AGREEMENT AND PLAN OF MERGER
AMONG
GENERAL DYNAMICS CORPORATION,
MARS ACQUISITION CORPORATION
AND
PRIMEX TECHNOLOGIES, INC.
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TABLE OF CONTENTS
Description Page
ARTICLE 1 THE MERGER...................................................1
Section 1.1 The Merger..............................................1
Section 1.2 The Closing.............................................1
Section 1.3 Effective Time..........................................2
Section 1.4 Effects of the Merger...................................2
Section 1.5 Articles of Incorporation and Bylaws....................2
Section 1.6 Directors...............................................2
Section 1.7 Officers................................................2
Section 1.8 Conversion of Company Common Stock......................2
Section 1.9 Stock Options; Equity-Based Awards......................3
Section 1.10 Conversion of Acquisition Corporation Common Stock......4
Section 1.11 Dissenters' Rights......................................4
ARTICLE 2 STOCKHOLDER APPROVAL.........................................5
Section 2.1 Company Actions.........................................5
Section 2.2 SEC Comments............................................5
ARTICLE 3 PAYMENT......................................................6
Section 3.1 Surrender of Certificates...............................6
Section 3.2 Paying Agent; Certificate Surrender Procedures..........6
Section 3.3 Transfer Books..........................................7
Section 3.4 Termination of Payment Fund.............................7
Section 3.5 Lost Certificates.......................................7
Section 3.6 No Rights as Stockholder................................7
Section 3.7 Withholding.............................................8
Section 3.8 Escheat.................................................8
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY................8
Section 4.1 Organization............................................8
Section 4.2 Authorization of Transaction; Enforceability............9
Section 4.3 Noncontravention; Consents..............................9
Section 4.4 Capitalization.........................................10
Section 4.5 Company Reports; Proxy Statement.......................11
Section 4.6 No Undisclosed Liabilities.............................12
Section 4.7 Absence of Material Adverse Change.....................12
Section 4.8 Litigation and Legal Compliance........................12
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Section 4.9 Contract Matters.......................................13
Section 4.10 Tax Matters............................................15
Section 4.11 Employee Benefit Matters...............................16
Section 4.12 Environmental Matters..................................21
Section 4.13 Title ..............................................22
Section 4.14 Intellectual Property Matters..........................23
Section 4.15 Labor Matters..........................................23
Section 4.16 Rights Agreement.......................................24
Section 4.17 State Takeover Laws....................................24
Section 4.18 Brokers' Fees..........................................24
Section 4.19 Representations and Warranties.........................24
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE PARENT CORPORATION....25
Section 5.1 Organization...........................................25
Section 5.2 Authorization of Transaction; Enforceability...........25
Section 5.3 Noncontravention; Consents.............................25
Section 5.4 Adequate Cash Resources................................26
Section 5.5 No Capital Ownership in the Company....................26
ARTICLE 6 COVENANTS...................................................26
Section 6.1 General................................................26
Section 6.2 Notices and Consents...................................26
Section 6.3 Interim Conduct of the Company.........................27
Section 6.4 Preservation of Organization...........................29
Section 6.5 Full Access............................................29
Section 6.6 Notice of Developments.................................29
Section 6.7 Nonsolicitation of Acquisition Proposals...............30
Section 6.8 Indemnification........................................31
Section 6.9 Public Announcements...................................33
Section 6.10 Preservation of Programs and Agreements...............33
Section 6.11 Actions Regarding Antitakeover Statutes................33
Section 6.12 Defense of Orders and Injunctions......................33
Section 6.13 Employee Benefit Matters...............................34
Section 6.14 Standstill Provisions..................................35
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ARTICLE 7 CONDITIONS TO THE CONSUMMATION OF THE MERGER..................36
Section 7.1 Conditions to the Obligations of Each Party............36
Section 7.2 Conditions to the Obligation of the Company............36
Section 7.3 Conditions to the Obligation of the Parent Corporation
and the Acquisition Corporation........................37
Section 7.4 Frustration of Closing Conditions......................37
ARTICLE 8 TERMINATION, AMENDMENT AND WAIVER...........................37
Section 8.1 Termination............................................37
Section 8.2 Effect of Termination..................................38
Section 8.3 Termination Fee........................................39
ARTICLE 9 MISCELLANEOUS...............................................40
Section 9.1 Nonsurvival of Representations.........................40
Section 9.2 Remedies...............................................40
Section 9.3 Successors and Assigns.................................40
Section 9.4 Amendment..............................................40
Section 9.5 Extension and Waiver...................................41
Section 9.6 Severability...........................................41
Section 9.7 Counterparts...........................................41
Section 9.8 Descriptive Headings...................................41
Section 9.9 Notices................................................41
Section 9.10 No Third Party Beneficiaries...........................42
Section 9.11 Entire Agreement.......................................42
Section 9.12 Construction...........................................42
Section 9.13 Submission to Jurisdiction.............................43
Section 9.14 Governing Law..........................................43
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TABLE OF DEFINED TERMS
Acquisition Corporation Preamble
Acquisition Proposal Section 6.7(b)
Antitrust Laws Section 4.3
Certificate Section 3.1
Closing Section 1.2
Closing Date Section 1.2
Code Section 4.10(f)
Coli Policy Section 4.11(j)
Company Preamble
Company Common Stock Section 1.8(a)
Company Disclosure Letter Article 4
Company Material Adverse Effect Section 4.1
Company Plans Section 4.11(a)
Company SEC Documents Section 4.5(a)
Company Stock-Based Award Section 1.9(a)(ii)
Company Stockholder Approval Section 2.1(a)
Company Stockholders Meeting Section 2.1(a)
Confidentiality Agreement Section 6.5
Delaware Act Section 1.1
Effective Time Section 1.3
Employee Pension Benefit Plan Section 4.11(a)
Employee Welfare Benefit Plan Section 4.11(a)
Employees Section 6.13(a)
Environmental Law Section 4.12(b)
ERISA Section 4.11(a)
Government Contract Section 4.9(b)
Government Subcontract Section 4.9(b)
Hazardous Materials Section 4.12(c)
HSR Act Section 4.3
Indemnified Parties Section 6.8(a)
Intellectual Property Section 4.14(b)
Lien Section 4.3
Merger Section 1.1
Merger Consideration Section 1.8(a)
Option Consideration Section 1.9(a)(iii)
Parent Corporation Preamble
Parent Corporation Disclosure Letter Article 5
Parent Corporation Material Adverse Effect Section 6.2
Paying Agent Section 3.1
Payment Fund Section 3.2(a)
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Permitted Liens Section 4.13
Proxy Statement Section 2.1(b)
Rights Agreement Section 4.16
SAR Section 1.9(a)
SEC Section 2.1(b)
Securities Act Section 4.5(a)
Securities Exchange Act Section 1.9(d)
Stock Option Section 1.9(a)
Stock Plans Section 1.9(a)
Subsidiary Section 1.8(c)
Superior Proposal Section 6.7(b)
Surviving Corporation Section 1.1
Taxes Section 4.10(a)
Tax Returns Section 4.10(a)
Termination Fee Section 8.3(a)
Third Party Acquisition Section 8.3(b)
Virginia Act Section 1.1
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of November 9, 2000 among General
Dynamics Corporation, a Delaware corporation (the "Parent Corporation"), Mars
Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of
the Parent Corporation (the "Acquisition Corporation"), and Primex Technologies,
Inc., a Virginia corporation (the "Company").
The Boards of Directors of the Parent Corporation, the Acquisition
Corporation, and the Company have each determined that a business combination
among the Parent Corporation, the Acquisition Corporation and the Company is
desirable and in the best interests of the Parent Corporation, the Acquisition
Corporation and the Company and their respective stockholders. The Boards of
Directors of the Parent Corporation, the Acquisition Corporation and the Company
accordingly have each duly adopted resolutions approving this Agreement and the
transactions contemplated hereby.
NOW, THEREFORE, in consideration of the mutual agreements contained herein
and for other good and valuable consideration, the value, receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, at the Effective Time (as defined in Section 1.3) the
Acquisition Corporation will be merged (the "Merger") with and into the Company
in accordance with the provisions of the Delaware General Corporation Law (the
"Delaware Act") and the Virginia Stock Corporation Act (the "Virginia Act").
Following the Merger, the Company will continue as the surviving corporation
(the "Surviving Corporation") and the separate corporate existence of the
Acquisition Corporation will cease.
Section 1.2 The Closing. Upon the terms and subject to the conditions set
forth in this Agreement, the consummation of the Merger and the other
transactions contemplated by this Agreement (the "Closing") will take place at
the offices of Jenner & Block, 601 13th Street, N.W., Washington, D.C. 20005, at
10:00 a.m., local time, no later than the third business day following the
satisfaction or waiver, to the extent permitted by applicable laws, of the
conditions set forth in Article 7 (other than those conditions that by their
nature are to be satisfied at the Closing, but subject to the satisfaction or,
where permitted, waiver of those conditions), or at such other date, time or
place as the Parent Corporation and the Company may agree. The date upon which
the Closing occurs is referred to in this Agreement as the "Closing Date."
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Section 1.3 Effective Time. The Merger will be consummated by the filing of
articles of merger with the State Corporation Commission of Virginia in
accordance with Section 720 of the Virginia Act and a certificate of merger in
accordance with Section 252 of the Delaware Act. The time the Merger becomes
effective in accordance with Section 720 of the Virginia Act is referred to in
this Agreement as the "Effective Time."
Section 1.4 Effects of the Merger. The Merger will have the effects set
forth in Section 721 of the Virginia Act and Section 259 of the Delaware Act.
Without limiting the generality of the foregoing, as of the Effective Time, all
properties, rights, privileges, powers and franchises of the Company and the
Acquisition Corporation will vest in the Surviving Corporation and all debts,
liabilities and duties of the Company and the Acquisition Corporation will
become debts, liabilities and duties of the Surviving Corporation.
Section 1.5 Articles of Incorporation and Bylaws. At the Effective Time,
the articles of incorporation and bylaws of the Company in the respective forms
delivered by the Company to the Parent Corporation prior to the date of this
Agreement will be the articles of incorporation and bylaws of the Surviving
Corporation, until amended by the Surviving Corporation pursuant to applicable
law.
Section 1.6 Directors. The directors of the Acquisition Corporation at the
Effective Time will be the initial directors of the Surviving Corporation and
will hold office from the Effective Time until their respective successors are
duly elected or appointed and qualified in the manner provided in the articles
of incorporation and bylaws of the Surviving Corporation or as otherwise
provided by law.
Section 1.7 Officers. The officers of the Acquisition Corporation at the
Effective Time will be the initial officers of the Surviving Corporation and
will hold office from the Effective Time until their respective successors are
duly elected or appointed and qualified in the manner provided in the articles
of incorporation and bylaws of the Surviving Corporation or as otherwise
provided by law.
Section 1.8 Conversion of Company Common Stock.
(a) Subject to the provisions of Section 1.8(b), each share of
the Company's Common Stock, par value $1.00 per share (the "Company
Common Stock"), issued and outstanding immediately prior to the
Effective Time (other than shares of Company Common Stock held in the
treasury of the Company, held by any Subsidiary of the Company or held
by the Parent Corporation or any Subsidiary of the Parent Corporation)
will, by virtue of the Merger and without any action on the part of
the holder thereof, be
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canceled and converted into the right to receive, upon the surrender
of the certificate formerly representing such share, $32.10 in cash
(the "Merger Consideration"). In the event that, subsequent to the
date of this Agreement but prior to the Effective Time, (i) the
outstanding shares of Company Common Stock are changed into a
different number of shares or a different class as a result of a stock
split, reverse stock split, stock dividend, subdivision,
reclassification, combination, exchange, recapitalization or similar
transaction, or (ii) there is any dividend, other than the regular
quarterly dividend of $0.075 per share of Company Common Stock, the
Merger Consideration into which each share of Company Common Stock
will be converted as a result of the Merger will be adjusted
appropriately.
(b) Each share of Company Common Stock held in the treasury of
the Company, held by any Subsidiary of the Company or held by the
Parent Corporation or any Subsidiary of the Parent Corporation
immediately prior to the Effective Time will, by virtue of the Merger
and without any action on the part of the holder thereof, be canceled
and retired and will cease to exist. For purposes of this Section
1.8(b), shares of Company Common Stock owned beneficially or held of
record by any plan, program or arrangement sponsored or maintained for
the benefit of any current or former employee of the Company, the
Parent Corporation or any of their respective Subsidiaries will not be
deemed to be held by the Company, the Parent Corporation or any such
Subsidiary, regardless of whether the Company, the Parent Corporation
or any such Subsidiary has the power, directly or indirectly, to vote
or control the disposition of such shares.
(c) The term "Subsidiary" as used in this Agreement means any
corporation, partnership, limited liability company or other business
entity 50 percent or more of the outstanding voting equity securities
of which are owned, directly or indirectly, by the Company or the
Parent Corporation, as applicable.
Section 1.9 Stock Options; Equity-Based Awards
(a) (i) The Company will take all necessary actions to cause each
option to purchase shares of Company Common Stock (a "Stock Option")
and each stock appreciation right linked to the price of Company
Common Stock (a "SAR") granted under any stock option plan, program,
agreement or arrangement of the Company or any of its Subsidiaries
(collectively, the "Stock Plans") which is outstanding and unexercised
immediately prior to the Effective Time, whether vested or unvested,
to be cancelled as of the Effective Time and to be converted at the
Effective Time into the right to receive in cash from the Company an
amount equal to the product of (a) the excess, if any, of the Merger
Consideration over the exercise price per share of Company Common
Stock of such Stock Option or SAR and (b) the number of shares of
Company Common Stock subject to such Stock Option or SAR; provided,
however, that no cash payment shall be
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made with respect to any SAR that is related to a Stock Option in
respect of which such a cash payment is made.
(ii) The Company will take all necessary actions to cause each
right of any kind, whether vested or unvested, contingent or accrued,
to acquire or receive shares of Company Common Stock or to receive
benefits measured by the value of a number of shares of Company Common
Stock, that may be held, awarded, outstanding, credited, payable or
reserved for issuance under the Stock Plans (including, without
limitation, restricted stock, restricted stock units, performance
awards and deferred stock units), except for Stock Options and SARs
converted in accordance with Section 1.9(a)(i) above (each, a "Company
Stock-Based Award") outstanding immediately prior to the Effective
Time to fully vest and become immediately distributable and payable,
and each Company Stock-Based Award shall be cancelled as of the
Effective Time and converted as of the Effective Time into the right
to receive in cash from the Company an amount equal to the product of
(x) the Merger Consideration (less any applicable exercise price) and
(y) the number of shares of Company Common Stock subject to such
Company Stock-Based Award.
(iii) Any cash payments required to be made pursuant to this
Section 1.9(a) (the "Option Consideration") will be made (subject to
applicable withholding and payroll taxes) promptly following the
Effective Time.
(b) No additional Stock Options, SARs, or other equity-based awards or
other rights to acquire Company Common Stock will be granted pursuant to the
Stock Plans or otherwise after the date of this Agreement.
(c) The Board of Directors, or applicable committee thereof, of the Company
will grant all approvals and take all other actions required pursuant to Rules
16b-3 under the Securities Exchange Act of 1934, as amended (together with the
rules and regulations of the SEC thereunder, the "Securities Exchange Act"), to
cause the disposition in the Merger of Company Common Stock, Stock Options and
SARs to be exempt from the provisions of Section 16(b) of the Securities
Exchange Act.
Section 1.10 Conversion of Acquisition Corporation Common Stock. Each share
of the Common Stock, par value $1.00 per share, of the Acquisition Corporation
issued and outstanding immediately prior to the Effective Time will, by virtue
of the Merger and without any action on the part of the holder thereof, be
converted into one share of the Common Stock, par value $1.00 per share, of the
Surviving Corporation.
Section 1.11 Dissenters' Rights. Subject to the consummation of the Merger
on the terms and conditions contained in this Agreement, the
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parties hereto confirm that the holders of shares of Company Common Stock will
not have dissenters' rights under Article 15 of the Virginia Act.
ARTICLE 2
STOCKHOLDER APPROVAL
Section 2.1 Company Actions. The Company, acting through its Board of
Directors, in accordance with applicable law, including the Virginia Act, its
Articles of Incorporation and Bylaws and the rules applicable to companies
listed on The Nasdaq Stock Market, will:
(a) duly call, give notice of, convene and hold a special meeting
of its stockholders (the "Company Stockholders Meeting"), to be held
as soon as practicable after the date of this Agreement, for the
purpose of submitting this Agreement for approval by the holders of
more than two-thirds of the outstanding shares of Company Common Stock
(the "Company Stockholder Approval");
(b) prepare and file with the Securities and Exchange Commission
(the "SEC") as promptly as practicable after the date of this
Agreement a Proxy Statement and related materials (the "Proxy
Statement") with respect to the Company Stockholders Meeting
satisfying the requirements of the Securities Exchange Act, respond
promptly to any comments raised by the SEC with respect to the
preliminary version of the Proxy Statement, and cause the definitive
version of the Proxy Statement to be mailed to its stockholders as
soon as it is legally permitted to do so; and
(c) include in the Proxy Statement (i) subject to Section 6.7(d),
the recommendation of the Board of Directors of the Company that the
stockholders of the Company vote in favor of the approval of this
Agreement and the transactions contemplated hereby and (ii) the
written opinion dated as of the date of this Agreement of Goldman,
Sachs & Co., financial advisor to the Board of Directors of the
Company, to the effect that as of the date of this Agreement the
Merger Consideration is fair to the stockholders of the Company, other
than the Parent Corporation and its affiliates, from a financial point
of view.
Section 2.2 SEC Comments. The Company will promptly advise the Parent
Corporation of receipt by the Company of, and will promptly furnish the Parent
Corporation with copies of, all comments received from the SEC with respect to
the Proxy Statement and will consult with the Parent Corporation in responding
to such comments.
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ARTICLE 3
PAYMENT
Section 3.1 Surrender of Certificates. From and after the Effective Time,
each holder of a certificate that immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (a "Certificate") will be
entitled to receive in exchange therefor, upon surrender thereof to a paying
agent (the "Paying Agent") to be designated by the Parent Corporation prior to
the Effective Time with approval of the Company, which approval shall not be
unreasonably withheld, the Merger Consideration into which the shares of Company
Common Stock evidenced by such Certificate were converted pursuant to the
Merger. No interest will be payable on the Merger Consideration to be paid to
any holder of a Certificate irrespective of the time at which such Certificate
is surrendered for exchange.
Section 3.2 Paying Agent; Certificate Surrender Procedures.
(a) As soon as reasonably practicable following the Effective
Time, the Parent Corporation will deposit, or cause to be deposited,
with the Paying Agent, an amount in cash sufficient to provide all
funds necessary for the Paying Agent to make payment of the Merger
Consideration pursuant to Section 1.8 (the "Payment Fund"). Pending
payment of such funds to the holders of certificates for shares of
Company Common Stock, such funds will be held and may be invested by
the Paying Agent as Parent Corporation directs (so long as such
directions do not impair the rights of holders of Company Common
Stock) in the direct obligations of the United States, obligations for
which the full faith and credit of the United States is pledged to
provide for the payment of principal and interest or commercial paper
rated of the highest quality by Moody's Investors Services, Inc. or
Standard & Poor's Corporation. Any net profit resulting from, or
interest or income produced by, such investments will be payable to
the Surviving Corporation or Parent Corporation, as Parent Corporation
directs. Parent Corporation will promptly replace any monies lost
through any investment made pursuant to this Section 3.2.
(b) As soon as reasonably practicable after the Effective Time,
the Parent Corporation will instruct the Paying Agent to mail to each
record holder of a Certificate (i) a letter of transmittal (which will
specify that delivery will be effected, and risk of loss and title to
such Certificates will pass, only upon delivery of the Certificate to
the Paying Agent and will be in such form and have such other
provisions as the Parent Corporation will reasonably specify) and (ii)
instructions for use in effecting the surrender of Certificates for
the Merger Consideration. Commencing immediately after the Effective
Time, upon the surrender to the Paying Agent of such Certificate or
Certificates, together with a duly executed and completed letter of
transmittal and all other documents and
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other materials required by the Paying Agent to be delivered in
connection therewith, the holder will be entitled to receive the
Merger Consideration into which the Certificate or Certificates so
surrendered have been converted in accordance with the provisions of
Section 1.8.
Section 3.3 Transfer Books. The stock transfer books of the Company will be
closed at the Effective Time and no transfer of any shares of Company Common
Stock will thereafter be recorded on any of the stock transfer books. In the
event of a transfer of ownership of any Company Common Stock prior to the
Effective Time that is not registered in the stock transfer records of the
Company at the Effective Time, the Merger Consideration into which such Company
Common Stock has been converted in the Merger will be paid to the transferee in
accordance with the provisions of Section 3.2(b) only if the Certificate is
surrendered as provided in Section 3.2 and accompanied by all documents required
to evidence and effect such transfer and by evidence of payment of any
applicable stock transfer taxes.
Section 3.4 Termination of Payment Fund. Any portion of the Payment Fund
which remains undistributed one hundred eighty (180) days after the Effective
Time will be delivered to the Parent Corporation upon demand, and each holder of
Company Common Stock who has not theretofore surrendered Certificates in
accordance with the provisions of this Article 3 will thereafter look only to
the Parent Corporation for satisfaction of such holder's claims for the Merger
Consideration.
Section 3.5 Lost Certificates. If any Certificate has 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 Parent
Corporation, the posting by such person of a bond in such reasonable amount as
the Parent Corporation may direct as indemnity against any claim that may be
made against it with respect to such Certificate, the Paying Agent will deliver
in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration pursuant to Section 1.8.
Section 3.6 No Rights as Stockholder. From and after the Effective Time,
the holders of Certificates will cease to have any rights as a stockholder of
the Surviving Corporation except as otherwise provided in this Agreement or by
applicable law, and the Parent Corporation will be entitled to treat each
Certificate that has not yet been surrendered for exchange solely as evidence of
the right to receive the Merger Consideration into which the shares of Company
Common Stock evidenced by such Certificate have been converted pursuant to the
Merger; provided, however, that each holder of a Certificate that has become
entitled to any declared and unpaid dividend will continue to be entitled to
such dividend following the Effective Time, and the Surviving Corporation will
pay such dividend to such holder in the amount and on the date specified
therefor by the Board of Directors of the Company at the time of declaration
thereof.
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Section 3.7 Withholding. The Parent Corporation will be entitled to deduct
and withhold from the Merger Consideration otherwise payable to any former
holder of Company Common Stock all amounts relating to federal and state income
and payroll taxes required by law to be deducted or withheld therefrom.
Section 3.8 Escheat. Neither the Parent Corporation, the Acquisition
Corporation nor the Company will be liable to any former holder of Company
Common Stock for any portion of the Merger Consideration delivered to any public
official pursuant to any applicable abandoned property, escheat or similar law.
In the event any Certificate has not been surrendered for the Merger
Consideration prior to the sixth anniversary of the Closing Date, or prior to
such earlier date as of which such Certificate or the Merger Consideration
payable upon the surrender thereof would otherwise escheat to or become the
property of any governmental entity, then the Merger Consideration otherwise
payable upon the surrender of such Certificate will, to the extent permitted by
applicable law, become the property of the Surviving Corporation, free and clear
of all rights, interests and adverse claims of any person.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Parent Corporation and the
Acquisition Corporation that except as disclosed in the reports, schedules,
forms, statements and other documents filed by the Company with the SEC since
December 31, 1999 and publicly available prior to the date of this Agreement or
as disclosed in the letter dated as of the date of this Agreement from the
Company to the Parent Corporation (the "Company Disclosure Letter"):
Section 4.1 Organization. The Company and each of its Subsidiaries is (a) a
corporation duly organized and validly existing under the laws of the
jurisdiction of its incorporation, (b) has all requisite power and authority to
own, lease and operate its properties and to carry on its business as presently
being conducted, and (c) is in good standing under the laws of the jurisdiction
of its incorporation and is duly qualified to conduct business as a foreign
corporation in each other jurisdiction where such qualification is required,
except, in the case of clauses (b) and (c) above, where such failure,
individually or in the aggregate, is not reasonably likely to have a material
adverse effect on the business, financial condition, operations or results of
operations of the Company and its Subsidiaries taken as a whole (other than
changes or effects resulting from occurrences relating to the economy in
general, the securities markets in general or the Company's industry in general
and not specifically relating to the Company) or the ability of the Company to
consummate the Merger and to perform its obligations under this Agreement (a
"Company Material Adverse Effect"). The Company has delivered to the Parent
Corporation correct and complete copies of its articles of incorporation and
bylaws, as presently in effect, and, upon request, will make available to the
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Parent Corporation after the date of this Agreement correct and complete copies
of the articles of incorporation and bylaws, as presently in effect, of each of
its Subsidiaries.
Section 4.2 Authorization of Transaction; Enforceability. Subject to
obtaining the Company Stockholder Approval, the Company has full corporate power
and authority and has taken all requisite corporate action to enable it to
execute and deliver this Agreement, to consummate the Merger and the other
transactions contemplated hereby and to perform its obligations hereunder. The
Board of Directors of the Company, at a meeting thereof duly called and held,
has duly adopted resolutions, by more than the required vote, approving this
Agreement, the Merger and the other transactions contemplated hereby,
determining that the terms and conditions of this Agreement, the Merger and the
other transactions contemplated hereby are in the best interests of the Company
and its stockholders and recommending that the Company's stockholders approve
this Agreement. The foregoing resolutions of the Board of Directors of the
Company have not been modified, supplemented or rescinded and remain in full
force and effect as of the date of this Agreement. In connection with its
adoption of the foregoing resolutions, the Board of Directors of the Company
received the written opinion of Goldman, Sachs & Co., financial advisor to the
Board of Directors of the Company, dated as of the date of this Agreement, to
the effect that, as of such date, the Merger Consideration is fair to the
stockholders of the Company, other than the Parent Corporation and its
affiliates, from a financial point of view. The foregoing opinion has not been
modified, supplemented or rescinded prior to the date of this Agreement. The
Company will deliver to the Parent Corporation promptly after the date of this
Agreement correct and complete copies of the foregoing resolutions and opinion.
Assuming due execution and authorization by the Parent Corporation and the
Acquisition Corporation, this Agreement constitutes the valid and legally
binding obligation of the Company, enforceable against the Company in accordance
with its terms and conditions.
Section 4.3 Noncontravention; Consents. Except for (a) filings and
approvals necessary to comply with the applicable requirements of the Securities
Exchange Act and the "blue sky" laws and regulations of various states, (b) the
filing of a Notification and Report Form and related material with the Federal
Trade Commission and the Antitrust Division of the United States Department of
Justice under the Hart-Scott-Rodino Act of 1976, as amended (the "HSR Act"), and
any other filing required pursuant to any other applicable competition, merger
control, antitrust or similar law or regulation (together with the HSR Act, the
"Antitrust Laws"), (c) the filing of articles of merger pursuant to the Virginia
Act, a certificate of merger pursuant to the Delaware Act and any applicable
documents with the relevant authorities of other jurisdictions in which the
Company or any of its Subsidiaries is qualified to do business, and (d) any
filings required under the rules and regulations of The NASDAQ Stock Market,
neither the execution and delivery of this Agreement by the Company, nor the
consummation by the Company of the transactions contemplated hereby, will
constitute a violation of, be in conflict with, constitute or create (with or
without notice or lapse of time or both) a default under, give rise to any right
of termination, cancellation, amendment or acceleration with respect to, or
result in the creation or imposition of
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any lien, encumbrance, security interest or other claim (a "Lien") upon any
property of the Company or any of its Subsidiaries pursuant to (i) the articles
of incorporation or bylaws of the Company or any of its Subsidiaries, (ii) any
constitutional provision, law, rule, regulation, permit, order, writ,
injunction, judgment or decree to which the Company or any of its Subsidiaries
is subject or (iii) any agreement or commitment to which the Company or any of
its Subsidiaries is a party or by which the Company, any of its Subsidiaries or
any of their respective properties is bound or subject, except, in the case of
clauses (ii) and (iii) above, for such matters which, individually or in the
aggregate, are not reasonably likely to have a Company Material Adverse Effect.
Section 4.4 Capitalization.
(a) As of the date of this Agreement, the authorized capital
stock of the Company consists of 60,000,000 shares of Company Common
Stock and 10,000,000 shares of Preferred Stock, par value $1.00 per
share, none of which shares of Preferred Stock have been issued. As of
the close of business on November 3, 2000, 10,401,241 shares of
Company Common Stock were issued and outstanding, 129,480 shares of
Company Common Stock were reserved for restricted stock grants or
awards (including stock grants or awards to non-employee directors),
no shares were held by the Company as treasury shares and 1,641,732
shares were reserved for issuance upon the exercise of outstanding
Stock Options. All of the issued and outstanding shares of capital
stock of the Company have been duly authorized and are validly issued,
fully paid and nonassessable.
(b) Other than Stock Options to acquire an aggregate of not more
than 1,560,952 shares of Company Common Stock and not more than 80,823
shares of Company Common Stock which are subject to restricted stock
granted or awarded (including stock grants or awards to non-employee
directors) by the Company to current and former directors, officers,
employees and advisors of the Company and its Subsidiaries, there are
no outstanding or authorized options, warrants, subscription rights,
conversion rights, exchange rights or other contracts or commitments
that could require the Company or any of its Subsidiaries to issue,
sell or otherwise cause to become outstanding any of its capital
stock. There are no outstanding stock appreciation, phantom stock,
profit participation or similar rights with respect to the Company or
any of its Subsidiaries. The schedule of Stock Options and SARs set
forth in the Company Disclosure Letter sets forth a list of all
outstanding Stock Options and SARs as of the date set forth therein,
the respective exercise prices thereof or amount of such rights and
the holders thereof.
(c) Neither the Company nor any of its Subsidiaries is a party to
any voting trust, proxy or other agreement or understanding with
respect to the voting of any capital stock of the Company or any of
its Subsidiaries.
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11
(d) The Board of Directors of the Company has not declared any
dividend or distribution with respect to the Company Common Stock the
record or payment date for which is on or after the date of this
Agreement (other than any regular quarterly dividend of $0.075 per
share of Company Common Stock).
(e) All of the outstanding shares of the capital stock of each of
the Company's Subsidiaries have been validly issued, are fully paid
and nonassessable and are owned by the Company or one of its
Subsidiaries, free and clear of any Lien. Except for its Subsidiaries
set forth in the Company Disclosure Letter, the Company does not
control directly or indirectly or have any direct or indirect equity
participation in any corporation, partnership, limited liability
company, joint venture or other entity.
Section 4.5 Company Reports; Proxy Statement.
(a) The Company has since December 31, 1996 filed all reports,
forms, statements and other documents (collectively, together with all
financial statements included or incorporated by reference therein,
the "Company SEC Documents") required to be filed by the Company with
the SEC pursuant to the provisions of the Securities Act of 1933, as
amended (the "Securities Act") or the Securities Exchange Act. Each of
the Company SEC Documents, as of its filing date, complied in all
material respects with the applicable requirements of the Securities
Act and the Securities Exchange Act. None of the Company SEC
Documents, as of their respective filing dates, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading. No Subsidiary of the Company is required to
file any reports, forms, statements or other documents pursuant to the
Securities Act or the Securities Exchange Act.
(b) Each of the consolidated financial statements (including
related notes) included in the Company SEC Documents presented fairly
in all material respects the consolidated financial condition, cash
flows and results of operations of the Company and its Subsidiaries
for the respective periods or as of the respective dates set forth
therein. Each of the financial statements (including related notes)
included in the Company SEC Documents has been prepared in accordance
with United States generally accepted accounting principles,
consistently applied during the periods involved, except (i) as noted
therein, (ii) to the extent required by changes in United States
generally accepted accounting principles or (iii) in the case of
unaudited interim financial statements, normal recurring year-end
audit adjustments.
<PAGE>
12
(c) The Company has delivered to the Parent Corporation correct
and complete copies of any proposed or contemplated amendments or
modifications to the Company SEC Documents (including any exhibit
documents included therein) that have not yet been filed by the
Company with the SEC.
(d) The Proxy Statement will comply in all material respects with
the applicable requirements of the Securities Exchange Act and will
not, at the time the definitive Proxy Statement is filed with the SEC
and mailed to the stockholders of the Company, contain any untrue
statement of 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 were made, not
misleading. No representation or warranty is made herein by the
Company with respect to any information, if any, supplied in writing
by the Parent Corporation for inclusion in the Proxy Statement.
Section 4.6 No Undisclosed Liabilities. The Company and its Subsidiaries
have no liabilities or obligations (whether absolute or contingent, liquidated
or unliquidated, or due or to become due) except for (a) liabilities and
obligations referenced (whether by value or otherwise) or reflected in the
Company SEC Documents, (b) liabilities and obligations incurred in the ordinary
course of business, consistent with past practice, since October 1, 2000, and
(c) other liabilities and obligations which, individually or in the aggregate,
are not reasonably likely to have a Company Material Adverse Effect.
Section 4.7 Absence of Material Adverse Change. Since October 1, 2000 there
has not been a Company Material Adverse Effect nor has there occurred any event,
change, effect or development which, individually or in the aggregate, is
reasonably likely to have a Company Material Adverse Effect.
Section 4.8 Litigation and Legal Compliance.
(a) As of the date of this Agreement, the Company Disclosure
Letter sets forth each instance in which the Company or any of its
Subsidiaries is (i) subject to any material unsatisfied judgment
order, decree, stipulation, injunction or charge or (ii) a party to
or, to the Company's knowledge, threatened to be made a party to any
material charge, complaint, action, suit, proceeding, hearing or, to
the Company's knowledge, investigation of or in any court or
quasi-judicial or administrative agency of any federal, state, local
or foreign jurisdiction, except for judgments, orders, decrees,
stipulations, injunctions, charges, complaints, actions, suits,
proceedings, hearings and investigations which, individually or in the
aggregate, are not reasonably likely to have a Company Material
Adverse Effect. As of the date of this Agreement, there are no
judicial or administrative actions, proceedings or, to the Company's
knowledge, investigations pending or, to the Company's knowledge,
threatened that question the validity of this
<PAGE>
13
Agreement or any action taken or to be taken by the Company in connection with
this Agreement,
(b) Except for instances of noncompliance which, individually or
in the aggregate, are not reasonably likely to have a Company Material
Adverse Effect, and except for Environmental Laws, which are the
subject of Section 4.12, the Company and its Subsidiaries are in
compliance with each constitutional provision, law, rule, regulation,
permit, order, writ, injunction, judgment or decree to which the
Company or any of its Subsidiaries is subject.
Section 4.9 Contract Matters.
(a) Neither the Company nor any of its Subsidiaries is in default
or violation of (and no event has occurred which with notice or the
lapse of time or both would constitute a default or violation) of any
term, condition or provision of any note, mortgage, indenture, loan
agreement, other evidence of indebtedness, guarantee, license, lease,
agreement or other contract, instrument or contractual obligation to
which the Company or any of its Subsidiaries is a party or by which
any of their respective assets is bound, except for any such default
or failure which, individually or in the aggregate, is not reasonably
likely to have a Company Material Adverse Effect.
(b) With respect to each contract, agreement, bid or proposal
between the Company or any of its Subsidiaries and any domestic or
foreign government or governmental agency, including any facilities
contract for the use of government-owned facilities (a "Government
Contract"), and each contract, agreement, bid or proposal that is a
subcontract between the Company or any of its Subsidiaries and a third
party relating to a contract between such third party and any domestic
or foreign government or governmental agency (a "Government
Subcontract"), (i) the Company and each of its Subsidiaries have
complied with all terms and conditions of such Government Contract or
Government Subcontract, including all clauses, provisions and
requirements incorporated expressly, by reference or by operation of
law therein, (ii) the Company and each of its Subsidiaries have
complied with all requirements of all laws, rules, regulations or
agreements pertaining to such Government Contract or Government
subcontract, including where applicable the Cost Accounting Standards
disclosure statement of the Company or such Subsidiary, (iii) all
representations and certifications executed, acknowledged or set forth
in or pertaining to such Government Contract or Government Subcontract
were complete and correct as of their effective dates and the Company
and its Subsidiaries have complied with all such representations and
certifications, (iv) neither the United States government nor any
prime contractor, subcontractor or other person or entity has notified
the Company or any of its Subsidiaries, in writing or orally, that the
Company or any of its Subsidiaries has breached or violated any law,
rule, regulation, certification, representation, clause, provision or
requirement pertaining to such Government Contract or Government
Subcontract, (v) neither the Company nor any of its
<PAGE>
14
Subsidiaries has received any notice of termination for convenience,
notice of termination for default, cure notice or show cause notice
pertaining to such Government Contract or Government Subcontract, (vi)
other than in the ordinary course of business, no cost incurred by the
Company or any of its Subsidiaries pertaining to such Government
Contract or Government Subcontract has been questioned or challenged,
is the subject of any audit or investigation or has been disallowed by
any government or governmental agency, and (vii) no payments due to
the Company or any of its Subsidiaries pertaining to such Government
Contract or Government Subcontract has been withheld or set off, nor
has any claim been made to withhold or set off money, and the Company
and its Subsidiaries are entitled to all progress payments received to
date with respect thereto, except for any such failure, noncompliance,
inaccuracy, breach, violation, termination, cost, investigation,
disallowance or payment which, individually or in the aggregate, is
not reasonably likely to have a Company Material Adverse Effect.
(c) To the Company's knowledge, neither the Company nor any
of its Subsidiaries, any of the respective directors, officers,
employees, consultants or agents of the Company or any of its
Subsidiaries is or since January 1, 1997 has been under
administrative, civil or criminal investigation, indictment or
information by any government or governmental agency or any audit
or an investigation by the Company or any of its Subsidiaries
with respect to any alleged act or omission arising under or
relating to any Government Contract or Government Subcontract.
(d) There exist (i) no material outstanding claims against the
Company or any of its Subsidiaries, either by any government or
governmental agency or by any prime contractor, subcontractor, vendor
or other person or entity, arising under or relating to any Government
Contract or Government Subcontract, and (ii) no disputes between the
Company or any of its Subsidiaries and the United States government
under the Contract Disputes Act or any other federal statute or
between the Company or any of its Subsidiaries and any prime
contractor, subcontractor or vendor arising under or relating to any
Government Contract or Government Subcontract, except for any such
claim or dispute which, individually or in the aggregate, is not
reasonably likely to have a Company Material Adverse Effect. Neither
the Company nor any of its Subsidiaries has (i) any interest in any
pending or potential material claim against any government or
governmental agency or (ii) any interest in any pending claim against
any prime contractor, subcontractor or vendor arising under or
relating to any Government Contract or Government Subcontract, which,
if adversely determined against the Company, individually or in the
aggregate, is reasonably likely to have a Company Material Adverse
Effect.
(e) Since January 1, 1997, neither the Company nor any of its
Subsidiaries has been debarred or suspended from participation in the
award of contracts with the United States government or any other
government or governmental agency (excluding for this purpose
ineligibility to bid on certain contracts due to generally applicable
bidding
<PAGE>
15
requirements). To the Company's knowledge, there exists no facts or
circumstances that would warrant the institution of suspension or
debarment proceedings or the finding of nonresponsibility or
ineligibility on the part of the Company, any of its Subsidiaries or
any of their respective directors, officers or employees. No payment
has been made by or on behalf of the Company or any of its
Subsidiaries in connection with any Government Contract or Government
Subcontract in violation of applicable procurement laws, rules and
regulations or in violation of, or requiring disclosure pursuant to,
the Foreign Corrupt Practices Act, as amended, except for any such
violation or failure to disclose which, individually or in the
aggregate, is not reasonably likely to have a Company Material Adverse
Effect.
(f) The Company Disclosure Letter sets forth, as of the date of this
Agreement, a list of each contract by the Company or any of its
Subsidiaries with any customer or supplier that (i) involves an
obligation of $3,000,000 or more (per annum, if applicable) or (ii)
represents one of the top three contracts (in dollar value) for any
particular business unit of the Company, provided the value of any
such contract exceeds $500,000 (per annum, if applicable), and
identifies the parties to the contract, the general nature of the
contract and the term and amount of each contract, whether a prime
contract, subcontract or otherwise.
Section 4.10 Tax Matters.
(a) For each taxable period beginning on or after January 1,
1997, the Company and each of its Subsidiaries have timely filed all
required returns, declarations, reports, claims for refund or
information returns and statements, including any schedule or
attachment thereto (collectively "Tax Returns"), relating to any
federal, state, local or foreign net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits,
license, lease, service, service use, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, property,
windfall profits, customs, duties or other tax, fee, assessment or
charge, including any interest, penalty or addition thereto and
including any liability for the taxes of any other person or entity
under Treasury Regulation Section 1.1502-6 (or any similar state,
local or foreign law, rule or regulation), and any liability in
respect of any tax as a transferee or successor, by law, contract or
otherwise (collectively "Taxes"), and all such Tax Returns are
accurate and complete in all respects, except to the extent any such
failure to file or any such inaccuracy in any filed Tax Return,
individually or in the aggregate, is not reasonably likely to have a
Company Material Adverse Effect. All Taxes owed by the Company or any
of its Subsidiaries (whether or not shown on any Tax Return) have been
paid or adequately reserved for in accordance with generally accepted
accounting principles in the financial statements of the Company,
except (i) for any Taxes related to any period prior to January 1,
1997 for which the Company would be entitled to indemnification from
Olin Corporation and are not required to be reserved in the financial
statements of the Company in accordance with generally accepted
accounting principles or (ii) except
<PAGE>
16
to the extent any such failure to pay or reserve, individually or in
the aggregate, is not reasonably likely to have a Company Material
Adverse Effect.
(b) The most recent financial statements contained in the Company
SEC Documents reflect adequate reserves in accordance with generally
accepted accounting principles for all Taxes payable by the Company
and its Subsidiaries for all Tax periods and portions thereof through
the date of such financial statements, except to the extent that any
failure to so reserve, individually or in the aggregate, is not
reasonably likely to have a Company Material Adverse Effect. No
deficiency with respect to Taxes has been proposed, asserted or
assessed against the Company or any of its Subsidiaries and no
requests for waivers of the time to assess any such Taxes are pending,
except to the extent any such deficiency or request for waiver,
individually or in the aggregate, is not reasonably likely to have a
Company Material Adverse Effect.
(c) For each taxable period beginning on or after January 1,
1997, none of the federal income Tax Returns of the Company or any of
its Subsidiaries consolidated in such Tax Returns have been examined
by and settled with the Internal Revenue Service.
(d) Except for Liens for current Taxes not yet due and payable or
which are being contested in good faith, there is no Lien affecting
any of the assets or properties of the Company or any of its
Subsidiaries that arose in connection with any failure or alleged
failure to pay any Tax, except for Liens which, individually or in the
aggregate, are not reasonably likely to have a Company Material
Adverse Effect.
(e) Neither the Company nor any of its Subsidiaries is a party to
any Tax allocation or Tax sharing agreement with any person other than
the Company or any of its Subsidiaries.
(f) No amount payable by either the Company or any of its
Subsidiaries will be subject to disallowance under Section 162(m) of
the Internal Revenue Code of 1986, as amended (the "Code").
(g) Neither the Company nor any of its Subsidiaries has made any
payments, is obligated to make any payments or is a party to any
agreement that could obligate it to make any payments as a result of
the execution and delivery of this Agreement, the obtaining of the
Company Stockholder Approval or the consummation of the Merger or any
other transaction contemplated by this Agreement (including as a
result of termination of employment on or following the Effective
Time) that would not be fully deductible by reason of Section 280G of
the Code.
Section 4.11 Employee Benefit Matters.
<PAGE>
17
(a) The Company Disclosure Letter lists each plan, program,
agreement or arrangement constituting a material employee welfare
benefit plan (an "Employee Welfare Benefit Plan") as defined in
Section 3(1) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or a material employee pension benefit plan (an
"Employee Pension Benefit Plan") as defined in Section 3(2) of ERISA,
and each other material employee benefit plan, agreement, program or
arrangement or employment practice maintained by the Company or any of
its Subsidiaries with respect to any of its current or former
employees or to which the Company or any of the Company Subsidiaries
contributes or is required to contribute with respect to any of its
current or former employees (collectively, the "Company Plans"). With
respect to each Company Plan:
(i) such Company Plan (and each related trust, insurance
contract or fund) has been administered in a manner consistent in
all respects with its written terms and complies in form and
operation with the applicable requirements of ERISA and the Code
and other applicable laws, except for failures of administration
or compliance which, individually or in the aggregate, are not
reasonably likely to have a Company Material Adverse Effect;
(ii) all required reports and descriptions (including Form
5500 Annual Reports, Summary Annual Reports, PBGC-1's and Summary
Plan Descriptions) have been filed or distributed appropriately
with respect to such Company Plan, except for failures of filing
or distribution which, individually or in the aggregate, are not
reasonably likely to have a Company Material Adverse Effect;
(iii) the requirements of Part 6 of Subtitle B of Title I of
ERISA and Section 4980B of the Code have been met with respect to
each such Company Plan which is an Employee Welfare Benefit Plan,
except for failures which, individually or in the aggregate, are
not reasonably likely to have a Company Material Adverse Effect;
(iv) all material contributions, premiums or other payments
(including all employer contributions and employee salary
reduction contributions) that are required to be made under the
terms of any Company Plan have been timely made or have been
reflected on the financial statements contained in the Company's
most recent Form 10-Q filed with the SEC;
(v) each such Company Plan which is an Employee Pension
Benefit Plan intended to be a "qualified plan" under Section
401(a) of the Code has received a favorable determination letter
from the Internal Revenue Service, and no event has occurred
which could reasonably be expected to cause the loss, revocation
or denial of any such favorable determination letter;
<PAGE>
18
(vi) the Company has made available and will continue to
make available to the Parent Corporation, upon its request,
correct and complete copies of the plan documents and most recent
summary plan descriptions, the most recent determination letter
received from the Internal Revenue Service, the most recent Form
5500 Annual Report, the most recent actuarial report, the most
recent audited financial statements, and all related trust
agreements, insurance contracts and other funding agreements that
implement such Company Plan (but excluding the failure to make
available any such document which is not material). The valuation
summaries provided by the Company to the Parent Corporation
reasonably represent the assets and liabilities attributable to
Company Plans calculated in accordance with the Company's past
practices, but excluding any failure which, individually or in
the aggregate, is not reasonably likely to have a Company
Material Adverse Effect;
(vii) no Company Plan which is an Employee Pension Benefit
Plan has been amended in any manner which would require the
posting of security under Section 401(a)(29) of the Code or
Section 307 of ERISA, except any such action which, individually
or in the aggregate, is not reasonably likely to have a Company
Material Adverse Effect;
(viii) neither the Company nor any of its Subsidiaries has
communicated to any employee (excluding internal memoranda to
management) any plan or commitment, whether or not legally
binding, to create any additional employee benefit plan or to
modify or change any Company Plan affecting any employee or
terminated employee of the Company or any of its Subsidiaries,
except any such action which, individually or in the aggregate,
is not reasonably likely to have a Company Material Adverse
Effect;
(ix) the Company Disclosure Letter includes a workers'
compensation paid loss summary through the date of this Agreement
on an accident year basis; the Company Disclosure Letter
additionally includes a recent listing of all open workers
compensation claims showing claimant name, claim number,
description, paid loss and case reserve, except for any such
claim which, individually or in the aggregate, is not reasonably
likely to have a Company Material Adverse Effect;
(x) the Company has never been nor is a party to or
otherwise bound by any advance agreement or similar arrangement
with any foreign, federal, state or local government or
regulatory body relating to the allowability, allocation or
reimbursement of benefit costs or other matters in connection
with any Company Plan;
(xi) any Company Plan is by its terms able to be amended or
terminated by the Company; and
<PAGE>
19
(xii) there are no liabilities or obligations relating to
any individual's current or former employment with the Company or
its Subsidiaries or related entities arising in connection with
any violation of any applicable law, except for any liabilities
or obligations which, individually or in the aggregate, is not
reasonably likely to have a Company Material Adverse Effect.
(b) With respect to each Employee Welfare Benefit Plan or
Employee Pension Benefit Plan that the Company or any of its
Subsidiaries maintains or ever has maintained, or to which any of them
contributes, ever has contributed or ever has been required to
contribute:
(i) no such Employee Pension Benefit Plan (other than any
Multiemployer Plan) has been completely or partially terminated
(other than any termination which, individually or in the
aggregate, is not reasonably likely to have a Company Material
Adverse Effect), no reportable event (as defined in Section 4043
of ERISA) for which the 30-day reporting requirement has not been
waived, as to which notices would be required to be filed with
the Pension Benefit Guaranty Corporation, has occurred but has
not yet been so reported (but excluding any failure to report
which, individually or in the aggregate, is not reasonably likely
to have a Company Material Adverse Effect), and no proceeding by
the Pension Benefit Guaranty Corporation to terminate such
Employee Pension Benefit Plan (other than any Multiemployer Plan)
has been instituted;
(ii) there have been no non-exempt prohibited transactions
(as defined in Section 406 of ERISA and Section 4975 of the Code)
with respect to such plan, no fiduciary has any liability for
breach of fiduciary duty or any other failure to act or comply in
connection with the administration or investment of the assets of
such plan, and no action, suit, proceeding, hearing or, to the
Company's knowledge, investigation with respect to the
administration or the investment of the assets of such plan
(other than routine claims for benefits) is pending or, to the
Company's knowledge, threatened, but excluding, from each of the
foregoing, events or circumstances which, individually or in the
aggregate, are not reasonably likely to have a Company Material
Adverse Effect; and
(iii) other than routine claims for benefits, none of the
Company or any of its Subsidiaries or related entities has
incurred, and the Company has no reason to expect that the
Company or any of its Subsidiaries or related entities will
incur, any liability under Subtitle C or D Title IV of ERISA or
under the Code with respect to any Company Plan that is an
Employee Pension Benefit Plan.
(c) Neither the Company nor any of its Subsidiaries presently
contributes to, nor, since January 1, 1997, have they been obligated
to contribute to, a Multiemployer Plan.
<PAGE>
20
(d) Other than pursuant to a Company Plan, neither the Company
nor any of its Subsidiaries has any obligation to provide medical,
health, life insurance or other welfare benefits for current or future
retired or terminated employees, their spouses or their dependents
(other than in accordance with Section 4980B of the Code).
(e) No Company Plan contains any provision that would prohibit
the transactions contemplated by this Agreement, would give rise to
any severance, termination or other payments as a result of the
transactions contemplated by this Agreement (alone or together with
the occurrence of any other event), or would cause any payment,
acceleration or increase in benefits provided by any Company Plan as a
result of the transactions contemplated by this Agreement (alone or
together with the occurrence of any other event), but excluding from
this paragraph (e) any payment or any benefit, acceleration or
increase to directors and employees, as to the top tier employees in
the amounts (based on the Company's good faith estimates as of the
date of this Agreement) and to the individuals specifically set forth
in, and as to other employees in the aggregate amount (based on the
Company's good faith estimates as of the date of this Agreement)
specifically set forth in, the Company Disclosure Letter and excluding
any non-employee or non-director payment or benefit acceleration or
increase which is not material.
(f) No individual classified as a non-employee for purposes of
receiving employee benefits (such an independent contractor, leased
employee, consultant or special consultant), regardless of treatment
for other purposes, is eligible pursuant to the terms thereof to
participate in or receive benefits under any Company Plan intended to
qualify under Section 401(a) of the Code.
(g) The provisions of Section 6.01(a) of the Distribution
Agreement by and between Olin Corporation and Company dated December
30, 1996 shall continue to apply to affected employees following the
Effective Time.
(h) The PRIME Plan does not take into account as compensation for
plan allocation purposes any bonus bank payment from the Company
Incentive Compensation Plan that may be paid on account of the Merger
contemplated herein.
(i) Certain of the Company Plans have been amended as stated in
the Company Disclosure Letter.
(j) The Company has previously provided to the Parent Corporation
a list of each Company owned life insurance policy (each a "Coli
Policy"). With respect to each Coli Policy:
(i) for purposes of Code Section 264(a)(4), each Coli Policy
qualifies as a contract purchased on or before June 20, 1986, no
change has taken place prior to the date of this Agreement and
will not be taken on or before the Closing
<PAGE>
21
Date to affect such status, and this status has never been
challenged by the Internal Revenue Service (or any other
government agency) in any audit or any other administrative or
judicial proceeding;
(ii) the aggregate cash surrender value of the Coli Policies
as of December 31, 1999 is set forth in the materials previously
disclosed to the Parent Corporation; and
(iii) there are no loans against such policies.
Section 4.12 Environmental Matters.
(a) Except for matters which, individually or in the aggregate,
are not reasonably likely to have a Company Material Adverse Effect:
(i) the Company and its Subsidiaries are, and, to the Company's
knowledge, since January 1, 1997 have been in compliance in all
respects with all Environmental Laws (as defined in Section 4.12(b))
in connection with the ownership, use, maintenance and operation of
their owned, operated or leased real property used by them and
otherwise in connection with their operations, (ii) neither the
Company nor any of its Subsidiaries has any liability, whether
contingent or otherwise, under, or for any violations of, any
Environmental Law, (iii) no notices of any violation or alleged
violation of, non-compliance or alleged noncompliance with or any
liability under, any Environmental Law have been received by the
Company or any of its Subsidiaries since January 1, 1997 that are
currently outstanding and unresolved as of the date of this Agreement,
and, to the Company's knowledge, there are no other outstanding
notices that are unresolved for which the Company or any of its
Subsidiaries have responsibility, (iv) there are no administrative,
civil or criminal writs, injunctions, decrees, orders or judgments
outstanding or any administrative, civil or criminal actions, suits,
claims, proceedings or, to the Company's knowledge, investigations
pending or, to the Company's knowledge, threatened, relating to
compliance with or liability under any Environmental Law affecting the
Company or any of its Subsidiaries, (v) the Company and its
Subsidiaries possess valid environmental permits required by any
Environmental Law in connection with the ownership, use, maintenance
and operation of its owned, operated and leased real property, and
(vi) to the knowledge of the Company, no material changes or
alterations in the practices or operations of the Company or any of
its Subsidiaries as presently conducted are anticipated to be required
in the future in order to permit the Company and its Subsidiaries to
continue to comply in all material respects with all applicable
Environmental Laws. The Company Disclosure Letter sets forth the
amount reserved as of October 1, 2000 by the Company for compliance
with all Environmental Laws.
(b) The term "Environmental Law" as used in this Agreement means
any law, rule, regulation, permit, order, writ, injunction, judgment
or decree with respect to the preservation of the environment or the
promotion of worker health and safety, including
<PAGE>
22
any law, rule, regulation, permit, order, writ, injunction,
judgment or decree relating to Hazardous Materials (as defined in
Section 4.12(c)). Without limiting the generality of the foregoing,
the term will encompass each of the following statutes and the
regulations promulgated thereunder, and any similar applicable state,
local or foreign law, rule or regulation, each as amended (i) the
Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, (ii) the Solid Waste Disposal Act, (iii) the Hazardous
Materials Transportation Act, (iv) the Toxic Substances Control Act,
(v) the Clean Water Act, (vi) the Clean Air Act, (vii) the Safe
Drinking Water Act, (viii) the National Environmental Policy Act of
1969, (ix) the Superfund Amendments and Reauthorization Act of 1986,
(x) Title III of the Superfund Amendments and Reauthorization Act,
(xi) the Federal Insecticide, Fungicide and Rodenticide Act and (xii)
the provisions of the Occupational Safety and Health Act of 1970
relating to the handling of and exposure to Hazardous Materials.
(c) The term "Hazardous Materials" as used in this Agreement
means each and every element, compound, chemical mixture, contaminant,
pollutant, material, waste or other substance (i) that is defined,
determined or identified as hazardous or toxic under any Environmental
Law or (ii) the spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, storing, escaping, leaching,
dumping, discarding, burying, abandoning or disposing into the
environment of which is prohibited under any Environmental Law.
Without limiting the generality of the foregoing, the term will
include (i) "hazardous substances" as defined in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, and
regulations promulgated thereunder, each as amended, (ii) "extremely
hazardous substance" as defined in the Superfund Amendments and
Reauthorization Act of 1986, or Title III of the Superfund Amendments
and Reauthorization Act and regulations promulgated thereunder, each
as amended, (iii) "hazardous waste" as defined in the Solid Waste
Disposal Act and regulations promulgated thereunder, each as amended,
(iv) "hazardous materials" as defined in the Hazardous Materials
Transportation Act and the regulations promulgated thereunder, each as
amended, (v) "chemical substance or mixture" as defined in the Toxic
Substances Control Act and regulation promulgated thereunder, each as
amended, (vi) petroleum and petroleum products and byproducts and
(vii) asbestos.
Section 4.13 Title. The Company and its Subsidiaries has good and, in the
case of real property, marketable title to all the properties and assets
purported to be owned by them, free and clear of all Liens except (a) Liens for
current Taxes or assessments not delinquent, (b) builder, mechanic,
warehousemen, materialmen, contractor, workmen, repairmen, carrier or other
similar Liens arising and continuing in the ordinary course of business for
obligations that are not delinquent, (c) the rights, if any, of vendors having
possession of tooling of the Company and its Subsidiaries, (d) liens arising
from the receipt by the Company and its Subsidiaries of progress payments by the
United States government, (e) Liens securing rental payments under capital lease
arrangements and (f) other Liens which, individually or in the aggregate, are
not reasonably likely to have a Company Material Adverse Effect (collectively,
"Permitted Liens").
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23
Section 4.14 Intellectual Property Matters.
(a) The Company and its Subsidiaries own or have the right to use
pursuant to valid license, sublicense, agreement or permission all
items of Intellectual Property necessary for their operations as
presently conducted and as presently proposed to be conducted, except
where the failure to have such rights, individually or in the
aggregate, are not reasonably likely to have a Company Material
Adverse Effect. Neither the Company nor any of its Subsidiaries has
received any charge, complaint, claim, demand or notice alleging any
interference, infringement, misappropriation or violation of the
Intellectual Property rights of any third party. Since January 1,
1997, to the Company's knowledge, no third party has interfered with,
infringed upon, misappropriated or otherwise come into conflict with
any Intellectual Property rights of the Company or any of its
Subsidiaries, except for misappropriations and violations which,
individually or in the aggregate, are not reasonably likely to have a
Company Material Adverse Effect.
(b) The term "Intellectual Property" as used in this Agreement
means, collectively, patents, patent disclosures, trademarks, service
marks, logos, trade names, copyrights and mask works, and all
registrations, applications, reissuances, continuations,
continuations-in-part, revisions, extensions, reexaminations and
associated good will with respect to each of the foregoing, computer
software (including source and object codes), computer programs,
computer data bases and related documentation and materials, data,
documentation, trade secrets, confidential business information
(including ideas, formulas, compositions, inventions, know-how,
manufacturing and production processes and techniques, research and
development information, drawings, designs, plans, proposals and
technical data, financial, marketing and business data and pricing and
cost information) and all other intellectual property rights (in
whatever form or medium).
Section 4.15 Labor Matters. There are no controversies pending or, to the
Company's knowledge, threatened between the Company or any of its Subsidiaries
and any of their current or former employees or any labor or other collective
bargaining unit representing any such employee that are reasonably likely to
have a Company Material Adverse Effect or are reasonably likely to result in a
material labor strike, dispute, slow-down or work stoppage. The Company is not
aware of any organizational effort presently being made or threatened by or on
behalf of any labor union with respect to employees of the Company or any of its
Subsidiaries. To the Company's knowledge, as of the date of this Agreement no
executive, key employee or group of employees of the Company or any of its
Subsidiaries has any plan to terminate employment with the Company and its
Subsidiaries, which termination, individually or in the aggregate, is reasonably
likely to have a Company Material Adverse Effect. As of the date of this
Agreement, there are no current DOL, OFCCP or EEOC audits. As of the date of
this Agreement, there are no OFCCP concilliation agreements in effect.
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24
Section 4.16 Rights Agreement. The Company has taken all requisite action
under the Rights Agreement dated as of February 1, 2000 between the Company and
The Bank of New York (the "Rights Agreement") to cause the provisions of the
Rights Agreement or any other similar agreement not to be applicable to this
Agreement, the Merger or the other transactions contemplated hereby.
Section 4.17 State Takeover Laws. The resolutions adopted by the Board of
Directors of the Company approving this Agreement are sufficient to cause the
provisions of Article 14 of the Virginia Act to be inapplicable to this
Agreement, the Merger and the other transactions contemplated hereby. Article
14.1 of the Virginia Act is not applicable to this Agreement, the Merger and the
other transactions contemplated hereby pursuant to Article VII, Section 5 of the
Bylaws of the Company as in effect on the date of this Agreement. To the
Company's knowledge, no other fair price, moratorium, control share acquisition
or other form of antitakeover statute, rule or regulation of any state or
jurisdiction applies or purports to apply to this Agreement, the Merger or the
other transactions contemplated hereby.
Section 4.18 Brokers' Fees. Except for the fees and expenses payable by the
Company to Goldman, Sachs & Co., neither the Company nor any of its Subsidiaries
has any liability or obligation to pay any fees or commissions to any financial
advisor, broker, finder or agent with respect to the transactions contemplated
by this Agreement. The Company has delivered to the Parent Corporation a correct
and complete copy of the engagement letter between the Company and Goldman,
Sachs & Co. relating to the transactions contemplated by this Agreement, which
letter describes the fees payable to Goldman, Sachs & Co. in connection with
this Agreement.
Section 4.19 Representations and Warranties. The representations and
warranties of the Company contained in this Agreement in the aggregate,
disregarding all qualifications and exceptions contained therein relating to
materiality or Company Material Adverse Effect, are true and correct with only
such exceptions which in the aggregate are not reasonably likely to have a
Company Material Adverse Effect. In the event a representation and warranty is
qualified by a Company Material Adverse Effect exception and there occurs a
Company Material Adverse Effect with respect thereto, such representation and
warranty shall be conclusively deemed breached without regard to whether the
Company Material Adverse Effect was or was not reasonably likely.
<PAGE>
25
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE PARENT CORPORATION
Each of the Parent Corporation and the Acquisition Corporation, as the case
may be, represents and warrants to the Company that:
Section 5.1 Organization. Each of the Parent Corporation and the
Acquisition Corporation is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and has
all requisite power and authority to own, lease and operate its properties and
to carry on its business as presently being conducted. All of the outstanding
shares of the capital stock of the Acquisition Corporation have been validly
issued, are fully paid and nonassessable and are owned by the Parent Corporation
free and clear of any Lien. The Acquisition Corporation has been organized
solely for the purpose of engaging in the Merger and the other transactions
contemplated by this Agreement and has not engaged in any business other than
contemplated by this Agreement.
Section 5.2 Authorization of Transaction; Enforceability. Each of the
Parent Corporation and the Acquisition Corporation has full corporate power and
authority and has taken all requisite corporate action to enable it to execute
and deliver this Agreement, to consummate the Merger and the other transactions
contemplated hereby and to perform its obligations hereunder. Each of the Board
of Directors of the Parent Corporation and the Board of Directors of the
Acquisition Corporation has duly adopted resolutions, by the requisite majority
vote, approving this Agreement, the Merger and the other transactions
contemplated hereby and determining that the terms and conditions of this
Agreement, the Merger and the other transactions contemplated hereby are in the
best interests of the Parent Corporation and its stockholders and of the
Acquisition Corporation and its sole stockholder, as the case may be. The
foregoing resolutions of each such Board of Directors have not been modified,
supplemented or rescinded and remain in full force and effect as of the date of
this Agreement. This Agreement constitutes the valid and legally binding
obligation of each of the Parent Corporation and the Acquisition Corporation,
enforceable against the Parent Corporation and the Acquisition Corporation in
accordance with its terms and conditions.
Section 5.3 Noncontravention; Consents. Except for (a) filings and
approvals necessary to comply with the applicable requirements of the Securities
Exchange Act and the "blue sky" laws and regulations of various states, (b) the
filing of a Notification and Report Form and related material with the Federal
Trade Commission and the Antitrust Division of the United States Department of
Justice under the HSR Act and any other filing required by any other Antitrust
Law, (c) the filing of articles of merger pursuant to the Virginia Act and a
certificate of merger under the Delaware Act, and (d) any filings required under
the rules and regulations of the New York Stock Exchange, neither
<PAGE>
26
the execution and delivery of this Agreement by the Parent Corporation or the
Acquisition Corporation, nor the consummation by the Parent Corporation or the
Acquisition Corporation of the transactions contemplated hereby, will constitute
a violation of, be in conflict with, or result in the breach of (i) the charter
or bylaws of the Parent Corporation or the Acquisition Corporation, (ii) any
constitutional provision, law, rule, regulation, permit, order, writ,
injunction, judgment or decree to which the Parent Corporation or the
Acquisition Corporation is subject or (iii) any material agreement or commitment
to which the Parent Corporation or the Acquisition Corporation is a party or by
which either of them is bound or subject.
Section 5.4 Adequate Cash Resources. The Parent Corporation has adequate
resources to provide the aggregate Merger Consideration and the Option
Consideration in cash in the amount and at the time required by Section 1.9 or
by Article 3.
Section 5.5 No Capital Ownership in the Company. Neither the Parent
Corporation nor any of its Subsidiaries owns any shares of Company Common Stock.
ARTICLE 6
COVENANTS
Section 6.1 General. Each of the parties will use its respective best
efforts to take all action and to do all things necessary, proper or advisable
to consummate and make effective the transactions contemplated by this
Agreement.
Section 6.2 Notices and Consents. Each of the parties prior to the Closing
Date will give all notices to third parties and governmental entities and will
use its respective best efforts to obtain all third party and governmental
consents and approvals that are required in connection with the transactions
contemplated by this Agreement. Within five business days following the
execution and delivery of this Agreement, each of the parties will file a
Notification and Report Form and related material with the Federal Trade
Commission and the Antitrust Division of the United States Department of Justice
under the HSR Act, will use its respective best efforts to obtain early
termination of the applicable waiting period and will make all further filings
pursuant thereto or any other Antitrust Law that may be necessary, proper or
advisable. The foregoing two sentences will not be deemed to require the Parent
Corporation to enter into any agreement, consent decree or other commitment
requiring the Parent Corporation or any of its Subsidiaries to divest or hold
separate any assets (including any assets of the Company or any of its
Subsidiaries) or to take any other action which, individually or in the
aggregate, is reasonably likely to have a material adverse effect on the
business, financial condition, operations or results of operations of the Parent
Corporation and its Subsidiaries taken as a whole (other than changes or effects
resulting from occurrences relating to the economy in general, the securities
markets in general or the Parent Corporation's
<PAGE>
27
industry in general and not specifically relating to the Parent Corporation) (a
"Parent Corporation Material Adverse Effect").
Section 6.3 Interim Conduct of the Company. Except as expressly
contemplated by this Agreement, as set forth in the Company Disclosure Letter,
as required by law or by the terms of any contract in effect on the date of this
Agreement or as the Parent Corporation may approve, which approval will not be
unreasonably withheld or delayed, from and after the date of this Agreement
through the Closing Date, the Company will, and will cause each of its
Subsidiaries to, conduct its operations in accordance with its ordinary course
of business, consistent with past practice, and in accordance with such covenant
will not, and will not cause or permit any of its Subsidiaries to:
(a) amend its articles of incorporation or bylaws or file any
certificate of designation or similar instrument with respect to any
shares of its authorized but unissued capital stock;
(b) authorize or effect any stock split or combination or
reclassification of shares of its capital stock;
(c) declare or pay any dividend or distribution with respect to
its capital stock (other than the regular quarterly dividend of $0.075
per share of Company Common Stock and dividends payable by a
Subsidiary of the Company to the Company or another Subsidiary), issue
or authorize the issuance of any shares of its capital stock (other
than in connection with the exercise of currently outstanding Stock
Options listed in the Company Disclosure Letter) or any other
securities exercisable or exchangeable for or convertible into shares
of its capital stock, or repurchase, redeem or otherwise acquire for
value any shares of its capital stock or any other securities
exercisable or exchangeable for or convertible into shares of its
capital stock;
(d) merge or consolidate with any entity;
(e) sell, lease or otherwise dispose of any of its capital
assets, including any shares of the capital stock of any of its
Subsidiaries, other than sales, leases or other dispositions of
machinery, equipment, tools, vehicles and other operating assets no
longer required in its operations made in the ordinary course of
business, consistent with past practice;
(f) liquidate, dissolve or effect any recapitalization or
reorganization in any form;
(g) acquire any interest in any business (whether by purchase of
assets, purchase of stock, merger or otherwise) or enter into any
joint venture;
<PAGE>
28
(h) create, incur, assume or suffer to exist any indebtedness for
borrowed money (including capital lease obligations), other than
indebtedness existing as of the date of this Agreement, borrowings
under existing credit lines in the ordinary course of business,
consistent with past practice, and intercompany indebtedness among the
Company and its Subsidiaries arising in the ordinary course of
business, consistent with past practice;
(i) create, incur, assume or suffer to exist any Lien (other than
Permitted Liens) affecting any of its material assets or properties;
(j) except as required as the result of changes in United States
generally accepted accounting principles, change any of the accounting
principles or practices used by it or revalue in any material respect
any of its assets or properties, other than write-downs of inventory
or accounts receivable in the ordinary course of business, consistent
with past practice;
(k) except as required under the terms of any collective
bargaining agreement in effect as of the date of this Agreement or as
required by applicable law, grant any general or uniform increase in
the rates of pay of its employees or grant any increase in the
benefits under any bonus or employee benefit plan or other
arrangement, contract or commitment;
(l) except for any increase required under the terms of any
collective bargaining agreement or consulting, executive or employment
agreement in effect on the date of this Agreement or as required by
applicable law, increase the compensation payable or to become payable
to officers and salaried employees with a base salary in excess of
$100,000 per year or increase any bonus, insurance, pension or other
benefit plan, payment or arrangement made to, for or with any such
officers or salaried employees;
(m) enter into any contract or commitment or engage in any
transaction with any affiliated person or entity (other than the
Company or its Subsidiaries) or enter into any contract or commitment
or engage in any transaction with any unaffiliated person or entity
which, to the Company's knowledge, is reasonably likely to have a
Company Material Adverse Effect;
(n) make any material Tax election or settle or compromise any
material Tax liability, except in the ordinary course of business;
(o) pay, discharge or satisfy any claims, liabilities or
obligations other than the payment, discharge and satisfaction in the
ordinary course of business of liabilities reflected or reserved for
in the consolidated financial statements of the Company or otherwise
incurred in the ordinary course of business, consistent with past
practice;
<PAGE>
29
(p) settle or compromise any material pending or threatened suit,
action or proceeding; or
(q) commit to do any of the foregoing.
Section 6.4 Preservation of Organization. Subject to compliance with the
provisions of Section 6.3, the Company will, and will cause each of its
Subsidiaries to, use its best efforts to preserve its business organization
intact in all material respects, use its reasonable efforts to keep available to
the Company and its Subsidiaries, the present officers and employees of the
Company and its Subsidiaries as a group and use its best efforts to preserve the
present relationships of the Company and its Subsidiaries with suppliers and
customers and others having business relations with the Company and its
Subsidiaries.
Section 6.5 Full Access. The Company will, and will cause its Subsidiaries
and its and their representatives to, afford the Parent Corporation and its
representatives reasonable access, upon reasonable notice at all reasonable
times to all premises, properties, books, records, contracts and documents of or
pertaining to the Company and its Subsidiaries. Notwithstanding the foregoing,
neither party will be required to provide access or to disclose information
where such access or disclosure would contravene any law or contract or would
result in the waiver of any legal privilege or work-product protection. Any
information disclosed will be subject to the provisions of the Confidentiality
Agreement, dated March 17, 2000, between the Company and the Parent Corporation
(the "Confidentiality Agreement").
Section 6.6 Notice of Developments. The Company will give prompt written
notice to the Parent Corporation of any material development affecting the
Company or any of its Subsidiaries. Each party will give prompt written notice
to the other of any material development which would give rise to a failure of a
condition set forth in Section 7.2 (in the case of the Parent Corporation or the
Acquisition Corporation) or Section 7.3 (in the case or the Company). No such
written notice of such a material development will be deemed to have amended any
of the disclosures set forth in the Company Disclosure Letter, to have qualified
the representations and warranties contained herein and to have cured any
misrepresentation or breach of warranty that otherwise might have existed
hereunder by reason of such material development.
<PAGE>
30
Section 6.7 Nonsolicitation of Acquisition Proposals.
(a) The Company and each of its Subsidiaries, and each of their
respective directors, officers, employees, agents and representatives,
will immediately cease any discussions or negotiations presently being
conducted with respect to any Acquisition Proposal. The Company and
its Subsidiaries will not and will use their best efforts to cause
their respective directors, officers, employees, agents and
representatives not to (i) initiate or solicit, directly or
indirectly, any inquiries with respect to, or the making of, any
Acquisition Proposal or (ii) engage in any negotiations or discussions
with, furnish any information or data to or enter into any letter of
intent, agreement in principle, acquisition agreement or similar
agreement with any party relating to any Acquisition Proposal;
provided, however, that the Board of Directors of the Company may, in
response to an Acquisition Proposal that the Board of Directors of the
Company determines in good faith is reasonably likely to lead to a
Superior Proposal, (A) furnish information with respect to the Company
and its Subsidiaries to the person making such Acquisition Proposal
(and its representatives) pursuant to a confidentiality agreement
containing provisions at least as restrictive with respect to such
person as the restrictions on the Parent Corporation contained in the
Confidentiality Agreement (as modified by Section 6.14) and (B)
participate in discussions or negotiations with the person making such
Acquisition Proposal (and its representatives) regarding such
Acquisition Proposal. The Company will be responsible for any breach
of the provisions of this Section 6.7 by any director, officer,
employee, agent or representative of the Company or any of its
Subsidiaries.
(b) The term "Acquisition Proposal" as used in this Agreement
means any bona fide proposal, whether or not in writing, made by a
party that if consummated would result in such party acquiring
beneficial ownership (as defined under Rule 13(d) promulgated under
the Securities Exchange Act) of more than 20% of the consolidated
assets (determined based on book or fair market value) of, or more
than 20% of the voting power in, the Company and its Subsidiaries,
taken as a whole, pursuant to a merger, consolidation or other
business combination, sale of shares of capital stock, sale of assets,
tender or exchange offer or similar transaction involving the Company
or any of its Subsidiaries, including any single or multi-step
transaction or series of related transactions that is structured to
permit such party to acquire such beneficial ownership.
(c) The term "Superior Proposal" as used in this Agreement means
any bona fide proposal, in writing, made by a party that (i) if
consummated, would result in such party acquiring beneficial ownership
of more than 50% of the consolidated assets (determined based on book
or fair market value) of, or more than 50% of the voting power in, the
Company and its Subsidiaries, taken as a whole, pursuant to a merger,
consolidation or other business combination, sale of shares of capital
stock, sale of assets, tender or exchange offer or similar transaction
involving the Company or any of its Subsidiaries, including any single
or multi-step transaction or series of related
<PAGE>
31
transactions that is structured to permit such party to acquire such
beneficial ownership, and (ii) the Board of Directors of the Company,
after consultation with its outside legal counsel and financial
advisers, determines in its good faith business judgment (x) is
superior from a financial view to the stockholders of the Company and
(y) is reasonably capable of being completed, taking into account all
legal, financial, regulatory and other aspects of such proposal.
(d) Nothing contained in this Agreement will prohibit the Company
from (i) taking and disclosing to its stockholders a position
contemplated by Rule 14e-2(a) promulgated under the Securities
Exchange Act or (ii) making any disclosure or recommendation,
including a withdrawal or adverse amendment of its recommendation of
the Merger that would permit the Parent Corporation to terminate this
Agreement pursuant to Section 8.1(c)(ii), to the Company's
stockholders if the Board of Directors of the Company, after
consultation with its outside legal counsel, determines in good faith
that failure to so disclose or recommend would be inconsistent with
applicable law.
Section 6.8 Indemnification.
(a) From and after the Closing Date, the Parent Corporation will
cause the Surviving Corporation to indemnify, defend and hold harmless
each person who is now, or has been at any time prior to the Effective
Time, an officer or director of the Company or any of its present or
former Subsidiaries or corporate parents (collectively, the
"Indemnified Parties") from and against all losses, claims, damages
and expenses (including reasonable attorney's fees and expenses)
arising out of or relating to actions or omissions, or alleged actions
or omissions, occurring at or prior to the Effective Time to the
fullest extent permitted from time to time by the Virginia Act or any
other applicable laws as presently or hereafter in effect.
(b) Any determination required to be made with respect to whether
any Indemnified Party may be entitled to indemnification will, if
requested by such Indemnified Party, be made by independent legal
counsel selected by the Indemnified Party and reasonably satisfactory
to the Surviving Corporation.
(c) For a period of six years after the Closing Date, the Parent
Corporation will cause to be maintained in effect the policies of
directors and officers liability insurance and fiduciary liability
insurance currently maintained by the Company with respect to claims
arising from or relating to actions or omissions, or alleged actions
or omissions, occurring on or prior to the Closing Date. The Parent
Corporation may at its discretion substitute for such policies
currently maintained by the Company directors and officers liability
insurance and fiduciary liability insurance policies with reputable
and financially sound carriers providing for no less favorable
coverage. Notwithstanding the provisions of this Section 6.8(c), the
Parent Corporation will not be obligated to make annual premium
payments with respect to such policies of insurance to the extent such
premiums exceed 200 percent of the annual premiums paid by the Company
as of the
<PAGE>
32
date of this Agreement. If the annual premium costs necessary to
maintain such insurance coverage exceed the foregoing amount, the
Parent Corporation will maintain the most advantageous policies of
directors and officers liability insurance and fiduciary liability
insurance obtainable for an annual premium equal to the foregoing
amount.
(d) To the fullest extent permitted from time to time under the
law of the Commonwealth of Virginia, the Parent Corporation will cause
the Surviving Corporation to pay on an as-incurred basis the
reasonable fees and expenses of each Indemnified Party (including
reasonable fees and expenses of counsel) in advance of the final
disposition of any action, suit, proceeding or investigation that is
the subject of the right to indemnification, subject to reimbursement
in the event such Indemnified Party is not entitled to
indemnification.
(e) The provisions providing for director and officer
indemnification, abrogation of liability and advancement of expenses
set forth in Article VII of the articles of incorporation of the
Company, as in effect immediately prior to the Effective Time, will
apply to each Indemnified Party with respect to all matters occurring
on or prior to the Effective Time. The foregoing will not be deemed to
restrict the right of the Surviving Corporation to modify the
provisions of its articles of incorporation relating to director and
officer indemnification, abrogation of liability or advancement of
expenses with respect to events or occurrences after the Closing Date
but such modifications shall not adversely affect the rights of the
Indemnified Parties hereunder. The Parent Corporation shall cause the
Surviving Corporation to honor the provisions of this Section 6.8(e).
(f) In the event of any action, suit, investigation or
proceeding, the Indemnified Party will be entitled to control the
defense thereof with counsel of its own choosing reasonably acceptable
to the Parent Corporation, and the Parent Corporation and the
Surviving Corporation will cooperate in the defense thereof, provided
that neither the Parent Corporation nor the Surviving Corporation will
be liable for the fees of more than one counsel for all Indemnified
Parties, other than local counsel, unless the use of a single counsel
would present conflict of interest issues which would make it
impracticable for all Indemnified Parties to be represented by a
single counsel, and provided further that neither the Parent
Corporation nor the Surviving Corporation will be liable for any
settlement effected without its written consent (which consent will
not be unreasonably withheld or delayed).
(g) The rights of each Indemnified Party hereunder will be in
addition to any other rights such Indemnified Party may have under the
articles of incorporation or bylaws of the Surviving Corporation or
any of their respective Subsidiaries, under the law of the
Commonwealth of Virginia or otherwise. Notwithstanding anything to the
contrary contained in this Agreement or otherwise, the provisions of
this Section 6.8 will survive the consummation of the Merger, and each
Indemnified Party will, for all purposes, be a third party beneficiary
of the covenants and agreements contained in this
<PAGE>
33
Section 6.8 and, accordingly, will be treated as a party to this
Agreement for purposes of the rights and remedies relating to
enforcement of such covenants and agreements and will be entitled to
enforce any such rights and exercise any such remedies directly
against the Parent Corporation and the Surviving Corporation.
(h) Nothing in this Section 6.8 will diminish any rights or
entitlements available to any director or officer of the Company under
the Company's articles of incorporation as in effect immediately prior
to the Effective Time.
Section 6.9 Public Announcements. The initial press release announcing the
transactions contemplated by this Agreement will be a joint press release.
Thereafter, the Parent Corporation and the Company will consult with one another
before issuing any press releases or otherwise making any public announcements
with respect to the transactions contemplated by this Agreement and, except as
may be required by applicable law or by the rules and regulations of the New
York Stock Exchange or of The Nasdaq Stock Market, will not issue any such press
release or make any such announcement prior to such consultation.
Section 6.10 Preservation of Programs and Agreements. From and after the
date of this Agreement through the Closing Date, the Company will not enter into
any agreement which it knows or has reason to know is reasonably likely to cause
a major customer of the Company or any of its Subsidiaries to terminate any
material program or agreement, the overall effect of which, after taking into
account the anticipated benefits of the new agreement and the anticipated
detriments of such termination, is reasonably likely to have a Company Material
Adverse Effect.
Section 6.11 Actions Regarding Antitakeover Statutes. If any fair price,
moratorium, control share acquisition or other form of antitakeover statute,
rule or regulation is or becomes applicable to the transactions contemplated by
this Agreement, the Board of Directors of the Company will grant such approvals
and take such other actions as may be required so that the transactions
contemplated hereby may be consummated as promptly as practicable on the terms
and conditions set forth in this Agreement.
Section 6.12 Defense of Orders and Injunctions. In the event either party
becomes subject to any order or injunction of a court of competent jurisdiction
which prohibits the consummation of the transactions contemplated by this
Agreement, each party will use its best efforts to overturn or lift such order
or injunction. The foregoing will not be deemed to require the Parent
Corporation to enter into any agreement, consent decree or other commitment
requiring the Parent Corporation or any of its Subsidiaries to divest or hold
separate any assets or to take any other action which, individually or in the
aggregate, is reasonably likely to have a Parent Corporation Material Adverse
Effect.
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34
Section 6.13 Employee Benefit Matters.
(a) Subject to applicable collective bargaining agreements, until
(or in respect of the period ending on ) December 31, 2001, Parent
Corporation shall cause to be maintained for the employees and former
employees of the Company and its Subsidiaries (the "Employees"),
benefits and benefit levels which are, in the aggregate, substantially
similar to benefits and benefit levels as provided by the Company and
its Subsidiaries through any Company Plan that is an Employee Pension
Benefit Plan, an Employee Welfare Benefit Plan, or a fringe benefit
program (providing, for example, sick pay, vacation pay and tuition
reimbursement) prior to the Effective Time. Notwithstanding the
foregoing, without limitation, this Section 6.13(a) shall not apply to
any bonus, incentive, or equity-based compensation plan or
arrangement. Further, subject to Section 6.3(k), this Section 6.13(a)
shall not prohibit any change in benefits or benefit levels adopted
prior to the Effective Time and effective on or after the Effective
Time or any other change in benefits (such as a change in vendor,
co-pay, deductible, lifetime maximum, etc.) that would have been made
by the Company in the ordinary course during the 2001 year to reflect
market conditions for the provision of these benefits.
(b) The Parent Corporation will honor and will cause the
Surviving Corporation to honor, in accordance with their respective
terms, the Company Plans and all of the Company's other employee
benefit, compensation, employment, severance and termination plans,
programs, policies, and arrangements, including any rights or benefits
arising as a result of the transactions contemplated by this Agreement
(either alone or in combination with any other event).
(c) Solely for purposes of eligibility and vesting under the
employee benefit plans of the Parent Corporation and its Subsidiaries
(including the Surviving Corporation) providing benefits to any
Employees after the Effective Time, each Employee will be credited
with his or her years of service with the Company and its Subsidiaries
(and any predecessor entities thereof) before the Effective Time, to
the same extent as such employee was entitled, before the Effective
Time, to credit for such service under any similar Company Plan.
Following the Effective Time, the Parent Corporation will, or will
cause its Subsidiaries to, (i) waive any pre-existing condition
limitation under any Employee Welfare Benefit Plan maintained by the
Parent Corporation or any of its Subsidiaries in which Employees and
their eligible dependents participate (except to the extent that such
pre-existing condition limitation would have been applicable under the
comparable Company Employee Welfare Benefit Plans immediately prior to
the Effective Time), and (ii) provide each Employee with credit for
any co-payments and deductibles incurred prior to the Effective Time
<PAGE>
35
(or such earlier or later transition date to new Employee Welfare
Benefits Plans) for the calendar year in which the Effective Time (or
such earlier or later transaction date) occurs, in satisfying any
applicable deductible or out-of-pocket requirements under any welfare
plans that the Employees participate in after the Effective Time.
(d) The Parent Corporation will, and will cause the Surviving
Corporation and their respective representatives to, afford any
officer (as of the Effective Time) of the Company and any of his or
her representatives reasonable access, upon reasonable notice, to such
books and records of the Company and the Surviving Corporation as are
reasonably required by such officer to determine amounts owing to such
officer under any Company Plan.
(e) The Parent Corporation and the Company agree to implement the
provisions of Section 6.13(e) of the Company Disclosure Letter.
(f) Subject to applicable collective bargaining agreements,
notwithstanding any provision to the contrary contained in this
Agreement, through the period ending on December 31, 2001, the Parent
Corporation and its Subsidiaries (including the Surviving Corporation)
will provide severance benefits and severance compensation to the
Employees that, in the aggregate, are not less favorable to the
Employees than those provided by the Company under a Company Plan to
the Employees immediately prior to the Effective Time.
(g) Nothing contained herein will create any rights in any third
party, including without limitation, any right to employment or right
to any particular benefit (except as set forth in Sections 6.13(d) and
(e)). Except as specifically provided, nothing contained herein shall
be construed as prohibiting or restricting in any way the right of the
Parent Company or the Company (or any successor thereto) to modify,
amend or terminate any employee benefit plan, program or arrangement
in whole or in part at any time after the Effective Time.
(h) The Company agrees that an independent trustee, either a bank
or a trust company, will act with respect to the Merger on behalf of
each Company Plan (and its participants) that holds Company Common
Stock in accordance with the terms and conditions of such Plan.
Section 6.14 Standstill Provisions. The restrictions on the Parent
Corporation and the Acquisition Corporation contained in the Standstill
Provisions of the Confidentiality Agreement between the Parent Corporation and
the Company are hereby waived by the Company to the extent reasonably required
to permit the Parent Corporation and the Acquisition Corporation to comply with
their obligations or enforce their rights under this Agreement.
<PAGE>
36
ARTICLE 7
CONDITIONS TO THE CONSUMMATION OF THE MERGER
Section 7.1 Conditions to the Obligations of Each Party. The respective
obligation of each party to effect the Merger is subject to the satisfaction at
or prior to the Closing Date of each of the following conditions:
(a) the Company will have obtained the Company Stockholder
Approval;
(b) all applicable waiting periods (and any extensions thereof)
under the HSR Act will have terminated or expired;
(c) all other consents, authorizations, orders and approvals of
or filings with any governmental commission, board or other regulatory
authority (other than in its capacity as a customer of the Company or
its Subsidiaries) required in connection with the consummation of the
transactions contemplated by this Agreement will have been obtained or
made, except where the failure to obtain or make such consents,
authorizations, orders, approvals or filings, from and after the
Closing Date, individually or in the aggregate, are not reasonably
likely to have a Company Material Adverse Effect; and
(d) no party will be subject to any order or injunction of a
court of competent jurisdiction or other legal restraint which
prohibits the consummation of the Merger.
Section 7.2 Conditions to the Obligation of the Company. The obligation of
the Company to effect the Merger is subject to the satisfaction at or prior to
the Closing Date of each of the following conditions:
(a) the representations and warranties of each of the Parent
Corporation and the Acquisition Corporation contained herein (i) that
are qualified as to materiality will be true and correct and (ii) that
are not qualified by materiality will be true and correct in all
material respects, in each case (i) and (ii), as of the date of this
Agreement and as of the Closing Date with the same effect as though
made as of the Closing Date, except that the accuracy of
representations and warranties that by their terms speak as of a
specified date will be determined as of such date; and
(b) each of the Parent Corporation and the Acquisition
Corporation will have in all material respects performed and complied
with all of its obligations under this Agreement required to be
performed by it at or prior to the Closing Date.
<PAGE>
37
The Parent Corporation and the Acquisition Corporation will furnish the
Company with a customary bring down certificate with respect to the satisfaction
of the conditions set forth in Sections 7.2(a) and (b).
Section 7.3 Conditions to the Obligation of the Parent Corporation and the
Acquisition Corporation. The obligation of the Parent Corporation and the
Acquisition Corporation to effect the Merger is subject to the satisfaction at
or prior to the Closing Date of each of the following conditions:
(a) the representations and warranties of the Company contained
herein (i) that are subject to a Company Material Adverse Effect
qualification will be true and correct and (ii) that are not subject
to a Company Material Adverse Effect qualification will be true and
correct, except that this clause (ii) will be deemed satisfied so long
as any failures of such representations and warranties, taken
together, are not reasonable likely to have a Company Material Adverse
Effect, in each case (i) and (ii), as of the date of this Agreement
and as of the Closing Date with the same effect as though made as of
the Closing Date, except that the accuracy of representations and
warranties that by their terms speak as of a specified date will be
determined as of such date; and
(b) the Company will have in all material respects performed and
complied with all of its obligations under this Agreement required to
be performed by it at or prior to the Closing Date,
The Company will furnish the Parent Corporation with a customary bring down
certificate with respect to the satisfaction of the conditions set forth in
Sections 7.3(a) and (b).
Section 7.4 Frustration of Closing Conditions. None of the Company, the
Parent Corporation or the Acquisition Corporation may rely on the failure of any
condition set forth in Section 7.1, 7.2 or 7.3, as the case may be, to be
satisfied if such party's breach of this Agreement has been a principal reason
that such condition has not been satisfied.
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time (notwithstanding the
receipt of the Company Stockholder Approval):
(a) with the mutual written consent of the Parent Corporation and
the Company;
<PAGE>
38
(b) by the Parent Corporation or the Company if any court of
competent jurisdiction or other governmental agency has issued a final
order, decree or ruling or taken any other final action restraining,
enjoining or otherwise prohibiting the consummation of the Merger, and
such order, decree, ruling or other action is or has become
nonappealable;
(c) by the Parent Corporation if (i) the Company has breached any
of its representations, warranties or covenants set forth in this
Agreement, which breach (A) would give rise to the failure of a
condition set forth in Section 7.3 and (B) is not cured within 30 days
after the date written notice of such breach is given by the Parent
Corporation to the Company, (ii) the Board of Directors of the Company
has withdrawn or amended in any manner adverse to the Parent
Corporation and the Acquisition Corporation its recommendation and
approval of the Merger, (iii) the Company Stockholder Approval has not
been obtained at a meeting duly called for such purpose or (iv) the
Merger has not been consummated on or before March 31, 2001; or
(d) by the Company if (i) either the Parent Corporation or the
Acquisition Corporation has breached any of its representations,
warranties or covenants set forth in this Agreement, which breach (A)
would give rise to the failure of a condition set forth in Section 7.2
and (B) is not cured within 30 days after the date written notice of
such breach is given by the Company to the Parent Corporation, (ii)
the Company Stockholder Approval has not been obtained at a meeting
called for such purpose or (iii) the Merger has not been consummated
on or before March 31, 2001.
Section 8.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 8.1, this Agreement will
forthwith become void and will be deemed to have terminated without liability to
any party (except for any liability of any party then in willful material breach
of any covenant or agreement); provided that the provisions of the
Confidentiality Agreement and the last sentence of Section 6.5, this Section
8.2, Section 8.3 and Article 9 (other than the exception clause in Section 9.10)
of this Agreement will continue in full force and effect notwithstanding such
termination and abandonment.
<PAGE>
39
Section 8.3 Termination Fee.
(a) If an Acquisition Proposal has been made to the Company or
its stockholders or any person has announced an intention to make an
Acquisition Proposal and thereafter
(i) the Parent Corporation terminates this Agreement
pursuant to Section 8.1(c)(ii) or Section 8.1(c)(iii),
(ii) the Company terminates this Agreement pursuant to
Section 8.1(d)(ii), or
(iii) a vote of the stockholders of the Company does not
occur and either the Parent Corporation terminates this Agreement
pursuant to Section 8.1(c)(iv) or the Company terminates this
Agreement pursuant to Section 8.1(d)(iii)
and
(x) the Company enters into an agreement with respect to a
Third Party Acquisition within 12 months of the date of such
termination, or
(y) a Third Party Acquisition occurs within 12 months after
the date of such termination,
then the Company will pay to the Parent Corporation, within one business
day following the occurrence of such event referred to in clause (x) or
clause (y), a termination fee equal to $10 million (the "Termination Fee"),
payable by wire transfer of immediately available funds to an account
designated by the Parent Corporation.
(b) The term "Third Party Acquisition" as used in this Agreement means
(i) the acquisition of the Company by merger or otherwise by any person
(including for purposes of this Section 8.3(b) any "person" or "group" as
defined in Section 13(d)(3) of the Securities Exchange Act) or entity other
than the Parent Corporation or any of its affiliates, (ii) the acquisition
by any person or entity other than the Parent Corporation or any of its
affiliates of more than 50 percent of the consolidated assets (determined
based on book or fair market value) of the Company and its Subsidiaries or
(iii) the acquisition by any person or entity other than the Parent
Corporation or any of its affiliates of more than 50 percent of the
outstanding shares of Company Common Stock, (iv) the adoption by the
Company of any plan of liquidation or the declaration by the Company of any
extraordinary dividend or distribution (including any distribution of any
shares of the capital stock of any material Subsidiary) of cash or property
constituting more than 50 percent of the consolidated assets (determined
based on book or fair market value) of the Company and its Subsidiaries or
(v) the purchase by the Company or any of its Subsidiaries of more than 50
percent of the outstanding shares of Company Common Stock.
(c) Except as specifically provided in this Section 8.3, each party
will bear its own expenses incurred in connection with the transactions
contemplated by this Agreement, whether or not such transactions are
consummated.
<PAGE>
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(d) The Company acknowledges that the agreements regarding the payment
of fees contained in this Section 8.3 are an integral part of the
transactions contemplated by this Agreement and that, in the absence of
such agreements, the Parent Corporation and the Acquisition Corporation
would not have entered into this Agreement. The Company accordingly agrees
that in the event the Company fails to pay the Termination Fee promptly,
the Company will in addition to the payment of such amount also pay to the
Parent Corporation all of the reasonable costs and expenses (including
reasonable attorneys' fees and expenses) incurred by the Parent Corporation
in the enforcement of its rights under this Section 8.3, together with
interest on such amount at a rate of 11 percent per annum from the date
upon which such payment was due, to and including the date of payment.
Provided that the Company was not in breach of the provisions of Section
6.7, payment of the Termination Fee will constitute full and complete
satisfaction, and will constitute the Parent Corporation's sole and
exclusive remedy for any loss, liability, damage or claim arising out of or
in connection with any such termination of this Agreement or the facts and
circumstances resulting in or related to this Agreement.
ARTICLE 9
MISCELLANEOUS
Section 9.1 Nonsurvival of Representations. The representations and
warranties contained in this Agreement will not survive the Merger or the
termination of this Agreement.
Section 9.2 Remedies. The parties agree that irreparable damage would occur
in the event that the provisions of this Agreement were not performed in
accordance with their specific terms. It is accordingly agreed that the parties
will be entitled to specific performance of the terms of this Agreement, without
posting a bond or other security, this being in addition to any other remedy to
which they are entitled at law or in equity.
Section 9.3 Successors and Assigns. No party hereto may assign or delegate
any of such party's rights or obligations under or in connection with this
Agreement without the written consent of the other parties hereto. Except as
otherwise expressly provided herein, all covenants and agreements contained in
this Agreement by or on behalf of any of the parties hereto or thereto will be
binding upon and enforceable against the respective successors and assigns of
such party and will be enforceable by and will inure to the benefit of the
respective successors and permitted assigns of such party.
Section 9.4 Amendment. This Agreement may be amended by the execution and
delivery of an written instrument by or on behalf of the Parent Corporation, the
Acquisition Corporation and the Company at any time before or after the Company
Stockholder Approval, provided that after the date of the Company Stockholder
Approval, no amendment to this Agreement will be made without the approval of
stockholders of the Company to the extent such approval is required under the
Virginia Act.
<PAGE>
41
Section 9.5 Extension and Waiver. At any time prior to the Effective Time,
the parties may extend the time for performance of or waive compliance with any
of the covenants or agreements of the other parties to this Agreement and may
waive any breach of the representations or warranties of such other parties. No
agreement extending or waiving any provision of this Agreement will be valid or
binding unless it is in writing and is executed and delivered by or on behalf of
the party against which it is sought to be enforced.
Section 9.6 Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
Section 9.7 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together will constitute
one and the same Agreement.
Section 9.8 Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
Section 9.9 Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement will
be in writing and will be deemed to have been given when delivered personally to
the recipient or when sent to the recipient by telecopy (receipt confirmed), one
business day after the date when sent to the recipient by reputable express
courier service (charges prepaid) or three business days after the date when
mailed to the recipient by certified or registered mail, return receipt
requested and postage prepaid. Such notices, demands and other communications
will be sent to the Parent Corporation and the Company at the addresses
indicated below:
If to the Parent
Corporation: General Dynamics Corporation
3190 Fairview Park Drive
Falls Church, Virginia 22041-4523
Attention: David A. Savner, Esq.
Senior Vice President and
General Counsel
Facsimile No.: (703) 876-3125
With a copy (which will
not constitute notice) to: Jenner & Block
One IBM Plaza, 40th Floor
<PAGE>
42
Chicago, IL 60611
Attention: Charles J. McCarthy, Esq.
Facsimile No.: (312) 840-7745
If to the Company: Primex Technologies, Inc.
10101 9th Street North
St. Petersburg, FL 33716
Attention: George H. Pain
Vice President and
General Counsel
Facsimile No.: (727) 578-8286
With a copy (which will
not constitute notice) to: Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
Attention: Robert I. Townsend, III, Esq.
Facsimile No.: (212) 474-3700
or to such other address or to the attention of such other party as the
recipient party has specified by prior written notice to the sending party.
Section 9.10 No Third Party Beneficiaries. This Agreement will not confer
any rights or remedies upon any person or entity other than the Parent
Corporation, the Acquisition Corporation and the Company and their respective
successors and permitted assigns, except that the respective beneficiaries as of
the Closing Date of the provisions of Section 6.8 and Sections 6.13(d) and (e)
will, for all purposes, be third party beneficiaries of the covenants and
agreements contained therein and, accordingly, will be treated as a party to
this Agreement for purposes of the rights and remedies relating to enforcement
of such covenants and agreements and will be entitled to enforce any such rights
and exercise any such remedies directly against the Parent Corporation and the
Surviving Corporation.
Section 9.11 Entire Agreement. This Agreement (including the
Confidentiality Agreement, the Company Disclosure Letter and the other documents
referred to herein) constitutes the entire agreement among the parties and
supersedes any prior understandings, agreements or representations by or among
the parties, written or oral, that may have related in any way to the subject
matter hereof.
Section 9.12 Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent
and no rule of strict construction will be applied against any party. The use of
the word "including" in this Agreement means "including without limitation" and
is intended by the parties to be by way of example rather than limitation. As
used in this Agreement, the
<PAGE>
43
qualification "to the Company's knowledge" and clauses of similar effect will
mean the actual knowledge by any executive officer of the Company or of its
Subsidiaries (or other officer or manager of the Company or of its Subsidiaries
if such officer or manager has primary responsibility over the subject matter in
question) of the existence or absence of facts which would contradict a
particular representation and warranty of the Company.
Section 9.13 Submission to Jurisdiction. Each of the parties to this
Agreement submits to the jurisdiction of any state or federal court sitting in
Alexandria, Virginia, in any action or proceeding arising out of or relating to
this Agreement, agrees that all claims in respect of the action or proceeding
may be heard and determined in any such court, and agrees not to bring any
action or proceeding arising out of or relating to this Agreement in any other
court. Each of the parties to this Agreement waives any defense of inconvenient
forum to the maintenance of any action or proceeding so brought and waives any
bond, surety or other security that might be required of any other party with
respect thereto.
Section 9.14 Governing Law. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS AGREEMENT AND THE SCHEDULES HERETO WILL BE
GOVERNED BY THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF THE COMMONWEALTH
OF VIRGINIA, EXCEPT THE DELAWARE ACT SHALL GOVERN THE CORPORATE MERGER
PROCEDURES AND EFFECT WITH RESPECT TO THE ACQUISITION CORPORATION.
* * * *
<PAGE>
44
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the date first written above.
GENERAL DYNAMICS CORPORATION
By /s/ Nicholas D. Chabraja
---------------------------
Nicholas D. Chabraja
Chairman and Chief Executive Officer
MARS ACQUISITION CORPORATION
By /s/ Arthur J. Veitch
----------------------------
Arthur J. Veitch
President
PRIMEX TECHNOLOGIES, INC.
By: /s/ James G. Hascall
---------------------------
James G. Hascall
Chairman and Chief Executive Officer
