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EXHIBIT 2.1
EXECUTION
COPY
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
THE MONY GROUP INC.
MONY ACQUISITION CORP.
AND
THE ADVEST GROUP, INC.
DATED AS OF AUGUST 23, 2000
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TABLE OF CONTENTS
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ARTICLE 1 The Merger.....................................................................................2
1.1 The Merger.............................................................................2
1.2 The Closing............................................................................2
1.3 Effective Time.........................................................................2
1.4 The Charter and Bylaws.................................................................2
1.5 Directors of the Surviving Corporation.................................................3
1.6 Officers of the Surviving Corporation..................................................3
ARTICLE 2 Conversion and Exchange of Securities..........................................................3
2.1 Merger Sub Stock.......................................................................3
2.2 Company Stock..........................................................................3
2.3 Exchange of Certificates Representing Company Common Stock.............................8
2.4 Adjustment of Exchange Ratio..........................................................11
ARTICLE 3 Representations and Warranties of the Company.................................................11
3.1 Existence; Good Standing; Corporate Authority.........................................11
3.2 Authorization, Validity and Effect of Agreements......................................11
3.3 Capitalization........................................................................12
3.4 Subsidiaries..........................................................................12
3.5 Other Interests.......................................................................13
3.6 No Violation..........................................................................13
3.7 SEC Documents.........................................................................14
3.8 Patents, Trademarks, Copyrights and Trade Secrets.....................................14
3.9 Investigations; Litigation............................................................15
3.10 Compliance with Law; Governmental Approvals...........................................16
3.11 Absence of Certain Changes............................................................17
3.12 Taxes and Tax Returns.................................................................17
3.13 Material Contracts....................................................................20
3.14 Employee Benefit Plans................................................................20
3.15 Labor Matters.........................................................................22
3.16 Parent Stock Ownership................................................................22
3.17 Tax Reorganization....................................................................22
3.18 Environmental Matters.................................................................22
3.19 Status of Subsidiary that is a Savings Association....................................23
3.20 Derivative Instruments................................................................23
3.21 Investment Advisory Activities........................................................23
3.22 State Takeover Statutes and Shareholder Rights Plan...................................24
3.23 No Brokers............................................................................24
3.24 Opinion of Financial Advisor..........................................................25
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ARTICLE 4 Representations and Warranties of Parent and Merger Sub.......................................25
4.1 Existence; Good Standing; Corporate Authority; Compliance with Law....................25
4.2 Authorization, Validity and Effect of Agreements......................................25
4.3 Capitalization........................................................................26
4.4 Merger Sub............................................................................26
4.5 Compliance with Law; Governmental Approvals...........................................27
4.6 No Violation..........................................................................27
4.7 Investigations; Litigation............................................................28
4.8 SEC Documents.........................................................................28
4.9 Absence of Certain Changes............................................................29
4.10 No Brokers............................................................................29
4.11 Taxes.................................................................................29
ARTICLE 5 Covenants.....................................................................................30
5.1 Alternative Proposals.................................................................30
5.2 Interim Operations....................................................................31
5.3 Meeting of Stockholders...............................................................33
5.4 Filings; Other Actions................................................................33
5.5 Inspection of Records.................................................................34
5.6 Publicity.............................................................................34
5.7 Registration Statement................................................................34
5.8 Listing Application...................................................................35
5.9 Affiliate Letters.....................................................................35
5.10 Expenses..............................................................................36
5.11 Directors' and Officers' Indemnification and Insurance................................36
5.12 Additional Agreements.................................................................38
5.13 Shareholder Rights Plan and Takeover Statutes.........................................38
5.14 Conveyance Taxes......................................................................38
5.15 Certain Tax Matters...................................................................39
5.16 Company Satisfaction of the Conditions of Section 15 of the 1940 Act..................39
5.17 Advisory Contract Consents............................................................40
5.18 Retention Plan........................................................................40
5.19 Dividends.............................................................................40
5.20 Employee Benefits.....................................................................41
5.21 Section 16 Matters....................................................................41
5.22 No Fundamental Parent Changes.........................................................42
ARTICLE 6 Conditions....................................................................................42
6.1 Conditions to Each Party's Obligation to Effect the Merger............................42
6.2 Conditions to Obligation of the Company to Effect the Merger..........................43
6.3 Conditions to Obligation of Parent and Merger Sub to Effect the Merger................43
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ARTICLE 7 Termination...................................................................................45
7.1 Termination by Mutual Consent.........................................................45
7.2 Termination by Either Parent or the Company...........................................45
7.3 Termination by the Company............................................................45
7.4 Termination by Parent.................................................................46
7.5 Effect of Termination and Abandonment.................................................46
7.6 Extension; Waiver.....................................................................47
ARTICLE 8 General Provisions............................................................................48
8.1 Nonsurvival of Representations, Warranties and Agreements.............................48
8.2 Notices...............................................................................48
8.3 Assignment; Binding Effect............................................................49
8.4 Entire Agreement......................................................................49
8.5 Amendment.............................................................................49
8.6 Governing Law.........................................................................50
8.7 Counterparts..........................................................................50
8.8 Headings..............................................................................50
8.9 Interpretation........................................................................50
8.10 Waivers...............................................................................50
8.11 Incorporation of Exhibits.............................................................50
8.12 Severability..........................................................................51
8.13 Enforcement of Agreement..............................................................51
8.14 Subsidiaries and Material Subsidiaries................................................51
8.15 Company Material Adverse Effect.......................................................51
8.16 Parent Material Adverse Effect........................................................52
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EXHIBIT A Form of Affiliate Letter
EXHIBIT B Advest 2000 Retention Plan
EXHIBIT C Advest 2000 Management Incentive Plan
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EXECUTION
COPY
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
August 23, 2000, between The MONY Group Inc., a Delaware corporation ("Parent"),
MONY Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
Parent ("Merger Sub"), and The Advest Group, Inc., a Delaware corporation (the
"Company").
RECITALS
A. Parent and the Company each have determined that a business
combination between Parent and the Company is in the best interests of their
respective companies and stockholders and presents an opportunity for their
respective companies to achieve long-term strategic and financial benefits, and
accordingly have agreed to effect the merger provided for herein upon the terms
and subject to the conditions set forth herein.
B. Concurrently with the execution of this Agreement, in order
to induce Parent and Merger Sub to enter into the Agreement, certain
stockholders of the Company are entering into a support agreement (the "Support
Agreement") with Parent, providing for certain voting and other restrictions
with respect to the shares of Company Common Stock (as defined herein)
beneficially owned by them upon the terms and conditions specified therein.
C. Concurrently with the execution of this Agreement, in order
to induce Parent and Merger Sub to enter into the Agreement, the Company is
entering into an option agreement with Parent pursuant to which Parent shall be
granted the right to purchase up to 19.9% of the issued and outstanding shares
of Company Common Stock upon the occurrence of certain events as set forth
therein (the "Option Agreement").
D. It is intended that for federal income tax purposes, the
merger provided for herein shall qualify as a reorganization within the meaning
of Section 368(a) of the Code (as defined in Section 3.12).
E. Merger Sub is a wholly-owned subsidiary of Parent and has
been formed solely to facilitate the Merger (as defined herein) and has
conducted and will conduct no business or activity other than in connection with
the Merger.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
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ARTICLE 1
THE MERGER
1.1 THE MERGER.
Subject to the terms and conditions of this Agreement, at the
Effective Time (as defined in Section 1.3), the Company shall be merged with and
into Merger Sub in accordance with this Agreement, and the separate corporate
existence of the Company shall thereupon cease (the "Merger"). Merger Sub shall
be the surviving corporation in the Merger (sometimes hereinafter referred to as
the "Surviving Corporation") and will be a wholly owned subsidiary of Parent.
The Merger shall have the effects specified in the Delaware General Corporation
Law ("DGCL").
1.2 THE CLOSING.
Subject to the terms and conditions of this Agreement, the closing
of the Merger (the "Closing") shall take place (a) at the offices of Dewey
Ballantine LLP, 1301 Avenue of the Americas, New York, New York, at 10:00 a.m.,
local time, on the first business day immediately following the day on which the
last to be fulfilled or waived of the conditions set forth in Article 6 shall be
fulfilled or waived in accordance herewith or (b) at such other time, date or
place as Parent and the Company may agree in writing. The date on which the
Closing occurs is hereinafter referred to as the "Closing Date."
1.3 EFFECTIVE TIME.
If all the conditions set forth in Article 6 shall have been
fulfilled or waived in accordance herewith and this Agreement shall not have
been terminated as provided in Article 7, the parties hereto shall cause a
Certificate of Merger meeting the requirements of Section 251 of the DGCL to be
properly executed and filed in accordance with such Section on the Closing Date.
The Merger shall become effective at the time of filing of the Certificate of
Merger with the Secretary of State of the State of Delaware in accordance with
the DGCL or at such later time which the parties hereto shall have agreed upon
and designated in such filings as the effective time of the Merger (the
"Effective Time").
1.4 THE CHARTER AND BYLAWS.
(a) The Certificate of Incorporation of Merger Sub as in effect
immediately prior to the Effective Time (with Article First thereof amended to
read in its entirety as follows: "The name of the corporation is: The Advest
Group, Inc.") shall be the Certificate of Incorporation of the Surviving
Corporation as of the Effective Time until duly amended as provided therein or
by applicable law.
(b) The Bylaws of Merger Sub in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation as of the
Effective Time, until thereafter amended as provided therein or by applicable
law.
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1.5 DIRECTORS OF THE SURVIVING CORPORATION.
The directors of Merger Sub immediately prior to the Effective
Time shall be the directors of the Surviving Corporation as of the Effective
Time and until their successors are duly appointed or elected in accordance with
applicable law.
1.6 OFFICERS OF THE SURVIVING CORPORATION.
The officers of Merger Sub immediately prior to the Effective Time
shall be the officers of the Surviving Corporation as of the Effective Time and
until their successors are duly appointed or elected in accordance with
applicable law.
ARTICLE 2
CONVERSION AND EXCHANGE OF SECURITIES
2.1 MERGER SUB STOCK.
At the Effective Time, each share of common stock, par value $1.00
per share, of Merger Sub outstanding immediately prior to the Effective Time
shall be converted into and exchanged for one validly issued, fully paid and
non-assessable share of common stock, par value $1.00 per share, of the
Surviving Corporation.
2.2 COMPANY STOCK.
(a) At the Effective Time, subject to the provisions of this
Section 2.2., each share of common stock, par value $.01 per share, of the
Company including all associated Rights (as defined in Section 3.22) ("Company
Common Stock"), other than shares canceled pursuant to Section 2.2(c) and
Dissenting Shares (as defined in Section 2.2(m)), if any, issued and outstanding
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into the
right to receive, at the option of the holder as contemplated by Sections 2.2(d)
through 2.2(i), (i) an amount in cash equal to the product of (A) the average
closing price per share of the common stock, par value $.01, of Parent ("Parent
Common Stock") on the New York Stock Exchange ("NYSE") for the ten consecutive
trading days ending on the fifth trading day prior to the Closing Date, as set
forth in the Eastern edition of the Wall Street Journal or, if not reported
therein, any other authoritative source ("Average Price") and (B) the Exchange
Ratio (as such term is defined and calculated pursuant to Annex A hereto, based
on the Average Price), without interest, (the "Cash Price Per Share"), (ii) a
number of shares of Parent Common Stock equal to the Exchange Ratio (together
with the associated rights issued pursuant to the Parent Rights Agreement (as
defined in Section 4.3)) or (iii) a combination of cash and Parent Common Stock
(together with the associated rights) determined in accordance with this Section
(each of the foregoing, the "Merger Consideration").
(b) As a result of the Merger and without any action on the
part of the holder thereof, at the Effective Time, all shares of Company Common
Stock outstanding immediately prior to the Effective Time shall cease to be
outstanding and shall cease to
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exist, and each holder of shares of Company Common Stock shall thereafter cease
to have any rights with respect to such shares of Company Common Stock (other
than Dissenting Shares, which shall have the rights contemplated by Section 262
of the DGCL), except the right to receive, without interest, the consideration
contemplated by Section 2.2(a) and cash in accordance with Sections 2.3(c) and
2.3(e) upon the surrender of a certificate (a "Certificate") representing such
shares of Company Common Stock.
(c) Each share of Company Common Stock that is owned by Parent
or any of Parent's wholly-owned subsidiaries or held in the Company's treasury
at the Effective Time ("Parent Shares") shall, by virtue of the Merger, cease to
be outstanding and shall be canceled and retired and shall cease to exist
without payment of any consideration therefor.
(d) Subject to the provisions of this Section 2.2, each record
holder of shares of Company Common Stock immediately prior to the Effective Time
will be entitled to elect to receive either (i) the Cash Price Per Share for all
of such holder's shares ("Cash Election"), (ii) the Cash Price Per Share for a
stated number of such holder's shares and a number of shares of Parent Common
Stock equal to the Exchange Ratio per share of Company Common Stock for the
balance of such holder's shares of Company Common Stock ("Partial Cash
Election") or (iii) a number of shares of Parent Common Stock equal to the
Exchange Ratio per share of Company Common Stock for all of such holder's shares
of Company Common Stock ("Stock Election"). All Cash Elections, Partial Cash
Elections and Stock Elections shall be unconditional and made on a form designed
for that purpose and mutually agreeable to Parent and the Company (a "Form of
Election"). Any holder of Company Common Stock who fails to properly make a Cash
Election, Partial Cash Election or Stock Election and any holder who fails to
submit to the Paying Agent referred to below a properly completed and signed and
properly and timely submitted Form of Election shall be deemed to have indicated
no preference as to the receipt of cash or Parent Common Stock with respect to
such holder's shares (a "Non-Election") and will receive the Merger
Consideration described below.
(e) The aggregate number of shares of Company Common Stock to
be converted into the right to receive cash in the Merger (which shall include
Dissenting Shares, if any) shall be equal to 49.9% of the total number of shares
of Company Common Stock issued and outstanding immediately prior to the
Effective Time (other than Parent Shares) (the "Cash Election Number"). The
remaining number of such issued and outstanding shares of Company Common Stock
immediately prior to the Effective Time (other than Parent Shares) (the "Stock
Election Number") shall be converted into the right to receive Parent Common
Stock in the Merger; provided, however, that notwithstanding anything contained
in this Agreement to the contrary, the Stock Election Number shall equal as
nearly as practicable 50.1% of the total number of shares of Company Common
Stock issued and outstanding immediately prior to the Effective Time (other than
Parent Shares).
(f) If the aggregate number of shares of Company Common Stock
for which cash was elected under a Cash Election or a Partial Cash Election plus
Dissenting
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Shares, if any, (collectively, the "Cash Election Shares") exceeds the Cash
Election Number, then all shares of Company Common Stock for which Parent Common
Stock was elected under a Stock Election or a Partial Cash Election
(collectively, the "Stock Election Shares") and all shares of Company Common
Stock covered by Non-Elections (the "Non-Election Shares") shall be converted
into the right to receive Parent Common Stock, and the Cash Election Shares
(other than Dissenting Shares) shall be converted into the right to receive cash
and Parent Common Stock in the following manner:
Each Cash Election Share (other than Dissenting Shares) shall be
converted into the right to receive (A) an amount of cash (rounded
to the nearest cent), without interest, equal to the product of
(x) the Cash Price Per Share and (y) a fraction (the "Cash
Fraction"), the numerator of which shall be the Cash Election
Number and the denominator of which shall be the total number of
Cash Election Shares and (B) a number of shares of Parent Common
Stock equal to the product of (x) the Exchange Ratio and (y) a
fraction equal to one (1) minus the Cash Fraction.
(g) If the aggregate number of Stock Election Shares exceeds
the Stock Election Number, all Cash Election Shares and all Non-Election Shares
shall be converted into the right to receive cash, and all Stock Election Shares
shall be converted into the right to receive Parent Common Stock and cash in the
following manner:
Each Stock Election Share shall be converted into the right to
receive (A) a number of shares of Parent Common Stock equal to the
product of (x) the Exchange Ratio and (y) a fraction (the "Stock
Fraction"), the numerator of which shall be the Stock Election
Number and the denominator of which shall be the total number of
Stock Election Shares, and (B) an amount of cash (rounded to the
nearest cent), without interest, equal to the product of (x) the
Cash Price Per Share and (y) a fraction equal to one (1) minus the
Stock Fraction.
(h) In the event that neither subparagraph (f) or (g) above is
applicable, all Cash Election Shares shall be converted into the right to
receive cash, all Stock Election Shares shall be converted into the right to
receive Parent Common Stock, and all Non-Election Shares shall be converted into
the right to receive (A) an amount of cash (rounded to the nearest cent),
without interest, equal to the product of (x) the Cash Price Per Share and (y) a
fraction, the numerator of which shall be the Cash Election Number less the Cash
Election Shares and the denominator of which shall be the Non-Election Shares,
and (B) a number of shares of Parent Common Stock equal to the product of (x)
the Exchange Ratio and (y) a fraction, the numerator of which shall be the Stock
Election Number less the Stock Election Shares and the denominator of which
shall be the Non-Election Shares.
(i) The Company shall use all reasonable best efforts to cause
copies of the Form of Election (which shall contain a Letter of Transmittal (as
defined herein)) to be mailed with the Proxy Statement/Prospectus (as defined in
Section 5.7) to the record holders of Company Common Stock (other than holders
of Dissenting Shares) as
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of the record date for the Company Stockholders Meeting and to make the Form of
Election available to all persons who become record holders of Company Common
Stock during the period between such record date and the Election Deadline
referred to below. A properly completed Form of Election must be received by the
Paying Agent by 5:00 p.m., New York City time, on the second business day
preceding the Closing Date (the "Election Deadline"), which day shall not be
less than 20 days after the initial mailing of the Form of Election, in order to
be effective. An election by a holder of Company Common Stock shall be validly
made only if the Paying Agent shall have timely received a Form of Election
properly completed and executed (with the signature or signatures thereon
guaranteed as required by the Form of Election) by that shareholder accompanied
either by the Certificate or Certificates representing all of the shares of
Company Common Stock owned by that shareholder, duly endorsed in blank or
otherwise in form acceptable for transfer on the books of the Company, or by an
appropriate guarantee of delivery in the form customarily used in transactions
of this nature from a member of a national securities exchange, a member of the
National Association of Securities Dealers, Inc., or a commercial bank or trust
company in the United States. All elections may be revoked until the Election
Deadline in writing by the record holders submitting Forms of Election. Parent
shall have the authority, in its sole discretion, to make all determinations as
to whether or not a Form of Election has been timely received.
(j) The Company shall cause a Stock Election to be made with
respect to each Company Common Share owned beneficially or of record by any
subsidiary of the Company or any other affiliate of the Company or any employee
benefit plan controlled by the Company.
(k) Effective immediately prior to the Effective Time, each
outstanding option to purchase shares of Company Common Stock granted under the
Company's 1993 Stock Option Plan, 1999 Stock Option Plan, 1994 Non-Employee
Director Stock Option Plan, 2000 Non-Employee Director Stock Option Plan and
Equity Plan (collectively, the "Company Stock Option Plans") or under any other
outstanding option, warrant or similar agreements granting options, warrants or
similar rights to purchase capital stock of the Company (the "Company Options"),
whether or not then exercisable or vested, will be cancelled and, in
consideration thereof, the Company (or, at Parent's option, Merger Sub) will pay
to each holder of a Company Option an amount in cash in respect thereof equal to
the product of (x) the excess, if any, of the Cash Price Per Share over the
exercise price of each such Company Option and (y) the number of shares of
Company Common Stock previously subject to the Company Option immediately prior
to its cancellation (such payment to be net of any withholding taxes required by
the Code or other applicable law). The Company agrees to take or cause to be
taken all action necessary under such Company Options to provide for such
cancellation and payment.
(l) The Company Stock Option Plans shall terminate as of the
Effective Time, and the provisions in any other plan or arrangement of the
Company or any of its Subsidiaries providing for the offering, issuance,
purchase, transfer or grant of any capital stock of the Company or any interest
in respect of any capital stock of the Company shall be deleted as of the
Effective Time, and following the Effective Time no
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holder of any Company Option or warrant or any participant in any Company Stock
Option Plan or other plan or arrangement of the Company shall have any right
thereunder to acquire any capital stock of the Company or the Surviving
Corporation.
(m) Prior to the Closing Date the Company shall take all
necessary and appropriate actions to provide that, upon the Effective Time, 50%
of each restricted stock award or deferred stock award or any other stock-based
award (other than the Options), the value of which is based upon the value of
the Company Common Stock (collectively, the "Stock Awards") which is at the
Effective Time subject to any vesting requirement which would not be accelerated
as a result of the transactions contemplated in this Agreement and which was
issued pursuant to a Company Stock Option Plan or any of the Company's
Non-Employee Director Equity Plan, Key Professional Equity Plan, Equity Plan,
1998 Equity Plan, 1997 Equity Plan, or 1995 Equity Plan or any other similar
plans, programs or arrangements, or pursuant to any individual restricted stock
agreements between the Company and certain executive employees, shall become
fully vested and payable or distributable 100% in cash (based upon the Cash
Price Per Share). At the Effective Time, the remaining 50% of such Stock Awards
which are outstanding immediately prior thereto shall be converted automatically
into stock awards for such number of shares of Parent Common Stock as shall be
equal to the product of the number of shares of such Company Common Stock
multiplied by the Exchange Ratio, provided that any fractional shares of Parent
Common Stock resulting therefrom shall be rounded up to the nearest whole share.
The terms of the new stock awards shall otherwise be the same as the original
stock awards, except all references to The Advest Group, Inc. shall be deemed to
be references to The MONY Group Inc. The Company agrees to take or cause to be
taken all actions necessary under such Stock Awards to provide for such
acceleration and payment. No Stock Award shall be subject to any election
pursuant to Section 2.2 (d) - (h).
(n) To the extent that holders thereof are entitled to
appraisal rights under Section 262 of the DGCL, shares of Company Common Stock
issued and outstanding immediately prior to the Effective Time and held by a
holder who has properly exercised and perfected his demand for appraisal rights
under Section 262 of the DGCL (the "Dissenting Shares") shall not be converted
into the right to receive the Merger Consideration, but the holders of
Dissenting Shares shall be entitled to receive such consideration as shall be
determined pursuant to Section 262 of the DGCL; provided, however, that if any
such holder shall have failed to perfect or shall effectively withdraw or lose
his right to appraisal and payment under the DGCL, each of such holder's shares
of Company Common Stock shall thereupon be deemed to have been converted as of
the Effective Time into the right to receive the Merger Consideration in
accordance with this Agreement with respect to those shares, as though such
shares as of the Effective Time were Non-Election Shares. The Company shall give
Parent (a) prompt notice of any written demands for fair value received by the
Company, withdrawals of such demands, and any other related instruments served
pursuant to Section 262 of the DGCL and received by the Company and (b) the
opportunity to direct all negotiations and proceedings with respect to demands
for fair value under the DGCL. The Company shall not, except with the prior
written consent of Parent, voluntarily make
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any payment with respect to any demands for fair value for Dissenting Shares or
offer to settle, or settle, any such demands.
2.3 EXCHANGE OF CERTIFICATES REPRESENTING COMPANY COMMON STOCK.
(a) Prior to the Effective Time, Parent shall appoint
EquiServe, or such other institution as may be reasonably acceptable to the
Company, to act as paying agent (the "Paying Agent") for the payment of Merger
Consideration upon surrender of certificates representing the shares of Company
Common Stock. As of the Effective Time, Parent shall deposit, or shall cause to
be deposited, with the Paying Agent, for the benefit of the holders of shares of
Company Common Stock, an amount of cash and certificates representing such
number of shares of Parent Common Stock required to effect the conversion of
Company Common Stock into Parent Common Stock and cash pursuant to Section 2.2,
plus additional cash in an amount equal to Parent's good faith estimate of the
cash required to be paid to holders of shares of Company Common Stock in lieu of
fractional shares expected to be payable in connection with the Merger (such
cash and certificates for shares of Parent Common Stock, together with any
dividends or distributions with respect thereto (relating to record dates for
such dividends or distributions after the Effective Time), being hereinafter
referred to as the "Exchange Fund") to be issued pursuant to Section 2.2 and
paid pursuant to this Section 2.3 in exchange for outstanding shares of Company
Common Stock.
(b) Promptly after the Effective Time, Parent shall cause the
Paying Agent to mail to each holder of record of shares of Company Common Stock
(other than Dissenting Shares) that has not timely submitted a properly
completed and executed Form of Election accompanied by an appropriately endorsed
Certificate or Certificates representing all of the shares of Company Common
Stock owned by that shareholder (or, alternatively, by an appropriate guarantee
of delivery) (i) a letter of transmittal specifying that delivery shall be
effected, and risk of loss and title to such shares of Company Common Stock
shall pass, only upon delivery of the Certificates representing such shares to
the Paying Agent and which letter shall be in such form and have such other
provisions as Parent may reasonably specify (a "Letter of Transmittal") and (ii)
instructions for use in effecting the surrender of Company Common Stock
Certificates in exchange for the Merger Consideration contemplated by Section
2.2 and this Section 2.3, including cash in lieu of fractional shares. After the
Effective Time, the holders of all Certificates previously submitted with a Form
of Election and of those subsequently surrendered for cancellation to the Paying
Agent together with a Letter of Transmittal, duly executed and completed in
accordance with the instructions thereto, shall be entitled to receive in
exchange therefor (x) a certificate representing that number of whole shares of
Parent Common Stock, if any, into which the shares of Company Common Stock
previously represented by such Certificate have been converted in accordance
with Section 2.2, (y) the amount of cash, if any, to which such holder is
entitled in accordance with Section 2.2 and (z) the amount of cash in lieu of
fractional shares of Parent Common Stock, if any, and unpaid dividends and
distributions, if any, that such holder has the right to receive in respect of
the Certificate surrendered pursuant to the provisions of this Article 2, after
giving effect to any required withholding tax, and the shares represented by the
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Certificate so surrendered shall forthwith be canceled. No interest will be paid
or accrued on the cash payable to holders of shares of Company Common Stock. In
the event of a transfer of ownership of Company Common Stock that is not
registered in the transfer records of the Company, a certificate representing
the proper number of shares of Parent Common Stock, together with a check for
the cash to be paid may be issued to the transferee if the Certificate
representing such Company Common Stock is presented to the Paying Agent,
accompanied by all documents required to evidence and effect such transfer and
to evidence that any applicable stock transfer taxes have been paid.
(c) Notwithstanding any other provisions of this Agreement, no
dividends or other distributions declared after the Effective Time on Parent
Common Stock shall be paid with respect to any shares of Company Common Stock
represented by a Certificate, and no cash payment in lieu of fractional shares
shall be paid to any such holder pursuant to Section 2.3 (e), until such
Certificate is surrendered for exchange as provided herein. Subject to the
effect of applicable laws, following surrender of any such Certificate, there
shall be paid to the holder of the certificates representing whole shares of
Parent Common Stock issued in exchange therefor, without interest, (i) at the
time of such surrender, the amount of any cash payable in lieu of a fractional
share of Parent Common Stock to which such holder is entitled pursuant to
Section 2.3(e) and the amount of dividends or other distributions with a record
date after the Effective Time theretofore payable with respect to such whole
shares of Parent Common Stock and not paid, less the amount of any withholding
taxes which may be required thereon, and (ii) at the appropriate payment date,
the amount of dividends or other distributions with a record date after the
Effective Time but prior to surrender and a payment date subsequent to surrender
payable with respect to such whole shares of Parent Common Stock, less the
amount of any withholding taxes which may be required thereon.
(d) At or after the Effective Time, there shall be no transfers
on the stock transfer books of the Company of the shares of Company Common Stock
which were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation, they
shall be canceled and exchanged for certificates for shares of Parent Common
Stock and cash deliverable in respect thereof pursuant to this Agreement in
accordance with the procedures set forth in this Article 2. Certificates
surrendered for exchange by any person constituting an "affiliate" of the
Company for purposes of Rule 145(c) under the Securities Act of 1933, as amended
(the "Securities Act"), shall not be exchanged until Parent has received a
written agreement from such person as provided in Section 5.9.
(e) No fractional shares of Parent Common Stock shall be issued
pursuant hereto. In lieu of the issuance of any fractional share of Parent
Common Stock, cash adjustments will be paid to holders in respect of any
fractional share of Parent Common Stock that would otherwise be issuable, and
the amount of such cash adjustment shall be equal to the product obtained by
multiplying such stockholder's fractional share of Parent Common Stock that
would otherwise be issuable by the Average Price. In lieu of depositing with the
Paying Agent the amount of cash to be paid to holders of fractional interests,
Parent shall have the right to deliver to the Paying Agent the aggregate number
of shares of Parent Common Stock to be issued in the Merger (the
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"Aggregate Shares"). Thereupon the Paying Agent shall determine the excess of
(i) the number of Aggregate Shares over (ii) the number of full shares of Parent
Common Stock to be issued in the Merger (the "Excess Shares"). Following the
Effective Time, the Paying Agent, as agent for the holders of the Aggregate
Shares, shall sell the Excess Shares at the prevailing prices on the NYSE. The
sale of the Excess Shares by the Paying Agent shall be executed on the NYSE
through one or more member firms of the NYSE and shall be executed in round lots
to the extent practicable. The Paying Agent shall use all reasonable best
efforts to complete the sale of the Excess Shares as promptly following the
Effective Time as, in the Paying Agent's reasonable judgment, is practicable
consistent with obtaining the best execution of such sales in light of
prevailing market conditions. Until the net proceeds of such sale or sales have
been distributed to the holders of Company Common Stock, the Paying Agent will
hold such proceeds in trust for such holders (the "Common Shares Trust"). Parent
shall pay all commissions, transfer taxes and other out-of-pocket transaction
costs, including the expenses and compensation of the Paying Agent, incurred in
connection with such sale of the Excess Shares. The Paying Agent shall determine
the portion of the Common Shares Trust to which each holder of shares shall be
entitled, if any, by multiplying the amount of the aggregate net proceeds
comprising the Common Shares Trust by a fraction, the numerator of which is the
amount of fractional share interests to which such holder is entitled (after
taking into account all shares of Company Common Stock held at the Effective
Time by such holder) and the denominator of which is the aggregate amount of
fractional shares interests to which all holders of Company Common Stock are
entitled.
(f) Any portion of the Exchange Fund (including the proceeds of
any investments thereof and any shares of Parent Common Stock) that remains
unclaimed by the former stockholders of the Company six months after the
Effective Time shall be delivered to Parent. Any former stockholders of the
Company who have not theretofore complied with this Article 2 shall thereafter
look only to Parent, and Parent shall comply with such requests, made in
accordance with the terms of this Agreement, for payment of their shares of
Parent Common Stock, cash and unpaid dividends and distributions on Parent
Common Stock deliverable in respect of each share of Company Common Stock such
stockholder holds as determined pursuant to this Agreement, in each case,
without any interest thereon.
(g) None of Parent, the Company, the Surviving Corporation, the
Paying Agent or any other person shall be liable (except to the extent provided
by applicable law) to any former holder of shares of Company Common Stock for
any amount properly delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
(h) In the event any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and the posting by
such person of a bond in such amount as the Surviving Corporation may direct as
indemnity against any claim that may be made against it with respect to such
Certificate, the Paying Agent will issue in exchange for such lost, stolen or
destroyed Certificate the shares of Parent Common Stock and cash deliverable in
respect thereof pursuant to this Agreement.
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2.4 ADJUSTMENT OF EXCHANGE RATIO.
In the event that, subsequent to the date of this Agreement but
prior to the Effective Time, the outstanding shares of Parent Common Stock or
Company Common Stock, respectively, shall have been 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 other similar transaction, the Exchange Ratio
shall be appropriately adjusted.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedule delivered at or
prior to the execution hereof to Parent (the "Company Disclosure Schedule") or
in the Company Reports (as defined below) filed on or prior to the date hereof,
the Company represents and warrants to Parent as of the date of this Agreement
as follows:
3.1 EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY.
The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of Delaware. The Company is duly licensed or
qualified to do business as a foreign corporation and is in good standing under
the laws of any other state of the United States in which the character of the
properties owned or leased by it or in which the transaction of its business
makes such qualification necessary, except where the failure to be so qualified
or to be in good standing is not reasonably likely to have a Company Material
Adverse Effect (as defined below). The Company has all requisite corporate power
and authority to own, operate and lease its properties and carry on its business
as now conducted or as reasonably contemplated in the future. Each of the
Company's Subsidiaries is a corporation or partnership duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization, has the corporate or partnership power and
authority to own its properties and to carry on its business as it is now being
conducted, and is duly qualified to do business and is in good standing in each
jurisdiction in which the ownership of its property or the conduct of its
business requires such qualification, except for jurisdictions in which such
failure to be so qualified or to be in good standing is not reasonably likely to
have a Company Material Adverse Effect. The Advest Group, Inc. has no
governmental or non-governmental permits, licenses or authorizations or any
contracts or other agreements that are not freely assignable.
3.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS.
The Company has all requisite corporate power and authority to
execute and deliver this Agreement, the Option Agreement and all other
agreements and documents contemplated hereby and thereby and to perform its
obligations hereunder and thereunder. Subject only to the approval of this
Agreement and the transactions contemplated hereby by the holders of a majority
of the outstanding shares of Company
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Common Stock, the consummation by the Company of the transactions contemplated
hereby and by the Option Agreement and the Support Agreement has been
unanimously approved by the Board of Directors of the Company (the "Company
Board") and duly authorized by all requisite corporate action. This Agreement
and the Option Agreement constitute, and all other agreements and documents
contemplated hereby to which the Company is a party (when executed and delivered
pursuant hereto) will constitute, the valid and legally binding obligations of
the Company, enforceable in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws of general
applicability relating to creditors' rights and general principles of equity.
3.3 CAPITALIZATION.
The authorized capital stock of the Company consists of 25,000,000
shares of Company Common Stock and 2,000,000 shares of preferred stock, $.01 par
value per share ("Company Preferred Stock"). As of August 18, 2000, there were
8,899,109 shares of Company Common Stock issued and outstanding, 2,215,047
shares of Company Common Stock held in the Company's treasury, and no shares of
Company Preferred Stock issued and outstanding. Since such date, no shares of
capital stock of the Company have been issued, except shares of Company Common
Stock issued pursuant to the exercise of options outstanding under the Company
Stock Option Plans. As of August 18, 2000, options to acquire 998,583 shares of
Company Common Stock were outstanding pursuant to the terms of the Company Stock
Option Plans. Since such date, no additional options have been granted. The
Company has no outstanding bonds, debentures, notes or other obligations the
holders of which have the right to vote (or which are convertible into or
exercisable for securities having the right to vote) on any matter with respect
to such securities. All issued and outstanding shares of Company Common Stock
are duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights, and were issued in compliance with all applicable federal and
state securities laws, rules and regulations. There are not at the date of this
Agreement any existing options, warrants, calls, subscriptions, convertible
securities, or other rights, agreements or commitments, other than under the
Company Stock Option Plans, that obligate the Company or any of its Subsidiaries
to issue, transfer or sell any shares of capital stock of the Company or any of
its Subsidiaries, except that as of the date hereof, there were shares of Series
A Participating Preferred Stock subject to issuance pursuant to the Shareholder
Rights Agreement, dated as of October 31, 1998, as amended on March 12, 1998,
between the Company and American Stock Transfer and Trust Company, as successor
Rights Agent (the "Rights Agreement"). After the Effective Time, the Surviving
Corporation will have no obligation to issue, transfer or sell any shares of
capital stock or other securities of the Company or the Surviving Corporation or
any Subsidiary of the Company pursuant to any Company Plan (as defined in
Section 3.14) or otherwise.
3.4 SUBSIDIARIES.
The Company owns directly or indirectly each of the outstanding
shares of capital stock (or other ownership interests having by their terms
ordinary voting power to
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elect a majority of directors or others performing similar functions with
respect to such Subsidiary) of each of the Company's Subsidiaries. Each of the
outstanding shares of capital stock of each of the Company's Subsidiaries is
duly authorized, validly issued, fully paid and nonassessable, and is owned,
directly or indirectly, by the Company free and clear of all liens, pledges,
security interests, claims or other encumbrances. Set forth in Section 3.4 of
the Company Disclosure Schedule is the name and jurisdiction of incorporation of
each Subsidiary of the Company.
3.5 OTHER INTERESTS.
Except for interests in its Subsidiaries and except pursuant to
its investment activities in the ordinary course of business, neither the
Company nor any of its Subsidiaries owns directly or indirectly any interest or
investment (whether equity or debt) in any corporation, partnership, joint
venture, business, trust or entity.
3.6 NO VIOLATION.
Neither the execution and delivery by the Company of this
Agreement or the Option Agreement nor the consummation by the Company of the
transactions contemplated hereby and thereby in accordance with the terms hereof
and thereof, or the consummation of the transactions contemplated by the Support
Agreement, will: (i) conflict with or result in a breach of any provisions of
the Restated Certificate of Incorporation or Restated Bylaws of the Company;
(ii) result in a breach or violation of, a default under, or the triggering of
any payment or other material obligations pursuant to, or accelerate vesting
under, any existing Company Plan, or any grant or award made under any of the
foregoing; (iii) violate, conflict with, result in a breach of any provision of,
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, result in the termination or in a right of
termination or cancellation of, accelerate the performance required by, result
in the triggering of any payment or other material obligations pursuant to,
result in the creation of any lien, security interest, charge or encumbrance
upon any of the material properties of the Company or its Subsidiaries under, or
result in being declared void, voidable, or without further binding effect, any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
deed of trust or any license, franchise, permit, lease, contract, agreement or
other instrument, commitment or obligation to which the Company or any of its
Subsidiaries is a party, or by which the Company or any of its Subsidiaries or
any of their respective properties is bound or affected, except for any of the
foregoing matters that are not reasonably likely to have a Company Material
Adverse Effect; or (iv) other than (a) the filings provided for in Article 1,
(b) the filings required under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), the Home Owners' Loan Act of 1933, as
amended (the "Home Owners' Loan Act"), the Connecticut General Statute of 1999,
as amended (the "Connecticut General Statute"), the Securities Exchange Act of
1934, as amended (the "Exchange Act"), the Securities Act and applicable state
securities and "Blue Sky" laws, the rules of the NYSE and the National
Association of Securities Dealers, Inc. (the "NASD"), (c) the consents,
approvals and notices required or contemplated under the Investment Company Act
of 1940, as amended (the "1940 Act") and the Investment Advisers Act of 1940, as
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amended (the "Advisers Act"), and (d) the filing of any required applications or
notices with the Office of Thrift Supervision (the "OTS"), the Commissioner of
Banking for the State of Connecticut and the NASD ((a), (b), (c) and (d),
collectively, the "Regulatory Filings"), require any consent, approval or
authorization of, action by or in respect of, or declaration, filing or
registration with, any domestic governmental or regulatory authority or
self-regulatory organization, other than consents, approvals, authorizations,
actions, declarations or filings or registration that, if not obtained or made,
are not reasonably likely to have an Company Material Adverse Effect.
3.7 SEC DOCUMENTS.
As of their respective dates, each registration statement, report,
proxy statement or information statement (as defined in Regulation 14C under the
Exchange Act) of the Company prepared by the Company since January 1, 1995, in
the form (including exhibits and any amendments thereto) filed with the
Securities & Exchange Commission (the "SEC"), (collectively, the "Company
Reports") (i) complied as to form in all material respects with the applicable
requirements of the Securities Act, the Exchange Act, and the rules and
regulations thereunder and (ii) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. Each of the balance sheets included
in or incorporated by reference into the Company Reports (including the related
notes and schedules) fairly presents in all material respects the consolidated
financial position of the Company and its Subsidiaries as of its date, and each
of the statements of earnings, changes in shareholders' equity and cash flows
included in or incorporated by reference into the Company Reports (including any
related notes and schedules) fairly presents in all material respects the
results of operations, retained earnings or cash flows, as the case may be, of
the Company and its Subsidiaries for the periods set forth therein (subject, in
the case of unaudited statements, to normal year-end audit adjustments which
would not be material in amount or effect), in each case in accordance with
generally accepted accounting principles ("GAAP") consistently applied during
the periods involved, except as may be noted therein. Neither the Company nor
any of its Subsidiaries has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise), except (a) as set forth in
the Company Reports, (b) liabilities or obligations reflected on, or reserved
against in, a balance sheet of the Company or in the notes thereto, prepared in
accordance with GAAP consistently applied and included in the Company Reports,
and (c) liabilities or obligations incurred in the ordinary course of business
which are not reasonably likely to have a Company Material Adverse Effect.
3.8 PATENTS, TRADEMARKS, COPYRIGHTS AND TRADE SECRETS.
(a) Except as set forth in Section 3.8 of the Company
Disclosure Schedule or the Company Reports, (i) there is no existing or, to the
knowledge of the Company, threatened infringement, misuse or misappropriation by
others, of any United States or foreign patents, patent applications,
trademarks, whether registered or as to which registration has been applied for,
tradenames, service marks, copyrights, processes, designs, formulae, inventions,
know-how, trade secrets or concepts (the "Intellectual
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Property") of the Company or any of its Subsidiaries that is reasonably likely
to be material to the Company's operation, (ii) there are no pending or
threatened claims by the Company or any of its Subsidiaries against others for
infringement, misuse or misappropriating, of any Intellectual Property of the
Company or its Subsidiaries that are reasonably likely to be material to the
Company's operation and (iii) neither the Company nor any of its Subsidiaries is
infringing, misusing or misappropriating any Intellectual Property of any third
party and no claim of such infringement, misuse or misappropriation is pending
or, to the Company's knowledge, threatened.
(b) Except as set forth in Section 3.8 of the Company
Disclosure Schedule or the Company Reports, the Company and its Subsidiaries own
or possess adequate licenses or other valid rights to use all of the
Intellectual Property of the Company and its Subsidiaries used or proposed to be
used in the business of the Company and its Subsidiaries as currently conducted
or as proposed to be conducted. The Company has no knowledge of any facts or
claims which may bring the validity of its issued patents into question.
3.9 INVESTIGATIONS; LITIGATION.
Except as set forth in Section 3.9 of the Company Disclosure
Schedule or in the Company Reports and except in the ordinary course of its
business, (a) no material investigation or review by any governmental entity
with respect to the Company or any of its Subsidiaries or any of the Company
Funds (as hereinafter defined) is pending (or, to the Company's knowledge,
threatened) nor has any governmental entity indicated to the Company an
intention to conduct the same; and (b) there are no actions, suits or
proceedings pending against the Company or its Subsidiaries or, to the knowledge
of the Company, threatened against the Company or its Subsidiaries, at law or in
equity, or before or by any federal, state, local or foreign commission, board,
bureau, agency or instrumentality. Neither the Company nor any of its
Subsidiaries is a party to or is subject to any order, decree, agreement,
memorandum of understanding or similar arrangement with, or a commitment letter
or similar submission to, any regulatory agency or other governmental entity
(including any United States or foreign government; any state or other political
subdivision thereof; any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government; any
Self-Regulatory Organization (as defined below) and any court, tribunal or
arbitrator(s) of competent jurisdiction) charged with the supervision or
regulation of broker-dealers, securities underwriting or trading, stock
exchanges, commodities exchanges, investment companies, investment advisors or
insurance agents and brokers or the supervision or regulation of the Company or
any of its Subsidiaries or any of the other businesses they conduct; and neither
the Company nor any of its Subsidiaries has been notified in writing by or
received any written communication from any such regulatory agency or other
governmental entity to the effect that such regulatory agency or other
governmental entity is contemplating issuing or requesting (or is considering
the appropriateness of issuing or requesting) any such order, decree, agreement,
memorandum of understanding, commitment letter or similar submission. Neither
the Company nor any of its affiliated persons, as defined in Section 2(a)(3) of
the 1940 Act, has been convicted within the past 10 years of any felony or
misdemeanor described in Section 9(a)(1) of the 1940 Act, or
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is, by reason of any misconduct, permanently or temporarily enjoined from acting
in the capacities, or engaging in the activities, described in Section 9(a)(2)
of the 1940 Act. As used herein, "Self-Regulatory Organization" means any United
States or foreign governmental or non-governmental self-regulatory organization,
agency or authority, including any of the NYSE, NASD, the National Futures
Association, or any securities or other exchange or board of trade of which the
Company or any of its Subsidiaries is a member or to the supervision or
regulation of which the Company or any of its Subsidiaries is subject.
3.10 COMPLIANCE WITH LAW; GOVERNMENTAL APPROVALS.
(a) Neither the Company nor any of its Subsidiaries is in
violation of any order of any court, governmental authority, arbitration board
or tribunal, or Self-Regulatory Organization to which the Company or any of its
Subsidiaries or any of their respective properties or assets is subject, other
than any violations that are not reasonably likely to have a Company Material
Adverse Effect. The Company, each of its Subsidiaries, each employee of each of
them, and each of the Company Funds (as hereinafter defined) holds, and has at
all pertinent times held, all licenses, franchises, permits, qualifications,
authorizations, orders and approval of, and has made or obtained all filings,
notices, applications, consents, registrations, approvals, permits or
authorizations with, to or of, all regulatory agencies, other governmental
entities and Self-Regulatory Organizations (collectively, "Permits") necessary
for the lawful ownership and use of the respective properties and assets of the
Company, each of its Subsidiaries, and each of the Company Funds and the conduct
of their respective businesses under and pursuant to every, and is in compliance
with each, and are not in default under any, and have taken all actions required
by each, applicable law, ordinance, governmental rule or regulation, or rule of
each Self-Regulatory Organization to which it is subject in connection with
their business as now conducted (including their sales and marketing practices),
except where the failure to obtain any such item or to take any such action is
not reasonably likely to have a Company Material Adverse Effect. The Company has
received no notice asserting any such violation. All such Permits are valid and
in good standing in all material respects and are not subject to any proceeding
for the suspension, modification or revocation thereof or proceedings related
thereto.
(b) The Company and each of its Subsidiaries that are required
to be registered as a broker-dealer, an investment advisor, a commodity pool
operator, futures commission merchant, introducing broker, commodity trading
advisor or insurance agent with the SEC, the CFTC, the securities commission or
similar authority or insurance authority of any state or foreign jurisdiction or
any Self-Regulatory Organization are duly registered as such and such
registrations are in full force and effect. All United States Federal, state and
foreign registration requirements have been complied with in all material
respects and such registrations as currently filed, and all periodic reports
required to be filed with respect thereto, are accurate and complete in all
material respects. Since January 1, 1998, there have been no contributions or
payments, and there is no other information, that would be required to be
disclosed by the Company or any of the Company's Subsidiaries on any Form
G-37/G-38 or recorded by the Company or any such Subsidiary pursuant to Rule
G-8(a)(xvi) of the United States Municipal Securities
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Rulemaking Board. As used herein, "CFTC" means the United States Commodities
Futures Trading Commission.
(c) The Company and each Subsidiary which renders investment
advisory services to investment advisory clients with whom such entity is or was
a party to an investment advisory agreement or similar arrangement has, at all
times since January 1, 1998 or its date of formation, whichever is later,
rendered such services in material compliance with all applicable requirements
as to portfolio composition and portfolio management including, but not limited
to, the terms of such investment advisory agreements, written instructions from
such investment advisory clients, prospectuses or other offering materials,
board of director or trustee directives and applicable law.
(d) Neither the Company, nor any of its Affiliates (as defined
below), is subject to a "statutory disqualification" as defined in Section
3(a)(39) of the Exchange Act or is subject to a disqualification that would be a
basis for censure, limitations on the activities, functions or operations of, or
suspension or revocation of the registration of any broker-dealer Subsidiary of
the Company as a broker-dealer, municipal securities dealer, government
securities broker or government securities dealer under Section 15, Section 15B
or Section 15C of the Exchange Act, and there is no reasonable basis for, or
proceeding or investigation, whether formal or informal or whether preliminary
or otherwise, that is reasonably likely to result in, any such censure,
limitations, suspension or revocation.
3.11 ABSENCE OF CERTAIN CHANGES.
Since January 1, 2000, the Company and each of its Subsidiaries
and each of the Investment Companies (as defined in Section 3.21(a)) has
conducted its business only in the ordinary course of such business, and there
has not been (i) any Company Material Adverse Effect or any event which is
reasonably likely to result in a Company Material Adverse Effect; (ii) any
declaration, setting aside or payment of any dividend or other distribution with
respect to its capital stock (other than regular quarterly cash dividends
payable on Company Common Stock in an amount not to exceed $0.06 per share);
(iii) any material change in its accounting principles, practices or methods; or
(iv) any action taken of the type contemplated in Section 5.2(iii), (vii), (x),
(xii) or (xiii).
3.12 TAXES AND TAX RETURNS.
(a) Definitions:
"Code" means the Internal Revenue Code of 1986, as amended. All
citations to provisions of the Code, or to the Treasury Regulations promulgated
thereunder, shall include any amendments thereto and any substitute or successor
provisions thereto.
"Taxes" means any and all federal, state, local and foreign taxes,
assessments and other governmental charges, duties, impositions, levies and
liabilities, including, without limitation, taxes based upon or measured by
gross receipts, income, profits, sales, use and occupation, and value added, ad
valorem, transfer, gains, franchise,
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withholding, payroll, recapture, employment, excise, unemployment, insurance,
social security, business license, occupation, business organization, stamp,
environmental and property taxes, together with all interest, penalties and
additions imposed with respect to such amounts. For purposes of this Agreement,
"Taxes" also includes any obligations under any agreements or arrangements with
any person with respect to the liability for, or sharing of, Taxes (including,
without limitation, pursuant to Treas. Reg. Section 1.1502-6 or comparable
provisions of state, local or foreign Tax law) and including, without
limitation, any liability for Taxes as a transferee or successor, by contract or
otherwise.
"Taxable Period" means any taxable year or any other period that
is treated as a taxable year (or other period, or portion thereof, in the case
of a Tax imposed with respect to such other period or portion thereof, e.g., a
quarter) with respect to which any Tax may be imposed under any applicable
statute, rule, or regulation.
"Tax Return" means any report, return, election, notice, estimate,
declaration, information statement and other forms and documents (including,
without limitation, all schedules, exhibits and other attachments thereto)
relating to and filed or required to be filed with a taxing authority in
connection with any Taxes (including, without limitation, estimated Taxes).
(b) All material Tax Returns required to be filed by or with
respect to the Company and each of its Subsidiaries and, to the Company's
knowledge, the Investment Companies for all Taxable Periods have been timely
filed. All such Tax Returns are true, correct, and complete in all material
respects. All Taxes shown to be payable on such Tax Returns, and all assessments
of Tax made against the Company and each of its Subsidiaries and, to the
Company's knowledge, the Investment Companies with respect to such Tax Returns,
have been paid when due. No adjustment relating to any such Tax Return has been
proposed or threatened in writing or to the Company's knowledge, in any other
communication, by any taxing authority.
(c) The Company and each of its Subsidiaries and the Investment
Companies have provided a reserve (without regard to deferred Tax assets and
liabilities) (the "Tax Reserve") on the financial statements included in the
Company Reports that is adequate in accordance with GAAP for all unpaid Taxes
for Taxable Periods ending on or prior to the date of such financial statements.
(d) The Company and each of its Subsidiaries have complied in
all material respects with the provisions of the Code relating to the
withholding and payment of Taxes, including, without limitation, the withholding
and reporting requirements under Code sections 1441 through 1464, 3401 through
3406, and 6041 through 6050S, as well as similar provisions under any other laws
(including without limitation state, local and foreign laws).
(e) None of the Tax Returns of the Company or any of its
Subsidiaries has been or is currently being examined by the Internal Revenue
Service ("IRS") or state, local or foreign taxing authorities. The Company is
not aware of any state of facts which to the Company's knowledge, would
constitute grounds for the proper assessment of any
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material liability for Taxes with respect to periods (or portions thereof) which
have not been audited by the IRS or other taxing authority and with respect to
which the relevant statute of limitations has not expired. There are no
examinations or other administrative or court proceedings relating to Taxes in
progress or pending, nor has the Company or any of its Subsidiaries or, to the
Company's knowledge, the Investment Companies received a revenue agent's or
similar written report asserting a Tax deficiency.
(f) No claim has ever been made in writing by any taxing
authority with respect to the Company or any of its Subsidiaries or, to the
Company's knowledge, the Investment Companies in a jurisdiction where the
Company and/or any of its Subsidiaries and/or the Investment Companies do not
file Tax Returns that the Company or any such Subsidiary or Investment Company
is or may be subject to taxation by that jurisdiction. There are no security
interests on any of the assets of the Company or any of its Subsidiaries that
arose in connection with any failure (or alleged failure) to pay any Taxes and,
except for liens for Taxes that are not yet due and payable or are being
disputed in good faith by appropriate proceedings, there are no liens for any
Tax upon any asset of the Company or any of its Subsidiaries or the Investment
Companies.
(g) Neither the Company nor any of its Subsidiaries or, to the
Company's knowledge, the Investment Companies is, or has been, a party to any
agreement relating to allocating or sharing the payment of, or liability for,
Taxes with respect to any Taxable Period (other than an agreement solely between
or among the Company and its Subsidiaries).
(h) Neither the Company nor any of its Subsidiaries or, to the
Company's knowledge, the Investment Companies has distributed the stock of any
corporation in a transaction satisfying the requirements of Section 355 of the
Code since April 16, 1997. The stock of neither the Company nor any of its
Subsidiaries has been distributed in a transaction satisfying the requirements
of Section 355 of the Code since April 16, 1997.
(i) No extension of time with respect to any date on which a
Tax Return was or is to be filed by the Company or any of its Subsidiaries or,
to the Company's knowledge, the Investment Companies is in force, and no waiver
or agreement by the Company or any of its Subsidiaries or, to the Company's
knowledge, the Investment Companies is in force for the extension of time for
the assessment or payment of any Taxes.
(j) Neither the Company nor any of its Subsidiaries has been a
member of an (i) affiliated group (within the meaning of Section 1504 of the
Code) or (ii) affiliated, combined, consolidated, unitary, or similar group for
state, local or foreign Tax purposes, in each case other than the group of which
the Company is the common parent.
(k) Neither the Company nor any of its Subsidiaries or, to the
Company's knowledge, the Investment Companies has been, is or is reasonably
expected to be a party to a closing agreement or similar arrangement with the
IRS or any relevant state, local or foreign taxing authority.
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3.13 MATERIAL CONTRACTS.
All contracts material to the business and operations of the
Company and its Subsidiaries and the Investment Companies taken as a whole (the
"Material Contracts") are in full force and effect and are enforceable against
all parties thereto in accordance with their terms. Neither the Company nor any
of its Subsidiaries or the Investment Companies is in default under any such
Material Contract and, to the knowledge of the Company, no other party to any
Material Contract with the Company or any Subsidiary or Investment Company is in
default thereunder and the Company has no knowledge of any fact, circumstance or
event which might reasonably be expected in the future to cause any such party
to be in default under any such Material Contract except for such instances that
are not reasonably likely to result in a Company Material Adverse Effect.
Neither the Company nor any of its Subsidiaries or the Investment Companies is a
party to or bound by any non-competition agreement or any other agreement or
obligation which purports to limit in any material respect the manner in which,
or the localities in which, the business of the Company or its Affiliates
(including Parent and its Subsidiaries following the Effective Time) is or would
be conducted.
3.14 EMPLOYEE BENEFIT PLANS.
(a) Schedule 3.14 of the Company Disclosure Schedule contains a
true and complete list of each material employment, bonus, deferred
compensation, incentive compensation, stock purchase, stock option, stock
appreciation right or other stock-based incentive, severance, change-in-control,
or termination pay, hospitalization or other medical, disability, life or other
insurance, supplemental unemployment benefits, profit-sharing, pension, or
retirement plan, program, agreement or arrangement, and each other employee
benefit plan, program, agreement or arrangement, sponsored, maintained or
contributed to or required to be contributed to by the Company or any Subsidiary
for the benefit of any current or former employee, consultant, or director of
the Company or any of its Subsidiaries (the "Company Plans").
(b) With respect to each of the Company Plans, the Company has
delivered to Parent true and complete copies of each of the following documents,
as applicable: (i) a copy of the Company Plan documents (including all
amendments thereto) for each written Company Plan; (ii) a copy of the annual
report or Internal Revenue Service Form 5500 Series for the last year ending
prior to the date of this Agreement if such report was required to be filed;
(iii) a copy of the actuarial report, if required under the Employment
Retirement Income Security Act of 1974, as amended ("ERISA"), for the last year
ending prior to the date of this Agreement; (iv) a copy of the most recent
Summary Plan Description ("SPD") if required under ERISA; (v) if the Company
Plan is funded through a trust or any other funding vehicle, a copy of the trust
or other funding agreement (including all amendments thereto) and the latest
financial statements thereof, if any, and (vi) the most recent determination
letter received from the IRS with respect to each Company Plan that is intended
to be qualified under Section 401(a) of the Code. In addition, with respect to
each Company Plan, the Company has made available, or will prior to the Closing
Date make available, to Parent true and
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correct copies of all insurance contracts and all other material contracts
relating to such Company Plans.
(c) Neither the Company, any Subsidiary, nor any trade or
business, whether or not incorporated (an "ERISA Affiliate"), that together with
the Company would be deemed a "single employer" within the meaning of Section
4001(b)(1) of ERISA has or at any time in the past has had (i) any obligation to
contribute to, or any liability, contingent or otherwise with respect to, a plan
subject to Title IV of ERISA, Section 412 of the Code, or Section 302 of ERISA,
or (ii) an obligation to contribute to any "multiemployer plan" (as defined in
Section 3(37) of ERISA).
(d) Neither the Company, any Subsidiary nor any of the Company
Plans, any trust created thereunder, nor to the knowledge of the Company, any
trustee, or administrator thereof has engaged in a transaction or has taken or
failed to take any action in connection with which the Company, any Subsidiary
or any ERISA Affiliate could be subject to any material liability for either a
civil penalty assessed pursuant to Section 409 or 502(i) of ERISA or a tax
imposed pursuant to Section 4975(a) or (b), 4976, 4980B, 4980D or 4980E of the
Code.
(e) Each of the Company Plans has been operated and
administered in all material respects in accordance with applicable laws,
including but not limited to ERISA, the Code and the Age Discrimination in
Employment Act of 1967, as amended.
(f) The Company has applied for and received a currently
effective determination letter from the IRS stating that each of the Company
Plans that is intended to be "qualified" within the meaning of Section 401(a) of
the Code is so qualified and the trusts maintained thereunder are exempt from
tax under Section 501(a) of the Code and no event has occurred which would
affect such qualified status.
(g) Any fund established under a Company Plan that is intended
to satisfy the requirements of section 501(c)(9) of the Code has so satisfied
such requirements.
(h) No Company Plan provides benefits, including health, life,
death or medical benefits (whether or not insured), with respect to current or
former employees of the Company, any Subsidiary or any ERISA Affiliate after
retirement or other termination of service (other than (i) coverage mandated by
applicable laws, (ii) death benefits or retirement benefits under any "employee
pension benefit plan," as that term is defined in Section 3(2) of ERISA, (iii)
deferred compensation benefits accrued as liabilities on the books of the
Company, a Subsidiary or an ERISA Affiliate, (iv) benefits, the full direct cost
of which is borne by the current or former employee (or beneficiary thereof), or
(v) under Section 4980B of the Code).
(i) The consummation of the transactions contemplated by this
Agreement, either alone or together with any other event, will not (i) entitle
any current or former employee, officer or director of the Company, any
Subsidiary or any ERISA Affiliate to severance pay or (ii) accelerate the time
of payment or vesting, or increase the
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amount of or otherwise enhance any benefit due any such employee, officer or
director. There are no pending, or, to the knowledge of Parent, threatened or
anticipated, claims by or on behalf of any Company Plan, by any employee or
beneficiary under any such Company Plan, or otherwise involving any such Company
Plan (other than routine claims for benefits).
3.15 LABOR MATTERS.
Neither the Company nor any of its Subsidiaries is a party to, or
bound by, any collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization. Neither the Company nor
any of its Subsidiaries, nor their respective representatives or employees, has
committed any unfair labor practices in connection with the operation of the
respective businesses of the Company or any of its Subsidiaries. There is no
unfair labor practice or labor arbitration proceeding pending or, to the
knowledge of the Company, threatened against the Company or its Subsidiaries
relating to their business by the National Labor Relations Board or any similar
governmental or adjudicatory agency or court. To the knowledge of the Company,
there are no organizational efforts with respect to the formation of a
collective bargaining unit currently being made or threatened involving
employees of the Company or any of its Subsidiaries. The Company and its
Subsidiaries are in compliance with all applicable federal, state and local
laws, rules and regulations regarding employment, consulting, employment
practices, employee classification, labor relations, safety and health, wages,
hours, withholding and terms and conditions of employment.
3.16 PARENT STOCK OWNERSHIP.
Neither the Company nor any of its Subsidiaries or the Investment
Companies beneficially owns any shares of Parent Common Stock or other
securities convertible into or exercisable for Parent Common Stock.
3.17 TAX REORGANIZATION.
The Company is not aware of any fact or circumstance that could
reasonably be expected to prevent the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Code.
3.18 ENVIRONMENTAL MATTERS.
Except as described in Section 3.18 of the Company Disclosure
Schedule or in the Company Reports, the Company and each of its Subsidiaries are
in material compliance with all applicable federal, state, local and foreign
laws, rules and regulations relating to pollution or protection of human health,
worker safety or the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata) (collectively,
"Environmental Laws"). Such compliance includes, but is not limited to, the
possession by the Company and its Subsidiaries of all material permits and other
governmental authorizations required under applicable Environmental Laws, and
compliance with the terms and conditions thereof. Neither the Company nor any of
its Subsidiaries has received written notice of, or to the knowledge of the
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Company, is the subject of, any actions, causes of action, claims,
investigations, demands or notices by any person or entity alleging liability
under or noncompliance with any Environmental Law. To the knowledge of the
Company, there are no circumstances that are reasonably likely to prevent or
interfere with such material compliance in the future.
3.19 STATUS OF SUBSIDIARY THAT IS A SAVINGS ASSOCIATION.
(a) Advest Bank and Trust Company (the "Bank"), a subsidiary of
the Company, is currently deemed to be a "savings association" by the OTS. As of
the date hereof, the Bank continues to meet all of the requirements of the OTS
to enable it to retain its status as a "savings association." The Company is
currently treated as a "unitary thrift holding company" by the OTS. As of the
date hereof, the Company continues to meet all of the requirements of the OTS to
enable it to retain its status as a "unitary thrift holding company."
(b) The Bank is "well capitalized" (as that term is defined at
12 C.F.R. 208.43(b)(1) or the relevant regulation of the Bank's primary federal
bank regulator), and "well managed" (as that term is defined at 12 C.F.R.
225.2(s)), and the Bank's rating pursuant to the Community Reinvestment Act of
1997 ("CRA") is no less than "satisfactory." Neither the Company nor any of its
Subsidiaries has been informed that the Bank's status as "well capitalized,"
"well managed" or "satisfactory" for CRA purposes will change within one year.
3.20 DERIVATIVE INSTRUMENTS.
Any and all swaps, caps, floors, futures, forward contracts,
option agreements and other derivative financial instruments, contracts or
arrangements, whether entered into for the account of the Company or one of its
Subsidiaries or for the account of a customer of the Company or one of its
Subsidiaries, were entered into in the ordinary course of business and, to the
Company's best knowledge, in accordance with prudent business practice and
applicable laws, rules, regulations and policies of all applicable regulatory
agencies and with counterparties believed to be financially responsible at the
time. The Company and each of its Subsidiaries have duly performed in all
respects all of their obligations thereunder to the extent that such obligations
to perform have accrued, and, to the Company's best knowledge, there are no
breaches, violations or defaults or allegations or assertions of such by any
party thereunder, except as, individually or in the aggregate, otherwise are not
reasonably likely to have a Company Material Adverse Effect.
3.21 INVESTMENT ADVISORY ACTIVITIES.
(a) Each of the Investment Companies (as defined below) (or the
trust or corporation of which it is a series) is duly organized and existing in
good standing under the laws of the jurisdiction under which it is organized.
Each of the Investment Companies (or the trust or corporation of which it is a
series) that is registered or required to be registered under the 1940 Act
(each, a "Company Fund") is governed by a board of trustees or directors (each a
"Fund Board" and, collectively, the "Fund Boards")
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consisting of at least 50% of trustees or directors who are not "interested
persons" (as defined in the 1940 Act) of the Company Funds or the Company. The
Fund Boards operate in all material respects in conformity with the requirements
and restrictions of the 1940 Act. As used herein, "Investment Company" means any
investment company within the meaning of the 1940 Act, disregarding Section 3(c)
thereof, that is sponsored, organized, advised, managed or distributed by the
Company or one of its Subsidiaries (including the Company Funds). Each Company
Fund is identified in Section 3.21 of the Company Disclosure Schedule.
(b) Each of the Investment Companies is in compliance in all
material respects with all applicable United States federal, state and foreign
laws, rules and regulations of the SEC, the CFTC, the IRS, and any
Self-Regulatory Organization having jurisdiction over such Investment Company.
(c) Each Investment Company has been operated or managed in
compliance with its respective objectives, policies and restrictions, including
those set forth in the applicable prospectus and registration statement, if any,
for that Investment Company. The Company and its Subsidiaries have operated
their investment accounts in accordance with the investment objectives and
guidelines in effect for such investment accounts.
(d) None of the Company or any of its Subsidiaries or any
"associated person" (as defined in the Advisers Act or the Exchange Act) or any
"affiliated person" (as defined in the 1940 Act) of the Company or any of its
Subsidiaries is ineligible pursuant to Section 203 of the Advisers Act, Section
9(a) or 9(b) of the 1940 Act or Section 15(b) of the Exchange Act to serve as a
registered investment adviser or broker-dealer or as an associated person of a
registered investment adviser or broker-dealer.
3.22 STATE TAKEOVER STATUTES AND SHAREHOLDER RIGHTS PLAN.
No "fair price", "moratorium", "control share acquisition" or
other form of antitakeover statute or regulation is applicable to the Merger or
the other transactions contemplated hereby and by the Option Agreement and the
Support Agreement. The Company has taken all actions necessary such that, for
all purposes under the Rights Agreement, neither Parent nor Merger Sub nor any
of their affiliates shall be deemed an Acquiring Person (as defined in the
Rights Agreement), the Distribution Date (as defined in the Rights Agreement)
shall not be deemed to occur, and the rights issuable pursuant to the Rights
Agreement (the "Rights") will not separate from the Company Common Stock, as a
result of Parent's and Merger Sub's entering into this Agreement, the Option
Agreement or the Support Agreement or consummating the Merger and/or other
transactions contemplated hereby or thereby.
3.23 NO BROKERS.
The Company has not entered into any contract, arrangement or
understanding with any person or firm which may result in the obligation of the
Company or Parent to pay any finder's fees, brokerage or agent's commissions or
other like
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payments in connection with the negotiations leading to this Agreement, the
Option Agreement and the Support Agreement, or the consummation of the
transactions contemplated hereby and thereby, except that the Company has
retained Goldman, Sachs & Co. as its financial advisor, the arrangements of
which have been disclosed by the Company to Parent. Other than the foregoing
arrangements, the Company is not aware of any claim for payment of any finder's
fees, brokerage or agent's commissions or other like payments in connection with
the negotiations leading to this Agreement, the Option Agreement and the Support
Agreement, or the consummation of the transactions contemplated hereby and
thereby.
3.24 OPINION OF FINANCIAL ADVISOR.
The Company has received the opinion of Goldman, Sachs & Co. to
the effect that, as of the date hereof, the consideration to be received in the
Merger is fair to the holders of Company Common Stock from a financial point of
view.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except as set forth in the disclosure schedule delivered at or
prior to the execution hereof to the Company (the "Parent Disclosure Schedule")
or in the Parent Reports (as defined below) filed on or prior to the date
hereof, Parent and Merger Sub represent and warrant to the Company as of the
date of this Agreement as follows:
4.1 EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY; COMPLIANCE
WITH LAW.
Each of Parent and Merger Sub is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation. Parent is duly licensed or qualified to do business as a foreign
corporation and is in good standing under the laws of any other state of the
United States in which the character of the properties owned or leased by it or
in which the transaction of its business makes such qualification necessary,
except where the failure to be so qualified or to be in good standing is not
reasonably likely to have a Parent Material Adverse Effect (as defined below).
Parent has all requisite corporate power and authority to own, operate and lease
its properties and carry on its business as now conducted. Parent and Merger Sub
have obtained all licenses, permits and other authorizations and have taken all
actions required by applicable law or governmental regulations in connection
with their business as now conducted, except where the failure to obtain any
such item or to take any such action is not reasonably likely to have a Parent
Material Adverse Effect.
4.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS.
Each of Parent and Merger Sub, respectively, has the requisite
corporate power and authority to execute and deliver this Agreement, the Support
Agreement, the Option Agreement and all other agreements and documents
contemplated hereby to which it is a party and perform its obligations hereunder
and thereunder. The
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consummation by Parent and Merger Sub, as applicable, of the transactions
contemplated hereby and by the Option Agreement and the Support Agreement have
been unanimously approved by the Board of Directors of Parent and Merger Sub, as
applicable, and duly authorized by all requisite corporate action. This
Agreement, the Support Agreement, and the Option Agreement constitute, and all
other agreements and documents contemplated hereby to which Parent or Merger
Sub, as applicable, is a party (when executed and delivered pursuant hereto)
shall constitute, the valid and legally binding obligations of Parent and/or
Merger Sub, as applicable, enforceable in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, moratorium or other similar
laws of general applicability relating to creditors' rights and general
principles of equity.
4.3 CAPITALIZATION.
The authorized capital stock of Parent consists of 400,000,000
shares of Parent Common Stock and 100,000,000 shares of Preferred Stock, par
value $.01 per share ("Parent Preferred Stock"). As of July 31, 2000, there were
46,147,359 shares of Parent Common Stock and no shares of Parent Preferred Stock
issued and outstanding and 1,095,900 shares of Parent Common Stock held in
Parent's treasury. Since such date, no additional shares of capital stock of
Parent have been issued, except shares issued pursuant to the exercise of
options outstanding under the MONY 1998 Stock Incentive Plan (the "Parent 1998
Stock Plan"). As of July 31, 2000, options to acquire 1,600,400 shares of Parent
Common Stock were outstanding. Since such date, no additional options have been
granted. Parent has no outstanding bonds, debentures, notes or other obligations
the holders of which have the right to vote (or which are convertible into or
exercisable for securities having the right to vote) with the stockholders of
Parent on any matter. All such issued and outstanding shares of Parent Common
Stock are, and all shares of Parent Common Stock to be issued pursuant to
Section 2.2(a) hereof, when issued in accordance with the terms hereof will be,
duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights. Except as contemplated by this Agreement, there are not at
the date of this Agreement any existing options, warrants, calls, subscriptions,
convertible securities, or other rights, agreements or commitments, other than
pursuant to the Parent 1998 Stock Plan and the Rights Agreement between Parent
and EquiServe dated November 10, 1998 (the "Parent Rights Agreement"), which
obligate Parent or any of its Subsidiaries to issue, transfer or sell any shares
of capital stock of Parent or any of its Subsidiaries.
4.4 MERGER SUB.
The authorized capital stock of Merger Sub consists of 2,500
shares of common stock, par value $1.00 per share, all of which shares are
issued and outstanding and owned by Parent. Merger Sub has not engaged in any
activities other than in connection with its formation and the transactions
contemplated by this Agreement.
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4.5 COMPLIANCE WITH LAW; GOVERNMENTAL APPROVALS.
Neither the Parent nor any of its Subsidiaries is in violation of
any order of any court, governmental authority, arbitration board or tribunal,
or Self-Regulatory Organization to which the Parent or any of its Subsidiaries
or any of their respective properties or assets is subject, other than any
violations that are not reasonably likely to have a Parent Material Adverse
Effect. The Parent, each of its Subsidiaries, and each employee of each of them
holds, and has at all pertinent times held, all Permits necessary for the lawful
ownership and use of the respective properties and assets of the Parent and each
of its Subsidiaries and the conduct of their respective businesses under and
pursuant to every, and is in compliance with each, and are not in default under
any, and have taken all actions required by each, applicable law, ordinance,
governmental rule or regulation, or rule of each Self-Regulatory Organization to
which it is subject in connection with their business as now conducted, except
where the failure to obtain any such item or to take any such action is not
reasonably likely to have a Parent Material Adverse Effect. The Parent has
received no notice asserting any such violation. All such Permits are valid and
in good standing in all material respects and are not subject to any proceeding
for the suspension, modification or revocation thereof or proceedings related
thereto.
4.6 NO VIOLATION.
Neither the execution and delivery by Parent and Merger Sub, as
applicable, of this Agreement, the Support Agreement or the Option Agreement,
nor the consummation by Parent and Merger Sub, as applicable, of the
transactions contemplated hereby and thereby in accordance with the terms hereof
and thereof, will: (i) conflict with or result in a breach of any provisions of
the respective Amended and Restated Certificate of Incorporation of Parent or
Certificate of Incorporation of Merger Sub or Amended and Restated By-Laws of
Parent or By-Laws of Merger Sub; (ii) result in a breach or violation of, a
default under, or the triggering of any payment or other material obligations
pursuant to, or accelerate vesting under, the Parent 1998 Stock Plan, or any
grant or award thereunder; (iii) violate, conflict with, result in a breach of
any provision of, constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, result in the termination or
in a right of termination or cancellation of, accelerate the performance
required by, result in the triggering of any payment or other material
obligations pursuant to, result in the creation of any lien, security interest,
charge or encumbrance upon any of the material properties of Parent or Merger
Sub under, or result in being declared void, voidable, or without further
binding effect, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust or any material license, franchise, permit,
lease, contract, agreement or other instrument, commitment or obligation to
which Parent or Merger Sub is a party, or by which Parent or Merger Sub or any
of their respective properties is bound or affected, except for any of the
foregoing matters that are not reasonably likely to have a Parent Material
Adverse Effect; or (iv) other than the Regulatory Filings, require any consent,
approval or authorization of, or declaration, filing or registration with, any
domestic governmental or regulatory authority or self-regulatory organization,
other than consents, approvals, authorizations, declarations or filings or
registrations which, if not obtained or made, are not reasonably likely to have
a Parent Material Adverse Effect.
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4.7 INVESTIGATIONS; LITIGATION.
Except as set forth in Section 4.7 of the Parent Disclosure
Schedule or in the Parent Reports and except in the ordinary course of its
business, (a) no material investigation or review by any governmental entity
with respect to the Parent or any of its Subsidiaries is pending (or, to the
Parent's knowledge, threatened) nor has any governmental entity indicated to the
Parent an intention to conduct the same; and (b) there are no actions, suits or
proceedings pending against the Parent or its Subsidiaries or, to the knowledge
of the Parent, threatened against the Parent or its Subsidiaries, at law or in
equity, or before or by any federal, state, local or foreign commission, board,
bureau, agency or instrumentality. Neither the Parent nor any of its
Subsidiaries is a party to or is subject to any order, decree, agreement,
memorandum of understanding or similar arrangement with, or a commitment letter
or similar submission to, any regulatory agency or other governmental entity
(including any United States or foreign government; any state or other political
subdivision thereof; any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government; any
Self-Regulatory Organization and any court, tribunal or arbitrator(s) of
competent jurisdiction) charged with the supervision or regulation of
broker-dealers, securities underwriting or trading, stock exchanges, commodities
exchanges, investment companies, investment advisors or insurance agents and
brokers or the supervision or regulation of the Parent or any of its
Subsidiaries or any of the other businesses they conduct; and neither the Parent
nor any of its Subsidiaries has been notified in writing by or received any
written communication from any such regulatory agency or other governmental
entity to the effect that such regulatory agency or other governmental entity is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, decree, agreement, memorandum of
understanding, commitment letter or similar submission. Neither the Parent nor
any of its affiliated persons, as defined in Section 2(a)(3) of the 1940 Act,
has been convicted within the past 10 years of any felony or misdemeanor
described in Section 9(a)(1) of the 1940 Act, or is, by reason of any
misconduct, permanently or temporarily enjoined from acting in the capacities,
or engaging in the activities, described in Section 9(a)(2) of the 1940 Act.
4.8 SEC DOCUMENTS.
As of their respective dates, each registration statement, report,
proxy statement or information statement (as defined in Regulation 14C under the
Exchange Act) of Parent prepared by Parent since its initial public offering, in
the form (including exhibits and any amendments thereto) filed with the SEC,
(collectively, the "Parent Reports") (i) complied as to form in all material
respects with the applicable requirements of the Securities Act, the Exchange
Act, and the rules and regulations thereunder and (ii) did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in the light
of the circumstances under which they were made, not misleading. Each of the
consolidated balance sheets included in or incorporated by reference into the
Parent Reports (including the related notes and schedules) fairly presents in
all material respects the consolidated financial position of Parent as of its
date, and each of the consolidated statements of income and comprehensive
income, changes in shareholders' equity and
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cash flows included in or incorporated by reference into the Parent Reports
(including, any related notes and schedules) fairly presents in all material
respects the results of operations, retained earnings or cash flows, as the case
may be, of Parent for the periods set forth therein (subject, in the case of
unaudited statements, to normal year-end audit adjustments which would not be
material in amount or effect), in each case in accordance with GAAP consistently
applied during the periods involved, except as may be noted therein.
4.9 ABSENCE OF CERTAIN CHANGES.
Since January 1, 2000, other than as set forth in the Parent
Reports, Parent has conducted its business only in the ordinary course of such
business, and there has not been any Parent Material Adverse Effect or any event
which is reasonably likely to result in a Parent Material Adverse Effect.
4.10 NO BROKERS.
Parent has not entered into any contract, arrangement or
understanding with any person or firm which may result in the obligation of the
Company or Parent to pay any finder's fee, brokerage or agent's commissions or
other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby, except
that Parent has retained Donaldson, Lufkin & Jenrette Securities Corporation as
its financial advisor. Other than the foregoing arrangements, Parent is not
aware of any claim for payment of any finder's fees, brokerage or agent's
commissions or other like payments in connection with the negotiations leading
to this Agreement or the consummation of the transactions contemplated hereby.
4.11 TAXES.
Except as would not result in a Parent Material Adverse Effect,
each of Parent and its Subsidiaries has (i) duly and timely filed (including
pursuant to applicable extensions granted without penalty) all Tax Returns
required to be filed by it, and such Tax Returns are to the best knowledge of
Parent true, correct and complete, and (ii) paid in full or made adequate
provision in the financial statements of Parent (in accordance with GAAP) for
all taxes related to such Tax Returns. Except as would not result in a Parent
Material Adverse Effect, no deficiencies for any Taxes have been proposed,
asserted or assessed in writing against or with respect to Parent or any of its
Subsidiaries, and, to the best knowledge of Parent, there are no liens for Taxes
upon the assets of either Parent or its Subsidiaries except for statutory liens
for current Taxes not yet due or liens for Taxes that are being contested in
good faith by appropriate proceedings, for which reserves adequate in accordance
with GAAP have been provided. Parent is not aware of any fact or circumstance
that could reasonably be expected to prevent the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.
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ARTICLE 5
COVENANTS
5.1 ALTERNATIVE PROPOSALS.
The Company, its affiliates and their respective officers,
directors, employees, representatives and agents shall immediately cease any
existing discussions or negotiations, if any, with any parties conducted
heretofore with respect to any merger, consolidation, share exchange, tender
offer or other business combination involving the Company or any of its Material
Subsidiaries, or the acquisition (including by way of lease or license) in any
manner of 10% or more of the voting stock or equity or 10% or more of the
consolidated assets of the Company or any of its Material Subsidiaries, other
than as contemplated by this Agreement (each, a "Transaction"). The Company may,
directly or indirectly, prior to the Company Stockholders Meeting (as defined
below), furnish non-confidential information and access, in each case only in
response to unsolicited requests therefor, to any corporation, partnership,
person or other entity or group, and may, prior to the Company Stockholders
Meeting, participate in discussions and negotiate with such entity or group
concerning any Transaction if such entity or group has submitted a written
proposal to the Company Board, prior to the Company Stockholders Meeting,
relating to any such Transaction (an "Alternative Proposal") and the Company
Board by a majority vote determines in its good faith judgment, after
consultation as to legal matters with outside legal counsel and after
consultation as to financial matters with an investment banking firm of national
reputation, that the Alternative Proposal is a Superior Proposal (as hereinafter
defined) and that failing to take such action would constitute a breach of the
Company Board's fiduciary duty. The Company Board shall provide a copy of any
such written proposal to Parent immediately after receipt thereof and thereafter
keep Parent promptly advised of any development with respect thereto. Except as
set forth above, neither the Company or any of its affiliates, nor any of its or
their respective officers, directors, employees, representatives or agents,
shall, directly or indirectly, encourage, solicit, participate in or initiate
discussions or negotiations with, or provide any information to, any
corporation, partnership, person or other entity or group (other than Parent and
Merger Sub, any affiliate or associate of Parent and Merger Sub or any designees
of Parent and Merger Sub) concerning, or enter into any agreement with respect
to, any Transaction, provided, however, that nothing herein shall prevent the
Company Board from taking, and disclosing to the Company's shareholders, a
position contemplated by Rules 14d-9 and 14e-2 promulgated under the Exchange
Act with regard to any tender offers; provided, further, that the Company Board
shall not recommend that the shareholders of the Company tender their
outstanding shares of Company Common Stock in connection with any such tender
offer or exchange offer unless the Company Board by a majority vote determines
in its good faith judgment, after consultation as to legal matters with outside
legal counsel and after consultation as to financial matters with an investment
banking firm of national reputation, that the tender offer is a Superior
Proposal and that failing to take such action would constitute a breach of the
Company Board's fiduciary duty under applicable laws. Nothing in this Section
5.1 shall (x) permit the Company to terminate this Agreement (except as
specifically provided in Article 7 hereof), (y) permit the
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Company to accept or enter into any agreement with respect to an Alternative
Proposal during the term of this Agreement (it being agreed that during the term
of this Agreement, the Company shall not enter into any agreement with any
person that provides for, or in any way facilitates, an Alternative Proposal),
or (z) affect any other obligation of the Company under this Agreement.
For purposes of this Agreement "Superior Proposal" means any
Alternative Proposal with respect to a Transaction which (a) is superior to the
Merger from a financial point of view to the stockholders of the Company, (b)
faces no material legal or other impediments to consummation, and (c) is fully
financed. In deciding whether an Alternative Proposal is a Superior Proposal,
the Company Board shall take into account, among other things, the tax effect on
the Company's stockholders of the Alternative Proposal and the form of
consideration contemplated by the Alternative Proposal.
5.2 INTERIM OPERATIONS.
Prior to the Effective Time, unless Parent has otherwise consented
in writing thereto, the Company:
(i) shall, and shall cause each of its Subsidiaries and each of
the Investment Companies to, conduct its operations according to their
usual, regular and ordinary course in substantially the same manner as
heretofore conducted;
(ii) shall use its reasonable best efforts, and shall cause each
of its Material Subsidiaries and each of the Investment Companies to use
its reasonable best efforts, to preserve intact their business
organizations and goodwill, keep available the services of their
respective officers and employees and maintain satisfactory relationships
with those persons having business relationships with them;
(iii) shall not, and shall cause its Material Subsidiaries not
to, amend their respective Certificates of Incorporation or Bylaws or
comparable governing instruments;
(iv) shall, and shall cause each of the Investment Companies to,
promptly notify Parent of (x) any Company Material Adverse Effect, (y)
any litigation matter relating to an amount in excess of $500,000,
governmental complaints, investigations or hearings (or communications
indicating that the same may be contemplated), or (z) any material breach
of any representation or warranty contained herein;
(v) shall, upon receiving any written notice from any Taxing
authority proposing any adjustment to any Tax relating to the Company or
any of its Subsidiaries, give prompt written notice thereof to Parent,
which notice shall describe in detail each proposed adjustment;
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(vi) shall promptly deliver to Parent true and correct copies of
any report, statement or schedule filed with the SEC subsequent to the
date of this Agreement;
(vii) shall not, and shall not permit any of its Subsidiaries to,
authorize, propose or announce an intention to authorize or propose, or
enter into an agreement with respect to, any merger, consolidation or
business combination (other than the Merger), any acquisition of assets
or securities other than in the ordinary course of business, any
disposition of assets or securities other than in the ordinary course of
business or any release or relinquishment of any material contract rights
other than in the ordinary course of business;
(viii) shall not, and shall not permit any of its Subsidiaries to,
issue any shares of its capital stock or securities convertible into or
exchangeable or exercisable for shares of its capital stock, except upon
exercise of options outstanding on the date of this Agreement under the
Company Stock Option Plans or granted pursuant to the terms of the Stock
Option Agreement to purchase shares of Company Common Stock, or effect
any stock split, reverse stock split, stock dividend, subdivision,
reclassification, combination, exchange, or other similar transaction
with respect to any shares of its capital stock or other ownership
interests, or otherwise change its capitalization;
(ix) shall not, and shall not permit any of its Subsidiaries to,
grant, confer or award any options, warrants, conversion rights or other
rights, not existing on the date hereof, to acquire any shares of its
capital stock or other securities of the Company or its Subsidiaries;
(x) shall not, and shall not permit any of its Subsidiaries to,
take or fail to take any actions which would, or would be reasonably
likely to, prevent the Merger from qualifying as a reorganization with
the meaning of Section 368(a) of the Code;
(xi) except pursuant to (i) applicable law, (ii) the terms of
pre-existing contractual arrangements or policies or (iii) the ordinary
course of business consistent with past practice, shall not, and shall
not permit any of its Subsidiaries to, amend the terms of any Company
Plan, including, without limitation, any employment, severance or similar
agreements or arrangements in existence on the date hereof, or adopt any
new employee compensation or benefit plans, programs or arrangements or
any employment, severance or similar agreements or arrangements, or
change in any respect any vesting schedule with respect to any Company
Plan or grant or award thereunder, or grant any salary increases to any
employee of the Company or any Subsidiary;
(xii) except in the ordinary course consistent with past
practice, shall not, and shall not permit any of its Subsidiaries to, (x)
incur, create, assume or otherwise become liable for borrowed money or
assume, guarantee, endorse or otherwise become responsible or liable for
the obligations of any other individual,
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corporation or other entity, (y) make any loans or advances to any other
person or (z) subject any of its property or assets, or permit any of its
property or assets to be subjected, to any lien, claim or encumbrance of
any kind;
(xiii) shall not, and shall not permit any of its Subsidiaries to,
(x) change any practice with respect to Taxes, (y) make, revoke or change
any election with respect to Taxes or (z) settle or compromise any Tax
liability;
(xiv) shall not (y) declare, set aside or pay any dividend or
make any other distribution or payment with respect to any shares of its
capital stock (other than regular quarterly cash dividends payable on
Company Common Stock in an amount not to exceed $0.06 per share) or other
ownership interests or (z) redeem, purchase or otherwise acquire any
shares of its capital stock, or make any commitment for any such action;
(xv) shall not, and shall not permit any of its Subsidiaries to,
agree, in writing or otherwise, to take any of the foregoing actions or
take any action which would make any representation or warranty in
Article 3 hereof untrue or incorrect.
5.3 MEETING OF STOCKHOLDERS.
The Company will take all action necessary in accordance with
applicable law and its Restated Certificate of Incorporation and Restated Bylaws
to convene a meeting of its stockholders (the "Company Stockholders Meeting,")
as promptly as practicable, and in any case not more than 45 days following the
declaration of the effectiveness of the Form S-4 (as defined in Section 5.7), to
consider and vote upon the approval of this Agreement and the transactions
contemplated hereby. The Company Board shall recommend such approval and shall
take all lawful action to solicit such approval, including, without limitation,
timely mailing the Proxy Statement/Prospectus (as defined in Section 5.7);
provided, however, that such recommendation or solicitation shall not be
required if and to the extent that the Company Board determines after the date
hereof, in its good faith judgment, after consultation as to legal matters with
outside legal counsel and after consultation as to financial matters with an
investment banking firm of national reputation, that the making of such
recommendation or solicitation would involve a breach of its fiduciary duties to
its stockholders imposed by law.
5.4 FILINGS; OTHER ACTIONS.
Subject to the terms and conditions herein provided, the Company
and Parent shall: (a) promptly make their respective filings and thereafter make
any other required submissions under the HSR Act, the Home Owners' Loan Act, the
Connecticut General Statute and the rules of the NASD and to the Federal Trade
Commission, the OTS, the Commissioner of Banking for the State of Connecticut
and the NASD with respect to the Merger and the transactions contemplated hereby
and by the Option Agreement and Support Agreement; (b) use all reasonable best
efforts to cooperate with one another (i) in determining which filings are
required to be made prior to the Effective Time with, and which consents,
approvals, permits or authorizations are required to be
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obtained prior to the Effective Time from, governmental or regulatory
authorities of the United States, the several states and foreign jurisdictions
and self-regulatory organizations in connection with the execution and delivery
of this Agreement, the Option Agreement and the Support Agreement and the
consummation of the transactions contemplated hereby and thereby and (ii) in
timely making all such filings and timely seeking all such consents, approvals,
permits or authorizations; and (c) use all reasonable best efforts to take, or
cause to be taken, all other actions and do, or cause to be done, all other
things necessary, proper or appropriate to consummate and make effective the
transactions contemplated by this Agreement, the Option Agreement and the
Support Agreement as promptly as practicable.
5.5 INSPECTION OF RECORDS.
From the date hereof to the Effective Time, Company and Parent
shall (i) allow all designated officers, attorneys, accountants and other
representatives of their respective companies reasonable access at all
reasonable times to the offices, records and files, correspondence, audits and
properties, as well as to all information relating to commitments, contracts,
titles and financial position, or otherwise pertaining to the business and
affairs, of the other party and their Subsidiaries, (ii) furnish to such other
party and such other party's counsel, financial advisors, auditors and other
authorized representatives such financial and operating data and other
information as such persons may reasonably request and (iii) instruct employees,
counsel and financial advisors to cooperate with such party in such party's
investigation of the business of the other party and its Subsidiaries.
5.6 PUBLICITY.
The initial press release relating to this Agreement shall be a
joint press release and thereafter the Company and Parent shall, subject to
their respective legal obligations (including requirements of stock exchanges
and other similar regulatory bodies), consult with each other, and use
reasonable best efforts to agree upon the text of any press release, before
issuing any such press release or otherwise making public statements with
respect to the transactions contemplated hereby and by the Option Agreement and
Support Agreement and in making any filing with any federal or state
governmental or regulatory agency or with any national securities exchange with
respect thereto.
5.7 REGISTRATION STATEMENT.
Parent and the Company shall cooperate and promptly prepare and
Parent shall file with the SEC as soon as practicable a Registration Statement
on Form S-4 (the "Form S-4") under the Securities Act, with respect to the
Parent Common Stock issuable in the Merger, which Registration Statement shall
contain the proxy statement with respect to the meeting of the stockholders of
the Company in connection with the Merger (the "Proxy Statement/Prospectus").
Parent and the Company agree that such filing of the Form S-4 shall be made no
later than 20 business days from the date hereof. The respective parties will
cause the Proxy Statement/Prospectus and the Form S-4 to comply
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as to form in all material respects with the applicable provisions of the
Securities Act, the Exchange Act and the rules and regulations thereunder.
Parent shall use reasonable best efforts, and Company will cooperate with
Parent, to have the Form S-4 declared effective by the SEC as promptly as
practicable. Parent shall use reasonable best efforts to obtain, prior to the
effective date of the Form S-4, all necessary state securities law or "Blue Sky"
permits or approvals required to carry out the transactions contemplated by this
Agreement. The information supplied by the Company for inclusion or
incorporation by reference in the Proxy Statement/Prospectus and the Form S-4
shall not (i) at the time the Form S-4 is declared effective, (ii) at the time
the Proxy Statement/Prospectus (or any amendment thereof or supplement thereto)
is first mailed to holders of Company Common Stock, (iii) at the time of the
Company Stockholders' Meeting and (iv) at the Effective Time, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading. The information
supplied by Parent for inclusion or incorporation by reference in the Proxy
Statement/Prospectus and the Form S-4 shall not (i) at the time the Form S-4 is
declared effective, (ii) at the time the Proxy Statement/Prospectus (or any
amendment thereof or supplement thereto) is first mailed to holders of Company
Common Stock, (iii) at the time of the Company Stockholders' Meeting and (iv) at
the Effective Time, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they are made,
not misleading. No amendment or supplement to the Proxy Statement/Prospectus
will be made by the Company without the approval of Parent. Parent will advise
the Company, promptly after it receives notice thereof, of the time when the
Form S-4 has become effective or any supplement or amendment has been filed, the
issuance of any stop order, the suspension of the qualification of the Parent
Common Stock issuable in connection with the Merger for offering or sale in any
jurisdiction, or any request by the SEC for amendment of the Proxy
Statement/Prospectus or the Form S-4 or comments thereon and responses thereto
or requests by the SEC for additional information.
5.8 LISTING APPLICATION.
Parent shall promptly prepare and submit to the NYSE a listing
application covering the shares of Parent Common Stock issuable in the Merger,
and shall use all reasonable best efforts to obtain, prior to the Effective
Time, approval for the listing of such Parent Common Stock, subject to official
notice of issuance.
5.9 AFFILIATE LETTERS.
Not less than 30 days prior to the Closing Date, the Company shall
deliver to Parent a list of names and addresses of those persons who were, at
the record date for the Company Stockholders Meeting, "affiliates" (each such
person, an "Affiliate") of the Company within the meaning of Rule 145 of the
rules and regulations promulgated under the Securities Act. The Company shall
provide Parent such information and documents as Parent shall reasonably request
for purposes of reviewing such list. The Company shall deliver or cause to be
delivered to Parent, prior to the Closing Date, from each of
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the Affiliates of the Company identified in the foregoing list, an Affiliate
Letter in the form attached hereto as Exhibit A. Parent shall be entitled to
place legends as specified in such Affiliate Letters on the certificates
evidencing any Parent Common Stock to be received by such Affiliates pursuant to
the terms of this Agreement, and to issue appropriate stop transfer instructions
to the transfer agent for the Parent Common Stock, consistent with the terms of
such Affiliate Letters.
5.10 EXPENSES.
Whether or not the Merger is consummated, all costs and expenses
incurred in connection with this Agreement, the Option Agreement and the Support
Agreement and the transactions contemplated hereby and thereby shall be paid by
the party incurring such expenses except as expressly provided herein and except
that the filing fee in connection with the filing of the Form S-4 or Proxy
Statement/Prospectus with the SEC and the expenses incurred in connection with
printing and mailing the Form S-4 and the Proxy Statement/Prospectus shall be
paid one-half by Parent and one-half by the Company.
5.11 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.
(a) From and after the Effective Time, in the event of any
threatened or actual claim, action, suit, proceeding or investigation, whether
civil, criminal or administrative, including, without limitation, any such
claim, action, suit, proceeding or investigation in which any person who is now,
or has been at any time prior to the date of this Agreement, or who becomes
prior to the Effective Time, a director or officer of the Company or any of its
Subsidiaries (the "Indemnified Parties") is, or is threatened to be, made a
party based in whole or in part on, or arising in whole or in part out of, or
pertaining to (i) the fact that he is or was a director or officer of the
Company, any of its Subsidiaries or any of their respective predecessors or was
prior to the Effective Time serving at the request of any such party as a
director, officer, fiduciary or agent of another corporation, partnership, trust
or other enterprise or (ii) this Agreement, or any of the transactions
contemplated hereby and all actions taken by an Indemnified Party in connection
herewith, whether in any case asserted or arising before or after the Effective
Time, the parties hereto agree to cooperate in connection with defending against
and responding to such proceedings. It is understood and agreed that after the
Effective Time, Parent shall indemnify and hold harmless, as and to the fullest
extent permitted by the corporate governance documents of the Company or its
Subsidiaries as of the date hereof and by law, each such Indemnified Party
against any losses, claims, damages, liabilities, costs, expenses (including
reasonable attorneys' fees and expenses in advance of the final disposition of
any claim, suit, proceeding or investigation to each Indemnified Parry to the
fullest extent permitted by law upon receipt of an undertaking, to the extent
required by the DGCL, from such Indemnified Party to repay such advanced
expenses if it is finally and unappealably determined that such Indemnified
Party was not entitled to indemnification hereunder), judgments, fines and
amounts paid in settlement in connection with any such threatened or actual
claim, action, suit, proceeding or investigation, and in the event of any such
threatened or actual claim, action, suit, proceeding or investigation (whether
asserted or arising before or after the Effective
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Time) (collectively, "Claims"), the Indemnified Parties may retain counsel
reasonably satisfactory to them after consultation with Parent; provided,
however, that except as otherwise specified by the corporate governance
documents of the Company or its Subsidiaries, (1) Parent shall have the right to
assume the defense thereof by retaining counsel reasonably satisfactory to the
Indemnified Parties and upon such assumption Parent shall not be liable to any
Indemnified Party for any legal expenses of other counsel or any other expenses
subsequently incurred by any Indemnified Party in connection with the defense
thereof, except that if Parent elects not to assume such defense or counsel for
the Indemnified Parties reasonably advises the Indemnified Parties that there
are or may be (whether or not any have yet actually arisen) issues which raise
conflicts of interest between Parent and the Indemnified Parties, the
Indemnified Parties may retain counsel reasonably satisfactory to them, and
Parent shall pay the reasonable fees and expenses of such counsel for the
Indemnified Parties, (2) Parent shall be obligated pursuant to this paragraph to
pay for only one firm of counsel for all Indemnified Parties with respect to any
Claim or series of related Claims, (3) Parent shall not be liable for any
settlement effected without its prior written consent (which consent shall not
be unreasonably withheld) and (4) Parent shall have no obligation hereunder to
any Indemnified Party when and if a court of competent jurisdiction shall
ultimately determine, and such determination shall have become final and
nonappealable, that indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by the corporate governance documents of the
Company or its Subsidiaries or applicable law. Any Indemnified Party wishing to
claim indemnification under this Section 5.11, upon learning of any such claim,
action, suit, proceeding or investigation, shall notify Parent thereof in
writing, provided that the failure to so notify shall not affect the obligations
of Parent under this Section 5.11 except (and only) to the extent such failure
to notify materially prejudices the Surviving Corporation.
(b) Without limiting any of the obligations under paragraph (a)
of this Section 5.11, Parent agrees that all rights to indemnification and all
limitations of liability existing in favor of the Indemnified Parties as
provided in the Company's Certificate of Incorporation or Bylaws or in the
similar governing documents of any of the Company's Subsidiaries as in effect as
of the date of this Agreement with respect to matters occurring on or prior to
the Effective Time shall survive the Merger and shall continue in full force and
effect for six (6) years thereafter, without any amendment thereto; provided,
however, that nothing contained in this Section 5.11(b) shall be deemed to
preclude the liquidation, consolidation or merger of the Company or any
Subsidiary thereof, in which case all of such rights to indemnification and
limitations on liability shall be deemed to so survive and continue
notwithstanding any such liquidation, consolidation or merger and shall
constitute rights which may be asserted against Parent or its successor. Nothing
contained in this Section 5.11(b) shall be deemed to preclude any rights to
indemnification or limitations on liability provided in Parent's Articles of
Incorporation or Bylaws or the similar governing documents of any of Parent's
Subsidiaries with respect to matters occurring subsequent to the Effective Time
to the extent that the provisions establishing such rights or limitations are
not otherwise amended to the contrary.
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(c) Parent shall use its reasonable best efforts to cause the
persons serving as officers and directors of the Company immediately prior to
the Effective Time to be covered for a period of six (6) years from the Closing
Date by the directors' and officers' liability insurance policy maintained by
the Company (provided that Parent may substitute therefor policies of at least
the same coverage and amounts containing terms and conditions which are not less
advantageous to such directors and officers of the Company than the terms and
conditions of such existing policy and provided further that in no event will
Parent be required to expend in any one year an amount in excess of 200% of the
annual premiums currently paid by the Company for such insurance (the "Insurance
Amount"), and further provided, that if Parent is unable to maintain or obtain
the insurance called for by this Section 5.11(c) as a result of the preceding
proviso, Parent shall use its reasonable best efforts to obtain as much
comparable insurance as available for the Insurance Amount with respect to acts
or omissions occurring prior to the Effective Time which were committed by such
officers and directors in their capacity as such. The provisions of this Section
5.11 are intended to be for the benefit of, and shall be enforceable by, each
Indemnified Party and his or her heirs and representatives.
5.12 ADDITIONAL AGREEMENTS.
In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement (including,
without limitation, any merger between a Subsidiary of Parent and a Subsidiary
of the Company) or to vest the Surviving Company with full title to all
properties, assets, rights, approvals, immunities and franchises of any of the
parties to the Merger, the proper officers and directors of each party to this
Agreement and their respective Subsidiaries shall take all such necessary action
as may be reasonably requested by Parent.
5.13 SHAREHOLDER RIGHTS PLAN AND TAKEOVER STATUTES.
The Company shall take all action necessary to render the Rights
Agreement and the Rights inapplicable to the transactions contemplated hereby or
by the Option Agreement or Support Agreement. The Company shall not amend,
modify or supplement the Rights Agreement or the Rights without the prior
written consent of Parent. If any "fair price," "moratorium," "control share
acquisition" or other form of antitakeover statute or regulation, is or shall
become applicable to the transactions contemplated hereby or by the Option
Agreement or the Support Agreement, the Company and the members of the Company
Board shall grant such approvals and take such actions as are necessary so that
the transactions contemplated hereby and by the Option Agreement and by the
Support Agreement may be consummated as promptly as practicable on the terms
contemplated hereby and by the Option Agreement and by the Support Agreement and
otherwise act to eliminate or minimize the effects of such statute or regulation
on the transactions contemplated hereby and by the Option Agreement and by the
Support Agreement. If requested by Parent at least three business days prior to
the Effective Time, the Company Board shall take all necessary action to
terminate or redeem all of the outstanding Rights and to terminate the Rights
Agreement, effective immediately prior to the Effective Time.
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5.14 CONVEYANCE TAXES.
The Company and Parent shall cooperate in the preparation,
execution and filing of all returns, questionnaires, applications or other
documents regarding any real property transfer or gains, sales, use, transfer,
value added, stock transfer and stamp Taxes, any transfer, recording,
registration and other fees or any similar Taxes which become payable in
connection with the transactions contemplated by this Agreement, the Option
Agreement and the Support Agreement that are required or permitted to be filed
on or before the Effective Time.
5.15 CERTAIN TAX MATTERS.
(a) From the date hereof until the Effective Time, (i) the
Company and each of its Subsidiaries and the Investment Companies will prepare
and file, or will cause to be prepared and filed, in the manner required by
applicable law, all Tax Returns that are required (with extensions) to be filed,
(ii) the Company and each of its Subsidiaries and the Investment Companies will
timely pay all Taxes shown as due and payable, or required to be shown as due
and payable, on such Tax Returns that are so filed, (iii) the Company and each
of its Subsidiaries and the Investment Companies will make provision for all
Taxes payable by the Company and/or any such Subsidiary and/or Investment
Company for which no Tax Return is due prior to the Effective Time and (iv) the
Company will promptly notify Parent in writing of any action, suit, proceeding,
claim or audit pending against or with respect to the Company or any Subsidiary
thereof in respect of any Tax.
(b) The Company agrees that it will, and will cause its
Subsidiaries and the Investment Companies to, make available all such
information, employees and records of or relating to the Company and each of its
Subsidiaries and the Investment Companies as Parent may reasonably request with
respect to matters relating to Taxes (including, without limitation, the right
to make copies of such information and records) and will cooperate with respect
to all matters relating to Taxes (including, without limitation, the filing of
Tax Returns, the filing of amended Tax Returns, audits, and proceedings).
(c) It is understood and agreed that Parent and the Company
will request that (i) Norman Sinrich, Esq., tax counsel to Parent (or such other
tax counsel to Parent as shall be reasonably acceptable to the Company), and
(ii) Day, Berry & Howard LLP and Wachtell, Lipton, Rosen & Katz, legal counsel
to the Company, issue to their respective clients for inclusion as exhibits to
the Form S-4 opinions to the effect that the Merger will be treated for U.S.
federal income tax purposes as a reorganization within the meaning of Section
368(a) of the Code and respecting related matters (each such opinion, an
"Exhibit Opinion" and, collectively, the "Exhibit Opinions"). In rendering such
Exhibit Opinions, such legal counsel may require and reasonably rely upon
reasonably requested representations contained in certificates of the Company,
Parent and Merger Sub (the "Tax Certificates").
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5.16 COMPANY SATISFACTION OF THE CONDITIONS OF SECTION 15 OF THE
1940 ACT.
(a) The Company shall use, and shall cause its Subsidiary
Boston Advisors ("BA") to use, its best efforts to cause the boards of trustees
of the Company Funds to approve, and to solicit their respective shareholders as
promptly as practicable with regard to the approval of, new investment advisory
agreements with BA acting as investment adviser for such funds, to be effective
on or as promptly as practicable after the Effective Time, pursuant to the
provisions of Section 15 of the 1940 Act, and consistent with all requirements
of the 1940 Act applicable thereto, provided that such agreements are identical
in all material respects to the existing agreements other than the term of the
agreement. The Company and its Subsidiaries also shall take any similar action
required under the 1940 Act to continue any underwriting or distribution
agreements of the Company Funds. Parent shall have a reasonable opportunity to
review and provide comments on any proxy or other materials that are proposed to
be used by the Company and its Subsidiaries to solicit the approvals
contemplated by this Section 5.16(a), prior to the use of such materials.
(b) The Company shall use, and shall cause BA to use, its best
efforts to ensure the satisfaction of the conditions set forth in Section 15(f)
of the 1940 Act with respect to each of the Company Funds.
5.17 ADVISORY CONTRACT CONSENTS.
As promptly as practicable, the Company and its Subsidiaries shall
inform, in compliance with applicable law, its investment advisory services
clients (other than those covered by the foregoing Section 5.16), custodial
services clients and mutual fund distribution services clients of the
transactions contemplated by this Agreement and shall request such clients'
written consents to the deemed assignment of their investment advisory services,
custodial services or mutual fund distribution services agreements, as the case
may be, resulting from the consummation of the transactions contemplated by this
Agreement and use their best efforts to obtain such consents or, in the case of
agreements which are not in writing or which either prohibit assignment or a
change in control or state by their terms that they terminate upon assignment or
a change in control, new agreements (and any required director and investor
approvals) with the Company or the appropriate Subsidiary, effective upon
Closing.
5.18 RETENTION PLAN.
Parent shall cause the Surviving Corporation to honor, effective
as of the Effective Time, the Advest 2000 Retention Plan on terms consistent
with those identified in Exhibit B hereto and the Advest 2000 Management
Incentive Plan on terms consistent with those identified in Exhibit C hereto.
The Company shall keep Parent informed in writing on a timely basis (which shall
be not less frequently than bi-weekly) as to the number of producers who elect
to participate in the Advest 2000 Retention Plan. The Company shall use
commercially reasonable efforts to cause its producers to become participants in
the Advest 2000 Retention Plan.
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5.19 DIVIDENDS.
The Company shall coordinate with Parent the declaration, setting
of record dates and payment dates of dividends on shares of Company Common Stock
so that holders of shares of Company Common Stock do not receive dividends on
both shares of Company Common Stock and Parent Common Stock received in the
Merger in respect of any calendar quarter (taking into account that Parent
declares and pays dividends on the Parent Common Stock annually).
5.20 EMPLOYEE BENEFITS.
For at least one year following the Effective Time, the Parent
shall, or shall cause its Subsidiaries to, provide the employees of the Company
who are employed by the Parent or any of its Subsidiaries immediately after the
Effective Time ("Company Employees") (i) substantially the same base salary and
wages on substantially the same terms and conditions as those in effect
immediately prior to the Effective Time, and (ii) employee benefits that are no
less favorable in the aggregate to the Company Plans provided to Company
Employees immediately prior to the Effective Time. Following the Effective Time,
the Parent agrees that the Parent shall, or shall cause its Subsidiaries to, (i)
recognize all Company Employees' service with the Company for the purposes of
eligibility, participation, level of benefits and vesting of benefits (but not
for benefit accrual under defined benefit pension plans) under any employee
benefit plans of the Parent or its Subsidiaries providing benefits to Company
Employees after the Effective Date (the "New Plans") to the extent such service
would have been recognized under the applicable Company Plans; provided, that no
such credited service shall result in a duplication of benefits.
In addition, and without limiting the generality of the foregoing:
(i) each Company Employee shall be immediately eligible to participate, without
any waiting time, in any and all New Plans to the extent coverage under such New
Plan replaces coverage under comparable Company Plans in which such Company
Employee participated immediately before the Effective Time (such plans,
collectively, the "Old Plans") and to the extent such coverage would have been
recognized under the applicable Old Plan; and (ii) for purposes of each New Plan
providing medical, dental, pharmaceutical and/or vision benefits to any Company
Employee, Parent shall cause all pre-existing condition exclusions and actively
at work requirements of such New Plan to be waived for such employee and his or
her covered dependents to the extent such exclusion or requirement would not
have applied under the applicable Old Plan, and Parent shall cause any eligible
expenses incurred by such employee and his or her covered dependents during the
portion of the plan year of the Old Plan ending on the date such employee's
participation in the corresponding New Plan begins to be taken into account
under such New Plan for purposes of satisfying all deductible, coinsurance and
maximum out of pocket requirements applicable to such employee and his or her
covered dependents for the applicable plan year as if such amounts had been paid
in accordance with such New Plan.
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5.21 SECTION 16 MATTERS.
Prior to the Effective Date, Parent and the Company shall take all
such steps as may be required and permitted to cause the transactions
contemplated by this Agreement, including any dispositions of shares of Company
Common Stock or acquisitions of shares of Parent Common Stock (including
derivative securities with respect to shares of Company Common Stock or Parent
Common Stock) by each individual who is or will be subject to the reporting
requirements of Section 16(a) of the Exchange Act with respect to the Company or
the Parent to be exempt under Rule 16b-3 promulgated under the Exchange Act.
5.22 NO FUNDAMENTAL PARENT CHANGES.
Except as expressly contemplated or permitted by this Agreement,
or as required by applicable law, rule or regulation, during the period from the
date of this Agreement to the Effective Time, Parent shall not, without the
prior written consent of the Company (which consent shall not be unreasonably
withheld, delayed or conditioned), (i) amend its articles of incorporation or
bylaws in a manner that would materially adversely affect the economic benefits
of the Merger to the holders of the Company Common Stock, (ii) take any action
that is intended or may reasonably be expected to result in any of its
representations and warranties set forth in this Agreement being or becoming
untrue in any material respect at any time prior to the Effective Time, or in
any of the conditions to the Merger set forth in Section 6.1 or 6.2 not being
satisfied in any material respect or in a material violation of any provision of
this Agreement, except, in every case, as may be required by applicable law, or
(iii) agree to, or make any commitment to, take any of the actions prohibited by
this Section 5.23.
ARTICLE 6
CONDITIONS
6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligation of each party to effect the Merger shall
be subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) This Agreement and the transactions contemplated hereby
shall have been approved by the holders of the issued and outstanding
shares of capital stock of the Company in accordance with the DGCL and
Company's Certificate of Incorporation.
(b) The waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated.
(c) None of the parties hereto shall be subject to any order or
injunction of a court of competent jurisdiction in the United States
which prohibits the consummation of the transactions contemplated by this
Agreement.
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In the event any such order or injunction shall have been issued, each
party agrees to use all reasonable best efforts to have any such
injunction lifted.
(d) The Form S-4 shall have become effective and shall be
effective at the Effective Time, and no stop order suspending
effectiveness of the Form S-4 shall have been issued, no action, suit,
proceeding, or investigation by the SEC to suspend the effectiveness
thereof shall have been initiated and be continuing, and all material
approvals under state securities laws relating to the issuance or trading
of the Parent Common Stock to be issued to the Company stockholders in
connection with the Merger shall have been received.
(e) The Parent Common Stock to be issued to the Company
stockholders in connection with the Merger shall have been approved for
listing on the NYSE, subject only to official notice of issuance.
(f) All consents, authorizations, orders and approvals of (or
filings or registrations with) any governmental commission or other
regulatory body or self-regulatory organization required pursuant to the
HSR Act, the Home Owners' Loan Act, the Connecticut General Statute and
the rules of the NASD shall have been obtained or made, and shall not
contain any terms that, in the reasonable good faith judgment of Parent,
is unreasonably burdensome to Parent.
6.2 CONDITIONS TO OBLIGATION OF THE COMPANY TO EFFECT THE
MERGER.
The obligation of the Company to effect the Merger shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) Parent shall have performed in all material respects its
agreements contained in this Agreement required to be performed on or
prior to the Closing Date, the representations and warranties of Parent
and Merger Sub contained in this Agreement, the Parent Disclosure
Schedule and documents delivered at Closing shall be true and correct as
of the Closing Date, except that those representations and warranties
which address matters only as of a particular date shall have been true
and correct as of such date; provided, however, that for purposes of this
paragraph, such representations and warranties shall be deemed to be true
and correct unless the failure or failures of such representations and
warranties to be so true and correct, either individually or in the
aggregate, and without giving effect to any qualification as to
materiality is reasonably likely to have a Parent Material Adverse
Effect, and the Company shall have received a certificate of the
President or a Vice President of Parent, dated the Closing Date,
certifying to such effect.
(b) The Company shall have received from its legal counsel,
Day, Berry & Howard LLP and Wachtell, Lipton, Rosen & Katz, the Exhibit
Opinion rendered by such legal counsel pursuant to Section 5.15(c) and
reconfirmed as of the Effective Time. In reconfirming its Exhibit Opinion
as of the Effective Time,
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such counsel may reasonably rely upon the Tax Certificates (updated as
necessary).
6.3 CONDITIONS TO OBLIGATION OF PARENT AND MERGER SUB TO EFFECT
THE MERGER.
The obligations of Parent and Merger Sub to effect the Merger
shall be subject to the fulfillment at or prior to the Closing Date of the
following conditions:
(a) (i) The Company shall have performed in all material
respects its agreements contained in this Agreement and the Option
Agreement and the Stockholders (as defined in the Support Agreement)
shall have performed in all material respects their agreements contained
in the Support Agreement, in each case required to be performed on or
prior to the Closing Date, (ii) the representations and warranties of the
Company contained in this Agreement and the Option Agreement, the Company
Disclosure Schedule and documents delivered at closing, and the
representations and warranties of the Stockholders contained in the
Support Agreement, shall be true and correct as of the Closing Date,
except that those representations and warranties which address matters
only as of a particular date shall have been true and correct as of such
date; provided, however, that for purposes of this paragraph, such
representations and warranties shall be deemed to be true and correct
unless the failure or failures of such representations and warranties to
be so true and correct, either individually or in the aggregate, and
without giving effect to any qualification as to materiality is
reasonably likely to have a Company Material Adverse Effect, and (iii)
Parent shall have received a certificate of the President or a Vice
President of the Company, dated the Closing Date, certifying to such
effect with respect to the Company.
(b) Parent shall have received from its tax counsel, Norman
Sinrich, Esq. (or such other tax counsel to Parent as shall be reasonably
acceptable to the Company), the Exhibit Opinion rendered by such legal
counsel pursuant to Section 5.15(c) and reconfirmed as of the Effective
Time. In reconfirming its Exhibit Opinion as of the Effective Time, such
legal counsel may reasonably rely upon the Tax Certificates (updated as
necessary).
(c) Other than due to the death or disability of the employee
party thereto, the employment and/or change of control agreements between
each of Messrs. Grant W. Kurtz and Daniel Mullane, and at least three (3)
of Messrs. Harry H. Branning, John C. Giesea, George A. Boujoukos, Martin
M. Lilienthal, Lee G. Kuckro, and Allen G. Botwinick, and The MONY Life
Insurance Company dated as of August 23, 2000 shall be unamended and in
full force and effect, and each employee shall be performing in all
material respects his obligations thereunder (or, in the case of Mr.
Boujoukos, he shall be employed by the Company).
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<PAGE> 49
(d) From the date of this Agreement through the Effective Time,
there shall not have occurred a Company Material Adverse Effect.
(e) At the Effective Time, the Company and each of its
Subsidiaries shall meet (i) the criteria set forth in Section 1467a of
the Home Owners' Loan Act as in effect as of the Effective Time and (ii)
any other criteria of the OTS necessary for Parent to qualify as a
"Savings and Loan Holding Company" as that term is used in Section
1467a(a)(1)(D), and all consents, authorizations, orders and approvals of
(or filings or registrations with) the OTS necessary for Parent to
qualify as a Savings and Loan Holding Company shall have been obtained or
made, and any requisite waiting periods imposed in respect thereof shall
have expired and shall not have been contested by any federal or state
governmental authority.
(f) No more than 5% of the Company Common Stock outstanding at
the Effective Time (excluding shares owned by Parent or any of Parent's
wholly-owned subsidiaries) shall be Dissenting Shares.
ARTICLE 7
TERMINATION
7.1 TERMINATION BY MUTUAL CONSENT.
This Agreement may be terminated and the Merger may be abandoned
at any time prior to the Effective Time, before or after the approval of this
Agreement by the stockholders of the Company, by the mutual consent of Parent
and the Company.
7.2 TERMINATION BY EITHER PARENT OR THE COMPANY.
This Agreement may be terminated and the Merger may be abandoned
at any time prior to the Effective Time by action of the Board of Directors of
either Parent or the Company if (a) the Merger shall not have been consummated
by February 28, 2001, (b) the approval of the Company's stockholders required by
Section 6.1(a) shall not have been obtained at a meeting duly convened therefor
or at any adjournment thereof, or (c) a United States federal, state, local or
foreign court of competent jurisdiction or United States federal or state, local
or foreign governmental, regulatory or administrative agency or commission shall
have issued an order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement and such order, decree, ruling or other action shall have become
final and nonappealable; provided, that the party seeking to terminate this
Agreement pursuant to this clause (c) shall have used all reasonable best
efforts to remove such injunction, order or decree; and provided, in the case of
a termination pursuant to clause (a) above, that the terminating party shall not
have breached in any material respect its obligations under this Agreement in
any manner that shall have proximately contributed to the failure to consummate
the Merger by February 28, 2001.
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7.3 TERMINATION BY THE COMPANY.
This Agreement may be terminated and the Merger may be abandoned
at any time prior to the Effective Time, before or after the adoption and
approval by the stockholders of the Company referred to in Section 6.1(a), by
action of the Company Board, if (a) in the exercise of its good faith judgment
as to fiduciary duties to its stockholders imposed by law after consultation as
to legal matters with outside legal counsel and after consultation as to
financial matters with an investment banking firm of national reputation, the
Company Board determines that such termination is required by reason of a
Superior Proposal being made, (b) there has been a breach (without regard to
materiality, Parent Material Adverse Effect or similar qualifiers) by Parent or
Merger Sub of any representation or warranty contained in this Agreement, which
breach is not curable or, if curable, is not cured within 30 days after written
notice of such breach is given by the Company to Parent; provided that such
breach, if occurring or continuing on the Closing Date, would constitute,
individually or in the aggregate with other such breaches, the failure of the
conditions set forth in Section 6.2(a), or (c) there has been a material breach
of any of the covenants or agreements set forth in this Agreement on the part of
Parent, which breach is not curable or, if curable, is not cured within 30 days
after written notice of such breach is given by the Company to Parent.
Notwithstanding the foregoing, the Company's ability to terminate this Agreement
pursuant to this Section 7.3 is conditioned upon the prior payment by the
Company of any amounts owed by it pursuant to Section 7.5(a).
7.4 TERMINATION BY PARENT.
This Agreement may be terminated and the Merger may be abandoned
at any time prior to the Effective Time, before or after the approval by the
stockholders of the Company referred to in Section 6.1(a), by action of the
Board of Directors of Parent, if (a) the Company Board shall have withdrawn,
modified in a manner adverse to Parent or failed to reconfirm within five
business days after written request from Parent its approval or recommendation
of this Agreement, the Option Agreement, the Support Agreement or the Merger or
other transactions contemplated hereby and thereby or shall have recommended an
Alternative Proposal to the Company stockholders, (b) there has been a breach
(without regard to materiality, Company Material Adverse Effect or similar
qualifiers) by the Company of any representation or warranty contained in this
Agreement, or by the Company of any representation or warranty contained in the
Option Agreement or by any Shareholder of any representation or warranty
contained in the Support Agreement, which breach is not curable or, if curable,
is not cured within 30 days after written notice of such breach is given by
Parent to the Company or the breaching Shareholder, as appropriate; provided
that such breach, if occurring or continuing on the Closing Date, would
constitute, individually or in the aggregate with other such breaches, the
failure of the conditions set forth in Section 6.3(a)(ii), or (c) there has been
a material breach of any of the covenants or agreements set forth in this
Agreement or the Option Agreement on the part of the Company, or any of the
covenants or agreements set forth in the Support Agreement by any Shareholder,
which breach is not curable or, if curable, is not cured within 30 days after
written notice of such breach is given by Parent to the Company or the breaching
Shareholder, as appropriate.
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7.5 EFFECT OF TERMINATION AND ABANDONMENT.
(a) If this Agreement is terminated (A) by Parent pursuant to
Section 7.4(a), (B) by the Company pursuant to 7.3(a), (C) by Parent or the
Company pursuant to Section 7.2(b) because of a failure to obtain the required
approval of the stockholders of the Company after a bona fide Transaction
proposal for the Company shall have been publicly disclosed, or any person or
entity shall have publicly disclosed a bona fide intention (whether or not
conditional) to make a Transaction proposal, (D) by Parent pursuant to Sections
7.4(b) or 7.4(c) if the breach giving rise to such termination was willful and,
at or prior to such willful violation forming the basis for such termination, a
bona fide Transaction proposal shall have been made known to the Board of
Directors of the Company or shall have been publicly disclosed to the Company's
stockholders, or any person or entity shall have made known to the Board of
Directors of the Company, or otherwise publicly disclosed, a bona fide intention
(whether or not conditional) to make a Transaction proposal, and regardless of
whether such Transaction proposal shall have been rejected by the Company or
withdrawn prior to the time of such termination, or (E) by Parent or the Company
pursuant to Section 7.2(a) if, at or before such termination, a bona fide
Transaction proposal shall have been made known to the Board of Directors of the
Company or shall have been publicly disclosed to the Company's stockholders, or
any person or entity shall have made known to the Board of Directors of the
Company, or otherwise publicly disclosed, a bona fide intention (whether or not
conditional) to make a Transaction proposal, and regardless of whether such
Transaction proposal shall have been rejected by the Company or withdrawn prior
to the time of such termination and, in the cases of clauses (C), (D) and (E),
within 18 months of the terminations contemplated thereby, (x) any third party
shall acquire beneficial ownership or more than 25% of the Company's outstanding
shares of voting stock or (y) the Company shall have entered into a definitive
agreement with respect to, or consummated, any Transaction), then in any such
case the Company shall pay to Parent, upon Parent's written request, a
termination fee of $10 million by wire transfer of immediately available funds
to such account as shall be designated by Parent. The Parties agree that, for
purposes of this Section 7.5, Transaction shall be as defined in Section 5.1
above, except that the 10% figures in such definition shall be 25%.
The Company acknowledges that the agreements contained in this
Section 7.5(a) are an integral part of the transactions contemplated in this
Agreement, and that, without these agreements, Parent and Merger Sub would not
enter into this Agreement; accordingly, if the Company fails to promptly pay the
amount due pursuant to this Section 7.5(a), and, in order to obtain such
payment, Parent or Merger Sub commences a suit which results in a judgment
against the Company for the full amount of the fee set forth in this Section
7.5(a), the Company shall pay to Parent its costs and expenses (including
attorneys' fees) in connection with such suit, together with interest on the
amount of the fee at the rate of 12% per annum from the date such fee was
required to be paid. If the fee contemplated by Section 7.5(a)(C), (D) or (E)
becomes payable, the Company shall pay such fee within one business day after
the acquisition of stock contemplated by clause (x) of the preceding paragraph,
or the entering into of an agreement or consummation of a Transaction
contemplated by clause (y) of the preceding paragraph.
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In the event of termination of this Agreement and the abandonment
of the Merger pursuant to this Article 7, all obligations of the parties hereto
shall terminate, except the obligations of the parties set forth in this Section
7.5 and Section 5.10 and except for the Confidentiality Agreement, dated May 9,
2000, between Parent and the Company (the "Confidentiality Agreement").
Moreover, in the event of termination of this Agreement pursuant to Section 7.3
or 7.4, nothing herein shall prejudice the ability of the nonbreaching party
from seeking damages from any other party for any breach of this Agreement,
including, without limitation, attorneys' fees and the right to pursue any
remedy at law or in equity.
7.6 EXTENSION; WAIVER.
At any time prior to the Effective Time, any party hereto, by
action taken by its Board of Directors, may, to the extent legally allowed, (a)
extend the time for the performance of any of the obligations or other acts of
the other parties hereto, (b) waive any inaccuracies in the representations and
warranties made to such party contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
conditions for the benefit of such party contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party.
ARTICLE 8
GENERAL PROVISIONS
8.1 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
All representations, warranties and agreements in this Agreement
or in any instrument delivered pursuant to this Agreement shall not survive the
Merger; provided, however, that the agreements contained in Article 1, Article
2, Section 5.10, Section 5.11, Section 5.18 and this Article 8 shall survive the
Merger to the extent contemplated by such sections.
8.2 NOTICES.
Any notice required to be given hereunder shall be sufficient if
in writing, and sent by facsimile transmission, by courier or other national
overnight express mail service (with proof of service), hand delivery or
certified or registered mail (return receipt requested and first-class postage
prepaid), addressed as follows:
If to Parent or Merger Sub:
The MONY Group Inc.
1740 Broadway
New York, New York 10017
Attention: General Counsel
Telecopy: (212) 708-2080
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with copies to:
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019-6092
Attention: Jonathan L. Freedman, Esq.
Telecopy: (212) 259-6333
If to the Company:
The Advest Group, Inc.
90 State House Square
Hartford, Connecticut 06103
Attention: General Counsel
Telecopy: (860) 509-5210
with copies to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019-6150
Attention: Craig M. Wasserman, Esq.
Telecopy: (212) 403-2232
and:
Day, Berry & Howard LLP
Cityplace I
Hartford, Connecticut 06103-3499
Attention: William H. Cuddy, Esq.
Telecopy:(860) 275-0343
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
8.3 ASSIGNMENT; BINDING EFFECT.
Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
parties, except that Merger Sub may assign its rights hereunder to any
Subsidiary of Parent. Subject to the preceding sentence, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. Notwithstanding anything contained in this
Agreement to the contrary, except for the provisions of Section 5.11, nothing in
this Agreement, expressed or implied, is intended to confer on any person
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other than the parties hereto or their respective heirs, successors, executors,
administrators and assigns any rights, remedies, obligations or liabilities
under or by reason of this Agreement.
8.4 ENTIRE AGREEMENT.
This Agreement, the Option Agreement, the Exhibits hereto, the
Company Disclosure Schedule, the Parent Disclosure Schedule, the Confidentiality
Agreement and any documents delivered by the parties in connection herewith or
therewith constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings
among the parties with respect thereto. No addition to or modification of any
provision of this Agreement shall be binding upon any party hereto unless made
in writing and signed by all parties hereto.
8.5 AMENDMENT.
This Agreement may be amended by the parties hereto, by action
taken by their respective Boards of Directors, at any time before or after
approval of matters presented in connection with the Merger by the stockholders
of the Company, but after such stockholder approval, no amendment shall be made
which by law requires the further approval of stockholders without obtaining
such further approval. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties hereto.
8.6 GOVERNING LAW.
This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware without regard to its rules of conflict
of laws.
8.7 COUNTERPARTS.
This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same instrument.
Each counterpart may consist of a number of copies hereof each signed by less
than all, but together signed by all of the parties hereto.
8.8 HEADINGS.
Headings of the Articles and Sections of this Agreement are for
the convenience of the parties only, and shall be given no substantive or
interpretive effect whatsoever.
8.9 INTERPRETATION.
In this Agreement, unless the context otherwise requires, words
describing the singular number shall include the plural and vice versa, and
words denoting each
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gender shall include the other gender and words denoting natural persons shall
include corporations and partnerships and vice versa.
8.10 WAIVERS.
Except as provided in this Agreement, no action taken pursuant to
this Agreement, including, without limitation, any investigation by or on behalf
of any party, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representations, warranties, covenants or
agreements contained in this Agreement. The waiver by any party hereto of a
breach of any provision hereunder shall not operate or be construed as a waiver
of any prior or subsequent breach of the same or any other provision hereunder.
8.11 INCORPORATION OF EXHIBITS.
The Company Disclosure Schedule, the Parent Disclosure Schedule
and all Exhibits attached hereto and referred to herein are hereby incorporated
herein and made a part hereof for all purposes as if fully set forth herein.
8.12 SEVERABILITY.
Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, the provision shall be interpreted to be only
so broad as is enforceable.
8.13 ENFORCEMENT OF AGREEMENT.
The parties hereto agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with its specific terms or were otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof, this being in addition to any other remedy to which they are
entitled at law or in equity.
8.14 SUBSIDIARIES AND MATERIAL SUBSIDIARIES.
As used in this Agreement, the word "Subsidiary" when used with
respect to any party means any corporation or other organization, whether
incorporated or unincorporated, of which such party directly or indirectly owns
or controls at least a majority of the securities or other interests having by
their terms ordinary voting power to elect a majority of the board of directors
or others performing similar functions with respect to such corporation or other
organization, or any organization of which such party is a general partner.
"Material Subsidiaries" means any subsidiary that is a "significant subsidiary"
as defined in Rule 1-02(w) of Regulation S-X of the SEC.
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8.15 COMPANY MATERIAL ADVERSE EFFECT.
"Company Material Adverse Effect" means any effect that is
material and adverse to (1) the financial position, results of operations,
assets, properties or business of the Company and its Subsidiaries, taken as a
whole, or (2) the ability of the Company to timely perform its obligations under
the Agreement or otherwise to consummate the transactions contemplated by this
Agreement, other than any fact, circumstance, event or thing (i) generally
affecting the securities industry, or resulting from general economic or market
conditions (including changes in interest rates) or changes in accounting
principles or changes in law, regulations or regulatory policies of general
applicability (or interpretations thereof), (ii) resulting from actions or
omissions of a party hereto taken with the prior written consent of the other
party in contemplation of the transactions contemplated hereby, or (iii)
resulting from the announcement or execution of this Agreement or the
transactions contemplated herein.
8.16 PARENT MATERIAL ADVERSE EFFECT.
"Parent Material Adverse Effect" means any effect that is material
and adverse to (1) the financial position, results of operations, assets,
properties or business of Parent and its Subsidiaries, taken as a whole, or (2)
the ability of Parent to timely perform its obligations under the Agreement or
otherwise to consummate the transactions contemplated by this Agreement, other
than any fact, circumstance, event or thing (i) generally affecting the
securities or insurance industries, or resulting from general economic or market
conditions (including changes in interest rates) or changes in accounting
principles or changes in law, regulations or regulatory policies of general
applicability (or interpretations thereof), (ii) resulting from actions or
omissions of a party hereto taken with the prior written consent of the other
party in contemplation of the transactions contemplated hereby, or (iii)
resulting from the announcement or execution of this Agreement or the
transactions contemplated herein.
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IN WITNESS WHEREOF, the parties have executed this Agreement and
caused the same to be duly delivered on their behalf on the day and year first
written above.
THE MONY GROUP, INC.
By:
------------------------------------------
Name: Michael I. Roth
Title: Chairman & Chief Executive Officer
MONY ACQUISITION CORP.
By:
------------------------------------------
Name: Bart Schwartz
Title: President
THE ADVEST GROUP, INC.
By:
------------------------------------------
Name: Grant W. Kurtz
Title: President & Chief Executive Officer
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EXHIBIT A
TO MERGER
AGREEMENT
FORM OF AFFILIATE LETTER
The MONY Group, Inc.
1740 Broadway, New York, NY 10017
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be
deemed to be an "affiliate" of The Advest Group, Inc., a Delaware corporation
(the "Company"), as the term "affiliate" is defined for purposes of paragraphs
(c) and (d) of Rule 145 of the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Act"). Pursuant to the terms of the
Agreement and Plan of Merger, dated as of August 23, 2000 (the "Agreement"),
between The MONY Group Inc., a Delaware corporation ("Parent"), MONY Acquisition
Corp., a Delaware corporation and a wholly-owned subsidiary of Parent ("Merger
Sub"), and the Company, the Company will be merged with and into Merger Sub (the
"Merger").
As a result of the Merger, I will receive shares of Common Stock,
par value $0.01, of Parent (the "Parent Common Stock") in exchange for shares
owned by me of Common Stock, par value $0.01, of the Company (the "Company
Common Stock").
Compliance with the Act.
1. In compliance with the Act and the Rules and Regulations
thereunder, I represent, warrant and covenant to Parent that in the event I
receive any Parent Common Stock as a result of the Merger:
A. I shall not make any sale, transfer or other disposition of
the Parent Common Stock in violation of the Act or the Rules and
Regulations.
B. I have carefully read this letter and the Agreement and
discussed the requirements of such documents and other applicable
limitations upon my ability to sell, transfer or otherwise dispose of the
Parent Common Stock, to the extent I felt necessary, with my counsel or
counsel for the Company.
C. I have been advised that the issuance of Parent Common
Stock to me pursuant to the Merger has been registered with the SEC under
the Act on a Registration Statement on Form S-4. However, I have also
been advised that, since at the time the Merger was submitted for a vote
of the stockholders of the Company, I may be deemed to have been an
affiliate of the Company and the distribution by me of the Parent Common
Stock has not been registered under the Act, I may not sell, transfer or
otherwise dispose of the Parent Common Stock issued to me in the Merger
unless such sale, transfer or other disposition (i) has
A-1
<PAGE> 59
been registered under the Act and all applicable state securities or
"blue sky" laws, (ii) is made in conformity with Rule 145 promulgated by
the SEC under the Act and all applicable state securities or "blue sky"
laws, or (iii) in the opinion of legal counsel reasonably acceptable to
Parent, or pursuant to a "no action" letter obtained by the undersigned
from the staff of the SEC, is otherwise exempt from registration under
the Act and all applicable state securities or "blue sky" laws.
D. I understand that Parent is under no obligation to register
the sale, transfer or other disposition of the Parent Common Stock
received by me or on my behalf as a result of the Merger under the Act or
to take any other action necessary in order to make compliance with an
exemption from such registration available.
E. I also understand that stop transfer instructions will be
given to Parent's transfer agents with respect to the Parent Common Stock
and that there will be placed on the certificates for the Parent Common
Stock issued to me, or any substitutions therefor, a legend stating in
substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION
TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES.
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE TRANSFERRED IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT DATED AUGUST 23, 2000 BETWEEN
THE REGISTERED HOLDER HEREOF AND PARENT, A COPY OF WHICH AGREEMENT IS ON
FILE AT THE PRINCIPAL OFFICES OF PARENT."
provided, however, that the foregoing legend will not be
placed upon certificates for the Parent Common Stock issued to me, or any
substitutions therefore if (i) I hold all of such shares of Parent Common
Stock issued to me in one brokerage account at one brokerage firm (the
"Firm") and (ii) I and the Firm acknowledge and agree in writing with
Parent that (A) the foregoing clause (i) accurately reflects the holding
of all of the shares of Parent Common Stock issued to me, (B) the shares
of Parent Common Stock were issued in a transaction to which Rule 145
under the Act applies, and may only be transferred in accordance with
Rule 145 and with all applicable state securities or "blue sky" laws and
(C) the shares of Parent Common Stock issued to me will not be
transferred, and I and the Firm will take all actions to ensure that the
shares of Parent Common Stock issued to me will not be transferred, in
violation of Rule 145 or any applicable state securities or "blue sky"
law.
F. I also understand that unless the transfer by me of my
Parent Common Stock has been registered under the Act or is a sale made
in conformity with the provisions of Rule 145 and all applicable state
securities or "blue sky" laws, Parent reserves the right to put the
following legend on the certificates issued to my transferee:
A-2
<PAGE> 60
G. "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE
SECURITIES OR "BLUE SKY" LAWS AND WERE ACQUIRED FROM A PERSON WHO
RECEIVED SUCH SHARES IN A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER
THE SECURITIES ACT OF 1933 APPLIES. THE SHARES HAVE BEEN ACQUIRED BY THE
HOLDER NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY
DISTRIBUTION THEREOF WITHIN THE MEANING OF THE SECURITIES ACT OF 1933 AND
MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE
WITH AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT OF 1933 AND ALL APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.
The representations, covenants and agreements contained herein
shall be true and correct at all times from the date hereof. I understand that
my obligations hereunder shall attach to and be binding upon any person or
entity to whom legal or beneficial ownership of my shares of Company Common
Stock (and shares of Parent Common Stock following the Merger) shall pass by
operation of law or otherwise.
Very truly yours,
Name:
Accepted this ____ day of
________, 2000 by Parent
By:
---------------------------------
Name:
Title:
A-3
<PAGE> 61
ANNEX A
Calculation of Exchange Ratio
P = Average Price (as defined in Section 2.2(a) of the Agreement)
ER = Exchange Ratio
<TABLE>
<CAPTION>
Range of P ER
---------- --
<S> <C>
$28 and lower 15.50/P + 0.498214
More than $28 and less than 29.45/P
or equal to $31.50
More than $31.50 and less than 15.50/P + 0.442857
or equal to $38.50
More than $38.50 and less than 32.55/P
Or equal to $42
More than $42 15.50/P + 0.405952
</TABLE>
<TABLE>
<CAPTION>
Then the Implied Price Per Share
If the Average Price Is of Company Common Stock Is
----------------------- --------------------------
<S> <C>
$24.50 $27.71
28.00 29.45
31.50 29.45
35.00 31.00
38.50 32.55
42.00 32.55
45.50 33.97
</TABLE>
