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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) NOVEMBER 15, 1994
COMMERCIAL METALS COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
1-4304 75-0725338
(Commission File Number) (IRS Employer Identification No.)
7800 STEMMONS FREEWAY, DALLAS, TEXAS 75247
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (214) 689-4300
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Item 1. Not Applicable.
Item 2. Acquisition of Assets.
On November 15, 1994, Commercial Metals Company, (the
"Company") acquired by merger of the Company's wholly-owned subsidiary, CMC
Acquisition Company, with Owen Steel Company, Inc. ("Owen"), all outstanding
common stock of Owen and two affiliated corporations, Owen Miscellaneous
Metals, Inc. and South Carolina Steel Corporation (the "Owen Affiliates"). The
acquisition was effected pursuant to an Agreement and Plan of Merger among
Owen, the Owen Affiliates, CMC Acquisition Company, the Company and the selling
stockholders identified therein dated September 26, 1994 (the "Agreement").
The Agreement is filed as Exhibit 2 to this report and is incorporated herein
by reference. All selling stockholders are unrelated to the Company or the
officers, directors or other affiliates of the Company.
The Company paid approximately $50 million consisting of
$25,055,895 in cash and issuance of 932,301 shares, valued at $26.875 per
share, of the Company's Common Stock to certain selling stockholders. The
Company also provided funds for the retirement of approximately $32 million of
Owen debt at the closing. The purchase price may be subject to further
post-closing adjustments. The Company obtained funds for the acquisition in
the ordinary course of business on a short term unsecured basis from Chase
Manhattan Bank, N.A.
The Company also acquired, by virtue of Owen's ownership of
all common stock of subsidiary corporations, control of Owen Steel Company of
N.C., Inc., Owen of Georgia, Inc., Owen Steel Company of Florida, Owen Supply
Company, Inc., Owen Industrial Products, Inc., Owen Joist Corporation, Owen
Electric Steel Company of South Carolina and Owen Joist of Florida, Inc. Owen,
the Owen Affiliates and subsidiaries are engaged in steel manufacturing,
fabrication and recycling. Owen is headquartered in Columbia, South Carolina.
The surviving corporation in the merger changed its name to
SMI-Owen Steel Company, Inc., and will continue the Owen businesses as a part
of the Steel Group in the Company's manufacturing segment. The acquisition
includes a steel minimill at Cayce, near Columbia, South Carolina, with an
annual melting capacity of about 350,000 tons and rolling capacity of
approximately 250,000 tons. Additionally the Company acquired six rebar
fabricating shops, five structural fabrication shops, two joist manufacturing
plants, three scrap metal processing facilities, and one construction supply
company operation, located in South Carolina, North Carolina, Virginia, Georgia
and Florida. The acquisition expands the Company's Steel Group manufacturing
and fabrication network into the southeastern United States and will increase
the Company's annual capacity for steel production to approximately 1.7 million
tons and for steel fabrication to approximately 500,000 tons. Owen affiliated
scrap metal processing
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operations, which will also operate as a part of the Company's Steel Group, are
expected to process approximately 155,000 tons per year of scrap metal,
primarily for melting at the nearby SMI-Owen minimill.
Items 3. through 4. Not Applicable.
Item 5. Other Events.
See Item 3. Legal Proceedings in the Company's Annual Report
on Form 10-K for the year ended August 31, 1994, filed November 28, 1994,
concerning litigation involving the Company's subsidiary, CMC Oil Company and
the Federal Energy Regulatory Commission of the United States Department of
Energy. On November 22, 1994, the United States District Court entered a Final
Order denying CMC Oil Company's motion for summary judgment, granting the
government's motion for summary judgment and affirming the November, 1993
Remedial Order as issued by the Federal Energy Regulatory Commission.
Judgment was entered in favor of the government in the principal sum of
$1,330,399 plus interest as provided in the Remedial Order which the CMC Oil
Company estimates to be approximately $5,400,000. CMC Oil Company is
evaluating its options with regard to the ruling including appeal.
Item 6. Not Applicable.
Item 7. Financial Statements and Exhibits.
The Company has determined that it is impracticable to file the
required financial statements of the acquired business and pro forma financial
information at the time of the filing of this report. Accordingly, the Company
undertakes to file the required financial statements and pro forma financial
information as soon as practicable, but not later than 60 days after the date
of filing of this report.
Exhibit:
2. Agreement and Plan of Merger among Owen Steel Company, Inc.,
Owen Miscellaneous Metals, Inc., South Carolina Steel
Corporation, Commercial Metals Company, CMC Acquisition
Company and the Stockholders Identified Herein dated September
26, 1994.
Item 8. Not Applicable.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
COMMERCIAL METALS COMPANY
Date November 30, 1994 By: /s/ STANLEY A. RABIN
Stanley A. Rabin,
President & Chief Executive
Officer
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INDEX TO EXHIBITS
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SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
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2. Agreement and Plan of Merger among Owen Steel Company, Inc.,
Owen Miscellaneous Metals, Inc., South Carolina Steel
Corporation, Commercial Metals Company, CMC Acquisition
Company and the Stockholders Identified Herein dated September
26, 1994.
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CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
AMONG
OWEN STEEL COMPANY, INC.,
OWEN MISCELLANEOUS METALS, INC.,
SOUTH CAROLINA STEEL CORPORATION,
COMMERCIAL METALS COMPANY,
CMC ACQUISITION COMPANY,
AND THE
STOCKHOLDERS IDENTIFIED HEREIN
DATED SEPTEMBER 26, 1994
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TABLE OF CONTENTS
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ARTICLE I
THE MERGER
SECTION 1.1. The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.2. Effect of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.3. Articles of Incorporation of the Surviving Corporation . . . . . . . . . . . . 3
SECTION 1.4. Bylaws of the Surviving Corporation . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.5. Board of Directors and Officers of the Surviving Corporation . . . . . . . . . 3
SECTION 1.6. Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.7. Appointment of Stockholder Representative . . . . . . . . . . . . . . . . . . 4
ARTICLE II
CONVERSION OF SHARES
SECTION 2.1. Conversion of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . 5
(a) Sub Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(b) Cancellation of Treasury Stock . . . . . . . . . . . . . . . . . . . . 5
(c) Conversion of Company Common Stock . . . . . . . . . . . . . . . . . . 5
(d) Merger Consideration . . . . . . . . . . . . . . . . . . . . . . . . . 6
(e) Cash Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(f) Stock Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(g) Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(h) Adjustment of Merger Consideration as a Result of
Reclassification, Etc . . . . . . . . . . . . . . . . . . . . . . . . . 6
(i) Stockholder Election . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.2. Net Worth Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(a) Pre-Closing Statement . . . . . . . . . . . . . . . . . . . . . . . . . 7
(b) Post-Closing Statement . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.3. No Further Ownership Rights in Company . . . . . . . . . . . . . . . . . . . 10
SECTION 2.4. Payment of Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.5. Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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(a) Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(b) Exchange Procedure . . . . . . . . . . . . . . . . . . . . . . . . . 11
(c) Unregistered Transfer of Company Common Stock . . . . . . . . . . . . 12
(d) Termination of Exchange Fund . . . . . . . . . . . . . . . . . . . . 12
(e) Distributions with Respect to Unexchanged Shares of
Parent Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . 12
(f) Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(g) Withholding Rights . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE III
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
SECTION 3.1. Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.2. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.3. No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.4. Capitalization of each of the Companies . . . . . . . . . . . . . . . . . . 14
SECTION 3.5. Subsidiaries and Equity Investments . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.6. Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.7. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.8. Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.9. Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.10. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.11. Liens and Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.12. Certain Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.13. Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.14. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.15. Compliance with Applicable Law . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.16. Brokers' Fees and Commissions . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.17. Proprietary Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.18. Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.19. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.20. Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.21. Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.22. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.23. Customers, Suppliers and Employees . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.24. Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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SECTION 3.25. Certain Business Practices and Regulations; Potential Conflicts
of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES OF STOCKHOLDERS
SECTION 4.1. Ownership of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.2. Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.3. No Conflicts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.4. Investment Intent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.5. Brokers and Finders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.6. Continuity of Proprietary Interest. . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.7. Allocation of Cash and Parent Common Stock. . . . . . . . . . . . . . . . . 32
ARTICLE V
REPRESENTATIONS AND
WARRANTIES OF PARENT AND SUB
SECTION 5.1. Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.2. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.3. No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.4. Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.5. Brokers' Fees and Commissions . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.6. Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.7. Securities Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.8. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE VI
COVENANTS
SECTION 6.1. Conduct of Business of each of the Companies Prior to the
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.2. Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.3. All Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.4. Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.5. Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.6. Disclosure Supplements . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 6.7. No Other Bids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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SECTION 6.8. South Carolina Steel Exchange . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 6.9. Owen Miscellaneous Exchange . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.10. Owen Joist Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.11. Owen Electric Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.12. Post-Closing Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.13. Employee Benefit Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.14. Stockholders Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.15. Transfer Restrictions; Registration Rights . . . . . . . . . . . . . . . . . 42
SECTION 6.16. Escrow Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.17. Waiver of Restrictions on Transfer . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.18. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.19. Operating Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.20. Future SEC Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.21. Indemnification of Directors and Officers . . . . . . . . . . . . . . . . . 43
ARTICLE VII
CLOSING CONDITIONS
SECTION 7.1. Conditions to Each Party's Obligations under this Agreement . . . . . . . . 44
SECTION 7.2. Conditions to the Obligations of Parent and Sub under this
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 7.3. Conditions to the Obligations of each of the Companies under
this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE VIII
CLOSING
SECTION 8.1. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE IX
TERMINATION AND ABANDONMENT
SECTION 9.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 9.2. Procedure and Effect of Termination . . . . . . . . . . . . . . . . . . . . 48
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Amendment and Modification . . . . . . . . . . . . . . . . . . . . . . . . . 49
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SECTION 10.2. Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 10.3. Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 10.4. Expenses and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 10.5. Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 10.6. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 10.7. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 10.8. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 10.9. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 10.10. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 10.11. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 10.12. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 10.13. Termination of Representations and Warranties . . . . . . . . . . . . . . . 56
SECTION 10.14. Exclusive Remedy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 10.15. Certain Tax Matters Concerning Owen Miscellaneous . . . . . . . . . . . . . 57
SECTION 10.16. Jurisdiction and Venue . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
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NOTICE: THIS CONTRACT IS SUBJECT TO ARBITRATION PURSUANT
TO THE SOUTH CAROLINA UNIFORM ARBITRATION ACT.
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated
September 26, 1994, by and among Owen Steel Company, Inc., a South Carolina
corporation (the "Company"), Owen Miscellaneous Metals, Inc., a South Carolina
corporation ("Owen Miscellaneous"), South Carolina Steel Corporation, a South
Carolina corporation ("South Carolina Steel"), Commercial Metals Company, a
Delaware corporation ("Parent"), CMC Acquisition Company, a South Carolina
corporation and a wholly-owned subsidiary of Parent ("Sub"), and each of the
persons identified on Schedules I, II, III, IV and V hereto (the "Company
Stockholders," the "Owen Miscellaneous Stockholders," the "South Carolina Steel
Stockholders," the "Owen Joist Stockholders" and the "Owen Electric
Stockholders," respectively, and collectively the "Stockholders"). The Company
and Sub are sometimes herein collectively referred to as the "Constituent
Corporations." The Company, Owen Miscellaneous, and South Carolina Steel are
sometimes herein collectively referred to as the "Companies."
RECITALS:
WHEREAS, Parent desires to acquire all of the issued and
outstanding shares of the Company's Class A Voting Common Stock, $1.00 par
value per share ("Class A Common Stock"), and Class B Non-Voting Common Stock,
$1.00 par value per share ("Class B Common Stock," and, together with the Class
A Common Stock, the "Company Common Stock"), by means of a merger ("Merger") of
the Company into the Sub, pursuant to which (i) the Stockholders shall receive
a cash payment and shares of Parent's Common Stock, $5.00 par value per share
("Parent Common Stock"), in the amounts set forth below, and (ii) Parent will
become the sole stockholder of the Surviving Corporation (as hereinafter
defined);
WHEREAS, the respective Boards of Directors of Parent, Sub and
the Company and the Company Stockholders have approved this Agreement and the
Merger in accordance with the South Carolina BCA (as hereinafter defined);
WHEREAS, it is intended that the Merger shall satisfy all the
requirements of Sections 368(a)(1)(A) and 368(a)(2)(D) of the Internal Revenue
Code of 1986, as amended (the "Code");
<PAGE> 8
WHEREAS, immediately prior to the Merger, the Company desires
to acquire, and the Owen Miscellaneous Stockholders desire to convey, all of
the issued and outstanding shares of Capital Stock, $10.00 par value per share,
of Owen Miscellaneous ("Owen Miscellaneous Capital Stock"), held by the Owen
Miscellaneous Stockholders by means of an exchange (the "Owen Miscellaneous
Exchange") pursuant to which (i) the Owen Miscellaneous Stockholders shall
receive shares of Class A Common Stock in the amounts set forth on Schedule II
hereto and (ii) the Company will become the sole stockholder of Owen
Miscellaneous;
WHEREAS, immediately prior to the Merger, the Company desires
to acquire, and the South Carolina Steel Stockholders desire to convey, all of
the issued and outstanding shares of Capital Stock, $10.00 par value per share,
of South Carolina Steel ("South Carolina Capital Stock"), held by the South
Carolina Steel Stockholders by means of an exchange (the "South Carolina Steel
Exchange") pursuant to which (i) the South Carolina Steel Stockholders shall
receive shares of Class A Common Stock in the amounts set forth on Schedule III
hereto and (ii) the Company will become the sole stockholder of South Carolina
Steel;
WHEREAS, immediately prior to the Merger, the Company desires
to acquire, and the Owen Joist Stockholders desire to convey, all of the issued
and outstanding shares of Capital Stock, $10.00 par value per share (the "Owen
Joist Capital Stock"), of Owen Joist Corporation, a South Carolina corporation
("Owen Joist"), held by the Owen Joist Stockholders by means of an exchange
(the "Owen Joist Exchange") pursuant to which (i) the Owen Joist Stockholders
shall receive Class A Common Stock in exchange for their shares of Owen Joist
Capital Stock in the amount set forth on Schedule IV hereto and (ii) the
Company will become the sole stockholder of Owen Joist; and
WHEREAS, immediately prior to the Merger, the Company desires
to acquire, and the Owen Electric Stockholders desire to convey, all of the
issued and outstanding shares of Capital Stock, $10.00 par value per share (the
"Owen Electric Capital Stock"), of Owen Electric Steel Company of South
Carolina, a South Carolina corporation ("Owen Electric"), held by the Owen
Electric Stockholders by means of an exchange (the "Owen Electric Exchange"
and, together with the Owen Miscellaneous Exchange, the South Carolina Steel
Exchange and the Owen Joist Exchange, the "Stock Exchanges"), pursuant to which
(i) the Owen Electric Stockholders shall receive Class A Common Stock in
exchange for their shares of Owen Electric Capital Stock in the amount set
forth on Schedule V hereto and (ii) the Company will become the owner of all of
Owen Electric's outstanding capital stock (other than the capital stock of Owen
Electric owned by Owen Joist and South Carolina Steel) as a result of the Owen
Electric Exchange and the consummation of the Post-Closing Mergers (as
hereinafter defined).
2
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NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements herein contained, the parties hereto
agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1. The Merger. Upon the terms and subject to the
conditions hereof, and in accordance with the provisions of the Business
Corporation Act of the State of South Carolina, as amended (the "South Carolina
BCA"), the Company shall be merged with and into Sub as of the Effective Time.
Following the Merger, the separate existence of the Company shall cease, and
Sub shall continue as the surviving corporation in the Merger (the "Surviving
Corporation") under the name "SMI-Owen Steel Company, Inc.".
SECTION 1.2. Effect of the Merger. The Merger shall have the effects
set forth in the applicable provisions of the South Carolina BCA. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time (as hereinafter defined), except as otherwise provided herein, all the
property, rights, privileges, powers and franchises of Sub and the Company
shall vest in the Surviving Corporation, and all debts, liabilities and duties
of Sub and the Company shall become the debts, liabilities and duties of the
Surviving Corporation. From and after the Effective Time, the Surviving
Corporation shall be a wholly-owned subsidiary of Parent.
SECTION 1.3. Articles of Incorporation of the Surviving Corporation.
At the Effective Time and without any further action on the part of the
Constituent Corporations, the Articles of Incorporation of Sub shall be the
Articles of Incorporation of the Surviving Corporation, provided that Article
One of such Articles of Incorporation shall be amended to read in its entirety
as follows:
The name of the corporation is SMI-Owen Steel Company, Inc.
SECTION 1.4. Bylaws of the Surviving Corporation. At the Effective
Time and without any further action on the part of the Constituent
Corporations, the Bylaws of Sub shall be the Bylaws of the Surviving
Corporation.
SECTION 1.5. Board of Directors and Officers of the Surviving
Corporation. At the Effective Time, the directors of Sub and the officers of
Sub immediately prior to the Effective Time shall be the directors and initial
officers of the Surviving Corporation,
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respectively, each of such directors and officers to hold office until their
respective successors are duly elected and qualified, or their earlier death,
resignation or removal.
SECTION 1.6. Effective Time of the Merger. The Constituent
Corporations will cause articles of merger and such other documents as are
required by the South Carolina BCA to be duly filed with the Secretary of State
of the State of South Carolina prior to 12:00 noon on the Closing Date (as
hereinafter defined). The Merger shall become effective upon the filing of the
articles of merger and such other documents as are required by the South
Carolina BCA to be filed (the time of such filing being the "Effective Time").
SECTION 1.7. Appointment of Stockholder Representative. The
Stockholders have designated each of Dorothy G. Owen, Ralph M. Moore, Jr., Guy
Hendley and Melvin Lee Burton, III to be the "Stockholder Representative"
referred to elsewhere in this Agreement and in the Escrow Agreement. The act
of a majority of the foregoing shall be binding and determinative as the act of
the Stockholder Representative. Upon the resignation of any of the foregoing
person whether by death, disability or otherwise, except as set forth in the
last sentence of Section 1.7, such persons shall be replaced by another person
selected by the affirmative vote of a majority of the remaining individuals
making up the Stockholder Representative. The Stockholder Representative shall
have the authority to take such actions and exercise such discretion as are
required of the Stockholder Representative pursuant to the terms of this
Agreement (and any such actions shall be binding on each Stockholder) including
without limitation the following:
(i) to receive, hold and deliver to Parent the
share certificates and any other documents relating thereto on behalf
of Stockholders;
(ii) to execute, acknowledge, deliver, record
and file all ancillary agreements, certificates and documents which
the Stockholder Representative deems necessary or appropriate in
connection with the consummation of the transactions contemplated by
the terms and provisions of this Agreement;
(iii) to receive any payments due under this
Agreement and acknowledge receipt for such payments;
(iv) to waive any breach or default under the
Agreement, or to waive any condition precedent to the Closing (as
hereinafter defined) under Article VII hereof;
(v) to terminate this Agreement;
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(vi) to receive service of process in connection
with any claims under this Agreement; and
(vii) to perform the obligations and exercise the
rights under the Escrow Agreement (as hereinafter defined), including
the settlement of any claims and disputes with Parent and Sub arising
thereunder.
The Stockholders may, at any time, substitute or replace a new
individual for any of the four individuals named above, if such action is
agreed to in writing by Stockholders owning not less than a majority of the
Company Comon Stock (whether voting or non-voting) and a copy of such writing
is delivered to each party to this Agreement; provided, however, that the
Stockholders may not substitute or replace Melvin Lee Burton, III unless a
majority of Stockholders listed on Schedule 1.7 hereto agree in writing to such
action.
ARTICLE II
CONVERSION OF SHARES
SECTION 2.1. Conversion of Capital Stock. As of the Effective Time,
by virtue of the Merger and without any action on the part of the holders of
the capital stock of the Constituent Corporations:
(a) Sub Common Stock. The issued and outstanding shares
of common stock, $.01 par value per share, of Sub ("Sub Common Stock"), all of
which is held by the Parent shall remain outstanding and, following the Merger,
shall represent all of issued and outstanding capital stock of the Surviving
Corporation.
(b) Cancellation of Treasury Stock. All shares of
Company Common Stock that are owned directly or indirectly by the Company or by
any Subsidiary (as hereinafter defined) ("Treasury Shares") shall be cancelled
and no consideration shall be delivered in exchange therefor.
(c) Conversion of Company Common Stock. Subject to the
terms and conditions of the Escrow Agreement, each issued and outstanding share
of Company Common Stock immediately prior to the Effective Time (other than
Treasury Shares) shall be converted into the right to receive a pro rata share
(the "Per Share Amount") of the Merger Consideration (as hereinafter defined),
as allocated pursuant to Section 2.1(i) and as adjusted pursuant to Section
2.1(h).
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(d) Merger Consideration. For purposes of this
Agreement, "Merger Consideration" shall mean collectively the Cash
Consideration (as hereinafter defined) and the Stock Consideration (as
hereinafter defined).
(e) Cash Consideration. For purposes of this Agreement,
the "Cash Consideration" shall be equal to the product of .5 multiplied by the
Purchase Price (as hereinafter defined).
(f) Stock Consideration. For purposes of this Agreement,
the "Stock Consideration" shall mean the number of shares of Parent Common
Stock equal to the product of .5 multiplied by a fraction, the numerator of
which is the Purchase Price and the denominator of which is $26.875; provided
however, that in the event the Average Stock Price (as hereinafter defined) of
the Parent Common Stock is greater than $28.22 per share or less than $25.53
per share, after giving effect to the adjustments contemplated in Section
2.1(h), then such denominator (the "Stock Price") shall equal the Average Stock
Price.
(g) Purchase Price. For purposes of this Agreement, the
"Purchase Price" shall mean, subject to adjustment pursuant to Section 2.2,
$55,000,000.
(h) Adjustment of Merger Consideration as a Result of
Reclassification, Etc. If, between the date of this Agreement and the
Effective Time (other than as contemplated hereby), the outstanding shares of
Company Common Stock or Parent Common Stock shall have been changed into a
different number of shares or a different class by reason of any
reclassification, recapitalization, split-up, combination, exchange of shares
or readjustment, or a stock dividend thereon shall be declared with a record
date within such period, the Per Share Amount to be received pursuant to
Section 2.1(c) shall be adjusted as appropriate.
(i) Stockholder Election. The Merger Consideration will
be allocated in the following manner: (i) the Owen Joist Stockholders shall
receive in exchange for each share of Class A Common Stock received in
connection with the Owen Joist Exchange a Per Share Amount payable in all Cash
Consideration; (ii) the Owen Electric Stockholders shall receive for each share
of Company Common Stock received in connection with the Owen Electric Exchange
a Per Share Amount payable in all Cash Consideration; and (iii) unless
otherwise instructed in accordance with the immediately following sentence, the
remainder of the Cash Consideration and Stock Consideration shall be allocated
pro rata to the remaining issued and outstanding shares of Company Common Stock
(exclusive of Treasury Shares). Notwithstanding the foregoing, in lieu of the
allocation of Merger Consideration contained in clause (iii) of the immediately
preceding sentence, the Stockholders may elect, by written
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notice executed by all of the Stockholders and delivered to Parent at least
five days prior to the Closing Date, to adjust each Stockholder's proportion of
the Cash Consideration and Stock Consideration allocated pursuant to such
clause (iii); provided however, that in no event will such adjustment alter the
aggregate Cash Consideration and Stock Consideration payable hereunder and in
any event such allocation shall be consistent with the representations
contained in Section 4.7. For purposes of the allocations effected pursuant to
this Section 2.1(i), the Stock Consideration shall be allocated on the basis of
the Stock Price.
SECTION 2.2. Net Worth Adjustment.
(a) Pre-Closing Statement. (i) At least two business
days prior to the Closing Date, the Company shall furnish to Parent
and Sub a statement of the Company (the "Pre-Closing Statement"),
prepared as of a date which is no more than 10 days prior to the
Closing Date, reflecting the Company's good faith estimate of the Net
Worth of the Company and its consolidated Subsidiaries (as hereinafter
defined) immediately prior to the Effective Time but after giving
effect to the Stock Exchanges (the "Net Worth Estimate") as determined
in accordance with generally accepted accounting principles applied in
a manner consistent with the 12/31/93 Balance Sheets (as hereinafter
defined) ("12/31/93 GAAP"); provided, however, that (A) no liabilities
or reserves related to inventories or allowance for doubtful accounts
reflected on the 12/31/93 Balance Sheets shall be adjusted prior to
the Effective Time except (1) by reason of a payment or credit
occurring in the ordinary course of business and consistent with past
practices, or (2) to the extent the subject matter of or events giving
rise to such liability or reserve occurred on or after December 31,
1993, (B) no liability or reserve for any environmental or litigation
matter reflected on the 12/31/93 Balance Sheets shall be increased on
the Pre-Closing Statement except to reflect circumstances not
disclosed on Sections 3.10 and 3.22 of the Disclosure Schedule, (C)
the aggregate amount of the fees and expenses of the Company and the
Subsidiaries incurred at or prior to the Closing in connection with
this Agreement and the consummation of the transactions contemplated
hereby, including without limitation any investment banking, brokers,
finders, legal fees, and including the fees of the Stockholder
Representative and Philpott, Ball & Company, or transfer taxes,
conveyance and recording fees, documentary stamp taxes and all other
similar charges shall be fully reflected as a liability on the
Pre-Closing Statement, but only to the extent they have not been paid
prior to the Closing (the "Company Expenses"), (D) no prepaid expense
related to any Company Expense shall be reflected as an asset on the
Pre-Closing Statement, (E) the sum of all Debt (as hereinafter
defined) outstanding following consummation of the repayments
contemplated by Section 2.4 and immediately prior to the Effective
Time shall be fully reflected on the Pre-Closing Statement, (F) the
gross amount of the Change of Control Payments (without
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regard to taxes or other withholdings) shall be reflected as a
liability on the Pre-Closing Statement to the extent they have not
been paid by the Company prior to the Closing, (G) all interest,
charges, fees, expenses and penalties, including prepayment penalties
on or which become due as a result of Section 2.4 or as a result of
any voluntary payments made by the Company on the Closing Date or in
contemplation of the Closing on any Debt shall be reflected as a
liability on the Pre-Closing Statement to the extent any of the
foregoing have not been paid by the Company prior to the Closing, (H)
all accrued and unpaid vacation shall be reflected as a liability on
the Pre-Closing Statement, (I) net loan origination fees relating to
the original incurrence of Designated Debt will be added back to Net
Worth after payment of the Designated Debt, (J) anticipated operating
losses arising from contracts in backlog shall not be reflected as a
liability on the Pre-Closing Statement, and (K) all property taxes
shall be treated as if accrued ratably throughout each fiscal year
(items (A) through (K) are hereinafter referred to as "Adjusted
Accounting Principles").
(ii) Based on the Pre-Closing Statement, if the
amount equal to the Net Worth Estimate minus $49.1 million (the "Net
Worth Adjustment") is a positive number, then the Purchase Price shall
be increased by such amount. If the Net Worth Adjustment is a
negative number, the Purchase Price shall be reduced by such amount.
(b) Post-Closing Statement. (i) As soon as practicable,
but in no event more than 120 days after the Closing Date, the
Surviving Corporation shall furnish the Stockholder Representative a
statement (the "Post-Closing Statement") reflecting the Net Worth of
the Company and its consolidated Subsidiaries immediately prior to the
Closing but after giving effect to the Stock Exchanges (the "Closing
Net Worth Amount") prepared in accordance with 12/31/93 GAAP and the
Adjusted Accounting Principles (references in the Adjusted Accounting
Principles to Pre-Closing Statement shall be deemed references to the
Post-Closing Statement for purposes of calculating the Closing Net
Worth Amount). In connection with the preparation of the Post-Closing
Statement, a physical inventory of the Companies and the Subsidiaries
shall be taken as of midnight of the day before the Closing Date.
(ii) Within 60 days after the delivery of the
Post-Closing Statement to the Stockholder Representative, the
Stockholder Representative shall (on behalf of the Stockholders)
either accept the amount of the Proposed Closing Differential (as
hereinafter defined) as reflected on the Post-Closing Statement as
correct or object to the Proposed Closing Differential, specifying in
reasonable detail in writing the nature of its objection(s). In the
event the Stockholder Representative does not object to the Proposed
Closing Differential within said 60-day period, the Stockholder
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Representative shall be deemed to have accepted the Proposed Closing
Differential as the Closing Differential. In the event the
Stockholder Representative objects to the Proposed Closing
Differential, then, during a 15-day period subsequent to the receipt
by the Surviving Corporation of notice of the Stockholder
Representative's objection(s), the Surviving Corporation and the
Stockholder Representative shall attempt in good faith to resolve the
differences respecting such Proposed Closing Differential. In the
event the Surviving Corporation and the Stockholder Representative are
unable to resolve their differences within said 15-day period, the
parties agree that the matter shall be submitted to a mutually
acceptable firm of certified public accountants, the costs and
expenses of which firm shall be borne equally by the Surviving
Corporation and the Stockholder Representative. If the Surviving
Corporation and the Stockholder Representative cannot mutually agree
upon said firm of certified public accountants within 15 days, the
disputed Proposed Closing Differential shall be jointly determined by
two firms of certified public accountants, one such firm being
selected by each of the Surviving Corporation and the Stockholder
Representative, with the Surviving Corporation and the Stockholder
Representative each paying the costs and expenses of the firm selected
by it. In the event that the respective firms of certified public
accountants of the Surviving Corporation and the Stockholder
Representative are unable to so agree, such firms of certified public
accountants shall select a third firm of certified public accountants
(which shall be one of the six largest nationally recognized public
accounting firms in the United States) to determine the Closing
Differential pursuant to this Section 2.2 and whose determination
shall be final and binding upon the parties. The costs and expenses
of such third firm of certified public accountants shall be borne
equally by the Surviving Corporation and the Stockholder
Representative. During the period from the date of delivery of the
Post-Closing Statement to the Stockholder Representative through the
date of resolution of any dispute regarding the Proposed Closing
Differential as contemplated by this Section 2.2(b)(ii), Parent shall
cause the Surviving Corporation and each Subsidiary to provide the
Stockholder Representative and its agents and representatives
reasonable access to the books, records (including those supplemental
schedules prepared by the Surviving Corporation in connection with
preparation of the Post-Closing Statement), facilities and employees
of the Surviving Corporation and each Subsidiary for purposes relevant
to the review of such Post-Closing Statement and the resolution of any
related dispute.
(iii) Based on the Post-Closing Statement, within
three (3) days after the final determination of the Closing
Differential, the Purchase Price shall be adjusted as follows: If the
amount of the Closing Differential is a positive amount, then the
Purchase Price shall be adjusted upward by an amount equal to the
Closing Differential. In such case, Parent or the Surviving
Corporation shall pay to the
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Paying Agent (as hereinafter defined) (for distribution to the holders
of Company Common Stock) the increase of the Merger Consideration
resulting from such adjusted Purchase Price. Conversely, if the
amount of the Closing Differential is a negative amount, then the
Purchase Price shall be adjusted downward by an amount equal to the
Closing Differential (expressed as a positive amount), which amount
shall be distributed to the Parent and the Surviving Corporation in
accordance with the terms of the Escrow Agreement.
(c) Preparation of Pre-Closing Statement/Post-Closing Statement.
The Company, in the case of the Pre-Closing Statement, and the Surviving
Corporation, in the case of the Post-Closing Statement, shall prepare such
statements to reflect the Net Worth of the Company and the Subsidiaries in
accordance with 12/31/93 GAAP and shall separately reflect the Adjusted
Accounting Principles to arrive at the Net Worth Estimate and Closing Net Worth
Amount, respectively.
(d) Collection of Accounts Receivable. In the event that the
Stockholders are entitled to a payment pursuant to Section 1.5(c) of the Escrow
Agreement, such payment shall be deemed an increase in the Merger
Consideration.
SECTION 2.3. No Further Ownership Rights in Company. At and after
the Effective Time, each holder of shares of Company Common Stock immediately
prior to the Effective Time shall cease to have any rights as a stockholder of
the Company, except for the right to surrender such stockholder's certificates
in exchange for receipt of the Merger Consideration described in Section
2.1(c), and after the Effective Time no transfer of shares of Company Common
Stock which were outstanding immediately prior to the Effective Time shall be
made on the stock transfer books of the Company. Any certificates presented
after the Effective Time for transfer shall be cancelled and exchanged for the
appropriate Merger Consideration. Parent shall have no obligation to deliver
to Stockholders their portion of the Merger Consideration except to the extent
that Stockholders have caused certificates representing Company Common Stock
(or affidavits of lost certificate in form and substance acceptable to Parent,
if applicable) to be tendered to Parent.
SECTION 2.4. Payment of Indebtedness. Immediately prior to the
Effective Time, the Parent will advance to the Company a loan (the "Company
Loan") in an amount sufficient to repay the Designated Debt (as hereinafter
defined) and the Company shall immediately apply such proceeds, by wire
transfer of immediately available funds, to the payment in full of the
Designated Debt and shall secure the release of any and all pledges, security
interests, mortgages, or other liens securing such Designated Debt.
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SECTION 2.5. Exchange of Certificates.
(a) Paying Agent. As of the Effective Time, Parent shall
deposit, or shall cause to be deposited, (i) with a bank or trust company
designated by Parent (the "Paying Agent") for the benefit of the holders of
shares of Company Common Stock, for exchange through the Paying Agent in
accordance with this Article II, certificates of stock and cash (the "Exchange
Fund") equal to the Merger Consideration issuable pursuant to Section 2.1 as
calculated at the Effective Time less the Escrow Funds and (ii) with the escrow
agent (the "Escrow Agent") under the Escrow Agreement, $4,400,000 of the Cash
Consideration and the number of shares of the Parent Common Stock constituting
part of the Stock Consideration determined by dividing $4,400,000 by the Stock
Price (collectively, the "Escrow Funds"), which amounts shall be held and
subsequently distributed by the Escrow Agent pursuant to the provisions of the
Escrow Agreement (the "Escrow Agreement") in substantially the form attached
hereto as Exhibit A. The Paying Agent shall, pursuant to irrevocable
instructions, distribute the Merger Consideration deposited in the Exchange
Fund on the basis established pursuant to Section 2.1(i).
(b) Exchange Procedure. Parent will instruct the Paying
Agent to distribute the Merger Consideration as soon as reasonably practicable
after the Effective Time, to each holder of record of a certificate or
certificates (the "Certificates") which immediately prior to the Effective Time
represented outstanding shares of Company Common Stock other than Treasury
Shares as set forth herein. Upon surrender of a Certificate (or affidavit of
lost Certificate in form and substance reasonably satisfactory to Parent and
Paying Agent, and, if Parent or Paying Agent shall reasonably request, the
posting of a bond in form and substance reasonably satisfactory to Parent and
Paying Agent) to the Paying Agent or to such other agent or agents as may be
appointed by the Surviving Corporation, together with a blank stock power, duly
executed, and such other documents as may be required by the Paying Agent, the
holder of such Certificate shall be entitled to receive in exchange therefor
(i) a certificate evidencing that number of whole shares of Parent Common Stock
which such holder has the right to receive in respect of the shares of Company
Common Stock formerly evidenced by such Certificate (after taking into account
all shares of Company Common Stock then held of record by such holder), and
cash in lieu of fractional shares of Parent Common Stock to which such holder
is entitled pursuant to Section 2.5(f), less the portion thereof deposited with
the Escrow Agent pursuant to Section 2.5(a), and (ii) the cash consideration
into which the shares of Company Common Stock theretofore represented by the
Certificate so surrendered shall have been converted, less the portion thereof
deposited with the Escrow Agent pursuant to Section 2.5(a). No interest will
be paid or will accrue on the Merger Consideration upon the surrender of any
Certificate.
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(c) Unregistered Transfer of Company Common Stock. In the
event of a transfer of ownership of Company Common Stock which is not
registered in the transfer records of the Company, the appropriate Merger
Consideration may be issued to a transferee if the Certificate representing
such Company Common Stock is presented to the Paying Agent, accompanied by all
documents reasonably required by Parent, including (i) documents to evidence
and effect such transfer and by evidence that any applicable stock transfer
taxes have been paid and (ii) documents evidencing transferee's representations
or warranties to Parent. Until surrendered as contemplated by this Section
2.5, each Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the applicable Merger
Consideration specified in Section 2.1(c) and any amounts distributable
pursuant to the Escrow Agreement.
(d) Termination of Exchange Fund. Any funds or Parent
Common Stock deposited with the Paying Agent that are payable to a former
stockholder of the Company which has not submitted a claim for its portion of
the Merger Consideration as described in this Section 2.5 within six months
after the Effective Time shall be paid or delivered, as the case may be, to the
Surviving Corporation upon demand, and any former stockholders of the Company
who have not theretofore complied with the instructions for exchanging their
Certificates shall thereafter look only to the Surviving Corporation for
payment, it being acknowledged by Parent and Sub that the Surviving
Corporation's receipt of any such amounts shall not relieve it of its payment
obligations to such former stockholders. In no event will any former
stockholder of the Company be entitled to receive interest or any other amounts
earned on the Merger Consideration held by the Surviving Corporation in
accordance with this Section 2.5(d), except as otherwise expressly provided in
Section 2.5(e).
(e) Distributions with Respect to Unexchanged Shares of
Parent Common Stock. Dividends and other distributions declared or made after
the Effective Time with respect to Parent Common Stock held in the Exchange
Fund, or held by the Surviving Corporation pursuant to Section 2.5(d), shall
not be paid to the holder of any unsurrendered Certificate with respect to the
shares of Parent Common Stock evidenced thereby until the holder of such
Certificate shall surrender such Certificate.
(f) Fractional Shares. No fraction of a share of Parent
Common Stock shall be issued in the Merger. In lieu of any such fractional
shares, each holder of Company Common Stock upon surrender of a certificate for
exchange pursuant to this Section 2.5 shall be paid an amount in cash (without
interest), rounded to the nearest cent, determined by multiplying (i) the Stock
Price by (ii) the fractional interest to which such holder would otherwise be
entitled (after taking into account all shares of Company Common Stock then
held of record by such holder).
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(g) Withholding Rights. Parent shall be entitled to
deduct and withhold from the consideration otherwise payable pursuant to this
Agreement to any holder of shares of Company Common Stock such amounts as
Parent is required to deduct and withhold with respect to the making of such
payment under the Code, or any provision of state, local or foreign tax law.
To the extent that amounts are so withheld by Parent, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of such shares of Company Common Stock in respect of which such
deduction and withholding was made by Parent.
ARTICLE III
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
Each of the Companies, jointly and severally, represents and
warrants to each of Parent and Sub as set forth below. As used in this Article
III, any reference to any event, change or effect being "material" with respect
to any entity means an event, change or effect related to the condition
(financial or otherwise), properties, assets, liabilities, businesses,
prospects or operations of such entity and its affiliates taken as a whole.
SECTION 3.1. Organization and Qualification. Except as set forth in
Section 3.1 of the Disclosure Schedule, each of the Companies and their
respective Subsidiaries is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation, with all
requisite corporate power and authority to own, operate and lease its
properties and to carry on its business as it is now being conducted, and is
qualified or licensed to do business and is in good standing in every
jurisdiction where the nature of the business conducted by it or the properties
owned or leased by it requires qualification. Each of the Companies have
delivered to Parent complete and correct copies of the Certificates or Articles
of Incorporation and Bylaws of each of the Companies and each of their
Subsidiaries.
SECTION 3.2. Authorization. Each of the Companies has full corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by each of the Companies, the performance by each of the Companies of their
obligations hereunder, and the consummation by them of the transactions
contemplated hereby, have been duly authorized, as applicable, by the Boards of
Directors of each of the Companies and their stockholders. No other corporate
action on the part of any of the Companies is necessary to authorize the
execution and delivery of this Agreement or the consummation of the
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transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by each of the Companies and, assuming this Agreement
constitutes a valid and binding obligation of Parent and Sub, will constitute a
valid and binding obligation of each of the Companies, enforceable against them
in accordance with its terms, except to the extent that such enforcement may be
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally, and the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
SECTION 3.3. No Violation. Except as set forth in Section 3.3 of the
Disclosure Schedule, neither the execution and delivery of this Agreement by
any of the Companies and the performance by any of the Companies of their
obligations hereunder nor the consummation by any of the Companies of the
transactions contemplated hereby will (a) violate, conflict with or result in
any breach of any provision of the Certificates or Articles of Incorporation or
Bylaws of any of the Companies or any of their Subsidiaries, (b) violate,
conflict with or result in a violation or breach of, or constitute a default
(with or without due notice or lapse of time or both) under, or permit the
termination of, or require the consent of any other party to, or result in the
acceleration of, or entitle any party to accelerate (whether as a result of a
change in control of any of the Companies or otherwise) any obligation, or
result in the loss of any benefit, or give rise to the creation of any lien,
charge, security interest or encumbrance upon any of the properties or assets
of any of the Companies or their Subsidiaries under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture or deed of
trust, or any material license, lease, agreement or other instrument or
obligation to which any of the Companies or any of their Subsidiaries is a
party or by which it or any of its properties or assets may be bound or
affected, or (c) violate any order, writ, judgment, injunction, decree,
statute, rule or regulation, of any court or governmental authority applicable
to any of the Companies or any of their Subsidiaries or any of their respective
properties or assets.
SECTION 3.4. Capitalization of each of the Companies.
(a) The authorized capital stock of the Company consists
of 1,000,000 shares of Class A Common Stock and 4,000,000 shares of Class B
Common Stock. As of the date hereof, the Company has, in the aggregate,
865,500 shares of Class A Common Stock (including 141,284 held in Treasury) and
2,820,000 shares of Class B Common Stock (including 498,370 held in Treasury)
issued and outstanding, all of which have been validly issued, are fully paid
and non-assessable and were not issued in violation of any preemptive rights.
Immediately prior to the Effective Time, after giving effect to the Stock
Exchanges, the Company will have, in the aggregate, 1,682,660 shares of Class A
Common Stock
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(including 141,284 held in Treasury) and 2,820,000 shares of Class B Common
Stock (including 498,370 held in Treasury) issued and outstanding, all of which
shall be validly issued, fully paid and non-assessable and shall have not been
issued in violation of any preemptive rights. Schedules I through V hereto set
forth the ownership of all Class A Common Stock and Class B Common Stock that
will be issued and outstanding immediately prior to the Effective Time, and
after giving effect to the Stock Exchanges. Except as set forth in Section 3.4
of the Disclosure Schedule, there are no options, warrants, calls,
subscriptions, conversion or other rights, agreements or commitments obligating
the Company to issue any additional shares of capital stock of the Company or
any other securities convertible into, exchangeable for or evidencing the right
to subscribe for any shares of capital stock of the Company.
(b) The authorized capital stock of Owen Miscellaneous
consists of 10,000 shares of Owen Miscellaneous Capital Stock, 3,600 shares of
which are issued and outstanding (all of which are held by the Owen
Miscellaneous Stockholders in the amounts identified in Schedule II hereto).
All of the issued and outstanding shares of Owen Miscellaneous Capital Stock
have been validly issued, are fully paid and non-assessable and were not issued
in violation of any preemptive rights. There are no options, warrants, calls,
subscriptions, conversion or other rights, agreements or commitments obligating
Owen Miscellaneous to issue any additional shares of capital stock or any other
securities convertible into, exchangeable for or evidencing the right to
subscribe for any shares of such capital stock.
(c) The authorized capital stock of South Carolina Steel
consists of 2,500 shares of South Carolina Capital Stock, all of which are
issued and outstanding (all of which are held by the South Carolina Steel
Stockholders in the amounts identified in Schedule III hereto). All of the
issued and outstanding shares of South Carolina Steel Capital Stock have been
validly issued, are fully paid and non-assessable and were not issued in
violation of any preemptive rights. There are no options, warrants, calls,
subscriptions, conversion or other rights, agreements or commitments obligating
South Carolina Steel to issue any additional shares of capital stock or any
other securities convertible into, exchangeable for or evidencing the right to
subscribe for any shares of such capital stock.
SECTION 3.5. Subsidiaries and Equity Investments.
(a) Section 3.5 of the Disclosure Schedule sets forth (i)
the name of each corporation of which any of the Companies directly or
indirectly owns shares of capital stock having in the aggregate 50% or more of
the total combined voting power of the issued and outstanding shares of capital
stock entitled to vote generally in the election of directors of such
corporation (individually, a "Subsidiary" and collectively, the
"Subsidiaries"); (ii) the
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name of each corporation, partnership, joint venture or other entity (other
than the Subsidiaries) in which any of the Companies have, or pursuant to any
agreement have the right to acquire at any time by any means, an equity
interest or investment; (iii) in the case of each of the Subsidiaries and such
other corporations described in the foregoing clause (i), (A) the jurisdiction
of incorporation and (B) the capitalization thereof and the percentage of each
class of voting stock owned by any of the Companies or by any of their
Subsidiaries, both on the date hereof and after giving effect to the Stock
Exchanges; and (iv) in the case of each of such unincorporated entities, the
equivalent of the information provided pursuant to the preceding clause (iii)
with regard to corporate entities.
(b) All of the outstanding shares of capital stock of
each Subsidiary have been duly authorized and validly issued, are fully paid
and non-assessable, have not been issued in violation of any preemptive rights,
and (except as specified in Section 3.5 of the Disclosure Schedule) are owned
of record and beneficially, directly or indirectly, by each of the Companies,
as the case may be, free and clear of any liens, claims, charges, security
interests or other legal or equitable encumbrances, limitations or
restrictions.
(c) There are no options, warrants, calls, subscriptions,
conversion or other rights, agreements or commitments obligating any of the
Subsidiaries to issue any additional shares of capital stock of such Subsidiary
or any other securities convertible into, exchangeable for or evidencing the
right to subscribe for any shares of such capital stock.
SECTION 3.6. Consents and Approvals. Except as set forth in Section
3.6 of the Disclosure Schedule, other than any consents and approvals of or
filings or registrations with the Antitrust Division of United States
Department of Justice (the "DOJ") pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), the filing of articles of
merger pursuant to the South Carolina BCA, and requirements of federal and
state securities laws, no filing or registration with, no notice to and no
permit, authorization, consent or approval of any governmental authority is
necessary for the consummation by any of the Companies of the transactions
contemplated by this Agreement.
SECTION 3.7. Financial Statements.
(a) The Company has delivered to Parent (i) copies of the
audited consolidated balance sheets of each of the Company, Owen Miscellaneous
and South Carolina Steel as of December 31, 1991, December 31, 1992 and
December 31, 1993 (the "12/31/93 Balance Sheets"), together with the related
audited consolidated statements of income, stockholders' equity and changes in
cash flow for the fiscal years ended on such dates, and the notes thereto,
accompanied by the reports thereon of the applicable firm of independent public
accountants, and (ii) copies of the unaudited consolidated balance sheets
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<PAGE> 23
of each of the Company, Owen Miscellaneous and South Carolina Steel as of March
31, 1994 (the "Interim Balance Sheets"), together with the related unaudited
consolidated statements of income, stockholders' equity and changes in cash
flow for the three-month period ended on such date, and the notes thereto,
certified by the chief financial officer of each of the Company, Owen
Miscellaneous and South Carolina Steel (such audited and unaudited interim
financial statements being hereinafter referred to as the "Financial
Statements"). The Financial Statements, including the notes thereto, (a) were
prepared in accordance with generally accepted accounting principles applied on
a consistent basis ("GAAP") throughout the periods covered thereby, except as
otherwise disclosed in Schedule 3.7 of the Disclosure Schedule, (b) present
fairly in all material respects the consolidated financial position, results of
operations and changes in cash flows of each of the Company, Owen Miscellaneous
and South Carolina Steel as of such dates and for the periods then ended
(subject, in the case of the unaudited interim Financial Statements, to normal
year-end, audit adjustments consistent with prior periods that would not be
material, individually or in the aggregate), and (c) in the case of the audited
Financial Statements, have been audited in accordance with generally accepted
auditing standards. The inventory (other than supplies) shown on the 12/31/93
Balance Sheets consists, and the inventory (other than supplies) that will be
shown on the Pre-Closing Statement will consist, of items usable and saleable
in the ordinary course of business of the Company, the Subsidiaries, Owen
Miscellaneous and South Carolina Steel and has been or will be, as the case may
be, valued in accordance with GAAP consistently applied. The supplies shown on
the 12/31/93 Balance Sheet consists, and the supplies that will be shown on the
Pre-Closing Statement will consist, of items usable in the ordinary course of
business of the Company, the Subsidiaries, Owen Miscellaneous and South
Carolina Steel and has been or will be, as the case may be, valued in
accordance with GAAP consistently applied. The accounts receivable shown on
the 12/31/93 Balance Sheets arose, and the accounts receivable that will be
shown on the Pre-Closing Statement will arise, out of transactions in the
ordinary course of business of the Company, the Subsidiaries, Owen
Miscellaneous and South Carolina Steel and the related reserves are or will be,
as the case may be, adequate under GAAP.
SECTION 3.8. Absence of Undisclosed Liabilities. Except for matters
relating to the transactions contemplated by the Agreement, there are no
liabilities or financial obligations of any of the Companies or any of their
Subsidiaries of any kind whatsoever (whether absolute, accrued, contingent or
otherwise, and whether due or to become due) that are required to be reflected
on, or disclosed in the notes to, a balance sheet prepared in accordance with
GAAP, other than liabilities and obligations: (a) provided for or reserved
against in the Financial Statements, (b) arising after March 31, 1994 in the
ordinary course of business consistent with past experience, or (c) disclosed
in Section 3.8 of the Disclosure Schedule.
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SECTION 3.9. Absence of Certain Changes. Except as disclosed in
Section 3.9 of the Disclosure Schedule, and except for matters relating to the
transactions contemplated by this Agreement, since December 31, 1993, each of
the Companies and their Subsidiaries have conducted their respective businesses
only in the ordinary course and since December 31, 1993 there has not occurred
(a) any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to the equity
interests of any the Companies or any of their Subsidiaries, (b) any
forgiveness, cancellation or waiver by any of the Companies or any of their
Subsidiaries of debts owed to any of the Companies or any of their Subsidiaries
or claims or rights of any of the Companies or any of their Subsidiaries
against others, or any discharge by any of the Companies or any of their
Subsidiaries of any lien, charge or encumbrance or payment by any of the
Companies or any of their Subsidiaries of any liability or obligation, other
than, as relates to all of the foregoing, in the ordinary course of business,
(c) any material change in the credit practices of any of the Companies or any
of their Subsidiaries, (d) (i) any increase in the rate or terms of
compensation (including termination and severance pay) payable or to become
payable by any of the Companies to any of their directors, officers or
employees, or any increase in the rate or terms of any bonus, insurance,
pension or other employee benefit plan, program or arrangement made to, for or
with any such directors, officers or employees, except, in each case, increases
occurring in the ordinary course of business or as required by applicable law,
and (ii) any entry by any of the Companies or any of their Subsidiaries into
any employment, severance or termination agreement with any such person, (e)
any entry into any agreement relating to the borrowing of money or any material
agreement, commitment or transaction by any of the Companies or any of their
Subsidiaries, except any agreements, commitments or transactions in the
ordinary course of business, (f) any damage, destruction or theft or other
casualty loss to the properties or assets owned or leased by any of the
Companies or any of their Subsidiaries with a book or replacement value of
$20,000 or more individually or $100,000 in the aggregate, whether or not
covered by insurance (other than damage, destruction or theft or other casualty
loss to any property or assets which property or assets have been repaired or
replaced and the cost of such repair or replacement has been expensed by the
Company), (g) any change by any of the Companies or any of their Subsidiaries
in their financial or tax accounting principles or methods, except insofar as
may be required by a change in GAAP, applicable law or circumstances which did
not exist as of the date of the respective Financial Statements, (h) any change
made or authorized in the Certificates or Articles of Incorporation or Bylaws
of any of the Companies or any of their Subsidiaries, (i) any purchase,
redemption, issue, sale or other acquisition or disposition by any of the
Companies or any of their Subsidiaries of any shares of capital stock or other
equity securities of any of the Companies or any of their Subsidiaries, or the
grant of any options, warrants or other rights to purchase, or convert any
obligation into, shares of capital stock or any evidence of indebtedness or
other securities of any of the Companies or any of their Subsidiaries, (j) any
material sale, lease, license, encumbrance or disposition by any of the
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Companies or any of their Subsidiaries of any of their assets which is not in
the ordinary course of business or (k) an event or condition that has had a
Material Adverse Effect.
SECTION 3.10. Litigation. Except as set forth in Section 3.10 of the
Disclosure Schedule, there is no action, suit, inquiry, judicial or
administrative proceeding, arbitration or investigation ("Litigation") pending
or, to the knowledge of the Company, threatened against any of the Companies,
any of their Subsidiaries or any of their respective properties, assets or
rights before any court arbitrator or administrative or governmental body, nor
is there any judgment, decree, injunction, or order of any court, governmental
department, commission, agency, instrumentality or arbitrator outstanding
against any of the Companies or any of their Subsidiaries.
SECTION 3.11. Liens and Encumbrances. Except as set forth in Section
3.11 of the Disclosure Schedule, all properties and assets owned by each of the
Companies and their Subsidiaries are free and clear of all title defects,
liens, pledges, claims, security interests, restrictions, mortgages, tenancies
and other possessory interests, conditional sale or other title retention
agreements, assessments, easements, rights of way, covenants, restrictions,
rights of first refusal, defects in title, encroachments and other burdens,
options or encumbrances of any kind (collectively, "Liens") except (a)
statutory Liens not yet delinquent or the validity of which are being contested
in good faith by appropriate actions, (b) purchase money Liens arising in the
ordinary course, (c) Liens for taxes not yet delinquent, (d) Liens reflected in
the Financial Statements (which have not been discharged) and (e) Liens which
in the aggregate do not materially detract from the value or, in the case of
personal property, materially impair the use by any of the Companies or any of
their Subsidiaries of properties or assets subject thereto or, in the case of
real property, materially impair the present and continued use in the usual and
normal conduct of the business of each of the Companies and their Subsidiaries.
Except as set forth on Section 3.11 of the Disclosure Schedule, all of the
property, plant and equipment of each of the Companies and their Subsidiaries
are owned or leased by each of the Companies or their Subsidiaries and are in
satisfactory condition to conduct the business of the Companies or such
Subsidiaries as presently conducted.
SECTION 3.12. Certain Agreements. Except as described in Section
3.12 of the Disclosure Schedule, none of the Companies nor any of their
Subsidiaries are parties to any oral or written agreement, plan or arrangement
with any officer, director or employee of any of the Companies or any of their
Subsidiaries (i) the benefits of which are contingent, or the terms of which
are materially altered, upon the occurrence of a transaction involving any of
the Companies of the nature of any of the transactions contemplated by this
Agreement, (ii) providing severance benefits or other benefits after the
termination of employment regardless of the reason for such termination of
employment, (iii) under which any person may receive payments subject to the
tax imposed by Section 4999 of the Code, or (iv) any of
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the benefits of which will be increased, or the vesting of benefits of which
will be accelerated, by the occurrence of any of the transactions contemplated
by this Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement. Except as disclosed in Section 3.12 of the Disclosure Schedule,
none of the Companies or any of their Subsidiaries are parties to any oral or
written (i) agreement, contract, indenture or other instrument relating to the
borrowing of money or the guarantee of any obligation for the borrowing of
money or (ii) other contract, agreement or commitment of any of the Companies
or any of their Subsidiaries material to any of the Companies or any of their
Subsidiaries. Except as set forth in Section 3.12 of the Disclosure Schedule,
each agreement, contract or obligation described in Section 3.12 of the
Disclosure Schedule, or required to be so described, is a valid and binding
obligation of the parties thereto and is in full force and effect without
amendment. Except as set forth in the Section 3.12 of the Disclosure Schedule,
each party has performed all obligations required to be performed by it through
the date hereof under the agreements so described and is not (with or without
lapse of time or giving notice, or both) in breach or default in any respect
thereunder.
SECTION 3.13. Employee Benefit Plans.
(a) Section 3.13 of the Disclosure Schedule sets forth a
true and complete list of each bonus, deferred compensation, incentive
compensation, stock purchase, stock option, employment, consulting, severance
or termination pay, hospitalization or other medical, life or other insurance,
supplemental unemployment benefits, profit-sharing, pension or retirement
plan, program, agreement or arrangement, and each other "employee benefit plan"
(within the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")) that is maintained or contributed to by any
of the Companies or any of their Subsidiaries ("Employee Benefit Plans") as of
the date of this Agreement.
(b) None of the Companies nor any of their Subsidiaries
maintains or contributes to, or on or after the date which is six years prior
to the date of this Agreement (the "6-Year Look Back Date") has maintained or
contributed to, any "multiemployer plan," as such term is defined in Section
3(37) or Section 4001(a)(3) of ERISA, or any single-employer defined benefit
plans covered by Title IV of ERISA. Each Employee Benefit Plan which is
intended to be qualified under Section 401(a) and, if applicable, Section
401(k) of the Code, is so qualified, and no officer or other employee of any of
the Companies or any of their Subsidiaries is aware of any event or condition
which would cause any such plan to lose such qualified status.
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Except as disclosed in Section 3.13 of the Disclosure
Schedule, no action, suit, inquiry, judicial or administrative proceeding,
arbitration or investigation relating to any Employee Benefit Plan (other than
claims for benefits for which the plan administrative procedures have not been
exhausted and "qualified domestic relations orders" as defined in Section
414(p) of the Code) is pending or, to the knowledge of any of the Companies,
threatened against any of the Companies, any of their Subsidiaries or any
Employee Benefit Plan before any court, arbitrator or administrative or
governmental body. None of the Companies or any of their Subsidiaries have
failed to make contributions to any Employee Benefit Plan that are required to
be made on or after January 1, 1992 under the terms of such Employee Benefit
Plans or under applicable law. None of the Companies, any of their
Subsidiaries, any officer of any of the Companies or any of their Subsidiaries,
or any of the Employee Benefit Plans of any of the Companies and any of their
Subsidiaries which are subject to ERISA, or any trusts created thereunder, or
any trustee or administrator thereof, has engaged in a "prohibited
transaction", as such term is defined in Section 4975 of the Code or under
ERISA on or after the 6-Year Look Back Date, which could reasonably subject any
of the Companies, their Subsidiaries, any officer of any of the Companies or
any of their Subsidiaries, any of such plans or any trust to any material tax
or penalty on prohibited transactions or any other liability imposed by such
Section 4975 or under ERISA . Each of the Companies and their Subsidiaries are
in good faith material compliance with the continuation coverage requirements
of group health plans as described in Section 4980B of the Code.
SECTION 3.14. Taxes. Except as set forth in Section 3.14 of the
Disclosure Schedule:
(a) Each of the Companies and their Subsidiaries have,
during the past three (3) years, timely filed or caused to be filed all
federal, state, local and foreign Tax (as defined below) returns required to be
filed and have paid or caused to be paid, or has made adequate provision or set
up an adequate accrual or reserve on each of the books of the Companies or the
Subsidiaries for the payment of, all Taxes required to be paid in respect of
the periods for which returns are due, and has established an adequate accrual
or reserve under GAAP on each of the books of the Companies or the Subsidiaries
for the payment of all Taxes payable in respect of the period, including
portions thereof, subsequent to the last of said periods required to be so
accrued or reserved up to and including the close of the Closing Date. For
these purposes, the Tax attributable to the period up to and including the
close of the Closing Date shall be determined as if the taxable year of each of
the Companies and the Subsidiaries ended as of the close of the Closing Date
and shall not include any Tax resulting from (i) any act or failure to act by
the Companies, the Subsidiaries, Parent or Sub occurring after the Effective
Time or (ii) a breach of any of the representations set forth in
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Section 5.8 hereof. There are no federal, state, and foreign income tax
returns which are due from any of the Companies or their Subsidiaries which
have not been filed.
(b) There is no delinquency by the Companies in the
payment of any material Tax. No material deficiencies for any Tax, assessment
or governmental charge have been claimed, proposed or assessed against any of
the Companies or any of their assets, and to the knowledge of each of the
Companies, none have been threatened.
(c) No waiver or extension of time to assess any Taxes
has been given or requested. None of the Companies have received notice of any
claim made by any taxing authority in any jurisdiction where any of the
Companies do not file Tax returns that any of the Companies are or may be
subject to taxation by that jurisdiction.
(d) The federal, state, local and foreign Tax returns
that include any of the Companies have not been audited since the date of the
most recent audit set forth in Section 3.14 of the Disclosure Schedule by the
Internal Revenue Service or comparable state or local agencies.
(e) Each of the Company, Owen Miscellaneous and South
Carolina Steel will transfer Substantially All (as hereinafter defined) of its
assets to Sub in connection with the merger of each of those corporations into
Sub, as contemplated by this Agreement. As used herein, (i) the term
"Substantially All," when used in reference to the assets of a corporation,
means assets that (a) include all of the assets of such corporation used in the
trades or businesses conducted by such corporation Immediately Before (as
hereinafter defined) the merger under consideration, and (b) have a fair market
value that (1) when reduced by the issue price of all of the liabilities of
such corporation, exceeds 90% of the excess of the total fair market value of
the assets owned by such corporation Immediately Before the merger under
consideration over the total issue price of all liabilities of such corporation
in existence Immediately Before the merger under consideration, and (2) exceeds
70% of the total fair market value of all of the assets owned by such
corporation Immediately Before the merger under consideration; and (ii) the
term "Immediately Before," when used in reference to assets, trades or
businesses, or liabilities of a corporation, includes all assets, trades or
businesses and liabilities of such corporation owned, conducted or outstanding
immediately before the merger under consideration and immediately before the
completion of any distributions, sales or other transactions that were planned,
undertaken, or completed at a time when any of the transactions contemplated by
this Agreement were under consideration by such corporation or its
stockholders.
(f) All liabilities of the Company, Owen Miscellaneous
and South Carolina Steel (each a "Merged Company") existing as of the Effective
Time that will be assumed by
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Sub in connection with the Merger and the Post-Closing Mergers (as hereinafter
defined) (collectively, the "Mergers") have been incurred by each such Merged
Company in the ordinary course of its business and are related to the assets to
be transferred by such Merged Company in the Mergers.
(g) None of the Merged Companies is an investment company
described in Section 368(a)(2)(F)(iii) of the Code.
(h) The sum of the cash and fair market value of the
shares of Parent Common Stock received by each Stockholder in connection with
the Merger approximately equals the sum of the fair market value of the shares
of each of the Companies' stock exchanged by such Stockholder for such cash and
Parent Common Stock.
(i) Each Stockholder will pay all expenses, if any,
incurred by such Stockholder in connection with the transactions contemplated
by this Agreement, and each of the Companies will pay all expenses, if any,
incurred by each of such Companies in connection with the transactions
contemplated by this Agreement.
(j) None of the Companies has, at any time during the
period beginning on January 1, 1991, and ending on the date of the Effective
Time, made any distributions with respect to, or in redemption of, any of its
stock or any stock of another one of the Companies, other than dividends in the
ordinary course of business in the amounts set forth on Section 3.14 of the
Disclosure Schedule.
(k) Except as contemplated by this Agreement, during the
period beginning on January 1, 1991, and ending on the date of the Effective
Time, there have been no sales, exchanges or other dispositions of any shares
of capital stock of any of the Companies.
(l) The Company has owned at least 86% of the Owen Joist
Capital Stock (which is that corporation's only class of outstanding stock
since the inception of that corporation) since January 1, 1991, and no shares
of Owen Joist Capital Stock have been sold, redeemed, exchanged or otherwise
disposed of since that date or in contemplation of any of the transactions
contemplated by this Agreement. The Company and Owen Joist, together, have
owned at least 83% of the Owen Electric Capital Stock (which is that
corporation's only class of outstanding stock since the inception of that
corporation) since January 1, 1991, and no shares of Owen Electric Capital
Stock have been sold, redeemed, exchanged or otherwise disposed of since that
date or in contemplation of any of the transactions contemplated by this
Agreement.
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For the purposes of this Agreement, the term "Tax" shall
include all taxes, charges, withholdings, fees, levies, penalties, additions,
interest or other assessments imposed by any United States Federal, state,
local and foreign or other taxing authority on any of the Companies or any of
their Subsidiaries (including, without limitation, as a result of being a
member of an affiliated, combined or unitary group or as a result of any
obligation arising out of an agreement to indemnify any other person), and
including, but not limited to, those related to income, gross receipts, gross
income, sales, use, occupation, services, leasing, valuation, transfer,
license, customs duties or franchise.
SECTION 3.15. Compliance with Applicable Law. Except as set forth in
Section 3.15 of the Disclosure Schedule, each of the Companies and their
Subsidiaries hold all licenses, franchises, permits and authorizations
necessary for the lawful conduct of their businesses under and pursuant to, and
the businesses of each of the Companies and their Subsidiaries are not being
conducted in violation of, any provision of any Federal, state, local or
foreign statute, law, ordinance, rule, regulation, judgment, decree, order,
concession, grant, franchise, permit or license or other governmental
authorization or approval applicable to any of the Companies or any Subsidiary.
SECTION 3.16. Brokers' Fees and Commissions. Except for Wheat, First
Securities, Inc. and Philpott, Ball & Company, none of the Companies, their
directors or officers, or, to their knowledge, any of their employees or
agents, has employed any investment banker, broker, or finder in connection
with the transactions contemplated hereby.
SECTION 3.17. Proprietary Rights. Section 3.17 of the Disclosure
Schedule contains an accurate and complete list of all domestic and foreign
letters patent, patents, patent applications, patent licenses, software
licenses and know-how licenses, trade names, trademarks, registered copyrights,
service marks, trademark registrations and applications, service mark
registrations and applications and copyright registrations and applications
owned or used by any of the Companies or any of their Subsidiaries in the
operation of their businesses (collectively, the "Intellectual Property").
Except as set forth in Section 3.17 of the Disclosure Schedule, each of the
Companies and their Subsidiaries own the entire right, title and interest in
and to the Intellectual Property, trade secrets and other confidential
proprietary information used in the operation of their business (including,
without limitation, the right to use and license the same). Except as set
forth in Section 3.17 of the Disclosure Schedule, there are no pending, or to
the knowledge of any of the Companies, threatened actions of any nature
affecting the Intellectual Property. Section 3.17 of the Disclosure Schedule
lists all notices or claims currently pending or received by any of the
Companies or any of their Subsidiaries which claim infringement of any domestic
or foreign letters patent, patent applications, patent licenses and know-how
licenses, trade names, trademark registrations and applications, service marks,
copyrights, copyright registrations or
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applications, trade secrets or other confidential proprietary information.
Except as set forth in Section 3.17 of the Disclosure Schedule, to the
knowledge of any of the Companies, none of the Companies or the Subsidiaries
infringes or has misappropriated any domestic or foreign letters patent,
patents, patent applications, patent licenses and know-how licenses, trade
name, trademark registrations and applications, trademarks, service marks,
copyrights, copyright registrations or applications, trade secrets or other
confidential proprietary information. Except as set forth in Section 3.17 of
the Disclosure Schedule, all letters patent, registrations and certificates
issued by any governmental authority relating to any of the Intellectual
Property and all licenses and other agreements pursuant to which any of the
Companies or any of their Subsidiaries use any of the Intellectual Property,
are valid and subsisting, have been properly maintained and none of the
Companies, their Subsidiaries or, to the knowledge of any of the Companies, any
other person is in default or violation thereunder.
SECTION 3.18. Labor Relations. Section 3.18 of the Disclosure
Schedule sets forth an accurate and complete list of all written agreements,
arrangements or understandings with officers, directors and employees of each
of the Companies and their Subsidiaries regarding services to be rendered,
including collective bargaining agreements. Except as listed or described on
Section 3.18 of the Disclosure Schedule, each of the Companies and their
Subsidiaries (a) are, and have been for the past three years, in compliance
with all applicable laws regarding employment and employment practices, terms
and conditions of employment, wages and hours, and plant closing, occupational
safety and health and workers' compensation and are not engaged in any unfair
labor practices, (b) have no, and have not had in the past three years any,
unfair labor practice charges or complaints pending or, to the knowledge of any
of the Companies, threatened against any of them before the National Labor
Relations Board, (c) have no, and have not had in the past three years any,
grievances pending or, to the knowledge of any of the Companies, threatened
against them that would have a Material Adverse Effect and (d) have no, and
have not had in the past three years any, charges pending before the Equal
Employment Opportunity Commission or any state or local agency responsible for
the prevention of unlawful employment practices. There is no labor strike,
slowdown, work stoppage or lockout actually pending or, to the knowledge of any
of the Companies, threatened against or affecting any of the Companies or any
of their Subsidiaries. To the knowledge of any of the Companies, no union
organizational campaign or representation petition is currently pending with
respect to the employees of the Companies or the Subsidiaries.
SECTION 3.19. Insurance. Each of the Companies has insurance
policies in full force and effect for such amounts as are sufficient for
material compliance with all requirements of law and of all agreements to which
any of the Companies and their Subsidiaries are parties or by which they are
bound. Set forth in Section 3.19 of the
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Disclosure Schedule is a list of all fire, liability and other forms of
insurance and all fidelity bonds held by or applicable to each of the Companies
or their Subsidiaries or their businesses or properties, setting forth in
respect of each such policy the policy name, policy number, carrier, term, type
of coverage and annual premium. Except as set forth in Section 3.19 of the
Disclosure Schedule, no event relating to any of the Companies or their
Subsidiaries or their business has occurred which can reasonably be expected to
result in a retroactive upward adjustment in premiums under any such insurance
policies or which is likely to result in a prospective upward adjustment in
such premiums. Excluding insurance policies that have expired and been
replaced in the ordinary course of business, no insurance policy has been
cancelled within the last two years and, to the knowledge of any of the
Companies, no threat has been made to cancel any insurance policy of any of the
Companies or their Subsidiaries during such period. Except as noted on
Schedule 3.19 of the Disclosure Schedule, all such insurance will remain in
full force and effect with respect to periods before the Closing after giving
effect to the Merger and the transactions contemplated hereby. No event has
occurred, including, without limitation, the failure by any of the Companies or
their Subsidiaries to give any notice or information or any of the Companies or
their Subsidiaries giving any inaccurate or erroneous notice or information,
which limits or impairs the rights of any of the Companies or their
Subsidiaries under any such insurance policies.
SECTION 3.20. Real Estate. Except as set forth in Section 3.20 of
the Disclosure Schedule, each of the Companies and their Subsidiaries have good
and marketable title in fee simple to all real properties owned by them and in
good and transferable leaseholds in all real estate leased by them, in each
case, under valid and enforceable leases. Except as disclosed in Section 3.20
of the Disclosure Schedule, none of such real properties is subject to any
easements, rights of way, licenses, grants, building or use restrictions,
exceptions, reservations, limitations or other impediments which materially and
adversely affect the value thereof or which interfere with or impair the
present and continued use in the usual and normal conduct of the business of
each of Companies and their Subsidiaries. Section 3.20 of the Disclosure
Schedule lists (i) the street address of each parcel of real property owned by
each of the Companies or their Subsidiaries (the "Owned Real Property") and
(ii) as to each parcel of Owned Real Property, the number of the title policy,
if any, and the name of the company issuing such policy, insuring that the
Company, Owen Miscellaneous, South Carolina Steel or a Subsidiary is the fee
owner of such parcel (each such policy being referred to herein as a "Title
Policy" and the insured under each such policy being referred to herein as an
"Insured"). The Companies have delivered to Parent true and complete copies of
(a) each Title Policy and (b) as to each parcel of Owned Real Property, the
recorded deed whereby the Insured acquired title to such parcel. Each Title
Policy is valid and binding on the relevant insurer(s) in accordance with its
terms and is in full force and
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effect, and the consummation of the transactions contemplated by this Agreement
will not affect the interest of the Insured in any Title Policy.
SECTION 3.21. Personal Property. Except as set forth in Section 3.21
of the Disclosure Schedule, each of the Companies and their Subsidiaries own
outright and have good title to all the machinery, equipment, furniture,
fixtures, inventory, receivables and other tangible or intangible personal
property reflected on the latest balance sheets included in the Financial
Statements and all such property acquired since the date thereof, except for
sales and other dispositions made in the ordinary course of business consistent
with past practices since such date.
SECTION 3.22. Environmental Matters. Except as set forth in Section
3.22 of the Disclosure Schedule.
(a) the operations of each of the Companies and their
Subsidiaries are in compliance with all applicable Environmental Laws (as
hereinafter defined);
(b)(i) each of the Companies and their Subsidiaries have
obtained and currently maintain all Environmental Permits (as hereinafter
defined) necessary for their operations and are in compliance with such
Environmental Permits, (ii) there are no Legal Proceedings pending or, to the
knowledge of any of the Companies, threatened to revoke such Environmental
Permits, and (iii) none of the Companies or their Subsidiaries has received any
notice from any Governmental Authority (as hereinafter defined) or written
notice from any person (as hereinafter defined) to the effect that there is
lacking any Environmental Permit required for the current use or operation of
any property owned, operated or leased by any of the Companies or their
Subsidiaries;
(c) there are no Legal Proceedings pending or, to the
knowledge of the Companies, threatened against any of the Companies or any of
their Subsidiaries alleging the violation of any Environmental Law or
Environmental Permit;
(d) none of the Companies, their Subsidiaries or any
predecessor of any of the Companies or their Subsidiaries, or any current or,
to the knowledge of the Companies, former owner or operator of premises
currently leased or operated by any of the Companies or their Subsidiaries has
filed any notice under any Environmental Law indicating past or present
treatment, storage, or disposal of or reporting a Release or threatened Release
of any Hazardous Material (as hereinafter defined) into the environment;
(e) none of the Companies or their Subsidiaries or any of
their past or current facilities and operations, or any predecessor of any of
the Companies or their Subsidiaries
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are subject to any outstanding written Order (as hereinafter defined) or
Contract (as hereinafter defined) with any Governmental Authority or other
person, or to any federal, state, local or foreign investigation respecting (i)
Environmental Laws, (ii) Remedial Action (as hereinafter defined), (iii) any
Environmental Claim (as hereinafter defined) or (iv) the Release or threatened
Release of any Hazardous Material;
(f) none of the real property currently or formerly owned,
operated or leased by any of the Companies or any of their Subsidiaries, and,
to the knowledge of the Companies, all property adjacent to such properties has
been contaminated by or from any Hazardous Materials in quantities or at levels
that would require remediation by the Companies or their Subsidiaries under the
Environmental Laws;
(g) none of the operations of any of the Companies, their
Subsidiaries, or any predecessor of any of the Companies or their Subsidiaries,
or of any owner of premises currently leased or operated by any of the
Companies or their Subsidiaries involves or previously involved the generation,
transportation, treatment, storage or disposal of hazardous waste, as defined
under 40 C.F.R. Parts 260-270 or any state, local or foreign equivalent;
(h) there is not now, nor (to the knowledge of the Companies
for all periods prior to their ownership, lease or operation of such real
property) has there been in the past, on, in or under any real property
currently or formerly owned, leased or operated by any of the Companies, their
Subsidiaries or any of their predecessors (i) any underground storage tanks,
above-ground storage tanks, dikes or impoundments, (ii) any asbestos-containing
materials, (iii) any polychlorinated biphenyls or (iv) any radioactive
substances; and
(i) none of the Companies or any of their Subsidiaries is
subject to Environmental Costs and Liabilities (as hereinafter defined) with
respect to Hazardous Materials at levels that would require remediation by the
Companies or the Subsidiaries under the Environmental Laws, and no facts or
circumstances exist which could give rise to Environmental Costs and
Liabilities with respect to compliance with Environmental Laws applicable to
Hazardous Materials.
SECTION 3.23. Customers, Suppliers and Employees. Except as
described in Section 3.23 of the Disclosure Schedule, since January 1, 1993
there has not been any material adverse change in the business relationship of
any of the Companies or their Subsidiaries with any customer or supplier, and
none of the Companies have reason to believe that there will be any such
adverse change in the future as a result of the consummation of the
transactions contemplated by this Agreement or otherwise. Except as described
in Section 3.23 of the Disclosure Schedule, none of the Companies has reason to
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believe that any employee material to the business of any of the Companies will
resign his employment with any of the Companies or their Subsidiaries as a
result of the consummation of the transactions contemplated by this Agreement.
SECTION 3.24. Information. No representation or warranty by any of
the Companies contained in this Agreement (including the Disclosure Schedule
hereto) or in any certificate furnished pursuant to Section 7.2 contemplated
hereby contains or will contain any untrue statement of a material fact, or
omits or will omit to state any material fact necessary, in light of the
circumstances under which it was or will be made, in order to make the
statements herein or therein not misleading.
SECTION 3.25. Certain Business Practices and Regulations; Potential
Conflicts of Interest. (a) None of the Companies, their Subsidiaries or any
directors, officers, agents or employees of any of the Companies or their
Subsidiaries has (i) used any corporate funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political activity,
(ii) made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds or violated any provision of the Foreign Corrupt Practices Act
of 1977, as amended, or (iii) made any other unlawful payment.
(b) Except as set forth in Section 3.25 of the Disclosure
Schedule, none of the stockholders, officers or directors of any of the
Companies or their Subsidiaries or any entity controlled by any of the
foregoing (i) owns, directly or indirectly, any significant interest in, or is
a director, officer, employee, consultant or agent of, any person which is a
competitor, lessor, lessee or customer of, or supplier of goods or services to,
any of the Companies or their Subsidiaries, (ii) owns, directly or indirectly,
in whole or in part, any real property, leasehold interests or other property
with a fair market value of at least $25,000 in the aggregate the use of which
is necessary for the business of any of the Companies or their Subsidiaries,
(iii) has any cause of action or other suit, action or claim whatsoever
against, or owes any amount to any of the Companies or their Subsidiaries other
than claims in the ordinary course of business, (iv) has sold to, or purchased
from, any of the Companies or their Subsidiaries any assets or property for
aggregate consideration in excess of $25,000 since January 1, 1991, or (v) is a
party to any contract or participates in any arrangement, written or oral,
pursuant to which any of the Companies or their Subsidiaries provide office
space or services of any nature to any such individual or entity, except to
such individual in his capacity as an employee of any of the Companies or their
Subsidiaries.
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ARTICLE IV
REPRESENTATIONS AND
WARRANTIES OF STOCKHOLDERS
Each Stockholder, severally and not jointly, for such Stockholder
alone, represents and warrants to the Parent and Sub that, as of the date of
this Agreement:
SECTION 4.1. Ownership of Shares. Such Stockholder is the holder of
record and owns beneficially that number of shares of Company Common Stock,
Owen Miscellaneous Capital Stock, South Carolina Steel Capital Stock, Owen
Joist Capital Stock and Owen Electric Capital Stock set forth opposite his, her
or its name on Schedules I through V hereto. Such Stockholder owns the shares
set forth on such Schedules free and clear of any liens, claims or encumbrances
(other than the restrictions on transfer that will be waived at the Effective
Time pursuant to Section 6.17). Such Stockholder is not a party to any voting
trust, proxy or other agreement with respect to the voting of any shares of
Company Common Stock, Owen Miscellaneous Capital Stock, South Carolina Steel
Capital Stock, Owen Joist Capital Stock or Owen Electric Capital Stock which
will remain in force or effect after the Closing.
SECTION 4.2. Authority.
(a) If such Stockholder is a trust, such Stockholder has
been duly created and is validly existing under the laws of the jurisdiction of
its creation; such Stockholder has all requisite power and authority to execute
and deliver this Agreement and to perform the obligations of such Stockholder
hereunder; and the execution, delivery and performance by such Stockholder of
this Agreement and the consummation by such Stockholder of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of such Stockholder.
(b) Such Stockholder has full legal capacity to execute
and deliver this Agreement and to perform the obligations of such Stockholder
hereunder. This Agreement has been duly and validly executed and delivered by
such Stockholder and, assuming this Agreement constitutes a valid and binding
obligation of Parent, Sub, each of the Companies, and each of the other
Stockholders, will constitute a valid and binding obligation of such
Stockholder, enforceable against it in accordance with its terms, except to the
extent that such enforcement may be subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights generally, and the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before
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which any proceeding therefore may be brought. Except as required pursuant to
Section 13 of the Securities Exchange Act of 1934, as amended, each consent,
authorization, order or approval of, or filing or registration with, any
governmental commission, board or other regulatory body, or any other person
required by applicable law on or before the Effective Time for or in connection
with the execution and delivery by such Stockholder of this Agreement, or the
performance by such Stockholder of his, her or its obligations hereunder, will
have been obtained or made on or before the Effective Time, except where the
failure to obtain any such consent, authorization, order, approval, filing or
registration would not affect such Stockholder's ability to perform his, her or
its obligations under this Agreement in any material respect.
SECTION 4.3. No Conflicts. The execution, delivery and performance
by such Stockholder of this Agreement does not (i) violate or breach any
provision of any law or statute applicable to such Stockholder (and, if such
Stockholder is a trust, any provision of its trust instrument), except where
the violation or breach would not affect such Stockholder's ability to perform
its obligations under this Agreement in any material respect or (ii) violate,
breach, cause a default under, or result in the creation of a lien or other
encumbrance pursuant to, any agreement or instrument to which such Stockholder
is a party or to which it or any of its properties may be subject, except where
the violation, breach, default or creation of a lien or other encumbrance is
not material to such Stockholder's ability to perform the obligations of such
Stockholder under this Agreement in any material respect.
SECTION 4.4. Investment Intent. To the extent a Stockholder receives
Parent Common Stock:
(a) The Parent Common Stock is being acquired by such
Stockholder solely for its own account, for investment, and not with a view to
any distribution thereof in violation of the Securities Act of 1933, as amended
(the "Securities Act"), or the applicable state securities laws of any state.
(b) Such Stockholder understands that the Parent Common
Stock has not been registered under the Securities Act or the securities laws
of any state and must be held indefinitely unless subsequently registered under
the Securities Act and any applicable state securities laws or unless an
exemption from such registration becomes or is available.
(c) Such Stockholder is financially able to hold the
Parent Common Stock for long-term investment and recognizes that there are
substantial risks involved in the ownership of Parent Common Stock.
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(d) Such Stockholder, either alone or with such
Stockholder's "purchaser representative" (as defined in Rule 501(h) of the
Securities Act), has such knowledge and experience in financial and business
matters that such Stockholder is capable of evaluating the merits and risks of
the prospective investment in the Parent Common Stock.
(e) Such Stockholder if his, her or its name appears on
Schedule 4.4 to the Disclosure Schedule is an "accredited investor," as defined
under Rule 501(a) promulgated under the Securities Act.
SECTION 4.5. Brokers and Finders. Except for Philpott, Ball &
Company, such Stockholder has not employed any investment banker, broker or
finder, or incurred any liability for brokerage fees, commissions or finders
fees, in connection with the transactions contemplated by this Agreement.
SECTION 4.6. Continuity of Proprietary Interest. There is no
obligation, plan, intention or commitment on the part of any Stockholder to
sell or otherwise dispose of any of the shares of Parent Common Stock to be
received by such Stockholder pursuant to the Merger.
SECTION 4.7. Allocation of Cash and Parent Common Stock. Pursuant to
Section 2.1 of the Agreement (including, without limitation, Section 2.1(i) of
the Agreement), (i) each of the Stockholders who own shares of Owen Electric
and Owen Joist will receive only cash from Parent pursuant to the Merger in
exchange for the shares of Class A Common Stock issued to such stockholder in
exchange for such Stockholder's Owen Electric Capital Stock or Owen Joist
Capital Stock, as the case may be; (ii) of the total consideration transferred
in the Merger to the former stockholders of South Carolina Steel in exchange
for their Class A Common Stock received pursuant to the South Carolina Steel
Exchange, Parent Common Stock having a fair market value on the date of
issuance equal to at least 45% of such total consideration will be received by
such former stockholders in exchange for the Class A Common Stock issued to
such former stockholders pursuant to the South Carolina Steel Exchange, as
contemplated by this Agreement; (iii) of the total consideration transferred in
the Merger to the former stockholders of Owen Miscellaneous in exchange for
their Company Common Stock received pursuant to the Owen Miscellaneous
Exchange, Parent Common Stock having a fair market value on the date of
issuance equal to at least 45% of such total consideration will be received by
such former stockholders in exchange for the Class A Common Stock issued to
such former stockholders pursuant to the Owen Miscellaneous Exchange, as
contemplated by this Agreement; and (iv) of the total consideration transferred
in the Merger to the existing holders of Company Common Stock in exchange for
such shares (other than any shares received by such holders pursuant to the
Stock Exchanges), Parent Common Stock having a fair market value on the date of
issuance
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equal to at least 45% of such total consideration will be received by such
existing holders of Company Common Stock.
ARTICLE V
REPRESENTATIONS AND
WARRANTIES OF PARENT AND SUB
Parent and Sub hereby jointly represent and warrant to each of the
Companies and the Stockholders that:
SECTION 5.1. Organization and Qualification. Each of Parent and Sub
is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, with all requisite power and
authority to own, lease and operate their respective properties and to carry on
their respective businesses as now being conducted, and is qualified or
licensed to do business and is in good standing in each jurisdiction in which
the ownership or leasing of property by it or the conduct of its business
requires such licensing or qualification the failure of which would have a
material adverse effect on the business, properties, assets or financial
condition of Parent or Sub.
SECTION 5.2. Authorization. Parent and Sub have full corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. No other corporate proceeding, including any
shareholder vote, on the part of Parent or Sub is necessary to authorize the
execution and delivery of this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Parent and Sub and, assuming the Agreement constitutes a valid and
binding obligation of each of the Company, Owen Miscellaneous, South Carolina
Steel, and each of the Stockholders, will constitute a valid and binding
obligation of Parent and Sub, enforceable against each of them in accordance
with its terms, except to the extent that such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
SECTION 5.3. No Violation. Neither the execution and delivery of
this Agreement by Parent and Sub and the performance by Parent and Sub of their
obligations hereunder nor the consummation by Parent and Sub of the
transactions contemplated hereby will (a) violate, conflict with or result in
any breach of any provision of the Certificate or Articles of
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Incorporation or Bylaws of Parent or Sub, (b) violate, conflict with or result
in a violation or breach of, or constitute a default (with or without due
notice or lapse of time or both) under, or permit the termination of, or
require the consent of any other party to, or result in the acceleration of, or
entitle any party to accelerate any obligation or result in the loss of a
benefit or give rise to the creation of any lien, charge, security interest or
encumbrance upon any of the respective properties or assets of Parent, Sub or
any of Parent's subsidiaries under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to which Parent, Sub or any of
Parent's subsidiaries is a party or by which they or any of their respective
properties or assets may be bound or affected or (c) violate any order, writ,
judgment, injunction, decree, statute, rule or regulation of any court or
domestic or foreign governmental authority applicable to Parent, Sub or any of
Parent's subsidiaries or any of their respective properties or assets.
SECTION 5.4. Consents and Approvals. Other than any consents and
approvals of or filings or registrations with the DOJ pursuant to the HSR Act,
the filing of articles of merger pursuant to the South Carolina BCA, and
requirements of federal and state securities laws, no filing or registration
with, no notice to and no permit, authorization, consent or approval of any
third party or any public or governmental body or authority is necessary for
the consummation by Parent or Sub of the transactions contemplated by this
Agreement.
SECTION 5.5. Brokers' Fees and Commissions. Except for Lehman
Brothers, neither Parent nor any of its directors or officers, nor, to its
knowledge, any of its employees or agents, has employed any investment banker,
broker or finder in connection with the transactions contemplated hereby.
SECTION 5.6. Capitalization. The entire authorized capital stock of
the Parent consists of 20,000,000 shares of Parent Common Stock, of which
14,276,872 shares were issued and outstanding as of the date of this Agreement,
and 2,000,000 shares of preferred stock, none of which is issued or
outstanding. All issued and outstanding shares of the Parent are duly
authorized, validly issued, fully paid and non-assessable. The entire
authorized capital stock of Sub consists of 1,000 shares of common stock, $.01
par value per share, of which 1,000 shares are issued and outstanding. All
issued and outstanding shares of common stock of Sub are duly authorized,
validly issued, fully paid and non-assessable. The Parent owns beneficially
and of record all of the issued and outstanding shares of capital stock of Sub.
The shares of the Parent Common Stock issued to each Stockholder pursuant to
the Merger will be duly authorized, validly issued, fully paid and
non-assessable and shall not be issued in violation of any preemptive rights.
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SECTION 5.7. Securities Reports. (a) Since August 31, 1993, Parent
has filed (i) all forms, reports, statements and other documents required to be
filed with (A) the Securities and Exchange Commission ("SEC"), including,
without limitation (1) all Annual Reports on Form 10-K, (2) all Quarterly
Reports on Form 10-Q, (3) all proxy statements relating to meetings of
stockholders (whether annual or special), (4) all Reports on Form 8-K, (5) all
other reports or registration statements and (6) all amendments and supplements
to all such reports and registration statements (collectively, the "Parent SEC
Reports") and (B) any other applicable state securities authorities and (ii)
all forms, reports, statements and other documents required to be filed with
any other applicable federal or state regulatory authorities, except where the
failure to file any such forms, reports, statements or other documents under
this clause (ii) would not have an Material Adverse Effect (all such forms,
reports, statements and other documents in clauses (i) and (ii) of this Section
5.7 being referred to herein, collectively, as the "Parent Reports"). The
Parent Reports, including all Parent Reports filed after the date of this
Agreement and prior to the Effective Time (x) were or will be prepared in all
material respects in accordance with the requirements of applicable law
(including, with respect to the Parent SEC Reports, the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, as the case
may be, and the rules and regulations of the SEC thereunder applicable to such
Parent SEC Reports) and (y) did not at the time they were filed, or will not at
the time they are filed, contain any untrue statement of material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
SECTION 5.8. Taxes.
(a) Prior to the Merger and the Post-Closing Mergers,
Parent will be in control of Sub within Section 368(c)(1) of the Code.
(b) Following the Merger and the Post-Closing Mergers,
Sub will not issue additional shares of its stock that would result in Parent
losing control of Sub within the meaning of Section 368(c)(1) of the Code.
(c) Parent has no plan or intention to reacquire any of
the shares of Parent Common Stock issued pursuant to the Merger (except for
acquisitions that result under the Escrow Agreement (as hereinafter defined)).
(d) Parent has no intention to liquidate Sub; to merge
Sub with and into another corporation; or to sell or otherwise dispose of any
of the assets of each of the Companies acquired pursuant to the Merger and the
Post-Closing Mergers, except for
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dispositions made in the ordinary course of business or transfers described in
Section 368(a)(2)(C) of the Code.
(e) Following the Merger and the Post-Closing Mergers,
Sub intends to continue the historic business of each of the Companies or use a
significant portion of the business assets of each of the Companies in a
business.
(f) Parent and Sub will pay their respective expenses, if
any, incurred in connection with the transactions contemplated by this
Agreement.
(g) Parent is not an investment company as defined in
Section 368(a)(2)(F)(iii) of the Code.
(h) Immediately after the Effective Time on the Closing
Date, (i) Sub shall cause each of Owen Miscellaneous and South Carolina Steel
to adopt plans of merger, pursuant to which Owen Miscellaneous and South
Carolina Steel will merge into Sub, with Sub being the surviving corporation,
and (ii) pursuant to said plans of merger, Owen Miscellaneous and South
Carolina Steel will merge into Sub, with Sub being the surviving corporation
(the "Post-Closing Mergers").
ARTICLE VI
COVENANTS
SECTION 6.1. Conduct of Business of each of the Companies Prior to
the Effective Time. During the period from the date of this Agreement and
continuing until the Effective Time, each of the Companies agree that except as
set forth in Section 6.1 of the Disclosure Schedule or as expressly
contemplated or permitted by this Agreement or to the extent that Parent shall
otherwise consent in writing, each of the Companies and their Subsidiaries
shall carry on their respective businesses in the usual, regular and ordinary
course in substantially the same manner as heretofore conducted and other than
actions taken in the ordinary course of business, shall use their best efforts
to (i) preserve intact their present business organization, (ii) keep available
the services of their present officers and employees material to the Companies
and (iii) preserve their relationships with material customers, suppliers and
others having business dealings with them, provided, however, that nothing in
this Section 6.1 shall require any of the Companies to deviate from their
normal business practices or to offer any additional compensation or incentives
to employees, customers, suppliers or others. Without limiting the generality
of the foregoing, prior to the Effective Time, and except as expressly
contemplated or permitted by this Agreement, or required by applicable law, or
disclosed in Schedule 6.1 of the Disclosure Schedule, none of the Companies
will, and none
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of the Companies will permit any of their Subsidiaries to, without the prior
written consent of Parent:
(a) split, combine or reclassify any shares of its
capital stock, declare, pay or set aside for payment any dividend or other
distribution in respect of its capital stock, or directly or indirectly,
redeem, purchase or otherwise acquire any shares of its capital stock or other
securities;
(b) issue, sell, pledge, dispose of, encumber or deliver
(whether through the issuance or granting of any options, warrants,
commitments, subscriptions, rights to purchase or otherwise) any stock of any
class of any of the Companies or their Subsidiaries or any securities
convertible into or exercisable or exchangeable for shares of stock of any
class of any of the Companies or their Subsidiaries (other than issuance of
Certificates in replacement of lost Certificates);
(c) intentionally incur any liability or obligation
(absolute, accrued, contingent or otherwise) other than in the ordinary course
of business consistent with past practices or issue any debt securities or,
other than in the ordinary course consistent with past practices, assume,
guarantee, endorse or otherwise as an accommodation become responsible for the
obligations of any other person;
(d) acquire or agree to acquire (by merger, consolidation
or acquisition of stock or assets) any corporation, partnership or other
business organization or division or significant assets thereof or acquire, or
agree to acquire, directly or indirectly, any equity interest in any person or
incur any capital expenditures other than the capital expenditures set forth in
Section 6.1 of the Disclosure Schedule;
(e) amend or modify its Certificate or Articles of
Incorporation or Bylaws (other than an amendment to the Articles of
Incorporation of the Company which amendment only increases the authorized
shares of Class A Common Stock up to an amount necessary to effect the Stock
Exchanges);
(f) sell, lease, license, encumber or dispose of any of
its assets, other than in the ordinary course of business consistent with past
practices;
(g) amend or terminate any material contract or other
agreement, other than in the ordinary course of business consistent with past
practices;
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(h) make any change in financial or tax accounting
methods, principles or practices or make or cause to be made any elections on
Tax returns of any of the Companies, unless required by GAAP or applicable law;
(i) extend credit in the sale of products, collection of
receivables or otherwise, other than in the ordinary course of business
consistent with past practices (provided that refraining from pursuing
collection of delinquent accounts shall not be deemed to be extending credit);
(j) fail to maintain its books, accounts and records in
the usual, regular and ordinary manner on a basis consistent with prior years;
(k) fail to use its best efforts to take, or omit to use
its best efforts to take, any action where such failure or omission would cause
(x) any representation or warranty in Article III hereof (but excluding any
representations or warranties which specifically relate to an earlier date) to
be untrue or incorrect in any material respect as of the Closing or (y) any of
the conditions to the Merger set forth in Article VII not being satisfied;
(l) adopt or amend in any material respect any collective
bargaining agreement or Employee Benefit Plan other than as required by law;
(m) grant to any executive officer any increase in
compensation or in severance or termination pay, grant any severance or
termination pay, or enter into to any employment agreement with any executive
officer, except as may be required under employment or termination agreements
in effect on the date of this Agreement;
(n) enter into any agreement, including an agreement to
purchase or lease assets or operating supplies, which includes an aggregate
payment or commitment on the part of either party of more than $100,000 other
than agreements or arrangements entered into in the ordinary course of business
as currently conducted in connection with the submission or award of any
binding bid permitted by Section 6.1(o);
(o) submit any binding bid other than in the ordinary
course of business as currently conducted;
(p) make any changes or agree to make any changes to any
federal or state income Tax returns filed prior to the date hereof or file any
amended federal or state income Tax returns;
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(q) amend or extend (beyond the Closing Date) the term of
the Interim Management Agreement (as hereinafter defined); or
(r) agree, in writing or otherwise, to do any of the
foregoing.
SECTION 6.2. Access to Information. Between the date of this
Agreement and the Effective Time, upon reasonable notice and at reasonable
times without significant disruption to the business of any of the Companies,
each of the Companies will give Parent and its authorized representatives
reasonable access to all personnel, offices and other facilities, and to all
books and records of each of the Companies (including Tax returns and
accounting work papers) and will permit Parent to make and will fully cooperate
with regard to such inspections as it may reasonably require and will cause its
officers to furnish Parent such financial and operating data and other
information with respect to the business and properties of each of the
Companies as Parent may from time to time reasonably request.
SECTION 6.3. All Reasonable Efforts. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done as promptly as practicable, all things necessary, proper and
advisable under applicable laws and regulations to consummate and make
effective as promptly as practicable the transactions contemplated by this
Agreement. If 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, the execution of additional instruments, the proper
officers and directors of each party to this Agreement shall take all such
necessary action.
SECTION 6.4. Consents and Approvals. The parties hereto each will
cooperate with one another and use all reasonable efforts to prepare all
necessary documentation (including, without limitation, furnishing all
information required under the HSR Act), to effect promptly all necessary
filings and to obtain all necessary permits, consents, approvals, orders and
authorizations of or any exemptions by, all third parties and governmental
bodies necessary to consummate the transactions contemplated by this Agreement.
Each party will keep the other party apprised of the status of any inquiries
made of such party by the DOJ or any other governmental agency or authority or
members of their respective staffs with respect to this Agreement or the
transactions contemplated hereby or thereby.
SECTION 6.5. Public Announcements. Parent and the Company will
consult with each other and will mutually agree (the agreement of each party
not to be unreasonably withheld) upon the content and timing of any press
release or other public statements with respect to the transactions
contemplated by this Agreement, including, without limitation, the Merger, and
shall not issue any such press release or make any such public statement prior
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to such consultation and agreement, except as may be required by applicable law
or by obligations pursuant to any listing agreement with any securities
exchange or any stock exchange regulations, provided, however, that Parent and
the Company will give prior notice to the other party of the content and timing
of any such press release or other public statement required by applicable law
or by obligations pursuant to any listing agreement with any securities
exchange or any stock exchange regulations.
SECTION 6.6. Disclosure Supplements. From time to time prior to the
Effective Time, each of the Companies will promptly supplement or amend the
Disclosure Schedule delivered in connection herewith with respect to any matter
which, if existing, occurring or known at the date of this Agreement, would
have been required to be set forth or described in such Disclosure Schedule or
which is necessary to correct any information in such Disclosure Schedule which
has been rendered inaccurate thereby. Any such supplement or amendment shall
have the effect of the Companies failing to satisfy the condition set forth in
Section 7.2(a); provided, however, that by consummating the transactions
contemplated hereby, Parent waives any right or claim it may otherwise have or
have had on account of any matter so disclosed in such supplement or amendment,
so long as the Company has disclosed such event or fact to Parent in writing
promptly after the Company becomes aware of such event or fact and at least
five days prior to the Closing.
SECTION 6.7. No Other Bids. From and after the date hereof, none of
the Companies shall, nor shall they permit any of their Subsidiaries to, nor
shall they authorize or permit any officer, director or employee of or any
investment banker, attorney, accountant or other representative retained by the
Companies or any of their Subsidiaries to, solicit, initiate or encourage
submission of any proposal or offer (including by way of furnishing
information) from any person which constitutes, or may reasonably be expected
to lead to, any Acquisition Proposal. As used in this Agreement, "Acquisition
Proposal" shall mean any proposal for a merger or other business combination
involving any of the Companies or any of their Subsidiaries or any proposal or
offer to acquire in any manner a substantial equity interest in any of the
Companies or any of their Subsidiaries or a substantial portion of the assets
of any of the Companies or any of their Subsidiaries.
SECTION 6.8. South Carolina Steel Exchange. Prior to the Effective
Time, the Company and South Carolina Steel Stockholders will consummate the
South Carolina Steel Exchange, on terms and conditions reasonably satisfactory
to Parent, pursuant to which (a) each share of South Carolina Steel Capital
Stock shall be exchanged for 418 validly issued, fully paid and non-assessable
shares of Class A Common Stock and (b) the Company will acquire 100% of the
issued and outstanding capital stock of South Carolina Steel.
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SECTION 6.9. Owen Miscellaneous Exchange. Prior to the Effective
Time, the Company and Owen Miscellaneous Stockholders will consummate the Owen
Miscellaneous Exchange, on terms and conditions reasonably satisfactory to
Parent, pursuant to which (a) each share of Owen Miscellaneous Capital Stock
shall be exchanged for 43 validly issued, fully paid and non-assessable shares
of Class A Common Stock and (b) the Company will acquire 100% of the issued and
outstanding capital stock of Owen Miscellaneous.
SECTION 6.10. Owen Joist Exchange. Prior to the Effective Time, the
Company and the Owen Joist Stockholders will consummate the Owen Joist
Exchange, on terms and conditions reasonably satisfactory to Parent, pursuant
to which (a) each share of the Owen Joist Capital Stock (other than the shares
held by the Company) shall be exchanged for 12 validly issued, fully paid and
non-assessable shares of the Class A Common Stock and (b) the Company will
acquire 100% of the issued and outstanding capital stock of Owen Joist.
SECTION 6.11. Owen Electric Exchange. Prior to the Effective Time,
the Company and the Owen Electric Stockholders will consummate the Owen
Electric Exchange, on terms and conditions reasonably satisfactory to Parent,
pursuant to which (a) each share of the Owen Electric Capital Stock (other than
the shares held by the Company, Owen Joist and South Carolina Steel) shall be
exchanged for 8 validly issued, fully paid and non-assessable shares of the
Class A Common Stock and (b) the Company will acquire all of the issued and
outstanding capital stock of Owen Electric as a result of the Owen Electric
Exchange other than the shares held by Owen Joist and South Carolina Steel.
SECTION 6.12. Post-Closing Mergers. Immediately after the Effective
Time on the Closing Date, each of Sub, Owen Miscellaneous and South Carolina
Steel will consummate the Post-Closing Mergers.
SECTION 6.13. Employee Benefit Matters. (a) On or prior to the
Closing, the Company will take all action necessary to terminate the Deferred
Compensation Arrangements (herein so called) listed on Section 6.13 of the
Disclosure Schedule. As part, and at the time, of such termination, the
Company will pay from its own funds to each current or former employee covered
under any of the Deferred Compensation Arrangements (a "Participant"), in a
lump sum, the full amount, without reduction to present value, of any deferred
compensation to which such Participant is then, or would be at any time
thereafter, entitled under the Deferred Compensation Arrangements upon the
retirement of such Participant after reaching the age of 65 or as a result of
the transactions contemplated by the Agreement. On the Closing Date, the
Surviving Corporation shall have no further obligations or liabilities with
respect to the Deferred Compensation Arrangements.
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(b) If requested in writing by the named insured, at or
before the Closing, upon the payment to the Company of funds in an amount equal
to the cash surrender value, less the principal and interest on any outstanding
indebtedness related thereto, as of such date of any or all of the life
insurance policies listed in Section 3.19 of the Disclosure Schedule, the
Company will assign, transfer and convey to the named insured under each such
policy, all right, title and interest in such of the life insurance policies
for which such payment shall be made, subject to any outstanding indebtedness
related thereto. Upon the earlier to occur of the assignment of such life
insurance policies and the Effective Time, the Surviving Company shall have no
further obligations or liabilities with respect to such policies, including
without limitation, any obligation or liability to make premium payments or
maintain such policies in force.
SECTION 6.14. Stockholders Agreement. At the Effective Time, Parent
and each of the Stockholders receiving Parent Common Stock pursuant to the
Merger shall enter into the Stockholders Agreement attached as Exhibit B hereto
(the "Stockholders Agreement").
SECTION 6.15. Transfer Restrictions; Registration Rights. The
Stockholders agree that, during the period of two years following the Effective
Time (the "Restriction Period"), the Stockholders will not effect any transfer
or other disposition of the Parent Common Stock received pursuant to the
Merger, or any interest therein, in any transaction that would constitute a
sale thereof within the meaning of the Securities Act; provided, however, that
such Restriction Period will lapse in the case of any Stockholder (or any trust
for the benefit of such Stockholder or any trust over which such Stockholder
has a power of appointment) upon such Stockholder's death. Further, in
connection with any permitted transfer during the Restriction Period of the
Parent Common Stock received pursuant to the Merger, the transferring
Stockholder shall secure the agreement of the transferee to be bound by the
covenants contained in this Section 6.15. At the Effective Time, Parent and
the Stockholder Representative shall enter into the Registration Rights
Agreement attached as Exhibit C hereto (the "Registration Rights Agreement")
providing for certain demand registration rights under the Securities Act,
which rights shall be exercisable by the holders of the Parent Common Stock
issued pursuant to the Merger following the expiration of the Restriction
Period.
SECTION 6.16. Escrow Agreement. At the Effective Time, Parent, Sub,
the Stockholder Representative, and the Escrow Agent named therein shall enter
into the Escrow Agreement.
SECTION 6.17. Waiver of Restrictions on Transfer. Each of the
Companies and the Stockholders agree that, effective as of the Effective Time,
all restrictions on transfer (including any rights of first offer or rights of
first refusal), if any, on the Company
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Common Stock, South Carolina Steel Capital Stock, Owen Miscellaneous Capital
Stock, Owen Joist Capital Stock and Owen Electric Capital Stock held by the
Stockholders shall be waived to permit consummation of the Merger and the Stock
Exchanges.
SECTION 6.18. Financial Statements. Each of the Companies shall
deliver to Parent by September 9, 1994 copies of the quarterly financial
statements for the quarter ended June 30, 1994. Each of such quarterly
financial statements shall be prepared in accordance with GAAP applied
throughout the periods involved and present fairly the financial condition of
each of the Companies and their Subsidiaries as at said dates (subject to
normal year end adjustments).
SECTION 6.19. Operating Data. Each of the Companies shall deliver to
Parent each week through the Closing Date, copies of all binding bids submitted
by any of the Companies during the previous week to any third party and all
agreements for the purchase or lease of assets or operating supplies, in each
case in excess of $250,000.
SECTION 6.20. Future SEC Filings. From and after the date hereof
until Closing, Parent shall deliver to the Company all filings made with the
Securities and Exchange Commission as promptly as possible upon being publicly
available.
SECTION 6.21. Indemnification of Directors and Officers. (a) From
and after the Effective Time, the Surviving Corporation shall indemnify, defend
and hold harmless the present officers and directors of the Companies and each
of the Subsidiaries (collectively, the "Indemnified Parties") against all
losses, expenses, claims, damages, liabilities in connection with any claim,
action, suit, proceeding or investigation (a "Claim"), based in whole or in
part on the fact that such person is or was a director, officer or, in the case
of James M. Daniel, III, an employee of the Companies or any Subsidiary and
arising out of actions or omissions occurring at or prior to the Effective Time
(including, without limitation, the transactions contemplated by this
Agreement), in each case to the full extent permitted under the South Carolina
BCA as in effect on the date hereof so long as such director, officer or
employee met the standard of conduct set forth in Section 33-8-510 of the South
Carolina BCA.
(b) This Section 6.21 is intended to be for the benefit of, and
shall be enforceable by, the Indemnified Parties, their heirs and personal
representatives and shall be binding on the Surviving Corporation and its
successors and assigns.
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ARTICLE VII
CLOSING CONDITIONS
SECTION 7.1. Conditions to Each Party's Obligations under this
Agreement. The respective obligations of each party under this Agreement shall
be subject to the fulfillment at or prior to the Effective Time of the
following conditions:
(a) Any waiting period applicable to the consummation of
the Merger under the HSR Act shall have expired or been terminated;
(b) No injunction, restraining order or other ruling or
order issued by any court of competent jurisdiction or governmental authority
or other legal restraint or prohibition preventing the consummation of the
Merger shall be in effect;
(c) Parent, Sub, the Stockholder Representative and the
Escrow Agent shall have entered into the Escrow Agreement and the Escrow
Agreement shall be in full force and effect;
(d) The Parent and the Stockholder Representative shall
have executed and delivered the Registration Rights Agreement, and the
Registration Rights Agreement shall be in full force and effect;
(e) The Parent and each of the Stockholders receiving
Parent Common Stock pursuant to the Merger shall have executed and delivered
the Stockholders Agreement, and the Stockholders Agreement shall be in full
force and effect;
(f) Since December 31, 1993, there has not occurred an
event with respect to Parent that has had a Material Adverse Effect; and
(g) The Stockholders shall have received from Dechert
Price & Rhoads an opinion dated the Effective Time that the Merger shall
satisfy all of the requirements of Section 368(a)(1)(A) and 368(a)(2)(D) of the
Code.
SECTION 7.2. Conditions to the Obligations of Parent and Sub under
this Agreement. The obligations of Parent and Sub under this Agreement shall
be further subject to the satisfaction, at or prior to the Effective Time, of
the following conditions:
(a) Each of the obligations of each of the Companies and
the Stockholders required to be performed by them at or prior to the Closing
pursuant to this Agreement shall
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have been duly performed and complied with in all material respects, and the
representations and warranties of each of the Companies and the Stockholders
contained in this Agreement shall be true and correct in all material respects
as of the date of this Agreement and as of the Closing as though made at and as
of the Closing (except as to any representation or warranty which specifically
relates to an earlier date), and Parent and Sub shall have received a
certificate to that effect signed by an officer of each of the Companies;
(b) Any and all permits, consents, waivers, clearances,
approvals and authorizations of all third parties and governmental bodies which
are necessary or advisable in connection with the consummation of the Merger
and the other transactions contemplated hereby shall have been obtained;
(c) Parent shall have received from counsel to the
Company reasonably satisfactory to Parent one or more opinions dated the
Effective Time, in form and substance reasonably satisfactory to Parent,
covering the matters set forth in the form of opinion delivered to such counsel
prior to execution of this Agreement;
(d) Provided that Parent shall have made the Company Loan
contemplated by Section 2.4, Parent shall have been furnished with evidence
reasonably satisfactory to it of the payment in full of the Designated Debt and
the release of all (i) pledges, security interests, mortgages and other liens
securing such indebtedness and (ii) pledges, security interests, mortgages and
other liens identified with an asterisk on Schedule 3.11;
(e) The Company shall have delivered to Parent a
statement of the Company Expenses in form and substance reasonably satisfactory
to Parent, which shall be certified by the Chief Financial Officer of the
Company;
(f) The Stock Exchanges shall have been consummated to
the satisfaction of Parent;
(g) The Deferred Compensation Arrangements shall have
been terminated;
(h) The Interim Management Agreement (the "Interim
Management Agreement"), effective September 1, 1993, between the Company and
Andersen Bauman Tourtellot Vos & Co., and related amendments dated February 8,
May 17, July 21 and September 16, 1994 shall have been terminated and the
Company shall have not further obligation thereunder; and
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(i) All officers and directors of each of the
Subsidiaries except such as have been designated in writing by Parent, shall
have delivered letters of resignation, effective immediately after the
Effective Time.
SECTION 7.3. Conditions to the Obligations of each of the Companies
under this Agreement. The obligations of each of the Companies under this
Agreement shall be further subject to the satisfaction, at or prior to the
Effective Time, of the following conditions:
(a) Each of the obligations of Parent and Sub,
respectively, required to be performed by it at or prior to the Closing
pursuant to the terms of this Agreement shall have been duly performed and
complied with in all material respects, and the representations and warranties
of Parent and Sub contained in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of the Effective Time
as though made at and as of the Effective Time (except as to any representation
or warranty which specifically relates to an earlier date), and the
Stockholders and the Companies shall have received a certificate to that effect
signed by an officer of Parent and Sub.
(b) Each of the Companies shall have received from
counsel to Parent reasonably satisfactory to the Company one or more opinions
dated the Effective Time, in form and substance reasonably satisfactory to the
Company, covering the matters set forth in the form of opinion delivered to
such counsel prior to execution of this Agreement.
(c) Any and all permits, consents, waivers, clearances,
approvals and authorizations of all governmental bodies which are necessary in
connection with the consummation of the Merger and the other transactions
contemplated hereby shall have been obtained.
ARTICLE VIII
CLOSING
SECTION 8.1. Closing. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of Weil,
Gotshal & Manges, 100 Crescent Court, Suite 1300, Dallas, Texas 75201, subject
to the satisfaction or waiver of the conditions set forth in Article VII, on
the later of October 31, 1994 or two business days after the receipt of all
requisite governmental approvals, or at such other time and place and on such
other date as Parent and the Company shall agree (the "Closing Date"). At the
Closing:
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(a) Each of the Companies shall deliver to Parent the
following:
(i) the certificates described in Section
7.2(a); and
(ii) all other previously undelivered documents
required to be delivered by any of the Companies to Parent at or prior
to the Closing pursuant to the terms of this Agreement.
(b) Parent and Sub shall deliver or cause to be delivered
to each of the Companies and the Stockholders the following:
(i) the certificate described in Section 7.3(a);
and
(ii) all other previously undelivered documents
required to be delivered by Parent to any of the Companies or the
Stockholders at or prior to the Closing pursuant to the terms of this
Agreement.
ARTICLE IX
TERMINATION AND ABANDONMENT
SECTION 9.1. Termination. This Agreement may be terminated and the
Merger contemplated hereby may be abandoned at any time prior to the Effective
Time:
(a) by mutual consent of the Companies and Parent; or
(b) by either the Companies or Parent:
(i) if there shall have been a material breach
of any representation, warranty, covenant or agreement on the part of
Parent or Sub on the one hand, or any of the Companies or the
Stockholders on the other, set forth in this Agreement which breach
shall not have been cured, in the case of a representation or
warranty, prior to the date on which the conditions other than the
accuracy of the representation and warranty in question would be
satisfied for the Closing or, in the case of a covenant or agreement,
within five (5) business days following receipt by the breaching party
of notice of such breach;
(ii) if a court of competent jurisdiction or
governmental, regulatory or administrative agency or commission shall
have issued an order, decree or ruling
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or taken any other action (which order, decree or ruling the parties
hereto shall use their best efforts to lift), in each case 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; or
(iii) if the Effective Time shall not have
occurred on or before November 15, 1994; provided, however, that the
right to terminate this Agreement shall not be available to any party
whose material breach of this Agreement has been the cause of, or
resulted in, the failure of the Merger to occur on or before such
date; or
(c) by the Company, if on the Determination Date (as
hereinafter defined) the Average Stock Price is greater than the Maximum Price
(as hereinafter defined) and the Company delivers to Parent the Company
Termination Notice (as hereinafter defined); or
(d) by the Parent, if on the Determination Date the
Average Stock Price is less than the Minimum Price (as hereinafter defined) and
Parent delivers to the Company the Parent Termination Notice (as hereinafter
defined).
For purposes of this Section 9.1, (i) "Determination Date" shall mean
the business day immediately prior to the Closing Date; (ii) "Maximum Price"
shall mean $33.59; (iii) "Minimum Price" shall mean $20.16; (iv) "Company
Termination Notice" shall mean written notice by the Company delivered to
Parent pursuant to Section 10.6 of this Agreement no later than 9:00 a.m. on
the Closing Date, stating that the Average Stock Price is greater than the
Maximum Price and that such notice is notice of termination of this Agreement
pursuant to Section 9.1(c); and (v) "Parent Termination Notice" shall mean
written notice by Parent pursuant to Section 10.6 of this Agreement no later
than 9:00 a.m. on the Closing Date, stating that the Average Stock Price is
less than the Minimum Price and that such notice is notice of termination of
this Agreement pursuant to Section 9.1(d).
SECTION 9.2. Procedure and Effect of Termination. In the event of
termination and abandonment of the Merger pursuant to Section 9.1, written
notice thereof shall forthwith be given to the other parties to this Agreement
and this Agreement shall terminate and the Merger shall be abandoned, without
further action by any of the parties hereto. If this Agreement is terminated
as provided herein:
(a) upon request therefor, each party will redeliver all
documents, work papers and other material of any other party relating to the
transactions contemplated hereby, whether obtained before or after the
execution hereof, to the party furnishing the same; and
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(b) no party hereto shall have any liability or further
obligation to any other party to this Agreement resulting from such termination
except (i) that the provision of this Section 9.2 and the proviso of Section
9.1(b)(iii) shall remain in full force and effect and (ii) no party waives any
claim or right against a breaching party to the extent that such termination
results from the breach by a party hereto of any of its representations,
warranties, covenants (other than the covenant contained in Sections 6.1(n) and
(o), which shall be deemed waived) or agreements set forth in this Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Amendment and Modification. This Agreement may be
amended by a written instrument signed by the parties hereto and, as
applicable, approved by action taken by their respective Boards of Directors,
at any time, but no amendment shall be made which by law requires further
approval by the stockholders of the Company or the Sub without such further
approval.
SECTION 10.2. Waiver of Compliance; Consents. Any failure of Parent
or Sub, on the one hand, or any of the Companies or the Stockholders, on the
other hand, to comply with any obligation, covenant, agreement or condition
contained herein may be waived in writing by each of the Companies and the
Stockholder Representative or Parent and Sub, respectively, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any other failure.
SECTION 10.3. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
SECTION 10.4. Expenses and Obligations. All costs and expenses
incurred in connection with the consummation of the transactions contemplated
by this Agreement by Parent and Sub shall be paid by Parent and all costs and
expense incurred in connection with the consummation of the transactions
contemplated by this Agreement by the Company shall be paid by the Company.
Notwithstanding the foregoing, the filing fees incurred in connection with the
filings or registrations with the DOJ pursuant to the HSR Act shall be borne
equally by Parent and the Company.
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SECTION 10.5. Parties in Interest. This Agreement shall be binding
upon and, except as provided below, inure solely to the benefit of each party
hereto, and, nothing in this Agreement, except as set forth below, express or
implied, is intended to confer upon any other person any rights or remedies of
any nature whatsoever under or by reason of this Agreement.
SECTION 10.6. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given upon the earlier of
delivery thereof if by hand or upon receipt if sent by mail (registered or
certified mail, postage prepaid, return receipt requested) or on the second
next business day after deposit if sent by a recognized overnight delivery
service or upon transmission if sent by telecopy or facsimile transmission
(with request of assurance of receipt in a manner customary for communication
of such type) as follows:
(a) If to Parent or Sub, to:
Commercial Metals Company
7800 Stemmons Freeway
Dallas, Texas 75247
Attention: Stanley A. Rabin
Facsimile No.: 214/689-4326
with copies to:
David M. Sudbury, Esq.
General Counsel
Commercial Metals Company
7800 Stemmons Freeway
Dallas, Texas 75247
Facsimile No.: 214/689-4326
and
Weil, Gotshal & Manges
100 Crescent Court, Suite 1300
Dallas, Texas 75201
Attention: R. Scott Cohen, Esq.
Facsimile No.: 214/746-7777
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(b) If to the Companies, to:
c/o Owen Steel Company, Inc.
801 Blossom Street
Columbia, South Carolina 29201
Attention: Mrs. Dorothy G. Owen
Mr. Ralph H. Moore, Jr.
Facsimile No.: 803/251-7665
with a copy to:
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, Pennsylvania 19103
Attention: G. Daniel O'Donnell, Esq.
Facsimile No.: 215/994-2222
(c) If to the Stockholders or the Stockholder
Representative, to:
Dorothy G. Owen
5000 Wittering Drive
Columbia, South Carolina 29208
Ralph H. Moore, Jr.
10 Upper Cove Road
Columbia, South Carolina 29223-3024
Guy Hendley
612 Hampton Trace Lane
Columbia, South Carolina 29223
Melvin Lee Burton, III
3248 Bagnal Drive
Columbia, South Carolina 29204
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with a copy to:
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, Pennsylvania 19103
Attention: G. Daniel O'Donnell, Esq.
Facsimile No.: 215/994-2222
SECTION 10.7. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of South Carolina without
regard to the conflicts-of-laws rules thereof.
SECTION 10.8. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
SECTION 10.9. Headings. The article and section headings contained
in this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 10.10. Certain Definitions. For purposes of this Agreement,
the term:
(a) "affiliate" shall mean a person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, another person;
(b) "Average Stock Price" shall mean the average of the
last reported sale price per share of the Parent Common Stock for the twenty
(20) trading days immediately preceding the business day prior to the Closing
Date as reported on the New York Stock Exchange;
(c) "Change of Control Payments" means (i) all payments,
other than payment of the Purchase Price, to which any officer, director,
employee or shareholder is entitled to receive as a result of the transaction
contemplated hereby and (ii) all amounts payable as a result of the termination
of the Deferred Compensation Arrangements;
(d) "Closing Differential" as used herein shall mean the
Proposed Closing Differential with such revisions, adjustments and changes
thereto, if any, as shall be effected pursuant to Section 2.2(b)(ii);
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(e) "Contract" means any contract, agreement, indenture,
note, bond, loan, instrument, lease, conditional sales contract, mortgage,
license, franchise, insurance policy, commitment or other arrangement or
agreement;
(f) "Debt" shall mean all indebtedness of the Companies
and their Subsidiaries, including without limitation (i) the Company Loan, (ii)
all obligations of the Companies and their Subsidiaries for borrowed money or
evidenced by bonds, debentures, notes, letters of credit or other similar
instruments, (iii) obligations as lessee under capital leases, (iv) obligations
to pay the deferred purchase price of property or services, except accounts
payable arising in the ordinary course of business, and (v) all debt of others
guaranteed by any of the Companies or their Subsidiaries, or secured by a lien
on any of the assets of the Companies or their Subsidiaries. Debt shall not
include, to the extent undrawn, that certain irrevocable documentary letter of
credit issued by Wachovia Bank of South Carolina in favor of the South Carolina
Department of Health and Environmental Control;
(g) "Designated Debt" shall mean all indebtedness under
that certain (i) Note Purchase Agreement dated as of September 15, 1990 among
the Company and the financial institutions party thereto, (ii) Financing
Agreement dated as of September 16, 1988, as amended, among the Company and
South Carolina National Bank (now known as Wachovia Bank of South Carolina),
(iii) Demand Note of South Carolina Steel dated September 23, 1988 in the
principal amount of $2,500,000 payable to First Citizen Bank, (iv) Revolving
Commercial Note of Owen Miscellaneous dated July 1, 1992 in the principal
amount of $1,000,000 payable to South Carolina National Bank (now known as
Wachovia Bank of South Carolina), and (v) Promissory Note dated November 8,
1984 of South Carolina Steel in the principal amount of $1,000,000 issued in
connection with the Greenville County, South Carolina Industrial Revenue Bond,
1984 (South Carolina Steel Project).
(h) "Environmental Claim" means any accusation,
allegation, notice of violation, action, claim, Environmental Lien, demand,
abatement or other Order or direction (conditional or otherwise) by any
Governmental Authority or any other person for personal injury (including
sickness, disease or death), tangible or intangible property damage, damage to
the environment (including natural resources), nuisance, pollution,
contamination, trespass or other adverse effects on the environment, or for
fines, penalties or restrictions resulting from or based upon (i) the
existence, or the continuation of the existence, of a Release (including,
without limitation, sudden or non-sudden accidental or non-accidental Releases)
of, or exposure to, any Hazardous Material, odor or audible noise in, into or
onto the environment (including, without limitation, the air, soil, surface
water or groundwater) in quantities or at levels that would require remediation
by the Companies or any Subsidiaries under the Environmental Laws at, in, by,
from or related to any property owned, operated or leased by any of the
Companies or any activities or operations thereof; (ii) the transportation,
53
<PAGE> 60
storage, treatment or disposal of Hazardous Materials on or prior to the
Closing Date in connection with any property currently or formerly owned,
operated or leased by any of the Companies or its operations or facilities; or
(iii) the violation, or alleged violation, of any Environmental Law, Order or
Environmental Permit of or from any Governmental Authority relating to
environmental matters in existence on the Closing Date with respect to any
property owned, leased or operated by any of the Companies;
(i) "Environmental Costs and Liabilities" means any and all
losses, liabilities, obligations, damages, fines, penalties, judgments,
actions, claims, costs and expenses (including, without limitation, fees,
disbursements and expenses of legal counsel, experts, engineers and consultants
and the costs of investigation and feasibility studies and Remedial Action)
arising from or under any (i) Environmental Law, Environmental Claim or Order
or (ii) Contract in existence as of the Closing Date with any Governmental
Authority or other person;
(j) "Environmental Law" means any federal, state, local, or
foreign law (including common law), statute, code, ordinance, rule, regulation
or other requirement relating to the environment, natural resources, or public
or employee health and safety and includes, but is not limited to, the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C. Section 9601 et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 et seq., the Resource Conservation
and Recovery Act ("RCRA"), 42 U.S.C. Section 6901 et seq., the Clean Water
Act, 33 U.S.C. Section 1251 et seq., the Clean Air Act, 33 U.S.C. Section
2601 et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601 et
seq., the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Section
136 et seq., the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.,
Federal Safe Drinking Water Act 42 U.S.C. Section 300 F et seq. and the
Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq., as such
laws have been amended or supplemented, and the regulations promulgated
pursuant thereto, and all analogous state or local statutes as in effect on the
Closing Date;
(k) "Environmental Permit" means any permit, approval,
authorization, license, variance, registration, or permission required under
any applicable Environmental Law or Order;
(l) "Governmental Authority" means any nation or government,
any state or other political subdivision thereof and an entity exercising
executive, legislative, judicial, regulatory or administrative function of or
pertaining to government;
(m) "Hazardous Material" means any substance, material or
waste which is regulated by any Governmental Authority or the United States or
other national government, including, without limitation, any material,
substance or waste which is defined as a
54
<PAGE> 61
"hazardous waste," "hazardous material," "hazardous substance," "extremely
hazardous substance," "restricted hazardous waste," "contaminant," "toxic
waste" or "toxic substance" under any provision of Environmental Law, which
includes, but is not limited to, petroleum, petroleum products (including crude
oil and any fraction thereof), asbestos, asbestos-containing materials, urea
formaldehyde and polychlorinated biphenyls;
(n) "Proposed Closing Differential" as used herein shall
mean, as reflected in the Post-Closing Statement, the amount (whether a
positive or negative number) equal to the difference between (1) the Closing
Net Worth Amount minus (2) the Net Worth Estimate;
(o) "Know-how" shall mean laboratory journals, know-how
(including, without limitation, product know-how and use and application
know-how), formulae, product formulations, recipes, processes, product designs,
specifications, quality control, procedures, manufacturing, engineering and
other drawings, computer data bases and software, technology, other
intangibles, technical information, safety information, engineering data and
design and engineering specifications, research records, market surveys and all
promotional literature, customer and supplier lists and similar data;
(p) "Knowledge" of the Companies shall mean the
knowledge, after due inquiry, of the individuals listed or described on
Schedule 10.10(p).
(q) "Legal Proceedings" means any judicial,
administrative or arbitral actions, suits, proceedings (public or private) or
governmental proceedings;
(r) "Material Adverse Effect" means a material adverse
effect on the business, operations, liabilities, properties, prospects, assets
or financial condition of, in the case of the Company, the Companies and their
Subsidiaries taken as a whole, and in the case of Parent, Parent and its
Subsidiaries taken as a whole;
(s) "Net Worth" shall mean at a particular date all
amounts which would, in conformity with GAAP, be included under shareholders'
equity on a consolidated basis for such entities and including the
shareholders' equity represented by the minority interest held by the
Stockholders in Owen Joist and Owen Electric;
(t) "Order" means any order, injunction, judgment,
decree, ruling, assessment or arbitration award;
(u) "person" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated organization or,
as applicable, any other entity;
55
<PAGE> 62
(v) "Release" means any release, spill, emission,
leaking, pumping, pouring, dumping, emptying, injection, deposit, disposal,
discharge, dispersal, leaching, or migration on or into the indoor or outdoor
environment or into or out of any property; and
(w) "Remedial Action" means all actions, including,
without limitation, any capital expenditures, required or voluntarily
undertaken to (i) clean up, remove, treat, or in any other way address any
Hazardous Material or other substance; (ii) prevent the Release or threat of
Release, or minimize the further Release of any Hazardous Material or other
substance so it does not migrate or endanger or threaten to endanger public
health or welfare or the indoor or outdoor environment; (iii) perform
pre-remedial studies and investigations or post-remedial monitoring and care;
or (iv) bring facilities on any property owned, operated or leased by any of
the Companies and the facilities located and operations conducted thereon into
compliance with all Environmental Laws and Environmental Permits.
SECTION 10.11. Entire Agreement. This Agreement and the Disclosure
Schedule embody the entire agreement and understanding of the parties hereto in
respect of the subject matter contained herein or therein. There are no
agreements, representations, warranties or covenants other than those expressly
set forth herein or therein. This Agreement and the Disclosure Schedule
supersede all prior agreements and understandings between the parties with
respect to such subject matter.
SECTION 10.12. Assignment. This Agreement shall not be assigned by
operation of law or otherwise.
SECTION 10.13. Termination of Representations and Warranties. All
representations and warranties and agreements of the Companies and the
Stockholders and Parent and Sub, shall survive the Closing.
SECTION 10.14. Exclusive Remedy. Parent and Sub agree that, to the
fullest extent permitted by law, Parent's and Sub's sole and exclusive remedy
after the Closing with respect to any claim or cause of action asserted by
Parent or Sub relating to or arising from breaches of the representations,
warranties or covenants of the Companies contained in this Agreement or any
document, list, certificate or other instrument furnished or to be furnished by
or on behalf of the Companies to Parent, Sub or any of their representatives in
connection with the transactions contemplated by this Agreement shall be
limited to Parent's and Sub's rights under, and shall be subject to the terms
and conditions of, the Escrow Agreement. Parent and Sub further agree that,
except as specifically set forth in this Agreement (or the Disclosure Schedule
or any document, statement or certificate specifically referenced in this
Agreement or the Disclosure Schedule), none of the parties has made or shall
have liability for any representation or warranty, express or implied, in
connection with the transactions
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<PAGE> 63
contemplated by this Agreement or relating to or arising from any existing or
future common or environmental statutory law, including CERCLA or any other
statutes now or hereafter in effect.
SECTION 10.15. Certain Tax Matters Concerning Owen Miscellaneous.
Parent and Sub agree that it shall be the sole right and responsibility of Guy
Hendley as "Tax Matters Person" for Owen Miscellaneous pursuant to Section 6241
et seq. of the Code, or such successor(s) as shall be duly appointed by the
Owen Miscellaneous Stockholders (the "TMP"), to cause to be prepared and filed
all federal and state S corporation income tax returns of Owen Miscellaneous
for taxable periods ending prior to or on the date of the Owen Miscellaneous
Exchange which are filed after the date of the Owen Miscellaneous Exchange (the
"Prior Period Returns"). The parties agree that, unless prohibited under
applicable federal or state tax law, the day before the date of the Owen
Miscellaneous Exchange will be treated as the last day of Owen Miscellaneous'
tax year as an S corporation. Parent and Sub shall make available or shall
cause the Surviving Corporation to make available to the TMP or his
representatives (including accountants and attorneys) any and all books and
records and other documents and information in their possession or control
relating to the Surviving Corporation reasonably requested by the TMP for the
purpose of preparing the Prior Period Returns. Parent and Sub will cause a
duly authorized officer of Owen Miscellaneous (or any successor) to execute
timely such Prior Period Returns. Parent and Sub further agree that the TMP
shall have the right to control any and all audits or other proceedings
relating to the Prior Period Returns filed for taxable years for which Owen
Miscellaneous has a valid election in effect under Section 1362 of the Code and
any other federal or state S corporation income tax returns of Owen
Miscellaneous filed on or before the Owen Miscellaneous Exchange, but only to
the extent that any tax imposed for any such periods is not borne, in whole or
in part, by Owen Miscellaneous, and Parent and Sub shall make available or
shall cause the Surviving Corporation to make available to the TMP any and all
such books and records of Owen Miscellaneous and other documents reasonably
requested by TMP and shall make available employees of the Surviving
Corporation reasonably needed to enable him to defend any such audits or other
proceedings with respect to any such returns and shall cooperate with the TMP,
at his expense, in the defense of such audits and other proceedings.
SECTION 10.16. Jurisdiction and Venue. The parties hereto agree that
any suit, action or proceeding arising out of or relating to this Agreement
shall be instituted only in the United States District Court for the District
of New York, United States of America or, in the absence of jurisdiction, the
Supreme Court of New York. Each party waives any objection it may have now or
hereafter to the laying of the venue of any such suit, action or proceeding,
and irrevocably submits to the jurisdiction of any such court in any such suit,
action or proceeding.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed on its behalf by its duly authorized officers, all as of
the day and year first above written.
OWEN STEEL COMPANY, INC.
By: /s/ Ralph H. Moore, Jr.
Name: Ralph H. Moore, Jr.
Title: President and Chief
Executive Officer
OWEN MISCELLANEOUS METALS, INC.
By: /s/ Ralph H. Moore, Jr.
Name: Ralph H. Moore, Jr.
Title: President and Chief
Executive Officer
SOUTH CAROLINA STEEL CORPORATION
By: /s/ Ralph H. Moore, Jr.
Name: Ralph H. Moore, Jr.
Title: President and Chief
Executive Officer
COMMERCIAL METALS COMPANY
By: /s/ Stanley A. Rabin
Name: Stanley A. Rabin
Title: President and Chief
Executive Officer
58
<PAGE> 65
CMC ACQUISITION COMPANY
By: /s/ Stanley A. Rabin
Name: Stanley A. Rabin
Title: President
59
<PAGE> 66
SIGNATURE PAGE TO
AGREEMENT AND PLAN OF MERGER
<TABLE>
<S> <C>
/s/ Elizabeth G. Owen /s/ Elizabeth Greene Owen
- ------------------------------------------- -------------------------------------------
Elizabeth G. Owen Elizabeth Greene Owen
/s/ Dorothy Greene Owen /s/ George William Owen
- ------------------------------------------- -------------------------------------------
Dorothy Greene Owen George William Owen
/s/ Franklyn D. Owen, III /s/ Ralph H. Moore, Jr.
- ------------------------------------------- -------------------------------------------
Franklyn D. Owen, III Ralph H. Moore, Jr.
/s/ Elizabeth Owen Burton /s/ Melvin Lee Burton, III
- ------------------------------------------- -------------------------------------------
Elizabeth Owen Burton Melvin Lee Burton, III
(Sturkie)
/s/ Barbara Burton Guzior /s/ Katherine Burton Wright
- ------------------------------------------- -------------------------------------------
Barbara Burton Guzior Katherine Burton Wright
/s/ James Best Letton, IV /s/ Dan DeTreville Letton
- ------------------------------------------- -------------------------------------------
James Best Letton, IV Dan DeTreville Letton
/s/ Kenneth Rives Letton /s/ Sarah Jeanne Owen
- ------------------------------------------- -------------------------------------------
Kenneth Rives Letton Sarah Jeanne Owen
</TABLE>
<PAGE> 67
SIGNATURE PAGE TO
AGREEMENT AND PLAN OF MERGER
<TABLE>
<S> <C>
TRUST A UNDER THE WILL OF U/W OF NANCY O. LETTON F/B/O
FRANKLYN D. OWEN, SR. JAMES BEST LETTON, IV, DAN
DETRIVILLE LETTON, KENNETH
RIVES LETTON
By:/s/ Elizabeth G. Owen
----------------------------------------
Elizabeth G. Owen, By:/s/ Elizabeth O. Burton
Co-Trustee ----------------------------------------
Elizabeth O. Burton,
Co-Trustee
By:/s/ Elizabeth Owen Burton
----------------------------------------
Elizabeth Owen Burton,
Co-Trustee By:/s/ Sarah Jeanne Owen
----------------------------------------
Sarah Jeanne Owen,
Co-Trustee
By:/s/ Sarah Jeanne Owen
----------------------------------------
Sarah Jeanne Owen,
Co-Trustee Wachovia Bank of South
Carolina, N.A., Co-Trustee
By:/s/ Ralph H. Moore, Jr.
----------------------------------------
Ralph H. Moore, Jr.,
Co-Trustee By:/s/ F. W. Coggins, Jr.
----------------------------------------
Name: F. W. Coggins, Jr.
Title: Sr. Vice President
Wachovia Bank of South
Carolina, N.A., Co-Trustee
By:/s/ F. W. Coggins, Jr.
----------------------------------------
Name: F. W. Coggins, Jr.
Title: Sr. Vice President
</TABLE>
<PAGE> 68
SIGNATURE PAGE TO
AGREEMENT AND PLAN OF MERGER
<TABLE>
<S> <C>
TRUST B UNDER THE WILL OF TRUST AGREEMENT WITH FRANKLYN
FRANKLYN D. OWEN, SR. D. OWEN, JR., DATED
DECEMBER 29, 1976 FOR BENEFIT
OF CHILDREN OF FRANKLYN D.
By:/s/ Elizabeth G. Owen OWEN, JR.
----------------------------------------
Elizabeth G. Owen,
Co-Trustee
By:/s/ Dorothy Greene Owen
--------------------------------------
Dorothy Greene Owen,
By:/s/ Elizabeth Owen Burton Co-Trustee
----------------------------------------
Elizabeth Owen Burton,
Co-Trustee
By:/s/ Elizabeth Owen Burton
--------------------------------------
Elizabeth Owen Burton,
By:/s/ Sarah Jeanne Owen Co-Trustee
----------------------------------------
Sarah Jeanne Owen,
Co-Trustee
By:/s/ Ralph H. Moore, Jr.
--------------------------------------
Ralph H. Moore, Jr.,
Co-Trustee
By:/s/ Ralph H. Moore, Jr.
----------------------------------------
Ralph H. Moore, Jr.,
Co-Trustee
Wachovia Bank of South
Carolina, N.A., Co-Trustee
By:/s/ F. W. Coggins, Jr.
----------------------------------------
Name: F. W. Coggins, Jr.
Title: Sr. Vice President
</TABLE>
<PAGE> 69
SIGNATURE PAGE TO
AGREEMENT AND PLAN OF MERGER
<TABLE>
<S> <C>
TRUST AGREEMENT WITH ELIZABETH U/W OF FANKLYN D. OWEN, JR.
G. OWEN, DATED DECEMBER 29, F/B/O FRANKLYN D. OWEN, III
1976 FOR THE BENEFIT OF THE
FOLLOWING: CHILDREN OF
FRANKLYN D. OWEN, JR., By:/s/ Dorothy G. Owen
CHILDREN OF ELIZABETH OWEN ----------------------------------------
BURTON (STURKIE), CHILDREN OF Dorothy G. Owen,
NANCY OWEN LETTON Co-Trustee
By:/s/ Elizabeth Owen Burton By:/s/ Ralph H. Moore, Jr.
---------------------------------------- ----------------------------------------
Elizabeth Owen Burton, Ralph H. Moore, Jr.,
Co-Trustee Co-Trustee
By:/s/ Dorothy G. Owen Wachovia Bank of South
---------------------------------------- Carolina, N.A., Co-Trustee
Dorothy G. Owen,
Co-Trustee
By:/s/ F. W. Coggins, Jr.
----------------------------------------
By:/s/ Ralph H. Moore, Jr. Name: F. W. Coggins, Jr.
---------------------------------------- Title: Sr. Vice President
Ralph H. Moore, Jr.
Co-Trustee
</TABLE>
<PAGE> 70
SIGNATURE PAGE TO
AGREEMENT AND PLAN OF MERGER
<TABLE>
<S> <C>
U/W OF FRANKLYN D. OWEN, JR. U/W OF FRANKLYN D. OWEN, JR.
F/B/O ELIZABETH GREENE OWEN F/B/O GEORGE WILLIAM OWEN
By:/s/ Dorothy G. Owen By:/s/ Dorothy G. Owen
---------------------------------------- ----------------------------------------
Dorothy G. Owen, Dorothy G. Owen,
Co-Trustee Co-Trustee
By:/s/ Ralph H. Moore, Jr. By:/s/ Ralph H. Moore, Jr.
---------------------------------------- ----------------------------------------
Ralph H. Moore, Jr., Ralph H. Moore, Jr.,
Co-Trustee Co-Trustee
Wachovia Bank of South Wachovia Bank of South
Carolina, N.A., Co-Trustee Carolina, N.A., Co-Trustee
By:/s/ F. W. Coggins, Jr. By:/s/ F. W. Coggins, Jr.
---------------------------------------- ----------------------------------------
Name: F. W. Coggins, Jr. Name: F. W. Coggins, Jr.
Title: Sr. Vice President Title: Sr. Vice President
</TABLE>
<PAGE> 71
OMITTED SCHEDULES
Set forth below are schedules to the Agreement which have been omitted
pursuant to Regulation S-K, Item 601(b)(2). Commercial Metals Company agrees
to furnish supplementally a copy of any omitted schedule requested by the
Securities and Exchange Commission.
Schedule I: Company Common Stock Ownership
Schedule II: Owen Miscellaneous Capital Stock Ownership
Schedule III: South Carolina Steel Capital Stock Ownership
Schedule IV: Owen Joist Capital Stock Ownership
Schedule V: Owen Electric Capital Stock Ownership
Section 1.7 of the Disclosure Schedule: Certain Stockholders
Section 3.1 of the Disclosure Schedule: Organization and
Qualification
Section 3.3 of the Disclosure Schedule: No Violation
Section 3.4 of the Disclosure Schedule: Options, Warrants and
Certain Other Rights
Section 3.5 of the Disclosure Schedule: Subsidiaries and Equity
Investments
Section 3.6 of the Disclosure Schedule: Consents and Approvals
Section 3.7 of the Disclosure Schedule: Financial Statements
Section 3.8 of the Disclosure Schedule: Absence of Undisclosed
Liabilities
Section 3.9 of the Disclosure Schedule: Absence of Certain Changes
Section 3.10 of the Disclosure Schedule: Pending Litigation
Section 3.11 of the Disclosure Schedule: Liens and Encumbrances
<PAGE> 72
Section 3.12 of the Disclosure Schedule: Certain Agreements
Section 3.13 of the Disclosure Schedule: Employee Benefit Plans
Section 3.14 of the Disclosure Schedule: Taxes
Section 3.15 of the Disclosure Schedule: Compliance with Applicable
Law
Section 3.17 of the Disclosure Schedule: Proprietary Rights
Section 3.18 of the Disclosure Schedule: Labor Relations
Section 3.19 of the Disclosure Schedule: Insurance
Section 3.20 of the Disclosure Schedule: Real Estate
Section 3.21 of the Disclosure Schedule: Personal Property
Section 3.22 of the Disclosure Schedule: Environmental Matters
Section 3.23 of the Disclosure Schedule: Customers, Suppliers and
Employers
Section 3.25 of the Disclosure Schedule: Potential Conflicts of
Interest
Section 4.4 of the Disclosure Schedule: Accredited Investors
Section 6.1 of the Disclosure Schedule: Conduct of Business of Each
of the Companies Prior to the
Effective Time
Section 6.13 of the Disclosure Schedule: Employee Benefit Matters
Section 10.10 of the Disclosure Schedule: Knowledge
2
