AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 25, 1998
REGISTRATION STATEMENT NO. 333-
Securities and Exchange Commission
Washington, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
Under The Securities Act of 1933
----------------
ConAgra, Inc.
(Exact name of registrant as specified in its charter)
Delaware 2011 47-0248710
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Identification No.)
organization) Classification
Code Number)
One ConAgra Drive
Omaha, Nebraska 68102-5001
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
James P. O'Donnell
Senior Vice President and Chief Financial Officer
ConAgra, Inc.
One ConAgra Drive
Omaha, Nebraska 68102-5001
(402) 595-4000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-----------------------
Copies to:
David L. Hefflinger Henry A. Mitchell, Jr.
McGrath, North, Mullin & Kratz, P.C. Gerald F. Roach
Suite 1400 One Central Park Plaza Smith, Anderson, Blount,
Omaha, NE 68102 Dorsett, Mitchell & Jernigan,
L.L.P.
2500 First Union Capitol Center
Raleigh, NC 27601
Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective time of the Merger described in this
Registration Statement.
If the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. |_|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
<TABLE>
CALCULATION OF REGISTRATION FEE
==================================================================================================================================
Title of each class of securities to be Amount to be Proposed maximum Proposed maximum Amount of
registered registered(1) offering price per unit aggregate offering Registration Fee(2)
price(2)
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Common Stock........................... 8,408,500 N/A $241,218,844 $71,160
==================================================================================================================================
- ----------
(1) Based upon the maximum number of shares of common stock of ConAgra, Inc.
("ConAgra") that may be issued pursuant to the merger described herein
(the "Merger").
(2) Estimated solely for purposes of calculating the registration fee and
computed pursuant to Rules 457(c) and (f) under the Securities Act of
1933, as amended, based on the product of (i) $28-11/16 the average of the
high and low per share prices of the common stock of GoodMark Foods, Inc.
(the "GoodMark Common Stock") on the Nasdaq National Market on June 18,
1998 and (ii) the maximum number of shares of GoodMark Common Stock
outstanding at the time of the Merger.
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE>
[GOODMARK LOGO AND ADDRESS]
July _____, 1998
Dear Shareholder:
You are cordially invited to attend a Special Meeting of the shareholders
of GoodMark Foods, Inc. ("GoodMark") on July _____, 1998 at 9:00 a.m., local
time, at GoodMark's executive offices, 6131 Falls of Neuse Road, Raleigh, North
Carolina 27609 (together with any adjournment, postponement or continuation
thereof, the "Special Meeting").
As described in the enclosed Proxy Statement/Prospectus, at the Special
Meeting, the holders of common stock, par value $.01 per share, of GoodMark
("GoodMark Common Stock"), will be asked to approve and adopt the Agreement and
Plan of Merger (the "Merger Agreement"), dated as of June 17, 1998, among
ConAgra, Inc., a Delaware corporation ("ConAgra"), CAG 40, Inc., a North
Carolina corporation which has not engaged in any material operations since its
incorporation and is a wholly-owned subsidiary of ConAgra ("Merger Sub"), and
GoodMark, and the transactions contemplated thereunder, including a merger (the
"Merger") pursuant to which Merger Sub would merge with and into GoodMark, with
GoodMark being the surviving corporation in the Merger. A copy of the Merger
Agreement appears as Annex A to the attached Proxy Statement/Prospectus.
In connection with the Merger, (i) each share of GoodMark Common Stock
issued and outstanding as of the Effective Time (as defined in the Merger
Agreement), other than shares as to which dissenters' rights have been perfected
under the North Carolina Business Corporation Act, would be converted into the
right to receive between .94488 and 1.08108 shares of the common stock, par
value $5.00 per share, of ConAgra ("ConAgra Common Stock"), depending on the
average trading price of the ConAgra Common Stock prior to the Effective Time,
with each share of GoodMark Common Stock valued at $30.00 and (ii) any option to
purchase shares of GoodMark Common Stock outstanding immediately prior to the
Effective Time would be assumed by ConAgra in the Merger and converted into an
option to purchase shares of ConAgra Common Stock on the same basis as
outstanding GoodMark Common Stock, all subject to and in accordance with the
terms and conditions of the Merger Agreement.
In approving the Merger Agreement, GoodMark's Board of Directors has
unanimously determined that the proposed Merger is in the best interests of the
GoodMark Shareholders. ACCORDINGLY, THE BOARD OF DIRECTORS RECOMMENDS THAT THE
SHAREHOLDERS OF GOODMARK VOTE IN FAVOR OF THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREUNDER, INCLUDING THE MERGER.
The close of business on June __, 1998 has been fixed by the GoodMark
Board of Directors as the record date (the "Record Date") for the determination
of shareholders entitled to vote at the Special Meeting. The affirmative vote of
the holders of shares representing at least a majority of the GoodMark Common
Stock issued and outstanding on the Record Date is necessary to approve the
Merger Agreement and the transactions contemplated thereunder, including the
Merger.
<PAGE>
You are urged to read the Proxy Statement/Prospectus carefully. It is very
important that your shares be represented at the Special Meeting. Whether or not
you plan to attend the Special Meeting, you are requested to complete, date,
sign and return the enclosed proxy card promptly in the enclosed pre-addressed
and pre-paid envelope so that it will be received no later than
__________________, 1998. If you attend the Special Meeting, you may vote in
person if you wish, even though you have previously returned your proxy.
Sincerely,
/s/ Ron E. Doggett
RON E. DOGGETT
Chairman and Chief Executive Officer
<PAGE>
GOODMARK FOODS, INC.
6131 Falls of Neuse Road
Raleigh, North Carolina 27609
July ____, 1998
NOTICE OF SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD ON JULY , 1998
TO THE SHAREHOLDERS OF GOODMARK FOODS, INC.:
A Special Meeting of the shareholders of GoodMark Foods, Inc. ("GoodMark")
will be held at GoodMark's executive offices, 6131 Falls of Neuse Road, Raleigh,
North Carolina 27609 on July ____, 1998 at 9:00 a.m., local time (together with
any adjournment, postponement or continuation thereof, the "Special Meeting")
for the following purposes:
1. To consider and vote upon a proposal to approve and adopt the Agreement
and Plan of Merger (the "Merger Agreement"), dated as of June 17, 1998,
among ConAgra, Inc., a Delaware corporation ("ConAgra"), CAG 40, Inc., a
North Carolina corporation which has not engaged in any material
operations since its incorporation and is a wholly-owned subsidiary of
ConAgra ("Merger Sub"), and GoodMark, and the transactions contemplated
thereunder, including a merger (the "Merger") pursuant to which Merger Sub
would be merged with and into GoodMark, with GoodMark being the surviving
corporation in the Merger; and
2. To transact such other business as may properly come before the Special
Meeting.
The close of business on June __, 1998 has been fixed by the GoodMark
Board of Directors as the record date (the "Record Date") for the determination
of shareholders entitled to vote at the Special Meeting. The affirmative vote of
the holders of shares representing at least a majority of the common stock, par
value $.01 per share, of GoodMark (the "GoodMark Common Stock") issued and
outstanding on the Record Date, is necessary to approve the Merger Agreement and
the transactions contemplated thereunder, including the Merger. A complete list
of shareholders entitled to vote at the Special Meeting will be available for
examination by any GoodMark Shareholder, for any purpose germane to the Special
Meeting, at the office of the Secretary of GoodMark, 6131 Falls of Neuse Road,
Raleigh, North Carolina 27609, beginning two business days after the date of
this Notice and continuing through the Special Meeting.
All shares represented by properly executed proxies will be voted in
accordance with the specifications on the proxy card. If no such specifications
are made, proxies will be voted FOR approval and adoption of the Merger
Agreement and the transactions contemplated thereunder, including the Merger.
Shareholders of GoodMark who do not vote in favor of or otherwise consent to
approval and adoption of the Merger Agreement and the Merger and who otherwise
comply with the provisions of Sections 55-13-01 through 55-13-31 of the North
Carolina Business Corporation Act (the "NCBCA"), will have the right, if the
Merger is consummated, to dissent and to demand an appraisal of the fair value
of their shares. A copy of Sections 55-13-01 through 55-13-31 of the NCBCA is
attached to the Proxy Statement/Prospectus as Annex C. See "Dissenters' Rights"
in the attached Proxy Statement/Prospectus for a description of how to properly
exercise dissenters' rights.
<PAGE>
You are urged to read the Proxy Statement/Prospectus carefully. It is very
important that your shares be represented at the Special Meeting. Whether or not
you plan to attend the Special Meeting, you are requested to complete, date,
sign, and return the enclosed proxy card promptly in the enclosed pre-addressed
and pre-paid envelope so that it will be received no later than July , 1998. If
you attend the Special Meeting, you may vote in person if you wish, even though
you have previously returned your proxy. Failure to return a properly executed
proxy or to vote at the Special Meeting will have the same effect as a vote
against the Merger Agreement and the transactions contemplated thereunder,
including the Merger. Any action may be taken on any of the foregoing proposals
at the Special Meeting on the date specified above or on any dates to which by
original or later adjournment the Special Meeting may be adjourned.
By order of the GoodMark Board of Directors,
ALVIN C. BLALOCK
Secretary
Raleigh, North Carolina
July , 1998
<PAGE>
GOODMARK FOODS, INC.
PROXY STATEMENT
- - - - - - - - - - -
CONAGRA, INC.
PROSPECTUS
- - - - - - - - - - -
This Proxy Statement/Prospectus ("Proxy Statement/Prospectus") is being
furnished to the holders of common stock, par value $.01 per share ("GoodMark
Common Stock") of GoodMark Foods, Inc., a North Carolina corporation
("GoodMark") in connection with the solicitation of proxies by the Board of
Directors of GoodMark (the "GoodMark Board") for use at a Special Meeting of
Shareholders of GoodMark to be held at GoodMark's executive offices, 6131 Falls
of Neuse Road, North Carolina 27609, on _____________, 1998, at 9:00 a.m., local
time (together with any and all adjournments, postponements or continuations
thereof, the "Special Meeting").
This Proxy Statement/Prospectus relates to the Agreement and Plan of Merger
dated as of June 17, 1998 (the "Merger Agreement") among ConAgra, Inc., a
Delaware corporation ("ConAgra"), CAG 40, Inc., a North Carolina corporation and
newly formed, wholly owned subsidiary of ConAgra ("Merger Sub"), and GoodMark,
which provides for the merger (the "Merger") of Merger Sub with and into
GoodMark, with GoodMark continuing as the surviving corporation (the "Surviving
Corporation") and a wholly owned subsidiary of ConAgra. Upon the terms and
subject to the conditions set forth in the Merger Agreement, each share of
GoodMark Common Stock outstanding immediately prior to the effective time (the
"Effective Time") of the Merger (other than shares, if any, owned by ConAgra,
which will be cancelled, and shares held by stockholders exercising dissenters'
rights under Article 13 of the Business Corporation Act of the State of North
Carolina ("NCBCA")) will be converted into the right (the "Per Share Merger
Consideration") to receive that number of validly issued, fully paid and
nonassessable shares of common stock, par value $5.00 per share, of ConAgra
("ConAgra Common Stock"), determined by dividing $30.00 by the average closing
price (the "Average Trading Price") of ConAgra Common Stock on the New York
Stock Exchange ("NYSE") Composite Transactions List for the ten full trading
days ending on the fifth full trading day immediately preceding the closing date
of the Merger (the "Closing Date"). In the event the Average Trading Price is
greater than $31.75, the Average Trading Price will, for purposes of determining
the Per Share Merger Consideration, be deemed to be $31.75, and in the event the
Average Trading Price is less than $27.75, the Average Trading Price will, for
purposes of determining the Per Share Merger Consideration, be deemed to be
$27.75. No fractional shares of ConAgra Common Stock will be issued, and any
fractional share interest to which any shareholder of GoodMark ("GoodMark
Shareholder") would otherwise be entitled will be rounded to the nearest whole
share. GoodMark Shareholders may call 1-800-___-____ after ___________ during
normal business hours to obtain the finally determined Per Share Merger
Consideration.
The consummation of the Merger is subject to certain closing conditions
including: (i) the approval and adoption of the Merger Agreement at the Special
Meeting by the affirmative vote of the holders of shares representing at least a
majority of GoodMark Common Stock issued and outstanding on June __, 1998 (the
"Record Date"); (ii) the transactions contemplated in the Merger Agreement
qualifying for accounting treatment as a pooling-of-interests and (iii) the
receipt of certain regulatory approvals, including, without limitation,
expiration or termination of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"). SEE "RISK FACTORS" COMMENCING ON PAGE __ FOR A DESCRIPTION OF
i
<PAGE>
CERTAIN MATTERS THAT SHOULD BE CONSIDERED BY STOCKHOLDERS BEFORE VOTING. A copy
of the Merger Agreement is attached hereto as Annex A.
Approval and adoption of the Merger Agreement will require the affirmative
vote at the Special Meeting of the holders of shares representing at least a
majority of GoodMark Common Stock issued and outstanding on the Record Date. At
the close of business on the Record Date certain GoodMark Shareholders,
including Ron E. Doggett, Chairman and Chief Executive Officer of GoodMark, and
the other executive officers of GoodMark, owned an aggregate of 2,500,240 shares
of GoodMark Common Stock, or approximately 34.6% of the voting power of the
GoodMark Common Stock. Pursuant to the Stock Voting Agreements entered into
between ConAgra and such GoodMark Shareholders, in connection with the Merger
Agreement (the "Voting Agreements"), such GoodMark Shareholders have agreed to
vote all of the shares of GoodMark Common Stock owned by them for the approval
and adoption of the Merger Agreement. The Voting Agreements will terminate on
the earlier to occur of the Effective Time or the termination of the Merger
Agreement in accordance with its terms.
This Proxy Statement/Prospectus also constitutes the Prospectus of ConAgra
filed as part of a Registration Statement on Form S-4 (the "Registration
Statement") with the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Securities Act"), relating to the
shares of ConAgra Common Stock to be issued in the Merger.
ConAgra Common Stock is listed for trading under the symbol "CAG" on the
NYSE. GoodMark Common Stock is listed for trading under the symbol "GDMK" on The
Nasdaq Stock Market National Market ("Nasdaq National Market"). On June 16,
1998, the last trading day prior to the execution of the Merger Agreement, the
last reported sale price of ConAgra Common Stock, as reported on the NYSE
Composite Transactions List, was $31.75 per share and the last reported sale
price of GoodMark Common Stock, as reported on the Nasdaq National Market, was
$22.125 per share. On __________, 1998, the last trading day prior to the date
of mailing of this Proxy Statement/Prospectus, the last reported sale price of
ConAgra Common Stock, as reported on the NYSE Composite Transactions List, was
$_____ share and the last reported sale price of GoodMark Common Stock, as
reported on the Nasdaq National Market, was $_____ per share.
This Proxy Statement/Prospectus and the accompanying forms of proxy are
first being mailed to the GoodMark Shareholders on or about ______________,
1998.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT/
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
- - - - - - - - - - - - - - -
The date of this Proxy Statement/Prospectus is _____________, 1998.
ii
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS PROXY
STATEMENT/PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
NOT CONTAINED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS
PROXY STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE
SOLICITATION OF AN OFFER TO PURCHASE, ANY OF THE SECURITIES OFFERED BY THIS
PROXY STATEMENT/PROSPECTUS, OR THE SOLICITATION OF A PROXY, IN ANY JURISDICTION
TO OR FROM ANY PERSON TO OR FROM WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION OF AN OFFER, OR PROXY SOLICITATION IN SUCH JURISDICTION. NEITHER
THE DELIVERY OF THIS PROXY STATEMENT/PROSPECTUS NOR THE ISSUANCE OR SALE OF ANY
SECURITIES HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH OR INCORPORATED HEREIN
SINCE THE DATE HEREOF.
AVAILABLE INFORMATION
ConAgra and GoodMark are each subject to the informational reporting
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith file reports, proxy and information
statements and other information with the SEC. Such reports, proxy and
information statements and other information filed by ConAgra and GoodMark can
be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549 and may be available at the following Regional Offices of the
Commission: Chicago Regional Office, Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661; and New York Regional
Office, 7 World Trade Center, 13th Floor, New York, New York 10048. Copies of
such materials can be obtained at prescribed rates from the Public Reference
Section of the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549. ConAgra and GoodMark are also required to file electronic versions of
these documents with the SEC through the SEC's Electronic Data Gathering
Analysis and Retrieval (EDGAR) system. The SEC maintains a world wide web site
at http://www.sec.gov that contains reports, proxy and information statements
and other information regarding registrants that file electronically with the
SEC. In addition, reports, proxy and information statements and other
information concerning ConAgra may be inspected at the offices of the NYSE, 20
Broad Street, New York, New York 10005, and concerning GoodMark may be inspected
at the offices of the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C., 20006-1506.
This Proxy Statement/Prospectus does not contain all the information set
forth in the Registration Statement and exhibits relating thereto, including any
amendments, of which this Proxy Statement/Prospectus is a part, and which
ConAgra has filed with the SEC under the Securities Act. Reference is made to
such Registration Statement for further information with respect to ConAgra and
the ConAgra Common Stock offered hereby. Statements contained herein or
incorporated herein by reference concerning the provisions of documents are
summaries of such documents, and each statement is qualified in its entirety by
reference to the copy of the applicable document if filed with the SEC or
attached as an annex hereto.
iii
<PAGE>
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents previously filed by ConAgra with the SEC pursuant
to the Exchange Act (Commission File No. 1-7275) are incorporated in this Proxy
Statement/Prospectus by reference: (i) ConAgra's annual report on Form 10-K for
the fiscal year ended May 25, 1997; (ii) ConAgra's quarterly reports on Form
10-Q for the quarters ended August 24, 1997, November 23, 1997 and February 22,
1998; (iii) ConAgra's current reports on Form 8-K filed on February 17, 1998 and
February 20, 1998; (iv) amendment to ConAgra's registration statement on Form
8-A filed on October 1, 1997; and (v) the description of the ConAgra Common
Stock and related preferred share purchase rights contained in ConAgra's
registration statements filed pursuant to the Exchange Act, and any amendment or
report filed for the purposes of updating such descriptions.
The following documents previously filed by GoodMark with the SEC pursuant
to the Exchange Act (Commission File No. 0-13944) are incorporated in this Proxy
Statement/Prospectus by reference: (i) GoodMark's annual report on Form 10-K for
the fiscal year ended May 25, 1997; (ii) GoodMark's quarterly reports on Form
10-Q for the quarters ended August 24, 1997, November 23, 1997 and February 22,
1998; and (iii) GoodMark's current report on Form 8-K filed on June 23, 1998.
All reports and other documents filed by each of ConAgra and Goodmark
pursuant to Section 13(a), 13(c), 13 or 15(d) of the Exchange Act subsequent to
the date hereof and prior to the GoodMark Special Meeting shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such reports and documents. In addition, all documents filed with the SEC by
ConAgra or GoodMark pursuant to the Exchange Act after the date of the initial
Registration Statement and prior to the effectiveness of the Registration
Statement shall be deemed to be incorporated by reference into this Proxy
Statement/Prospectus. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Proxy Statement/Prospectus to the extent that a
statement contained herein, or in any other subsequently filed document that
also is incorporated or deemed to be incorporated by reference herein, modifies
or supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Proxy Statement/Prospectus.
THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH
ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (NOT INCLUDING
EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY
REFERENCE INTO SUCH DOCUMENTS) ARE AVAILABLE, WITHOUT CHARGE, UPON WRITTEN OR
ORAL REQUEST OF ANY PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS PROXY
STATEMENT/PROSPECTUS IS DELIVERED TO, IN THE CASE OF DOCUMENTS RELATING TO
CONAGRA, ONE CONAGRA DRIVE, OMAHA, NEBRASKA 68105, ATTENTION: INVESTOR RELATIONS
DEPARTMENT (TELEPHONE NO. (402) 595-4157), OR, IN THE CASE OF DOCUMENTS RELATING
TO GOODMARK, POST OFFICE BOX 18300, RALEIGH, NORTH CAROLINA 27619, ATTENTION:
PAUL L. BRUNSWICK (TELEPHONE NO. (919) 790-9940). IN ORDER TO ENSURE TIMELY
DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY _________, 1998.
iv
<PAGE>
CERTAIN FORWARD-LOOKING STATEMENTS
Certain statements in this Proxy Statement/Prospectus (including the
documents incorporated by reference herein) constitute "Forward-Looking
Statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements are based on many assumptions and
factors, including availability and prices of raw materials, consumer
preferences, product pricing, competitive environment and related market
conditions, operating efficiencies, access to capital and actions of
governments. Such risk and uncertainties, including those set forth under "Risk
Factors," in this Proxy Statement/Prospectus could cause actual results to
differ materially from those contemplated in such forward-looking statements.
Additional factors that could cause actual results of GoodMark to differ
materially are discussed in GoodMark's recent filings with the Securities and
Exchange Commission, including but not limited to its Report on Form 10-K for
the year ended May 1997, its subsequent Reports on Form 10-Q and its other
periodic reports. Neither ConAgra nor GoodMark undertake any obligation to
publicly release any revisions to these forward-looking statements to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
v
<PAGE>
<TABLE>
TABLE OF CONTENTS
PAGE
<S> <C>
AVAILABLE INFORMATION................................................................................. iii
INCORPORATION OF DOCUMENTS BY REFERENCE............................................................... iv
CERTAIN FORWARD-LOOKING STATEMENTS.................................................................... v
SUMMARY............................................................................................... 1
The Companies................................................................................... 1
Per Share Merger Consideration.................................................................. 2
The Special Meeting............................................................................. 3
No Vote By Stockholders of ConAgra.............................................................. 3
Risk Factors.................................................................................... 4
The Merger and the Merger Agreement............................................................. 5
Certain U.S. Federal Income Tax Considerations.................................................. 7
Voting Agreements............................................................................... 7
Comparative Rights of Stockholders.............................................................. 8
Dissenters' Rights.............................................................................. 8
Selected Historical Financial Information of ConAgra............................................ 9
Selected Historical Financial Information of GoodMark........................................... 10
Comparative Per Share Data of ConAgra and GoodMark.............................................. 11
ConAgra Earnings Per Share Computation.......................................................... 13
GoodMark Earnings Per Share Computation......................................................... 15
Market Prices and Dividends Paid................................................................ 16
RISK FACTORS.......................................................................................... 17
Limits on Per Share Merger Consideration........................................................ 17
Stock Ownership in ConAgra...................................................................... 17
Interests of Certain Persons in the Merger...................................................... 17
Need for Government Approvals; Possible Operating Restrictions.................................. 17
THE SPECIAL MEETING................................................................................... 18
Purpose......................................................................................... 18
Record Date; Voting Rights; Required Vote....................................................... 18
Stock Ownership of Management................................................................... 19
Quorum.......................................................................................... 19
Proxies......................................................................................... 19
Authorization to Vote on Adjournment and Other Matters.......................................... 20
Solicitation of Proxies......................................................................... 20
Dissenters' Rights.............................................................................. 20
THE MERGER............................................................................................ 22
General......................................................................................... 22
Background of the Merger........................................................................ 22
ConAgra's Reasons for the Merger................................................................ 24
GoodMark's Reasons for the Merger............................................................... 24
Recommendation of the GoodMark Board of Directors............................................... 26
Opinion of Interstate/Johnson Lane Corporation.................................................. 26
Interests of Certain Persons in the Merger...................................................... 31
Ownership Interest of GoodMark Shareholders After the Merger.................................... 32
Treatment of Stock Options...................................................................... 32
Stock Exchange Listing.......................................................................... 33
Delisting and Deregistration of GoodMark Common Stock........................................... 33
vi
<PAGE>
Accounting Treatment............................................................................ 33
Governmental and Regulatory Approvals........................................................... 33
Procedures for Exchange of GoodMark Common Stock Certificates................................... 34
Resales of ConAgra Common Stock................................................................. 35
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS........................................................ 36
THE MERGER AGREEMENT.................................................................................. 38
Structure of the Merger......................................................................... 38
Conversion of GoodMark Common Stock............................................................. 38
Certain Representations and Warranties.......................................................... 38
Conduct of Business by GoodMark Pending the Merger.............................................. 38
Conditions to Consummate the Merger............................................................. 39
Pooling......................................................................................... 40
Employee Benefits............................................................................... 41
No Solicitation................................................................................. 41
Third-Party Standstill Agreements............................................................... 41
Indemnification and Insurance................................................................... 42
Termination..................................................................................... 42
Fees and Expenses and Effect of Termination..................................................... 43
Amendment and Modification...................................................................... 44
Waiver.......................................................................................... 45
VOTING AGREEMENTS..................................................................................... 45
DISSENTERS' RIGHTS.................................................................................... 45
DESCRIPTION OF CONAGRA CAPITAL STOCK.................................................................. 46
General......................................................................................... 49
Dividends on ConAgra Common Stock............................................................... 49
ConAgra Common Stock............................................................................ 50
Voting Rights in Certain Cases.................................................................. 50
Rights Dividend................................................................................. 52
COMPARISON OF THE RIGHTS OF HOLDERS OF GOODMARK
COMMON STOCK AND CONAGRA COMMON STOCK................................................................. 53
Authorized Capital Stock........................................................................ 53
Common Stock.................................................................................... 54
Board Authorized Preferred Stock................................................................ 54
Voting Rights................................................................................... 54
Directors....................................................................................... 54
Dissenters' Rights.............................................................................. 55
Derivative Actions.............................................................................. 56
Amendment of Charter and By-Laws................................................................ 56
Advance Notice for Raising Business or Making Nominations at Annual Meetings.................... 57
Indemnification and Limitations of Liability.................................................... 58
Provisions Applicable to Business Combinations and Changes in Control........................... 60
Vote Required for Extraordinary Transactions.................................................... 61
Special Meetings of Stockholders................................................................ 62
Stockholder Consent in Lieu of Meeting.......................................................... 62
EXPERTS............................................................................................... 62
LEGAL MATTERS......................................................................................... 63
</TABLE>
LIST OF ANNEXES
ANNEX A AGREEMENT AND PLAN OF MERGER
vii
<PAGE>
ANNEX B OPINION OF INTERSTATE/JOHNSON LANE CORPORATION
ANNEX C ARTICLE 13 OF THE NORTH CAROLINA BUSINESS
CORPORATION ACT
viii
<PAGE>
SUMMARY
The following is a summary of certain information contained elsewhere or
incorporated by reference in this Proxy Statement/Prospectus. Reference is made
to, and this summary is qualified in its entirety by, the more detailed
information contained or incorporated by reference in this Proxy
Statement/Prospectus and the Annexes hereto. As used herein, unless the context
otherwise clearly requires: "GoodMark" refers to GoodMark Foods, Inc. and its
consolidated subsidiaries and "ConAgra" refers to ConAgra, Inc. and its
consolidated subsidiaries. Capitalized terms not defined in this Proxy
Statement/Prospectus have the respective meanings specified in the Merger
Agreement.
----------------
SHAREHOLDERS OF GOODMARK ARE URGED TO READ THIS PROXY STATEMENT/PROSPECTUS
AND THE ANNEXES HERETO IN THEIR ENTIRETY AND SHOULD CONSIDER CAREFULLY THE
INFORMATION SET FORTH BELOW ON PAGE ___ UNDER THE CAPTION "RISK FACTORS."
----------------
The Companies
ConAgra. ConAgra is a diversified international food company operating
across the food chain in three industry segments: Food Inputs & Ingredients,
Refrigerated Foods, and Grocery & Diversified Products.
In the Food Inputs & Ingredients segment, ConAgra's major crop inputs
business distributes crop protection chemicals, fertilizers and seeds at
wholesale and retail levels. In the ingredients sector, ConAgra primarily
processes, distributes and trades ingredients for food products and meat and
poultry production. ConAgra's ingredient processing businesses include flour,
oat and dry corn milling, tortilla manufacturing, barley malting, specialty food
ingredient manufacturing and marketing and feed ingredient merchandising.
ConAgra internationally trades grain, dry edible beans and peas, fertilizer and
other commodities. ConAgra's trading and processing businesses also include a
private label consumer products business and a pet products business. ConAgra
has Food Inputs & Ingredients operations in Canada, Australia, Europe, Asia and
Latin America, as well as in the U.S.
In the Refrigerated Foods segment, ConAgra produces and markets branded
processed meats and deli meats, fresh meat, poultry products, and cheese
products for retail, foodservice and export markets. ConAgra processed meat
products include hot dogs, bacon, ham, sausages, cold cuts, turkey products and
kosher products. ConAgra fresh meat products include beef, pork and lamb.
ConAgra's poultry businesses include chicken and turkey products. ConAgra's
cheese business includes cheese products and dessert toppings. Refrigerated
Foods brands include Armour, Butterball, Cook's, County Line, Country Pride,
Decker, Eckrich, Healthy Choice, Hebrew National and Swift Premium. ConAgra owns
Australia Meat Holdings Pty Ltd., a major Australian beef processor and
exporter.
In the Grocery & Diversified Products segment, ConAgra produces
shelf-stable and frozen foods for retail and foodservice markets. Shelf-stable
products include tomato products, cooking oils,
1
<PAGE>
popcorn, soup, puddings, canned beans, cocoa mixes, peanut butter and ethnic
products. Frozen foods include dinners, entrees, potato products, snacks, and
seafood. Grocery & Diversified Products brands include Act II, Banquet, Healthy
Choice, Hunt's, La Choy, Marie Callender's, Orville Redenbacher's, Peter Pan,
Snack Pack, Swiss Miss, Van Camp's and Wesson.
ConAgra is a Delaware corporation with executive offices located at One
ConAgra Drive, Omaha, Nebraska 68102-5001, telephone (402) 595-4000.
GoodMark. GoodMark manufactures consumer food products including meat
snacks and extruded grain snacks. GoodMark is a leading producer and marketer of
meat snacks in the United States. Its principal products are meat sticks, beef
jerky, kippered beef steak and pickled sausage sold under the SLIM JIM (R),
PENROSE (R), PEMMICAN (R) and ROUGH CUT (R) brand names. SLIM JIM meat sticks
are ready-to-eat dry sausage made of meat, spices and seasonings. GoodMark
markets over 30 different types of SLIM JIM meat sticks. SLIM JIM jerky is made
from beef which has been chopped, seasoned, formed, thinly sliced, and dried.
PEMMICAN natural style beef jerky is made from thinly-sliced beef which has been
seasoned, smoked and dried. PEMMICAN natural style jerky comes in several
flavors including natural, teriyaki, peppered and hickory. PENROSE beef and pork
products are sausages which are seasoned, cooked, pickled and packed in a
variety of sizes. ANDY CAPP'S extruded products are french fry shaped snacks
that are baked rather than fried from a grain and vegetable base and ANDY CAPP'S
are sold in three flavors: Hot, Cheddar and Salsa.
GoodMark is a North Carolina corporation with principal executive offices
located at 6131 Falls of Neuse Road, Raleigh, NC 27609, telephone (919)
790-9940.
Merger Sub. Merger Sub was incorporated in North Carolina solely for the
purpose of consummating the Merger and the other transactions contemplated by
the Merger Agreement and has engaged in no other business activities. Merger
Sub's principal executive offices are located at One ConAgra Drive, Omaha, NE
68102-5001 and its telephone number is (402) 595-4000.
Per Share Merger Consideration
Each share of GoodMark Common Stock outstanding immediately prior to the
Effective Time (other than shares, if any, owned by ConAgra, which will be
cancelled, and shares held by shareholders exercising dissenters' rights) will
be converted into the right to receive the Per Share Merger Consideration, that
is, such number of validly issued, fully paid and non-assessable shares of
ConAgra Common Stock determined by dividing $30 by the Average Trading Price. In
the event the Average Trading Price is greater than $31.75, the Average Trading
Price will, for purposes of determining the Per Share Merger Consideration, be
deemed to be $31.75 and, therefore, under such circumstances, each share of
GoodMark Common Stock will be converted into the right to receive no less than
.94488 shares of ConAgra Common Stock. In the event the Average Price is less
than $27.75, the Average Trading Price will, for purposes of determining the Per
Share Merger Consideration, be deemed to be $27.75, therefore, under such
circumstances, each share of GoodMark Common Stock will be converted into the
right to receive no more than 1.08108 shares of ConAgra Common Stock.
2
<PAGE>
The Special Meeting
Purpose. The Special Meeting will be held at GoodMark's executive offices,
6131 Falls of Neuse Road, Raleigh, North Carolina 27609 on _____________, ____,
1998, at 9:00 a.m., local time to consider and vote upon a proposal to approve
and adopt the Merger Agreement, which provides for the merger of Merger Sub with
and into GoodMark with GoodMark continuing as the surviving corporation and a
wholly-owned subsidiary of ConAgra. The GoodMark Shareholders will also consider
and take action upon any other business which may properly be brought before the
Special Meeting. See "THE SPECIAL MEETING--Purpose."
Record Date. Only holders of record of GoodMark Common Stock at the close
of business on June __, 1998 are entitled to receive notice of and to vote at
the Special Meeting. At the close of business on the Record Date, there were
7,214,254 shares of GoodMark Common Stock outstanding, each of which entitles
the registered holder thereof to one vote. See "THE SPECIAL MEETING--Record
Date; Voting Rights; Required Vote."
Required Vote. Approval and adoption of the Merger Agreement will require
the affirmative vote of the holders of shares representing at least a majority
of the GoodMark Common Stock issued and outstanding on the Record Date. An
abstention will not be counted as a vote cast and will have the effect of a vote
against approval and adoption of the Merger Agreement. Brokers who hold shares
of GoodMark Common Stock as nominees will not have discretionary authority to
vote such shares in the absence of instructions from the beneficial owners
thereof. Broker non-votes will not be counted as votes cast and will have the
effect of votes against approval and adoption of the Merger Agreement.
Stock Ownership of Management. At the close of business on the Record Date,
directors and executive officers of GoodMark and their affiliates were the
beneficial owners of an aggregate of 2,997,284 shares of GoodMark Common Stock,
or 39.0% of the voting power of the GoodMark Common Stock then outstanding.
Certain GoodMark Shareholders, including Ron E. Doggett, Chairman and Chief
Executive Officer of GoodMark and the other executive officers of GoodMark,
holding an aggregate of 2,500,240 shares of GoodMark Common Stock, or
approximately 34.6% of the voting power of GoodMark Common Stock as of the
Record Date, have entered into Voting Agreements pursuant to which, among other
things, such shareholders have agreed to vote all of the shares of GoodMark
Common Stock owned by them for the approval and adoption of the Merger
Agreement. The Voting Agreements will terminate on the earlier to occur of the
Effective Time or the termination of the Merger Agreement in accordance with its
terms. See "VOTING AGREEMENTS." See "THE SPECIAL MEETING--Stock Ownership of
Management."
No Vote By Stockholders of ConAgra
The holders of ConAgra Common Stock (in their capacities as such) do not
have rights to vote with respect to the Merger or Merger Agreement.
3
<PAGE>
Risk Factors
In considering whether to approve and adopt the Merger Agreement, the
GoodMark Shareholders should consider that: (i) the number of shares of ConAgra
Common Stock to be received as Per Share Merger Consideration will not be more
than 1.08108 shares of ConAgra Common Stock per share of GoodMark Common Stock
and will not be further adjusted in the event of any decrease in the Average
Trading Price below $27.75; (ii) GoodMark Shareholders will become stockholders
of ConAgra and the business of ConAgra is different from the business of
GoodMark; (iii) certain directors and officers of GoodMark have interests in the
Merger in addition to their interest as GoodMark Shareholders and (iv) the
Merger is conditioned upon the expiration or termination of the applicable
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
See "RISK FACTORS."
The Merger and the Merger Agreement
General. At the Effective Time of the Merger, Merger Sub will be merged
with and into GoodMark with GoodMark continuing as the surviving corporation and
a wholly-owned subsidiary of ConAgra in accordance with Section 55-11-06 of the
NCBCA. Upon the terms and subject to the conditions set forth in the Merger
Agreement, at the Effective Time, each share of GoodMark Common Stock
outstanding immediately prior to the Effective Time (other than shares, if any,
owned by ConAgra, which will be cancelled, and shares held by shareholders
exercising dissenters' rights under Article 13 of the NCBCA) will be converted
into the right to receive the Per Share Merger Consideration. Any fractional
shares of ConAgra Common Stock to which a GoodMark Shareholder is otherwise
entitled will be rounded to the nearest whole share of ConAgra Common Stock. See
"THE MERGER--General."
The Merger will become effective upon the filing of articles of merger
(the "Articles of Merger") with the Secretary of State of the State of North
Carolina unless the Articles of Merger provide for a later time. The filing of
the Articles of Merger will occur as soon as practicable following the
satisfaction or waiver of the conditions set forth in the Merger Agreement. See
"THE MERGER AGREEMENT--Conditions to Consummate the Merger."
Recommendation of the GoodMark Board. The GoodMark Board, by the unanimous
vote of all members, has determined that the Merger is in the best interests of
the GoodMark Shareholders and has approved the Merger Agreement. ACCORDINGLY,
THE GOODMARK BOARD RECOMMENDS THAT THE SHAREHOLDERS OF GOODMARK VOTE IN FAVOR OF
THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREUNDER, INCLUDING THE
MERGER. See "THE MERGER--Recommendation of the GoodMark Board of Directors."
Opinion of Interstate/Johnson Lane Corporation. Interstate/Johnson Lane
Corporation ("IJL") was engaged by GoodMark to serve as a financial advisor in
connection with the Merger. At the meeting of the GoodMark Board on June 17,
1998, IJL made a presentation to the GoodMark Board and rendered its written
opinion dated June 17, 1998 (the "IJL Opinion") to the GoodMark Board to the
effect that as of June 17, 1998, and based on and subject to certain
assumptions, limitations and qualifications, the Per Share Merger Consideration
was fair, from a financial point of view, to the GoodMark Shareholders. The full
text of the IJL Opinion, which sets forth the assumptions made, procedures
4
<PAGE>
followed, matters considered and limits of the review by IJL, is attached hereto
as Annex B and should be read carefully and in its entirety. A summary of the
material financial analyses considered and performed by IJL in connection with
providing the IJL Opinion is set forth under the caption "THE MERGER--Opinion of
Interstate/Johnson Lane Corporation."
Ownership Interest of GoodMark Shareholders After the Merger. Based on the
number of shares of GoodMark Common Stock outstanding on the Record Date and
assuming a Per Share Merger Consideration of one share of ConAgra Common Stock
for each share of GoodMark Common Stock, upon consummation of the Merger, there
will be approximately 485,000,000 shares of ConAgra Common Stock outstanding at
the Effective Time of which the GoodMark Shareholders (assuming exercise of the
GoodMark Options) will own approximately 1.6%.
Governmental and Regulatory Approvals. The consummation of the Merger is
conditioned upon the expiration or termination of the applicable waiting period
under the HSR Act. On June 23, 1998, GoodMark and ConAgra filed notification and
report forms under the HSR Act with the Federal Trade Commission (the "FTC") and
the Antitrust Division of the Department of Justice (the "Antitrust Division").
The HSR Act provides for an initial 30-calendar day waiting period following the
filing with the FTC and Antitrust Division. ConAgra and GoodMark have requested
early termination of the 30-day HSR Act waiting period. The HSR Act further
provides that if, within the initial 30-calendar day waiting period, the FTC or
the Antitrust Division issues a request for additional information or documents,
the waiting period will be extended until the 20th day after the date of
substantial compliance by the filing parties with such request. The applicable
waiting period under the HSR Act is anticipated to expire at 11:59 p.m. on July
24, 1998; however, notwithstanding the expiration of the waiting period under
the HSR Act, the FTC, the Antitrust Division, a state or a private person or
entity could seek under federal or state antitrust laws, among other things, to
enjoin or rescind the Merger. See "THE MERGER -- Governmental and Regulatory
Approvals."
Conditions to Consummate the Merger. The respective obligations of
GoodMark, ConAgra and Merger Sub to consummate the Merger are subject to the
satisfaction or waiver of certain closing conditions, including but not limited
to the approval of the Merger Agreement and the transactions contemplated
thereby by the requisite vote of the GoodMark Shareholders. See "THE MERGER
AGREEMENT--Conditions to Consummate the Merger."
Termination of the Merger Agreement. The Merger Agreement may be
terminated, and the Merger and the other transactions contemplated thereby may
be abandoned, at any time prior to the Effective Time, whether before or after
approval by the GoodMark Shareholders: (a) by mutual written consent of ConAgra
and GoodMark; (b) by either ConAgra or GoodMark, if (i) the Merger has not been
consummated on or before December 31, 1998; (ii) the GoodMark Shareholders do
not approve the Merger Agreement by the requisite vote at a meeting duly
convened therefor or any adjournment thereof; or (iii) if any permanent
injunction, order, decree or ruling by any governmental entity of competent
jurisdiction preventing the consummation of the Merger shall have become final
and non-appealable; provided, however, that the party seeking to terminate the
Merger Agreement has used reasonable best efforts to remove such injunction or
overturn such action; (c) by ConAgra, if (i) the number of shares of GoodMark
Common Stock dissenting from the Merger precludes accounting for the Merger as a
pooling-of-interests, (ii) there has been a material breach of the
representations or warranties, covenants or agreements of GoodMark set forth in
the Merger Agreement, which breach is not curable or, if curable, is not cured
within 30 days after written
5
<PAGE>
notice of such breach is given by ConAgra to GoodMark, or (iii) the GoodMark
Board (x) fails to convene a meeting of GoodMark Shareholders to approve the
Merger on or before 150 days following the date of the Merger Agreement, or
postpones the date scheduled for the meeting of the GoodMark Shareholders to
approve the Merger Agreement beyond that date, except with the written consent
of ConAgra, (y) fails to recommend the approval of the Merger Agreement and the
Merger to the GoodMark Shareholders in accordance with the Merger Agreement, or
(z) withdraws or amends or modifies in a manner adverse to ConAgra its
recommendation or approval in respect of the Merger Agreement or the Merger or
fails to reconfirm such recommendation within two business days of a written
request for such confirmation by ConAgra; (d) by GoodMark if GoodMark receives a
proposal with respect to any merger, consolidation, or other business
combination involving GoodMark, or the acquisition of all or any significant
part of the assets or capital stock of GoodMark (an "Acquisition Transaction")
and the GoodMark Board of Directors reasonably determines that such proposal is
superior to the transactions contemplated by the Merger Agreement (a "Superior
Proposal"), subject to certain conditions; and (e) by GoodMark if there has been
a breach of any of the representations or warranties, covenants or agreements of
ConAgra set forth in the Merger Agreement of such a magnitude that the closing
conditions cannot be satisfied, which breach is not curable or, if curable, is
not cured within 30 days after written notice of such breach is given by
GoodMark to ConAgra. See "THE MERGER AGREEMENT--Termination."
Fees and Expenses and Effect of Termination. If the Merger Agreement is
terminated under any of the following circumstances, GoodMark will be required
to pay ConAgra a fee of $9,400,000: (i) if ConAgra terminates the Merger
Agreement pursuant to subsections (c)(iii)(x) or (c)(iii)(y) in the above
paragraph; (ii) if GoodMark terminates the Merger Agreement pursuant to
subsection (d) in the above paragraph; or (iii) if ConAgra terminates the Merger
Agreement as a result of GoodMark's failure to perform certain covenants with
respect to the Merger qualifying for treatment as a pooling-of-interests for
accounting purposes, or if ConAgra or GoodMark terminates the Merger Agreement
pursuant to subsection (b)(ii) in the above paragraph, or if ConAgra terminates
the Merger Agreement pursuant to subsection (c)(i) or subsection (c)(iii)(z) in
the above paragraph and, in any such case, either prior to such termination or
within twelve months thereafter, GoodMark consummates an Acquisition Transaction
(or enters into an agreement with respect thereto or a tender offer or similar
transaction is commenced with respect thereto, and thereafter such Acquisition
Transaction is consummated) that involves consideration for the GoodMark
Shareholders of $24.00 or more per share.
In the event the Merger Agreement is terminated for any reason not
specified above (other than as a result of a breach by ConAgra), GoodMark will
reimburse ConAgra its actual expenses incurred in connection with the
transactions contemplated by the Merger Agreement (including, without
limitation, attorneys' fees and fees of financial advisors) in an amount up to
$500,000. If GoodMark terminates the Merger Agreement as a result of a breach by
ConAgra, ConAgra will reimburse GoodMark its actual expenses incurred in
connection with the transactions contemplated by the Merger Agreement
(including, without limitation, attorneys' fees and fees of financial advisors)
in an amount up to $500,000. See "THE MERGER AGREEMENT--Fees and Expenses and
Effect of Termination."
No Solicitation. GoodMark has agreed in the Merger Agreement that, prior
to the Effective Time, neither it nor any of its subsidiaries or affiliates
will, directly or indirectly, solicit or initiate any Acquisition Transaction or
negotiate or discuss an Acquisition Transaction with any third party;
6
<PAGE>
provided, however, GoodMark may, in response to an unsolicited Superior Proposal
of a third party, furnish information to, or negotiate or otherwise engage in
discussions with, such third party if the GoodMark Board determines in good
faith, based upon the advice of outside counsel, that such action is reasonably
necessary for the GoodMark Board to comply with its legal duties under
applicable law. See "THE MERGER AGREEMENT--No Solicitation."
Accounting Treatment. The Merger will be accounted for under the
"pooling-of-interests" method of accounting in accordance with generally
accepted accounting principles ("GAAP"). It is a condition to ConAgra's
obligation to consummate the Merger that it has received assurances reasonably
satisfactory to it that the transactions contemplated in the Merger Agreement
qualify for accounting treatment as a pooling-of-interests. See "THE MERGER
AGREEMENT--Conditions to Consummate the Merger."
Securities Law Considerations. All shares of ConAgra Common Stock to be
issued in the Merger will be freely transferable, except that shares received by
any person who may be deemed to be an "affiliate" (as used in paragraphs (c) and
(d) of Rule 145 under the Securities Act) ("Rule 145"), including, without
limitation, directors and executive officers of GoodMark, for purposes of such
Rule 145, may be resold only (i) in transactions permitted by Rule 145 or as
otherwise permitted under the Securities Act and (ii) in compliance with
requirements for pooling-of-interests accounting treatment. See "THE
MERGER--Resales of ConAgra Common Stock."
Certain U.S. Federal Income Tax Considerations
The Merger is intended to qualify as a tax-free transaction for U.S.
federal income tax purposes; however, no ruling has been (or will be) sought
from the Internal Revenue Service (the "IRS") as to the anticipated U.S. federal
income tax consequences of the Merger. It is a condition to the consummation of
the Merger that GoodMark receive an opinion from its counsel, Smith, Anderson,
Blount, Dorsett, Mitchell & Jernigan, L.L.P. ("Smith Anderson"), substantially
to the effect that based upon certain facts, representations and assumptions,
the Merger will qualify as a reorganization within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code"). However, GoodMark
is entitled to waive this condition. See "CERTAIN U.S. FEDERAL INCOME TAX
CONSIDERATIONS" and "THE MERGER AGREEMENT--Conditions to Consummate the Merger."
Voting Agreements
Pursuant to the Voting Agreements, certain GoodMark Shareholders,
including Ron E. Doggett, Chairman and Chief Executive Officer and the principal
shareholder of GoodMark, and the other executive officers of GoodMark, owning
2,500,240 shares of GoodMark Common Stock as of the Record Date, representing
approximately 34.6% of the voting power of the GoodMark Common Stock then
outstanding, have agreed to vote, with respect to all of the shares of GoodMark
Common Stock owned by them, for the approval and adoption of the Merger
Agreement and the transactions contemplated thereby. The Voting Agreements will
terminate on the earlier to occur of the Effective Time or the termination of
the Merger Agreement in accordance with its terms. In addition, under the Voting
Agreements, such Shareholders have agreed not to transfer their shares of
GoodMark Common Stock, except to certain permitted transferrees as set forth in
the Voting Agreements. Moreover, such Shareholders have agreed in the Voting
Agreements that neither they nor any of their
7
<PAGE>
agents or representatives will, directly or indirectly, solicit or initiate any
Acquisition Transaction or negotiate or discuss any Acquisition Transaction. See
"VOTING AGREEMENTS."
Comparative Rights of Stockholders
See "COMPARISON OF THE RIGHTS OF HOLDERS OF GOODMARK COMMON STOCK AND
CONAGRA COMMON STOCK" for a summary of the material differences between the
rights of holders of GoodMark Common Stock and the rights of holders of ConAgra
Common Stock.
Dissenters' Rights
The holders of shares of GoodMark Common Stock who vote against or abstain
from voting on approval of the Merger Agreement and file a demand for appraisal
prior to the Special Meeting have the right to receive a cash payment from
Goodmark for the fair value of their shares of GoodMark Common Stock (exclusive
of any appreciation or depreciation in anticipation of the Merger unless
exclusion would be inequitable). In order to exercise such rights, a holder of
shares of GoodMark Common Stock must comply with the requirements set forth in
Article 13 of the NCBCA, the full text of which is set forth as Annex C to this
Proxy Statement/Prospectus. See "DISSENTERS' RIGHTS."
If the number of dissenting GoodMark Shareholders precludes the Merger
from qualifying for accounting treatment as a pooling-of-interests, ConAgra will
have no obligation to consummate the Merger. See "THE MERGER
AGREEMENT--Conditions to Consummate the Merger."
8
<PAGE>
SELECTED HISTORICAL FINANCIAL INFORMATION OF CONAGRA
The following summary historical financial information should be read in
conjunction with the historical financial statements and accompanying notes that
ConAgra has included in its annual report on Form 10-K for the year ended May
25, 1997 and its quarterly report on Form 10-Q for the thirteen and thirty-nine
weeks ended February 22, 1998 incorporated by reference herein. See "AVAILABLE
INFORMATION" and "INCORPORATION OF DOCUMENTS BY REFERENCE."
<TABLE>
39 WEEKS ENDED
FEB. 22 FEB. 23 FISCAL YEAR ENDED MAY
------------------------------------------
----------------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
(In Millions, Except Per Share Data)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Net Sales(1) .............. $ 17,959.0 $ 18,206.8 $ 24,002.1 $ 23,899.3 $ 23,425.8 $ 23,095.8 $ 21,194.3
Income from continuing
operations ................ 459.3 428.5 615.0 188.9(2) 495.6 437.1 391.5
Income per basic share
from continuing ........... 0.80
operations(3) ............. 1.02 0.95 1.36 0.40(2) 1.04 0.91
Income per diluted share
from continuing
operations(3) ............. 1.00 0.93 1.34 0.39(2) 1.02 0.90 0.79
Cash dividends per share(3) 0.45 0.39 0.53 0.46 0.40 0.35 0.30
BALANCE SHEET DATA:
Total Assets .............. $ 12,643.9 $ 12,177.6 $11,277.1 11,196.6 10,801.0 10,721.8 9,988.7
Long-term obligations and
redeemable preferred stock 2,442.5 $ 2,333.5 2,355.7 2,262.9 2,874.9 2,562.4 2,515.1
(1) Beginning in fiscal 1997, international fertilizer sales are restated
on a gross margin basis rather than an invoice basis, consistent with
the manner in which ConAgra accounts for sales in comparable
businesses. Sales in fiscal 1993 through 1996 have been restated
accordingly.
(2) 1996 amounts include non-recurring charges: before tax, $507.8 million;
after tax, $356.3 million, or $0.79 per basic earnings per share and
$0.78 per diluted earnings per share.
(3) On July 11, 1997, ConAgra's Board of Directors declared a two-for-one
split of the ConAgra Common Stock in the form of a stock dividend
effected on October 1, 1997. All per share data have been restated to
reflect the stock split for all periods presented.
</TABLE>
9
<PAGE>
SELECTED HISTORICAL FINANCIAL INFORMATION OF GOODMARK
The following summary historical financial information should be read in
conjunction with the historical financial statements and accompanying notes that
Goodmark has included in its annual report on Form 10-K for the year ended May
25, 1997 and its quarterly report on Form 10-Q for the thirteen and thirty-weeks
ended February 22, 1998 incorporated by reference herein. See "AVAILABLE
INFORMATION" and "INCORPORATION OF DOCUMENTS BY REFERENCE."
<TABLE>
39 WEEKS ENDED
FEB. 22 FEB. 23 FISCAL YEAR ENDED MAY
-------------------------------
-----------------------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
(In Millions, Except Per Share Data)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Net Sales................... $ 123.0 $ 118.8 $ 161.0 $ 157.7 $ 156.8 $ 138.6 $ 120.5
Income from continuing
operations(1)............... 6.7 4.5 5.9 6.1 7.8 5.3 3.2
Income per basic share from
continuing operations....... 0.94 0.59 0.79 0.79 1.01 0.66 0.38
Income per diluted share
from continuing operations.. 0.91 0.57 0.77 0.76 0.98 0.65 0.37
Cash dividends per share.... 0.18 0.15 0.20 0.16 0.12 0.10 --
BALANCE SHEET DATA:
Total assets................ 83.7 87.5 84.7 85.0 86.8 59.6 57.7
Long-term obligations.......
15.2 21.5 18.3 17.8 20.2 5.5 4.5
(1) On March 17, 1997, GoodMark decided to discontinue the operations
comprising its Jesse Jones packaged meats business. Accordingly, the
operations of the discontinued business have been excluded from the income
from continuing operations. Income (loss) from discontinued operations,
net of tax was $(437,000), $578,000, $1,760,000, $1,776,000, $1,608,000
and $20,000 for the fiscal years ended May 25, 1997, May 26, 1996, May 29,
1995, May 30, 1994, May 31, 1993 and the thirty-nine weeks ended February
23, 1997, respectively.
</TABLE>
10
<PAGE>
COMPARATIVE PER SHARE DATA OF CONAGRA AND GOODMARK
The following table sets forth certain historical per share data of
ConAgra and Goodmark and combined per share data on an unaudited pro forma
combined basis and on a per share equivalent pro forma combined basis after
giving effect to the Merger using the pooling-of-interests basis of accounting.
Pro forma earnings per share and book value per share have been calculated
assuming that 1.00 share of ConAgra Common Stock is issued in exchange for each
share of Goodmark Common Stock outstanding. The information set forth below
should be read in conjunction with the selected historical financial data
included elsewhere in this Proxy Statement/Prospectus, and the separate
historical financial statements of ConAgra and Goodmark and the notes thereto,
incorporated by reference herein. The unaudited pro forma combined financial
data are not necessarily indicative of the operating results or financial
position that would have been achieved had the Merger been in effect as of the
beginning of the periods presented and should not be construed as representative
of future operations.
<TABLE>
39 WEEKS ENDED FISCAL YEAR ENDED MAY
FEB. 22, 1998 1997 1996 1995
CONAGRA
<S> <C> <C> <C> <C>
Historical Per Common Share:
Income per basic share from continuing operations...... $ 1.02 $ 1.36 $ 0.40 $ 1.04
Income per diluted share from continuing operations.... 1.00 1.34 0.39 1.02
Cash dividends per share............................... 0.45 0.53 0.46 0.40
Book Value per share (1)............................... 5 83 5.49 4.96 5.51
Pro Forma Combined per share of ConAgra Common Stock: (2)
Income per basic share from continuing operations...... 1.02 1.35 0.41 1.04
Income per diluted share from continuing operations.... 1.00 1.33 0.40 1.02
Cash dividends per share............................... 0.45 0.53 0.46 0.40
Book Value per share (1)............................... 5.84 5.51 4.99 5.52
39 WEEKS ENDED FISCAL YEAR ENDED MAY
FEB 22, 1998 1997 1996 1995
GOODMARK
Historical Per Common Share:
Income per basic share from continuing operations...... $ 0.94 $ 0.79 $ 0.79 $ 1.01
Income per diluted share from continuing operations.... 0.91 0.77 0.76 0.98
Cash dividends per share............................... 0.18 0.20 0.16 0.12
Book Value per share (1)............................... 6.89 6.48 6.43 5.97
Pro Forma Combined per share of ConAgra Common Stock: (2)
Income per basic share from continuing operations...... 1.02 1.35 0.41 1.04
Income per diluted share from continuing operations.... 1.00 1.33 0.40 1.02
Cash dividends per share............................... 0.45 0.53 0.46 0.40
Book Value per share (1)............................... 5.84 5.51 4.99 5.52
- -----------
(1) Historical book value per common share is computed by dividing
shareholders' equity for ConAgra and GoodMark by the number of shares of
common stock outstanding at the end of each period for ConAgra and
GoodMark, respectively. Pro forma book value per common share is computed
by dividing pro forma shareholders' equity by the pro forma number of
shares of common stock outstanding at the end of the period.
(2) Pursuant to the Merger Agreement, holders of GoodMark Common Stock will
receive between .94488 and 1.08108 shares of ConAgra Common Stock for each
share of GoodMark Common Stock they hold. The pro forma information has
been prepared as if each holder of GoodMark Common Stock received 1.00
share of ConAgra Common Stock for each share of GoodMark
</TABLE>
11
<PAGE>
Common Stock they hold. The effect of GoodMark Shareholders receiving
between .94488 and 1.08108 shares of ConAgra Common Stock would not
change the above pro forma income per share information.
12
<PAGE>
ConAgra Earnings Per Share Computation
Statement of Financial Accounting Standards No. 128, adopted by ConAgra,
requires the presentation of basic and diluted earnings per share and replaces
the prior presentation of primary and fully diluted earnings per share. Basic
earnings per share is calculated on the basis of weighted average outstanding
common shares, after giving effect to preferred stock dividends. Diluted
earnings per share is computed on the basis of weighted average outstanding
common shares, outstanding options that are dilutive, and equivalent shares
assuming conversion of outstanding convertible securities, where dilutive.
Earnings per share are restated for the periods below in accordance with
SFAS 128 and are adjusted to reflect a two-for-one stock split effective October
1, 1997:
<TABLE>
(In millions, except per share amounts)
Fiscal Year Ended
------------------------------------------------------------------------------------
May 30, May 29, May 28, May 26, May 25,
1993 1994 1995 1996(1) 1997
<S> <C> <C> <C> <C> <C>
Computation of basic earnings per share:
Income before cumulative effect of
change in accounting principle $ 391.5 $ 437.1 $ 495.6 $ 188.9 $ 615.0
Less preferred dividends 24.0 24.0 24.0 8.6 -
--------- --------- ------- --------- ---------
Income available to common stock
before cumulative effect of change in
accounting principle 367.5 413.1 471.6 180.3 615.0
Cumulative effect of change in
accounting principle(2) (121.2) - - - -
--------- --------- ------- --------- ---------
Income available to common stock $ 246.3 $ 413.1 $ 471.6 $ 180.3 $ 615.0
--------- --------- ------- --------- ---------
Weighted average common shares outstanding 460.5 453.3 453.0 451.3 451.3
--------- --------- ------- ---------- ---------
Basic earnings per share:
Before cumulative effect of change in
accounting principle $ 0.80 $ 0.91 $ 1.04 $ 0.40 $ 1.36
Cumulative effect of change in accounting
principle(2) (0.26) - - -
Basic earnings per share $ 0.54 $ 0.91 $ 1.04 $ 0.40 $ 1.36
---------- --------- -------- --------- ----------
Computation of diluted earnings per share:
Income available to common stock before
cumulative effect of change in accounting
principle $ 367.5 $ 413.1 $ 471.6 $ 180.3 $ 615.0
Add dividends on convertible preferred
stock where dilutive - 24.0 24.0 - -
--------- --------- -------- --------- ----------
Net income available to common stock
before cumulative effect of change in
accounting principle assuming full dilution 367.5 437.1 495.6 180.3 615.0
Cumulative effect of change in accounting
principle(2) (121.2) - - - -
--------- --------- -------- ---------- ----------
Net income applicable to common stock
assuming full dilution $ 246.3 $ 437.1 $ 495.6 $ 180.3 $ 615.0
--------- --------- -------- ---------- ----------
13
<PAGE>
Weighted average common shares outstanding 460.5 453.3 453.0 451.3 451.3
Add shares applicable to stock options 5.4 3.7 4.9 7.6 7.7
Add shares assumed issued for convertible
preferred stock where dilutive - 29.3 29.3 - -
---------- ----------- ---------- ----------- ---------
Weighted average common and common
equivalent shares assuming full dilution 465.9 486.3 487.2 458.9 459.0
---------- ------------ ---------- ----------- ---------
Diluted earnings per share:
Before cumulative effect of change in
accounting principle $ 0.79 $ 0.90 $ 1.02 $ 0.39 $ 1.34
Cumulative effect of change in accounting
principle(2) (0.26) - - - -
---------- ----------- ---------- ----------- --------
Diluted earnings per share $ 0.53 $ 0.90 $ 1.02 $ 0.39 $ 1.34
---------- ----------- ---------- ----------- ---------
(1) 1996 includes non-recurring charges of $0.79 and $0.78 for basic and diluted earnings per share, respectively.
--
(2) Cumulative effect relates to adoption of EITF No. 97-13, which requires
business process reengineering costs associated with computer systems
development to be expensed as incurred. Previously ConAgra had capitalized
such costs as development costs.
</TABLE>
14
<PAGE>
GoodMark Earnings Per Share Computation
Statement of Financial Accounting Standards No. 128, adopted by GoodMark,
requires the presentation of basic and diluted earnings per share and replaces
the prior presentation of primary and fully diluted earnings per share. Basic
earnings per share is calculated on the basis of weighted average outstanding
common shares. Diluted earnings per share is computed on the basis of weighted
average outstanding common shares and outstanding options that are dilutive.
Earnings per share are restated for the periods below in accordance with
SFAS 128 and are adjusted to reflect a two-for-one stock split effective June
27, 1994.
<TABLE>
(In thousands, except per share amounts)
Fiscal Year Ended
-------------------------------------------------------------------
May 31, May 30, May 29, May 26, May 25,
1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
Computation of basic earnings per share:
Income from continuing operations ........... $ 3,248 $ 5,338 $ 7,838 $ 6,121 $ 5,931
Income (loss) from discontinued
operations, net of tax .................... 1,608 1,776 1,760 578 (437)
Cumulative effect of accounting change(1) ... -- (211) -- -- --
--------- ------- ------- ------- -------
Income available to common stock ............ $ 4,856 $ 6,903 $ 9,598 $ 6,699 $ 5,494
--------- ------- ------- ------- -------
Weighted average common shares outstanding ......... 8,638 8,044 7,723 7,745 7,484
--------- ------- ------- ------- -------
Basic earnings per share:
Income from continuing operations ........... $ 0.38 $ 0.66 $ 1.01 $ 0.79 $ 0.79
Income (loss) from discontinued
operations, net of tax .................... 0.19 0.22 0.23 0.07 (0.06)
Cumulative effect of accounting change(1) ... -- (0.03) -- -- --
--------- ------- ------- ------- -------
Basic earnings per share .................... $ 0.57 $ 0.85 $ 1.24 $ 0.86 $ 0.73
--------- ------- ------- ------- -------
Computation of diluted earnings per share:
Weighted average common shares outstanding ......... 8,638 8,044 7,723 7,745 7,484
Add shares applicable to stock options ........ 51 119 295 310 266
Weighted average common and common --------- ------- ------- ------- -------
equivalent shares assuming full dilution 8,689 8,163 8,018 8,055 7,750
- ---------------------------------------------------- --------- ------- ------- ------- -------
Diluted earnings per share:
Income from continuing operations ........... $ 0.37 $ 0.65 $ 0.98 $ 0.76 $ 0.77
Income (loss) from discontinued operations,
net of tax .................................. 0.19 0.22 0.22 $ 0.07 $ (0.06)
Cumulative effect of accounting change(1) ... (0.03)
--------- ------- ------- ------- -------
Diluted earnings per share .................. $ 0.56 $ 0.84 $ 1.20 $ 0.83 $ 0.71
--------- ------- ------- ------- -------
(1) Cumulative effect relates to the adoption of SFAS 109, "Accounting for Income Taxes."
</TABLE>
15
<PAGE>
MARKET PRICES AND DIVIDENDS PAID
GoodMark Common Stock trades on the Nasdaq National Market symbol
"GDMK"), and ConAgra Common Stock trades on the NYSE (symbol "CAG"). The table
below sets forth, for the fiscal quarters indicated, the high and low sales
prices per share reported by the Nasdaq National Market and the NYSE Composite
List, and dividends paid for the GoodMark Common Stock and the ConAgra Common
Stock. ConAgra price and dividend amounts have been restated to reflect a
two-for-one stock split effected in the form of a dividend on October 1, 1997.
<TABLE>
GoodMark Common Stock ConAgra Common Stock
--------------------- --------------------
High Low Per Share High Low Per Share
Dividends Dividends
<S> <C> <C> <C> <C> <C> <C>
1997:
First Quarter $ 16.25 $ 13.25 $ .05 $ 23.69 $ 20.69 $ .11875
Second Quarter $ 17.25 $ 15.25 $ .05 $ 26.50 $ 20.75 $ .13625
Third Quarter $ 18.75 $ 14.63 $ .05 $ 27.63 $ 24.19 $ .13625
Fourth Quarter $ 15.25 $ 12.00 $ .05 $ 30.75 $ 25.75 $ .13625
1998:
First Quarter: $ 19.50 $ 12.88 $ .06 $ 35.81 $ 29.63 $ .13625
Second Quarter: $ 17.50 $ 15.63 $ .06 $ 37.25 $ 28.69 $ .15625
Third Quarter: $ 19.50 $ 16.00 $ .06 $ 38.75 $ 27.00 $ .15625
Fourth Quarter: $ 24.75 $ 17.25 $ .06 $ 32.88 $ 27.88 $ .15625
1999:
First Quarter:
(through June __, 1998)
</TABLE>
On June 16, 1998, the last trading day prior to the announcement of the
Merger Agreement, the last reporting sale price of ConAgra Common Stock as
reported on the NYSE Composite Transaction List, was $31.75 per share and the
last reported sale price of GoodMark Common Stock, as reported on the Nasdaq
National Market, was $22.125 per share. On ____________, 1998, the last trading
day prior to the mailing of this Proxy Statement/Prospectus, the last reported
sale price of ConAgra Common Stock as reported on the NYSE Composite Transaction
List, was $_____ per share and the last reported sale price of GoodMark Common
Stock, as reported on the Nasdaq National Market was $_____ per share.
16
<PAGE>
RISK FACTORS
Limits on Per Share Merger Consideration
The number of shares of ConAgra Common Stock to be received as Per
Share Merger Consideration will not be less than .94488 nor more than 1.08108
shares of ConAgra Common Stock per share of GoodMark Common Stock
notwithstanding the market price of the ConAgra Common Stock. In the event the
Average Trading Price is greater than $31.75, the Average Trading Price will,
for purposes of determining the Per Share Merger Consideration, be deemed to be
$31.75, and in the event the Average Trading Price is less than $27.75, the
Average Trading Price will, for purposes of determining the Per Share Merger
Consideration, be deemed to be $27.75. Accordingly, in the event the Average
Trading Price is less than $27.75, the Per Share Merger Consideration will not
increase above 1.08108 shares of ConAgra Common Stock for each share of GoodMark
Common Stock, and there are no termination rights for GoodMark Shareholders in
the event the Average Trading Price is less than $27.75. If the Closing had
occurred on June 17, 1998, the date on which the Merger Agreement was executed
by ConAgra and GoodMark, the Average Trading Price for purposes of determining
the Per Share Merger Consideration would have been $30.06250, resulting in each
outstanding share of GoodMark Common Stock being converted into .99792 share of
ConAgra Common Stock. If the Closing had occurred on _______, 1998, the last
trading date prior to the mailing of this Proxy Statement/Prospectus, the
Average Trading Price for purposes of determining the Per Share Merger
Consideration would have been $____, resulting in each outstanding share of
GoodMark Common Stock being converted into _____ share of ConAgra Common Stock.
Stock Ownership in ConAgra
Upon completion of the Merger, holders of GoodMark Common Stock will
become holders of ConAgra Common Stock. ConAgra's business is different from
that of GoodMark, and ConAgra's results of operations, as well as the price of
ConAgra Common Stock, will be affected by many factors different from those
affecting GoodMark's results of operations and the price of GoodMark Common
Stock. See "MARKET PRICES AND DIVIDENDS PAID."
Interests of Certain Persons in the Merger
In considering the recommendation of the approval and adoption of the
Merger Agreement by the GoodMark Board, the GoodMark Shareholders should be
aware that certain directors and executive officers of GoodMark have interests
in the Merger in addition to their interests as GoodMark Shareholders; and that
such interests, together with other relevant factors, were considered by the
GoodMark Board in recommending the approval and adoption of the Merger Agreement
and the consummation of the transactions contemplated thereby to the GoodMark
Shareholders. See "THE MERGER--Interests of Certain Persons in the Merger."
Need for Government Approvals; Possible Operating Restrictions
The consummation of the Merger is conditioned upon the expiration or
termination of the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976. ConAgra and GoodMark each has requested
early termination of the HSR Act waiting period.
17
<PAGE>
GoodMark and ConAgra are seeking to obtain all required regulatory approvals
prior to the Special Meeting; however, no assurances can be given that required
regulatory approvals will be obtained on that timetable or that restrictions on
the combined company will not be sought by governmental agencies as a condition
to obtaining such approvals. There can be no assurance that any operating
restrictions imposed would not adversely affect the value of the combined
company. See "THE MERGER--Governmental and Regulatory Approvals."
THE SPECIAL MEETING
Purpose
This Proxy Statement/Prospectus is being furnished to the GoodMark
Shareholders in connection with the solicitation of proxies by the GoodMark
Board for use at the Special Meeting.
At the Special Meeting, the GoodMark Shareholders will consider and
vote upon a proposal to approve and adopt the Merger Agreement, which provides
for the merger of Merger Sub with and into GoodMark, with GoodMark continuing as
the surviving corporation and a wholly owned subsidiary of ConAgra. The GoodMark
Shareholders will also consider and take action upon any other business which
may properly be brought before the Special Meeting.
The GoodMark Board has, by a unanimous vote of all members, determined that
the Merger is in the best interests of the GoodMark Shareholders and has
approved the Merger Agreement. ACCORDINGLY, THE GOODMARK BOARD RECOMMENDS THAT
THE SHAREHOLDERS OF GOODMARK VOTE IN FAVOR OF THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREUNDER, INCLUDING THE MERGER. See "THE
MERGER--Recommendation of the GoodMark Board of Directors." For a discussion of
the interests that certain directors and executive officers of GoodMark have
with respect to the Merger, in addition to their interests as GoodMark
Shareholders generally, see "THE MERGER--Interests of Certain Persons in the
Merger." Such interests, together with other relevant factors, were considered
by the GoodMark Board in making its recommendation and approving the Merger
Agreement.
Record Date; Voting Rights; Required Vote
Only holders of record of GoodMark Common Stock at the close of business on
the Record Date, June __, 1998, are entitled to receive notice of and to vote at
the Special Meeting. At the close of business on the Record Date, there were
7,214,254 shares of GoodMark Common Stock outstanding, each of which entitles
the registered holder thereof to one vote.
Approval and adoption of the Merger Agreement will require the affirmative
vote at the Special Meeting of the holders of shares representing at least a
majority of the GoodMark Common Stock issued and outstanding on the Record Date.
18
<PAGE>
Stock Ownership of Management
At the close of business on the Record Date, directors and executive
officers of GoodMark and their affiliates were the beneficial owners of an
aggregate of 2,997,284 shares of GoodMark Common Stock or 39.0% of the voting
power of the GoodMark Common Stock then outstanding.
At the close of business on the Record Date, certain GoodMark Shareholders,
including Ron E. Doggett, Chairman and Chief Executive Officer, and the other
executive officers of GoodMark, owned an aggregate of 2,500,240 shares of
GoodMark Common Stock or approximately 34.6% of the voting power of the GoodMark
Common Stock. Pursuant to the Voting Agreements, such shareholders have agreed
to vote all of the shares of GoodMark Common Stock owned by them for the
approval and adoption of the Merger Agreement. The Voting Agreements will
terminate on the earlier to occur of the Effective Time or the termination of
the Merger Agreement in accordance with its terms. See "VOTING AGREEMENTS."
Quorum
The presence, in person or by properly executed proxy, of the holders of a
majority of the votes represented by the issued and outstanding shares of
GoodMark Common Stock, considered as a single class, is necessary to constitute
a quorum at the Special Meeting.
Shares of GoodMark Common Stock represented by proxies which are marked
"abstain" will be counted as shares present for purposes of determining the
presence of a quorum on all matters, as will shares of GoodMark Common Stock
that are represented by proxies that are executed by any broker, fiduciary or
other nominee on behalf of the beneficial owner(s) thereof regardless of whether
authority to vote is withheld by such broker, fiduciary or nominee on one or
more matters.
In the event that a quorum is not present at the Special Meeting, it is
expected that such meeting will be adjourned or postponed to solicit additional
proxies.
Proxies
All shares of GoodMark Common Stock represented by properly executed
proxies in the enclosed form which are received in time for the Special Meeting
and have not been revoked will be voted in accordance with the instructions
indicated in such proxies. If no instructions are indicated, such shares will be
voted FOR approval and adoption of the Merger Agreement.
An abstention will have the effect of a vote against approval and adoption
of the Merger Agreement. Brokers who hold shares of GoodMark Common Stock as
nominees will not have discretionary authority to vote such shares in the
absence of instructions from the beneficial owners thereof. Any shares which are
not voted because the nominee-broker lacks such discretionary authority will be
counted for purposes of determining a quorum at the Special Meeting, but will
have the effect of votes cast against the approval and adoption of the Merger
Agreement.
GoodMark does not know of any matter not described in the Notice of Special
Meeting that is expected to come before the Special Meeting. If, however, any
other matters are properly presented for action at the Special Meeting, the
persons named in the enclosed form of proxy and
19
<PAGE>
acting thereunder will have the discretion to vote on such matters in accordance
with their best judgment, unless such authority is withheld.
Any proxy in the enclosed form may be revoked by the shareholder
executing it at any time prior to its exercise by giving written notice thereof
to the Secretary of GoodMark, by signing and returning a later dated proxy or by
voting in person at the Special Meeting. No such revocation shall be effective,
however, until such notice of revocation has been received by GoodMark at or
prior to the Special Meeting. Attendance at the Special Meeting will not in and
of itself constitute the revocation of a proxy.
Authorization to Vote on Adjournment and Other Matters
By signing a proxy, a GoodMark Shareholder will be authorizing the
proxyholder to vote in his discretion regarding any procedural motions which may
come before the Special Meeting. For example, this authority could be used to
adjourn the Special Meeting if GoodMark believes it is desirable to do so.
Adjournment or other procedural matters could be used to obtain more time before
a vote is taken in order to solicit additional proxies or to provide additional
information to Shareholders. GoodMark has no plans to adjourn the meeting at
this time, but intends to do so, if needed, to promote Shareholder interests.
Solicitation of Proxies
Proxies are being solicited hereby on behalf of the GoodMark Board.
Except as otherwise provided in the Merger Agreement, the entire cost of proxy
solicitation for the Special Meeting, including the reasonable expenses of
brokers, fiduciaries and other nominees in forwarding solicitation material to
beneficial owners, will be borne by GoodMark. In addition to the use of the
mail, solicitation may be made by telephone or otherwise by officers and regular
employees of GoodMark. Such officers and regular employees will not be
additionally compensated for such solicitation, but may be reimbursed for
out-of-pocket expenses incurred in connection therewith. If undertaken, the
expense of such solicitation would be nominal.
Dissenters' Rights
The holders of shares of ConAgra Common Stock (in their capacities as
such) will not have rights as dissenting stockholders by reason of the Merger.
The holders of shares of GoodMark Common Stock who vote against or
abstain from voting on approval of the Merger Agreement and file a written
demand for appraisal prior to the GoodMark Special Meeting have the right to
receive a cash payment from Goodmark for the fair value of their shares of
GoodMark Common Stock (exclusive of any appreciation or depreciation in
anticipation of the Merger unless exclusion would be inequitable). In order to
exercise such rights, a holder of shares of GoodMark Common Stock must comply
with the requirements set forth in Article 13 of the NCBCA, the full text of
which is set forth as Annex C to this Proxy Statement/Prospectus. See
"DISSENTERS' RIGHTS."
20
<PAGE>
STOCKHOLDERS SHOULD NOT FORWARD ANY STOCK CERTIFICATES WITH THEIR PROXY
CARDS. A TRANSMITTAL FORM WITH INSTRUCTIONS FOR THE SURRENDER OF STOCK
CERTIFICATES WILL BE MAILED TO STOCKHOLDERS SHORTLY AFTER THE EFFECTIVE TIME.
21
<PAGE>
THE MERGER
The description of the Merger and the Merger Agreement contained in
this Proxy Statement/Prospectus does not purport to be complete and is qualified
in its entirety by reference to the Merger Agreement, a copy of which is
attached hereto as Annex A and incorporated herein by reference.
General
At the Effective Time of the Merger, Merger Sub will be merged with and
into GoodMark with GoodMark continuing as the Surviving Corporation and a wholly
owned subsidiary of ConAgra. Upon the terms and subject to the conditions set
forth in the Merger Agreement, at the Effective Time, each share of GoodMark
Common Stock outstanding immediately prior to the Effective Time (other than
shares, if any, owned by ConAgra, which will be cancelled, and shares held by
stockholders exercising dissenters' rights under the NCBCA) will be converted
into the right to receive the Per Share Merger Consideration. Any fractional
shares of ConAgra Common Stock to which a GoodMark Shareholder would otherwise
be entitled will be rounded to the nearest whole share.
The Merger will become effective upon the filing of Articles of Merger
with the Secretary of State of the State of North Carolina unless the Articles
of Merger provide for a later date of effectiveness. The filing of the Articles
of Merger will occur as soon as practicable following the satisfaction or waiver
of the conditions set forth in the Merger Agreement. See THE MERGER
AGREEMENT--Conditions to Consummate the Merger."
Background of the Merger
General. GoodMark's long-term strategy has been to sustain its internal
growth and increase its product offerings, manufacturing expertise and
geographic reach in order to remain competitive in the snack foods industry,
particularly meat snacks. At the same time, other larger, better capitalized
companies in the snack foods industry have continued to grow, both internally
and through acquisitions, especially in the international realm. Periodically,
GoodMark has been informally approached in the past by companies, including
ConAgra, that have expressed preliminary interest in a potential business
combination with GoodMark, which GoodMark has rejected, consistent with its
strategic plan.
In recent months, however, the GoodMark Board and management of
GoodMark considered becoming part of a larger company as a way to facilitate its
further growth and enable it to enhance its ability to expand into new markets.
The GoodMark Board's consideration of these strategic issues were, in part,
influenced by an informal meeting in ConAgra's Omaha, Nebraska offices in
November 1997 in which ConAgra indicated to GoodMark management that it had some
interest in exploring a joint venture, business combination or other transaction
with GoodMark. GoodMark management's response was that it would need
significantly more information about ConAgra before it would consider any such
transaction. In February 1998, Bruce Rohde, ConAgra's President and Chief
Executive Officer, visited GoodMark's offices in Raleigh, North Carolina and met
with Ron Doggett, GoodMark's Chairman and Chief Executive Officer, to follow-up
on the November 1997 meeting in Omaha and to discuss ConAgra's interest in
pursuing a business transaction with
22
<PAGE>
GoodMark. No offer was made by ConAgra, nor were terms discussed, at either of
these meetings, but following these contacts and as part of its ongoing
consideration of its long-term strategy, the GoodMark Board decided that further
consideration should be given to becoming part of a larger organization,
although no decision was made to do so. As a result, the GoodMark Board
authorized management and HT Capital Advisors, LLC ("HT Capital"), the president
and a principal of which is Eric J. Lomas, a GoodMark director (See "THE
MERGER--Interests of Certain Persons in the Merger"), to pursue parties
potentially interested in a combination with GoodMark. Subsequently, in March
1998 GoodMark entered into an agreement with HT Capital to render financial,
advisory and investment banking services in connection with the Board's
direction to pursue possible business combinations. HT Capital was chosen
because of its familiarity with GoodMark and the snack foods industry over many
years.
GoodMark's Contacts with and Responses to Third Parties. At a Board meeting
held on March 23, 1998, management of GoodMark and HT Capital reported that the
process of considering potential merger parties had begun. After ratifying HT
Capital's agreement, the GoodMark Board authorized HT Capital to broaden its
canvas of interested parties to those that were believed to be most likely to
have the interest and ability to pursue a transaction with GoodMark. HT Capital
developed a list of potential interested parties, which included those parties
that had inquired about a transaction in the past, as well as additional parties
that HT Capital believed would be most interested in a transaction with
GoodMark. During March, April and May 1998, HT Capital approached these
companies on a confidential basis. Of the companies contacted, three (including
ConAgra) pursued discussions with GoodMark. During this time, each of the three
companies was permitted access to GoodMark's business and financial information
and interviewed management in order to conduct a due diligence investigation in
connection with a potential proposal. GoodMark held discussions with the three
parties, each of whom made an acquisition proposal that the GoodMark Board
deemed inadequate in each case. HT Capital communicated GoodMark's
dissatisfaction with the terms of the three proposals and sought better terms
from the three interested parties. Two of the parties chose not to respond with
an increased offer. The remaining party, ConAgra, responded on June 1, 1998 that
it would proceed with discussions and due diligence for a potential proposal
involving the issuance of ConAgra stock for each share of GoodMark stock, but
only if GoodMark would enter into an exclusive arrangement (a "no-shop"
agreement') with ConAgra and proceed immediately to negotiate and execute a
definitive merger agreement.
GoodMark's Decision to Proceed with ConAgra. At its June 3, 1998 meeting,
the GoodMark Board deliberated and discussed the potential ConAgra proposal, and
reviewed (i) prior indications of interests by other parties which had been
received, (ii) the process by which GoodMark had contacted other parties, (iii)
valuation and other factors relevant to GoodMark and its industry, (iv) the
advice of HT Capital, (v) ConAgra's requirements of a no-shop agreement and (vi)
other factors. The GoodMark Board determined that it had adequately explored
indications of interest in GoodMark and that ConAgra's proposal was desirable,
both as to potential price and strategic compatibility of the parties. The
GoodMark Board concluded that GoodMark should proceed with negotiations with
ConAgra.
Thus, shortly after the June 3 Board meeting, GoodMark agreed to refrain
from soliciting, encouraging or negotiating with any party other than ConAgra
for any business combination, tender offer, merger or sale of material assets of
GoodMark for a period ending no later than July 4, 1998. The GoodMark Board
concluded that entering into the no-shop agreement with a short duration was
23
<PAGE>
reasonable and calculated to solidify the ConAgra proposal, without precluding
proposals from other parties. GoodMark and ConAgra then began negotiations with
respect to a definitive agreement. The GoodMark Board also authorized a
committee of the GoodMark board to engage an investment banking firm to render a
fairness opinion with respect to the transaction with ConAgra. Subsequently, on
June 11, 1998 the Board engaged IJL to serve as a financial advisor to the
GoodMark Board to provide assistance to the GoodMark Board in its evaluation of
the consideration to be received by the GoodMark Shareholders in the proposed
transaction with ConAgra and to deliver an opinion to the GoodMark Board as to
the fairness of the consideration to be received in the transaction, from a
financial point of view, to the GoodMark Shareholders.
Negotiations ensued over the two weeks following the June 3 Board meeting
as the parties discussed structure, terms, price and other matters and the
directors were regularly consulted by management. During this time, certain
management shareholders of GoodMark, including Ron Doggett, chairman and chief
executive officer, indicated that they would be willing to enter into agreements
to vote their approximately 34% of the shares of GoodMark Common Stock in favor
of a merger with ConAgra.
On June 17, 1998, the GoodMark Board held a special meeting to consider
approval of the proposed merger with ConAgra. Also, at this meeting, IJL
rendered its opinion to the GoodMark Board that based upon various
considerations and upon IJL's review and analysis and that as of the date
thereof, the Per Share Merger Consideration was fair, from a financial point of
view, to the GoodMark Shareholders (described more fully below under the caption
"Opinion of Interstate/Johnson Lane Corporation"). Following extensive
discussion and deliberation, the GoodMark Board concluded that a merger with
ConAgra would be in the best interests of the GoodMark Shareholders. The Board
unanimously adopted resolutions authorizing the officers of GoodMark to, among
other things, enter into and perform a merger agreement with ConAgra, subject to
Shareholder approval, and recommended to the GoodMark Shareholders that they
vote in favor of approval and adoption of the Merger Agreement.
ConAgra's Reasons for the Merger
The Board of Directors of ConAgra believes the Merger fits with
ConAgra's strategy of seeking growth opportunities across the food chain. The
ConAgra Board believes that the Merger will benefit ConAgra by (i) enhancing
ConAgra's presence in the meat snacks retail category with the acquisition of
GoodMark's Slim Jim, Penrose, Pemmican and Rough Cut brands, (ii) raising from
21 to 22 the number of ConAgra brands with annual retail sales exceeding $100
million, and (iii) acquiring GoodMark's strong distribution capabilities in
convenience stores which complement the strong distribution capabilities in
other channels of ConAgra's Golden Valley Microwave Food business. The ConAgra
Board believes that both ConAgra and GoodMark have records of successful
participation and growth in the food industry which factors should enhance
long-term values for ConAgra stockholders.
GoodMark's Reasons for the Merger
In approving the Merger Agreement and the transactions contemplated
thereby, and in recommending that the GoodMark Shareholders approve the same,
the GoodMark Board consulted
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with management, as well as its financial and legal advisors, and considered a
number of factors, including the following:
(i) GoodMark's long term goal of growing in size and
increasing its product offerings, manufacturing expertise and
geographic reach in order to remain competitive in an industry in which
the large and more diversified companies are increasingly more able to
compete on a global basis;
(ii) Management's assessment of ConAgra's business, market
presence, current business strategy and competitive position in the
consumer foods industry, the receptivity of ConAgra's management to the
mission and values of GoodMark and its employees and the continued
preservation of GoodMark as an independent operating company and
wholly-owned subsidiary of ConAgra;
(iii) The business and financial condition of ConAgra;
(iv) The structure, form and amount of consideration to be
paid in the Merger as measured and evaluated against other parties who
had expressed preliminary interest in a transaction;
(v) The historical trading prices of ConAgra Common Stock, the
wide coverage by analysts of ConAgra Common Stock, the consistency of
ConAgra's financial results as compared with the financial results of
GoodMark and other related factors which bear on whether an investment
in ConAgra Common Stock is desirable;
(vi) The financial resources which would be made available to
GoodMark after the Merger to deal with uncertainties and changes which
may result from the ongoing consolidation of the consumer foods
industry;
(vii) The ability, through the Merger, to recognize value from
the strategic assets which GoodMark has developed, including its
methods of operations, reputation, market presence and brand names;
(viii) The competence, experience and integrity of ConAgra
management;
(ix) The expected tax-free nature of the Merger to the
GoodMark Shareholders;
(x) The IJL Opinion delivered to the GoodMark Board as to the
fairness, from a financial point of view, of the Per Share Merger
Consideration to the holders of GoodMark Common Stock. See "Opinion of
Interstate/Johnson Lane Corporation";
(xi) The effect of the merger on the long-term and short-term
interests of GoodMark and its Shareholders, and the interests of
employees, customers, suppliers and creditors of GoodMark, as well as
the effect on the areas it serves and in which its offices are located;
and
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(xii) The fact that consummation of the Merger will give the
GoodMark Shareholders an equity interest in a much larger and more
diversified company and access to a broader and more accessible trading
market for the shares they will hold after the Merger.
The GoodMark Board examined all of the factors and considerations outlined
above in evaluating the overall fairness of the Merger to the GoodMark
Shareholders. No particular weight was assigned to any of the factors and
considerations examined by the GoodMark Board.
Recommendation of the GoodMark Board of Directors
The GoodMark Board of Directors has unanimously approved and adopted the
Merger Agreement and the Merger and unanimously recommends that the GoodMark
Shareholders vote "FOR" the approval and adoption of the Merger Agreement and
the transactions contemplated thereunder, including the Merger. The GoodMark
Board believes that the Merger is in the best interests of the GoodMark
Shareholders.
Opinion of Interstate/Johnson Lane Corporation
IJL was retained by GoodMark to act as a financial advisor in connection
with the Merger. IJL delivered its written opinion dated June 17, 1998 to the
GoodMark Board (the "IJL Opinion") to the effect that, as of the date thereof,
based on the matters set forth therein, the Per Share Merger Consideration to be
received by the GoodMark Shareholders upon consummation of the Merger is fair,
from a financial point of view, to such shareholders. The Per Share Merger
Consideration was determined based upon negotiations between the parties,
without any involvement of IJL. IJL has consented to the inclusion of the IJL
Opinion in this Proxy Statement-Prospectus.
THE FULL TEXT OF THE IJL OPINION, WHICH SETS FORTH THE ASSUMPTIONS MADE,
PROCEDURES FOLLOWED, MATTERS CONSIDERED AND LIMITS ON THE REVIEW UNDERTAKEN, IS
ATTACHED AS ANNEX B TO THIS PROXY STATEMENT- PROSPECTUS AND IS INCORPORATED
HEREIN BY REFERENCE. THE SUMMARY OF THE IJL OPINION SET FORTH HEREIN IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF THE OPINION IN ANNEX
B. GOODMARK SHAREHOLDERS ARE URGED TO READ THE IJL OPINION IN ITS ENTIRETY. THE
IJL ANALYSES AND OPINION WERE PREPARED FOR AND ADDRESSED TO THE GOODMARK BOARD
FOR ITS INFORMATION AND ARE DIRECTED ONLY TO THE FAIRNESS, FROM A FINANCIAL
POINT OF VIEW, OF THE PER SHARE MERGER CONSIDERATION TO BE RECEIVED BY THE
GOODMARK SHAREHOLDERS UPON CONSUMMATION OF THE MERGER AND DO NOT CONSTITUTE AN
OPINION AS TO THE MERITS OF THE MERGER OR A RECOMMENDATION TO ANY GOODMARK
SHAREHOLDER AS TO HOW TO VOTE IN CONNECTION WITH THE MERGER.
IJL is a nationally recognized investment banking firm and was selected by
GoodMark based on the firm's reputation and general investment banking
experience, including its experience in rendering fairness opinions. IJL, as
part of its investment banking business, is engaged in the valuation of
businesses and their securities in connection with mergers and acquisitions,
negotiated
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underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for estate, corporate and
other purposes.
In connection with rendering the IJL Opinion, IJL, among other things, (i)
reviewed the June 17, 1998 draft of the Merger Agreement; (ii) reviewed annual
audited financial statements for GoodMark and for ConAgra for the prior three
fiscal years ended May 1997 and interim unaudited financial statements through
May 1998 for GoodMark and through February 1998 for ConAgra; (iii) reviewed
publicly available information including recent Securities and Exchange
Commission filings and shareholder communications for GoodMark and for ConAgra;
(iv) met with members of the senior managements of GoodMark and ConAgra to
discuss their respective businesses, financial conditions and operating results;
(v) compared certain financial and stock market data for GoodMark and for
ConAgra with similar data for certain selected publicly held food companies;
(vi) reviewed the financial terms of certain recent business combinations in the
food industry; (vii) reviewed premiums paid historically for certain other
publicly traded companies deemed relevant; (viii) reviewed historical market
price, volume data, and dividend history for the common stock of GoodMark and
for the common stock of ConAgra; (ix) performed a discounted cash flow analysis
for GoodMark; (x) reviewed various published research reports and investment
opinions on ConAgra and the food industry; and (xi) performed such other
financial studies and analyses as IJL deemed appropriate.
In rendering the IJL Opinion, IJL relied without independent verification
upon the accuracy and completeness of all of the financial and other information
furnished to it by or on behalf of GoodMark and ConAgra, and other published
information that it considered in its review. IJL relied upon the reasonableness
of all projections and forecasts provided to it by GoodMark and assumed that
they were prepared in accordance with accepted practice on bases reflecting the
best currently available estimates and good faith judgments of GoodMark's
management and that such forecasts will be realized in the amounts and at the
times contemplated thereby. The IJL Opinion is based upon the economic,
monetary, market and other conditions and circumstances existing and known to
IJL as of the date of the IJL Opinion, and IJL assumed that there were no
material changes in the assets, financial condition, results of operations,
business or prospects of GoodMark or ConAgra since the date of the most recent
financial statements made available to it. IJL has not made or considered any
independent evaluations or appraisals of the assets or liabilities (contingent
or otherwise) of either GoodMark or ConAgra. IJL does not express any opinion
regarding
the value of any of GoodMark's or ConAgra's specific individual
assets. IJL has also assumed that obtaining any necessary regulatory approvals
and third party consents for the Merger or otherwise will not have an adverse
effect on GoodMark or ConAgra. Other than as set forth herein, there were no
limitations imposed by the GoodMark Board on IJL with respect to the
investigations made or procedures followed by IJL in rendering the IJL Opinion.
The following is a summary of the material financial analyses considered
and performed by IJL in connection with providing the IJL Opinion. Such summary
does not purport to be a complete description of the analyses performed by IJL.
The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis or a summary description.
Comparable Companies Analysis. Based on publicly available information and
First Call consensus earnings estimates, IJL reviewed and compared actual and
estimated selected financial and stock market information and financial ratios
of GoodMark and ConAgra to groups of eight and 14 food companies, respectively.
(First Call compiles earnings estimates published by selected research analysts
for use by the investment community.) GoodMark was compared to a group of eight
snack
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foods companies consisting of: Bridgford Foods Corporation; Eskimo Pie
Corporation; Golden Enterprises, Inc.; John B. Sanfilippo & Son, Inc.; J&J Snack
Foods Corp.; Lance, Inc.; Lincoln Snacks Company; and Tasty Baking Company (the
"Selected Snack Foods Companies"). ConAgra was compared to a group of 14
grocery/diversified food and refrigerated foods/ingredients companies consisting
of: Archer-Daniels-Midland Company; Bestfoods; Campbell Soup Company; General
Mills Inc.; H.J. Heinz Company; Hormel Foods Corporation; IBP, Inc.; Kellogg
Company; Michael Foods, Inc.; Nabisco Holdings Corp.; Pilgrim's Pride
Corporation; Quaker Oats Company; Smithfield Foods, Inc.; and Tyson Foods, Inc.
(the "Selected Food Companies"). The historical financial information and ratios
analyzed for the companies are as of their respective most recent reported
periods. Earnings estimates and price-to-forward earnings multiples for the
companies have been shifted to reflect calendar year ends.
IJL 's observations included, among other things, the following:
GoodMark had a compound annual growth rate in sales over the past three years of
4.5% compared to the median of 3.5% for the Selected Snack Foods Companies.
GoodMark had an EBITDA margin, an EBIT margin and a net income margin of 12.9%,
9.7%, and 5.7%, respectively, compared to the medians of 11.6%, 6.6%, and 4.6%,
respectively, for the Selected Snack Foods Companies (EBITDA equals earnings
before interest, taxes, depreciation and amortization; EBIT equals earnings
before interest and taxes). GoodMark had a return on equity of 18.4% compared to
the median of 13.1% for the Selected Snack Foods Companies. GoodMark had a total
debt to book value of total capital ratio of 21.8% compared to the median of
12.6% for the Selected Snack Foods Companies (total debt equals short term debt
plus long term debt; book value of total capital equals shareholders' equity
plus total debt).
IJL also observed, among other things, the following: GoodMark had a
market value of capitalization to sales multiple of 1.0 times compared to the
median of 0.9 times for the Selected Snack Foods Companies (market value of
capitalization equals the market value of shareholders' equity plus net debt;
net debt equals short term debt plus long term debt less cash and equivalents).
GoodMark had a market value of capitalization to EBITDA multiple of 7.4 times
compared to the median of 8.2 times for the Selected Snack Foods Companies.
GoodMark had a market value of capitalization to EBIT multiple of 9.9 times
compared to the median of 13.3 times for the Selected Snack Foods Companies.
GoodMark had a market value of equity to book value of equity multiple of 3.0
times compared to the median of 2.2 times for the Selected Snack Foods
Companies. GoodMark had a common stock price per share to earnings per share
multiple for the latest twelve months ended May 1998, for estimated 1998, and
for estimated 1999 of 16.4 times, 17.7 times and 13.8 times, respectively,
compared to the medians of 20.6 times, 29.1 times and 18.7 times, respectively,
for the Selected Snack Foods Companies. GoodMark had a price to estimated 1999
earnings per share multiple to 1999 earnings per share growth rate ratio of
49.4% compared to the median of 96.1% for the Selected Snack Foods Companies.
IJL's observations included, among other things, the following: ConAgra
had a compound annual growth rate in sales over the past three years of 1.2%
compared to the median of 5.3% for the Selected Food Companies. ConAgra had an
EBITDA margin, an EBIT margin and a net income margin of 7.1%, 5.6% and 2.7%,
respectively, compared to the medians of 13.7%, 8.5%, and 4.3% for the Selected
Food Companies (EBITDA equals earnings before interest, taxes, depreciation and
amortization; EBIT equals earnings before interest and taxes). ConAgra had a
return on equity of 24.2% compared to the median of 17.2% for the Selected Food
Companies. ConAgra had a total debt to book value of total capital ratio of
64.9% compared to the median of 53.7% for the Selected
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Food Companies (total debt equals short term debt plus long term debt; book
value of total capital equals shareholders' equity plus total debt).
IJL also observed, among other things, the following: ConAgra had a
market value of capitalization to sales multiple of 0.8 times compared to the
median of 1.4 times for the Selected Food Companies (market value of
capitalization equals the market value of shareholders' equity plus net debt).
ConAgra had a market value of capitalization to EBITDA multiple of 11.9 times
compared to the median of 11.6 times for the Selected Food Companies. ConAgra
had a market value of capitalization to EBIT multiple of 15.2 times compared to
the median of 14.7 times for the Selected Food Companies. ConAgra had a market
value of equity to book value of equity multiple of 5.7 times compared to the
median of 3.2 times for the Selected Food Companies. ConAgra had a common stock
price per share to earnings per share multiple for the latest twelve months
ended February 1998 and for estimated 1998 of 22.4 times and 21.9 times,
respectively, compared to the medians of 23.2 times and 23.6 times,
respectively, for the Selected Food Companies. Earnings per share estimates for
ConAgra for calendarized 1999 were not available.
Although the Selected Snack Foods Companies and the Selected Food
Companies were used for comparative purposes, none of such companies is directly
comparable to GoodMark or ConAgra. Accordingly, an analysis of the results of
such a comparison is not purely mathematical but involves complex considerations
and judgments concerning differences in historical and projected financial and
operating characteristics of the companies and other factors that could affect
the public trading values of the companies.
Comparable Transactions Analysis. IJL compiled information for completed
mergers and acquisitions since January 1, 1996 in which a United States food
company acquired, was acquired or was merged into another entity in a
transaction with a value equal to or in excess of $20 million. IJL reviewed
certain information relating to nine such transactions (the "Selected Food
Company Transactions"). Such analysis indicated that the multiples of enterprise
value to net sales, to operating cash flow and to operating income for the
Merger were 1.3 times, 10.0 times and 13.3 times, respectively, compared to the
median multiples of 0.8 times, 9.0 times and 14.0 times, respectively, for the
Selected Food Company Transactions (enterprise value equals equity value plus
net debt). The multiples of equity value to net income and to book value of
equity for the Merger were 21.9 times and 4.0 times, respectively, compared to
the median multiples of 21.5 times and 2.7 times, respectively, for the Selected
Food Company Transactions.
IJL also reviewed separately a subset of the Selected Food Company
Transactions including transactions involving the sale or other business
combination of a company doing business under one of the following primary
Standard Industrial Classification ("SIC") codes: sausage and other prepared
meat [SIC code 2013]; cookies and crackers [SIC code 2052]; candy and
confections [SIC code 2064]; salted and roasted nuts [SIC code 2068]; or potato
chips, corn chips and snacks [SIC code 2096] (the "Selected Snack Foods Company
Transactions"). Such analysis indicated that the multiples of enterprise value
to net sales, to operating cash flow and to operating income for the Merger were
1.3 times, 10.0 times and 13.3 times, respectively, compared to the median
multiples of 0.9 times, 8.8 times and 14.0 times, respectively, for the Selected
Snack Foods Company Transactions. The multiples of equity value to net income
and to book value of equity for the Merger were 21.9 times and 4.0 times,
respectively, compared to the median multiples of 21.4 times and 1.7 times,
respectively, for the Selected Snack Foods Company Transactions.
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Premiums Paid Analysis. IJL reviewed certain information relating to
the Selected Food Company Transactions in which a public company was acquired or
merged into another entity. The resulting group of six companies (the "Selected
Premiums Paid Transactions") were analyzed to determine the premiums paid
relative to the seller's stock price four weeks, one week and one day prior to
the public announcement of the acquisition of the acquired company. The premiums
to be paid as of the date of the IJL Opinion for four weeks, one week and one
day prior to public announcement for the Merger are 30.4%, 46.3% and 35.6%,
respectively, compared to the medians paid of 53.5%, 31.6%, and 23.5%,
respectively, for the Selected Premiums Paid Transactions. IJL also reviewed
median premiums paid in acquisitions of U.S. companies exceeding $50 million
where majority control was purchased. Premiums calculated based on final price
versus the price five business days prior reflected a median control premium of
39.4% for transactions closed between January 1, 1998 and June 11, 1998.
Discounted Cash Flow Analysis. IJL performed a discounted cash flow
analysis to determine a range of present values for GoodMark assuming it was
sold at the end of fiscal 2002. Based on GoodMark's fiscal 1999 projections and
additional information supplied by management, IJL assumed net sales would
increase by 10% per year from fiscal 1999 to 2002 and operating margins would
remain constant. For the terminal value, IJL assumed that GoodMark would be sold
at the end of fiscal 2002 at an EBITDA multiple in line with those seen in the
Selected Snack Foods Companies (6.0 times to 10.0 times). The free cash flow
streams and terminal values were presently valued using a range of discount
rates from 12% to 16%. After applying the above ranges of multiples and discount
rates, the analysis indicated an equity value for GoodMark ranging from
approximately $117.6 million to approximately $211.8 million.
Other Analyses. IJL reviewed various published research reports on
ConAgra and, among other things, the investment opinions, stock price targets
and earnings estimates contained therein. In addition, IJL reviewed and analyzed
the historical trading prices and volumes for GoodMark Common Stock and for
ConAgra Common Stock.
Other Considerations. IJL also considered the preliminary indications
of interest that GoodMark received from third parties other than ConAgra, as
presented by GoodMark.
IJL believes that its analyses must be considered as a whole and that
selecting portions of its analyses without considering all factors and analyses
would create an incomplete view of the analyses and processes underlying the IJL
Opinion. IJL did not attribute any particular weight to any analysis or factor
considered by it but rather made qualitative judgments as to the significance
and relevance of each analysis and factor. In its analyses, IJL relied upon
numerous assumptions made by GoodMark and ConAgra with respect to industry
performance, general business and economic conditions and other matters, many of
which are beyond the control of GoodMark or ConAgra. Analyses based on forecasts
of future results are not necessarily indicative of actual values, which may be
significantly more or less favorable than suggested by such analyses. No company
or transaction used as a comparison in the analysis is identical to GoodMark or
ConAgra or to the Merger. Additionally, estimates of the value of businesses do
not purport to be appraisals or necessarily reflective of the prices at which
businesses actually may be sold. Because such estimates are inherently subject
to uncertainty, IJL does not assume responsibility for the accuracy of such
estimates. IJL's analyses were prepared solely for purposes of the IJL Opinion
and do not purport to be appraisals or necessarily reflect the prices at which
GoodMark or GoodMark Common Stock
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actually may be sold. Furthermore, IJL is not expressing any opinion as to the
range of prices at which ConAgra Common Stock will trade subsequent to
consummation of the Merger.
For the services provided by IJL as a financial advisor in connection
with rendering the IJL Opinion, IJL received a fee of $250,000. No portion of
IJL's fee has been or is contingent upon the consummation of the Merger. In
addition, GoodMark has agreed to reimburse IJL for its reasonable out-of-pocket
expenses incurred in connection with the Merger, but not to exceed $10,000
without GoodMark's prior consent, and to indemnify IJL against certain
liabilities, including certain liabilities arising under the federal securities
laws, arising out of IJL's engagement.
IJL has advised GoodMark that, in the ordinary course of its business
as a full-service securities firm, IJL may, subject to certain restrictions,
actively trade the equity or debt securities of GoodMark or of ConAgra for its
own account or for the accounts of its customers and, accordingly, may at any
time hold a long or short position in such securities. IJL has made a market in
the past in the GoodMark Common Stock, for which it has received customary
compensation.
Interests of Certain Persons in the Merger
On March 16, 1998, as ratified by the GoodMark Board of Directors on
March 23, 1998, GoodMark entered into an agreement with HT Capital, the
president and a principal of which is Eric J. Lomas, a member of the GoodMark
Board of Directors since 1995. The agreement with HT Capital provides that HT
Capital will render financial, advisory and investment banking services to
GoodMark in connection with GoodMark's decision to pursue possible business
combinations. See " --Background of the Merger." HT Capital's fee in connection
with the services it has rendered to GoodMark is expected to be approximately
$2.7 million, and is payable only if the Merger is consummated. GoodMark chose
to engage HT Capital because of the Board's confidence in Mr. Lomas's ability,
its familiarity with Mr. Lomas's skills gained since 1982 during transactions in
which GoodMark sought Mr. Lomas's advice and Mr. Lomas's familiarity with
GoodMark specifically and the snack foods industry in general.
Ron E. Doggett, Chairman and Chief Executive Officer of GoodMark, and
the other executive officers of GoodMark (Richard Kennedy, Alvin Blalock,
Richard Miller and Paul Brunswick) are each party to an agreement with GoodMark
that may entitle them to severance pay in the event that their employment is
terminated after the Effective Time under certain circumstances. In the case of
Mr. Doggett, the employment agreement with GoodMark under which he is employed
by GoodMark extends through 2002. If, after the Effective Time, Mr. Doggett's
employment with GoodMark were to be terminated under certain circumstances prior
to the end of the employment term, he may be entitled to severance pay equal to
his salary and bonus due to him for the remainder of his employment term. In the
cases of Messrs. Kennedy, Blalock, Miller and Brunswick, if their employment
with GoodMark is terminated by ConAgra within two years after the Effective Time
they could be entitled to severance pay equal to two times their aggregate
salary and bonus as of the termination date. See "Incorporation of Documents by
Reference" with respect to GoodMark's reports under the Exchange Act that
provide additional detail with respect to these employment and severance
agreements.
Following the Merger, ConAgra will indemnify each present and former
director and officer of GoodMark against claims and liabilities arising out of
any action or omission prior to the Effective
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Time and asserted within six years of the Effective Time to the same extent
permitted or required as of the date of the Merger Agreement under GoodMark's
Articles of Incorporation or By-Laws. GoodMark may also obtain directors' and
officers' liability insurance coverage with respect to any claims made during
such six year period of a type substantially equivalent to levels of coverage
currently in effect under GoodMark's existing directors' and officers' liability
insurance. See "THE MERGER AGREEMENT--Indemnification and Insurance."
As of the Record Date, the directors and executive officers of GoodMark as
a group beneficially owned 2,997,284 shares of GoodMark Common Stock, including
options to acquire 468,750 shares of GoodMark Common Stock. Other than for
restrictions on transfer as set forth under "THE MERGER--Resales of ConAgra
Common Stock," all of such shares held will be treated in the Merger in the same
manner as the shares of GoodMark Common Stock held by other GoodMark
Shareholders, and all of such options held will be treated in the Merger in the
same manner as options to acquire GoodMark Common Stock held by other GoodMark
employees. Each director and executive officer of GoodMark will enter into an
agreement restricting his sale of ConAgra shares for a period following the
Effective Time. Certain GoodMark Shareholders, including Ron E. Doggett,
Chairman and Chief Executive Officer of GoodMark and the executive officers of
GoodMark, holding an aggregate of 2,500,240 shares of GoodMark Common Stock, or
approximately 34.6% of the voting power of GoodMark Common Stock as of the
Record Date, entered into Voting Agreements pursuant to which, among other
things, such shareholders have agreed to vote all of the shares of GoodMark
Common Stock owned by them for the approval and adoption of the Merger
Agreement. See "THE MERGER--Resales of ConAgra Common Stock" and "THE VOTING
AGREEMENTS."
Ownership Interest of GoodMark Shareholders After the Merger
Based on the number of shares of GoodMark Common Stock outstanding on the
Record Date and assuming a Per Share Merger Consideration of one share of
ConAgra Common Stock for each share of GoodMark Common Stock, upon consummation
of the Merger there will be approximately 485,000,000 shares of ConAgra Common
Stock outstanding at the Effective Time, of which the GoodMark Shareholders
(assuming exercise of the GoodMark Options) will own an aggregate of
approximately 1.6%.
Treatment of Stock Options
Options to purchase shares (the "Options") granted by GoodMark under
GoodMark's 1985 Non-Qualified Stock Option Plan and Restricted Stock Award Plan
(collectively the "Option Plans") that remain outstanding immediately prior to
the Effective Time, whether or not then exercisable, will, by virtue of the
Merger and without any action on the part of the holder thereof, be assumed by
ConAgra and will entitle the holder thereof to subscribe to, purchase or acquire
from ConAgra the number of shares of ConAgra Common Stock which equals the
product of the Per Share Merger Consideration multiplied by the number of shares
of GoodMark Common Stock subject to the Option immediately prior to the
Effective Time (rounded to the nearest whole share), at an exercise price per
share of ConAgra Common Stock equal to the exercise price per share then
specified with respect to such Option divided by the Per Share Merger
Consideration (rounded to the nearest whole cent). However, in the event any
Option is an incentive stock option as defined in Section 422 of the Code, the
aggregate adjusted exercise price of such Option and the number of shares to
which
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such Option is exercisable will be computed in compliance in all respects with
the requirements of Section 424(a) of the Code, including the requirements that
such adjustments not confer on the holder of any such Option any additional
benefits not currently provided under the Option Plans. At June __, 1998, there
were outstanding options to acquire an aggregate of 563,525 shares of GoodMark
Common Stock.
Stock Exchange Listing
Under the terms of the Merger Agreement, ConAgra has agreed to use its
reasonable best efforts to cause the shares of ConAgra Common Stock issued in
the Merger to be listed on the NYSE. ConAgra Common Stock is listed for trading
on the NYSE. It is also a condition to the obligations of both ConAgra and
GoodMark to consummate the Merger that such NYSE listing shall have been
obtained. See "THE MERGER AGREEMENT--Conditions to Consummate the Merger."
Delisting and Deregistration of GoodMark Common Stock
If the Merger is consummated, the shares of GoodMark Common Stock will
be delisted from the Nasdaq National Market and will be deregistered under the
Exchange Act.
Accounting Treatment
The Merger is intended to qualify as a pooling-of-interests for accounting
and financial reporting purposes. Accounting Principles Board Opinion 16 ("APB
16") and related interpretations specify the conditions under which the
pooloing-of-interests accounting method is required. APB 16 also defines the
manner in which the pooling-of-interests accounting method is applied. Under
this method, the recorded assets and liabilities of the combining companies are
carried forward at their historical recorded amounts and the reported income of
the companies are combined as income of the combined company. It is also a
condition to ConAgra's obligation to consummate the Merger that it has received
assurances reasonably satisfactory to it that the transactions contemplated in
the Merger Agreement qualify for accounting treatment as a pooling-of-interests.
See "THE MERGER AGREEMENT--Conditions to Consummate the Merger."
Governmental and Regulatory Approvals
The consummation of the Merger is conditioned upon the expiration or
termination of the applicable waiting period under the HSR Act. Under the HSR
Act and the regulations promulgated thereunder by the FTC, the Merger may not be
consummated until notifications have been given and certain information has been
furnished to the FTC and the Antitrust Division and the applicable waiting
period has expired or been terminated. On June 23, 1998, ConAgra and GoodMark
filed notifications and report forms under the HSR Act with the FTC and the
Antitrust Division. ConAgra and GoodMark have requested early termination of the
30-day HSR waiting period. The HSR Act provides for an initial 30-calendar day
waiting period following the filing with the FTC and the Antitrust Division. The
HSR Act further provides that if, within the initial 30-calendar day waiting
period, the FTC or the Antitrust Division issues a request for additional
information or documents, the waiting period will be extended until 11:59 p.m.
on the 20th day after the date of substantial compliance by the filing parties
with such request. Only one such extension of the initial waiting
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period is permitted under the HSR Act; however, the filing parties may
voluntarily extend the waiting period.
The applicable waiting period is anticipated to expire on July 24, 1998 at
11:59 p.m. Notwithstanding expiration of the waiting periods, at any time before
or after the Effective Time, the FTC, the Antitrust Division or others could
take action under the antitrust laws with respect to the Merger, including
seeking to enjoin the consummation of the Merger or seeking the divestiture by
ConAgra of all or part of the stock or assets of GoodMark, or other businesses
conducted by ConAgra.
The respective obligations of ConAgra and GoodMark to consummate the Merger
are subject to the condition that no court or other governmental entity having
jurisdiction over ConAgra or Goodmark, or any of their respective subsidiaries,
shall have entered any injunction or other order (whether temporary, preliminary
or permanent) which is then in force and has the effect of making the Merger or
any of the transactions contemplated by the Merger Agreement illegal. See "THE
MERGER AGREEMENT--Conditions to Consummate the Merger."
Procedures for Exchange of GoodMark Common Stock Certificates
ConAgra will designate a bank or trust company reasonably satisfactory to
GoodMark to act as exchange agent under the Merger Agreement (the "Exchange
Agent"). Immediately following the Effective Time, ConAgra will deliver, in
trust, to the Exchange Agent, for the benefit of the holders of shares of
GoodMark Common Stock, for exchange in accordance with the Merger Agreement
through the Exchange Agent, certificates evidencing the shares of ConAgra Common
Stock issuable as the Per Share Merger Consideration.
At the Effective Time, all shares of GoodMark Common Stock will no longer
be outstanding and will automatically be cancelled and retired and will cease to
exist; and each holder of a certificate which immediately prior to the Effective
Time represented outstanding shares of GoodMark Common Stock (the
"Certificates") will cease to have any rights as a shareholder of GoodMark. As
soon as practicable after the Effective Time, ConAgra will cause the Exchange
Agent to mail to each holder of Certificates (i) a form of letter of transmittal
specifying that delivery will be effected, and risk of loss and title to the
Certificates will pass, only upon proper delivery of the Certificates to the
Exchange Agent, and (ii) instructions for use in surrendering such Certificates
in exchange for the Per Share Merger Consideration. Upon surrender of a
Certificate for cancellation to the Exchange Agent, together with such letter of
transmittal, duly executed, the holder of such Certificate will be entitled to
receive in exchange therefor the product of the Per Share Merger Consideration
multiplied by the number of shares of GoodMark Common Stock represented by the
surrendered Certificate.
No dividends or other distributions that are declared on or after the
Effective Time on ConAgra Common Stock, or are payable to the holders of record
thereof who became such on or after the Effective Time, will be paid to any
person entitled by reason of the Merger to receive certificates representing
shares of ConAgra Common Stock, until such person surrenders his or her
Certificates as provided in the Merger Agreement. Subject to applicable law,
there will be paid to each person receiving a certificate representing such
shares of ConAgra Common Stock, at the time of such surrender or as promptly as
practicable thereafter, the amount of any dividends or other distributions
previously paid with respect to the shares of ConAgra Common Stock represented
by
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such certificate and having a record date on or after the Effective Time but
prior to such surrender and a payment date on or subsequent to such surrender.
In no event will the person entitled to receive such dividends or other
distributions be entitled to receive interest thereon. If any cash or
certificate representing shares of ConAgra Common Stock is to be paid to or
issued in a name other than that in which the Certificate surrendered in
exchange therefor is registered, it will be a condition of such exchange that
the Certificate so surrendered will be properly endorsed and otherwise in proper
form for transfer and that the person requesting such exchange will pay to the
Exchange Agent any transfer or other taxes required by reason of the issuance of
such certificate representing shares of ConAgra Common Stock and the
distribution of such cash payment in the name other than that of the registered
holder of the Certificate so surrendered, or will establish to the satisfaction
of the Exchange Agent that such tax has been paid or is not applicable.
ConAgra or the Exchange Agent will be entitled to deduct and withhold
from the consideration otherwise payable pursuant to the Merger Agreement to any
holder of GoodMark Common Stock such amounts as ConAgra or the Exchange Agent
are required to deduct and withhold under the Code or any provision of state,
local or foreign tax law, with respect to the making of such payment. To the
extent that amounts are so withheld by ConAgra or the Exchange Agent, such
withheld amounts will be treated for all purposes of the Merger Agreement as
having been paid to the holder of GoodMark Common Stock in respect of whom such
deduction and withholding are made by ConAgra or the Exchange Agent.
At the Effective Time, the stock transfer books of GoodMark will be
closed and no transfer of shares of GoodMark Common Stock will thereafter be
made. If, after the Effective Time, Certificates are presented to ConAgra, they
will be cancelled and exchanged as provided in the Merger Agreement.
No certificates or scrip representing any fractional shares of ConAgra
Common Stock will be issued upon the surrender for exchange of Certificates; any
fractional share of ConAgra Common Stock to which a GoodMark Shareholder would
otherwise be entitled will be rounded to the nearest whole share. No dividend or
distribution with respect to shares will be payable on or with respect to any
fractional shares; and such fractional share interests will not entitle the
owner thereof to vote or to any other rights of a stockholder of ConAgra.
Resales of ConAgra Common Stock
All shares of ConAgra Common Stock to be issued in the Merger will be
freely transferable, except that shares received by any person who may be deemed
to be an "affiliate" (as used in paragraphs (c) and (d) of Rule 145, including,
without limitation, directors and executive officers) of GoodMark for purposes
of Rule 145 may not be resold except in transactions permitted by Rule 145 or as
otherwise permitted under the Securities Act. Under Rule 145, during the one
year period following the Effective Time, affiliates of GoodMark may resell
publicly the ConAgra Common Stock received in the Merger within certain
limitations as to the amount of ConAgra Common Stock sold in any three-month
period and as to the manner of sale. After one year, if such person is not an
affiliate of ConAgra and ConAgra is current in the filing of its periodic
securities law reports, a former affiliate of GoodMark may freely resell the
ConAgra Common Stock received in the Merger without limitation. After two years
from the issuance of the ConAgra Common Stock, if
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such person is not an affiliate of ConAgra at the time of sale or for at least
three months prior to such sale, such person may freely resell such ConAgra
Common Stock, without limitation.
Pursuant to requirements for the pooling-of-interests method of
accounting, affiliates of each of the acquired and acquiring company may not
dispose of any shares of the corporation they own or shares of a corporation
they receive in connection with a merger during the period beginning 30 days
before consummation of the merger and ending when financial results covering at
least 30 days of post-merger combined operations of the combining companies have
been published.
GoodMark has agreed to prepare and deliver to ConAgra a list
identifying each person who, at the time of the Special Meeting, may be deemed
to be an "affiliate" (as used in the preceding paragraph) of GoodMark and to use
its reasonable best efforts to cause each person so identified to deliver to
ConAgra on or prior to the Effective Time a written agreement, in the form
previously approved by ConAgra and GoodMark, providing that each person will
only sell, transfer or otherwise dispose of any shares of ConAgra Common Stock
issued to such person in connection with the Merger, (i) pursuant to an
effective registration statement or in compliance with Rule 145 or another
exemption from the registration requirements of the Securities Act and (ii) in
compliance with requirements regarding qualifying for pooling-of-interests
accounting treatment. See "THE MERGER AGREEMENT--Conditions to Consummate the
Merger."
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a summary of certain U.S. federal income
tax consequences of the Merger to the GoodMark Shareholders. The discussion
which follows is based on the Code, Treasury regulations promulgated thereunder,
administrative rulings and pronouncements and judicial decisions as of the date
hereof, all of which are subject to change, possibly with retroactive effect.
The discussion below is for general information only and does not address the
effects of any state, local or foreign tax laws on the Merger. The tax treatment
for a GoodMark Shareholder may vary depending upon his or her particular
situation, and certain GoodMark Shareholders (including insurance companies,
tax-exempt organizations, financial institutions and broker-dealers, persons who
do not hold GoodMark Common Stock as capital assets, individuals who received
GoodMark Common Stock pursuant to the exercise of employee stock options or
otherwise as compensation, and non-U.S. persons) may be subject to special rules
not discussed below. EACH GOODMARK SHAREHOLDER IS URGED TO CONSULT HIS OR HER
TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES TO HIM OR HER OF THE MERGER,
INCLUDING THE EFFECT OF U.S. FEDERAL, STATE AND LOCAL, AND FOREIGN AND OTHER TAX
RULES, AND THE EFFECT OF POSSIBLE CHANGES IN TAX LAWS.
Consummation of the Merger is conditioned upon the receipt by GoodMark
of an opinion from Smith Anderson, counsel to GoodMark, on the Closing Date,
that the Merger will qualify under Section 368(a) of the Code as a
"reorganization" for U.S. federal income tax purposes and that ConAgra and
GoodMark each will be a party to that reorganization within the meaning of
Section 368(b) of the Code, and other matters. Such opinion of counsel will be
based on certain representations as to factual matters made by ConAgra and
GoodMark. Such representations, if incorrect in certain material respects, could
jeopardize the conclusions reached in the opinion. Neither ConAgra nor GoodMark
is currently aware of any facts or circumstances which would cause
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any such representations made to counsel to be untrue or incorrect in any
material respect. Any opinion of counsel is not binding on the Internal Revenue
Service (the "IRS") or the courts.
Based on the anticipated opinion discussed above, the material U.S.
federal income tax consequences that will result from the Merger are as follows:
(i) no income, gain or loss will be recognized by ConAgra or
GoodMark as a result of the Merger;
(ii) a GoodMark Shareholder will not recognize any income,
gain or loss upon the receipt of ConAgra Common Stock solely in
exchange for such Shareholder's shares of GoodMark Common Stock
pursuant to the Merger;
(iii) a GoodMark Shareholder's tax basis for the ConAgra
Common Stock received pursuant to the Merger will equal such GoodMark
Shareholder's tax basis in the GoodMark Common Stock exchanged
therefor;
(iv) a GoodMark Shareholder's holding period for the ConAgra
Common Stock received pursuant to the Merger will include the holding
period of the GoodMark Common Stock surrendered in exchange therefor,
provided that the GoodMark Common Stock was held as a capital asset at
the Effective Time; and
(v) a dissenting GoodMark Shareholder that receives cash in
exchange for GoodMark Common Stock pursuant to the Merger, will be
treated as having had the GoodMark Common Stock redeemed. Subject to
special rules described below, such a Shareholder will generally
recognize capital gain or loss on such redemption in an amount equal to
the difference between the amount of cash received and the basis of
such GoodMark Common Stock, if the GoodMark Common Stock was held as a
capital asset at the Effective Time. The tax rate applicable to capital
gain of an individual taxpayer varies depending on the taxpayer's
holding period for the shares. In the case of an individual, any such
capital gain will be subject to a maximum federal income tax rate of
(i) 20% if the individual's holding period in such stock was more than
18 months on the date of the Effective Time or (ii) 28% if the
individual's holding period was more than one year but not more than 18
months on the date of the Effective Time. An individual's gain on the
sale of GoodMark Common Stock held for one year or less is subject to
tax as ordinary income at a maximum rate of 39.6%. Under special rules,
cash received by a dissenting GoodMark Shareholder may be treated as
ordinary income, taxable at a maximum rate of 39.6%, if the redemption
of such Shareholder's GoodMark Common Stock is treated as a dividend.
Dissenting GoodMark Shareholders should consult their individual tax
advisors on the possible treatment of the redemption of their GoodMark
Common Stock as a dividend.
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THE MERGER AGREEMENT
The description of the Merger and Merger Agreement contained in this
Proxy Statement/Prospectus does not purport to be complete and is qualified in
its entirety by reference to the Merger Agreement, a copy of which is attached
hereto as Annex A and incorporated herein by reference. Each GoodMark
Shareholder is advised to read the Merger Agreement carefully.
Structure of the Merger
At the Effective Time, Merger Sub will be merged with and into
GoodMark, with GoodMark continuing as the surviving corporation and as a wholly
owned subsidiary of ConAgra.
Conversion of GoodMark Common Stock
At the Effective Time, each share of GoodMark Common Stock outstanding
immediately prior to the Effective Time (other than shares, if any, owned by
ConAgra and Merger Sub, which will be cancelled, and shares held by GoodMark
Shareholders exercising dissenters' rights under the NCBCA) will be converted
into the right to receive the Per Share Merger Consideration. Any fractional
shares of ConAgra Common Stock to which a GoodMark Shareholder would otherwise
be entitled will be rounded to the nearest whole share of ConAgra Common Stock.
See "THE MERGER--Procedures for Exchange of GoodMark Common Stock Certificates;
- --Treatment of Stock Options" for a description of the exchange of GoodMark
Common Stock for ConAgra Common Stock and the assumption by ConAgra of Options
previously granted by GoodMark under the Option Plans.
Certain Representations and Warranties
The Merger Agreement contains various representations and warranties of
GoodMark and ConAgra relating, among other things, to: (i) corporate
organization and good standing; (ii) Certificate or Articles of Incorporation
and By-Laws; (iii) capitalization; (iv) corporate authority; (v)
non-contravention of, among other things, certain contracts; (vi) government
approvals and required consents; (vii) SEC documents and financial statements;
(viii) absence of certain changes or events; (ix) information in disclosure
documents and registration statement; (x) compliance with laws; (xi) brokers and
financial advisors or investment bankers; and (xii) pooling-of-interests
accounting treatment. In addition, the Merger Agreement contains representations
and warranties of GoodMark relating to (i) company subsidiaries; (ii) actions
and legal proceedings; (iii) absence of undisclosed liabilities; (iv) certain
contracts and arrangements; (v) taxes; (vi) patents, trademarks and similar
rights; (vii) employee benefit plans; (viii) environmental matters; (ix) labor
matters; (x) affiliate transactions; (xi) opinion of financial advisor; (xii)
brokers; (xiii) title to properties; (xiv) accounts receivable; (xv)
inventories; (xvi) issuance of securities and other equity matters; and (xvii)
accuracy of disclosures. Furthermore, the Merger Agreement contains
representations and warranties of ConAgra relating to interim operations of the
Merger Sub. The representations and warranties of GoodMark, ConAgra and Merger
Sub do not survive the Effective Time.
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Conduct of Business by GoodMark Pending the Merger
Prior to the Effective Time, unless ConAgra otherwise agrees in writing
(which agreement is not to be unreasonably withheld or delayed), GoodMark is to
conduct, and cause each of its subsidiaries to conduct, its business only in the
ordinary and usual course consistent with the manner as heretofore conducted,
and GoodMark is to use, and cause each of its subsidiaries to use, its
reasonable efforts to preserve intact its present business organization, keep
available the services of its present officers and key employees, and preserve
its existing business relationships.
Without limiting the generality of the foregoing, GoodMark agreed that,
without the prior written consent of ConAgra, it will not, nor will it permit
any of its subsidiaries to: (a)(i) amend its Articles of Incorporation, By-Laws
or other organizational documents, (ii) split, combine or reclassify any shares
of its outstanding capital stock, (iii) declare, set aside or pay any dividend
or other distribution payable in cash, stock or property (other than regular
quarterly dividends with record dates and payment dates substantially consistent
with past practice of not more than $.06 per share of GoodMark Common Stock), or
(iv) directly or indirectly redeem or otherwise acquire any shares of its
capital stock or shares of the capital stock of any of its subsidiaries; (b)
authorize for issuance, issue (except upon the exercise of outstanding Options
or warrants) or sell or agree to issue or sell any shares of, or rights to
acquire or convertible into any shares of, its capital stock or shares of the
capital stock of any of its subsidiaries; (c)(i) merge, combine or consolidate
with another entity, (ii) acquire or purchase an equity interest in or a
substantial portion of the assets of another corporation, partnership or other
business organization or otherwise acquire any material assets outside the
ordinary course of business and consistent with past practice or otherwise enter
into any material contract, commitment or transaction outside the ordinary
course of business and consistent with past practice, or (iii) sell, transfer,
encumber or otherwise dispose of any of its material assets outside the ordinary
course of business and consistent with past practice; (d)(i) incur, assume or
prepay any indebtedness, obligations or liabilities other than in each case in
the ordinary course of business and consistent with past practice and other than
existing indebtedness of a subsidiary of GoodMark, (ii) assume, guarantee,
endorse or otherwise become liable or responsible for the obligations of any
person other than a subsidiary of GoodMark, in each case other than in the
ordinary course of business and consistent with past practice and other than
existing indebtedness of a subsidiary of GoodMark except for (A) short-term
borrowings incurred in the ordinary course of business consistent with the
manner as heretofore conducted and (B) borrowings pursuant to existing credit
facilities in the ordinary course of business or any modifications, renewals or
replacements of such credit facilities, or (iii) make any loans, advances or
capital contributions to, or investments in, any other person, other than to any
subsidiary of GoodMark; (e) pay, satisfy, discharge or settle any material
claim, liabilities or obligations, other than in the ordinary course of business
and consistent with past practice or pursuant to mandatory terms of any company
contract in effect on the date of the Merger Agreement; (f) modify or amend, or
waive any benefit of, any non-competition agreement to which GoodMark or any of
its subsidiaries is a party; (g) authorize or make capital expenditures in
excess of $200,000 individually, or in excess of $1,000,000 in the aggregate
except for certain specified projects; (h) permit any insurance policy naming
GoodMark or any subsidiary as a beneficiary or a loss payee to be canceled or
terminated other than in the ordinary course of business; (i)(i) adopt, enter
into, terminate or amend (except as may be required by applicable law) any
employee plan, agreement, contract, arrangement or other company plan for the
current or future benefit or welfare of any director, officer or employee, (ii)
except in the ordinary course of business consistent with past practice,
increase in any manner the compensation or fringe benefits of, or pay
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any bonus to, any director, officer or employee; or (iii) other than pursuant to
the terms of the Merger Agreement, take any action to fund or in any other way
secure, or to accelerate or otherwise remove restrictions with respect to, the
payment of compensation or benefits under any employee plan, agreement,
contract, arrangement or other company plan; (j) make any material change in
GoodMark's accounting or tax policies or procedures, except as required by
applicable law or to comply with generally accepted accounting principles; or
(k) enter into any contract, agreement, commitment or arrangement with respect
to any of the foregoing.
Conditions to Consummate the Merger
The respective obligations of GoodMark, ConAgra and Merger Sub to
consummate the Merger are subject to the satisfaction or waiver at or prior to
the Closing Date of the following conditions: (i) the approval and adoption of
the Merger Agreement by the requisite vote of GoodMark Shareholders in
accordance with applicable law; (ii) the receipt of all necessary governmental
approvals and consents; (iii) the termination or expiration of the waiting
period under the HSR Act; (iv) the effectiveness of the Registration Statement
and the absence of any stop order suspending the effectiveness of the
Registration Statement and proceedings initiated for that purpose by the SEC;
(v) the absence of any actions of any governmental entity having jurisdiction
over ConAgra or GoodMark, or any of their respective subsidiaries, enacting,
issuing, promulgating, enforcing or entering any law, rule, regulation,
executive order, decree, injunction or other order (whether temporary,
preliminary or permanent) which has the effect of making the Merger or the
Voting Agreements illegal or otherwise prohibiting consummation of the Merger;
and (vi) shares of ConAgra Common Stock to be issued in connection with the
Merger shall have been approved for listing on the New York Stock Exchange,
subject to official notice of issuance.
The obligations of ConAgra and Merger Sub to consummate the Merger is
also subject to the satisfaction at or prior to the Effective Time of the
following additional conditions, unless waived in writing by ConAgra: (i) the
representations and warranties of GoodMark that are qualified with reference to
materiality being true and correct, and the representations and warranties that
are not so qualified being true and correct in all material respects, in each
case as of the date of the Merger Agreement, and, except to the extent such
representations and warranties speak of an earlier date, as of the Effective
Time as though made at and as of the Effective Time; (ii) the performance by
GoodMark in all material respects of all obligations required to be performed by
it under the Merger Agreement at or prior to the Effective Time; (iii) the
absence, since the date of the Merger Agreement, of any event or occurrence
which has had a material adverse effect, individually or in the aggregate, on
the business, assets, liabilities, condition (financial or otherwise), prospects
or results of operations of the Company and its subsidiaries taken as a whole,
or the ability of the Company to consummate the Merger; (iv) the receipt by
ConAgra of written agreements with GoodMark's Rule 145 affiliates; (v) GoodMark
having obtained any necessary non-governmental consents and approvals required
to consummate the transactions contemplated by the Merger Agreement; (vi)
receipt by ConAgra of assurances satisfactory to it that the Merger will qualify
as a reorganization within the meaning of Section 368 of the Code; (vii) ConAgra
having received assurances reasonably satisfactory to it that the Merger
qualifies for treatment as a pooling-of-interests pursuant to APB 16; and (viii)
the number of shares of GoodMark Common Stock dissenting from the Merger shall
not preclude accounting for the Merger as a pooling-of-interests pursuant to APB
16.
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The obligation of GoodMark to consummate the Merger is subject to
satisfaction at or prior to the Effective Time of the following additional
conditions, unless waived in writing by GoodMark: (i) the representations and
warranties of ConAgra and Merger Sub that are qualified with reference to
materiality being true and correct, and the representations and warranties that
are not so qualified being true and correct in all material respects, in each
case as of the date of the Merger Agreement, and, except to the extent such
representations and warranties speak as of an earlier date, as of the Effective
Time as though made on and as of the Effective Time; (ii) each of ConAgra and
Merger Sub having performed in all materials respects all obligations required
to be performed by it under the Merger Agreement at or prior to the Effective
Time; and (iii) the receipt by GoodMark of an opinion of Smith Anderson, counsel
to GoodMark, relating to certain tax matters.
Pooling
ConAgra and GoodMark have each agreed to use reasonable efforts to
cause the Merger to be accounted for as a pooling-of-interests, and each has
agreed to not voluntarily take any action that would cause such treatment not to
be obtained.
Employee Benefits
The Merger Agreement provides that, if at any time during the two year
period following the Effective Time, any employee benefit plan applicable to
employees of GoodMark is merged or combined with an employee benefit plan of
ConAgra's Golden Valley Microwave subsidiary (or any successor thereto), ConAgra
shall cause such subsidiary to credit such employees' service with GoodMark or
its subsidiaries, to the same extent as such service is credited under the
merged or combined plan of GoodMark immediately prior to such merger or
combination for purposes of determining eligibility to participate in and
vesting under, and for purposes of calculating benefits under, such employee
benefit plan. Furthermore, for the two year period following the Effective Time,
the employee benefits applicable to employees of GoodMark shall, in the
aggregate, be no less favorable to such employees than such employees' current
benefits.
No Solicitation
GoodMark has agreed that, prior to the Effective Time, it will not, and
it will use its reasonable best efforts to cause its subsidiaries and
affiliates, and their respective directors, officers, employees, agents or
representatives not to, directly or indirectly, (i) solicit or initiate any
inquiries or the making of any proposal with respect to any Acquisition
Transaction or (ii) negotiate, explore or otherwise engage in discussions with
any person (other than ConAgra and its representatives) with respect to any
Acquisition Transaction, or which may reasonably be expected to lead to a
proposal for an Acquisition Transaction or enter into any agreement, arrangement
or understanding with respect to any such Acquisition Transaction or which would
require it to abandon, terminate or fail to consummate the Merger or any other
transaction contemplated by the Merger Agreement; provided, however, that
GoodMark may, in response to an unsolicited written proposal from a third party
(including a new or unsolicited proposal received by GoodMark after the
execution of the Merger Agreement from a person whose initial contact with
GoodMark may have been solicited by GoodMark prior to such execution) setting
forth a Superior Proposal, furnish information to, negotiate or otherwise engage
in discussions with such third party, if the Board of Directors of
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GoodMark determines in good faith, based upon the advice of outside counsel,
that such action is reasonably necessary for the GoodMark Board to comply with
its legal duties under applicable law, including, without limitation, the NCBCA.
Except as may be reasonably necessary to comply with the legal duties
of the GoodMark Board under applicable law, including, without limitation, the
NCBCA (based on the advice of outside counsel), GoodMark has agreed that, as of
the date of the Merger Agreement, it, its subsidiaries and affiliates, and the
respective directors, officers, employees, agents and representatives of the
foregoing, will immediately cease and cause to be terminated any existing
activities, discussions and negotiations with any person (other than ConAgra and
its representatives) conducted prior to that date with respect to any
Acquisition Transaction. GoodMark has agreed to promptly advise ConAgra of any
inquiries or proposals received by, any such information requested from, and any
requests for negotiations or discussions sought to be initiated or continued
with, GoodMark, its subsidiaries or affiliates, or any of the respective
directors, officers, employees, agents or representatives of the foregoing, in
each case from a person (other than ConAgra and its representatives) with
respect to an Acquisition Transaction. In addition, GoodMark is to promptly
advise ConAgra of the substance and content of any such inquiry, proposal,
information request, negotiations or discussions unless the GoodMark Board
determines in good faith and based on written advice of its outside legal
counsel that such action would constitute a breach of the GoodMark Board's legal
duties under applicable law, including, without limitation, the NCBCA.
Third-Party Standstill Agreements
During the period from the date of the Merger Agreement through the
Effective Time, GoodMark has agreed that it will not terminate, amend, modify or
waive any provisions of any confidentiality or standstill agreement to which it
or any of its subsidiaries is a party that was entered into in contemplation of
discussions or negotiations regarding a possible Acquisition Transaction.
Indemnification and Insurance
ConAgra and GoodMark have agreed that all rights to indemnification now
existing in favor of any employee, agent, director or officer of GoodMark and
its Subsidiaries (the "Indemnified Parties"), as provided in their respective
Certificate or Articles of Incorporation or Bylaws, will survive the Merger and
shall continue in full force and effect for a period of six years after the
Effective Time; provided that in the event any claim or claims are asserted or
made within such six year period, all rights to indemnification in respect of
any such claim shall continue until final disposition of such claim.
ConAgra has also agreed that, from and after the Effective Time,
GoodMark may obtain continuation coverage under GoodMark's existing Directors
and Officers Liability and Employment Practice Liability insurance and
indemnification policy (including any fiduciary liability policy) to provide
coverage with respect to any claims made during the six year period following
the Effective Time for events occurring prior to the Effective Time (the "D & O
Insurance") or, if substantially equivalent insurance coverage is unavailable,
the best available coverage; provided, however, that the one time premium for
the D & O Insurance is not to exceed $36,000, but if such premium would but for
this proviso exceed such amount, GoodMark may purchase as much coverage as
possible for such amount.
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Termination
The Merger Agreement may be terminated, and the Merger and the other
transactions contemplated thereby may be abandoned, at any time prior to the
Effective Time, whether before or after approval by the GoodMark Shareholders:
(i) By mutual written consent of ConAgra and GoodMark;
(ii) By either ConAgra or GoodMark, if (a) the Merger is not
consummated on or before December 31, 1998, or (b) the GoodMark Shareholders do
not approve the Merger Agreement by the requisite vote at a meeting duly
convened therefor or any adjournment thereof;
(iii) By either ConAgra or GoodMark, if any permanent injunction,
order, decree or ruling by any governmental entity of competent jurisdiction
preventing the consummation of the Merger becomes final and nonappealable;
provided, however, that the party seeking to terminate the Merger Agreement will
have used reasonable best efforts to remove such injunction or overturn such
action;
(iv) By ConAgra, if (a) the number of shares of GoodMark Common Stock
dissenting from the Merger precludes accounting for the Merger as a
pooling-of-interests pursuant to APB 16, (b) there has been a material breach of
the representations or warranties, covenants or agreements of GoodMark set forth
in the Merger Agreement, which is not curable or, if curable, is not cured
within 30 days after written notice of such breach is given by ConAgra to
GoodMark, or (c) the GoodMark Board (x) fails to convene a meeting of the
GoodMark Shareholders to approve the Merger on or before 150 days following the
date of the Merger Agreement ("Special Meeting Date"), or postpones the date
scheduled for the meeting of the GoodMark Shareholders to approve the Merger
Agreement beyond the Special Meeting Date, except with the written consent of
ConAgra, (y) fails to recommend the approval of the Merger Agreement and the
Merger to the GoodMark Shareholders, or (z) withdraws or amends or modifies in a
manner adverse to ConAgra its recommendation or approval in respect of the
Merger Agreement or the Merger or fails to reconfirm such recommendation within
two business days of a written request for such confirmation by ConAgra;
(v) By GoodMark, if the GoodMark Board reasonably determines that a
proposal for an Acquisition Transaction constitutes a Superior Proposal;
provided, however, that GoodMark may not terminate the Merger Agreement on this
basis unless (a) five business days shall have elapsed after delivery to ConAgra
of a written notice of such determination by the GoodMark Board and, during such
five business day period, GoodMark shall have informed ConAgra of the terms and
conditions of such proposal for an Acquisition Transaction and the identity of
the person or group making such proposal for an Acquisition Transaction, and (b)
at the end of such five business day period, the GoodMark Board believes that
such proposal for an Acquisition Transaction constitutes a Superior Proposal to
the transaction contemplated under the Merger Agreement; and
(vi) By GoodMark, if there has been a breach of any of the
representations or warranties, covenants or agreements of ConAgra or Merger Sub
set forth in the Merger Agreement of such magnitude that the closing conditions
under the Merger Agreement cannot be satisfied, which breach is not curable or,
if curable, is not cured within 30 days after written notice of such breach is
given by GoodMark to ConAgra.
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Fees and Expenses and Effect of Termination
Each of GoodMark and ConAgra will bear its own costs and expenses in
connection with the Merger Agreement and the transactions contemplated thereby,
except that expenses incurred in connection with printing and mailing this Proxy
Statement/Prospectus and the Registration Statement shall be shared equally by
ConAgra and GoodMark. The Merger Agreement also provides for the payment of the
following amounts upon termination of the Merger Agreement:
(i) If (A) ConAgra terminates the Merger Agreement as a result of the
GoodMark Board failing to convene a meeting of the GoodMark Shareholders to
approve the Merger on or before the Special Meeting Date, or postpones the date
scheduled for the meeting of the GoodMark Shareholders to approve the Merger
Agreement beyond the Special Meeting Date, or fails to recommend the approval of
the Merger Agreement and the Merger to the GoodMark Shareholders or (B) GoodMark
terminates the Merger Agreement as a result of the GoodMark Board reasonably
determining that a proposal for an Acquisition Transaction constitutes a
Superior Proposal as described above, then, in any such case, GoodMark is
obligated to pay ConAgra within one business day following termination of the
Merger Agreement a termination fee of $9.4 million;
(ii) If ConAgra or GoodMark terminates the Merger Agreement as the
result of the GoodMark Shareholders failing to approve the Merger Agreement by
the requisite vote at a meeting duly convened therefor, or if ConAgra terminates
the Merger Agreement as a result of the number of shares of GoodMark common
stock dissenting from the Merger precluding accounting for the Merger as a
pooling-of-interests pursuant to APB 16, or as a result of the GoodMark Board
withdrawing or amending or modifying in a manner adverse to ConAgra its
recommendation or approval of the Merger Agreement or the Merger, or as a result
of GoodMark failing to perform certain obligations with respect to the Merger
qualifying as a pooling-of-interests, and either before such termination or
within twelve months after the date of such termination (A) GoodMark (i)
consummates an Acquisition Transaction, or (ii) enters into a definitive
agreement to do so (or a tender offer or similar transaction with respect
thereto is commenced), and (B) such Acquisition Transaction or tender offer
proposes consideration to the GoodMark Shareholders of $24.00 per share or more
(which amount is subject to adjustment based on stock dividends, subdivisions,
reclassification, recapitalization, split, combination, exchange or issuance of
shares or similar transactions occurring prior thereto), then, in any such case,
GoodMark shall pay to ConAgra, within one business day following consummation of
any Acquisition Transaction, a termination fee of $9.4 million;
(iii) In the event the transactions contemplated by the Merger
Agreement are terminated for any reason not specified in paragraph (i) or (ii)
above (and other than pursuant to a breach of any of the representations and
warranties, covenants and agreements of ConAgra or Merger Sub set forth in the
Merger Agreement), then GoodMark shall reimburse ConAgra its actual expenses
incurred in connection with the Merger Agreement (including, without limitation,
attorneys' fees and fees of financial advisors) in an amount up to $500,000; and
(iv) If GoodMark terminates the Merger Agreement as a result of a
breach of any of the representations or warranties, covenants or agreements of
ConAgra or Merger Sub set forth in the Merger Agreement, ConAgra shall reimburse
GoodMark its actual expenses incurred in connection
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with the Merger Agreement (including, without limitation, attorneys' fees and
fees of financial advisors) in an amount up to $500,000.
Amendment and Modification
The Merger Agreement may be amended, modified or supplemented at any
time prior to the Effective Time only by written agreement (referring
specifically to the Merger Agreement) of ConAgra and GoodMark with respect to
any of the terms contained in the Merger Agreement; provided, however, that
after any approval and adoption of the Merger Agreement by the shareholders of
GoodMark, no such amendment, modification or supplementation will be made which
under applicable law requires the approval of such shareholders, without the
further approval of such shareholders.
Waiver
At any time prior to the Effective Time, ConAgra, on the one hand, and
GoodMark, on the other hand, may (i) extend the time for the performance of any
of the obligations or other acts of the other, (ii) waive any inaccuracies in
the representations and warranties of the other contained in the Merger
Agreement or in any documents delivered pursuant thereto and (iii) waive
compliance by the other with any of the agreements or conditions contained in
the Merger Agreement which may legally be waived. Any such extension or waiver
will be valid only if set forth in an instrument in writing specifically
referring to the Merger Agreement and signed on behalf of such party.
VOTING AGREEMENTS
In connection with the execution of the Merger Agreement, ConAgra entered
into separate Voting Agreements with each of the following GoodMark
Shareholders: Ron E. Doggett, Jeanette R. Doggett, Michael S. Doggett, Mark P.
Doggett, Jane C. Doggett, Anne D. Davis, Richard Kennedy, Alvin Blalock, Richard
Miller, Paul Brunswick, Ron E. Doggett Charitable Lead Unitrust, Ron E. Doggett
Annuity Trust (One), Ron E. Doggett Annuity Trust (Two), Ron E. Doggett Annuity
Trust (Three), Jeanette R. Doggett Annuity Trust (One), and Jeanette R. Doggett
Annuity Trust (Two) (collectively, the "Voting Agreement Shareholders"). Ron E.
Doggett is the Chairman and Chief Executive Officer of GoodMark. Jeanette R.
Doggett is Mr. Doggett's spouse. Michael S. Doggett, Mark P. Doggett, Jane C.
Doggett and Anne D. Davis are Mr. & Mrs. Doggett's children. Richard Kennedy,
Alvin Blalock, Richard Miller and Paul Brunswick are executive officers of
GoodMark. As of the Record Date, the Voting Agreement Shareholders owned
2,500,240 shares of GoodMark Common Stock, representing approximately 34.6% of
the voting power of the GoodMark Common Stock then outstanding.
Pursuant to the Voting Agreements, the Voting Agreement Shareholders
have: (i) agreed to revoke any and all previous proxies with respect to the
shares of GoodMark Common Stock owned by them; (ii) irrevocably agreed to vote
and otherwise act (including pursuant to written consent), with respect to all
of the shares of GoodMark Common Stock owned by them, for the approval and the
adoption of the Merger Agreement, as the same may be amended from time to time
(in any manner which does not reduce or alter the form of consideration to be
received by the GoodMark Shareholders), all agreements related to the Merger and
any actions related thereto; and (iii) agreed to vote such shares against any
proposal or transaction which could prevent or delay the
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consummation of the transactions contemplated by the Voting Agreements or the
Merger Agreement, at any meeting or meetings of the GoodMark Shareholders, and
at any adjournment, postponement or continuation thereof, at which the Merger
Agreement and other related agreements, or such other actions are submitted for
the consideration and vote of the GoodMark Shareholders. The foregoing
agreements will remain in effect with respect to the shares of GoodMark Common
Stock owned by the Voting Agreement Shareholders until the termination of the
Voting Agreements. The Voting Agreements will terminate on the earlier of (i)
the Effective Time or (ii) the termination of the Merger Agreement in accordance
with its terms.
The Voting Agreements further provide that the Voting Agreement
Shareholders, during the term of the Voting Agreements, will not: (i) subject to
certain exceptions, transfer or consent to any transfer of any or all of the
shares owned by them or any interest therein, except pursuant to the Merger;
(ii) enter into any contract, option or other agreement or understanding with
respect to any transfer of any or all of such shares or any interest therein;
(iii) grant any proxy, power-of-attorney or other authorizations in or with
respect to such shares; or (iv) deposit such shares into a voting trust or enter
into a voting agreement or arrangement with respect to the shares.
Notwithstanding the foregoing, the Voting Agreements provide that the Voting
Agreement Shareholders may transfer any of the shares of GoodMark Common Stock
owned by them to a Permitted Transferee (as defined in the Voting Agreements)
provided that (a) the Voting Agreement Shareholders provide written notice to
ConAgra at least thirty (30) days prior to such transfer, (b) at least fifteen
(15) days prior to any such transfer, the Voting Agreement Shareholders provide
to ConAgra at their expense a written opinion of nationally or regionally
recognized tax counsel, in form and substance reasonably acceptable to ConAgra,
that such transfer will not adversely affect the treatment of the Merger as a
reorganization within the meaning of Section 368 of the Code, (c) each
Shareholder receives from ConAgra at least fifteen (15) days prior to such
transfer notice that such transfer will not adversely affect the Merger
qualifying for pooling-of-interests treatment under APB 16, and (d) prior to any
such transfer, such Permitted Transfer agrees in writing to take such shares
subject to, and comply with, all of the provisions of the Voting Agreements.
The Voting Agreement Shareholders have further agreed, in their
capacity as Shareholders, that, prior to the Effective Time, they will not, and
will use their reasonable best efforts to cause their affiliates, and their
respective agents or representatives not to, directly or indirectly, (i) solicit
or initiate (including by way of furnishing or disclosing non-public
information) any inquiries or the making of any proposal with respect to any
Acquisition Transaction including the shares owned by the Voting Agreement
Shareholders or (ii) negotiate, explore or otherwise engage in discussions with
any person (other than ConAgra and its representatives) with respect to, or
which may reasonably be expected to lead to a proposal for, any Acquisition
Transaction, or enter into any agreement, arrangement or understanding with
respect to any such Acquisition Transaction or which would require the Voting
Agreement Shareholders to abandon, terminate or fail to perform their
obligations under the Stock Voting Agreements or to vote for, or otherwise
support, in their capacity as shareholders, such Acquisition Transaction.
DISSENTERS' RIGHTS
Article 13 (entitled "Dissenters' Rights") of the NCBCA sets forth the
rights of the GoodMark Shareholders who object to the Merger. The following is a
brief summary of the statutory procedures to be followed by a holder of GoodMark
Common Stock in order to dissent
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from the Merger and perfect dissenters' rights under the NCBCA. This summary is
qualified in its entirety by reference to Article 13 of the NCBCA, a copy of
which is attached as Annex C hereto.
If any GoodMark Shareholder elects to exercise such Shareholder's right to
dissent from the Merger and demand appraisal, such Shareholder must satisfy each
of the following conditions:
(i) such Shareholder must give to GoodMark, and GoodMark must
actually receive, before the vote on approval or disapproval of the
Merger is taken, written notice (the "Notice") of such Shareholder's
intent to demand payment for such Shareholder's shares if the Merger is
effectuated (this Notice must be in addition to and separate from any
proxy or vote against the Merger; neither voting against, abstaining
from voting, nor failing to vote on the Merger will constitute a Notice
within the meaning of the NCBCA); and
(ii) such Shareholder must not vote in favor of the Merger (a
failure to vote will satisfy this requirement, but a vote in favor of
the Merger, by proxy or in person, or the return of a signed proxy
which does not specify a vote against approval of the Merger or
direction to abstain, will constitute a waiver of such Shareholder's
dissenters' rights).
If the requirements of (i) and (ii) above are not satisfied and the Merger
becomes effective, a GoodMark Shareholder will not be entitled to payment for
such Shareholder's shares under the provisions of Article 13 of the NCBCA.
Any Notice should be addressed to GoodMark Foods, Inc. 6131 Falls of Neuse
Road, Raleigh, North Carolina 27609, attention Paul L. Brunswick. The Notice
must be executed by the holder of record of shares of GoodMark Common Stock as
to which dissenters' rights are to be exercised. A beneficial owner may assert
dissenters' rights only if he dissents with respect to all GoodMark Common Stock
of which he is the beneficial owner. With respect to shares of GoodMark Common
Stock which are owned of record by a voting trust or by a nominee, the
beneficial owner of such shares may exercise dissenters' rights if such
beneficial holder also submits to GoodMark the record holder's written consent
to such exercise not later than the time such beneficial holder asserts the
dissenters' rights. A record owner, such as a broker, who holds shares of
GoodMark Common Stock as a nominee for others, may exercise dissenters' rights
with respect to the shares held for all or less than all beneficial owners of
shares as to which such person is the record owner, provided such record owner
dissents with respect to all GoodMark Common Stock beneficially owned by any one
person. In such case, the Notice submitted by such broker as record owner must
set forth the name and address of the Shareholder who is objecting to the Merger
and demanding payment for such person's shares.
If the Merger creating dissenter's rights is approved, GoodMark will be
required to mail by registered or certified mail, return receipt requested, a
written notice (the "Dissenters' Notice") to all Shareholders who have satisfied
the requirements of (i) and (ii) above. The notice must be sent no later than
ten days after the Shareholder approval of the Merger, and must (i) state where
the payment demand must be sent and where and when certificates for shares of
GoodMark Common Stock must be deposited; (ii) supply a form for demanding
payment; (iii) set a date by which GoodMark must receive the payment demand (not
fewer than thirty days nor more than sixty days after the Dissenters' Notice is
mailed) and (iv) include a copy of Article 13 of the NCBCA.
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A Shareholder who receives a Dissenters' Notice must demand payment and
deposit such Shareholder's share certificates in accordance with the terms of
the Dissenters' Notice. A Shareholder who demands payment and deposits such
Shareholder's share certificates retains all other rights of a Shareholder until
these rights are canceled or modified by the Merger. A Shareholder who does not
demand payment or deposit such Shareholder's share certificates where required,
each by the date set in the Dissenters' Notice, is not entitled to payment for
their shares under the NCBCA.
Within thirty days after receipt of a demand for payment, GoodMark is
required to pay each dissenting Shareholder the amount GoodMark estimates to be
the fair value of such Shareholder's shares, plus interest accrued from the
Effective Date to the date of payment. The payment must be accompanied by (i)
GoodMark's most recent available balance sheet, income statement and statement
of cash flows as of the end of or for the fiscal year ending not more than
sixteen months before the date of payment, and the latest available interim
financial statements, if any; (ii) an explanation of how GoodMark estimated the
fair value of the shares; (iii) an explanation of the interest calculation; (iv)
a statement of the dissenters' right to demand payment (as described below); and
(v) a copy of Article 13 of the NCBCA.
If the Merger is not consummated within sixty days after the date set
for demanding payment and depositing share certificates, GoodMark must, pursuant
to the NCBCA, return the deposited certificates. If after returning the
deposited certificates the Merger is consummated, GoodMark must send a new
Dissenters' Notice and repeat the payment demand procedure.
A Shareholder may, however, notify GoodMark in writing of such
Shareholder's own estimate of the fair value of his shares and amount of
interest due, and demand payment of the excess of such Shareholder's estimate of
the fair value of such Shareholder's shares over the amount previously paid by
GoodMark if: (i) the Shareholder believes that the amount paid is less than the
fair value of the GoodMark Common Stock or that the interest is incorrectly
calculated; (ii) GoodMark fails to make payment of its estimate of fair value to
a Shareholder within thirty days after receipt of a demand for payment; or (iii)
the Merger not having been consummated, GoodMark does not return the deposited
certificates within sixty days after the date set for demanding payment. A
Shareholder waives the right to demand payment unless such Shareholder notifies
GoodMark of such Shareholder's demand in writing within thirty days of
GoodMark's payment of its estimate of fair value (with respect to clause (i)
above) or GoodMark's failure to perform (with respect to clauses (ii) and (iii)
in this paragraph). A Shareholder who fails to notify GoodMark of his demand
within such thirty-day period shall be deemed to have withdrawn such
Shareholder's dissent and demand of payment.
If a demand for payment remains unsettled, the dissenting Shareholder
may commence a proceeding within sixty days after the earlier of (i) the date of
his payment demand or (ii) the date payment is made, by filing a complaint with
the Superior Court Division of the North Carolina General Court of Justice to
determine the fair value of the shares and accrued interest. If the dissenting
Shareholder does not commence the proceeding within such sixty-day period, the
dissenting Shareholder shall be deemed to have withdrawn the dissent and demand
for payment.
The court in such an appraisal proceeding will determine all costs of
the proceeding and assess the costs as it finds equitable. The proceeding is to
be tried as in other civil actions; however, the dissenting Shareholder will not
have the right to a trial by jury. The court may also assess the
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fees and expenses of counsel and expenses for the respective parties, in the
amounts of the court finds equitable: (i) against GoodMark if the court finds
that it did not comply with the statutes; or (ii) against GoodMark or the
dissenting Shareholder, if the court finds that the party against whom the fees
and expenses are assessed acted arbitrarily, vexatiously or not in good faith.
If the court finds that the services of counsel for any dissenting Shareholder
were of substantial benefit to other dissenting Shareholders, and that the fees
for those services should not be assessed against GoodMark, the court may award
to these counsel reasonable fees to be paid out of the amounts awarded the
dissenting Shareholders who were benefited.
THE SUMMARY SET FORTH ABOVE DOES NOT PURPORT TO BE A COMPLETE STATEMENT
OF THE PROVISIONS OF THE NCBCA RELATING TO THE RIGHTS OF DISSENTING HOLDERS OF
SHARES OF GOODMARK COMMON STOCK AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
THE APPLICABLE SECTIONS OF THE NCBCA, WHICH ARE INCLUDED AS ANNEX "C" TO THIS
PROXY STATEMENT/PROSPECTUS. HOLDERS OF SHARES OF GOODMARK COMMON STOCK INTENDING
TO EXERCISE THEIR DISSENTERS' RIGHTS ARE URGED TO REVIEW CAREFULLY ANNEX "C" AND
TO CONSULT WITH LEGAL COUNSEL SO AS TO BE IN STRICT COMPLIANCE THEREWITH.
If the number of shares of GoodMark Common Stock held by GoodMark
Shareholders dissenting from the Merger would preclude accounting for the Merger
as a pooling-of-interests, ConAgra will have no obligation to consummate the
Merger. See "THE MERGER AGREEMENT"--Conditions to Consummate the Merger."
See "CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS" for a summary of
the tax effects of perfecting and exercising dissenters' rights.
DESCRIPTION OF CONAGRA CAPITAL STOCK
General
The authorized capital stock of ConAgra consists of 1,200,000,000
shares of ConAgra Common Stock, par value $5.00 per share; 150,000 shares of
ConAgra Class B Preferred Stock, $50.00 par value; 250,000 shares of ConAgra
Class C Preferred Stock, $100.00 par value; 1,100,000 shares of ConAgra Class D
Preferred Stock, without par value; and 16,550,000 shares of ConAgra Class E
Preferred Stock, without par value.
Class B Preferred Stock, Class C Preferred Stock, Class D Preferred
Stock and Class E Preferred Stock are issuable in one or more series created by
the Board of Directors of ConAgra, which in creating any such series is given
authority to fix the voting rights, dividend rate, redemption provisions,
liquidation preferences and conversion provisions. On May 1, 1998 there were
outstanding 476,642,716 shares of ConAgra Common Stock. No shares of preferred
stock are currently issued and outstanding.
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Dividends on ConAgra Common Stock
ConAgra Common Stock Dividend Policy. ConAgra has paid cash dividends
on its ConAgra Common Stock each year since 1976. It is the present intention of
ConAgra to continue to pay quarterly cash dividends on ConAgra Common Stock and
that dividend payments, over time, will average in the range of 30 to 35 percent
of cash earnings. The payment of dividends and their amount will however, be
dependent upon ConAgra's earnings, financial position, cash requirements and
other relevant factors, including the satisfaction of preferred stock dividend
requirements.
Dividend Rights. The Board of Directors may declare and pay dividends
on ConAgra Common Stock out of surplus or net earnings. It is anticipated that
any issuance of preferred stock would contain provisions granting the shares so
issued a preference over the ConAgra Common Stock as to the payment of
dividends.
ConAgra Common Stock
Holders of outstanding ConAgra Common Stock are entitled to one vote
for each share. Upon liquidation, the holders of ConAgra Common Stock are
entitled to share ratably in assets available for distribution to stockholders
after satisfaction of any liquidation preferences of any outstanding preferred
stock. The issuance of any additional shares of series of preferred stock in
future financings, acquisitions or otherwise may result in dilution of voting
power and relative equity interest of the holders of shares of ConAgra Common
Stock and will subject the ConAgra Common Stock to the prior dividend and
liquidation rights of the outstanding shares of the series of preferred stock.
The shares of ConAgra Common Stock to be offered hereunder are fully
paid and non-assessable. The ConAgra Common Stock has no conversion rights nor
are there any redemption or sinking fund provisions with respect to such stock.
Holders of ConAgra Common Stock have no pre-emptive right to subscribe for or
purchase any additional stock or securities of ConAgra.
Voting Rights in Certain Cases
Article XIV of the ConAgra Certificate of Incorporation requires, with
certain exceptions, a 75% affirmative vote of ConAgra's stock to approve (i) a
merger or consolidation with, (ii) the issuance or transfer of securities of
ConAgra in exchange for assets, securities or cash to, or (iii) the sale of all
or a substantial part of the assets of ConAgra to another person, corporation or
other entity, that owns beneficially, directly or indirectly, 5% or more of
ConAgra's outstanding capital stock entitled to vote generally in the election
of directors. The 75% voting requirement does not apply if a majority of the
outstanding shares of all classes of capital stock of such other corporation
entitled to vote generally in the election of directors, considered as one
class, is owned of record or beneficially by ConAgra or its subsidiaries, the
transaction was approved by a majority of ConAgra's Board of Directors prior to
the time that the other entity became a beneficial owner of 5% or more of
ConAgra's outstanding shares, or if the transaction is approved by a
three-fourths vote of ConAgra's Board of Directors at any time prior to its
consummation.
Article XV of the ConAgra Certificate of Incorporation requires the
approval of 95% of ConAgra's stock entitled to vote in the election of
directors, voting as one class, for any business
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combination with any other entity, if, as of the applicable record date, such
other entity is the beneficial owner directly or indirectly of 30% of the
outstanding shares of ConAgra stock entitled to vote. Such 95% voting
requirement shall be inapplicable if certain fair price, dividend, proxy, and
other procedures detailed in such Article XV have been observed by such other
entity since it acquired 30% control. Article XV cannot be amended, altered,
changed or repealed without a 95% vote of all stockholders of ConAgra entitled
to vote in an election of directors, considered as one class, unless such
amendment, alteration, change or repeal is recommended to the stockholders by a
vote of 80% of the directors who would be eligible to serve as "continuing
directors" as that term is defined in Article XV.
Article XVI of the ConAgra Certificate of Incorporation prescribes
relevant factors, including social and economic effects on employees, customers,
suppliers and other constituents of ConAgra, to be considered by the Board of
Directors when reviewing any proposal by another corporation to acquire or
combine with ConAgra.
Article XVII of the ConAgra Certificate of Incorporation requires that
any action required or permitted to be taken by ConAgra's stockholders must be
effected at a duly called annual or special meeting of the stockholders and may
not be effected by a consent in writing by such stockholders.
Article XVIII of the ConAgra Certificate of Incorporation provides in
general that any direct or indirect purchase by ConAgra or any subsidiary of
ConAgra of any of its Voting Stock (as defined in Article XVIII), or rights to
acquire Voting Stock, known to be beneficially owned by any person or group that
holds more than 3% of a class of its Voting Stock (an "Interested Stockholder")
and that has owned the securities being purchased for less than two years, must
be approved by the affirmative vote of at least a majority of the votes entitled
to be cast by the holders of the Voting Stock (excluding Voting Stock held by an
Interested Stockholder). Article XVIII is intended to prevent "greenmail," which
is a term used to describe the accumulation of a block of a corporation's stock
by a speculator and the subsequent attempt by the speculator to coerce the
corporation into repurchasing its shares, typically at a substantial premium
over the market price.
Article VII requires that the ConAgra Board of Directors consist of
nine to sixteen members divided into three classes of as nearly equal size as
possible. The terms of the directors are staggered such that the terms of
approximately one-third of the directors expire at each annual election of
directors. The provisions of Article VII may not be amended without (i) the
affirmative vote of 80% of all outstanding voting stock or (ii) the affirmative
vote of a majority of outstanding voting stock and the affirmative vote of at
least 75% of the Board of Directors.
Article VII, Article XIV, Article XV, Article XVI, Article XVII and
Article XVIII may be deemed to have anti-takeover effects. Such provisions may
discourage or make more difficult an attempt by a stockholder or other entity to
acquire control of ConAgra. Also, it may be more difficult for a stockholder or
other entity to remove management. Furthermore, the provision for a classified
Board of Directors may make more difficult removal of directors, even when such
removal is considered desirable.
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Rights Dividend
On July 12, 1996, the Board of Directors of ConAgra declared a dividend
of one preferred share purchase right (a "Right") for each outstanding share of
ConAgra Common Stock for stockholders of record on July 24, 1996 (the Record
Date"). The one Right for each outstanding share of ConAgra Common Stock was
adjusted to one-half Right for each share effective October 1, 1997 as a result
of an adjustment made following a two-for-one stock split of the ConAgra Common
Stock.
The Rights will expire on July 12, 2006. The Rights are represented by
the ConAgra Common Stock certificates and are not exercisable or transferable
apart from the ConAgra Common Stock certificates except upon the occurrence of
certain events described below. Pursuant to the Rights Agreement, the exercise
price and the number of shares of Preferred Stock or other securities or other
property issuable are subject to adjustment in the event of stock splits, stock
dividends and certain other distributions and customary antidilution provisions.
All shares of ConAgra Common Stock issued between July 24, 1996 and the earlier
of (i) July 12, 2006, (ii) the date on which the Rights are redeemed, or (iii) a
date generally ten days after a Share Acquisition Date, will receive Rights.
Each Right entitles the registered holder to purchase from ConAgra one
one-thousandth of a share of Series A Junior Participating Class E Preferred
Stock, without par value, of ConAgra (the "Preferred Stock") at a price of $200
per one one-thousandth of a share of Preferred Stock (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth in
a Rights Agreement dated as of July 12, 1996, as the same may be amended from
time to time (the "Rights Agreement"), between the Company and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent (the "Rights Agent").
The Rights become exercisable on the earlier to occur of (i) ten days
following announcement that a person or group (the "Acquiring Person") has
acquired 10% or more of the ConAgra Common Stock (the date of such announcement
being called the "Share Acquisition Date") or (ii) ten days following the
commencement of (or announcement of an intention to make) a tender offer for 15%
or more of the ConAgra Common Stock.
Shares of Preferred Stock purchasable upon exercise of the Rights will
not be redeemable. Each share of Preferred Stock will be entitled, when, as and
if declared, to a minimum preferential quarterly dividend payment of $1.00 per
share but will be entitled to an aggregate dividend of 2000 times the dividend
declared per share of ConAgra Common Stock. In the event of liquidation,
dissolution or winding up of the ConAgra, the holders of the Preferred Stock
will be entitled to a minimum preferential payment of $100 per share (plus any
accrued but unpaid dividends) but will be entitled to an aggregate payment of
2000 times the payment made per share of ConAgra Common Stock. Each share of
Preferred Stock will have 2000 votes, voting together with the ConAgra Common
Stock. In the event of any merger, consolidation or other transaction in which
outstanding shares of ConAgra Common Stock are converted or exchanged, each
share of Preferred Stock will be entitled to receive 2000 times the amount
received per share of ConAgra Common Stock.
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Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the value of the one one-thousandth interest in a share of
Preferred Stock purchasable upon exercise of each Right should approximate the
value of two shares of ConAgra Common Stock.
In the event that any person or group becomes an Acquiring Person, the
Rights Agreement provides that each holder of a Right (other than an Acquiring
Person) will thereafter have the right to receive, upon exercise, shares of
ConAgra Common Stock having a value of twice the exercise price of the Right.
In the event that (i) ConAgra engages in a merger or other business
combination transaction in which ConAgra is not the surviving company, or (ii)
50% or more of ConAgra's assets or earning power is sold, the Rights Agreement
provides that each holder of a Right shall thereafter have the right to receive,
upon exercise, shares of common stock of the acquiring company having a value of
twice the exercise price of the Right.
At any time after any person or group becomes an Acquiring Person and
prior to the earlier of one of the events described in the previous paragraph or
the acquisition by such Acquiring Person of 50% or more of the outstanding
shares of ConAgra Common Stock, the Board of Directors of ConAgra may exchange
the Rights (other than Rights owned by such Acquiring Person which will have
become void), in whole or in part, for shares of ConAgra Common Stock or
Preferred Stock (or a series of ConAgra's preferred stock having equivalent
rights, preferences and privileges).
At any time on or prior to the Share Acquisition Date, ConAgra may
redeem the Rights at a redemption price of $.01 per Right.
COMPARISON OF THE RIGHTS OF HOLDERS OF GOODMARK
COMMON STOCK AND CONAGRA COMMON STOCK
As a result of the Merger, GoodMark Shareholders, whose rights are now
governed primarily by the NCBCA, the articles of incorporation of GoodMark (the
"GoodMark Articles of Incorporation") and by-laws of GoodMark (the "GoodMark
By-Laws") will become stockholders of ConAgra, a Delaware corporation, and as
such their rights will be governed by the General Corporation Law of Delaware
(the "DGCL"), the ConAgra Certificate of Incorporation and the by-laws of
ConAgra (the "ConAgra By-laws"). Certain differences arise from the change in
governing law as well as from distinctions between the GoodMark Articles of
Incorporation and the GoodMark By-laws and the ConAgra Certificate of
Incorporation and the ConAgra By-Laws. The material differences in the rights of
stockholders of GoodMark and ConAgra are discussed below. The following
comparison of certain provisions of the DGCL and the ConAgra Certificate of
Incorporation and By-Laws, on the one hand, the NCBCA and the GoodMark Articles
of Incorporation and By-Laws, on the other, does not purport to be a complete
statement of the differences which may affect the rights of shareholders.
Authorized Capital Stock
The GoodMark Articles of Incorporation provide that GoodMark has
authority to issue 20,000,000 shares of GoodMark Common Stock, par value $.01
per share. The ConAgra Certificate of Incorporation provides that ConAgra has
the authority to issue (i) 1,200,000,000 shares of
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ConAgra Common Stock, par value $5.00 per share, (ii) 150,000 shares of Class B
stock, par value $50.00 per share ("Class B Stock"), (iii) 250,000 shares of
Class C Preferred Stock, par value $100.00 per share ("Class C Stock"), (iv)
1,100,000 shares of Class D Preferred Stock, without par value ("Class D
Stock"), and (v) 16,550,000 shares of Class E Preferred Stock, without par value
("Class E Stock").
Common Stock
Holders of ConAgra Common Stock do not have preemptive rights, or any
subscription, redemption or conversion privileges. Holders of ConAgra Common
Stock are entitled to participate ratably in dividends on ConAgra Common Stock,
if any, as declared by the ConAgra Board, and are entitled to share ratably in
all assets available for distribution to stockholders in the event of
liquidation or dissolution of ConAgra. The outstanding shares of ConAgra Common
Stock are, and the shares of ConAgra Common Stock to be issued in connection
with the Merger in exchange for outstanding shares of GoodMark Common Stock will
be, legally issued, fully paid and nonassessable.
Holders of GoodMark Common Stock do not have preemptive rights or any
subscription, redemption or conversion privileges. Holders of GoodMark Common
Stock are entitled to participate ratably in dividends on GoodMark Common Stock,
if any, as declared by the GoodMark Board, and are entitled to share ratably in
all assets available for distribution to shareholders in the event of
liquidation or dissolution of GoodMark.
Board Authorized Preferred Stock
The GoodMark Articles of Incorporation do not authorize the GoodMark
Board to issue preferred stock. However, under the ConAgra Certificate of
Incorporation, the ConAgra Board is authorized to issue, without further
stockholder approval, some or all of the shares of Class B Stock, Class C Stock,
Class D Stock and/or Class E Stock from time to time with such voting rights,
dividend rate, redemption provisions, liquidation preferences, and conversion
provisions as may be determined by the ConAgra Board.
Voting Rights
All voting rights in ConAgra and GoodMark are presently vested in the
holders of ConAgra Common Stock and GoodMark Common Stock, respectively. Each
share of ConAgra Common Stock and each share of GoodMark Common Stock is
entitled to one vote on all matters presented to the stockholders. The voting
rights vested in holders of ConAgra Common Stock are subject to the authority
granted in the ConAgra Certificate of Incorporation to the ConAgra Board to
issue preferred stock with voting rights. The GoodMark Articles of Incorporation
do not authorize the issuance of any preferred stock.
Directors
Number. The ConAgra By-Laws provide that the number of directors will
not be less than nine nor more than sixteen. The ConAgra Board currently
consists of fifteen members. The ConAgra By-Laws provides that the ConAgra Board
has the exclusive right to fill vacancies in the ConAgra Board, including
vacancies created by expansion of the ConAgra Board or the removal of
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a director, and that any director elected to fill a vacancy shall serve until
the next election of the class for which such director shall have been chosen.
The GoodMark By-Laws provide that the number of directors will not be
less than three nor more than nine. The GoodMark Board currently consists of
seven members. In accordance with the NCBCA and the GoodMark Articles of
Incorporation, vacancies on the Board may be filled by either the Shareholders
or the remaining directors.
Removal of Directors. The ConAgra By-Laws provide that directors may be
removed from office with or without cause only by the holders of a majority of
the outstanding shares then entitled to vote at an election of directors.
The GoodMark By-Laws provide that directors may be removed from office
with or without cause by a vote of shareholders holding at least 66-2/3% of the
shares entitled to vote at an election of directors.
Classified Board. The DGCL permits, but does not require, the adoption
of a "classified" board of directors with staggered terms under which part of
the board of directors is elected each year for a maximum term of three years.
The ConAgra By-Laws provide for such a "classified" board of directors and
divide the board into three classes. The DGCL provides that a corporation's
directors shall be elected by a plurality of the votes of the shares present in
person or represented by proxy at a meeting and entitled to vote on the election
of directors. Under the DGCL, stockholders of a corporation may not elect
directors by cumulative voting unless the corporation's certificate of
incorporation so provides. The ConAgra Certificate of Incorporation does not
provide for cumulative voting.
The NCBCA permits, but does not require, the adoption of a "classified"
board of directors with staggered terms under which part of the board of
directors is elected each year for a maximum term of four years. The GoodMark
Articles of Incorporation do not provide for such a "classified" board of
directors. The NCBCA provides that a corporation's directors shall be elected by
plurality of the votes of the shares present in person or represented by proxy
at a meeting and entitled to vote on the elections of directors. Under the
NCBCA, shareholders of a corporation may not elect directors by cumulative
voting unless the corporation's articles of incorporation so provide. The
GoodMark Articles of Incorporation do not provide for cumulative voting for the
election of directors.
Dissenters' Rights
Under the DGCL, a stockholder of a corporation participating in certain
merger and similar transactions may, under certain circumstances, receive cash
in the amount of the fair value of such person's shares (as determined by a
court) in lieu of the consideration such person would otherwise receive in the
merger. The DGCL does not provide stockholders with appraisal upon a sale of all
or substantially all of the assets of a corporation unless otherwise provided by
the corporation's certificate of incorporation. Unless a corporation's
certificate of incorporation provides otherwise, the DGCL also does not require
that dissenters' rights of appraisal be afforded with respect to a merger or
consolidation (i) to stockholders of a corporation, the shares of which are
either listed on a national securities exchange or the Nasdaq National Market or
widely held (by more than 2,000
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stockholders), if the stockholders of such corporation receive only shares of
the surviving corporation or of a listed or widely held corporation (plus cash
in lieu of any fractional shares), or (ii) to stockholders of a corporation
surviving a merger, if no vote of such stockholders is required to approve the
merger because, pursuant to Section 251(f) of the DGCL, the agreement of merger
does not amend the certificate of incorporation of the surviving corporation,
each share of stock of the surviving corporation outstanding immediately prior
to the effective date of the merger is to be identical to outstanding or
treasury shares of the surviving corporation after the effective date of the
merger and the number of shares of common stock into which securities to be
issued in the merger can be converted does not exceed 20% of the shares of
common stock of the surviving corporation outstanding immediately prior to the
merger. The ConAgra Certificate of Incorporation does not provide for separate
appraisal rights and thus holders of shares of ConAgra Common Stock (in light of
the fact that such shares are traded on the New York Stock Exchange) may not be
entitled to appraisal rights in certain circumstances.
Under the NCBCA, a shareholder of a North Carolina corporation may have
dissenters' rights in connection with the consummation of a merger in which the
corporation participates, the consummation of the sale of all or substantially
all of the corporation's assets, certain amendments to the articles of
incorporation of the corporation and similar transactions. The NCBCA also
provides an exception to the application of dissenters' rights for a corporation
whose shares are traded on a national securities exchange or otherwise held by
more than 2,000 shareholders. The application of dissenters' rights under North
Carolina law with respect to the Merger is described herein under "DISSENTERS'
RIGHTS."
Derivative Actions
Derivative actions may be brought in Delaware by a stockholder on
behalf of, and for the benefit of, a Delaware corporation. The DGCL provides
that a stockholder must aver in the complaint that such person was a stockholder
of the corporation at the time of the transaction of which such person
complains. A stockholder may not sue derivatively unless such person first makes
a demand on the corporation that it bring suit and such demand is refused,
unless it is shown that such demand would have been futile.
Under the NCBCA, a shareholder of a North Carolina corporation, who was
a shareholder, by operation of law or otherwise, at the time of the action or
omission complained of may institute a lawsuit in the name of the corporation
upon meeting certain requirements, including the requirement of making a written
demand upon the corporation to take appropriate action and refraining from
filing a lawsuit with respect to such demand until ninety days expires following
such demand, unless the corporation notifies the shareholder that it rejected
the demand or unless irreparable injury would result to the corporation by
waiting for the ninety days to expire.
Amendment of Charter and By-Laws
The DGCL requires approval of the corporation's Board of Directors
followed by the affirmative vote of a majority of the outstanding stock of each
class entitled to vote for any amendment to the certificate of incorporation,
unless a greater level of approval is required by the certificate of
incorporation. The ConAgra Certificate of Incorporation does not require a
greater level of approval. If any amendment would, among other things, alter the
powers, preferences or
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special rights of a particular class or series of stock so as to affect them
adversely, the class or series shall be given the power to vote as a class
notwithstanding the absence of any specifically enumerated power in the
certificate of incorporation. The DGCL also states that the power to adopt,
amend or repeal the by-laws of a corporation shall be in the stockholders
entitled to vote, provided that the corporation in its certificate of
incorporation may confer such power on the board of directors in addition to the
stockholders. The ConAgra Certificate of Incorporation expressly authorizes the
ConAgra Board to adopt, amend or repeal the ConAgra By-Laws.
The NCBCA generally requires the recommendation of the Board of
Directors and the approval of the shareholders by a majority of the votes cast
or, if the amendment would create dissenters' rights, by a majority of the votes
entitled to be cast. In addition, the GoodMark Articles of Incorporation require
that amendments thereto be approved by the holders of the majority of the
outstanding shares entitled to vote, or, if a specified GoodMark Board approval
is not obtained, by the holders of two-thirds of the outstanding shares entitled
to vote. Under the NCBCA, shareholders can amend or repeal a corporation's
by-laws, even though the by-laws can be amended by the board of directors. In
the absence of a provision in the articles of incorporation or the by-laws
requiring shareholder action to amend the by-laws, the board of directors is
authorized to amend them without shareholder approval, except that the board of
directors may not adopt, repeal or amend a by-law adopted, repealed or amended
by the shareholders, unless the articles of incorporation or a by-law adopted by
the shareholders authorizes the board of directors to adopt, amend or repeal
that particular by-law or the by-laws generally. The GoodMark By-Laws expressly
authorize the GoodMark Board to amend or repeal GoodMark's By-Laws, except to
the extent otherwise provided in GoodMark's Articles of Incorporation, a by-law
adopted by the GoodMark Shareholders, or the NCBCA, and except that a by-law
adopted, amended or repealed by the GoodMark Shareholders may not be readopted,
amended or repealed by the GoodMark Board if neither of the GoodMark Articles of
Incorporation nor a by-law adopted by the shareholders authorizes the GoodMark
Board to adopt, amend or repeal that particular by-law or by-laws generally. In
addition, a by-law that fixes a greater quorum or voting requirement for the
GoodMark Board may be amended or repealed: (i) if originally adopted by the
GoodMark Shareholders, only by the GoodMark Shareholders, unless the by-law
permits amendment or repeal by the GoodMark Board; or (ii) if originally adopted
by the GoodMark Board, either by the GoodMark Shareholders or by the GoodMark
Board. A by-law that fixes a greater quorum or voting requirement for the
GoodMark Board may not be adopted by the GoodMark Board by a vote of less than a
majority of the directors then in office and may not itself be amended by a
quorum or vote of the directors less than the quorum or vote therein prescribed
or prescribed by a by-law adopted or amended by the Shareholders. Finally, a
by-law adopted or amended by the GoodMark Shareholders that fixes a greater
voting or quorum requirement for the GoodMark Board may provide that it may be
amended or repealed only by specific vote of either the GoodMark Shareholders or
the GoodMark Board.
Advance Notice for Raising Business or Making Nominations at Annual Meetings
The ConAgra By-Laws establish an advance notice procedure for
stockholder proposals to be brought before an annual meeting of stockholders of
ConAgra and for nominations by stockholders of candidates for election as
directors at an annual meeting or a special meeting at which directors are to be
elected. Subject to any other applicable requirements, including, without
limitation, Rule 14a-8 under the Exchange Act, or any successor provision, only
such business may be conducted at an annual meeting of stockholders as has been
brought before the meeting by, or at
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the direction of, the ConAgra Board, or by a stockholder who has provided the
Secretary of ConAgra timely written notice of the stockholder's intention to
bring such business before the meeting. Only persons who are nominated by, or at
the direction of, the ConAgra Board, or who are nominated at the meeting by a
stockholder who has given timely written notice to the Secretary of ConAgra
prior to the meeting at which directors are to be elected, will be eligible for
election as directors of ConAgra. Such notice must be received by ConAgra not
less than 60 nor more than 90 days prior to the anniversary of its prior annual
meeting.
Notice to bring business before an annual meeting of stockholders must
include: (i) a brief description of the business desired to be brought before
the annual meeting and the reasons for conducting such business at the annual
meeting, (ii) the name and address, as they appear on ConAgra's books, of the
stockholder proposing such business, (iii) the class and number of shares of
ConAgra which are beneficially owned by the stockholder, and (iv) any material
interest of the stockholder in such business. Notice as to nominations of a
director must include: (a) as to each person whom the stockholder proposes to
nominate for election or reelection as a director, all information related to
such person that is required to be disclosed in solicitation of proxies for
election of directors, or as otherwise required, in each case pursuant to
Regulation 14A under the Exchange Act, as amended (including such person's
written consent to be named as a nominee and to serve as a director if elected);
and (b) as to the stockholder giving the notice (i) the name and address, as
they appear on ConAgra's books, of such stockholder, and (ii) the class and
number of shares of ConAgra which are beneficially owned by such stockholder.
The GoodMark By-Laws do not provide for a similar advance notice
procedure for shareholder proposals or nominations at an annual meeting.
Indemnification and Limitations of Liability
The DGCL provides that a corporation may limit or eliminate a
director's personal liability for monetary damages to the corporation or its
stockholders, except for liability (i) for any breach of the director's duty of
loyalty to such corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) for paying a dividend or approving a stock repurchase in violation of
Section 174 of the DGCL, or (iv) for any transaction from which the director
derived an improper personal benefit. The ConAgra Certificate of Incorporation
provides that, to the full extent provided by law, a director will not be
personally liable for monetary damages to such corporation or its stockholders
for or with respect to any acts or omissions in the performance of his or her
duties as a director of such corporation.
Under the DGCL, directors and officers as well as other employees and
individuals may be indemnified against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement in connection with specified
actions, suits or proceedings, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation as a
derivative action) if they acted in good faith and in a manner they reasonably
believed to be in, or not opposed to, the best interest of, the corporation,
and, with respect to any criminal action or proceeding, if they had no
reasonable cause to believe their conduct was unlawful. The ConAgra Certificate
of Incorporation and the ConAgra By-Laws provide to directors and officers
indemnification to the full extent provided by law, thereby affording the
directors and officers of ConAgra the protection available to directors and
officers of Delaware corporations. Article VIII
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of the ConAgra By-Laws also provides that expenses incurred by certain employees
in defending a civil or criminal action, suit or proceeding by reason of the
fact that such person is or was a director or officer shall be paid in advance
of the final disposition of such action, suit or proceeding, upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it is ultimately determined that he or she is not entitled to be indemnified by
ConAgra as authorized by relevant Delaware law. ConAgra has purchased a
directors and officers liability insurance policy that provides coverage to
ConAgra and to its officers and directors for actions taken by them in the
ordinary course of their duties.
The GoodMark Articles of Incorporation limit the personal liability of
GoodMark's directors for monetary damages for breach of any duty as a director.
The limitation does not apply to: (i) acts or omissions that the director at the
time of such breach knew or believed were clearly in conflict with the best
interests of the corporation; (ii) liability for unlawful distributions approved
by a director; (iii) any transaction from which the director derived an improper
personal benefit; or (iv) acts or omissions occurring prior to the date the
provision limiting liability became effective.
Pursuant to the NCBCA, a corporation may, with certain exceptions,
indemnify a director, officer, employee or agent of the corporation who was, is
or is threatened to be made a party to any threatened, pending or completed
legal action, suit or proceeding because of the fact that such a person was a
director, officer, agent or employee of the corporation, or is or was serving at
the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. This indemnity may include the obligation to
pay any judgment, settlement, penalty, fine and reasonable expenses incurred in
connection with the proceeding (including counsel fees), but no indemnification
may be granted unless such director, officer, agent or employee (i) conducted
himself in good faith, (ii) reasonably believed (1) that any action taken in his
official capacity with the corporation was in the best interest of the
corporation or (2) that in all other cases, his conduct at least was not opposed
to the corporation's best interest, and (iii) in the case of any criminal
proceeding, had no reasonable cause to believe his conduct was unlawful. The
corporation, however, may not indemnify a director in connection with a
proceeding by or in right of the corporation in which the director was adjudged
liable to the corporation or in connection with a proceeding in which a director
was adjudged liable on the basis of having received an improper personal
benefit. In addition to, and separate from, the indemnification described above,
the NCBCA permits a corporation to indemnify or agree to indemnify any of its
directors, officers, employees or agents against liability and expenses
(including counsel fees) in any proceeding (including proceedings brought by or
on behalf of the corporation) arising out of their status as such or their
activities in such capacities, except for any liabilities or expenses incurred
on account of activities that were, at the time taken, known or believed by the
person to be clearly in conflict with the best interests of the corporation. The
GoodMark By-Laws provide for indemnification to the fullest extent permitted
under North Carolina Law.
GoodMark has purchased a directors and officers liability insurance
policy that provides coverage to GoodMark and to its officers and directors for
actions taken by them in the ordinary course of their duties.
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Provisions Applicable to Business Combinations and Changes in Control
Under Section 203 of the DGCL, certain "business combinations" between
a Delaware corporation, whose stock generally is publicly traded or held of
record by more than 2,000 stockholders, and an "interested stockholder" are
prohibited for a three year period following the date that such stockholder
became an interested stockholder, unless (i) prior to the date such stockholder
became an interested stockholder, the board of directors of the corporation
approved the business combination or the transaction that resulted in the person
becoming an interested stockholder, (ii) upon consummation of the transaction
that made it an interested stockholder, the interested stockholder owned at
least 85% of the voting stock of the corporation outstanding at the commencement
of the transaction (excluding voting stock owned by directors who are also
officers or held in employee benefit plans in which the employees do not have a
confidential right to tender or vote stock held by the plan), or (iii) the
business combination was approved by the board of directors of the corporation
and ratified by holders of 66-2/3% of the voting stock which the interested
stockholder did not own. The three year prohibition also does not apply to
certain business combinations proposed by an interested stockholder following
the announcement or notification of certain extraordinary transactions involving
the corporation and a person who had not been an interested stockholder during
the previous three years or who became an interested stockholder with the
approval of a majority of the corporation's directors.
The term "business combination" is defined generally to include mergers
or consolidations between a Delaware corporation and an "interested
stockholder", transactions with an "interested stockholder" involving the assets
or stock of the corporation or its majority-owned subsidiaries and transactions
which increase an interested stockholder's percentage ownership of stock. The
term "interested stockholder" is defined generally as any stockholder who
becomes the beneficial owner of 15% or more of a Delaware corporation's voting
stock.
See "DESCRIPTION OF CONAGRA CAPITAL STOCK--Voting Rights in Certain
Cases," and "Rights Dividend" for a description of voting rights in certain
cases of holders of ConAgra stock pursuant to the ConAgra Certificate of
Incorporation and certain ConAgra preferred share purchase rights.
Pursuant to the North Carolina Shareholder Protection Act of the NCBCA,
no business combination (defined to include any merger, consolidation, share
exchange or sale of all or any substantial part of the corporation's assets)
involving a corporation (such as GoodMark) which has a class of securities
registered under the Exchange Act and any entity that is the beneficial owner,
directly or indirectly, of more than 20% of the corporation's voting shares may
be consummated unless the holders of 95% of the outstanding voting shares
approve the business combination. This provision does not apply if the parties
comply with certain requirements specified in the NCBCA relating to the value of
the consideration paid in the business combination, the composition of the
corporation's board of directors, the disclosure to stockholders regarding the
business combination and other procedural matters. GoodMark has opted out of,
and is not subject to, the North Carolina Shareholder Protection Act.
The North Carolina Control Share Acquisition Act of the NCBCA applies
to a corporation that is incorporated in North Carolina and that has substantial
assets in North Carolina, its principal place of business or a principal office
within North Carolina, a class of securities registered under
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the Exchange Act and more than 10% of its shareholders resident in North
Carolina or more than 10% of its shares held by North Carolina residents. The
North Carolina Control Share Acquisition Act restricts the voting rights of a
person who acquires "control shares" in a subject corporation. Control shares
are shares that, when added to all other shares of the subject corporation
beneficially owned by a person, would entitle that person to voting power equal
to or greater than one-fifth, one-third or a majority of all voting power.
Without shareholder approval by "disinterested shareholders," the shares
acquired by the acquiror have no voting rights. Disinterested shareholders are
shareholders other than the acquiror and the employee-directors of the subject
corporation. If the shares held by acquiror are accorded voting rights pursuant
to the procedure described above and the acquiror beneficially holds more than
50% of the voting power for the election of directors, each of the corporation's
other shareholders have the right to require that the corporation redeem their
shares at a price not less than the highest price per share paid by the acquiror
for any of its shares. GoodMark has opted out of, and is not subject to, the
North Carolina Control Share Acquisition Act.
Vote Required for Extraordinary Transactions
The DGCL requires the affirmative vote of a majority of the outstanding
stock entitled to vote thereon to authorize any merger or consolidation of a
corporation, except that, unless required by its certificate of incorporation,
no authorizing stockholder vote is required of a corporation surviving a merger
if (i) such corporation's certificate of incorporation is not amended in any
respect by the merger; (ii) each share of stock of such corporation outstanding
immediately prior to the effective date of the merger will be an identical
outstanding or treasury share of the surviving corporation after the effective
date of the merger; and (iii) the number of voting shares to be issued in the
merger does not exceed 20% of such corporation's outstanding common stock
immediately prior to the effective date of the merger.
The NCBCA requires the affirmative vote of a majority of votes entitled
to be cast by each voting group entitled to vote thereon to authorize any merger
or consolidation of a corporation, except that, unless required by its articles
of incorporation, no authorizing shareholder vote is required of a corporation
surviving a merger if: (i) such corporation's articles of incorporation are not
amended in any respect by the merger; (ii) each shareholder of such corporation
whose shares were outstanding immediately prior to the merger will hold the same
shares, with identical designations, preferences, limitations, and relative
rights, immediately after the effective date of the merger; (iii) the number of
voting shares outstanding immediately after the merger, plus the number of
voting shares to be issued in the merger does not exceed by more than 20% the
total number of such corporation's outstanding voting shares immediately prior
to the effective date of the merger; and (iv) the number of participating shares
outstanding immediately after the merger, plus the number of participating
shares to be issued in the merger does not exceed by more than 20% the total
number of such corporation's outstanding participating shares immediately prior
to the effective date of the merger. The GoodMark Articles of Incorporation
require an affirmative vote of the GoodMark Shareholders holding at least a
majority of the issued and outstanding shares of GoodMark entitled to vote
thereon if a Business Combination (as defined in the GoodMark Articles of
Incorporation) has received the prior approval by resolution adopted by an
affirmative vote of at least 66-2/3% of the full GoodMark Board before such
Business Combination is submitted for approval to the GoodMark Shareholders; or
by affirmative vote of the shareholders holding at least 66-2/3% of the issued
and outstanding shares of GoodMark entitled to vote thereon if such Business
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Combination has received the prior approval by resolution adopted by an
affirmative vote of the majority of a quorum (but less than 66-2/3%) of the
GoodMark Board. If a Business Combination has received the prior approval by
resolution adopted by an affirmative vote of the majority of a quorum (but less
than 66-2/3%) of the GoodMark Board, certain fair price provisions and a
prohibition against changes in the annual rate of dividends paid on the GoodMark
Common Stock contained in the GoodMark Articles of Incorporation are triggered.
Except as described above, the GoodMark Articles of Incorporation and
the GoodMark ByLaws do not provide certain voting rights with respect to
extraordinary transactions comparable to the rights provided in the ConAgra
Certificate of Incorporation. See "DESCRIPTION OF CONAGRA CAPITAL STOCK--Voting
Rights in Certain Cases" for a description of voting rights of stockholders of
ConAgra in certain cases.
Special Meetings of Stockholders
The ConAgra By-Laws provide that special meetings of stockholders of
ConAgra may be called at any time by the Chairman of the ConAgra Board or the
Chief Executive Officer of ConAgra or by a majority of the directors of ConAgra.
The GoodMark By-Laws provide that special meetings of the GoodMark Shareholders
may be called at any time by GoodMark's Chief Executive Officer, President,
Chairman of the Board, or the GoodMark Board. The GoodMark By-Laws also provide
that special meetings may be called at any time by the GoodMark Shareholders if
the holders of at least 25% (10% in the event GoodMark at the time does not have
a class of shares registered under Section 12 of the Exchange Act) of all votes
entitled to be cast on any issue proposed to be considered at the proposed
special meeting, sign, date and deliver to the secretary of GoodMark a written
demand for the meeting describing the purpose or purposes for which it is to be
held.
Stockholder Consent in Lieu of Meeting
Under the DGCL, unless otherwise provided in the certificate or
articles of incorporation, any action required to be taken or which may be taken
at any annual or special meeting of stockholders may be taken without a meeting
if a consent in writing is signed by the holders of outstanding stock having not
less than the minimum number of votes that would be necessary to authorize such
action at a meeting at which all shares entitled to vote were present and voted.
Under the NCBCA, shareholders may not act by written consent unless such consent
is unanimous. The GoodMark Articles of Incorporation do not impose any
limitations on actions of shareholders by written consent. The ConAgra
Certificate of Incorporation requires that any action required or permitted to
be taken by stockholders of ConAgra must be effected at a duly called annual or
special meeting of the stockholders and may not be effected by a consent in
writing by such stockholders.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this Proxy Statement/Prospectus by reference from ConAgra's
annual report on Form 10-K for the year ended May 25, 1997 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports, which
are incorporated herein by reference (which express an unqualified opinion and
include an explanatory paragraph relating to the adoption of the Financial
Accounting Standards Board's Statement of Financial Accounting Standards No. 121
"Accounting for the Impairment of
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Long-Lived Assets and Long-Lived Assets to be Disposed Of"), and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
The financial statements and the related financial statement schedules
incorporated in this Proxy Statement/Prospectus by reference from GoodMark's
annual report on Form 10-K for the year ended May 25, 1997 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports, which
are incorporated herein by reference and have been so incorporated in reliance
upon the reports of such firm given upon their authority as experts in
accounting and auditing.
Documents incorporated herein by reference in the future will include
financial statements, related schedules (if required) and auditors' reports,
which financial statements and schedules will have been audited to the extent
and for the period set forth in such reports by the firm or firms rendering such
reports, and, to the extent so audited and consent to incorporation by reference
is given, will be incorporated herein by reference in reliance upon such reports
given upon the authority of such firms as experts in accounting and auditing.
LEGAL MATTERS
The validity of the issuance of the shares of ConAgra Common Stock
offered hereby has been passed upon for ConAgra by McGrath, North, Mullin &
Kratz, P.C., Omaha, Nebraska 68102.
Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P., counsel
to GoodMark, has given its opinion to the effect that the discussion under the
caption "CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS," subject to certain
qualifications, fairly and accurately describes the material U.S. federal income
tax consequences of the Merger to the GoodMark Shareholders that receive ConAgra
Common Stock pursuant to the Merger.
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ANNEX A
AGREEMENT AND PLAN OF MERGER
among
CONAGRA, INC.,
CAG 40, INC.
and
GOODMARK FOODS, INC.
Dated as of June 17, 1998
<PAGE>
<TABLE>
TABLE OF CONTENTS
PAGE
<S> <C> <C>
ARTICLE I THE MERGER ............................................................................2
Section 1.1 The Merger ............................................................................2
Section 1.2 Closing ...............................................................................3
Section 1.3 Effective Time ........................................................................3
Section 1.4 Articles of Incorporation and By-Laws .................................................3
Section 1.5 Directors and Officers ................................................................4
ARTICLE II CONVERSION OF SHARES ..................................................................4
Section 2.1 Conversion of Shares ..................................................................4
Section 2.2 Exchange Procedures ...................................................................6
Section 2.3 Dividends; Transfer Taxes; Withholding ................................................7
Section 2.4 Fractional Shares .....................................................................8
Section 2.5 Undistributed Parent Common Stock .....................................................8
Section 2.6 Dissenting Shares .....................................................................8
Section 2.7 Options................................................................................9
Section 2.8 Closing of Transfer Books ............................................................10
Section 2.9 Further Assurances ...................................................................10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF
THE COMPANY ..........................................................................11
Section 3.1 Organization and Good Standing .......................................................11
Section 3.2 Articles of Incorporation and By-Laws ................................................12
Section 3.3 Capitalization .......................................................................12
Section 3.4 Company Subsidiaries .................................................................13
Section 3.5 Corporate Authority ..................................................................13
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TABLE OF CONTENTS
PAGE
Section 3.6 Compliance with Applicable Law .......................................................14
Section 3.7 Non-Contravention ....................................................................15
Section 3.8 Government Approvals; Required Consents ..............................................15
Section 3.9 SEC Documents and Other Reports ......................................................16
Section 3.10 Absence of Certain Changes or Events .................................................17
Section 3.11 Actions and Proceedings ..............................................................18
Section 3.12 Absence of Undisclosed Liabilities ...................................................18
Section 3.13 Certain Contracts and Arrangements ...................................................18
Section 3.14 Taxes ................................................................................19
Section 3.15 Patents, Trademarks and Similar Rights ...............................................21
Section 3.16 Information in Disclosure Documents and Registration
Statement ............................................................................23
Section 3.17 Employee Benefit Plans; ERISA ........................................................24
Section 3.18 Environmental Matters ................................................................25
Section 3.19 Labor Matters ........................................................................26
Section 3.20 Affiliate Transactions ...............................................................27
Section 3.21 Opinion of Financial Advisor .........................................................27
Section 3.22 Brokers ..............................................................................27
Section 3.23 Title to Properties...................................................................27
Section 3.24 Pooling...............................................................................28
Section 3.25 Accounts Receivable...................................................................28
Section 3.26 Inventories...........................................................................28
Section 3.27 Equity Matters........................................................................28
Section 3.28 Disclosure............................................................................28
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TABLE OF CONTENTS
PAGE
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF
PARENT AND MERGER SUB ................................................................29
Section 4.1 Organization and Good Standing .......................................................29
Section 4.2 Certificate of Incorporation and By-Laws .............................................29
Section 4.3 Capitalization .......................................................................30
Section 4.4 Corporate Authority ..................................................................31
Section 4.5 Non-contravention ....................................................................32
Section 4.6 Government Approvals; Required Consents ..............................................32
Section 4.7 SEC Documents and Other Reports ......................................................32
Section 4.8 Absence of Certain Changes or Events .................................................33
Section 4.9 Information in Disclosure Documents and Registration
Statement ............................................................................33
Section 4.10 Interim Operations of the Merger Subsidiary...........................................34
Section 4.11 Compliance with Laws..................................................................34
Section 4.12 Finders and Investment Bankers........................................................34
Section 4.13 Pooling...............................................................................35
ARTICLE V CONDUCT OF BUSINESS PENDING THE MERGER ...............................................35
Section 5.1 Conduct of Business by the Company Pending the Merger ................................35
ARTICLE VI ADDITIONAL AGREEMENTS ................................................................38
Section 6.1 Access and Information ...............................................................38
Section 6.2 No Solicitation ......................................................................38
Section 6.3 Third-Party Standstill Agreements ....................................................40
Section 6.4 Registration Statement ...............................................................40
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TABLE OF CONTENTS
PAGE
Section 6.5 Proxy Statements; Shareholder Approval ...............................................41
Section 6.6 Compliance with the Securities Act ...................................................41
Section 6.7 Reasonable Best Efforts ..............................................................42
Section 6.8 Public Announcements .................................................................43
Section 6.9 Directors' and Officers' Indemnification and Insurance ...............................43
Section 6.10 Expenses .............................................................................44
Section 6.11 Listing Application ..................................................................45
Section 6.12 Supplemental Disclosure ..............................................................45
Section 6.13 Pooling of Interests..................................................................45
Section 6.14 Employee Matters......................................................................45
ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER .............................................46
Section 7.1 Conditions to Each Party's Obligation to Effect the Merger ...........................46
Section 7.2 Conditions to Obligations of Parent and Merger Sub to
Effect the Merger ....................................................................47
Section 7.3 Conditions to Obligation of the Company to Effect the
Merger ...............................................................................48
ARTICLE VIII TERMINATION ..........................................................................50
Section 8.1 Termination ..........................................................................50
Section 8.2 Effect of Termination ................................................................51
ARTICLE IX GENERAL PROVISIONS ...................................................................53
Section 9.1 Amendment and Modifications ..........................................................53
Section 9.2 Waiver ...............................................................................53
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TABLE OF CONTENTS
PAGE
Section 9.3 Survivability; Investigations ........................................................53
Section 9.4 Notices ..............................................................................53
Section 9.5 Descriptive Headings; Interpretations ................................................55
Section 9.6 Entire Agreement .....................................................................55
Section 9.7 Governing Law ........................................................................56
Section 9.8 Enforcement ..........................................................................56
Section 9.9 Counterparts .........................................................................56
Section 9.10 Assignment; Third-Party Beneficiaries ................................................56
Exhibit "A" Form of Stock Voting Agreement
Exhibit "B" Form of Affiliate Letter
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<PAGE>
INDEX OF DEFINED TERMS
"accumulated funding deficiency" has the meaning specified in Section 3.17(a).
"Acquisition Transaction" has the meaning specified in Section 6.2(a).
"affiliate" has the meaning specified in Section 6.6.
"Agreement" shall mean this Agreement and Plan of Merger.
"Applicable Law" has the meaning specified in Section 3.6.
"Articles of Merger" has the meaning specified in Section 1.3.
"Average Trading Price" has the meaning specified in Section 2.1(a).
"Benefit Plans" has the meaning specified in Section 3.17(a).
"Certificates" has the meaning specified in Section 2.1(d).
"Class B Stock" has the meaning specified in Section 4.3(a).
"Class C Stock" has the meaning specified in Section 4.3(a).
"Class D Stock" has the meaning specified in Section 4.3(a).
"Class E Stock" has the meaning specified in Section 4.3(a).
"Closing" has the meaning specified in Section 1.2.
"Closing Date" has the meaning specified in Section 1.2.
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"Code" shall have the meaning set forth in the Recitals.
"Company" shall mean Goodmark Foods, Inc.
"Company 10-K" has the meaning specified in Section 3.12.
"Company's Assets" has the meaning specified in Section 3.18.
"Company Business Personnel" has the meaning specified in Section 3.19.
"Company Common Stock" has the meaning specified in Section 2.1(a).
"Company Disclosure Schedule" has the meaning specified in Article III.
"Company Material Adverse Effect" has the meaning specified in Section 3.1.
"Company Multiemployer Plan" has the meaning specified in Section 3.17(a).
"Company Permits" has the meaning specified in Section 3.6.
"Company Plan" has the meaning specified in Section 3.17(a)(i).
"Company Rule 145 Affiliates" has the meaning specified in Section 6.6.
"Company SEC Documents" has the meaning specified in Section 3.9(a).
"Company Shareholder Meeting" has the meaning specified in Section 6.5(a).
"Consent" has the meaning specified in Section 6.7(b).
"Contract" has the meaning specified in Section 3.7.
"Dissenting Shares" has the meaning specified in Section 2.6.
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"DOJ" has the meaning specified in Section 6.7(d).
"Effective Time" has the meaning specified in Section 1.3.
"ERISA" has the meaning specified in Section 3.17(a).
"Exchange Act" has the meaning specified in Section 3.8.
"Exchange Agent" has the meaning specified in Section 2.2(a).
"FTC" has the meaning specified in Section 6.7(d).
"GAAP" has the meaning specified in Section 3.9(a).
"Governmental Entity" has the meaning specified in Section 3.6.
"HSR Act" has the meaning specified in Section 3.8.
"Indemnified Parties" has the meaning specified in Section 6.9(a).
"IRS" has the meaning specified in Section 3.14.
"License Agreements" has the meaning specified in Section 3.15(b).
"Licensed Patent Agreements" has the meaning specified in Section 3.15(a)(ii).
"Licensed Trademark Agreements" has the meaning specified in Section
3.15(a)(iv).
"Liens" has the meaning specified in Section 3.4.
"Maximum Amount" has the meaning specified in Section 6.9(b).
"Meeting Date" has the meaning specified in Section 8.1(d).
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"Merger" shall have the meaning set forth in the Recitals.
"Merger Sub" shall mean CAG 40, Inc.
"Merger Sub Common Stock" has the meaning specified in Section 2.1(b).
"multiemployer plan" has the meaning specified in Section 3.17(a).
"NCBCA" shall have the meaning set forth in the Recitals.
"Option Plans" has the meaning specified in Section 2.7.
"Options" has the meaning specified in Section 2.7.
"Owned Patents" has the meaning specified in Section 3.15(a)(i).
"Owned Trademarks" has the meaning specified in Section 3.15(a)(iii).
"Parent" shall mean ConAgra, Inc.
"Parent Capital Stock" has the meaning specified in Section 4.3(a).
"Parent Common Stock" has the meaning specified in Section 2.1(a).
"Parent Disclosure Schedule" has the meaning specified in Article IV.
"Parent Material Adverse Effect" has the meaning specified in Section 4.1.
"Parent SEC Documents" has the meaning specified in Section 4.7.
"pension plan" has the meaning specified in Section 3.17(a)(i)(x).
"Per Share Merger Consideration" has the meaning specified in Section 2.1(a).
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"person" has the meaning specified in Section 9.5.
"Proxy Statement" has the meaning specified in Section 3.16.
"Registration Statement" has the meaning specified in Section 3.16.
"reportable event" has the meaning specified in Section 3.17(a).
"SEC" has the meaning specified in Section 3.9(a).
"Securities Act" has the meaning specified in Section 4.3(a).
"Shares" has the meaning specified in Section 2.1(a).
"Stock Voting Agreement" shall have the meaning set forth in the Recitals.
"Subsequent Company SEC Documents" has the meaning specified in Section 3.9(a).
"Subsequent Parent SEC Documents" has the meaning specified in Section 4.7.
"Subsidiary" has the meaning specified in Section 3.1.
"Superior Proposal" has the meaning specified in Section 6.2(b).
"Surviving Corporation" has the meaning specified in Section 1.1.
"Tax Returns" has the meaning specified in Section 3.14.
"Taxes" has the meaning specified in Section 3.14.
"welfare plan" has the meaning specified in Section 3.17(a).
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of June 17, 1998 (this
"Agreement"), by and among CONAGRA, INC., a Delaware corporation ("Parent"), CAG
40, INC., a North Carolina corporation and newly formed, wholly owned subsidiary
of Parent (the "Merger Sub"), and GOODMARK FOODS, INC., a North Carolina
corporation (the "Company").
RECITALS:
(a) The Boards of Directors of the Parent and the Company
have each approved and deem it advisable and in the
best interests of their respective shareholders for
Parent to acquire the Company upon the terms and
subject to the conditions of this Agreement; and
(b) It is intended that the transaction be accomplished
by a merger of Merger Sub with and into the Company,
with the Company continuing as the surviving
corporation (the "Merger"); and
(c) As a condition and an inducement to Parent and Merger
Sub entering into this Agreement and incurring the
obligations set forth herein, concurrently with the
execution and delivery of this Agreement, Parent is
entering into a Stock Voting Agreement with
shareholders of the Company, who own an aggregate of
approximately 34% of the outstanding shares of
Company Common Stock (as hereinafter defined), in the
form of Exhibit "A" hereto (the "Stock Voting
Agreement"); and
(d) The Board of Directors of the Company has approved
the transactions contemplated by this Agreement and
the Stock Voting Agreement in accordance with the
provisions of Section 55-11-01 of the Business
Corporation Act of the State of North Carolina (the
"NCBCA"), and has resolved, subject to the terms of
this Agreement, to recommend the
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approval of the Merger by its shareholders in
accordance with the provisions of Section 55-11-03 fo
the NCBCA; and
(e) The Board of Directors of Merger Sub has unanimously
approved the transactions contemplated by this
Agreement and has unanimously resolved, subject to
the terms of this Agreement, to recommend the
approval of the Merger to Parent, its sole
shareholder; and
(f) The Board of Directors of Parent has approved the
transactions contemplated hereby as sole shareholder
of Merger Sub; and
(g) The parties hereto intend that the Merger will
qualify as a nontaxable reorganization under Section
368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), and the regulations promulgated
thereto, and that this Agreement shall be, and is
hereby, adopted as a plan of reorganization for
purposes of Section 368 of the Code; and
(h) The parties intend that the transactions contemplated
herein qualify for treatment as a pooling of
interests pursuant to APB Opinion No. 16.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the conditions
contained in this Agreement, and in accordance with the NCBCA, at the Effective
Time (as hereinafter
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defined), Merger Sub shall be merged with and into the Company, the separate
corporate existence of Merger Sub shall thereupon cease, and the Company shall
continue as the surviving corporation (sometimes hereinafter referred to as the
"Surviving Corporation") and shall continue its corporate existence under the
laws of the State of North Carolina, and in accordance with Section 55-11-06 of
the NCBCA, all of the rights, privileges, powers, immunities, purposes and
franchises of Merger Sub and the Company shall vest in the Surviving Corporation
and all of the debts, liabilities, obligations and duties of Merger Sub and the
Company shall become the debts, liabilities, obligations and duties of the
Surviving Corporation.
Section 1.2 Closing. Subject to the terms and conditions of this
Agreement, the closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of McGrath, North, Mullin & Kratz,
P.C., 222 South Fifteenth Street, One Central Park Plaza, Suite 1400, Omaha,
Nebraska, at 10:00 a.m., local time, as promptly as practicable after all of the
conditions set forth in Article VII are satisfied or waived or on such other
date and at such other time and place as Parent and the Company shall agree (the
date on which the Closing actually occurs being referred to herein as the
"Closing Date").
Section 1.3 Effective Time. The Merger shall become effective at the
time of filing of, or at such later time specified in, properly executed
articles of merger (the "Articles of Merger"), in the form required by and
executed in accordance with the NCBCA, filed with the Secretary of State of the
State of North Carolina, in accordance with the provisions of Section 55-11-05
of the NCBCA. Such filing shall be made contemporaneously with, or immediately
after, the Closing. When used in this Agreement, the term "Effective Time" shall
mean the date and time at which the Merger shall become effective.
Section 1.4 Articles of Incorporation and By-Laws. From and after the
Effective Time, the Articles of Incorporation of the Surviving Corporation shall
be amended so that the Articles of Incorporation of Merger Sub as in effect
immediately prior to the Effective Time shall be the Articles of Incorporation
of the Surviving Corporation until thereafter amended in accordance with
Applicable Law (as hereinafter defined), provided that such Articles of
Incorporation shall be amended to reflect "GoodMark Foods, Inc." as the name of
the Surviving Corporation. From and after the Effective Time, the By-Laws of
Merger
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Sub in effect immediately prior to the Effective Time shall be the By-Laws of
the Surviving Corporation until thereafter amended in accordance with Applicable
Law.
Section 1.5 Directors and Officers. From and after the Effective Time,
the directors of Merger Sub immediately prior to the Effective Time shall become
the directors of the Surviving Corporation and shall hold office from the
Effective Time until their respective successors are duly elected or appointed
and qualified in the manner provided in the Articles of Incorporation or By-Laws
of the Surviving Corporation or as otherwise provided by law. The officers of
Merger Sub at the Effective Time shall become the officers of the Surviving
Corporation and shall hold office from the Effective Time until their respective
successors are duly elected or appointed and qualified in the manner provided in
the Articles of Incorporation or By-Laws of the Surviving Corporation or as
otherwise provided by law.
ARTICLE II
CONVERSION OF SHARES
Section 2.1 Conversion of Shares. At the Effective Time, by virtue of
the Merger and without any action on the part of any holder of any shares of
Company Common Stock (as defined herein) or any shares of capital stock of
Merger Sub:
(a) Each share of Common Stock, par value $.01 per share of the Company
("Company Common Stock" or "Shares") issued and outstanding immediately prior to
the Effective Time (other than Shares to be cancelled pursuant to Section 2.1(c)
hereof and Shares which are held by shareholders exercising dissenters' rights
under Article 13 of the NCBCA) shall be converted into the right to receive that
number rounded to five (5) decimal places of validly issued, fully paid and
nonassessable shares of Common Stock, par value $5.00 per share of Parent
("Parent Common Stock"), determined by dividing $30.00 by the "Average Trading
Price" (the "Per Share Merger Consideration"). For purposes of this Agreement,
"Average Trading Price" shall mean the average closing price of Parent Common
Stock on the NYSE Composite Transactions List (as reprinted by The Wall Street
Journal) for the ten (10) full trading days ending on the fifth (5th) full
trading day
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immediately preceding the Closing Date, provided, however, in the event the
Average Trading Price is greater than $31.75, the Average Trading Price shall,
for purposes of determining the Per Share Merger Consideration, be deemed to be
$31.75, and in the event the Average Trading Price is less than $27.75, the
Average Trading Price shall, for purposes of determining the Per Share Merger
Consideration, be deemed to be $27.75.
(b) Each share of common stock, par value $1.00, of Merger Sub ("Merger
Sub Common Stock") issued and outstanding immediately prior to the Effective
Time shall be converted into one duly issued, validly authorized, fully paid and
nonassessable share of common stock, par value $1.00 per share, of the Surviving
Corporation.
(c) All Shares that are owned by the Company as treasury stock and any
Shares that are owned by Parent or Merger Sub shall automatically be cancelled
and retired and shall cease to exist and no consideration shall be delivered or
deliverable in exchange therefor.
(d) All Shares converted pursuant to Section 2.1(a) shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease to
exist and each holder of a certificate which immediately prior to the Effective
Time represented such outstanding shares (the "Certificates") shall cease to
have any rights as shareholders of the Company, except the right to receive the
consideration set forth in Section 2.1(a) for each such Share.
(e) If between the date of this Agreement and the Effective Time, the
outstanding shares of Parent Common Stock shall have been changed into a
different number of shares or a different class, by reason of any stock
dividend, subdivision, reclassification, recapitalization, split, combination,
exchange of shares or similar transaction or if Parent pays an extraordinary
dividend or distribution, the number of shares of Parent Common Stock to be
issued in the Merger shall be correspondingly adjusted to reflect such stock
dividend, subdivision, reclassification, recapitalization, split, combination,
exchange of shares or similar transaction or extraordinary dividend or
distribution, upon surrender of the certificate formerly representing Shares in
the manner provided in Section 2.2 hereof.
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Section 2.2 Exchange Procedures.
(a) Parent shall designate a bank or trust company to act as Exchange
Agent hereunder (the "Exchange Agent"). Immediately following the Effective
Time, Parent shall deliver, in trust, to the Exchange Agent, for the benefit of
the holders of Shares, for exchange in accordance with this Article II through
the Exchange Agent, certificates evidencing the shares of Parent Common Stock
issuable pursuant to Section 2.1(a) in exchange for outstanding Shares.
(b) As soon as practicable after the Effective Time, Parent shall cause
the Exchange Agent to mail to each holder of record of Certificates (i) a form
of letter of transmittal (in customary form) specifying that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only upon
proper delivery of the Certificates to the Exchange Agent and (ii) instructions
for use in surrendering such Certificates in exchange for the Per Share Merger
Consideration. Upon surrender of a Certificate for cancellation to the Exchange
Agent, together with such letter of transmittal, duly executed, the holder of
such Certificate shall be entitled to receive in exchange therefor (A) that
number of shares of Parent Common Stock equal to the product of the Per Share
Merger Consideration multiplied by the number of Shares represented by the
surrendered Certificate, and (B) any amounts to which the holder is entitled
pursuant to Section 2.3 hereof after giving effect to any required tax
withholdings and the Certificate so surrendered shall forthwith be cancelled.
Until surrendered as contemplated by this Section 2.2(b), each Certificate
(other than certificates representing shares to be cancelled pursuant to Section
2.1(c) hereof and Shares which are held by dissenters) shall be deemed from and
after the Effective Time to represent only the right to receive upon such
surrender the Per Share Merger Consideration. In no event shall the holder of
any such surrendered Certificate be entitled to receive interest on any cash to
be received in the Merger. Neither the Exchange Agent nor any party hereto shall
be liable to a holder of Shares for any amount paid to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(c) If any Certificate shall have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the person claiming such Certificate
to be lost, stolen or destroyed and, if required by Parent, the posting by such
person of a bond, in such reasonable and customary amount as Parent may direct,
as indemnity against any claim that
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may be made against it with respect to such Certificate, the Exchange Agent will
issue in exchange for such lost, stolen or destroyed Certificate the Per Share
Merger Consideration.
Section 2.3 Dividends; Transfer Taxes; Withholding. No dividends or
other distributions that are declared on or after the Effective Time on Parent
Common Stock, or are payable to the holders of record thereof who became such on
or after the Effective Time, shall be paid to any person entitled by reason of
the Merger to receive certificates representing shares of Parent Common Stock,
until such person shall have surrendered its Certificate(s) as provided in
Section 2.2 hereof. Subject to applicable law, there shall be paid to each
person receiving a certificate representing such shares of Parent Common Stock,
at the time of such surrender or as promptly as practicable thereafter, the
amount of any dividends or other distributions theretofore paid with respect to
the shares of Parent Common Stock represented by such certificate and having a
record date on or after the Effective Time but prior to such surrender and a
payment date on or subsequent to such surrender. In no event shall the person
entitled to receive such dividends or other distributions be entitled to receive
interest on such dividends or other distributions. If any cash or certificate
representing shares of Parent Common Stock is to be paid to or issued in a name
other than that in which the Certificate surrendered in exchange therefor is
registered, it shall be a condition of such exchange that the Certificate so
surrendered shall be properly endorsed and otherwise in proper form for transfer
and that the person requesting such exchange shall pay to the Exchange Agent any
transfer or other taxes required by reason of the issuance of such certificate
representing shares of Parent Common Stock and the distribution of such cash
payment in a name other than that of the registered holder of the Certificate so
surrendered, or shall establish to the satisfaction of the Exchange Agent that
such tax has been paid or is not applicable. Parent or the Exchange Agent shall
be entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of Company Common Stock such amounts as
Parent or the Exchange Agent are required to deduct and withhold under the Code
or any provision of state, local or foreign tax law, with respect to the making
of such payment. To the extent that amounts are so withheld by Parent or the
Exchange Agent, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the Company Common Stock in
respect of whom such deduction and withholding were made by Parent or the
Exchange Agent.
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Section 2.4 Fractional Shares. No certificates or scrip representing
fractional shares of Parent Common Stock shall be issued upon the surrender for
exchange of Certificates, no dividend or distribution with respect to shares
shall be payable on or with respect to any fractional share and such fractional
share interests shall not entitle the owner thereof to vote or to any other
rights of a stockholder of Parent. Any such fractional share interest to which
any shareholder of the Company would otherwise be entitled shall be rounded to
the nearest whole share.
Section 2.5 Undistributed Parent Common Stock. Any portion of the
certificates representing shares of Parent Common Stock issuable upon conversion
of Company Common Stock pursuant to Section 2.1(a) hereof, together with any
dividends or distributions payable in respect thereof pursuant to Section 2.3
hereof, which remains undistributed to the former holders of Company Common
Stock for six months after the Effective Time shall be delivered to Parent, upon
its request, and any such former holders who have not theretofore surrendered to
the Exchange Agent their certificates in compliance with this Article II shall
thereafter look only to Parent for payment of their claim for such shares of
Parent Common Stock and any dividends or distributions with respect to such
shares of Parent Common Stock (in each case, without interest thereon).
Section 2.6 Dissenting Shares. Each outstanding share of Company Common
Stock as to which a written notice of intent to demand payment is furnished in
accordance with Section 55-13-21 of the NCBCA at or prior to the Company
Shareholder Meeting and not withdrawn at or prior to the Company Shareholder
Meeting and which is not voted in favor of the Merger shall not be converted
into or represent a right to receive the Per Share Merger Consideration unless
and until the holder thereof shall have failed to perfect, or shall have
effectively withdrawn or lost the right to payment for each such share of
Company Common Stock under Section 55-13-21, at which time each such share shall
be converted into the right to receive the Merger Consideration. All such shares
of Company Common Stock as to which such a written demand for payment is so
furnished and not withdrawn at or prior to the Company Shareholder Meeting and
which are not voted in favor of the Merger, except any such shares of Company
Common Stock the holder of which, prior to the Effective Time, shall have
effectively withdrawn or lost such right to payment for such shares of Company
Common Stock under Section 55-13-21, are herein referred to as "Dissenting
Shares." The Company shall give Parent prompt notice upon receipt by the
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Company of any written demands for payment, withdrawal of such demands, and any
other written communications delivered to the Company pursuant to Section
55-13-21, and the Company shall give Parent the opportunity, to the extent
permitted by law, to participate in all negotiations and proceedings with
respect to such demands. Except with the prior written consent of Parent, the
Company shall not voluntarily make any payment with respect to any demands for
payment and shall not settle or offer to settle any such demands. If the Merger
is approved at the Company Shareholder Meeting, the Company shall send out
written dissenters' notices pursuant to Section 55-13-22 of the NCBCA to all
shareholders of the Company who satisfied the requirements of Section 55-13-21
of the NCBCA and, assuming the dissenting shareholder complies with Section
55-13-23 of the NCBCA, shall remit payment to the dissenting shareholders
pursuant to, and shall otherwise comply with, Section 55-13-25 of the NCBCA.
Section 2.7 Options.
(a) Options to purchase Shares (collectively "Options") granted by the
Company under the Company's 1985 Non-Qualified Stock Option Plan, as amended and
restated on March 23, 1998, or Restricted Stock Award Plan, dated October 15,
1985, (collectively, the "Option Plans"), that remain outstanding immediately
prior to the Effective Time, whether or not then exercisable, shall, by virtue
of the Merger and without any action on the part of the holder thereof, be
assumed by Parent and converted so as to entitle the holder thereof to subscribe
to, purchase or acquire from Parent the number of shares of Parent Common Stock
which equals the product of the Per Share Merger Consideration times the number
of shares of Company Common Stock subject to the Options immediately prior to
the Effective Time (rounded to the nearest whole share), at an exercise price
per share of Parent Common Stock equal to the exercise price per share of
Company Common Stock then specified with respect to such Option divided by the
Per Share Merger Consideration (rounded to the nearest whole cent); provided,
however, in the event of any Option Plan which is an incentive stock option as
defined in Section 422 of the Code the aggregate adjusted exercise price of such
Option and the number of shares to which such Option is exercisable shall be
computed in compliance in all respects with the requirements of Section 424(a)
of the Code, including the requirements that such adjustments not confer on the
holder of any Option any additional benefits not currently provided under the
Option Plans. Material terms and provisions of each Option as assumed and
converted by Parent shall be
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at least as favorable to the holder thereof as the terms and conditions of the
Option existing immediately prior to the Effective Time, except that there shall
be substituted the appropriate number of shares of Parent Common Stock for
Company Common Stock at the appropriate exercise prices described above,
effective as of the Effective Time. As promptly as practicable after the
Effective Time, Parent shall issue to each holder of an Option a written
instrument evidencing its assumption by Parent.
(b) The Parent and the Company shall take all corporate action
necessary to effectuate the assumption and conversion of the Options as set
forth in subpart (a) above, and the Parent shall take all corporate actions
necessary to reserve for issuance a sufficient number of shares of Parent Common
Stock for delivery thereunder, assumed in accordance with this Section 1.9.
Promptly after the Effective Time, the Parent shall file a Registration
Statement on Form S-8 (or any successor form) under the Securities Act of 1933,
as amended (the "Securities Act") with respect to all shares of Parent Common
Stock subject to Options that may be registered on a Form S-8, and shall use
commercially reasonable efforts to maintain the effectiveness of such
Registration Statement for so long as such Options remain outstanding.
Section 2.8 Closing of Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed and no transfer of shares of
Company Common Stock shall thereafter be made. If, after the Effective Time,
Certificates are presented to Parent, they shall be cancelled and exchanged as
provided in this Article II.
Section 2.9 Further Assurances. If, at any time after the Effective
Time, Parent shall consider or be advised that any deeds, bills of sale,
assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of the Company acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the merger or otherwise to
carry out this Agreement, the officers of the Surviving Corporation shall be
authorized to execute and deliver, in the name and on behalf of the Company or
otherwise, all such deeds, bills of sale, assignments and assurances and to take
and do all such other actions and things as may be necessary or desirable to
vest, perfect or confirm any and all right, title and interest in, to
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or under such rights, properties or assets in the Surviving Corporation or
otherwise to carry out the purposes of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Merger Sub as
follows. Such representations and warranties are made subject to certain
exceptions and qualifications set forth in the Company Disclosure Schedule dated
as of the date hereof and delivered as a separate document and incorporated in
this Agreement by reference (the "Company Disclosure Schedule"). The
representation(s) and warranty(ies) to which each such exception or
qualification relates is(are) specifically identified (by cross-reference or
otherwise) in the Company Disclosure Schedule unless the applicability of such
exception is apparent on its face.
Section 3.1 Organization and Good Standing. The Company is a
corporation duly organized and validly existing under the laws of the State of
North Carolina and has the corporate power and authority to carry on its
business as it is now being conducted. The Company is duly qualified as a
foreign corporation to do business, and is in good standing (to the extent such
concept is recognized), in each jurisdiction where the character of its
properties owned or held under lease or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified or in good
standing would not have a material adverse effect, individually or in the
aggregate, on the business, assets, liabilities, condition (financial or
otherwise), prospects or results of operations of the Company and its
Subsidiaries taken as a whole, or the ability of the Company to consummate the
Merger and the other transactions contemplated by this Agreement (a "Company
Material Adverse Effect"). As used in this Agreement, a "Subsidiary" of any
person means another person owned directly or indirectly by such person by
reason of such person owning or controlling an amount of the voting securities,
other voting ownership or voting partnership interests of another person which
is sufficient to elect at least a majority of its Board of Directors or other
governing body of another person or, if there are no such voting interests, 50%
or more of the equity interests of another person.
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Section 3.2 Articles of Incorporation and By-Laws. True, correct and
complete copies of the Articles of Incorporation and By-laws or equivalent
organizational documents, each as amended to date, of the Company and each of
its Subsidiaries have been delivered to Parent. The Articles of Incorporation,
By-laws and equivalent organizational documents of the Company and each of its
Subsidiaries are in full force and effect. Neither the Company nor any of its
Subsidiaries is in violation of any provision of its Articles of Incorporation,
By-laws or equivalent organizational documents.
Section 3.3 Capitalization.
(a) The authorized capital stock of the Company consists of 20,000,000
shares of Common Stock $0.01 par value. As of June 17, 1998, (i) 7,214,104
shares of Company Common Stock were issued and outstanding and no shares were
held in the treasury of the Company, and (ii) 1,700,000 shares of Company Common
Stock were reserved for issuance upon the exercise of outstanding Options. Since
June 17, 1998, the Company has not issued any shares of capital stock, or any
security convertible into or exchangeable for shares of such capital stock,
including any Option, other than the issuance of shares of Company Common Stock
upon the exercise of Options. All of the issued and outstanding Shares have been
validly issued, and are fully paid and nonassessable, and are not subject to
preemptive rights.
(b) Except as described in Section 3.3(a) hereof, and except as set
forth in Section 3.3 of the Company Disclosure Schedule: (i) no shares of
capital stock or other equity securities of the Company are authorized, issued
or outstanding, or reserved for issuance, and there are no options, warrants or
other rights (including registration rights), agreements, arrangements or
commitments of any character to which the Company or any of its Subsidiaries is
a party relating to the issued or unissued capital stock or other equity
interests of the Company or any of its Subsidiaries, requiring the Company or
any of its Subsidiaries to grant, issue or sell any shares of the capital stock
or other equity interests of the Company or any of its Subsidiaries by sale,
lease, license or otherwise; (ii) neither the Company nor its Subsidiaries has
any obligation, contingent or otherwise, to repurchase, redeem or otherwise
acquire any shares of the capital stock or other equity interests of the Company
or its Subsidiaries; (iii) neither the Company nor any of its Subsidiaries,
directly or indirectly, owns, or has agreed to purchase or otherwise acquire,
the capital stock or other
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equity interests of, or any interest convertible into or exchangeable or
exercisable for such capital stock or such equity interests, of any corporation,
partnership, joint venture or other entity which would be material in value to
the Company; and (iv) there are no voting trusts, proxies or other agreements or
understandings to or by which the Company or any of its Subsidiaries is a party
or is bound with respect to the voting of any shares of capital stock or other
equity interests of the Company or any of its Subsidiaries.
Section 3.4 Company Subsidiaries. Section 3.4 of the Company Disclosure
Schedule sets forth a list of each Subsidiary of the Company. Each Subsidiary of
the Company is a corporation, partnership or other entity duly organized,
validly existing and in good standing (to the extent such concept is recognized
in such jurisdiction) under the laws of its jurisdiction of incorporation or
organization. Each Subsidiary of the Company has the corporate power and
authority to carry on its business as it is now being conducted. Each Subsidiary
of the Company is duly qualified as a foreign corporation or organization
authorized to do business, and is in good standing (to the extent such concept
is recognized in such jurisdiction), in each jurisdiction where the character of
its properties owned or held under lease or the nature of its activities makes
such qualification necessary, except where the failure to be so qualified or in
good standing would not, individually or in the aggregate, have a Company
Material Adverse Effect. All of the outstanding shares of capital stock or other
equity interests in each of the Company's Subsidiaries have been validly issued,
and are fully paid, nonassessable and are owned by the Company or another
Subsidiary of the Company free and clear of all pledges, claims, options, liens,
charges, encumbrances and security interests of any kind or nature whatsoever
(collectively, "Liens"), and are not subject to preemptive rights. Neither the
Company nor any Subsidiary has any material investment in any subsidiary or any
material investment in any partnership, joint venture or similar entity, except
as disclosed in Section 3.4 of the Company Disclosure Schedule, all of which
investments are owned free and clear of all Liens.
Section 3.5 Corporate Authority.
(a) The Company has the requisite corporate power and authority to
execute and deliver this Agreement and, subject to the approval of the Merger by
the Company's shareholders, to consummate the transactions contemplated hereby.
The execution and delivery by the Company of this Agreement, and the
consummation by the Company of the
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transactions contemplated hereby, have been duly authorized by its Board of
Directors and, subject to the approval of the Merger by the Company's
shareholders, no other corporate action on the part of the Company is necessary
to authorize the execution and delivery by the Company of this Agreement and the
consummation by it of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by the Company and, assuming this Agreement
constitutes the valid and binding agreement of Parent and Merger Sub,
constitutes a valid and binding agreement of the Company and is enforceable
against the Company in accordance with its terms. The preparation, filing and
distribution of the Proxy Statement (as hereinafter defined) to be filed with
the SEC has been duly authorized by the Board of Directors of the Company.
(b) Prior to execution and delivery of this Agreement, the Board of
Directors of the Company (at a meeting duly called and held) has (i) unanimously
approved this Agreement and the Merger and the transactions contemplated hereby
and by the Stock Voting Agreement, (ii) determined that the transactions
contemplated hereby are in the best interests of the holders of Company Common
Stock and (iii) determined to recommend this Agreement, the Merger and the other
transactions contemplated hereby to the Company's shareholders for approval and
adoption at the shareholders meeting contemplated by Section 6.5(a) hereof. The
affirmative vote of the holders of a majority of the shares of Company Common
Stock outstanding on the record date for the Company Shareholder Meeting, voting
together as a single class, is the only vote of the holders of any class or
series of the Company's capital stock necessary to approve the Merger or the
transactions contemplated hereby. Neither Article 9, Shareholder Protection Act,
nor Article 9A, Control Share Acquisition, of the NCBCA is applicable to the
transactions contemplated herein as a result of the Company opting out of such
acts pursuant to Sections 8 and 9 of Article IX of the Company's by-laws and in
compliance with the provisions of the NCBCA.
Section 3.6 Compliance with Applicable Law. (i) Each of the Company and
its Subsidiaries holds or has applied for, and is in compliance with the terms
of, all permits, licenses, exemptions, orders and approvals of all Governmental
Entities (as hereinafter defined) necessary for the conduct of their respective
businesses as currently conducted ("Company Permits"), except for failures to
hold or to comply with such Company Permits which would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse Effect;
(ii) with respect to the Company Permits, no action or
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proceeding is pending or, to the knowledge of the Company, threatened, and, to
the knowledge of the Company, no fact exists or event has occurred that would,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect; (iii) the business of the Company and its Subsidiaries
is being conducted in compliance with all applicable laws, ordinances,
regulations, judgments, decrees or orders ("Applicable Law") of any federal,
state, local, foreign or multinational court, arbitral tribunal, administrative
agency or commission or other governmental or regulatory authority or
administrative agency or commission (a "Governmental Entity"), except for
violations or failures to so comply that would not, individually, or in the
aggregate, have a Company Material Adverse Effect; and (iv) no investigation or
review by any Governmental Entity with respect to the Company or its
Subsidiaries is pending or, to the knowledge of the Company, threatened, other
than, in each case, those which would not, individually, or in the aggregate,
have a Company Material Adverse Effect.
Section 3.7 Non-Contravention. Except as set forth in Section 3.7 of
the Company Disclosure Schedule, the execution and delivery by the Company of
this Agreement do not, and the consummation of the transactions contemplated
hereby and compliance with the provisions hereof will not, (i) result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to the loss of a material benefit under any loan, guarantee of
indebtedness or credit agreement, note, bond, mortgage, indenture, lease,
agreement, contract, instrument, permit, concession, franchise, right or license
(any of the foregoing, a "Contract") binding upon the Company or any of its
Subsidiaries, or result in the creation of any Lien upon any of the properties
or assets of the Company or any of its Subsidiaries, (ii) conflict with or
result in any violation of any provision of the Articles of Incorporation or
By-Laws or other equivalent organizational document, in each case as amended, of
the Company or any of its Subsidiaries, or (iii) conflict with or violate any
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to the Company or any of its Subsidiaries or any of their respective properties
or assets, other than, in the case of clauses (i) and (iii), any such violation,
conflict, default, right, loss or Lien that, individually or in the aggregate,
would not have a Company Material Adverse Effect.
Section 3.8 Government Approvals; Required Consents. No filing or
registration with, or authorization, consent or approval of, any Governmental
Entity is required by or
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with respect to the Company or any of its Subsidiaries in connection with the
execution and delivery of this Agreement by the Company or is necessary for the
consummation of the transactions contemplated hereby (including, without
limitation, the Merger) except: (i) the filing with the SEC of the Proxy
Statement and such reports under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and any applicable state securities or "blue sky" law as
may be required in connection with this Agreement and the transactions
contemplated by this Agreement, (ii) the filing of a notification under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (iii) the filing of Articles of Merger with the Secretary of State of the
State of North Carolina, (iv) such consents, approvals, authorizations, permits,
filings and notifications listed in Section 3.8 of the Company Disclosure
Schedule and (v) such other consents, orders, authorizations, registrations,
declarations and filings the failure of which to obtain or make would not,
individually or in the aggregate, have a Company Material Adverse Effect.
Section 3.9 SEC Documents and Other Reports.
(a) The Company has filed all documents required to be filed prior to
the date hereof by it and its Subsidiaries with the Securities and Exchange
Commission (the "SEC") since May 28, 1995 (the "Company SEC Documents"). As of
their respective dates, or if amended, as of the date of the last such
amendment, the Company SEC Documents complied, and all documents required to be
filed by the Company with the SEC after the date hereof and prior to the
Effective Time (the "Subsequent Company SEC Documents") will comply, in all
material respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and the applicable rules and regulations promulgated
thereunder and none of the Company SEC Documents contained when filed, and the
Subsequent Company SEC Documents will not contain, any untrue statement of a
material fact or omitted, or will omit, to state any material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, or are to be made, not misleading. The
consolidated financial statements of the Company included in the Company SEC
Documents when filed fairly presented, and included in the Subsequent Company
SEC Documents will fairly present, the consolidated financial position of the
Company and its consolidated Subsidiaries, as at the respective dates thereof
and the consolidated results of their operations and their consolidated cash
flows for the respective periods then ended (subject, in the case of the
unaudited statements, to normal year-end audit
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adjustments) in conformity with United States generally accepted accounting
principles ("GAAP") (except, in the case of the unaudited statements, as
permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated therein or in the notes thereto).
Since May 25, 1997, the Company has not made any change in the accounting
practices or policies applied in the preparation of its financial statements,
except as may be required by GAAP.
Section 3.10 Absence of Certain Changes or Events. Except as set forth
in the Company SEC Documents, since May 25, 1997, the Company and its
Subsidiaries have conducted their respective businesses and operations only in
the ordinary and usual course consistent with past practice and, except as set
forth in Section 3.10 of the Company Disclosure Schedule, there has not occurred
(i) any change in the business, assets, prospects, liabilities, financial
condition or the results of the Company and the Subsidiaries that would have a
Company Material Adverse Effect; (ii) any damage, destruction or loss (whether
or not covered by insurance) having a Company Material Adverse Effect; (iii) any
declaration, setting aside or payment of any dividend or distribution of any
kind by the Company on any class of its capital stock (other than regular
quarterly dividends of not more than $.06 per share of Common Stock); (iv) any
material increase in the compensation payable or to become payable by the
Company or any Subsidiary to its directors, officers or key employees or any
material increase in any bonus, insurance, pension or other employee benefit
plan, payment or arrangement made to, for or with such directors, officers or
key employees, other than in the ordinary course of business; (v) any labor
dispute, other than routine matters none of which has, or would be reasonably
expected to have, a Company Material Adverse Effect; (vi) any entry by the
Company or the Subsidiaries into any commitment or transaction (including,
without limitation, any borrowing or capital expenditure) material (individually
or in the aggregate), to the Company or its Subsidiaries other than in the
ordinary course of business; (vii) any change by the Company or its Subsidiaries
in accounting methods, principles or practices except as required by concurrent
changes in GAAP or concurred with by the Company's independent public
accountants; (viii) any material agreement, whether in writing or otherwise, to
take any action described in this Section 3.10; or (ix) any event during the
period from May 25, 1997 through the date of this Agreement that, if taken
during the period from the date of this Agreement through the Effective Time,
would constitute a breach of Section 5.1 hereof.
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Section 3.11 Actions and Proceedings. Except as set forth in the
Company SEC Documents, there are no material outstanding orders, judgments,
injunctions, awards or decrees of any Governmental Entity against the Company or
any of its Subsidiaries, any of their properties, assets or business, or, to the
knowledge of the Company, any of the Company's or its Subsidiaries' current or
former directors or officers (during the period served as such) or any other
person whom the Company or any of its Subsidiaries has agreed to indemnify, as
such. Except as set forth in the Company SEC Documents, there are no material
(individually or in the aggregate) actions, suits or legal, administrative,
regulatory or arbitration proceedings pending or, to the knowledge of the
Company, threatened against the Company or any of its Subsidiaries, any of their
properties, assets or business, or, to the knowledge of the Company, any of the
Company's or its Subsidiaries' current or former directors or officers or any
other person whom the Company or any of its Subsidiaries has agreed to
indemnify.
Section 3.12 Absence of Undisclosed Liabilities. Except as set forth in
the Company SEC Documents or in Section 3.12 of the Company Disclosure Schedule,
and except for liabilities or obligations which are accrued or reserved against
on the balance sheet (or reflected in the notes thereto) included in the
Company's Annual Report on Form 10-K for the year ended May 25, 1997 (the
"Company 10-K"), neither the Company nor any of its Subsidiaries has any
material (individually or in the aggregate) liabilities or obligations
(including, without limitation, Tax (as hereinafter defined) liabilities)
(whether absolute, accrued, contingent or otherwise), other than liabilities or
obligations incurred in the ordinary course of business since May 25, 1997 or
liabilities under this Agreement.
Section 3.13 Certain Contracts and Arrangements. Except for agreements
listed as exhibits to the Company 10-K, or as set forth in Section 3.13 of the
Company Disclosure Schedule, none of the Company or any of its Subsidiaries is a
party to any material: (a) employment agreement; (b) collective bargaining
agreement; (c) indenture, mortgage, note, installment obligation, agreement or
other instrument relating to the borrowing of money in excess of $5,000,000 by
the Company or any Subsidiary or the guaranty of any obligation for the
borrowing of money by the Company or any Subsidiary; or (d) agreement (other
than contracts for insurance), fixed price sales contract, take or pay
arrangement, material lease (i.e., a lease with a remaining term of more than
three (3) years and yearly rental payments in excess of $100,000), or any
non-competition agreement or any other agreement or
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obligation which purports to limit in any material respect the manner in which,
or the localities in which, the Company or any of its Subsidiaries is entitled
to conduct all or any material portion of the business of the Company and its
Subsidiaries taken as a whole, which (i) is not terminable by the Company, or a
Subsidiary, as applicable, on ninety (90) or fewer days' notice at any time
without penalty and involves the receipt or payment by the Company or a
subsidiary of more than $1,000,000, (ii) any joint venture, partnership or
similar arrangement extending beyond six (6) months or involving equity or
investments of more than $500,000, or (iii) is otherwise material to the Company
or the Subsidiaries taken as a whole. Except as set forth in Section 3.13 of the
Company Disclosure Schedule, there is not, under any of the aforesaid
obligations, any default or event of default by the Company or other event which
(with or without notice, lapse of time or both) would constitute a default or
event of default by the Company or any Subsidiary except for defaults or other
events which, individually or in the aggregate, would not have a Company
Material Adverse Effect.
Section 3.14 Taxes. (i) The Company and each of its Subsidiaries has
filed all federal, and all material state, local, foreign and provincial, tax
returns, declarations, statements, reports, schedules, bonus and information
returns and any amendments to any of the preceding ("Tax Returns") required to
have been filed on or prior to the date hereof, or appropriate extensions
therefor have been properly obtained, and such Tax Returns are in all material
respects true, correct and complete; (ii) all federal, state, local, foreign and
provincial taxes, charges, duties, levies, imposts and other assessments of a
similar or substitute nature (whether imposed directly or through withholding)
including any interest, additions to tax or penalties applicable thereto
("Taxes") shown to be due and payable on such Tax Returns either (x) have been
timely paid or (y) extensions for payment have been properly obtained or such
Taxes are being timely and properly contested and, in either case, adequate
reserves pursuant to GAAP have been established on the Company's consolidated
financial statements with respect thereto; (iii) the Company and each of its
Subsidiaries have complied in all material respects with all rules and
regulations relating to the withholding of Taxes; (iv) neither the Company nor
any of its Subsidiaries has waived any statute of limitations in respect of its
Taxes or Tax Returns; (v) any Tax Returns of the Company and its Subsidiaries
covering periods through the Company's fiscal year ended May, 1995 relating to
federal and material state income Taxes have been examined by the Internal
Revenue Service ("IRS") or the appropriate taxing authority, and Section 3.14 of
the
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Company Disclosure Schedule sets forth all pending audits, examinations or
claims by any taxing authority of any Tax Returns; (vi) no issues that have been
communicated to the Company in writing by a taxing authority in connection with
the examination of any federal or material state Tax Returns of the Company and
its Subsidiaries are currently pending and, to the Company's knowledge, no such
issues that are, individually or in the aggregate, material to the Company have
been raised orally; (vii) all deficiencies asserted or assessments made as a
result of any examination of such Tax Returns by any taxing authority have been
paid in full or are being timely and properly contested and proper accruals
pursuant to GAAP have been established on the Company's consolidated financial
statements with respect thereto; (viii) neither the Company nor any of its
Subsidiaries has any liability for Taxes of any person other than the Company
and its Subsidiaries (a) under Treasury Regulations Section 1.1502-6 (or any
similar provision of state, local, foreign or provincial law), (b) as a
transferee or successor, or (c) any express or implied agreement or otherwise;
(ix) neither the Company nor any of its Subsidiaries have been a member of any
affiliated group within the meaning of Section 1504(a) of the Code other than
the affiliated group of which the Company is the common parent corporation; (x)
none of the property owned or used by the Company or its Subsidiaries is subject
to a tax benefit transfer lease executed in accordance with Section 168(f)(8) of
the Internal Revenue Code of 1954, as amended by the Economic Recovery Act of
1981; (xi) none of the property owned by the Company or its Subsidiaries is "tax
exempt use property" within the meaning of Section 168(h) of the Code; (xii)
none of the Company or its Subsidiaries has made any payments, is obligated to
make any payments, or is a party to any agreement that under any circumstances
could obligate any of the Company or its Subsidiaries to make any payments that
will not be deductible under either Section 162(m) or Section 280G of the Code
(or cause the Company or any of its Subsidiaries to incur a payment to reimburse
a person for a tax imposed under Code Section 4999); (xiii) each of the Company
and its Subsidiaries has disclosed on its U.S. federal income tax return all
positions taken therein that could give rise to a substantial understatement of
U.S. federal income tax within the meaning of Code Section 6662 other than
positions for which there is or was substantial authority; and (xiv) none of the
Company or its Subsidiaries is a party to any Tax allocation agreement, any Tax
sharing agreement, or any Tax indemnity agreement.
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Section 3.15 Patents, Trademarks and Similar Rights.
(a) Section 3.15 of the Company Disclosure Schedule
contains a true, complete and correct list of:
(i) All issued patents and all pending applications for
patents which the Company or any of its Subsidiaries
owns ("Owned Patents");
(ii) All agreements, contracts and commitments whether
written or oral, pursuant to which the Company or any
of its Subsidiaries is licensing from or to one or
more third parties the right to use issued patents or
pending applications for patents ("Licensed Patent
Agreements");
(iii) All trademarks, service marks and trade names which
are material to the Company's business and currently
used by the Company or any of its Subsidiaries other
than by virtue of a Licensed Trademark Agreement
(defined below), and all registrations and pending
applications relating thereto, which the Company or
any of its Subsidiaries owns ("Owned Trademarks");
(iv) All agreements, contracts and commitments, pursuant
to which the Company or any of its Subsidiaries is
licensing from or to one or more third parties
trademarks, service marks or trade names which are
material to the Company's business, or any
registrations or pending applications relating
thereto ("Licensed Trademark Agreements"), and
together with the Licensed Patent Agreements, the
"License Agreements"); and
(b) Except as disclosed in Section 3.15 of the Company Disclosure
Schedule and except for such exceptions as will not have a Company Material
Adverse Effect on any Owned Patent or Owned Trademark or any intellectual
property subject to any Licensed Patent Agreement (collectively, the "License
Agreements"):
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(i) Either the Company or one of its Subsidiaries now
owns, and shall own as of the Effective Time, all
right, title and interest in and to the Owned Patents
and Owned Trademarks;
(ii) All of the Owned Patents and all registrations and
pending applications relating to the Owned Trademarks
are, and shall be as of the Effective Time, valid and
in full force and effect in accordance with their
terms;
(iii) To the best of the Company's knowledge, no impediment
exists, nor shall exist as of the Effective Time, to
the Company's or its Subsidiary's exclusive
ownership, of any of the Owned Trademarks or Owned
Patents for use in its business as currently
conducted;
(iv) To the best of the Company's knowledge, no impediment
exists, nor shall exist as of the Effective Time, to
the Company's or its Subsidiary's use of any of the
Owned Patents or Owned Trademarks or any intellectual
property subject to any License Agreement for use in
its business as currently conducted;
(v) None of the Owned Trademarks or Owned Patents and to
the knowledge of the Company, none of the
intellectual property subject to any License
Agreement is involved in, or is the subject of, any
pending or, to the knowledge of the Company,
threatened infringement, interference, opposition, or
similar action, suit or proceeding or has otherwise
been challenged in any way.
(c) Except for such exceptions as will not have a Company Material
Adverse Effect on any Owned Patent or Owned Trademark or any intellectual
property subject to any License Agreement, the License Agreements are valid,
binding and enforceable in accordance with their respective terms for the period
stated therein, and there is not under any of them any existing default or been
a default by the Company, or to the knowledge of the Company, other parties
thereto.
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(d) To the Company's knowledge, other than Owned Patents, Owned
Trademarks and intellectual property subject to the License Agreements, neither
the Company nor any Subsidiary uses or utilizes other issued patents, pending
applications for patents, trademarks, service marks and trade names (and all
registrations and pending applications relating thereto) except where such use
or utilization (or the loss thereof) is not reasonably likely to have a Company
Material Adverse Effect, and further, neither the Company nor any of its
Subsidiaries is involved, or is the subject of, any pending or, to the knowledge
of the Company, threatened infringement, interference, opposition or similar
action, suite or proceeding with respect to such use or utilization.
Section 3.16 Information in Disclosure Documents and Registration
Statement. None of the information supplied or to be supplied by the Company
specifically for inclusion in (i) the Registration Statement on Form S-4 to be
filed with the SEC under the Securities Act for the purpose of registering the
shares of Parent Common Stock to be issued in connection with the Merger (the
"Registration Statement") or (ii) the proxy statement/prospectus to be
distributed in connection with the Company's meeting of shareholders to vote
upon this Agreement (the "Proxy Statement") will, in the case of the
Registration Statement, at the time it becomes effective or, in the case of the
Proxy Statement or any amendments thereof or supplements thereto, at the time of
the initial mailing of the Proxy Statement and any amendments or supplements
thereto, and at the time of the Company Shareholder Meeting (as defined herein)
to be held in connection with the Merger, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. As of the date of its
initial mailing and as of the date of the Company Shareholder Meeting, the Proxy
Statement will comply (with respect to information relating to the Company) as
to form in all material respects with the applicable requirements of the
Exchange Act, and the rules and regulations promulgated thereunder.
Notwithstanding the foregoing, the Company makes no representation or warranty
with respect to any statement made or incorporated by reference in the foregoing
documents based upon information supplied by or on behalf of Parent or Merger
Sub for inclusion or incorporation by reference therein.
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Section 3.17 Employee Benefit Plans; ERISA.
(a) Section 3.17 of the Company Disclosure Schedule sets forth the name
of each Company Plan (as defined below) and of each bonus, deferred compensation
(together with a list of participants therein), incentive compensation, profit
sharing, salary continuation (together with a list of participants therein),
employee benefit plan, stock purchase, stock option, employment, severance,
termination, golden parachute, consulting or supplemental retirement plan or
agreement (collectively, the "Benefit Plans"), true copies of which have
heretofore been delivered to Parent. Each Company Plan and Benefit Plan complies
in all material respects with the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), the Code and all other applicable laws and
administrative or governmental rules and regulations. No "reportable event"
(within the meaning of Section 4043 of ERISA) has occurred with respect to any
Company Plan for which the 30- day notice requirement has not been waived (other
than with respect to the transactions contemplated by this Agreement); neither
the Company nor any of its ERISA Affiliates has withdrawn from any Company Plan
under Section 4063 of ERISA or Company Multiemployer Plan (as hereinafter
defined) under Section 4203 or 4205 of ERISA or has taken, or is currently
considering taking, any action to do so; and no action has been taken, or is
currently being considered, to terminate any Company Plan subject to Title IV of
ERISA. Except as set forth in Section 3.17 of the Company Disclosure Schedule,
no Company Plan, nor any trust created thereunder, has incurred any "accumulated
funding deficiency" (as defined in Section 302 of ERISA), whether or not waived.
There are no material (individually or in the aggregate) actions, suits or
claims pending or, to the knowledge of the Company, threatened (other than
routine claims for benefits) with respect to any Company Plan or Benefit Plan.
Neither the Company nor any of its ERISA Affiliates has incurred or would
reasonably be expected to incur any material liability under or pursuant to
Title IV of ERISA that has not been satisfied in full. To the knowledge of the
Company, no non-exempt prohibited transactions described in Section 406 of ERISA
or Section 4975 of the Code have occurred. All Company Plans and Benefit Plans
that are intended to be qualified under Section 401(a) of the Code have received
a favorable determination letter as to such qualification from the Internal
Revenue Service, and no event has occurred, either by reason of any action or
failure to act, which could be expected to cause the loss of any such
qualification, and the Company is not aware of any reason why any Company Plan
and Benefit Plan is not so qualified in operation. Neither the Company
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nor any of its ERISA Affiliates knows or has been notified by any Company
Multiemployer Plan that such Company Multiemployer Plan is currently in
reorganization or insolvency under and within the meaning of Section 4241 or
4245 of ERISA or that such Company Multiemployer Plan intends to terminate or
has been terminated under Section 4041A of ERISA. As used herein: (i) "Company
Plan" means (x) a "pension plan" (as defined in Section 3(2) of ERISA, other
than a Company Multiemployer Plan) or a "welfare plan" (as defined in Section
3(l) of ERISA) established or maintained by the Company or any of its ERISA
Affiliates or to which the Company or any of its ERISA Affiliates has
contributed in the last six years or otherwise may have any liability; and (ii)
"Company Multiemployer Plan" means a "multiemployer plan" (as defined in Section
4001(a)(3) of ERISA) to which the Company or any of its ERISA Affiliates is or
has been obligated to contribute or otherwise may have any liability.
(b) (i) No amount payable under any Company Plan will fail to be
deductible for federal income tax purposes by virtue of Section 280G of the
Code; and (ii) the consummation of the transactions contemplated by this
Agreement will not, either alone or in combination with any other event that is
reasonably likely to occur, (A) entitle any current or former director, officer
or employee of the Company or any of its ERISA Affiliates to severance pay,
golden parachute payments, unemployment compensation or any other payment,
except as expressly provided in this Agreement, or (B) accelerate the time of
payment or vesting, or increase the amount of compensation due any such
director, officer or employee.
(c) Except as described in Section 3.17 of the Company Disclosure
Schedule, the consummation of the transactions contemplated by this Agreement
will not (i) entitle any current or former employee of the Company or any of its
Subsidiaries to severance pay, unemployment compensation or any payment
contingent upon a change in control or ownership of the Company, or (ii)
accelerate the time of payment or vesting, or increase the amount, of any
compensation due to any such employee or former employee.
Section 3.18 Environmental Matters. Except as set forth in the Company
SEC Documents, (i) no person, entity or governmental agency has asserted against
the Company or any of its Subsidiaries any requests, claims or demands for
material (individually or in the aggregate) damages, costs, expenses or causes
of action arising out of or due to the emission,
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disposal, discharge or other release or threatened release of any Hazardous
Substances or Pollutants or Contaminants (in each case, as defined in or
governed by any applicable federal, state or local statute, law or regulation)
in connection with or related to any past or present facilities, properties or
assets, owned, leased or operated by the Company or any of its Subsidiaries
(collectively, the "Company's Assets"), arising out of or due to any injury to
human health or the environment by reason of the current condition or operation
of the Company's Assets, or past conditions and operations or activities on the
Company's Assets; (ii) neither the Company nor any Subsidiary is a party to any
pending, or to the knowledge of the Company, threatened actions for damages,
costs, expenses, demands, causes of action, claims, losses, administrative
proceedings, enforcement actions, or investigations relating to the emission,
disposal, discharge or release of Hazardous Substances or Pollutants or
Contaminants associated with the Company's Assets or operations; (iii) there is
no environmental condition, situation or incident on, at or concerning the
Company's Assets that could give rise to a material action or liability under
applicable environmental law, rule, ordinance or common law theory relating to
Hazardous Substances, Pollutants or Contaminants; and (iv) there is no material
liability associated with the Company's Assets under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, the
Resource Conservation and Recovery Act or the Toxic Substances and Control Act,
or any other similar state or local law.
Section 3.19 Labor Matters. Except as set forth in Section 3.17 of the
Company Disclosure Schedule, neither the Company nor any of its Subsidiaries has
any labor contracts, collective bargaining agreements or material employment or
consulting agreements with any persons employed by the Company or any persons
otherwise performing services primarily for the Company or any of its
Subsidiaries (the "Company Business Personnel"). There is no unfair labor
practice complaint pending or, to the knowledge of the Company, threatened,
against the Company or any of its Subsidiaries with respect to the Company
Business Personnel which, in either such case, would have, individually or in
the aggregate, a Company Material Adverse Effect. Since May 25, 1997, there has
not been any labor strike, dispute, slowdown or stoppage pending or, to the
knowledge of the Company, threatened against the Company or any of its
Subsidiaries, and neither the Company nor any of its Subsidiaries has
experienced any primary work stoppage or other labor difficulty involving its
employees, in either such case, which has had or would reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect.
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Section 3.20 Affiliate Transactions. Except as set forth in the Company
SEC Documents, there are no material Contracts or other material transactions
between the Company or any of its Subsidiaries, on the one hand, and any (i)
officer or director of the Company or of any of its Subsidiaries, (ii) record or
beneficial owner of five percent or more of any class of the voting securities
of the Company or (iii) affiliate (as such term is defined in Rule 12b-2
promulgated under the Exchange Act) of any such officer, director or beneficial
owner, on the other hand.
Section 3.21 Opinion of Financial Advisor. The Company has received the
written opinion of Interstate/Johnson Lane Corporation ("IJL") to the effect
that as of the date of this Agreement, the consideration to be received in the
Merger by the holders of Company Common Stock is fair to such holders from a
financial point of view. A true, correct and complete copy of the written
opinion delivered by IJL, which opinion shall be included in the Proxy
Statement, as well as a true and correct copy of the Company's engagement of
IJL, have been delivered to Parent by the Company.
Section 3.22 Brokers. Other than HT Capital Advisors, LLC, no broker,
finder or financial advisor retained by the Company is entitled to any
brokerage, finder's or other fee or commission from the Company in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company. A true and correct copy of the Company's
engagement letter with HT Capital Advisors, LLC has been delivered to Parent by
the Company.
Section 3.23 Title to Properties. The Company or its Subsidiaries have
good and marketable title to all properties and assets reflected on the
Company's consolidated financial statements as owned by it or acquired by it
after the date thereof (except for properties sold or otherwise disposed of in
the ordinary course of business since the date of the Company's most recent
consolidated financial statements), free and clear of all title defects and all
liens, mortgages, pledges, claims, charges, security interests or other
encumbrances of any nature whatsoever except as stated in the Company SEC
Documents or which alone or in the aggregate do not materially detract from the
value, or materially interfere with the present use, of any material asset or
property or of the assets or properties of the Company and its Subsidiaries as a
whole or otherwise materially impair the business of the Company and its
Subsidiaries as a whole.
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Section 3.24 Pooling. The Company does not know of any reason why the
Merger will not qualify as a pooling of interests transaction under APB 16, and
neither the Company nor any of its Subsidiaries has, to its knowledge after
consultation with its independent accountants, prior to the date of this
Agreement taken any action that will prevent the Merger from qualifying as a
pooling of interests transaction under APB 16.
Section 3.25 Accounts Receivable. The accounts receivable of the
Company and its Subsidiaries reflected in the Company's consolidated financial
statements represent in all material respects sales made in the ordinary course
of business and the reserves shown on the Company's consolidated financial
statements have been established in accordance with GAAP, consistently applied
and are considered by management of the Company to be adequate.
Section 3.26 Inventories. The inventories of the Company and its
Subsidiaries consist in all material respects of items suitable and merchantable
for filling orders in the ordinary course of business and at normal prices
(except to the extent of the inventory reserves shown on the Company's
consolidated financial statements, which have been established in accordance
with GAAP, consistently applied). To the knowledge of the Company, there are no
obsolete, slow moving or otherwise unsalable inventory in excess of such
reserves.
Section 3.27 Equity Matters. Except as set forth in Section 3.27 of the
Disclosure Schedule, during the past two (2) years (i) the Company has not
issued, distributed, purchased, redeemed or otherwise acquired any shares of
capital stock of the Company, except issuance of capital stock of the Company in
connection with the exercise of outstanding options; (ii) the Company has not
issued any options, rights, warrants or other agreements or arrangements
relating to the capital stock of the Company or any other instruments
convertible into capital stock of the Company; and (iii) the Company has not
amended, modified or altered its 1985 Non-Qualified Stock Option Plan or its
Restricted Stock Award Plan or any options granted thereunder.
Section 3.28 Disclosure. No representations or warranties by the
Company in this Agreement and no statement by the Company or, to the best
knowledge of the Company, any other person, contained in any document,
certificate or other writing furnished by the Company to Parent in connection
with the transactions contemplated in this Agreement,
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contains any untrue statement of material fact or omits any material fact
necessary to make the statements herein or therein, in light of the
circumstances under which they were made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND
MERGER SUB
Except as set forth in the Parent SEC Documents (as defined in Section
4.7), Parent and Merger Sub, jointly and severally, represent and warrant to the
Company as follows:
Section 4.1 Organization and Good Standing. Each of Parent and Merger
Sub is a corporation duly organized, validly existing and in good standing under
the laws of the States of Delaware and North Carolina, respectively, and each
has the corporate power and authority to carry on its business as it is now
being conducted. Parent is duly qualified as a foreign corporation to do
business, and is in good standing (to the extent such concept is recognized), in
each jurisdiction where the character of its properties owned or held under
lease or the nature of its activities makes such qualification necessary, except
where the failure to be so qualified or in good standing would not have a
material adverse effect, individually or in the aggregate, on the business,
properties, assets, liabilities, condition (financial or otherwise), or results
of operations of Parent and its Subsidiaries taken as a whole, or the ability of
Parent or Merger Sub to consummate the Merger and the other transactions
contemplated by this Agreement (a "Parent Material Adverse Effect").
Section 4.2 Certificate of Incorporation and By-Laws. True, correct and
complete copies of the Certificates of Incorporation and By-laws or equivalent
organizational documents, each as amended to date, of Parent and Merger Sub have
been made available to the Company. The Certificates of Incorporation and
By-laws, or equivalent organizational documents, of Parent and each of its
Subsidiaries are in full force and effect. Neither Parent nor any of its
Subsidiaries is in violation of any provision of its Certificate of
Incorporation, By-laws or equivalent organizational documents.
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Section 4.3 Capitalization. (a) The authorized capital stock of Parent
consists of (i) 1,200,000,000 shares of Common Stock, par value $5.00 per share,
constituting Parent Common Stock, (ii) 150,000 shares of parent Class B Stock,
$50.00 par value ("Class B Stock"), (iii) 250,000 shares of Parent Class C
Preferred Stock, $100.00 par value ("Class C Stock"), (iv) 1,100,000 shares of
Parent Class D Preferred Stock, without par value ("Class D Stock"), and (v)
16,550,000 shares of parent Class E Preferred Stock, without par value ("Class E
Stock"). The Class B Stock, Class C Stock, Class D Stock and Class E Stock,
together with Parent Common Stock, is referred to as the "Parent Capital Stock".
As of May 1, 1998, (i) 479,642,716 shares of Parent Common Stock were issued and
outstanding, and 29,956,969 shares were held in the treasury of Parent.
Currently, there are no shares of Class B Stock, Class C Stock, Class D Stock or
Class E Stock issued and outstanding. Since May 1, 1998 through the date hereof,
Parent has not issued any shares of its capital stock, or any security
convertible into or exchangeable for shares of such capital stock, other than
the issuance of options and restricted stock pursuant to the plans and
arrangements described in the Parent SEC Documents and other than upon the
exercise of stock options. The authorized capital stock of Merger Sub consists
of 10,000 shares of Common Stock, par value $1.00 per share, constituting the
Merger Sub Common Stock. As of the date hereof, 1,000 shares of Merger Sub
Common Stock are issued and outstanding, all of which are owned by Parent, and
no shares of Merger Sub Common Stock are held in the treasury of Merger Sub. All
of the issued and outstanding shares of Parent Common Stock and Merger Sub
Common Stock have been validly issued, and are fully paid and nonassessable, and
are not subject to preemptive rights. Each share of Parent Common Stock to be
issued in connection with the Merger has been duly authorized and, when so
issued, will be fully paid and nonassessable, free and clear of any liens, will
not be subject to preemptive rights, and will be freely transferrable except for
restrictions on transfer required in order to preserve pooling of interests
accounting treatment of the Merger. Without limiting the generality of the
foregoing, and subject to the provisions of Rule 145 under the Securities Act,
none of the shares of Parent Common Stock to be issued in the Merger will
constitute "restricted" securities within the meaning of Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act").
(b) As of the date hereof, (i) there are no options, warrants or other
agreements, arrangements or commitments of any character to which Parent or
Merger Sub or any of their respective Subsidiaries is a party, requiring Parent
or Merger Sub to grant,
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issue or sell any shares of the capital stock or other equity interests of
Parent; (ii) neither Parent nor any of its Subsidiaries have any obligation,
contingent or otherwise, to repurchase, redeem or otherwise acquire any shares
of the capital stock or other equity interests of Parent or Merger Sub; and
(iii) there are no voting trusts, proxies or other agreements or understandings
to or by which Parent or Merger Sub or any of their respective Subsidiaries is a
party or is bound with respect to the voting of any shares of capital stock or
other equity interests of Parent or Merger Sub. Since May 1, 1998, Parent has
not issued any capital stock at less than fair value (subject to the issuance of
shares pursuant to outstanding options) and has not granted any options,
warrants or other agreements obligating it to issue capital stock other than for
fair value and other than the issuance of options and restricted stock pursuant
to plans and arrangements described in the Parent SEC Documents.
Section 4.4 Corporate Authority.
(a) Each of Parent and Merger Sub has the requisite 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 Parent and Merger Sub and the consummation by Parent and Merger Sub of the
transactions contemplated hereby have been duly authorized by its respective
Board of Directors and no other corporate action on the part of Parent or Merger
Sub is necessary to authorize the execution and delivery by Parent and Merger
Sub of this Agreement and the consummation by it of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Parent and Merger Sub and, assuming this Agreement constitutes the valid and
binding agreement of the Company, and constitutes a valid and binding agreement
of Parent and Merger Sub and is enforceable against Parent and Merger Sub in
accordance with its terms. The preparation of the Registration Statement to be
filed with the SEC has been duly authorized by the Board of Directors of Parent.
(b) Prior to the execution and delivery of this Agreement, the Board of
Directors of each of Parent and Merger Sub (at a meeting duly called and held)
has unanimously approved this Agreement, the Stock Voting Agreement, the Merger
and the other transactions contemplated hereby.
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Section 4.5 Non-contravention. The execution and delivery by Parent and
Merger Sub of this Agreement do not, and the consummation of the transactions
contemplated hereby and compliance with the provisions hereof will not, (i)
result in any violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to the loss of a material benefit under any
Contract binding upon Parent or any of its Subsidiaries, or result in the
creation of any Lien upon any of the properties or assets of Parent or any of
its Subsidiaries, (ii) conflict with or result in any violation of any provision
of the Certificate of Incorporation or By-Laws or other equivalent
organizational document, in each case as amended, of Parent or any of its
Subsidiaries, or (iii) conflict with or violate any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Parent or any of its
Subsidiaries or any of their respective properties or assets, other than, in the
case of clauses (i) and (iii), any such violation, conflict, default, right,
loss or Lien that, individually or in the aggregate, would not have a Parent
Material Adverse Effect.
Section 4.6 Government Approvals; Required Consents. No filing or
registration with, or authorization, consent or approval of, any Governmental
Entity is required by or with respect to Parent or any of its Subsidiaries in
connection with the execution and delivery of this Agreement by Parent or is
necessary for the consummation of the transactions contemplated hereby
(including, without limitation, the Merger) except: (i) the filing with the SEC
of the Registration Statement and such reports under the Exchange Act, and any
applicable state securities or "blue sky" law as may be required in connection
with this Agreement and the transactions contemplated by this Agreement, (ii)
the filing of a notification under the HSR Act, (iii) the filing of Articles of
Merger with the Secretary of State of the State of North Carolina, (iv) such
consents, approvals, authorizations, permits, filings and notifications listed
in Section 4.6 of the Parent Disclosure Schedule and (v) such other consents,
orders, authorizations, registrations, declarations and filings the failure of
which to obtain or make would not, individually or in the aggregate, have a
Parent Material Adverse Effect.
Section 4.7 SEC Documents and Other Reports. Parent has filed all
documents required to be filed by it and its Subsidiaries with the SEC since May
25, 1997 (the "Parent SEC Documents"). As of their respective dates, or if
amended as of the date of the last such amendment, the Parent SEC Documents
complied, and all documents required to be filed by
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Parent with the SEC after the date hereof and prior to the Effective Time
("Subsequent Parent SEC Documents") will comply, in all material respects with
the requirements of the Securities Act or the Exchange Act, as the case may be,
and the applicable rules and regulations promulgated thereunder and none of the
Parent SEC Documents contained when filed, and the Subsequent Parent SEC
Documents will not contain, any untrue statement of a material fact or omitted,
or will omit, to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, or are to be made, not misleading. The consolidated
financial statements of Parent included in the Parent SEC Documents when filed
fairly present, and included in the Subsequent Parent SEC Documents will fairly
present, the consolidated financial position of Parent and its consolidated
Subsidiaries, as at the respective dates thereof and the consolidated results of
their operations and their consolidated cash flows for the respective periods
then ended (subject, in the case of the unaudited statements, to normal year-end
audit adjustments and to any other adjustments described therein) in conformity
with GAAP (except, in the case of the unaudited statements as permitted by Form
10-Q of the SEC) applied on a consistent basis during the periods involved
(except as may be indicated therein or in the notes thereto). Since May 25,
1997, Parent has not made any change in the accounting practices or policies
applied in the preparation of its financial statements, except as may be
required by GAAP. Since May 25, 1997 and the date of this Agreement, Parent has
not incurred any liabilities or obligations of any nature which, individually or
in the aggregate, would have a Parent Material Adverse Effect.
Section 4.8 Absence of Certain Changes or Events. Since May 25, 1997,
Parent and its Subsidiaries have conducted their respective businesses and
operations in the ordinary and usual course consistent with past practice,
except where such failure would not have a Parent Material Adverse Effect, and
there has not occurred (i) as of the date hereof, any event, condition or
occurrence having or that would have, individually or in the aggregate, a Parent
Material Adverse Effect; (ii) any damage, destruction or loss (whether or not
covered by insurance) having or which would have, individually or in the
aggregate, a Parent Material Adverse Effect; or (iii) any declaration, setting
aside or payment of any dividend or distribution of any kind by Parent or Merger
Sub on any class of its capital stock.
Section 4.9 Information in Disclosure Documents and Registration
Statement. None of the information supplied or to be supplied by Parent or
Merger Sub specifically for
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inclusion in (i) the Registration Statement or (ii) the Proxy Statement will, in
the case of the Registration Statement, at the time it becomes effective or, in
the case of the Proxy Statement or any amendments thereof or supplements
thereto, at the time of the initial mailing of the Proxy Statement and any
amendments or supplements thereto, and at the time of the meeting of
shareholders of the Company to be held in connection with the Merger, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Registration Statement, as of its effective date, will comply
(with respect to information relating to Parent and Merger Sub) as to form in
all material respects with the requirements of the Securities Act, and the rules
and regulations promulgated thereunder. Notwithstanding the foregoing, neither
Parent nor Merger Sub makes any representation or warranty with respect to any
statement made or incorporated by reference in the foregoing documents based
upon information supplied by or in behalf of the Company for inclusion or
incorporation by reference therein.
Section 4.10 Interim Operations of the Merger Subsidiary. Merger Sub
was formed solely for the purpose of engaging in the transactions contemplated
hereby, has engaged in no other business activities and has conducted its
operations only as contemplated hereby.
Section 4.11 Compliance with Laws. The business of Parent and its
Subsidiaries is being conducted in compliance with all Applicable Laws, except
for violations or failures to so comply that would not, individually, or in the
aggregate, have a Parent Material Adverse Effect, and no investigation or review
by any Governmental Entity with respect to the Parent or its Subsidiaries is
pending or, to the knowledge of the Parent, threatened, other than, in each
case, those which would not, individually, or in the aggregate, have a Parent
Material Adverse Effect.
Section 4.12 Finders and Investment Bankers. Neither the Parent, Merger
Sub or any other Subsidiary of Parent, nor any of their respective officers or
directors has employed any broker, finder or investment banker in connection
with the transactions contemplated by this Agreement or has incurred any
liability to any third party for any brokerage fees, commissions or finder's
fees in connection with the transactions contemplated hereby. Any such fees and
expenses shall be the sole responsibility of Parent.
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Section 4.13 Pooling. Parent does not know of any reason why the Merger
will not qualify as a pooling of interests transaction under APB Opinion No. 16,
and neither the Parent nor any of its Subsidiaries, has, to its knowledge after
consultation with its independent accountants, prior to the date of this
Agreement taken any action that will prevent the Merger from qualifying as a
pooling of interests transaction under APB 16.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
Section 5.1 Conduct of Business by the Company Pending the Merger.
Prior to the Effective Time, unless Parent shall otherwise agree in writing
(which agreement shall not be unreasonably withheld or delayed), or as set forth
in Section 5.1 of the Company Disclosure Schedule or as expressly contemplated
by this Agreement, the Company shall conduct, and cause each of its Subsidiaries
to conduct, its business only in the ordinary and usual course consistent with
the manner as heretofore conducted, and the Company shall use, and cause each of
its Subsidiaries to use, its reasonable efforts to preserve intact the present
business organization, keep available the services of its present officers and
key employees, and preserve their existing business relationships. Without
limiting the generality of the foregoing, unless Parent shall otherwise agree in
writing (which agreement shall not be unreasonably withheld or delayed), or as
set forth in Section 5.1 of the Company Disclosure Schedule, prior to the
Effective Time the Company shall not, nor shall it permit any of its
Subsidiaries to:
(a) (i) amend its Articles of Incorporation, as amended, By-Laws or
other organizational documents, (ii) split, combine or reclassify any shares of
its outstanding capital stock, (iii) declare, set aside or pay any dividend or
other distribution payable in cash, stock or property (other than (i) regular
quarterly dividends with record dates and payment dates substantially consistent
with past practice of not more than $.06 per share of Common Stock (it being the
express understanding of Parent and the Company that the shareholders of the
Company shall be entitled to either a dividend on the Shares or on the shares of
Parent Common Stock, but not both, for the quarter in which the Closing shall
occur, and the Board of Directors of the Company shall not declare any dividend
or fix any record therefor which
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would have such effect)), and (ii) dividend and distributions by a wholly-owned
Subsidiary of the Company to its parent entity, or (iv) directly or indirectly
redeem or otherwise acquire any shares of its capital stock or shares of the
capital stock of any of its Subsidiaries;
(b) authorize for issuance, issue (except upon the exercise of
outstanding stock options or warrants) or sell or agree to issue or sell any
shares of, or rights to acquire or convertible into any shares of, its capital
stock or shares of the capital stock of any of its Subsidiaries (whether through
the issuance or granting of options, warrants, commitments, subscriptions,
rights to purchase or otherwise);
(c) (i) merge, combine or consolidate with another entity, (ii) acquire
or purchase an equity interest in or a substantial portion of the assets of
another corporation, partnership or other business organization or otherwise
acquire any material assets outside the ordinary course of business and
consistent with past practice or otherwise enter into any material contract,
commitment or transaction outside the ordinary course of business and consistent
with past practice or (iii) sell, lease, license, waive, release, transfer,
encumber or otherwise dispose of any of its material assets outside the ordinary
course of business and consistent with past practice;
(d) (i) incur, assume or prepay any indebtedness, obligations or
liabilities other than in each case in the ordinary course of business and
consistent with past practice and other than existing indebtedness of a
Subsidiary of the Company, (ii) assume, guarantee, endorse or otherwise become
liable or responsible (whether directly, contingently or otherwise) for the
obligations of any person other than a Subsidiary of the Company, in each case
other than in the ordinary course of business and consistent with past practice
and other than existing indebtedness of a Subsidiary of the Company except for
(A) short-term borrowings incurred in the ordinary course of business consistent
with the manner as heretofore conducted and (B) borrowings pursuant to existing
credit facilities in the ordinary course of business or any modifications,
renewals or replacements of such credit facilities, or (iii) make any loans,
advances or capital contributions to, or investments in, any other person, other
than to any Subsidiary of the Company;
(e) pay, satisfy, discharge or settle any material claim, liabilities
or obligations (absolute, accrued, contingent or otherwise), other than in the
ordinary course
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of business and consistent with past practice or pursuant to mandatory terms of
any Company Contract in effect on the date hereof;
(f) modify or amend, or waive any benefit of, any non-competition
agreement to which the Company or any of its Subsidiaries is a party;
(g) authorize or make capital expenditures in excess of $200,000
individually, or in excess of $1,000,000 in the aggregate except for those
projects set forth in Section 5.1 of the Company Disclosure Schedule;
(h) permit any insurance policy naming the Company or any Subsidiary of
the Company as a beneficiary or a loss payee to be cancelled or terminated other
than in the ordinary course of business;
(i) (i) adopt, enter into, terminate or amend (except as may be
required by Applicable Law) any employee plan, agreement, contract, arrangement
or other Company Plan for the current or future benefit or welfare of any
director, officer or employee, (ii) except in the ordinary course of business
consistent with past practice, increase in any manner the compensation or fringe
benefits of, or pay any bonus to, any director, officer or employee; or (iii)
other than pursuant to Section 2.7 hereof, take any action to fund or in any
other way secure, or to accelerate or otherwise remove restrictions with respect
to, the payment of compensation or benefits under any employee plan, agreement,
contract, arrangement or other Company Plan;
(j) make any material change in its accounting or tax policies or
procedures, except as required by Applicable Law or to comply with GAAP; or
(k) enter into any contract, agreement, commitment or arrangement with
respect to any of the foregoing.
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ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Access and Information. Each party hereto shall (and shall
cause its Subsidiaries and its and their respective officers, directors,
employees, auditors and agents to) afford to the other party and to such other
party's officers, employees, financial advisors, legal counsel, accountants,
consultants and other representatives (except to the extent not permitted under
Applicable Law as advised by counsel) reasonable access during normal business
hours throughout the period prior to the Effective Time to all of its books and
records and its properties, plants and personnel and, during such period, shall
furnish promptly to the other party a copy of each report, schedule and other
document filed or received by it pursuant to the requirements of federal
securities laws. Unless otherwise required by Applicable Law, each party hereto
agrees that it shall, and it shall cause its Subsidiaries and its and their
respective officers, directors, employees, auditors and agents to, hold in
confidence all non-public information so acquired and to use such information
solely for purposes of effecting the transactions contemplated by this
Agreement.
Section 6.2 No Solicitation.
(a) Prior to the Effective Time, the Company agrees that it shall not,
and it shall use its reasonable best efforts to cause its Subsidiaries and
affiliates, and their respective directors, officers, employees, agents or
representatives not to, directly or indirectly, (i) solicit or initiate
(including by way of furnishing or disclosing non-public information) any
inquiries or the making of any proposal with respect to any merger,
consolidation or other business combination involving the Company or any
Subsidiary of the Company or the acquisition of all or any significant part of
the assets or capital stock of the Company or any Subsidiary of the Company (an
"Acquisition Transaction") or (ii) negotiate, explore or otherwise engage in
discussions with any person (other than Parent and its representatives) with
respect to any Acquisition Transaction, or which may reasonably be expected to
lead to a proposal for an Acquisition Transaction or enter into any agreement,
arrangement or understanding with respect to any such Acquisition Transaction or
which would require it to abandon, terminate or fail to consummate the Merger or
any other transaction contemplated by this Agreement; provided, however, that,
the Company may,
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in response to an unsolicited written proposal from a third party (including a
new or unsolicited proposal received by the Company after the execution of this
Agreement from a person whose initial contact with the Company may have been
solicited by the Company or its representatives prior to the execution of this
Agreement) setting forth a Superior Proposal (as hereinafter defined), furnish
information to, negotiate or otherwise engage in discussions with such third
party, if the Board of Directors of the Company determines in good faith, based
upon the advice of outside counsel, that such action is reasonably necessary for
the Board of Directors to comply with its legal duties under Applicable Law,
including, without limitation the NCBCA.
(b) Except as may be reasonably necessary to comply with the legal
duties of the Company's Board of Directors under Applicable Law, including,
without limitation, the NCBCA (based on the advice of outside counsel), the
Company agrees that, as of the date hereof, it, its Subsidiaries and affiliates,
and the respective directors, officers, employees, agents and representatives of
the foregoing, shall immediately cease and cause to be terminated any existing
activities, discussions and negotiations with any person (other than Parent and
its representatives) conducted heretofore with respect to any Acquisition
Transaction. The Company agrees to promptly advise Parent of any inquiries or
proposals received by, any such information requested from, and any requests for
negotiations or discussions sought to be initiated or continued with, the
Company, its Subsidiaries or affiliates, or any of the respective directors,
officers, employees, agents or representatives of the foregoing, in each case
from a person (other than Parent and its representatives) with respect to an
Acquisition Transaction. In addition, the Company shall promptly advise Parent
of the substance and content of any such inquiry, proposal, information request,
negotiations or discussions unless the Board of Directors of the Company
determines in good faith and based on written advice of its outside legal
counsel that such action would constitute a breach of the Board of Directors
legal duties under Applicable Law, including, without limitation, the NCBCA. As
used herein, "Superior Proposal" means a bona fide, written and unsolicited
proposal or offer (including a new or unsolicited proposal received by the
Company after the execution of this Agreement from a person whose initial
contact with the Company may have been solicited by the Company or its
representatives prior to the execution of this Agreement) made by any person or
group (other than Parent or any of its Subsidiaries) with respect to an
Acquisition Transaction on terms which the Board of Directors of the Company
determines in good faith, and in the exercise of reasonable
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judgment (based on the advice of independent financial advisors and outside
legal counsel), to be superior to the transactions contemplated hereby, taking
into consideration all elements of the transactions contemplated hereby
including, without limitation, the non-taxable element of said transaction.
(c) Nothing contained in this Section 6.2 or elsewhere in this
Agreement shall prohibit the Company from (i) filing with the SEC a report on
Form 8-K with respect to this Agreement, including a copy of this Agreement and
any related agreements as an exhibit to such report, (ii) taking and disclosing
to its shareholders a position contemplated by Rule 14d-9 or 14e-2 promulgated
under the Exchange Act, or (iii) making any disclosure to its shareholders if,
in the good faith judgment of the Board of Directors of the Company, upon the
advice of outside counsel, failure to so disclose would be inconsistent with any
Applicable Law or any duty of the Board of Directors. The Company shall be
entitled to provide copies of this Section 6.2 to third parties who, on an
unsolicited basis after the date of this Agreement, contact the Company
regarding an Acquisition Transaction.
Section 6.3 Third-Party Standstill Agreements. During the period from
the date of this Agreement through the Effective Time, the Company shall not
terminate, amend, modify or waive any provision of any confidentiality or
standstill agreement to which it or any of its Subsidiaries is a party that was
entered into in contemplation of discussions or negotiations regarding a
possible Acquisition Transaction.
Section 6.4 Registration Statement. As promptly as practicable, Parent
and the Company shall in consultation with each other prepare and file with the
SEC the Proxy Statement and Registration Statement in preliminary form. Each of
the Company and Parent shall use its reasonable best efforts to have the Proxy
Statement cleared by the SEC and the Registration Statement declared effective
as soon as practicable. The Company shall furnish Parent with all information
concerning the Company and the holders of its capital stock and shall take such
other action Parent may reasonably request in connection with the Registration
Statement and the issuance of shares of Parent Common Stock in connection with
the Merger. If, at any time prior to the Effective Time, any event or
circumstance relating to the Company, any Subsidiary of the Company, Parent or
any Subsidiary of Parent, or their respective officers or directors, should be
discovered by such party which should be set forth in an amendment or a
supplement to the Registration Statement or Proxy
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Statement, such party shall promptly inform the other thereof and take
appropriate action in respect thereof.
Section 6.5 Proxy Statements; Shareholder Approval.
(a) The Company, acting through its Board of Directors, shall, subject
to and in accordance with Applicable Law, its Articles of Incorporation and its
By-Laws, promptly and duly call, give notice of, convene and hold as soon as
practicable following the date upon which the Registration Statement becomes
effective a meeting of the holders of Company Common Stock for the purpose of
voting to approve and adopt this Agreement and the transactions contemplated
hereby (the "Company Shareholder Meeting"), and, (i) except as reasonably
necessary to comply with the legal duties under Applicable Law, including,
without limitation, NCBCA, of the Board of Directors as advised by outside
counsel, recommend approval and adoption of this Agreement and the transactions
contemplated hereby to the shareholders of the Company and include in the Proxy
Statement such recommendation and (ii) except as reasonably necessary to comply
with the legal duties under Applicable Laws, including, without limitation,
NCBCA, of the Board of Directors as advised by outside counsel, take all
reasonable action to solicit and obtain such approval.
(b) The Company shall cause the definitive Proxy Statement to be mailed
to its shareholders as soon as practicable following the date on which it is
cleared by the SEC and the Registration Statement is declared effective.
Section 6.6 Compliance with the Securities Act. Prior to the Effective
Time, the Company shall cause to be prepared and delivered to Parent a list
(reasonably satisfactory to counsel for Parent) identifying each person who, at
the time of the Company Shareholder Meeting, may be deemed to be an "affiliate"
of the Company, as such term is used in paragraphs (c) and (d) of Rule 145 under
the Securities Act (the "Company Rule 145 Affiliates"). The Company shall use
its reasonable best efforts to cause each person who is identified as a Company
Rule 145 Affiliate in such list to deliver to Parent on or prior to the
Effective Time a written agreement, substantially in the form of Exhibit "B"
hereto.
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Section 6.7 Reasonable Best Efforts.
(a) Subject to the terms and conditions herein provided and applicable
legal requirements, each of the parties hereto agrees to use its reasonable best
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, and to assist and cooperate with the other parties hereto in doing, as
promptly as practicable, all things necessary, proper or advisable under
applicable laws and regulations to ensure that the conditions set forth in
Article VII are satisfied and to consummate and make effective the transactions
contemplated by this Agreement; provided, however, that the Company shall not,
without Parent's prior written consent, and Parent shall not be required to,
divest or hold separate or otherwise take or commit to take any other similar
action with respect to any assets, businesses or product lines of Parent, the
Company or any of their respective Subsidiaries.
(b) Each of the parties shall use its reasonable best efforts to obtain
as promptly as practicable all consents, waivers, approvals, authorizations or
permits of, or registration or filing with or notification to (any of the
foregoing being a "Consent"), of any Governmental Entity or any other person
required in connection with, and waivers of any violations, defaults or breaches
that may be caused by, the consummation of the transactions contemplated by this
Agreement.
(c) Each party hereto shall promptly inform the other of any material
communication from the SEC, the United States Federal Trade Commission, the
United States Department of Justice or any other Governmental Entity regarding
any of the transactions contemplated by this Agreement. If any party hereto or
any affiliate thereof receives a request for additional information or
documentary material from any such Governmental Entity with respect to the
transactions contemplated by this Agreement, then such party shall use
commercially reasonable efforts to cause to be made, as soon as reasonably
practicable and after consultation with the other party, an appropriate response
in compliance with such request.
(d) Without limiting the generality of the foregoing and subject to the
proviso to Section 6.7(a) hereof, Parent and the Company will use their
respective reasonable best efforts to obtain all authorizations or waivers
required under the HSR Act to consummate the transactions contemplated hereby,
including, without limitation, making all
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filings with the Antitrust Division of the Department of Justice ("DOJ") and the
Federal Trade Commission ("FTC") required in connection therewith (the initial
filing to occur no later than ten business days following the execution and
delivery of this Agreement) and responding as promptly as practicable to all
inquiries received from the DOJ or FTC for additional information or
documentation. Each of Parent and the Company shall furnish to the other such
necessary information and reasonable assistance as the other may request in
connection with its preparation of any filing or submission which is necessary
under the HSR Act. Parent and the Company shall keep each other apprised of the
status of any communications with, and any inquiries or requests for additional
information from, the FTC and the DOJ.
(e) The parties hereto intend the Merger to qualify as a reorganization
under Section 368(a) of the Code. Each of the parties hereto shall, and shall
cause its respective Subsidiaries to, and shall use its reasonable best efforts
to cause its respective affiliates to, use its and their respective reasonable
best efforts to cause the Merger to so qualify. No party hereto nor any
affiliate thereof shall take any action prior to or after the Effective Time
that would cause the Merger not to qualify under these Sections of the Code, and
the parties hereto shall take the position for all purposes that the Merger
qualifies as a reorganization under such Sections of the Code.
Section 6.8 Public Announcements. Parent and the Company shall consult
with each other before issuing any press releases or making any public statement
with respect to the transactions by this Agreement and shall not issue any such
press release or such public statement prior to such consultation and without
the approval of the other (which approval shall not unreasonably be withheld),
except as may be required by applicable law or obligations pursuant to any
listing agreement with any national securities exchange.
Section 6.9 Directors' and Officers' Indemnification and Insurance.
(a) Parent and the Company agree that all rights to indemnification now
existing in favor of any employee, agent, director or officer of the Company and
its Subsidiaries (the "Indemnified Parties"), as provided in their respective
Articles of Incorporation or By-Laws, shall survive the Merger and shall
continue in full force and effect for a period of six (6) years after the
Effective Time; provided that in the event any claim
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or claims are asserted or made within such six (6) year period, all rights to
indemnification in respect of any such claim shall continue until final
disposition of such claim. To the extent any such indemnity requires approval by
the Board of Directors of the Surviving Corporation, the Parent shall cause such
approval to be provided by such Board of Directors.
(b) The Company may obtain continuation coverage under the Company's
existing Directors and Officers and Company Liability Insurance Policy to
provide coverage with respect to any claims made during the six (6) years period
following the Effective Time for events occurring prior to the Effective Time
(the "D&O Insurance") or, if substantially equivalent insurance coverage is
unavailable, the best available coverage; provided, however, that the one time
premium for the D&O Insurance shall not exceed $36,000, but if such premium
would but for this proviso exceed such amount, the Company may purchase as much
coverage as possible for such amount.
(c) In the event the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its properties
and assets to any person, then, and in each such case, to the extent necessary
to effectuate the purposes of this Section 6.9, Parent shall cause proper
provision to be made so that the successors and assigns of the Surviving
Corporation assume the obligations set forth in this Section 6.9 and none of the
actions described in clauses (i) or (ii) shall be taken until such provision is
made.
(d) The provisions of this Section 6.9 are intended to be for the
benefit of, and shall be enforceable by, each such covered insured, and such
covered insured's heirs and personal representatives and shall be binding on all
successors and assigns of the Company.
Section 6.10 Expenses. Except as otherwise set forth in Sections 8.2(b)
and (c), each party hereto shall bear its own costs and expenses in connection
with this Agreement and the transactions contemplated hereby, except that
expenses incurred in connection with printing and mailing the Proxy Statement
and Registration Statement shall be shared equally by Parent and the Company.
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Section 6.11 Listing Application. Parent shall each use its reasonable
best efforts to cause the shares of Parent Common Stock to be issued pursuant to
this Agreement in the Merger to be listed for trading on the New York Stock
Exchange or on any securities exchange on which shares of Parent Common Stock
shall be listed at the Effective Time.
Section 6.12 Supplemental Disclosure. The Company shall give prompt
notice to Parent, and Parent shall give prompt notice to the Company, of (i) the
occurrence, or non-occurrence, of any event the occurrence, or nonoccurrence, of
which would be likely to cause (x) any representation or warranty contained in
this Agreement to be untrue or inaccurate or (y) any covenant, condition or
agreement contained in this Agreement not to be complied with or satisfied and
(ii) any failure of the Company or Parent, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder; provided, however, that the delivery of any notice pursuant to
this Section 6.12 shall not have any effect for the purpose of determining the
satisfaction of the conditions set forth in Article VII of this Agreement or
otherwise limit or affect the remedies available hereunder to any party.
Section 6.13 Pooling of Interests. Each of the Company and Parent will
use reasonable efforts to cause the transactions contemplated by this Agreement,
including the Merger, to be accounted for as a pooling of interests under
Opinion 16 of the Accounting Principles Board and applicable SEC rules and
regulations, and such accounting treatment to be accepted by each of the
Company's and Parent's independent public accountants, and by the SEC,
respectively, and each of the Company and Parent agrees that it will not
voluntarily take any action that would cause such accounting treatment not to be
obtained.
Section 6.14 Employee Matters. If, at any time during the two (2) year
period following the Effective Time, any employee benefit plan applicable to
employees of the Company is merged or combined with an employee benefit plan of
Parent's Golden Valley Microwave subsidiary (or any successor thereto), Parent
shall cause such subsidiary to credit such employees' service with the Company
or its subsidiaries, to the same extent as such service was credited under the
merged or combined plan of the Company immediately prior to such merger or
combination for purposes of determining eligibility to participate in and
vesting under, and for purposes of calculating benefits under such employee
benefit plan. Furthermore, for the two (2) year period following the Effective
Time, the employee benefits
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applicable to employees of the Company shall, in the aggregate, be no less
favorable to such employees than such employees current benefits.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 7.1 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligations of each party to effect the Merger shall be subject
to the satisfaction or waiver at or prior to the Closing Date of the following
conditions:
(a) Shareholder Approval. This Agreement and the transactions
contemplated hereby shall have been approved and adopted by the requisite vote
(as described in Section 3.5(b)) of the Company in accordance with Applicable
Law.
(b) Governmental Approvals. All authorizations, consents, orders,
declarations or approvals of, or filings with, or terminations or expirations of
waiting periods imposed by, any Governmental Entity, which the failure to
obtain, make or occur would have the effect of making the Merger or any of the
transactions contemplated hereby illegal or would have a Material Adverse Effect
on Parent or the Company (as the Surviving Corporation) or would materially
impair the operations of the Surviving Corporation, assuming the Merger had
taken place, shall have been obtained, shall have been made or shall have
occurred.
(c) HSR Act. The waiting period under the HSR Act shall have expired or
been terminated.
(d) Registration Statement. The Registration Statement shall have
become effective in accordance with the provisions of the Securities Act. No
stop order suspending the effectiveness of the Registration Statement shall have
been issued by the SEC and no proceedings for that purpose shall have been
initiated by the SEC.
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(e) No Injunction. No Governmental Entity having jurisdiction over the
Company or Parent, or any of their respective Subsidiaries, shall have enacted,
issued, promulgated, enforced or entered any law, rule, regulation, executive
order, decree, injunction or other order (whether temporary, preliminary or
permanent, collectively, the "Restraints")) which is then in effect and has the
effect of making the Merger or the Stock Voting Agreement illegal or otherwise
prohibiting consummation of the Merger; provided, however, that each of the
parties hereto shall have used their respective reasonable efforts to prevent
the entry of any such Restraints and to appeal as promptly as possible any such
Restraints that may be entered.
(f) NYSE. The Parent Company Stock to be issued in connection with the
Merger shall have been approved for listing on the NYSE, subject to official
notice of issuance.
Section 7.2 Conditions to Obligation of Parent and Merger Sub to Effect
the Merger. The obligation of Parent and Merger Sub to effect the Merger shall
be subject to the satisfaction at or prior to the Effective Time of the
following additional conditions, unless waived in writing by Parent:
(a) Representations and Warranties. The representations and warranties
of the Company that are qualified with reference to materiality shall be true
and correct, and the representations and warranties that are not so qualified
shall be true and correct in all material respects, in each case as of the date
hereof, and, except to the extent such representations and warranties speak as
of an earlier date, as of the Effective Time as though made at and as of the
Effective Time, and Parent shall have received a certificate signed on behalf of
the Company by the Chief Executive Officer or the Chief Financial Officer of the
Company to such effect (it being understood that, for purposes of determining
the accuracy of such representations and warranties as of the Effective Time,
any inaccuracy resulting from events occurring from the date hereof through the
Effective Time that do not have a Company Material Adverse Effect shall be
disregarded.
(b) Performance of Obligations of the Company. The Company shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Effective Time, and Parent shall have
received a certificate
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signed on behalf of the Company by the Chief Executive Officer or the Chief
Financial Officer of the Company to such effect.
(c) Material Adverse Change. Since the date of this Agreement, there
shall have been no event or occurrence which has had a Company Material Adverse
Effect, and Parent shall have received a certificate signed on behalf of the
Company by the Chief Executive Officer or the Chief Financial Officer of the
Company to such effect.
(d) Company Affiliate Agreements. Parent shall have received the
written agreements, substantially in the form of Exhibit "B" hereto, from the
Company Rule 145 Affiliates described in Section 6.6.
(e) Consents Under Agreements. The Company shall have obtained the
consent or approval of each person (other than the Governmental Entities
referred to in Section 7.1(b)) whose consent or approval shall be required in
connection with the transactions contemplated hereby under any indenture,
mortgage, evidence of indebtedness, lease or other agreement or instrument,
except where the failure to obtain the same would not reasonably be expected,
individually or in the aggregate, to have a Parent Material Adverse Effect or
Company Material Adverse Effect (as the Surviving Corporation).
(f) Tax Matters. Parent shall have received assurances satisfactory to
it that the Merger will qualify as a reorganization within the meaning of
Section 368 of the Code.
(g) Pooling. Parent shall have received assurances reasonably
satisfactory to it that the transactions contemplated herein qualify for
treatment as a pooling of interests pursuant to APB 16.
(h) Dissenters. The number of Shares dissenting from the Merger
pursuant to the NCBCA shall not preclude accounting for the Merger as a pooling
of interests pursuant to APB 16.
Section 7.3 Conditions to Obligation of the Company to Effect the
Merger. The obligation of the Company to effect the Merger shall be subject to
the satisfaction at or prior
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to the Effective Time of the following additional conditions, unless waived in
writing by the Company:
(a) Representations and Warranties. The representations and warranties
of Parent and Merger Sub that are qualified with reference to materiality shall
be true and correct, and the representations and warranties that are not so
qualified shall be true and correct in all material respects, in each case as of
the date hereof, and, except to the extent such representations and warranties
speak as of an earlier date, as of the Effective Time as though made on and as
of the Effective Time, and the Company shall have received a certificate signed
on behalf of Parent by the Chief Financial Officers of Parent to such effect (it
being understood that, for purposes of determining the accuracy of such
representations and warranties as of the Effective Time, any inaccuracy
resulting from events occurring from the date hereof through the Effective Time
that do not have a Parent Material Adverse Effect shall be disregarded.
(b) Performance of Obligations of Parent and Merger Sub. Each of Parent
and Merger Sub shall have performed in all material respects all obligations
required to be performed by it under this Agreement at or prior to the Effective
Time, and the Company shall have received a certificate signed on behalf of
Parent by the Chief Financial Officer of Parent to such effect.
(c) Tax Opinion. The Company shall have received an opinion of Smith,
Anderson, Blount, Dorsett, Mitchell & Jernigan, LLP ("Smith Anderson"), counsel
to the Company, to the effect that the Merger will qualify as a reorganization
within the meaning of Section 368 of the Code. The issuance of such opinion
shall be conditioned on the receipt by such tax counsel of representation
letters from each of Parent and Merger Sub, the Company and certain shareholders
of the Company, including, but not limited to, Ron E. Doggett, in each case, in
form and substance reasonably satisfactory to Smith Anderson. The specific
provisions of each such representation letter shall be in form and substance
reasonably satisfactory to such tax counsel, and each such representation letter
shall be dated on or before the date of such opinion and shall not have been
withdrawn or modified in any material respect.
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ARTICLE VIII
TERMINATION
Section 8.1 Termination. This Agreement may be terminated, and the
Merger and the other transactions contemplated hereby may be abandoned, at any
time prior to the Effective Time, whether before or after approval by the
shareholders of the Company or Parent:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company, if (i) the Merger shall not have
been consummated on or before December 31, 1998, or (ii) the shareholders of the
Company do not approve this Agreement by the requisite vote at a meeting duly
convened therefor or any adjournment thereof;
(c) by either Parent or the Company, if any permanent injunction,
order, decree or ruling by any Governmental Entity of competent jurisdiction
preventing the consummation of the Merger shall have become final and
nonappealable; provided, however, subject to the proviso to Section 6.7(a)
hereof, that the party seeking to terminate this Agreement pursuant to this
Section 8.1(c) shall have used reasonable best efforts to remove such injunction
or overturn such action;
(d) by Parent, if (i) the number of Shares dissenting from the Merger
precludes accounting for the Merger as a pooling of interests pursuant to APB
Opinion No. 16, (ii) there has been a material breach of the representations or
warranties, covenants or agreements of the Company set forth in this Agreement,
which breach is not curable or, if curable, is not cured within thirty (30) days
after written notice of such breach is given by Parent to the Company, or (iii)
the Board of Directors of the Company (x) fails to convene a meeting of the
Company's shareholders to approve the Merger on or before 150 days following the
date hereof (the "Meeting Date"), or postpones the date scheduled for the
meeting of the shareholders of the Company to approve this Agreement beyond the
Meeting Date, except with the written consent of Parent, (y) fails to recommend
the approval of this Agreement and the Merger to the Company's shareholders in
accordance with Section 6.5(a)
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hereof, or (z) withdraws or amends or modifies in a manner adverse to Parent its
recommendation or approval in respect of this Agreement or the Merger or fails
to reconfirm such recommendation within two business days of a written request
for such confirmation by Parent;
(e) by the Company if the Board of Directors of the Company shall
reasonably determine that a proposal for an Acquisition Transaction constitutes
a Superior Proposal; provided, however, that the Company may not terminate this
Agreement pursuant to this subsection (e) unless (i) five business days shall
have elapsed after delivery to Parent of a written notice of such determination
by such Board of Directors and, during such five business day period, the
Company shall have informed Parent of the terms and conditions of such proposal
for an Acquisition Transaction and the identity of the person or group making
such proposal for an Acquisition Transaction, and (ii) at the end of such five
business day period, the Board of Directors believe that such proposal for
Superior Proposal is superior to the transaction contemplated under this
Agreement; and
(f) by the Company, if there has been a breach of any of the
representations or warranties, covenants or agreements of Parent or Merger Sub
set forth in this Agreement of such a magnitude that the closing conditions
cannot be satisfied, which breach is not curable or, if curable, is not cured
within 30 days after written notice of such breach is given by the Company to
Parent.
Section 8.2 Effect of Termination.
(a) In the event of termination of this Agreement pursuant to this
Article VIII, the Merger shall be deemed abandoned and this Agreement shall
forthwith become void, except that the provisions of the last sentence of
Section 6.1, Section 6.8, Section 6.10 and this Section 8.2 shall survive any
termination of this Agreement; provided, however, that, except as otherwise
provided in this Section 8.2, nothing in this Agreement shall relieve any party
from liability for any breach of this Agreement.
(b) If (A) Parent shall have terminated this Agreement pursuant to
Section 8.1(d)(iii) (x) or (y), or (B) the Company shall have terminated this
Agreement pursuant to Section 8.1(e), then, in any such case, the Company shall
pay Parent within one
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(1) business day following such termination, a termination fee of $9.4 million,
payable by wire transfer of immediately available funds to an account designated
by Parent.
(c) If Parent or Company shall have terminated this Agreement pursuant
to Section 8.1(b)(ii) or if Parent shall have terminated this Agreement pursuant
to Section 8.1(d)(i), Section 8.1(d)(iii)(z), or as a result of the Company's
breach of Section 6.13 and either before such termination or within twelve (12)
months after the date of such termination (A) the Company (i) consummates an
Acquisition Transaction, or (ii) enters into a Definitive Agreement to do so (or
a tender offer or similar transaction with respect thereto is commenced), and
(B) such Acquisition Transaction or tender offer proposes consideration to the
shareholders of the Company of $24 per share or more (which amount is subject to
adjustment based on stock dividends, subdivisions, reclassification,
recapitalization, split, combination, exchange or issuance of shares or similar
transactions occurring prior thereto), then, in any such case, the Company shall
pay Parent, within one (1) business day following consummation of any
Acquisition Transaction, a termination fee of $9.4 million payable by wire
transfer of immediately available funds to an account designated by Parent.
(d) In the event the transactions contemplated hereunder are terminated
for any reason not specified in Sections 8.2(b) or 8.2(c) and other than
pursuant to Section 8.1(f)), the Company shall reimburse Parent its actual
expenses incurred in connection with the transactions contemplated by this
Agreement (including, without limitation, attorney's fees and fees of financial
advisors) in an amount up to $500,000, such payment to be made by wire transfer
of immediately available funds to an account designated by Parent.
(e) If the Company shall have terminated this Agreement pursuant to
Section 8.1(f), Parent shall reimburse the Company its actual expenses incurred
in connection with the transactions contemplated by this Agreement (including,
without limitation, attorney's fees and fees of financial advisors) in an amount
up to $500,000, such payment to be made by wire transfer of immediately
available funds to an account designated by the Company.
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ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Amendment and Modification. At any time prior to the
Effective Time, this Agreement may be amended, modified or supplemented only by
written agreement (referring specifically to this Agreement) of Parent and the
Company with respect to any of the terms contained herein; provided, however,
that after any approval and adoption of this Agreement by the shareholders of
the Company, no such amendment, modification or supplementation shall be made
which under Applicable Law requires the approval of such shareholders, without
the further approval of such shareholders.
Section 9.2 Waiver. At any time prior to the Effective Time, Parent, on
the one hand, and the Company, on the other hand, may (i) extend the time for
the performance of any of the obligations or other acts of the other, (ii) waive
any inaccuracies in the representations and warranties of the other contained
herein or in any documents delivered pursuant hereto and (iii) subject to the
provisions of Section 9.1, waive compliance by the other with any of the
agreements or conditions contained herein which may legally be waived. Any such
extension or waiver shall be valid only if set forth in an instrument in writing
specifically referring to this Agreement and signed on behalf of such party. The
failure of any party to this Agreement to assert any of its rights under this
Agreement or otherwise shall not constitute a waiver of such rights.
Section 9.3 Survivability; Investigations. The respective
representations and warranties of Parent and Merger Sub, on the one hand, and
the Company, on the other hand, contained herein or in any certificates or other
documents delivered prior to or as of the Effective Time (i) shall not be deemed
waived or otherwise affected by any investigation made by any party hereto and
(ii) shall not survive beyond the Effective Time. The covenants and agreements
of the parties hereto (including the Surviving Corporation after the Merger)
shall survive the Effective Time, without limitation (except for those which, by
their terms, contemplate a shorter survival period).
Section 9.4 Notices. All notices and other communications hereunder
shall be in writing and shall be delivered personally or by next-day courier or
telecopied with
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confirmation of receipt, to the parties at the addresses specified below (or at
such other address for a party as shall be specified by like notice; provided
that notices of a change of address shall be effective only upon receipt
thereof). Any such notice shall be effective upon receipt, if personally
delivered or telecopied, or one day after delivery to a courier for next-day
delivery.
If to Parent or Merger Sub, to:
ConAgra, Inc.
One ConAgra Drive
Omaha, Nebraska, 68102-5001
Attention: Senior Vice President/Controller
Telephone: (402) 595-4349
Telecopier: (402) 595-4611
with copies to:
McGrath, North, Mullin & Kratz, P.C.
1400 One Central Park Plaza
222 South Fifteenth Street
Omaha, Nebraska, 68102
Attention: Roger W. Wells, Esq.
Telephone: (402) 341-3070
Telecopier: (402) 341-0216
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If to the Company, to:
GoodMark Foods, Inc.
6131 Falls of Neuse Road
Raleigh, North Carolina, 27609
Attention: Mr. Ron E. Doggett
Telephone: (919) 790-9940
Telecopier: (919) 790-6535
with a copy to:
Smith, Anderson, Blount, Dorsett, Mitchell &
Jernigan, L.L.P.
2500 First Union Capitol Center
150 Fayetteville Street Mall
Raleigh, NC 27601
Attention: Henry A. Mitchell, Jr.
Telephone: (919) 821-1220
Telecopier: (919) 821-6800
Section 9.5 Descriptive Headings; Interpretation. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. References in this
Agreement to Sections, Exhibits or Articles mean a Section, Exhibit or Article
of this Agreement unless otherwise indicated. References to this Agreement shall
be deemed to include the Exhibits hereto, the Company Disclosure Schedule and
the Parent Disclosure Schedule, unless the context otherwise requires. The term
"person" shall mean and include an individual, a partnership, a limited
liability company, a joint venture, a corporation, a trust, a Governmental
Entity or an unincorporated organization.
Section 9.6 Entire Agreement. This Agreement (including the Exhibits,
the Company Disclosure Schedule, the Parent Disclosure Schedule, the Stock
Voting Agreement and the Confidentiality Agreement between the parties)
constitutes the entire agreement and supersedes all other prior agreements and
understandings, both written and oral, among the parties or any of them, with
respect to the subject matter hereof and except for Article II and
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Sections 6.9 and 6.13, are not intended to confer upon any person other than the
parties hereto any rights or remedies.
Section 9.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina, without
giving effect to the provisions thereof relating to conflicts of law.
Section 9.8 Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of North Carolina or in North Carolina state court, this
being in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto (a) consents to submit itself to
the personal jurisdiction of any federal court located in the State of North
Carolina or any North Carolina state court in the event any dispute arises out
of this Agreement or any of the transactions contemplated by this Agreement, (b)
agrees that it will not attempt to deny or defeat such personal jurisdiction by
motion or other request for leave from any such court and (c) agrees that it
will not bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a federal or state court
sitting in the State of North Carolina.
Section 9.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same agreement.
Section 9.10 Assignment; Third-Party Beneficiaries. This Agreement and
the rights, interests and obligations hereunder shall be binding upon, inure to
the benefit of and be enforceable by the parties hereto and their respective
successors and permitted assigns; provided, however, that no party hereto may
assign or otherwise transfer its rights, interests or obligations hereunder
without the prior written consent of the other parties hereto. Except for
Article II and Sections 6.9 and 6.13, nothing in this Agreement is intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder.
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IN WITNESS WHEREFORE, Parent, Merger Sub and the Company have caused
this Agreement and Plan of Merger to be executed on its behalf by their
respective officers thereunto duly authorized, all as of the date first above
written.
CONAGRA, INC.
By: /s/ Bruce Rohde
Its: President and Chief Executive Officer
CAG 40, INC.
By: /s/ Dwight J. Goslee
Its: Vice President
GOODMARK FOODS, INC.
By: /s/ Ron E. Doggett
Its: Chairman and CEO
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ANNEX B
[Letterhead of Interstate/Johnson Lane]
June 17, 1998
Board of Directors
GoodMark Foods, Inc.
6131 Falls of Neuse Road
Raleigh, North Carolina 27609
Gentlemen:
You have requested our opinion as to the fairness, from a financial point of
view, to holders of the outstanding common stock of GoodMark Foods, Inc.
("GoodMark") of the Exchange Ratio (as defined below) in the proposed merger
(the "Merger") of GoodMark with and into CAG 40, Inc. (the "Merger Sub"), a
North Carolina corporation and newly formed, wholly owned subsidiary of ConAgra,
Inc. ("ConAgra") pursuant to the terms and conditions of the proposed Merger as
set forth in the draft of the Agreement and Plan of Merger among ConAgra, the
Merger Sub and GoodMark dated June 17, 1998 (the "Agreement"). Pursuant to the
Merger, each share of common stock of GoodMark will be converted into shares of
common stock of ConAgra in accordance with the exchange ratio (the "Exchange
Ratio") as set forth in the Agreement.
In arriving at our opinion, we, among other things, (i) reviewed the June 17,
1998 draft of the Agreement; (ii) reviewed annual audited financial statements
for GoodMark and for ConAgra for the prior three fiscal years ended May, 1997
and interim unaudited financial statements through May, 1998 for GoodMark and
through February, 1998 for ConAgra; (iii) reviewed publicly available
information including recent Securities and Exchange Commission filings and
shareholder communications for GoodMark and for ConAgra; (iv) met with members
of the senior managements of GoodMark and ConAgra to discuss their respective
businesses, financial conditions and operating results; (v) compared certain
financial and stock market data for GoodMark and for ConAgra with similar data
for selected publicly held food companies; (vi) reviewed the financial terms of
certain recent business combinations in the food industry; (vii) reviewed
premiums paid historically for certain other publicly traded companies deemed
relevant; (viii) reviewed historical market price, volume data, and dividend
history for the common stock of GoodMark and for the common stock of ConAgra;
(ix) reviewed a discounted cash flow analysis for GoodMark; (x) reviewed various
published research reports and investment opinions on ConAgra and the food
industry; and (xi) performed such other financial studies and analyses as we
deemed appropriate. We were not requested to and did not solicit the interest of
third parties in submitting a competing offer for the acquisition of GoodMark.
In rendering this opinion, we have relied upon the accuracy and completeness of
all financial and other information furnished to us by or on behalf of GoodMark
and ConAgra, other information used by us in arriving at our opinion and other
published information that we considered in our review. We were not requested to
and generally have not undertaken to verify independently the accuracy
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and completeness of such information. We have relied upon the reasonableness of
all projections provided to us by the management of GoodMark and have assumed
that they were prepared in accordance with accepted practice on bases reflecting
the best currently available estimates and good faith judgments of GoodMark's
management. We have not independently verified any such information. Our opinion
herein is based upon the circumstances existing and known to us as of the date
hereof, and we have assumed that there have been no material changes in the
assets, financial condition, results of operations, business or prospects of
GoodMark or of ConAgra since the date of the most recent financial statements
made available to us. We have not made or considered any independent evaluations
or appraisals of the assets or liabilities (contingent or otherwise) of either
GoodMark or ConAgra, nor were we furnished with any such evaluations or
appraisals. Consequently, we do not express any opinion regarding the value of
any of GoodMark's or ConAgra's specific individual assets. We were not requested
to, and therefore did not, participate in the structuring or negotiating of the
Merger. Furthermore, we are not expressing any opinion herein as to the range of
prices at which ConAgra's common stock will trade subsequent to consummation of
the Merger.
Interstate/Johnson Lane Corporation, as part of its investment banking business,
is engaged in the valuation of businesses and their securities in connection
with mergers and acquisitions, negotiated underwritings, competitive biddings,
secondary distributions of listed and unlisted securities, private placements
and valuations for estate, corporate and other purposes. Pursuant to our
engagement in connection with this fairness opinion, we will receive a fee for
our services in rendering said opinion.
The opinion expressed herein is provided to GoodMark's Board of Directors and
does not constitute a recommendation to any shareholder of GoodMark as to how
any such shareholder should vote on the Merger. The opinion, and any supporting
analysis or other material supplied by us may not be quoted, referred to, or
used in any public filing or in any written document without the prior written
approval of Interstate/Johnson Lane Corporation; provided that we hereby consent
to the inclusion of this letter in its entirety in any filing with the
Securities and Exchange Commission in connection with the Merger.
Based upon the foregoing considerations and our review and analysis, it is our
opinion that as of the date hereof the Exchange Ratio is fair, from a financial
point of view, to the shareholders of GoodMark.
Sincerely,
/s/ Interstate/Johnson Lane Corporation
INTERSTATE/JOHNSON LANE CORPORATION
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ANNEX C
DISSENTERS' RIGHTS
N.C. GEN. STAT. CHAPTER 55, ARTICLE 13 WITH 1997 AMENDMENTS
GENERAL STATUTES OF NORTH CAROLINA
CHAPTER 55. NORTH CAROLINA BUSINESS CORPORATION ACT
ARTICLE 13. DISSENTERS' RIGHTS
PART 1. RIGHT TO DISSENT AND OBTAIN PAYMENT FOR SHARES
N.C. Gen. Stat. ss.55-13-01 (1996)
ss.55-13-01. Definitions
In this Article:
(1) "Corporation" means the issuer of the shares held by a dissenter before
the corporate action, or the surviving or acquiring corporation by merger or
share exchange of that issuer.
(2) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under G.S. 55-13-02 and who exercises that right when and in
the manner required by G.S. 55-13-20 through 55-13-28.
(3) "Fair value", with respect to a dissenter's shares, means the value of
the shares immediately before the effectuation of the corporate action to which
the dissenter objects excluding any appreciation or depreciation in anticipation
of the corporate action unless exclusion would be inequitable.
(4) "Interest" means interest from the effective date of the corporate
action until the date of payment, at a rate that is fair and equitable under all
the circumstances, giving due consideration to the rate currently paid by the
corporation on its principal bank loans, if any, but not less than the rate
provided in G.S. 24-1.
(5) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares to
the extent of the rights granted by a nominee certificate on file with a
corporation.
(6) "Beneficial shareholder" means the person who is a beneficial owner of
shares held in a voting trust or by a nominee as the record shareholder.
(7) "Shareholder" means the record shareholder or the beneficial
shareholder.
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N.C. Gen. Stat. ss.55-13-02 (1996)
ss.55-13-02. Right to dissent
(a) In addition to any rights granted under Article 9, a shareholder is
entitled to dissent from, and obtain payment of the fair value of his shares in
the event of, any of the following corporate actions:
(1) Consummation of a plan of merger to which the corporation (other than
a parent corporation in a merger under G.S. 55-11-04) is a party unless (i)
approval by the shareholders of that corporation is not required under G.S.
55-11-03(g) or (ii) such shares are then redeemable by the corporation at a
price not greater than the cash to be received in exchange for such shares;
(2) Consummation of a plan of share exchange to which the corporation is a
party as the corporation whose shares will be acquired, unless such shares are
then redeemable by the corporation at a price not greater than the cash to be
received in exchange for such shares;
(3) Consummation of a sale or exchange of all, or substantially all, of
the property of the corporation other than as permitted G.S. 55-12-01, including
a sale in dissolution, but not including a sale pursuant to court order or a
sale pursuant to a plan by which all or substantially all of the net proceeds of
the sale will be distributed in cash to the shareholders within one year after
the date of sale;
(4) An amendment of the articles of incorporation that materially and
adversely affects rights in respect of a dissenter's shares because it (i)
alters or abolishes a preferential right of the shares; (ii) creates, alters, or
abolishes a right in respect of redemption, including a provision respecting a
sinking fund for the redemption or repurchase, of the shares; (iii) alters or
abolishes a preemptive right of the holder of the shares to acquire shares or
other securities; (iv) excludes or limits the right of the shares to vote on any
matter, or to cumulate votes; (v) reduces the number of shares owned by the
shareholder to a fraction of a share if the fractional share so created is to be
acquired for cash under G.S. 55-6-04; or (vi) changes the corporation into a
nonprofit corporation or cooperative organization;
(5) Any corporate action taken pursuant to a shareholder vote to the
extent the articles of incorporation, bylaws, or a resolution of the board of
directors provides that voting or nonvoting shareholders are entitled to dissent
and obtain payment for their shares.
(b) A shareholder entitled to dissent and obtain payment for his shares under
this Article may not challenge the corporate action creating his entitlement,
including without limitation a merger solely or partly in exchange for cash or
other property, unless the action is unlawful or fraudulent with respect to the
shareholder or the corporation.
(c) Notwithstanding any other provision of this Article, there shall be no
right of dissent in favor of holders of shares of any class or series which, at
the record date fixed to determine the shareholders entitled to receive notice
of and to vote at the meeting at which the plan of merger or share exchange or
the sale or exchange of property is to be acted on, were (i) listed on a
national securities exchange or (ii) held by at least 2,000 record shareholders,
unless in either case:
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(1) The articles of incorporation of the corporation issuing the shares
provide otherwise;
(2) In the case of a plan of merger or share exchange, the holders of the
class or series are required under the plan of merger or share exchange to
accept for the shares anything except:
a. Cash;
b. Shares, or shares and cash in lieu of fractional shares of the
surviving or acquiring corporation, or of any other corporation which, at
the record date fixed to determine the shareholders entitled to receive
notice of and vote at the meeting at which the plan of merger or share
exchange is to be acted on, were either listed subject to notice of
issuance on a national securities exchange or held of record by at least
2,000 record shareholders; or
c. A combination of cash and shares as set forth in sub-subdivisions a.
and b. of this subdivision.
N.C. Gen. Stat. ss.55-13-03 (1996)
ss.55-13-03. Dissent by nominees and beneficial owners
(a) A record shareholder may assert dissenters' rights as to fewer than all
the shares registered in his name only if he dissents with respect to all shares
beneficially owned by any one person and notifies the corporation in writing of
the name and address of each person on whose behalf he asserts dissenters'
rights. The rights of a partial dissenter under this subsection are determined
as if the shares as to which he dissents and his other shares were registered in
the names of different shareholders.
(b) A beneficial shareholder may assert dissenters' rights as to shares held
on his behalf only if:
(1) He submits to the corporation the record shareholder's written consent
to the dissent not later than the time the beneficial shareholder asserts
dissenters' rights; and
(2) He does so with respect to all shares of which he is the beneficial
shareholder.
N.C. Gen. Stat. ss.55-13-04 (1996)
ss.ss.55-13-04 through 55-13-19
Reserved for future codification purposes.
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PART 2. PROCEDURE FOR EXERCISE OF DISSENTERS' RIGHTS
N.C. Gen. Stat. ss.55-13-20 (1996)
ss.55-13-20. Notice of dissenters' rights
(a) If proposed corporate action creating dissenters' rights under G.S.
55-13-02 is submitted to a vote at a shareholders' meeting, the meeting notice
must state that shareholders are or may be entitled to assert dissenters' rights
under this Article and be accompanied by a copy of this Article.
(b) If corporate action creating dissenters' rights under G.S. 55-13-02 is
taken without a vote of shareholders, the corporation shall no longer than 10
days thereafter notify in writing all shareholders entitled to assert
dissenters' rights that the action was taken and send them the dissenters'
notice described in G.S. 55-13-22.
(c) If a corporation fails to comply with the requirements of this section,
such failure shall not invalidate any corporate action taken; but any
shareholder may recover from the corporation any damage which he suffered from
such failure in a civil action brought in his own name within three years after
the taking of the corporate action creating dissenters' rights under G.S.
55-13-02 unless he voted for such corporate action.
ss.55-13-21. Notice of intent to demand payment
(a) If proposed corporate action creating dissenters' rights under G.S.
55-13-02 is submitted to a vote at a shareholders' meeting, a shareholder who
wishes to assert dissenters' rights:
(1) Must give to the corporation, and the corporation must actually
receive, before the vote is taken written notice of his intent to demand payment
for his shares if the proposed action is effectuated; and
(2) Must not vote his shares in favor of the proposed action.
(b) A shareholder who does not satisfy the requirements of subsection (a) is
not entitled to payment for his shares under this Article.
N.C. Gen. Stat. ss.55-13-22 (1996)
ss.55-13-22. Dissenters' notice
(a) If proposed corporate action creating dissenters' rights under G.S.
55-13-02 is authorized at a shareholders' meeting, the corporation shall mail by
registered or certified mail, return receipt requested, a written dissenters'
notice to all shareholders who satisfied the requirements of G.S. 55- 13-21.
(b) The dissenters' notice must be sent no later than 10 days after
shareholder approval, or if no shareholder approval is required, after the
approval of the board of directors, of the corporate action creating dissenters'
rights under G.S. 55-13-02, and must:
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(1) State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited;
(2) Inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received;
(3) Supply a form for demanding payment;
(4) Set a date by which the corporation must receive the payment
demand, which date may not be fewer than 30 nor more than 60 days after
the date the subsection (a) notice is mailed; and
(5) Be accompanied by a copy of this Article.
N.C. Gen. Stat. ss.55-13-23 (1996)
ss.55-13-23. Duty to demand payment
(a) A shareholder sent a dissenters' notice described in G.S. 55-13-22 must
demand payment and deposit his share certificates in accordance with the terms
of the notice.
(b) The shareholder who demands payment and deposits his share certificates
under subsection (a) retains all other rights of a shareholder until these
rights are cancelled or modified by the taking of the proposed corporate action.
(c) A shareholder who does not demand payment or deposit his share
certificates where required, each by the date set in the dissenters' notice, is
not entitled to payment for his shares under this Article.
N.C. Gen. Stat. ss.55-13-24 (1996)
ss.55-13-24. Share restrictions
(a) The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed corporate
action is taken or the restrictions released under G.S. 55-13-26.
(b) The person for whom dissenters' rights are asserted as to uncertificated
shares retains all other rights of a shareholder until these rights are
cancelled or modified by the taking of the proposed corporate action.
N.C. Gen. Stat. ss.55-13-25 (1996)
ss.55-13-25. Payment
(a) As soon as the proposed corporate action is taken, or within 30 days
after receipt of a payment demand, the corporation shall pay each dissenter who
complied with G.S. 55-13-23 the
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amount the corporation estimates to be the fair value of his shares, plus
interest accrued to the date of payment.
(b) The payment shall be accompanied by:
(1) The corporation's most recent available balance sheet as of the end
of a fiscal year ending not more than 16 months before the date of
payment, an income statement for that year, a statement of cash flows for
that year, and the latest available interim financial statements, if any:
(2) An explanation of how the corporation estimated the fair value of
the shares;
(3) An explanation of how the interest was calculated;
(4) A statement of the dissenters' right to demand payment under G.S.
55-13-28; and
(5) A copy of this Article.
N.C. Gen. Stat. ss.55-13-26 (1996)
ss.55-13-26. Failure to take action
(a) If the corporation does not take the proposed action within 60 days after
the date for demanding payment and depositing share certificates, the
corporation shall return the deposited certificates and release the transfer
restrictions imposed on uncertificated shares.
(b) If after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under G.S. 55-13-22 and repeat the payment demand procedure.
N.C. Gen. Stat. ss.55-13-27 (1996)
ss.55-13-27
Reserved for future codification purposes.
N.C. Gen. Stat. ss. 55-13-28 (1996)
ss. 55-13-28. Procedure if shareholder dissatisfied with corporation's
payment or failure to perform
(a) A dissenter may notify the corporation in writing of his own estimate of
the fair value of his shares and amount of interest due, and demand payment of
the amount in excess of the payment by the corporation under G.S. 55-13-25 for
the fair value of his shares and interest due, if:
(1) The dissenter believes that the amount paid under G.S. 55-13-25 is
less than the fair value of his shares or that the interest due is
incorrectly calculated;
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(2) The corporation fails to make payment under G.S. 55-13-25; or
(3) The corporation, having failed to take the proposed action, does
not return the deposited certificates or release the transfer restrictions
imposed on uncertificated shares within 60 days after the date set for
demanding payment.
(b) A dissenter waives his right to demand payment under this section unless
he notifies the corporation of his demand in writing (i) under subdivision
(a)(1) within 30 days after the corporation made payment for his shares or (ii)
under subdivisions (a)(2) and (a)(3) within 30 days after the corporation has
failed to perform timely. A dissenter who fails to notify the corporation of his
demand under subsection (a) within such 30-day period shall be deemed to have
withdrawn his dissent and demand for payment.
N.C. Gen. Stat. ss.55-13-29 (1996)
ss.55-13-29
Reserved for future codification purposes.
PART 3. JUDICIAL APPRAISAL OF SHARES
N.C. Gen. Stat. ss.55-13-30 (1996)
ss.55-13-30. Court action
(a) If a demand for payment under G.S. 55-13-28 remains unsettled, the
dissenter may commence a proceeding within 60 days after the earlier of (i) the
date payment is made under G.S. 55-13-25, or (ii) the date of the dissenter's
payment demand under G.S. 55-13-28 by filing a complaint with the Superior Court
Division of the General Court of Justice to determine the fair value of the
shares and accrued interest. A dissenter who takes no action within the 60-day
period shall be deemed to have withdrawn his dissent and demand for payment.
(a1) Repealed by Session Laws 1997-202, s.4, effective October 1, 1997.
(b) [Reserved for future codification purposes.]
(c) The court shall have the discretion to make all dissenters (whether or
not residents of this State) whose demands remain unsettled parties to the
proceeding as in an action against their shares and all parties must be served
with a copy of the complaint. Nonresidents may be served by registered or
certified mail or by publication as provided by law.
(d) The jurisdiction of the superior court in which the proceeding is
commenced under subsection (a) is plenary and exclusive. The court may appoint
one or more persons as appraisers to receive evidence and recommend decision on
the question of fair value. The appraisers have the powers described in the
order appointing them, or in any amendment to it. The parties are entitled to
the same discovery rights as parties in other civil proceedings. The proceeding
shall be tried as in other civil actions. However, in a proceeding by a
dissenter in a corporation that was a public corporation
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immediately prior to consummation of the corporate action giving rise to the
right of dissent under G.S. 55-13-02, there is no right to a trial by jury.
(e) Each dissenter made a party to the proceeding is entitled to judgment for
the amount, if any, by which the court finds the fair value of his shares, plus
interest, exceeds the amount paid by the corporation.
ss.55-13-31. Court action
(a) The court in an appraisal proceeding commenced under G.S. 55-13-30 shall
determine all costs of the proceeding, including the reasonable compensation and
expenses of appraisers appointed by the court, and shall assess the costs as it
finds equitable.
(b) The court may also assess the fees and expenses of counsel and experts
for the respective parties, in amounts the court finds equitable.
(1) Against the corporation and in favor of any or all dissenters if
the court finds the corporation did not substantially comply with the
requirements of G.S. 55-13-20 through 55-13- 28; or
(2) Against either the corporation or a dissenter, in favor of either
or any other party, if the court finds that the party against whom the
fees and expenses are assessed acted arbitrarily, vexatiously, or not in
good faith with respect to the rights provided by this Article.
(c) If the court finds that the services of counsel for any dissenter were of
substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against the corporation, the court may
award to these counsel reasonable fees to be paid out of the amounts awarded the
dissenters who were benefited.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Pursuant to Article V of the Certificate of Incorporation of ConAgra,
ConAgra shall, to the extent required, and may, to the extent permitted, by
Section 102 and Section 145 of the General Corporation Law of the State of
Delaware, as amended from time to time, indemnify and reimburse all persons whom
it may indemnity and reimburse pursuant thereto. No director shall be liable to
ConAgra or its stockholders for monetary damages for breach of fiduciary duty as
a director with respect to acts or omissions occurring on or after September 18,
1986. A director shall continue to be liable for (i) any breach of a director's
duty or loyalty to ConAgra or its stockholders; (ii) acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law; (iii) paying a dividend or approving a stock repurchase which would violate
Section 174 of the General Corporation Law of the State of Delaware; or (iv) any
transaction from which the director derived an improper personal benefit.
The by-laws of ConAgra provide for indemnification of ConAgra officers
and directors against all expenses, liabilities or losses reasonably incurred or
suffered by the officer or director, including liability arising under the
Securities Act of 1933, to the extent legally permissible under Section 145 of
the General Corporation Law of the State of Delaware where any such person was,
is, or is threatened to be made a party to or is involved in any action, suit or
proceeding whether civil, criminal, administrative or investigative, by reason
of the fact such person was serving ConAgra in such capacity. Generally, under
Delaware law, indemnification will only be available where an officer or
director can establish that such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of ConAgra.
ConAgra also maintains a director and officer insurance policy which
insures the officers and directors of ConAgra and its subsidiaries against
damages, judgments, settlements and costs incurred by reason of certain wrongful
acts committed by such persons in their capacities as officers and directors.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits.
Number Description
2.1 Agreement and Plan of Merger among ConAgra, Inc., CAG 40, Inc., and
GoodMark Foods, Inc. dated as of June 17, 1998 (included as Annex A to
the Proxy Statement/Prospectus included in this Registration
Statement). Certain schedules and exhibits relating to the Agreement
and Plan of Merger have been omitted. ConAgra will furnish
supplementally to the Commission such schedules or exhibits upon
request.
2.2 Form of Voting Agreement among ConAgra and certain shareholders of
GoodMark Foods, Inc. dated as of June 17, 1998.
<PAGE>
3.1 ConAgra's Certificate of Incorporation, as amended, incorporated herein
by reference to ConAgra's annual report on Form 10-K for the fiscal
year ended May 26, 1996.
3.2 ConAgra's By-Laws, as amended, incorporated herein by reference to
ConAgra's current report on Form 8-K dated July 12 1996.
3.3 Restated Articles of Incorporation and Bylaws of GoodMark Foods,
incorporated herein by reference to the annual report of GoodMark Foods
on Form 10-K for the fiscal year ended May 27, 1990.
4.1 Rights Agreement dated July 12, 1996, incorporated hereby by reference
to ConAgra's current report on Form 8-K dated July 12, 1996.
4.2 Form of Common Stock Certificate incorporated by reference to Exhibit
4.4 of ConAgra's Registration Statement on Form S-3 (33-63081).
5.1 Opinion of McGrath, North, Mullin & Kratz, P.C. regarding the legality
of the securities to be issued.
8.1 Opinion of Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan,
L.L.P. regarding certain tax matters.
23.1 Consent of McGrath, North, Mullin & Kratz, P.C. (included in Exhibit
5.1)
23.2 Consent of Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan,
L.L.P. (included in Exhibit 8.1)
23.3 Consent of Deloitte & Touche LLP with respect to ConAgra financial
statements.
23.4 Consent of Deloitte & Touche LLP with respect to GoodMark Foods
financial statements.
23.5 Consent of Interstate/Johnson Lane Corporation (included in Annex B to
the Proxy Statement/Prospectus included in this Registration
Statement).
24.1 Powers of Attorney.
99.1 Opinion of Interstate/Johnson Lane Corporation (included as Annex B to
the Proxy Statement/Prospectus included in this Registration
Statement).
99.2 Form of GoodMark Foods Proxy.
(b) Financial Statement Schedules.
None.
<PAGE>
(c) Item 4(b) Information.
The opinion of Interstate/Johnson Lane Corporation is included as
Annex B to the Proxy Statement/Prospectus included in this
Registration Statement.
ITEM 22. UNDERTAKINGS
(1) The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement to include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended (the "Securities Act"), as
amended (the "Securities Act"), each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(2) The registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) The registrant hereby undertakes as follows: that prior to any
public reoffering of the securities registered hereunder through
use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c), the issuer
undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters,
in addition to the information called for by the other items of
the applicable form.
(4) The registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (3) immediately preceding, or (ii) that
purports to meet the requirements of Section 10(a)(3) of the
Securities Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until
such amendment is effective, and that, for purposes of determining
any liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
<PAGE>
(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons
controlling the registrant, or otherwise, the registrant has been
informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable. In
the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of
such issue.
(6) The registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus
pursuant to Item 4, 10(b), 11, or 13 of this form, within one
business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt
means. This includes information contained in documents filed
subsequent to the effective date of the registration statement
through the date of responding to the request.
(7) The registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction,
and the company being acquired involved therein, that was not the
subject of and included in the registration statement when it
became effective.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant, ConAgra, Inc., a Delaware corporation, has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Omaha, State of Nebraska, on the 25th day of
June, 1998.
CONAGRA, INC.
/s/ Bruce C. Rohde
By: ____________________________
Bruce C. Rohde
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 25th day of June, 1998.
Signature Title
/s/ Bruce C. Rohde
_______________________________ President, Chief Executive Officer
Bruce C. Rohde and Director
/s/ James P. O'Donnell
_______________________________ Executive Vice President
James P. O'Donnell and Chief Financial Officer
(Principal Financial Officer)
/s/ Kenneth W. DiFonzo
_______________________________ Senior Vice President, Controller
Kenneth W. DiFonzo (Principal Accounting Officer)
Philip B. Fletcher* Director
C. M. Harper* Director
Robert A. Krane* Director
Mogens Bay* Director
Gerald Rauenhorst* Director
Carl E. Reichardt* Director
Ronald W. Roskens* Director
Marjorie M. Scardino* Director
Walter Scott, Jr.* Director
Kenneth E. Stinson* Director
Jane J. Thompson* Director
Frederick B. Wells* Director
Thomas R. Williams* Director
Clayton K. Yeutter* Director
* Bruce C. Rohde, by signing his name hereto, signs the Registration Statement
on behalf of each of the persons indicated. A Power-of-Attorney authorizing
Bruce C. Rohde to sign this Registration Statement on behalf of each of the
indicated Directors of ConAgra, Inc. is filed herewith as Exhibit 24.
/s/ Bruce C. Rohde
By: ____________________________
Bruce C. Rohde
Attorney-In-Fact
<PAGE>
INDEX OF EXHIBITS
Number Description
2.1 Agreement and Plan of Merger among ConAgra, Inc., CAG 40, Inc., and
GoodMark Foods, Inc. dated as of June 17, 1998 (included as Annex A to
the Proxy Statement/Prospectus included in this Registration Statement).
Certain schedules and exhibits relating to the Agreement and Plan of
Merger have been omitted. ConAgra will furnish supplementally to the
Commission such schedules or exhibits upon request.
2.2 Form of Voting Agreement among ConAgra and certain shareholders of
GoodMark Foods, Inc. dated as of June 17, 1998.
3.1 ConAgra's Certificate of Incorporation, as amended, incorporated herein
by reference to ConAgra's annual report on Form 10-K for the fiscal year
ended May 26, 1996.
3.2 ConAgra's By-Laws, as amended, incorporated herein by reference to
ConAgra's current report on Form 8-K dated July 12 1996.
3.3 Restated Articles of Incorporation and Bylaws of GoodMark Foods,
incorporated herein by reference to the annual report of GoodMark Foods
on Form 10-K for the fiscal year ended May 27, 1990.
4.1 Rights Agreement dated July 12, 1996, incorporated hereby by reference to
ConAgra's current report on Form 8-K dated July 12, 1996.
4.2 Form of Common Stock Certificate incorporated by reference to Exhibit 4.4
of ConAgra's Registration Statement on Form S-3 (33-63081).
5.1 Opinion of McGrath, North, Mullin & Kratz, P.C. regarding the legality of
the securities to be issued.
8.1 Opinion of Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P.
regarding certain tax matters.
23.1 Consent of McGrath, North, Mullin & Kratz, P.C. (included in Exhibit 5.1)
23.2 Consent of Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P.
(included in Exhibit 8.1)
23.3 Consent of Deloitte & Touche LLP with respect to ConAgra financial
statements.
23.4 Consent of Deloitte & Touche LLP with respect to GoodMark Foods financial
statements.
23.5 Consent of Interstate/Johnson Lane Corporation (included in Annex B to
the Proxy Statement/Prospectus included in this Registration Statement).
24.1 Powers of Attorney.
99.1 Opinion of Interstate/Johnson Lane Corporation (included as Annex B to
the Proxy Statement/Prospectus included in this Registration Statement).
99.2 Form of GoodMark Foods Proxy.
<PAGE>
Exhibit 2.2
FORM OF
STOCK VOTING AGREEMENT
STOCK VOTING AGREEMENT (this "Agreement"), dated as of June ____, 1998 by
and between ______________________ ("Shareholder") and CONAGRA, INC., a Delaware
corporation ("Parent").
RECITALS:
(a) Concurrently herewith, Parent, CAG 40, Inc., a North Carolina
corporation and a wholly-owned subsidiary of Parent (the
"Merger Sub"), and GoodMark Foods, Inc., a North Carolina
corporation (the "Company"), are entering into an Agreement
and Plan of Merger of even date herewith (such Agreement in
the form attached hereto as Exhibit A being the "Merger
Agreement"), pursuant to which the Merger Sub will merge with
and into the Company (the "Merger"); and
(b) Shareholder owns as of the date hereof, approximately
_____________ shares of common stock, $.01 par value per share
(the "Common Stock"), of the Company (such Common Stock
referred to as the "Existing Shares," and, together with any
shares of Common Stock acquired after the date hereof and
prior to the termination hereof, hereinafter collectively
referred to as the "Shares"); and
(c) Parent and Merger Sub have entered into the Merger Agreement
in reliance on and in consideration of Shareholder's
representations, warranties, covenants and agreements
hereunder.
AGREEMENT:
In consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration, and intending to be legally
bound hereby, it is agreed as follows:
1. Agreement to Vote. Shareholder hereby revokes any and all
previous proxies with respect to the Shares and irrevocably agrees to vote and
otherwise act (including
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pursuant to written consent) with respect to all of the Shares, for the approval
and the adoption of the Merger Agreement, as the same may be amended from time
to time in any manner which does not reduce or alter the form of the
consideration to be received by the shareholders of the Company incident to the
Merger (except to the extent agreed to by the shareholders), all agreements
related to the Merger and any actions related thereto, and against any proposal
or transaction which could prevent or delay the consummation of the transactions
contemplated by this Agreement or the Merger Agreement, at any meeting or
meetings of the shareholders of the Company, and at any adjournment,
postponement or continuation thereof which does not reduce or alter the form of
the consideration to be received by the shareholders of the Company incident to
the Merger (except to the extent agreed to by the shareholders), at which the
Merger Agreement and other related agreements (or any amended version or
versions thereof), or such other actions are submitted for the consideration and
vote of the shareholders of the Company. The foregoing shall remain in effect
with respect to the Shares until the termination of this Agreement. Shareholder
hereby agrees to, execute such additional documents as Parent may reasonably
request to effectuate the foregoing.
2. Representations and Warranties of Shareholder. Shareholder
represents and warrants to Parent as follows:
2.1 Ownership of Shares. On the date hereof, the Existing Shares
are all of the Shares currently owned by Shareholder. On the
Closing Date, the Shares will constitute all of the shares of
Common Stock owned by Shareholder. On the date hereof and on
the date of the Company Shareholders Meeting (as defined in
the Merger Agreement), the Existing Shares represent, and will
represent, at least ______________ of the outstanding voting
power of the Company. Shareholder does not have any rights to
acquire any additional shares of Common Stock (other than
pursuant to options disclosed in the Company's Proxy Statement
dated August 18, 1997). Shareholder currently has, and at
Closing will have (other than Shares transferred in accordance
with Section 3.2 hereof), good, valid and marketable title to
the Shares, free and clear of all liens, encumbrances,
restrictions, options, warrants, rights to purchase and claims
of every kind (other than the encumbrances created by this
Agreement and other than restrictions on transfer under
applicable Federal and State securities laws).
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<PAGE>
2.2 Authority; Binding Agreement. Shareholder has the full legal
right, power and authority to enter into and perform all of
his obligations under this Agreement. The execution and
delivery of this Agreement by Shareholder will not violate any
other agreement to which Shareholder is a party including,
without limitation, any voting agreement, shareholders
agreement or voting trust. This Agreement has been duly
executed and delivered by Shareholder and constitutes a legal,
valid and binding agreement of Shareholder, enforceable in
accordance with its terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws, now or hereafter in effect
affecting creditors, rights and remedies generally or general
principles of equity. Neither the execution and delivery of
this Agreement nor the consummation by Shareholder of the
transactions contemplated hereby will (i) violate, or require
any consent, approval or notice under, any provision of any
judgment, order, decree, statute, law, rule or regulation
applicable to Shareholder or the Shares or (ii) constitute a
violation of, conflict with or constitute a default under, any
contract, commitment, agreement, understanding, arrangement or
other restriction of any kind to which Shareholder is a party
or by which Shareholder is bound.
2.3 Reliance on Agreement. Shareholder understands and
acknowledges that Merger Sub and Parent each are entering into
the Merger Agreement in reliance upon Shareholder's execution,
delivery and performance of this Agreement. Shareholder
acknowledges that the agreement set forth in Section 1 is
granted in consideration for the execution and delivery of the
Merger Agreement by Merger Sub and Parent.
3. Certain Covenants of Shareholder. Except in accordance with
the provisions of this Agreement, Shareholder agrees with, and covenants to,
Parent as follows:
3.1 Transfer. Shareholder shall not (i) except as set forth in
Section 3.2 below, transfer (which term shall include, without
limitation, for the purposes of this Agreement, any sale,
gift, pledge, assignment, encumbrance or other disposition) or
consent to any transfer of, any or all of the Shares or any
interest therein, except pursuant to the Merger, (ii) enter
into any contract, option or other agreement or understanding
with respect to any transfer of any or all such Shares or any
interest therein, (iii) grant any proxy, power-of- attorney or
other authorizations in or with respect to such Shares or (iv)
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<PAGE>
deposit such Shares into a voting trust or enter into a voting
agreement or arrangement with respect to the Shares.
Shareholder will submit to the Company, promptly after the
execution of this Agreement, any and all certificates
representing the Shares and Shareholder agrees with, and
consents to (i) the inscription on all such certificates prior
to their prompt return to Shareholder of the following legend
by the Company on such certificates: "The shares of Common
Stock, $.01 par value, of GoodMark Foods, Inc., represented by
this certificate are subject to a Stock Voting Agreement,
dated as of June ____, 1998, and may not be sold or otherwise
transferred, except in accordance therewith. Copies of such
Agreement may be obtained at the principal executive office of
GoodMark Foods, Inc., 6131 Falls of Neuse Road, Raleigh, NC
27609. Such restrictions on sale or other transfer expire and
terminate, whether or not this legend remains on any
certificate representing such shares of Common Stock and
without any notice, action or demand of any person, on the
date such Agreement terminates"; and (ii) the entering of stop
transfer orders with the transfer agent and the registrar of
the Company against the transfer of the Shares other than in
compliance with the requirements of this Agreement, such stop
transfer orders to expire by their terms on the date this
Agreement terminates with no notice, action or demand by
Shareholder, Parent or the Company.
3.2 Permitted Transfer. Notwithstanding Section 3.1 hereof to the
contrary, Shareholder may transfer any of the Shares to the
Shareholder's spouse, lineal descendants of the Shareholder or
to a trust which is substantially for the benefit of
Shareholder, his spouse or his lineal descendants (herein
"Permitted Transferee") provided that (a) Shareholder shall
provide written notice to Purchaser at least thirty (30) days
prior to such transfer, which notice shall specify the
proposed transferee and all terms and conditions relating to
said proposed transfer, (b) at least fifteen (15) days prior
to any such transfer, Shareholder shall provide at his expense
a written opinion of nationally or regionally recognized tax
counsel, in form and substance reasonably acceptable to
Parent, that such transfer will not adversely affect the
treatment of the Merger as a reorganization within the meaning
of Section 368 of the Code, (c) Shareholder shall have
received from Parent at least fifteen (15) days prior to such
transfer notice that such transfer will not adversely affect
the Merger qualifying for pooling of interests treatment under
APB 16, and (d) prior to any such transfer, such Permitted
Transferee shall agree in writing to take
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<PAGE>
such Shares subject to, and comply with, all of the provisions
of this Agreement, a copy of which writing shall be delivered
to Parent.
3.3 Solicitation. Prior to the Effective Time, Shareholder agrees
in his capacity as a Shareholder of the Company, that he shall
not, and he shall use his reasonable best efforts to cause his
affiliates, and their respective agents or representatives not
to, directly or indirectly, (i) solicit or initiate (including
by way of furnishing or disclosing non-public information) any
inquiries or the making of any proposal with respect to any
merger, consolidation or other business combination involving
the Company or any Subsidiary of the Company or the
acquisition of all or any significant part of the assets or
capital stock of the Company, including the Shares, or any
Subsidiary of the Company (an "Acquisition Transaction") or
(ii) negotiate, explore or otherwise engage in discussions
with any person (other than Parent and its representatives)
with respect to any Acquisition Transaction, or which may
reasonably be expected to lead to a proposal for an
Acquisition Transaction or enter into any agreement,
arrangement or understanding with respect to any such
Acquisition Transaction or which would require the Shareholder
to abandon, terminate or fail to perform his obligations
hereunder or to vote for, or otherwise support, in his
capacity as a shareholder, such Acquisition Transaction.
3.4 Notifications. Shareholder shall, while this Agreement is in
effect, notify Parent promptly, but in no event later than two
days, of the number of any shares of Common Stock acquired by
Shareholder after the date hereof.
4. Delivery of Affiliate Letter. In connection with the execution
of this Agreement, Shareholder shall execute and deliver to Parent on the date
hereof an Affiliate Letter substantially in the form attached hereto as Exhibit
A.
5. Termination. This Agreement shall terminate on the earlier of
(i) the Effective Time (as defined in the Merger Agreement) or (ii) immediately
upon the termination of the Merger Agreement in accordance with its terms.
6. Action in Shareholder Capacity Only. Shareholder makes no
agreement or understanding herein as director or officer of the Company. The
Shareholder signs solely in his capacity as a record holder and beneficial owner
of the Shares, and nothing herein
-5-
<PAGE>
shall limit or affect any actions taken in his capacity as an officer or
director of the Company, including, without limitation, the exercise of his
duties as a director to the Company and its other shareholders.
7. Miscellaneous.
7.1 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and
shall be delivered personally or by next-day courier or
telecopied with confirmation of receipt, to the parties at the
addresses specified below (or at such other address for a
party as shall be specified by like notice; provided that
notices of a change of address shall be effective only upon
receipt thereof). Any such notice shall be effective upon
receipt, if personally delivered or telecopied or one day
after delivery to a courier for next-day delivery.
If to Parent:
ConAgra, Inc.
One ConAgra Drive
Omaha, Nebraska 68102
Attention: Senior Vice President/Controller
Telecopier: (402) 595-4611
with a copy to:
McGrath, North, Mullin & Kratz, P.C.
Suite 1400
One Central Park Plaza
222 South Fifteenth Street
Omaha, Nebraska 68102
Attention: Roger W. Wells, Esq.
Telecopier: (402) 341-0216
-6-
<PAGE>
If to Shareholder:
===================================
===================================
Telecopier: _______________________
with a copy to:
===================================
===================================
Attention: ________________________
Telecopier: __________________________
7.2 Entire Agreement. This Agreement, together with the documents
expressly referred to herein, constitute the entire agreement
and supersede all other prior agreements and understandings,
both written and oral, among the parties or any of them, with
respect to the subject matter contained herein.
7.3 Amendments. This Agreement may not be modified, amended,
altered or supplemented, except upon the execution and
delivery of a written agreement executed by the parties
hereto.
7.4 Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective
successors, assigns and personal representatives, but neither
this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto
without the prior written consent of the other parties.
7.5 Governing Law. This Agreement, and all matters relating
hereto, shall be governed by, and construed in accordance with
the laws of the State of North Carolina without giving effect
to the principles of conflicts of laws thereof.
-7-
<PAGE>
7.6 Injunctive Relief; Jurisdiction. Shareholder agrees that
irreparable damage would occur and that Parent would not have
any adequate remedy at law in the event that any of the
provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is
accordingly agreed that Parent shall be entitled to an
injunction or injunctions to prevent breaches by Shareholder
of this Agreement and to enforce specifically the terms and
provisions of this Agreement in any court of the United States
located in the State of North Carolina or in any North
Carolina state court (collectively, the "Courts"), this being
in addition to any other remedy to which they are entitled at
law or in equity. In addition, each of the parties hereto (i)
irrevocably consents to the submission of such party to the
personal jurisdiction of the Courts in the event that any
dispute arises out of this Agreement or any of the
transactions contemplated hereby, (ii) agrees that such party
will not attempt to deny or defeat such party to the personal
jurisdiction by motion or other request for leave from any of
the Courts and (iii) agrees that such party will not bring any
action relating to this Agreement or any of the transactions
contemplated hereby in any court other the Courts. Shareholder
hereby appoints, and shall give prompt notice of such
appointment to, the law firm of Smith, Anderson, Blount,
Dorsett, Mitchell & Jernigan, LLP, as his authorized agent
(the "Authorized Agent") upon which process may be served in
any action based on this Agreement which may be instituted in
the Courts by Parent, and Shareholder expressly accepts the
jurisdiction of any such Court in respect to such action. Such
appointment shall be irrevocable. Shareholder represents and
warrants that the Authorized Agent has agreed to act as said
agent for service of process, and Shareholder agrees to take
any and all action, including, without limitation, the filing
of any and all documents and instruments, which may be
necessary to continue such appointment in full force and
effect. Service of process upon the Authorized Agent and
written notice of such service to Shareholder shall be deemed,
in every respect, effective service of process upon
Shareholder.
7.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original
and all of which together shall constitute one and the same
document.
7.8 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective
-8-
<PAGE>
to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and
provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, such provision
shall be interpreted to be only so broad as is enforceable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the date and year first above written.
CONAGRA, INC.
______________________________ By: ______________________________
Name:
Its:
-9-
<PAGE>
McGrath, North, Mullin & Kratz, P.C. Exhibit 5.1
Suite 1400 One Central Park Plaza
222 South Fifteenth Street
Omaha, Nebraska 68102
(402) 341-3070
June 25, 1998
ConAgra, Inc.
Corporate Headquarters
One ConAgra Drive
Omaha, Nebraska 68102-5001
Ladies and Gentlemen:
We have acted as counsel for ConAgra, Inc., a Delaware corporation
("ConAgra"), in connection with the proposed merger of a wholly-owned subsidiary
of ConAgra with and into GoodMark Foods, Inc., a North Carolina corporation
("GoodMark") with GoodMark being the surviving corporation and a wholly-owned
subsidiary of ConAgra (the "Merger"), pursuant to an Agreement and Plan of
Merger dated June 17, 1998 among ConAgra, GoodMark and the ConAgra subsidiary
(the "Merger Agreement").
We have examined such corporate records and other documents, including
the registration statement on Form S-4 (the "Registration Statement") to be
filed with the Securities and Exchange Commission relating to shares of ConAgra
common stock, par value $5.00 per share (the "Common Stock") to be issued by
ConAgra in connection with the Merger and have reviewed such matters of law as
we have deemed necessary for this opinion.
Based upon the foregoing, we are of the opinion that under the laws of
the State of Delaware, pursuant to which ConAgra is incorporated, upon the
issuance of the shares of Common Stock in accordance with the terms of the
Merger Agreement after the Registration Statement becomes effective, such shares
of Common Stock will be duly authorized, validly issued, fully paid and
nonassessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement.
Yours very truly,
McGRATH, NORTH, MULLIN &
KRATZ, P.C.
By: /s/ David L. Hefflinger
For the Firm
<PAGE>
Exhibit 8.1
Smith, Anderson, Blount, Dorsett, Mitchell
& Jernigan, LLP
2500 First Union Capitol Center
Raleigh, North Carolina 27601
June 25, 1998
GoodMark Foods, Inc.
6131 Falls of the Neuse Road
Raleigh, North Carolina 27609
Agreement and Plan of Merger among ConAgra, Inc., CAG 40, Inc.
and GoodMark Foods, Inc.
Gentlemen:
We have acted as counsel to GoodMark Foods, Inc. ("GoodMark"), a North
Carolina corporation, in connection with the proposed merger (the "Merger") of
CAG 40, Inc. ("CAG"), a North Carolina corporation wholly owned by ConAgra, Inc.
("ConAgra"), a Delaware corporation, with and into GoodMark pursuant to the
terms of the Agreement and Plan of Merger dated as of June 17, 1998 (the "Merger
Agreement") by and among ConAgra, GoodMark, and CAG. This opinion is being
rendered pursuant to Section 7.3(c) of the Merger Agreement. All capitalized
terms, unless otherwise specified, have the meaning assigned to them in the
Merger Agreement.
In connection with this opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
the Merger Agreement, the Registration Statement and such other documents as we
have deemed necessary or appropriate in order to enable us to render the opinion
expressed below. In our examination, we have assumed the genuineness of all
signatures, the legal capacity of all natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed or photostatic copies and
the authenticity of the originals of such copies.
In rendering the opinion set forth below, we have relied, with your
permission, upon certain written factual representations of ConAgra and GoodMark
dated as of the date of this letter. We have assumed that any representation or
statement made in connection with such representations that is made "to the best
of knowledge" or similarly qualified is correct without such qualification. We
have also assumed that when a person or entity making a representation has
represented that such person or entity either is not a party to or does not
have, or is not aware of, any plan or intention, understanding or agreement as
to a particular matter, that there is in fact no such plan, intention,
understanding or agreement. We have also assumed that all such written
representations will be true as of the Effective Time.
In rendering our opinion, we have considered the applicable provisions
of the Code, the Treasury Regulations, pertinent judicial authorities,
interpretive rulings of the Internal Revenue Service and such other authorities
as we have considered relevant.
<PAGE>
Based upon and subject to the foregoing, we are of the opinion that (i)
the Merger will constitute a tax-free reorganization under Section 368(a) of the
code; (ii) ConAgra, CAG and GoodMark will each be a party to the reorganization
within the meaning of Section 368(b) of the Code; and (iii) the summary of
"Certain U.S. Federal Income Tax Considerations" set forth in the Registration
Statement filed by ConAgra with the Securities and Exchange Commission is
accurate, subject to the assumptions, conditions and limitations set forth
therein.
Our opinion expressed in this letter is based on current law and upon
facts and assumptions as of the date of this letter. Our opinion is subject to
change in the event of a change in the applicable law, a change in the
interpretation of the applicable law by the courts or by the Internal Revenue
Service or a change in any of the facts or assumptions upon which the opinion is
based. There is no assurance that legislative, regulatory, administrative or
judicial developments may not be forthcoming which would significantly modify
the statements or opinion expressed in this letter. Any such developments may or
may not be retroactive. This opinion represents our best legal judgment but has
no binding effect or official status of any kind. As a result, no assurance can
be given that the opinion expressed in this letter will be sustained by a court
if contested. No ruling will be obtained from the Internal Revenue Service with
respect to the Merger.
Except as set forth above, we express no opinion as to the tax
consequences to any party, whether Federal, state, local or foreign, of the
Merger or of any transactions related to the Merger or contemplated by the
Merger Agreement. This opinion is being furnished only to you in connection with
the Merger and solely for your benefit in connection therewith and may not be
used or relied upon for any other purpose and may not be circulated, quoted or
otherwise referred to for any other purpose without our express written consent.
We hereby acknowledge and consent to ConAgra's filing of this opinion as an
exhibit to the Registration Statement with the Securities and Exchange
Commission.
Very truly yours,
SMITH, ANDERSON, BLOUNT, DORSETT,
MITCHELL & JERNIGAN, L.L.P.
By: /s/ Henry A. Mitchell, Jr.
<PAGE>
Exhibit 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
ConAgra, Inc. on Form S-4 of our reports dated July 11, 1997 (which express an
unqualified opinion and include an explanatory paragraph relating to the
adoption of the Financial Accounting Standards Board's Statement of Financial
Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of), appearing in and incorporated by
reference in the Annual Report on Form 10-K of ConAgra, Inc. for the year ended
May 25, 1997 and to the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Omaha, Nebraska
June 25, 1998
Exhibit 23.4
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of ConAgra, Inc. on Form S-4 of our reports dated July 10, 1997, appearing in
and incorporated by reference in the Annual Report on Form 10-K of GoodMark
Foods, Inc. for the year ended May 25, 1997 and to the reference to us under the
heading "Experts" in the Prospectus, which is part of this Registration
Statement.
/s/ Deloitte & Touche LLP
Raleigh, North Carolina
June 25, 1998
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned Director of ConAgra,
Inc. constitutes and appoints each of Bruce C. Rohde and James P. O'Donnell as
his true and lawful attorney-in-fact and agent, each having full power of
substitution and resubstitution, with full power to act, together or each
without the other, for him and in his name, place and stead in any and all
capacities, to execute a registration statement on Form S-4 for the registration
under the Securities Act of 1933 of shares of common stock of ConAgra, Inc.
proposed to be issued in connection with ConAgra's acquisition of GoodMark
Foods, Inc. and any and all amendments and post-effective amendments and
supplements to the registration statement and any and all instruments necessary
or incidental in connection therewith, and to file the same with the Securities
and Exchange Commission, granting unto such attorney-in-fact and agent, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, and each of them, or their
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 16th day of June, 1998.
/s/ Philip B. Fletcher
---------------------
Philip B. Fletcher
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned Director of ConAgra,
Inc. constitutes and appoints each of Bruce C. Rohde and James P. O'Donnell as
his true and lawful attorney-in-fact and agent, each having full power of
substitution and resubstitution, with full power to act, together or each
without the other, for him and in his name, place and stead in any and all
capacities, to execute a registration statement on Form S-4 for the registration
under the Securities Act of 1933 of shares of common stock of ConAgra, Inc.
proposed to be issued in connection with ConAgra's acquisition of GoodMark
Foods, Inc. and any and all amendments and post-effective amendments and
supplements to the registration statement and any and all instruments necessary
or incidental in connection therewith, and to file the same with the Securities
and Exchange Commission, granting unto such attorney-in-fact and agent, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, and each of them, or their
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 16th day of June, 1998.
/s/ C. M. Harper
---------------------
C. M. Harper
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned Director of ConAgra,
Inc. constitutes and appoints each of Bruce C. Rohde and James P. O'Donnell as
his true and lawful attorney-in-fact and agent, each having full power of
substitution and resubstitution, with full power to act, together or each
without the other, for him and in his name, place and stead in any and all
capacities, to execute a registration statement on Form S-4 for the registration
under the Securities Act of 1933 of shares of common stock of ConAgra, Inc.
proposed to be issued in connection with ConAgra's acquisition of GoodMark
Foods, Inc. and any and all amendments and post-effective amendments and
supplements to the registration statement and any and all instruments necessary
or incidental in connection therewith, and to file the same with the Securities
and Exchange Commission, granting unto such attorney-in-fact and agent, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, and each of them, or their
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 16th day of June, 1998.
/s/ Robert A. Krane
---------------------
Robert A. Krane
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned Director of ConAgra,
Inc. constitutes and appoints each of Bruce C. Rohde and James P. O'Donnell as
his true and lawful attorney-in-fact and agent, each having full power of
substitution and resubstitution, with full power to act, together or each
without the other, for him and in his name, place and stead in any and all
capacities, to execute a registration statement on Form S-4 for the registration
under the Securities Act of 1933 of shares of common stock of ConAgra, Inc.
proposed to be issued in connection with ConAgra's acquisition of GoodMark
Foods, Inc. and any and all amendments and post-effective amendments and
supplements to the registration statement and any and all instruments necessary
or incidental in connection therewith, and to file the same with the Securities
and Exchange Commission, granting unto such attorney-in-fact and agent, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, and each of them, or their
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 16th day of June, 1998.
/s/ Mogens Bay
---------------------
Mogens Bay
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned Director of ConAgra,
Inc. constitutes and appoints each of Bruce C. Rohde and James P. O'Donnell as
his true and lawful attorney-in-fact and agent, each having full power of
substitution and resubstitution, with full power to act, together or each
without the other, for him and in his name, place and stead in any and all
capacities, to execute a registration statement on Form S-4 for the registration
under the Securities Act of 1933 of shares of common stock of ConAgra, Inc.
proposed to be issued in connection with ConAgra's acquisition of GoodMark
Foods, Inc. and any and all amendments and post-effective amendments and
supplements to the registration statement and any and all instruments necessary
or incidental in connection therewith, and to file the same with the Securities
and Exchange Commission, granting unto such attorney-in-fact and agent, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, and each of them, or their
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 16th day of June, 1998.
/s/ Gerald Rauenhorst
---------------------
Gerald Rauenhorst
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned Director of ConAgra,
Inc. constitutes and appoints each of Bruce C. Rohde and James P. O'Donnell as
his true and lawful attorney-in-fact and agent, each having full power of
substitution and resubstitution, with full power to act, together or each
without the other, for him and in his name, place and stead in any and all
capacities, to execute a registration statement on Form S-4 for the registration
under the Securities Act of 1933 of shares of common stock of ConAgra, Inc.
proposed to be issued in connection with ConAgra's acquisition of GoodMark
Foods, Inc. and any and all amendments and post-effective amendments and
supplements to the registration statement and any and all instruments necessary
or incidental in connection therewith, and to file the same with the Securities
and Exchange Commission, granting unto such attorney-in-fact and agent, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, and each of them, or their
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 16th day of June, 1998.
/s/ Carl E. Reichardt
---------------------
Carl E. Reichardt
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned Director of ConAgra,
Inc. constitutes and appoints each of Bruce C. Rohde and James P. O'Donnell as
his true and lawful attorney-in-fact and agent, each having full power of
substitution and resubstitution, with full power to act, together or each
without the other, for him and in his name, place and stead in any and all
capacities, to execute a registration statement on Form S-4 for the registration
under the Securities Act of 1933 of shares of common stock of ConAgra, Inc.
proposed to be issued in connection with ConAgra's acquisition of GoodMark
Foods, Inc. and any and all amendments and post-effective amendments and
supplements to the registration statement and any and all instruments necessary
or incidental in connection therewith, and to file the same with the Securities
and Exchange Commission, granting unto such attorney-in-fact and agent, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, and each of them, or their
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 16th day of June, 1998.
/s/ Ronald W. Roskens
---------------------
Ronald W. Roskens
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned Director of ConAgra,
Inc. constitutes and appoints each of Bruce C. Rohde and James P. O'Donnell as
her true and lawful attorney-in-fact and agent, each having full power of
substitution and resubstitution, with full power to act, together or each
without the other, for her and in her name, place and stead in any and all
capacities, to execute a registration statement on Form S-4 for the registration
under the Securities Act of 1933 of shares of common stock of ConAgra, Inc.
proposed to be issued in connection with ConAgra's acquisition of GoodMark
Foods, Inc. and any and all amendments and post-effective amendments and
supplements to the registration statement and any and all instruments necessary
or incidental in connection therewith, and to file the same with the Securities
and Exchange Commission, granting unto such attorney-in-fact and agent, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, and each of them, or their
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand and seal
this 16th day of June, 1998.
/s/ Marjorie M. Scardino
---------------------
Marjorie M. Scardino
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned Director of ConAgra,
Inc. constitutes and appoints each of Bruce C. Rohde and James P. O'Donnell as
his true and lawful attorney-in-fact and agent, each having full power of
substitution and resubstitution, with full power to act, together or each
without the other, for him and in his name, place and stead in any and all
capacities, to execute a registration statement on Form S-4 for the registration
under the Securities Act of 1933 of shares of common stock of ConAgra, Inc.
proposed to be issued in connection with ConAgra's acquisition of GoodMark
Foods, Inc. and any and all amendments and post-effective amendments and
supplements to the registration statement and any and all instruments necessary
or incidental in connection therewith, and to file the same with the Securities
and Exchange Commission, granting unto such attorney-in-fact and agent, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, and each of them, or their
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 16th day of June, 1998.
/s/ Walter Scott, Jr.
---------------------
Walter Scott, Jr.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned Director of ConAgra,
Inc. constitutes and appoints each of Bruce C. Rohde and James P. O'Donnell as
his true and lawful attorney-in-fact and agent, each having full power of
substitution and resubstitution, with full power to act, together or each
without the other, for him and in his name, place and stead in any and all
capacities, to execute a registration statement on Form S-4 for the registration
under the Securities Act of 1933 of shares of common stock of ConAgra, Inc.
proposed to be issued in connection with ConAgra's acquisition of GoodMark
Foods, Inc. and any and all amendments and post-effective amendments and
supplements to the registration statement and any and all instruments necessary
or incidental in connection therewith, and to file the same with the Securities
and Exchange Commission, granting unto such attorney-in-fact and agent, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, and each of them, or their
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 16th day of June, 1998.
/s/ Kenneth E. Stinson
---------------------
Kenneth E. Stinson
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned Director of ConAgra,
Inc. constitutes and appoints each of Bruce C. Rohde and James P. O'Donnell as
her true and lawful attorney-in-fact and agent, each having full power of
substitution and resubstitution, with full power to act, together or each
without the other, for her and in her name, place and stead in any and all
capacities, to execute a registration statement on Form S-4 for the registration
under the Securities Act of 1933 of shares of common stock of ConAgra, Inc.
proposed to be issued in connection with ConAgra's acquisition of GoodMark
Foods, Inc. and any and all amendments and post-effective amendments and
supplements to the registration statement and any and all instruments necessary
or incidental in connection therewith, and to file the same with the Securities
and Exchange Commission, granting unto such attorney-in-fact and agent, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, and each of them, or their
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand and seal
this 16th day of June, 1998.
/s/ Jane J. Thompson
---------------------
Jane J. Thompson
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned Director of ConAgra,
Inc. constitutes and appoints each of Bruce C. Rohde and James P. O'Donnell as
his true and lawful attorney-in-fact and agent, each having full power of
substitution and resubstitution, with full power to act, together or each
without the other, for him and in his name, place and stead in any and all
capacities, to execute a registration statement on Form S-4 for the registration
under the Securities Act of 1933 of shares of common stock of ConAgra, Inc.
proposed to be issued in connection with ConAgra's acquisition of GoodMark
Foods, Inc. and any and all amendments and post-effective amendments and
supplements to the registration statement and any and all instruments necessary
or incidental in connection therewith, and to file the same with the Securities
and Exchange Commission, granting unto such attorney-in-fact and agent, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, and each of them, or their
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 16th day of June, 1998.
/s/ Frederick B. Wells
---------------------
Frederick B. Wells
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned Director of ConAgra,
Inc. constitutes and appoints each of Bruce C. Rohde and James P. O'Donnell as
his true and lawful attorney-in-fact and agent, each having full power of
substitution and resubstitution, with full power to act, together or each
without the other, for him and in his name, place and stead in any and all
capacities, to execute a registration statement on Form S-4 for the registration
under the Securities Act of 1933 of shares of common stock of ConAgra, Inc.
proposed to be issued in connection with ConAgra's acquisition of GoodMark
Foods, Inc. and any and all amendments and post-effective amendments and
supplements to the registration statement and any and all instruments necessary
or incidental in connection therewith, and to file the same with the Securities
and Exchange Commission, granting unto such attorney-in-fact and agent, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, and each of them, or their
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 16th day of June, 1998.
/s/ Thomas R. Williams
---------------------
Thomas R. Williams
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned Director of ConAgra,
Inc. constitutes and appoints James P. O'Donnell as his true and lawful
attorney-in-fact and agent, having full power of substitution and
resubstitution, with full power to act for him and in his name, place and stead
in any and all capacities, to execute a registration statement on Form S-4 for
the registration under the Securities Act of 1933 of shares of common stock of
ConAgra, Inc. proposed to be issued in connection with ConAgra's acquisition of
GoodMark Foods, Inc. and any and all amendments and post-effective amendments
and supplements to the registration statement and any and all instruments
necessary or incidental in connection therewith, and to file the same with the
Securities and Exchange Commission, granting unto such attorney-in-fact and
agent, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 16th day of June, 1998.
/s/ Bruce C. Rohde
---------------------
Bruce C. Rohde
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, the undersigned Director of ConAgra,
Inc. constitutes and appoints each of Bruce C. Rohde and James P. O'Donnell as
his true and lawful attorney-in-fact and agent, each having full power of
substitution and resubstitution, with full power to act, together or each
without the other, for him and in his name, place and stead in any and all
capacities, to execute a registration statement on Form S-4 for the registration
under the Securities Act of 1933 of shares of common stock of ConAgra, Inc.
proposed to be issued in connection with ConAgra's acquisition of GoodMark
Foods, Inc. and any and all amendments and post-effective amendments and
supplements to the registration statement and any and all instruments necessary
or incidental in connection therewith, and to file the same with the Securities
and Exchange Commission, granting unto such attorney-in-fact and agent, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, and each of them, or their
substitute or substitutes may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal
this 16th day of June, 1998.
/s/ Clayton K. Yeutter
---------------------
Clayton K. Yeutter
<PAGE>
Exhibit 99.2
PROXY
GOODMARK FOODS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of GoodMark Foods, Inc., a North Carolina
corporation ("GoodMark"), hereby appoints Ron E. Doggett and Paul L. Brunswick,
or any of them, attorneys and proxies of the undersigned, with full power of
substitution and with authority in each of them to act in the absence of the
other, to vote and act for the undersigned shareholder at the Special Meeting of
Shareholders to be held at 9:00 a.m., local time, on , 1998, at GoodMark's
executive offices, 6131 Falls of Neuse Road, Raleigh, North Carolina 27609, and
at any adjournment, postponement or continuation thereof, upon the following
matter:
Proposal: Approval and adoption of the Agreement and Plan of
Merger (the "Merger Agreement"), dated as of June
17, 1998, among ConAgra, Inc., a Delaware
corporation ("ConAgra"), CAG 40, Inc., a North
carolina corporation which has not engaged in any
material operations since its incorporation and is
a wholly-owned subsidiary of ConAgra ("Merger
Sub"), and GoodMark, and the transactions
contemplated thereunder, including a merger (the
"Merger") pursuant to which Merger Sub would be
merged with and into GoodMark, with GoodMark being
the surviving corporation in the Merger, as more
fully described in the accompanying Proxy
Statement/Prospectus.
FOR __________ AGAINST __________ ABSTAIN ________
This proxy will be voted as directed by the undersigned shareholder.
UNLESS CONTRARY DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE PROPOSAL.
The undersigned shareholder may revoke this proxy at any time before it is voted
by delivering to the Secretary of GoodMark either a written revocation of the
proxy or a duly executed proxy bearing a later date, or by appearing at the
Special Meeting and voting in person. The undersigned shareholder hereby
acknowledges receipt of notice of the Special Meeting and Proxy
Statement/Prospectus dated June , 1998 and hereby revokes any proxy or proxies
heretofore given.
By signing a proxy, a GoodMark Shareholder will be authorizing the
proxyholder to vote in his discretion regarding any procedural motions which may
come before the Special Meeting. For example, this authority could be used to
adjourn the Special Meeting if GoodMark believes it is desirable to do so.
Adjournment or other
<PAGE>
procedural matters could be used to obtain more time before a vote is taken in
order to solicit additional proxies or to provide additional information to
Shareholders. GoodMark has no plans to adjourn the meeting at this time, but
intends to do so, if needed, to promote Shareholder interests.
(Continued and to be dated and signed on reverse side)
<PAGE>
(Continued from other side)
If you receive more than one proxy card, please sign and return all
cards in the accompanying envelope.
Date: , 1998
(Signature of Shareholder or
Authorized Representative)
(Print name)
Please date and sign
exactly as name appears
hereon. Each executor,
administrator, trustee,
guardian, attorney-in-fact
and other fiduciary should
sign and indicate his or
her full title. In the case
of stock ownership in the
name of two or more
persons, both persons
should sign.
PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY TO ENSURE A QUORUM
AT THE SPECIAL MEETING. IT IS IMPORTANT WHETHER YOU OWN FEW OR MANY SHARES.
FAILURE TO RETURN THIS PROXY WILL HAVE THE SAME EFFECT AS A VOTE AGAINST THE
PROPOSAL.
<PAGE>
