that if, in the reasonable
opinion of Grantee, prior notification to or approval of any regulatory
agency is required in connection with such purchase, the Company or
Grantee, as the case may be, shall promptly file the required notice or
application for approval and shall expeditiously process the same and the
period of time that otherwise would run pursuant to this sentence shall
run instead from the date on which any required notification periods have
expired or been terminated or such approvals have been obtained and any
requisite waiting period or periods shall have passed. In the event that
(x) Grantee receives official notice that an approval of any regulatory
authority required for the purchase of Option Shares (or other Option
Securities) would not be issued or granted or (y) an Option Closing Date
shall not have occurred within one (1) year after the related Notice Date
due to the failure to obtain any such required approval, Grantee shall,
to the extent permitted by applicable Law, nevertheless be entitled to
exercise its rights as set forth herein, including without limitation the
rights set forth in Subsection 8(a) and Grantee shall be entitled to
exercise the Option (or Substitute Option (as defined herein)) in
connection with the resale of the Company Common Stock or other Option
Securities pursuant to a registration statement as provided in Section 9.
(f) PURCHASE PRICE. At the Option Closing, Grantee shall pay
to the Company the aggregate Option Price in immediately available funds
by wire transfer to a bank account designated by the Company, provided
that failure or refusal of the Company to designate such a bank account
shall not preclude Grantee from exercising the Option.
(g) ISSUANCE OF COMPANY COMMON STOCK. At the Option Closing,
simultaneously with the delivery of immediately available funds as
provided in Subsection 2(f), the Company shall deliver to Grantee a
certificate or certificates representing the number of shares of Company
Common Stock (or other Option Securities) purchased by Grantee and, if
the Option should be exercised in part only, a new Option evidencing the
rights of Grantee thereof to purchase the balance of the shares (or other
Option Securities) purchasable hereunder. If at the time of issuance of
any Option Shares pursuant to an exercise of all or part of the Option
hereunder, the Company shall have issued any rights or other securities
which are attached to or otherwise associated with the Company Common
Stock, then each Option Share issued pursuant to such exercise shall also
represent such rights or other securities with terms substantially the
same as and at least as favorable to Grantee as are provided under any
shareholder rights agreement or similar agreement of the Company then in
effect.
(h) LEGEND. Certificates for Company Common Stock (or other
Option Securities) delivered at a closing hereunder may be endorsed with
a restrictive legend that shall read substantially as follows:
"The transfer of the shares represented by this certificate is
subject to resale restrictions arising under the Securities Act of 1933,
as amended."
It is understood and agreed that the reference to the resale restrictions
of the Securities Act of 1933, as amended (the "Securities Act"), in the
above legend shall be removed by delivery of substitute certificate(s)
without such reference if Grantee shall have delivered to the Company a
copy of a letter from the staff of the SEC, or an opinion of counsel,
reasonably satisfactory to the Company, to the effect that such legend is
not required for purposes of the Securities Act. In addition, such
certificates shall bear any other legend as may be required by Law.
(i) RECORD GRANTEE; EXPENSES. Upon the delivery by Grantee to
the Company of the Exercise Notice and the tender of the applicable
Option Price in immediately available funds, Grantee shall be deemed to
be the holder of record of the shares of Company Common Stock (or other
Option Securities) issuable upon such exercise, notwithstanding that the
stock transfer books of the Company shall then be closed or that
certificates representing such shares of Company Common Stock (or other
Option Securities) shall not then be actually delivered to Grantee or the
Company shall have failed or refused to designate the bank account
described in Subsection 2(f). The Company shall pay all expenses, and any
and all United States federal, state and local taxes and other charges
that may be payable in connection with the preparation, issuance and
delivery of stock certificates under this Section 2 in the name of
Grantee. The Grantee shall pay all expenses and any and all United States
federal, state, local or other taxes or charges that may be payable in
connection with the issuance and delivery of stock certificates or a
substitute option agreement in the name of any assignee, transferee or
designee of Grantee.
3. EVALUATION OF INVESTMENTS. Grantee, by reason of its
knowledge and experience in financial and business matters, believes
itself capable of evaluating the merits and risks of an investment in the
Option and the securities to be purchased/sold pursuant to this Agreement
(collectively the "Option Securities.")
4. DOCUMENTS DELIVERED. Grantee acknowledges receipt of
copies of the following documents:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1996;
(b) The Company's Proxy Statement for the meeting of the
Company's stockholder held April 16, 1997; and
(c) The Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997.
5. INVESTMENT INTENT. Grantee represents and warrants that
it is entering into this Agreement and is acquiring and/or will acquire
the Option Securities for its own account and not with a view to resale
or distribution of all or any part of the Option Securities in violation
of applicable Law.
6. RESERVATION OF SHARES. The Company agrees (i) that it
shall at all times maintain, free from preemptive rights, sufficient
authorized but unissued or treasury shares of Company Common Stock (and
other Option Securities) issuable pursuant to this Agreement so that the
Option may be exercised without additional authorization of Company
Common Stock (or such other Option Securities) after giving effect to all
other options, warrants, convertible securities and other rights to
purchase Company Common Stock (or such other Option Securities); (ii)
that it will not, by charter amendment or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any other
voluntary act, avoid or seek to avoid the observance or performance of
any of the covenants, stipulations or conditions to be observed or
performed hereunder by the Company; (iii) promptly to take all action as
may from time to time be required in order to permit Grantee to exercise
the Option and the Company to duly and effectively issue shares of
Company Common Stock (or other Option Securities) pursuant hereto; and
(iv) (to the extent agreed to herein) promptly to take all action
provided herein to protect the rights of Grantee against dilution.
7. DIVISION OF OPTION; LOST OPTIONS. This Agreement (and the
Option granted hereby) are exchangeable, without expense, at the option
of Grantee, upon presentation and surrender of this Agreement at the
principal office of the Company, for other Agreements providing for
Options of different denominations entitling the holder thereof to
purchase, on the same terms and subject to the same conditions as are set
forth herein, in the aggregate the same number of shares of Company
Common Stock purchasable hereunder. The terms "Agreement" and "Option" as
used herein include any Stock Option Agreements and related Options for
which this Agreement (and the Option granted hereby) may be exchanged.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Agreement, and (in the
case of loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this Agreement,
if mutilated, the Company will execute and deliver a new Agreement of
like tenor and date.
8. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. The number of
shares of Company Common Stock purchasable upon the exercise of the
Option shall be subject to adjustment from time to time as provided in
this Section 8.
(a) ADDITIONAL SHARES ADJUSTMENT. Excluding issuances
contemplated by Subsection 8(b), in the event that any additional shares
of Company Common Stock, or any rights, options, warrants, subscriptions,
calls, convertible securities or other agreements or commitments
obligating the Company to issue any shares of Company Common Stock, are
issued or otherwise become outstanding after the date hereof (an
"Increase"), the number of shares of Company Common Stock subject to the
Option shall be increased by a number of shares equal to the product of
(A) a fraction, the numerator of which is the number of shares of Company
Common Stock for which the Option was exercisable immediately prior to
the Increase and the denominator of which is the number of shares of
Company Common Stock specified in Section 1 and (B) the product of (i)
ten percent (10%) and (ii) the number of shares of Company Common Stock
issued and outstanding on a fully diluted basis immediately after the
Increase minus the number of shares of Company Common Stock issued and
outstanding on a fully diluted basis immediately prior to the Increase;
provided that the number of shares of Company Common Stock subject to the
Option shall in no event exceed ten percent (10%) of the issued and
outstanding shares of Company Common Stock on a fully diluted basis
immediately prior to exercise.
(b) TRANSACTION ADJUSTMENT. In the event of any change in
Company Common Stock by reason of stock dividends, splits, mergers,
recapitalization, combinations, subdivisions, conversions, exchanges of
shares or other similar transactions then, the type and number of shares
of Company Common Stock purchasable upon exercise hereof shall be
appropriately adjusted so that Grantee shall receive upon exercise of the
Option and payment of the aggregate Option Price hereunder the number and
class of shares or other securities or property that Grantee would have
received in respect of Company Common Stock if the Option had been
exercised in full immediately prior to such event, or the record date
therefor, as applicable.
(c) OPTION PRICE ADJUSTMENT. Whenever the number of shares of
Company Common Stock subject to this Option are adjusted pursuant to
Subsection 8(a) or 8(b) the Option Price shall be adjusted by multiplying
the Option Price by a fraction, the numerator of which shall be equal to
the aggregate number of shares of Company Common Stock purchasable under
the Option prior to the adjustment and the denominator of which shall be
equal to the aggregate number of shares of Company Common Stock
purchasable under the Option immediately after the adjustment.
9. REGISTRATION RIGHTS. The Company will, if requested by the
Grantee at any time and from time to time within two (2) years of a
Triggering Event (the "Registration Period"), as expeditiously as
practicable prepare, file and cause to be made effective up to two
registration statements under the Securities Act if such registration is
necessary or desirable in order to permit the offering, sale and delivery
of any or all shares of Company Common Stock (or other Option Securities)
that have been acquired by or are issuable to the Grantee upon exercise
of the Option in accordance with the intended method of sale or other
disposition stated by the Grantee, including, at the sole discretion of
the Company, a "shelf" registration statement under Rule 415 under the
Securities Act or any successor provision, and the Company will use all
reasonable efforts to qualify such shares or other Option Securities
under any applicable state securities laws. Without the Grantee's prior
written consent, no other securities may be included in any such
registration. The Grantee agrees to use all reasonable efforts to cause,
and to cause any underwriters of any sale or other disposition to cause,
any sale or other disposition pursuant to such registration statement to
be effected on a widely distributed basis so that upon consummation
thereof no purchaser or transferee will own beneficially more than 5% of
the then outstanding voting power of the Company. The Company will use
all reasonable efforts to cause each such registration statement to
become effective, to obtain all consents or waivers of other parties
which are required therefor and to keep such registration statement
effective for such period not in excess of 180 days from the day such
registration statement first becomes effective as may be reasonably
necessary to effect such sale or other disposition. The obligations of
the Company hereunder to file a registration statement and to maintain
its effectiveness may be suspended for one or more periods of time not
exceeding ninety (90) days in the aggregate if the Board of Directors of
the Company shall have determined in good faith that the filing of such
registration or the maintenance of its effectiveness would require
disclosure of nonpublic information that would materially and adversely
affect the Company. The expenses associated with the preparation and
filing of any such registration statement pursuant to this Section 9 and
any sale covered thereby (including any fees related to blue sky
qualifications and filing fees in respect of the Securities and Exchange
Commission or the National Association of Securities Dealers, Inc.)
("Registration Expenses") will be for the account of the Company except
for underwriting discounts or commissions or brokers' fees in respect to
shares of Company Common Stock (or other Option Securities) to be sold by
the Grantee and the fees and disbursements of the Grantee's counsel;
provided, however, that the Company will not be required to pay for any
Registration Expenses with respect to such registration if the
registration request is subsequently withdrawn at the request of the
Grantee unless the Grantee agrees to forfeit its right to request one
registration; provided further, however, that, if at the time of such
withdrawal the Grantee has learned of a material adverse change in the
results of operations, condition, business or prospects of the Company
from that known to the Grantee at the time of its request and has
withdrawn the request with reasonable promptness following disclosure by
the Company of such material adverse change, then the Grantee will not be
required to pay any of such expenses and will retain all remaining rights
to request registration. The Grantee will provide all information
reasonably requested by the Company for inclusion in any registration
statement to be filed hereunder. If during the Registration Period the
Company shall propose to register under the Securities Act the offering,
sale and delivery of Company Common Stock for cash for its own account or
for any other stockholder of the Company pursuant to a firm underwriting,
it will, in addition to the Company's other obligations under this
Section 9, allow the Grantee the right to participate in such
registration provided that the Grantee participates in the underwriting;
provided, however, that, if the managing underwriter of such offering
advises the Company in writing that in its opinion the number of shares
of Company Common Stock (or other Option Securities) requested to be
included in such registration exceeds the number which can be sold in
such offering, the Company will, after fully including therein all
shares of Company Common Stock and/or Option Securities to be sold by the
Company, include the shares of Company Common Stock (or other Option
Securities) requested to be included therein by Grantee pro rata (based
on the number of shares of Company Common Stock or other Option
Securities intended to be included therein) with the shares of Company
Common Stock or other Option Securities intended to be included therein
by Persons other than the Company. In connection with any offering, sale
and delivery of Company Common Stock pursuant to a registration statement
effected pursuant to this Section 9, the Company and the Grantee will
provide each other and each underwriter of the offering with customary
representations, warranties and covenants, including covenants of
indemnification and contribution. For purposes of determining whether two
requests have been made under this Section 9, only requests relating to a
registration statement that has become effective under the Securities Act
and pursuant to which the Grantee has disposed of all shares of Company
Common Stock covered thereby in the manner contemplated therein will be
counted. The registration rights granted under this Section 9 are subject
to and are limited by any registration rights previously granted by the
Company and the Grantee acknowledges the registration rights granted
under this Section 9 shall be construed subject to any such limitations.
10. REPURCHASE OF OPTION AND OPTION SHARES. (a) Within ten
(10) Business Days following the occurrence of a Repurchase Event (as
defined herein), the Company shall (i) deliver an offer (an "Option
Repurchase Offer") to repurchase the Option from Grantee at a price (the
"Option Repurchase Price") equal to the amount by which (A) the Competing
Transaction Price (as defined below) exceeds (B) the Option Price,
multiplied by the maximum number of shares for which the Option may then
be exercised by the Grantee, and (ii) deliver an offer (an "Option Share
Repurchase Offer") to repurchase the Option Shares from each owner of
Option Shares from time to time (each, an "Owner") at a price (the
"Option Share Repurchase Price") equal to the amount by which (A) the
Competing Transaction Price exceeds (B) the Option Price, multiplied by
the number of Option Shares then held by such Owner. The term "Competing
Transaction Price" shall mean, as of any date for the determination
thereof, the price per share of Common Stock paid pursuant to the
consummation of any Acquisition Proposal (such consummated Acquisition
Proposal being referred to herein as a "Competing Transaction") or, in
the event of a sale of assets of the Company, the last per-share sale
price of Company Common Stock on the fourth trading day following the
announcement of such sale. If the consideration paid or received in the
Competing Transaction shall be other than in cash, the per share value of
such consideration (on a fully diluted basis) shall be determined by a
nationally recognized investment banking firm selected by Grantee and
reasonably acceptable to the Company, which determination shall be
conclusive for all purposes of this Agreement.
(b) REPURCHASE REQUEST. Upon the occurrence of a Repurchase
Event and whether or not the Company shall have made an Option Repurchase
Offer or Option Share Repurchase Offer under Section 10(a), (i) at the
request (the date of such request being the "Option Repurchase Request
Date") of Grantee delivered prior to the Option Termination Date, the
Company shall repurchase the Option from Grantee at the Option Repurchase
Price and (ii) at the request (the date of such request being the "Option
Share Repurchase Request Date") of any Owner delivered prior to the
Option Termination Date, the Company shall repurchase such number of the
Option Shares (to the extent clearly identifiable as such) from the Owner
as the Owner shall designate at the Option Share Repurchase Price.
(c) REPURCHASE PROCEDURES. Grantee or the Owner, as the case
may be, may (i) accept the Company's Option Repurchase Offer or Option
Share Repurchase Offer under Subsection 10(a) or (ii) exercise its right
to require the Company to repurchase the Option or any Option Shares, as
the case may be, pursuant to Subsection 10(b) by a written notice or
notices stating that Grantee or the Owner, as the case may be, elects to
accept such offer or to require the Company to repurchase the Option or
the Option Shares in accordance with the provisions of this Section 10.
As promptly as practicable, and in any event within five (5) Business
Days, after the surrender to the Company of this Agreement or
Certificates for Option Shares, as applicable, following receipt of a
notice under this Subsection 10(c), the Company shall deliver or cause to
be delivered to Grantee the Option Repurchase Price or to the Owner the
Option Share Repurchase Price, as the case may be.
(d) REGULATORY APPROVALS. The Company hereby undertakes to
use its best efforts to obtain all required regulatory and legal
approvals and to file any required notices as promptly as practicable in
order to accomplish any repurchase contemplated by this Section 10.
Nonetheless, to the extent that the Company is prohibited under
applicable Law from repurchasing the Option or any Option Shares in full,
the Company shall immediately so notify Grantee or the Owner and
thereafter deliver or cause to be delivered, from time to time, to
Grantee or the Owner, as appropriate, the portion of the Option
Repurchase Price and the Option Share Repurchase Price, respectively,
that it is no longer prohibited from delivering, within five (5) Business
Days after the date on which the Company is no longer so prohibited;
provided, however, that if the Company at any time after delivery of a
notice of repurchase pursuant to Section 10(b) hereof is prohibited under
applicable Law, from delivering to Grantee or the Owner, as appropriate,
the Option Repurchase Price or the Option Share Repurchase Price,
respectively, in full, Grantee or the Owner, as appropriate, may revoke
its notice of repurchase of the Option or the Option Shares,
respectively, either in whole or in part whereupon, in the case of a
revocation in part, the Company shall promptly (i) deliver to Grantee or
the Owner, as appropriate, that portion of the Option Repurchase Price or
the Option Share Repurchase Price that the Company is not prohibited from
delivering after taking into account any such revocation and (ii)
deliver, as appropriate, either (A) to Grantee, a new Agreement
evidencing the right of Grantee to purchase that number of shares of
Company Common Stock equal to the number of shares of Company Common
Stock purchasable immediately prior to the delivery of the notice of
repurchase less the number of shares of Company Common Stock covered by
the portion of the Option repurchased or (B) to the Owner, a certificate
for the number of Option Shares covered by the revocation. If an Option
Termination Event shall have occurred prior to the date of the notice by
the Company described in the first sentence of this Subsection 10(d), or
shall be scheduled to occur at any time before the expiration of a period
ending on the thirtieth day after such date, Grantee shall nonetheless
have the right to exercise the Option until the expiration of such thirty
(30) day period.
(e) DEFINITION. The term "Repurchase Event" shall mean a
Triggering Event followed by the consummation of any transaction included
in the definition of Competing
Transaction.
(f) COMPETING TRANSACTION. Notwithstanding anything to the
contrary in Subsections 2(a), the delivery of a notice by Grantee or an
Owner under Subsection 10(b) hereof specifying that such notice is based
on the Company's public announcement of the execution of an agreement
providing for a Competing Transaction shall be deemed to constitute an
election to exercise the Option, as to the number of Option Shares not
heretofore purchased pursuant to one or more prior exercises of the
Option, on the fifth Business Day following the public announcement of
the consummation of the transaction contemplated by such agreement, in
which event a closing shall occur with respect to such unpurchased Option
Shares in accordance with Subsection 2(e).
(g) REPRESENTATIONS. In connection with any purchase/sale of
the Option or the Option Shares pursuant to this Section 10, the Grantee
and/or the Owner, as applicable, will be required to represent and
warrant to the Company that such Person is the owner of the Option/Option
Shares being purchased, free and clear of all adverse claims and that
such Person will deliver good title to such Option/Option Shares to the
Company, free and clear of all adverse claims, upon consummation of any
purchase/sale pursuant to this Section 10.
11. SUBSTITUTE OPTION IN THE EVENT OF CORPORATE CHANGE. (a)
In the event that prior to an Option Termination Event, the Company shall
enter into an agreement (i) to consolidate with or merge into any person,
other than Grantee or one of its Subsidiaries, and shall not be the
continuing or surviving corporation of such consolidation or merger, (ii)
to permit any person, other than Grantee or one of its Subsidiaries, to
merge into the Company and the Company shall be the continuing or
surviving corporation, but, in connection with such merger, the then
outstanding shares of Company Common Stock shall be changed into or
exchanged for stock or other securities of any other person or cash or
any other property or the then outstanding shares of Company Common Stock
shall after such merger represent less than 50% of the outstanding shares
and share equivalents of the merged company, or (iii) to sell or
otherwise transfer all or substantially all of its assets to any person,
other than Grantee or one of its Subsidiaries, then, and in each such
case, the agreement governing such transaction shall make proper
provision so that the Option shall, upon the consummation of any such
transaction and upon the terms and conditions set forth herein, be
converted into, or exchanged for, an option (the "Substitute Option"), at
the election of Grantee, of either (x) the Acquiring Corporation (as
hereinafter defined) or (y) any person that controls the Acquiring
Corporation subsequent to the consolidation, merger or sale in question.
(b) DEFINITIONS. The following terms have the meanings
indicated:
(1) "Acquiring Corporation" shall mean (i) the
continuing or surviving corporation of a consolidation or
merger with the Company (if other than the Company), (ii) the
Company in a merger in which the Company is the continuing or
surviving person, and (iii) the transferee of all or
substantially all of the Company's assets.
(2) "Substitute Common Stock" shall mean the common
stock issued by the Company upon exercise of the Substitute
Option.
(3) "Assigned Value" shall mean the Competing Transaction
Price, as defined in Section 10.
(4) "Average Price" shall mean the average closing
price of a share of the Substitute Common Stock for the
ninety (90) days immediately preceding the consolidation,
merger or sale in question; provided that if the Company is
the issuer of the Substitute Option, the Average Price shall
be computed with respect to a share of common stock issued by
the Company, the Person merging into the Company or by any
company which controls or is controlled by such Person
subsequent to the consideration merger or sale in question,
as Grantee may elect.
(c) TERMS OF THE SUBSTITUTE OPTION. The Substitute Option
shall have the same terms as the Option; provided that if the terms of
the Substitute Option cannot, for legal reasons, be the same as the
Option, such terms shall be as similar as possible and in no event less
advantageous to Grantee. The issuer of the Substitute Option shall also
enter into an agreement with Grantee in substantially the same form as
this Agreement, which agreement shall be applicable to the Substitute
Option.
(d) SUBSTITUTE COMMON STOCK. The Substitute Option shall be
exercisable for such number of shares of Substitute Common Stock as is
equal to the Assigned Value multiplied by the number of shares of Company
Common Stock for which the Option is then exercisable, divided by the
Average Price. The exercise price of the Substitute Option per share of
Substitute Common Stock shall then be equal to the Option Price
multiplied by a fraction, the numerator of which shall be the number of
shares of Company Common Stock for which the Option is then exercisable
and the denominator of which shall be the number of shares of Substitute
Common Stock for which the Substitute Option is exercisable.
(e) LIMITATION. In no event, pursuant to any of the foregoing
paragraphs, shall the Substitute Option be exercisable for more than ten
percent (10%) of the shares of Substitute Common Stock issued and
outstanding prior to exercise of the Substitute
Option.
(f) ASSUMPTION OF OBLIGATION. The Company shall not enter
into any transaction described in Subsection 11(a) unless the Acquiring
Corporation and any person that controls the Acquiring Corporation assume
in writing all the obligations of the Company hereunder.
12. EXTENSION OF TIME FOR REGULATORY APPROVALS. The periods
related to exercise of the Option and the other rights of Grantee
hereunder shall be extended (i) to the extent necessary to obtain all
regulatory approvals for the exercise of such rights, and for the
expiration of all statutory waiting periods and (ii) to the extent
necessary to avoid liability under Section 10(b) of the Exchange Act by
reason of such exercise.
13. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents and warrants to Grantee as follows:
(a) AUTHORITY. The Company has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by the Board of Directors of the
Company and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the transactions
so contemplated. This Agreement has been duly and validly executed and
delivered by the Company. This Agreement is the valid and legally binding
obligation of the Company, enforceable against the Company in accordance
with its terms subject to bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to
creditors' rights generally or to general principles of equity.
(b) CORPORATE ACTION. The Company has taken all necessary
corporate action to authorize and reserve and to permit it to issue, and
at all times from the date hereof through the termination of this
Agreement in accordance with its terms will have reserved for issuance
upon the exercise of the Option, that number of shares of Company Common
Stock equal to the maximum number of shares of Company Common Stock at
any time and from time to time issuable hereunder, and all such shares of
Company Common Stock, upon issuance pursuant hereto, will be duly
authorized, validly issued, fully paid, nonassessable, and will be
delivered free and clear of all Liens and not subject to any preemptive
rights.
(c) NO CONFLICT. The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated hereby
will not, conflict with, or result in any violation pursuant to any
provisions of the Certificate of Incorporation or by-laws of the Company
or any Subsidiary of the Company, subject to obtaining any approvals or
consents contemplated hereby, result in any violation of any loan or
credit agreement, note, mortgage, indenture, lease, plan or other
agreement, obligation, instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Company or any Subsidiary of the Company or
their respective properties or assets.
(d) ANTI-TAKEOVER STATUTES. The provisions of Section 203 of
the General Corporation Law of the State of Delaware will not, prior to
the termination of this Agreement, apply to this Agreement or the
transactions contemplated hereby and thereby. The Company has taken, and
will in the future take, all steps necessary to irrevocably exempt the
transactions contemplated by this Agreement from any other applicable
state takeover law and from any applicable charter or contractual
provision containing change of control or anti-takeover provisions.
14. ASSIGNMENT. The Company may not assign any of its rights
or obligations under this Agreement or the Option created hereunder to
any other Person, without the express written consent of Grantee. Grantee
may not assign any of its rights or obligations under this Agreement or
the Option created hereunder to any other Person without the consent of
the Company (which consent will not be unreasonably withheld).
15. APPLICATION FOR REGULATORY APPROVAL. Each of Grantee and
the Company will use its best efforts to make all filings with, and to
obtain consents of, all third parties and governmental authorities
necessary to the consummation of the transactions contemplated by this
Agreement, including without limitation making application to list the
shares of Company Common Stock issuable hereunder on the Nasdaq National
Market of The Nasdaq Stock Market, Inc. upon official notice of issuance.
16. SPECIFIC PERFORMANCE. The parties hereto acknowledge that
damages would be an inadequate remedy for a breach of this Agreement by
either party hereto and that the obligations of the parties hereto shall
be enforceable by either party hereto through injunctive or other
equitable relief.
17. SEPARABILITY OF PROVISIONS. If any term, provision,
covenant or restriction contained in this Agreement is held by a court or
a federal or state regulatory agency of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions
and covenants and restrictions contained in this Agreement shall remain
in full force and effect, and shall in no way be affected, impaired or
invalidated.
18. NOTICES. All notices, claims, demands and other
communications hereunder shall be deemed to have been duly given or made
when delivered in person, by registered or certified mail (postage
prepaid, return receipt requested), by overnight courier or by facsimile
at the respective addresses of the parties set forth in the Merger
Agreement.
19. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
20. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which will be deemed to be an original, but
all of which shall constitute one and the same agreement.
21. DEFINITIONS. Capitalized terms used and not defined
herein shall have the meanings set forth in the Merger Agreement.
22. EXPENSES. Except as otherwise expressly provided herein
or in the Merger Agreement, each of the parties hereto shall bear and pay
all costs and expenses incurred by it or on its behalf in connection with
the transactions contemplated hereunder, including fees and expenses of
its own financial consultants, investment bankers, accountants and
counsel.
23. ENTIRE AGREEMENT. Except as otherwise expressly provided
herein or in the Merger Agreement, this Agreement contains the entire
agreement between the parties with respect to the transactions
contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereof, written or oral. The terms and
conditions of this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted
assigns. Nothing in this Agreement, expressed or implied, is intended to
confer upon any party, other than the parties hereto, and their
respective successors and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement, except
as expressly provided herein. Any provision of this Agreement may be
waived only in writing at any time by the party that is entitled to the
benefits of such provision. This Agreement may not be modified, amended,
altered or supplemented except upon the execution and delivery of a
written agreement executed by the parties hereto.
24. FIRST REFUSAL. If the Grantee shall desire to sell,
assign, transfer or otherwise dispose of all or any of the shares of
Company Common Stock or other Option Securities acquired by it pursuant
to the Option, it will give the Company written notice of the proposed
transaction (an "Offeror's Notice"), identifying the proposed transferee,
accompanied by a copy of a binding to purchase such shares of Company
Common Stock, Options or other Option Securities signed by such
transferee and setting forth the terms of the proposed transaction. An
Offeror's Notice will be deemed an offer by the Grantee to the Company,
which may be accepted, in whole but not in part, within ten (10) Business
Days of the receipt of such Offeror's Notice, on the same terms and
conditions and at the same price at which the Grantee is proposing to
transfer such shares of Company Common Stock, Options or other Option
Securities to such transferee. The purchase of any such shares of Company
Common Stock, Options or other Option Securities by the Company will be
settled within ten (10) Business Days of the date of the acceptance of
the offer and the purchase price will be paid to the Grantee in
immediately available funds. In the event of the failure or refusal of
the Company to purchase all the shares of Company Common Stock, Options
or other Option Securities covered by an Offeror's Notice, the Grantee
may, within sixty (60) days from the date of the Offeror's Notice, sell
all, but not less than all, of such shares of Company Common Stock,
Options or other Option Securities to the proposed transferee at no less
than the price specified and on terms no more favorable than those set
forth in the Offeror's Notice; provided, however, that the provisions of
this sentence will not limit the rights the Grantee may otherwise have if
the Company has accepted the offer contained in the Offeror's Notice and
wrongfully refuses to purchase the shares of Company Common Stock,
Options or other Option Securities subject thereto. The requirements of
this Section 24 will not apply to (a) any disposition as a result of
which the proposed transferee would own beneficially not more than 2% of
the outstanding voting power of the Company, (b) any disposition of
Company Common Stock or other Option Securities by a Person to whom the
Grantee has assigned its rights under the Option with the consent of the
Company, (c) any sale by means of a public offering registered under the
Securities Act or (d) any transfer to a wholly-owned Subsidiary of the
Grantee which agrees in writing to be bound by the terms hereof.
25. LIMITATION OF GRANTEE PROFIT. (a) Notwithstanding any
other provision of this Agreement, in no event shall Grantee's Total
Profit (as hereinafter defined) exceed in the aggregate $7,278,000 and,
if it otherwise would exceed such amount, Grantee, at its sole election,
shall either (i) reduce the number of shares of Company Common Stock
subject to this Option, (ii) deliver to the Company for cancellation
Option Shares previously purchased by Grantee, (iii) pay cash to the
Company, or (iv) any combination thereof, so that Grantee's actually
realized Total Profit shall not exceed in the aggregate $7,278,000 after
taking into account the foregoing actions.
(b) As used herein, the term "Total Profit" shall mean the
sum of (i) (x) the amount (before taxes but net of reasonable and
customary commissions paid or payable in connection with such
transaction) received or receivable by the Grantee pursuant to the sale
of Option Shares (or any other securities or property into which such
Option Shares are converted or exchanged) to any unaffiliated Person(s)
or to the Company with respect to such Option Shares (or any other
securities or property into which such Option Shares are converted or
exchanged), less (y) Grantee's purchase price for such Option Shares (or
any other securities or property into which such Option Shares are
converted or exchanged), (ii) any amounts (before taxes but net of
reasonable and customary commissions paid or payable in connection with
such transaction) received or receivable by the Grantee on the transfer
of the Option (or any portion thereof) to any unaffiliated Person(s) (if
permitted hereunder) or to the Company, (iii) any equivalent amount(s)
with respect to the Substitute Option, and (iv) the amount received by
the Grantee pursuant to Subsection 9.2(b) of the Merger Agreement.
26. FURTHER ASSURANCES. In the event of any exercise of the
Option by Grantee, the Company and Grantee shall execute and deliver all
other documents and instruments and take all other action that may be
reasonably necessary in order to consummate the transactions provided for
by such exercise. Nothing contained in this Agreement shall be deemed to
authorize the Company or Grantee to breach any provision of the Merger
Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
UNITRODE CORPORATION
By: /s/ Robert J. Richardson
_________________________________
Name: Robert J. Richardson
Title: President and Chief
Executive Officer
BENCHMARQ MICROELECTRONICS, INC.
By: /s/ Alan R. Schuele
__________________________________
Name: Alan R. Schuele
Title: President and Chief
Executive Officer
EXHIBIT 3
VOTING AGREEMENT
VOTING AGREEMENT, dated as of March 2, 1998 (this "Voting
Agreement") by and among Alan R. Schuele, Derrell C. Coker, L.J. Sevin,
Harvey B. Cash, Dietrich Erdmann, Jack Kilby and Charles H. Phipps (the
"Stockholders"), and Unitrode Corporation, a Maryland corporation
("Acquiror").
WHEREAS, BENCHMARQ Microelectronics, Inc., a Delaware corporation,
Acquiror and Merrimack Corporation, a Delaware corporation and a wholly
owned subsidiary of Acquiror ("Newco"), have contemporaneously with the
execution of this Voting Agreement, entered into an Agreement and Plan of
Merger dated March 2, 1998 (the "Merger Agreement") which provides, among
other things, that Newco shall be merged (the "Merger")with and into the
Company pursuant to the terms and conditions thereof;
WHEREAS, as an essential condition and inducement to Acquiror to
enter into the Merger Agreement and in consideration therefor, the
undersigned Stockholders have agreed to enter into this Voting Agreement;
and
WHEREAS, as of the date hereof, the Stockholders own of record and
beneficially the shares of common stock, par value $.001 per share, of
the Company (the "Company Common Stock") set forth opposite their
respective names on Schedule A hereto and wish to enter into this
Agreement with respect to such shares of Company Common Stock and the
options to purchase shares of Company Common Stock ("Options");
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein and in the Merger Agreement,
and intending to be legally bound hereby, the parties hereto hereby agree
as follows:
ARTICLE I
Voting of Shares
Section 1.1 Voting Agreement. Each Stockholder hereby agrees to:
(a) appear, or cause the holder of record on the applicable record date
(the "Record Holder") to appear for the purpose of obtaining a quorum at
any annual or special meeting of stockholders of the Company and at any
adjournment thereof; (b) vote, or cause the Record Holder to vote, in
person or by proxy, at every meeting of the stockholders of the Company
at which such matters are considered and at every adjournment thereof,
all of the shares of the Company Common Stock owned or with respect to
which such Stockholder has or shares voting power or control and all of
the shares of Company Common Stock which shall, or with respect to which
voting power or control shall, hereafter be acquired by such Stockholder
(collectively, the "Shares") in favor the Merger, the Merger Agreement
and the transactions contemplated by the Merger Agreement; and (c) vote,
or cause the Record Holder to vote, in person or by proxy, at every
meeting of the stockholders of the Company at which such matters are
considered and at every adjournment thereof, such Stockholder's Shares
against any action, proposal or agreement that could reasonably be
expected to result, directly or indirectly, in a breach in any material
respect of any covenant, representation or warranty or any other
obligation of the Company under the Merger Agreement or the Stock Option
Agreement dated March 2, 1998 between the Company and Acquiror (the
"Option Agreement"), or which could reasonably be expected to result in
any of the conditions to the Company's obligations under the Merger
Agreement or the Option Agreement not being fulfilled.
Section 1.2 No Ownership Interest. Nothing contained in this Voting
Agreement shall be deemed to vest in Acquiror any direct or indirect
ownership or incidence of ownership of or with respect to any Shares. All
rights, ownership, and economic benefits of and relating to the Shares or
Options shall remain and belong to the Stockholders, and Acquiror shall
have no authority to manage, direct, superintend, restrict, regulate,
govern, or administer any of the policies or operations of the Company or
exercise any power or authority to direct the Stockholders in the voting
of any of the Shares, except as otherwise provided herein, or the
performance of the Stockholders' duties or responsibilities as
stockholders of the Company.
Section 1.3 Evaluation of Investment. Each Stockholder, by reason
of its knowledge and experience in financial and business matters,
believes itself capable of evaluating the merits and risks of the
investment in shares of common stock, par value $.01 per share, of
Acquiror ("Acquiror Common Stock"), contemplated by the Merger Agreement.
Section 1.4 Documents Delivered. Each Stockholder acknowledges
receipt of copies of the following documents:
(a) the Merger Agreement and all Annexes thereto;
(b) the Option Agreement;
(c) Acquiror's 1996 Annual Report (including Annual Report
on Form 10-K for the year ended January 31, 1996);
(d) Acquiror's Proxy Statement dated for the stockholders
meeting dated June 2, 1997; and
(e) Acquiror's Quarterly Report for the quarter ended
November 1, 1997 (including Report on Form 10-Q).
Section 1.5 No Inconsistent Agreements. Each Stockholder hereby
covenants and agrees that, except as contemplated by this Voting
Agreement and the Merger Agreement, the Stockholder (a) has not entered,
and shall not enter at any time while this Voting Agreement remains in
effect into any voting agreement and (b) has not granted, and shall not
grant at any time while this Voting Agreement remains in effect, a proxy
or power of attorney, in either case which is inconsistent with this
Agreement.
ARTICLE II
Restrictions on Transfer
Section 2.1 Transfer of Title.
(a) Each Stockholder hereby covenants and agrees that such
Stockholder will not, prior to the termination of this Voting Agreement,
either directly or indirectly, offer or otherwise agree to sell, assign,
pledge, hypothecate, transfer, exchange, or dispose of any Shares or
Options or any other securities or rights convertible into or
exchangeable for shares of Company Common Stock, owned either directly or
indirectly by such Stockholder or with respect to which such Stockholder
has the power of disposition, whether now or hereafter acquired, without
the prior written consent of Acquiror (provided nothing contained herein
will be deemed to restrict the exercise of Options).
(b) Each Stockholder hereby agrees and consents to the entry
of stop transfer instructions with the Company against the transfer of
any Shares consistent with the terms of Section 2.1(a) hereof.
ARTICLE III
Representations and Warranties
of the Stockholders
Each Stockholder hereby severally represents and warrants to
Acquiror as follows:
Section 3.1 Authority Relative to This Agreement. Such Stockholder
is competent to execute and deliver this Voting Agreement, to perform it
obligations hereunder and to consummate the transactions contemplated
hereby. This Voting Agreement has been duly and validly executed and
delivered by such Stockholder and, assuming the due authorization,
execution and delivery by Acquiror, constitutes a legal, valid and
binding obligation of such Stockholder, enforceable against such
Stockholder in accordance with its terms except that (i) the
enforceability thereof may be subject to applicable bankruptcy,
insolvency or other similar laws, now or hereinafter in effect affecting
creditors' rights generally and (ii) the availability of the remedy of
specific performance or injunctive or other forms of equitable relief may
be subject to equitable defenses and would be subject to the discretion
of the court before which any proceeding therefor may be brought.
Section 3.2 No Conflict. The execution and delivery of this Voting
Agreement by such Stockholder does not, and the performance of this
Voting Agreement by such Stockholder shall not result in any breach of or
constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance, on any of the Shares or Options
pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to
which such Stockholder is a party or by which such Stockholder or the
Shares or Options are bound or affected.
Section 3.3 Title to the Shares. The Shares and Options held by
such Stockholder are owned free and clear of all security interests,
liens, claims, pledges, options, rights of first refusal, agreements,
limitations on such Stockholder's voting rights, charges and other
encumbrances of any nature whatsoever and such Stockholder has not
appointed or granted any proxy, which appointment or grant is still
effective, with respect to the Shares.
ARTICLE IV
Miscellaneous
Section 4.1 Termination. This Agreement shall terminate upon the
earliest to occur of (a) the termination of the Merger Agreement in
accordance with its terms or (b) the Effective Time (as defined in the
Merger Agreement). Upon such termination, no party shall have any further
obligations or liabilities hereunder, provided that no such termination
shall relieve any party from liability for any breach of this Agreement
prior to such termination.
Section 4.2 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of
this Voting Agreement were not performance in accordance with its
specified terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Voting Agreement and to specific performance of the
terms and provisions hereof in addition to any other remedy to which they
are entitled at law or in equity.
Section 4.3 Successors and Affiliates. This Voting Agreement shall
inure to the benefit of and shall be binding upon the parties hereto and
their respective heirs, legal representatives and assigns. If any
Stockholder shall at any time hereafter acquire ownership of, or voting
power with respect to, any additional Shares in any manner, whether by
the exercise of any Options or any securities or rights convertible into
or exchangeable for shares of Company Common Stock, operation of law or
otherwise, such Shares shall be held subject to all of the terms and
provisions of this Voting Agreement. Without limiting the foregoing, each
Stockholder specifically agrees that the obligations of such Stockholder
hereunder shall not be terminated by operation of law, whether by death
or incapacity of the Stockholder or otherwise.
Section 4.4 Entire Agreement. This Voting Agreement constitutes the
entire agreement among Acquiror and the Stockholders with respect to the
subject matter hereof and supersedes all prior agreements and
understandings, both written and oral, among Acquiror and the
Stockholders with respect to the subject matter hereof.
Section 4.5 Captions and Counterparts. The captions in this Voting
Agreement are for convenience only and shall not be considered a part of
or affect the construction of interpretation of any provision of this
Voting Agreement. This Voting Agreement may be executed in several
counterparts, each of which shall constitute one in the same instrument.
Section 4.6 Amendment. This Voting Agreement may not be amended
except by an instrument in writing signed by the parties hereto.
Section 4.7 Waivers. Except as provided in this Voting Agreement,
no action taken pursuant to this Voting Agreement, including without
limitation any investigation by or on behalf of any party, shall be
deemed to constitute a waiver by the party taking such action of
compliance with any representations, warranties, covenants or agreements
contained in this Voting Agreement. The wavier by any party hereto of a
breach of any provision hereunder shall not operate or be construed as a
wavier of any prior or subsequent breach of the same or any other
provision hereunder.
Section 4.8 Severability. If any term of other provision of this
Voting Agreement is invalid, illegal or incapable of being enforced by
any rule of law, or public policy, all other conditions and provisions of
this Voting Agreement shall nevertheless remain in full force and effect.
Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Voting Agreement so as to effect
the original intent of the parties as closely as possible to the fullest
extent permitted by applicable law in a mutually acceptable manner in
order that the terms of this Voting Agreement remain as originally
contemplated to the fullest extent possible.
Section 4.9 Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been
duly given or made and shall be effective upon receipt, if delivered
personally, mailed by registered or certified mail (postage prepaid,
return receipt requested) to the parties at the following addresses (or
at such other address for a party as shall be specified by like changes
of address) or sent by electronic transmission (provided that a
confirmation copy is sent by another approved means) to the telecopier
number specified below:
If to a Stockholder:
c/o Benchmarq Microelctronics, Inc.
17919 Waterview Parkway
Dallas, Texas 75252
Fax: (972) 437-9198
If to Acquiror:
Unitrode Corporation
7 Continental Boulevard
Merrimack, New Hampshire 03054
Attention: Allan R. Campbell
Fax: (603) 429-8771
with a copy to:
Margaret A. Brown, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street
31st Floor
Boston, Massachusetts 02108
Telephone: (617) 573-4800
Fax: (617) 573-4822
Section 4.10 Governing Law. This Voting Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware
regardless of the laws that might otherwise govern under applicable
principles of conflicts of law.
Section 4.11 Definitions. Capitalized terms used and not defined
herein shall have the meaning set forth in the Merger Agreement.
Section 4.12 Obligations of Stockholders. The obligations of the
Stockholders hereunder shall be "several" and not (i) "joint" or (ii)
"joint and several." Without limiting the generality of the foregoing,
under no circumstances will any Stockholder have any liability or
obligation with respect to any misrepresentation or breach of covenant of
any other Stockholder.
Section 4.13 Officers and Directors. No person who is or becomes
(during the term hereof) a director or officer of the Company makes any
agreement or understanding herein in his or her capacity as such director
or officer, and nothing herein will limit or affect any actions taken by
any Stockholder in his or her capacity as an officer or director of the
Company in exercising its rights under the Merger Agreement.
IN WITNESS WHEREOF, each of the parties hereto have caused this
Voting Agreement to be duly executed as of the date first written above.
By: /s/ Alan R. Schuele
_________________________________
Name: Alan R. Schuele
By: /s/ Derrell C. Coker
_________________________________
Name: Derrell C. Coker
By: /s/ L. J. Sevin
_________________________________
Name: L. J. Sevin
By: /s/ Harvey B. Cash
_________________________________
Name: Harvey B. Cash
By: /s/ Dietrich Erdmann
_________________________________
Name: Dietrich Erdmann
By: /s/ Jack Kilby
_________________________________
Name: Jack Kilby
By: /s/ Charles H. Phipps
_________________________________
Name: Charles H. Phipps
UNITRODE CORPORATION
By: /s/ Robert J. Richardson
_________________________________
Name: Robert J. Richardson
Title: President and Chief
Executive Officer
VOTING AGREEMENT
SCHEDULE A
Number of Shares of Company Common
Stockholder: Stock Owned by Stockholder:
- ------------ ---------------------------
L.J. Sevin 695,120
Jack Kilby 6,250
Derrell C. Coker 72,755
Dietrich Erdmann 602,212
Harvey B. Cash 43,850
Charles H. Phipps 40,422
Alan R. Schuele 0
