EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
By and Among
UNILEVER PLC,
UNILEVER N.V.,
CONOPCO, INC.,
TITAN ACQUISITION COMPANY
and
BESTFOODS
Dated as of June 6, 2000
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
The Merger
-----------
SECTION 1.01. The Merger 1
SECTION 1.02. Closing 2
SECTION 1.03. Effective Time 2
SECTION 1.04. Effects of the Merger 2
SECTION 1.05. Certificate of Incorporation and By-laws 2
SECTION 1.06. Directors 2
SECTION 1.07. Officers 3
ARTICLE II
Conversion of Securities
------------------------
SECTION 2.01. Conversion of Capital Stock 3
SECTION 2.02. Exchange of Certificates 4
ARTICLE III
Representations and Warranties
------------------------------
SECTION 3.01. Representations and Warranties of
the Company 7
SECTION 3.02. Representations and Warranties of the
Parents, New York Sub and Delaware Sub 25
ARTICLE IV
Covenants Relating to Conduct of Business
-----------------------------------------
SECTION 4.01. Conduct of Business 27
SECTION 4.02. No Solicitation 31
ARTICLE V
Additional Agreements
---------------------
SECTION 5.01. Preparation of the Proxy Statement;
Stockholders Meeting 35
SECTION 5.02. Access to Information; Confidentiality 36
SECTION 5.03. Reasonable Best Efforts;
Notification 36
SECTION 5.04. Company Stock Options 38
SECTION 5.05. Indemnification, Exculpation and
Insurance 39
SECTION 5.06. Fees and Expenses 40
SECTION 5.07. Information Supplied 41
SECTION 5.08. Benefits Matters 42
SECTION 5.09. Public Announcements 45
SECTION 5.10. Rights Agreement; Consequences if
Rights Triggered 45
SECTION 5.11. Parents' Shareholders' Meetings 45
SECTION 5.12. Stockholder Litigation 45
SECTION 5.13. Control of the Company's Operations 46
SECTION 5.14. Parents' Conduct 46
ARTICLE VI
Conditions Precedent
--------------------
SECTION 6.01. Conditions to Each Party's Obligation
to Effect the Merger 46
SECTION 6.02. Conditions to Obligations of the
Parents, New York Sub and Delaware Sub 47
SECTION 6.03. Conditions to Obligation of the Company 48
SECTION 6.04. Frustration of Closing Conditions 49
ARTICLE VII
Termination, Amendment and Waiver
---------------------------------
SECTION 7.01. Termination 49
SECTION 7.02. Effect of Termination 50
SECTION 7.03. Amendment 51
SECTION 7.04. Extension; Waiver 51
ARTICLE VIII
General Provisions
------------------
SECTION 8.01. Nonsurvival of Representations and
Warranties 51
SECTION 8.02. Notices 51
SECTION 8.03. Definitions 53
SECTION 8.04. Interpretation 54
SECTION 8.05. Counterparts 54
SECTION 8.06. Entire Agreement; No Third-Party
Beneficiaries 54
SECTION 8.07. Governing Law 54
SECTION 8.08. Assignment 55
SECTION 8.09. Enforcement 55
ANNEX I Index of Defined Terms
EXHIBIT A Certificate of Incorporation of the Surviving
Corporation
<PAGE>
AGREEMENT AND PLAN OF MERGER dated as of June 6, 2000, by and
among UNILEVER PLC, a company incorporated under the laws of and registered
in England ("PLC"), UNILEVER N.V., a Netherlands corporation ("N.V." and,
together with PLC, the "Parents"), CONOPCO, INC., a New York corporation
and a subsidiary of the Parents ("New York Sub"), TITAN ACQUISITION
COMPANY, a Delaware corporation and a wholly owned subsidiary of New York
Sub ("Delaware Sub"), and BESTFOODS, a Delaware corporation (the
"Company").
WHEREAS the Board of Directors of each of the Company and
Delaware Sub has approved and declared advisable, and the Board of
Directors of each of the Parents and New York Sub has approved, this
Agreement and the merger of Delaware Sub with and into the Company (the
"Merger"), upon the terms and subject to the conditions set forth in this
Agreement, whereby each issued and outstanding share of common stock, par
value $.25 per share, of the Company (the "Company Common Stock") not owned
by the Parents, New York Sub, Delaware Sub or the Company, other than the
Appraisal Shares (as defined in Section 2.01(d)), will be converted into
the right to receive $73.00 in cash;
WHEREAS the Parents, New York Sub, Delaware Sub and the Company
desire to make certain representations, warranties, covenants and
agreements in connection with the Merger and also to prescribe various
conditions to the Merger;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
The Merger
----------
SECTION 1.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the Delaware
General Corporation Law (the "DGCL"), Delaware Sub shall be merged with and
into the Company at the Effective Time (as defined in Section 1.03). At the
Effective Time, the separate corporate existence of Delaware Sub shall
cease and the Company shall continue as the surviving corporation (the
"Surviving Corporation") and shall succeed to and assume all the rights and
obligations of Delaware Sub in accordance with the DGCL.
SECTION 1.02. Closing. Upon the terms and subject to the
conditions set forth in this Agreement, the closing of the Merger (the
"Closing") shall take place at 11:00 a.m., New York time, on the second
business day after the satisfaction or waiver of the conditions set forth
in Section 6.01 (other than those that by their terms cannot be satisfied
until the time of the Closing), at the offices of Cravath, Swaine & Moore,
825 Eighth Avenue, New York, New York 10019, or at such other time, date or
place agreed to in writing by the Parents, on the one hand, and the
Company, on the other hand; provided, however, that if all the conditions
set forth in Article VI shall not have been satisfied or waived on such
second business day, then the Closing shall take place on the first
business day on which all such conditions shall have been satisfied or
waived. The date on which the Closing occurs is referred to in this
Agreement as the "Closing Date".
SECTION 1.03. Effective Time. Upon the terms and subject to the
conditions set forth in this Agreement, as soon as practicable on or after
the Closing Date, a certificate of merger or other appropriate documents
(in any such case, the "Certificate of Merger") shall be duly prepared,
executed and acknowledged by the parties in accordance with the relevant
provisions of the DGCL and filed with the Secretary of State of the State
of Delaware. The Merger shall become effective upon the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware
or at such subsequent time or date as the Parents, on the one hand, and the
Company, on the other hand, shall agree and specify in the Certificate of
Merger. The time at which the Merger becomes effective is referred to in
this Agreement as the "Effective Time".
SECTION 1.04. Effects of the Merger. The Merger shall have the
effects set forth in Section 259 of the DGCL.
SECTION 1.05. Certificate of Incorporation and By-laws. (a) The
Certificate of Incorporation of the Surviving Corporation shall be amended
at the Effective Time to read in the form of Exhibit A and, as so amended,
such Certificate of Incorporation shall be the Certificate of Incorporation
of the Surviving Corporation until thereafter changed or amended as
provided therein or by applicable law.
(b) The By-laws of Delaware Sub as in effect immediately prior to
the Effective Time shall be the By-laws of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law.
SECTION 1.06. Directors. The directors of Delaware Sub
immediately prior to the Effective Time shall be the directors of the
Surviving Corporation until the earlier of their resignation or removal or
until their respective successors are duly elected and qualified, as the
case may be.
SECTION 1.07. Officers. The officers of the Company immediately
prior to the Effective Time shall be the officers of the Surviving
Corporation until the earlier of their resignation or removal or until
their respective successors are duly elected and qualified, as the case may
be.
ARTICLE II
Conversion of Securities
------------------------
SECTION 2.01. Conversion of Capital Stock. At the Effective Time,
by virtue of the Merger and without any action on the part of the holder of
any shares of capital stock of the Company or Delaware Sub:
(a) Capital Stock of Delaware Sub. Each issued and outstanding
share of common stock of Delaware Sub shall be converted into and
become one fully paid and nonassessable share of common stock, par
value $1.00 per share, of the Surviving Corporation.
(b) Cancelation of Treasury Stock, the Parents- Owned Stock and
New York Sub-Owned Stock. Each share of Company Common Stock that is
owned by the Company as treasury stock, or by any of the Parents, New
York Sub or Delaware Sub, immediately prior to the Effective Time
shall automatically be canceled and retired and shall cease to exist
and no consideration shall be delivered in exchange therefor.
(c) Conversion of Company Common Stock. Each share of Company
Common Stock issued and outstanding immediately prior to the Effective
Time (other than shares to be canceled in accordance with Section
2.01(b) and the Appraisal Shares) shall be converted into the right to
receive $73.00 in cash, without interest (the "Merger Consideration").
At the Effective Time all such shares shall no longer be out standing
and shall automatically be canceled and shall cease to exist, and each
holder of a certificate that immediately prior to the Effective Time
represented any such shares (a "Certificate") shall cease to have any
rights with respect thereto, except the right to receive the Merger
Consideration with respect to each such share.
(d) Appraisal Rights. Notwithstanding anything in this Agreement
to the contrary, shares (the "Appraisal Shares") of Company Common
Stock issued and outstanding immediately prior to the Effective Time
that are held by any holder who is entitled to demand and properly
demands appraisal of such shares pursuant to, and who complies in all
respects with, the provisions of Section 262 of the DGCL ("Section
262") shall not be converted into the right to receive the Merger
Consideration as provided in Section 2.01(c), but instead such holder
shall be entitled to payment of the fair value of such shares in
accordance with the provisions of Section 262. At the Effective Time,
all Appraisal Shares shall no longer be outstanding and shall
automatically be canceled and shall cease to exist, and each holder of
Appraisal Shares shall cease to have any rights with respect thereto,
except the right to receive the fair value of such shares in
accordance with the provisions of Section 262. Notwithstanding the
foregoing, if any such holder shall fail to perfect or otherwise shall
waive, withdraw or lose the right to appraisal under Section 262 or a
court of competent jurisdiction shall determine that such holder is
not entitled to the relief provided by Section 262, then the right of
such holder to be paid the fair value of such holder's Appraisal
Shares under Section 262 shall cease and each such Appraisal Share
shall be deemed to have been converted at the Effective Time into, and
shall have become, the right to receive the Merger Consideration as
provided in Section 2.01(c). The Company shall provide reasonably
prompt notice to the Parents of any demands for appraisal of any
shares of Company Common Stock, and the Parents shall have the right
to participate in and direct all negotiations and proceedings with
respect to such demands. Prior to the Effective Time, the Company
shall not, without the prior written consent of the Parents, make any
payment with respect to, or settle or offer to settle, any such
demands, or agree to do any of the foregoing.
SECTION 2.02. Exchange of Certificates. (a) Paying Agent. Prior
to the Effective Time, New York Sub shall designate a bank or trust company
reasonably acceptable to the Company to act as agent for the payment of the
Merger Consideration upon surrender of Certificates (the "Paying Agent").
Prior to the Effective Time, New York Sub will enter into a disbursing
agent agreement with the Paying Agent, in form and substance reasonably
acceptable to the Company. Promptly following the Effective Time, the
Parents shall deposit or cause to be deposited with the Paying Agent in
trust for the benefit of the Company's stockholders cash in an aggregate
amount necessary to make the payments pursuant to Section 2.01(c) to
holders of shares of Company Common Stock in respect of each such share
(such amounts being collectively hereinafter referred to as the "Exchange
Fund"). The Paying Agent shall invest the Exchange Fund, as New York Sub
directs, in direct obligations of the United States of America, obligations
for which the full faith and credit of the United States of America is
pledged to provide for the payment of all principal and interest or
commercial paper obligations receiving the highest rating from either
Moody's Investors Service, Inc. or Standard & Poor's, a division of The
McGraw Hill Companies, or a combination thereof, provided that, in any such
case, no such instrument shall have a maturity exceeding three months. Any
net profit resulting from, or interest or income produced by, such
investments shall be payable to New York Sub. The Exchange Fund shall not
be used for any other purpose except as provided in this Agreement.
(b) Exchange Procedure. As soon as reasonably practicable after
the Effective Time, the Paying Agent shall mail to each holder of
record of a Certificate (i) a form of letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and
title to the Certificates held by such person shall pass, only upon
proper delivery of the Certificates to the Paying Agent and shall be
in customary form and have such other provisions as New York Sub may
reasonably specify) and (ii) instructions for use in effecting the
surrender of a Certificate in exchange for the Merger Consideration
with respect to each share of Company Common Stock formerly
represented by such Certificate. The Paying Agent shall also establish
customary procedures for electronic or in-person delivery of
Certificates and payment therefor. Upon surrender of a Certificate for
cancelation to the Paying Agent or to such other agent or agents as
may be appointed by New York Sub, together with such letter of
transmittal, duly completed and validly executed, and such other
documents as may reasonably be required by the Paying Agent, the
holder of such Certificate shall be entitled to receive in exchange
therefor the amount of cash into which the shares formerly represented
by such Certificate shall have been converted pursuant to Section
2.01(c) into the right to receive, and the Certificate so surrendered
shall forthwith be canceled. In the event of a transfer of ownership
of Company Common Stock that is not registered in the stock transfer
books of the Company, the proper amount of cash may be paid in
exchange therefor to a person other than the person in whose name the
Certificate so surrendered is registered if such Certificate shall be
properly endorsed or otherwise be in proper form for transfer and the
person requesting such payment shall pay any transfer or other taxes
required by reason of the payment to a person other than the
registered holder of such Certificate or establish to the satisfaction
of New York Sub that such tax has been paid or is not applicable. No
interest shall be paid or shall accrue on the cash payable upon
surrender of any Certificate.
(c) No Further Ownership Rights in Company Common Stock. All cash
paid upon the surrender of a Certificate in accordance with the terms
of this Article II shall be deemed to have been paid in full
satisfaction of all rights pertaining to the shares of Company Common
Stock formerly represented by such Certificate. At the close of
business on the day on which the Effective Time occurs, the stock
transfer books of the Company shall be closed, and there shall be no
further registration of transfers on the stock transfer books of the
Surviving Corporation of the shares of Company Common Stock that were
outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving
Corporation or the Paying Agent for transfer or any other reason, they
shall be canceled and exchanged as provided in this Article II.
(d) No Liability. None of the Parents, New York Sub, Delaware
Sub, the Company or the Paying Agent shall be liable to any person in
respect of any cash delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law. If any
Certificates shall not have been surrendered prior to three years
after the Effective Time (or immediately prior to such earlier date on
which any Merger Consideration would otherwise escheat to or became
the property of any Governmental Entity (as defined in Section
3.01(d)), any such Merger Consideration in respect thereof shall, to
the extent permitted by applicable law, become the property of the
Surviving Corporation, free and clear of all claims or interest of any
person previously entitled thereto.
(e) Lost Certificates. If any Certificate shall have been lost,
stolen, defaced or destroyed, upon the making of an affidavit of that
fact by the person claiming such Certificate to be lost, stolen,
defaced or destroyed and, if reasonably required by the Surviving
Corporation, the posting by such person of a bond in such reasonable
amount as the Surviving Corporation may direct as indemnity against
any claim that may be made against it with respect to such
Certificate, the Paying Agent shall pay in respect of such lost,
stolen, defaced or destroyed Certificate the Merger Consideration with
respect to each share of Company Common Stock formerly represented by
such Certificate.
(f) Withholding Rights. New York Sub, the Surviving Corporation
or the Paying Agent shall be entitled to deduct and withhold any
applicable taxes from the consideration otherwise payable pursuant to
this Agreement to any holder of shares of Company Common Stock.
(g) Termination of Exchange Fund. Any portion of the Exchange
Fund that remains undistributed to the holders of Company Common Stock
for six months after the Effective Time shall be delivered to New York
Sub, upon demand, and any holder of Company Common Stock who has not
theretofore complied with this Article II shall thereafter look only
to New York Sub for payment of its claim for Merger Consideration.
ARTICLE III
Representations and Warranties
------------------------------
SECTION 3.01. Representations and Warranties of the Company.
Except as set forth on the disclosure schedule (with specific reference to
the Section or Subsection of this Agreement to which the information stated
in such disclosure relates) delivered by the Company to the Parents prior
to the execution of this Agreement (the "Company Disclosure Schedule") (it
being agreed that disclosure of any item under a Subsection of this Section
3.01 in the Company Disclosure Schedule shall be deemed disclosure with
respect to other Subsections of this Section 3.01 (other than Section
3.01(e) and 3.01(f)) if the applicability of such item to any such other
Subsection is readily apparent from the face of the Company Disclosure
Schedule), the Company represents and warrants to the Parents, New York Sub
and Delaware Sub as follows:
(a) Organization, Standing and Power. Each of the Company and its
Significant Subsidiaries (as defined in Section 8.03) (i) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) has the requisite corporate,
company or partnership power and authority to carry on its business as
now being conducted and (iii) is duly qualified or licensed to do
business and is in good standing in each jurisdiction in which the
nature of its business or the ownership, leasing or operation of its
properties makes such qualification or licensing necessary, other than
(except in the case of clause (i) above with respect to the Company)
where the failure to be so organized, existing, qualified or licensed
or in good standing individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect (as defined
in Section 8.03). The Company has delivered to the Parents true and
complete copies of its Restated Certificate of Incorporation and
By-laws as amended to the date of this Agreement. The Company has made
available to the Parents and their representatives true and complete
copies of the minutes of all meetings of the stockholders, the Board
of Directors and each committee of the Board of Directors of the
Company held since January 1, 1997 (other than any such minutes to the
extent relating to the Company's consideration of the Merger or other
contemporaneous strategic alternatives).
(b) Subsidiaries. Except as set forth on Exhibit 21 to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999 on file with the Securities and Exchange Commission
(the "SEC"), all the outstanding shares (other than any director
qualifying shares) of capital stock of, or other equity or voting
interests in, each subsidiary (as defined in Section 8.03) of the
Company listed on such Exhibit 21 are owned by the Company, by another
wholly owned subsidiary of the Company or by the Company and another
wholly owned subsidiary of the Company, free and clear of all pledges,
claims, liens, charges, encumbrances and security interests of any
kind or nature whatsoever (collectively, "Liens"), and are duly
authorized, validly issued, fully paid and nonassessable. Except for
the capital stock of, or other equity or voting interests in, its
subsidiaries, the Company does not own, directly or indirectly, any
capital stock of, or other equity or voting interests in, any
corporation, partnership, joint venture, association, limited
liability company or other entity, in any such case, which entity
conducts any activity which is material to the Company or with respect
to which the Company, directly or indirectly through one or more
subsidiaries or otherwise, has any material monetary or other
obligations or exposure to liability.
(c) Capital Structure. The authorized capital stock of the
Company consists of 900,000,000 shares of Company Common Stock, and
25,000,000 shares of preferred stock, par value $1.00 per share (the
"Company Preferred Stock"). Prior to the Effective Time, each issued
and outstanding share of Series B ESOP Convertible Preferred Stock of
the Company (the "Company Series B Preferred Stock") shall
automatically be converted into 4.37968 shares of Company Common Stock
pursuant to the Restated Certificate of Incorporation of the Company,
as amended to the date of this Agreement. As of the close of business
on May 31, 2000, (A) 277,292,968 shares of Company Common Stock
(excluding shares held by the Company as treasury shares but including
2,631,306 shares of Company Common Stock held in a rabbi trust) were
issued and outstanding, (B) 113,249,920 shares of Company Common Stock
were held by the Company as treasury shares, (C) 37,000,000 shares of
Company Common Stock were originally reserved for issuance pursuant to
the Company's 1984 Stock and Performance Plan, 1993 Stock and
Performance Plan, Deferred Compensation Plan for Outside Directors and
Deferred Stock Unit Plan (such plans, collectively, the "Company Stock
Plans"), of which (as of June 6, 2000) 8,569,819 shares were subject
to outstanding Company Stock Options (as defined below), (D) 1,633,766
shares of Company Series B Preferred Stock were issued and
outstanding, (E) 7,155,374 shares of Company Common Stock were
reserved for issuance upon conversion of the Company Series B
Preferred Stock and (F) 2,000,000 shares of Company Preferred Stock
were reserved for issuance in connection with the rights (the "Company
Rights") issued pursuant to the Rights Agreement dated as of January
4, 1999 (as amended from time to time, the "Company Rights
Agreement"), between the Company and First Chicago Trust Company of
New York, as Rights Agent. Other than 2,345,349 issued and outstanding
performance unit rights (whether or not currently earned) that are
linked to the price of Company Common Stock and have been granted
under the Company Stock Plans (collectively, the "Company Performance
Units"), there are no outstanding stock appreciation rights or other
rights that are linked to the price of Company Common Stock granted
under any Company Stock Plan whether or not granted in tandem with a
related Stock Option. No shares of Company Common Stock are owned by
any subsidiary of the Company. The Company has delivered to the
Parents a true and complete list, as of the close of business on June
6, 2000, of all outstanding Company Performance Units granted under
the Company Stock Plans, the grant dates and the fair market value (as
determined under the applicable Company Stock Plans) of Company Common
Stock on such grant dates and the names of the holders thereof. During
the period from the close of business on April 30, 2000 to the date of
this Agreement, no Company Performance Units have been granted by the
Company. The Company has delivered to the Parents a true and complete
list, as of the close of business on June 6, 2000, of all outstanding
options to purchase Company Common Stock granted under the Company
Stock Plans (collectively, the "Company Stock Options") and all other
rights to purchase or receive Company Common Stock (collectively, the
"Company Stock Issuance Rights") granted under the Company Stock
Plans, the number of shares subject to each such Company Stock Option
or Company Stock Issuance Right, the grant dates and exercise prices
of each such Company Stock Option or, as applicable, Company Stock
Issuance Right and the names of the holder thereof. As of the close of
business on June 6, 2000, there were outstanding Company Stock Options
(stand-alone or detached from canceled Company Performance Units) to
purchase 8,569,819 shares of Company Common Stock with exercise prices
on a per share basis lower than the Merger Consideration, and the
weighted average exercise price of such Company Stock Options was
equal to $42.90. Except as set forth above, as of the close of
business on May 31, 2000, no shares of capital stock of, or other
equity or voting interests in, the Company, or options, warrants or
other rights to acquire any such stock or securities, were issued,
reserved for issuance or outstanding. During the period from May 31,
2000 to the date of this Agreement, (x) there have been no issuances
by the Company of shares of capital stock of, or other equity or
voting interests in, the Company other than issuances of shares of
Company Common Stock pursuant to the exercise of Company Stock Options
outstanding on such date as required by their terms as in effect on
the date of this Agreement and (y) there have been no issuances by the
Company of options, warrants or other rights to acquire shares of
capital stock or other equity or voting interests from the Company.
All outstanding shares of capital stock of the Company are, and all
shares that may be issued pursuant to the Company Stock Plans will be,
when issued in accordance with the terms thereof, duly authorized,
validly issued, fully paid and nonassessable and not subject to
preemptive rights. There are no bonds, debentures, notes or other
indebtedness of the Company or any of its subsidiaries, and, except as
set forth above, no securities or other instruments or obligations of
the Company or any of its subsidiaries, having in any such case at any
time (whether actual or contingent) the right to vote (or which are
convertible into, or exchangeable for, securities having the right to
vote) on any matters on which stockholders of the Company or any of
its subsidiaries may vote. Except as set forth above and except as
specifically permitted under Section 4.01(a), there are no Contracts
(as defined in Section 3.01(d)) of any kind to which the Company or
any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound obligating the Company or any of its
subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock of, or other
equity or voting interests in, or securities convertible into, or
exchangeable or exercisable for, shares of capital stock of, or other
equity or voting interests in, the Company or any of its subsidiaries
or obligating the Company or any of its subsidiaries to issue, grant,
extend or enter into any such security, option, warrant, call, right
or Contract. There are no outstanding contractual obligations of the
Company or any of its subsidiaries to (I) repurchase, redeem or
otherwise acquire any shares of capital stock of, or other equity or
voting interests in, the Company or any of its subsidiaries or (II)
vote or dispose of any shares of the capital stock of, or other equity
or voting interests in, any of its subsidiaries. To the knowledge of
the Company as of the date of this Agreement, there are no irrevocable
proxies and no voting agreements with respect to any shares of the
capital stock of, or other equity or voting interests in, the Company
or any of its subsidiaries. The Company has made available to the
Parents a complete and correct copy of the Company Rights Agreement,
as amended to the date of this Agreement (prior to the amendments
thereto referred to in Section 3.01(d)(ii)).
(d) Authority; Noncontravention. (i) The Company 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 the Company and the
consummation by the Company of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the
part of the Company and no other corporate proceedings on the part of
the Company are necessary to approve this Agreement or to consummate
the transactions contemplated hereby, subject, in the case of the
consummation of the Merger, to obtaining the Company Stockholder
Approval (as defined in Section 3.01(n)). This Agreement has been duly
executed and delivered by the Company and constitutes a valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except that such enforcement may be subject
to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting or relating to enforcement of creditors' rights
generally and (ii) general equitable principles. The Board of
Directors of the Company, at a meeting duly called and held at which
directors of the Company constituting a quorum were present, duly
adopted resolutions (i) approving and declaring advisable the Merger
and this Agreement and the transactions contemplated hereby, (ii)
declaring that it is in the best interests of the Company's
stockholders that the Company enter into this Agreement and consummate
the Merger on the terms and subject to the conditions set forth in
this Agreement, (iii) declaring that the consideration to be paid to
the Company's stockholders in the Merger is fair to such stockholders,
(iv) directing that this Agreement be submitted to a vote at a meeting
of the Company's stockholders and (v) recommending that the Company's
stockholders adopt this Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
and compliance with the provisions hereof do not and will not conflict
with, or result in any violation or breach of, or default (with or
without notice or lapse of time, or both) under, or give rise to a
right of, or result in, termination, cancelation or acceleration of
any obligation or to loss of a material benefit under, or result in
the creation of any Lien in or upon any of the properties or assets of
the Company or any of its subsidiaries under, or give rise to any
increased, additional, accelerated or guaranteed rights or
entitlements under, any provision of (i) the Restated Certificate of
Incorporation or By-laws of the Company or the certificate of
incorporation or by-laws (or similar organizational documents) of any
of its subsidiaries, (ii) any loan or credit agreement, bond,
debenture, note, mortgage, indenture, guarantee, lease or other
contract, commitment, agreement, instrument, arrangement,
understanding, obligation, undertaking, permit, concession, franchise
or license, whether oral or written (each, including all amendments
thereto, a "Contract"), to which the Company or any of its
subsidiaries is a party or any of their respective properties or
assets is subject or otherwise under which the Company or any of its
subsidiaries have rights or benefits or (iii) subject to the
governmental filings and other matters referred to in the following
sentence, any (A) statute, law, ordinance, rule or regulation or (B)
judgment, order or decree, in each case applicable to the Company or
any of its subsidiaries or their respective properties or assets,
other than, in the case of clauses (ii) and (iii), any such conflicts,
violations, breaches, defaults, rights, losses, Liens or entitlements
that individually or in the aggregate would not reasonably be expected
to have a Material Adverse Effect. No consent, approval, order or
authorization of, or registration, declaration or filing with, any
domestic or foreign (whether national, federal, state, provincial,
local or otherwise) government or any court, administrative agency or
commission or other governmental or regulatory authority or agency,
domestic, foreign or supranational (a "Governmental Entity"), is
required by or with respect to the Company or any of its subsidiaries
in connection with the execution and delivery of this Agreement by the
Company or the consummation by the Company of the transactions
contemplated hereby or compliance with the provisions hereof, except
for (1) the receipt of a decision under Article 6(1)(b) or 8(2) of
Council Regulation No. 4064/89 of the European Community, as amended
(the "EC Merger Regulation"), declaring the Merger compatible with the
EC common market, the filing of a premerger notification and report
form by the Company under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), and the receipt, termination
or expiration, as applicable, of such other approvals or waiting
periods required under any other applicable competition, merger
control, antitrust or similar law or regulation, (2) the filing with
the SEC of a proxy statement relating to the adoption by the Company's
stockholders of this Agreement (as amended or supplemented from time
to time, the "Proxy Statement") and such reports under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as may be
required in connection with this Agreement, the Merger and the other
transactions contemplated hereby, (3) the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware and
appropriate documents with the relevant authorities of other states in
which the Company or any of its subsidiaries is qualified to do
business, (4) any filings required under the rules and regulations of
the New York Stock Exchange ("NYSE") and (5) such other consents,
approvals, orders, authorizations, registrations, declarations and
filings the failure of which to be obtained or made individually or in
the aggregate would not reasonably be expected to have a Material
Adverse Effect.
(ii) The Company and the Board of Directors of the Company
have taken all action necessary to (i) render the Company Rights
inapplicable to this Agreement, the Merger and the other
transactions contemplated hereby and (ii) ensure that (A) neither
of the Parents nor any of their respective affiliates or
associates is or will become an "Acquiring Person" (as defined in
the Company Rights Agreement) by reason of this Agreement, the
Merger or any other transaction contemplated hereby, (B) a
"Distribution Date" (as defined in the Company Rights Agreement)
shall not occur by reason of this Agreement, the Merger or any
other transaction contemplated hereby and (C) the Company Rights
shall expire immediately prior to the Effective Time.
(e) SEC Documents. The Company has filed with the SEC all forms,
reports, schedules, statements and other documents required to be
filed with the SEC by the Company since January 1, 1999 (together with
all information incorporated therein by reference, the "SEC
Documents"). No subsidiary of the Company is required to file any
form, report, schedule, statement or other document with the SEC. As
of their respective dates, the SEC Documents complied in all material
respects with the requirements of the Securities Act of 1933 (the
"Securities Act") or the Exchange Act, as the case may be, and the
rules and regulations of the SEC promulgated thereunder applicable to
such SEC Documents, and none of the SEC Documents at the time they
were filed contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Except to
the extent that information contained in any SEC Document filed and
publicly available prior to the date of this Agreement (a "Filed SEC
Document") has been revised or superseded by a later filed Filed SEC
Document, none of the SEC Documents contains any untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. The
financial statements (including the related notes) included in the SEC
Documents comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the
SEC with respect thereto, have been prepared in accordance with
generally accepted accounting principles ("GAAP") (except, in the case
of 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 in the notes thereto) and fairly present in all material
respects the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates thereof and their
consolidated results of operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal and
recurring year-end audit adjustments). Except as set forth in the
Filed SEC Documents, the Company and its subsidiaries have no
liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise), other than (x) liabilities for taxes (as
defined in Section 3.01(l)(vi)) and (y) liabilities and obligations
that individually or in the aggregate would not reasonably be expected
to have a Material Adverse Effect.
(f) Absence of Certain Changes or Events. Since December 31,
1999, the Company and its subsidiaries have conducted their respective
businesses only in the ordinary course consistent with past practice,
and there has not been (i) a Material Adverse Effect, (ii) prior to
the date of this Agreement, any declaration, setting aside or payment
of any dividend on, or other distribution (whether in cash, stock or
property) in respect of, any of the Company's or any of its
subsidiaries' capital stock or other equity or voting interests,
except for dividends by a wholly owned subsidiary of the Company to
its parent and except for the regular quarterly cash dividend with
respect to the Company Common Stock in the amount of $0.265 per share
and the regular semi-annual cash dividend on the Company Series B
Preferred Stock, (iii) prior to the date of this Agreement, any
purchase, redemption or other acquisition of any shares of capital
stock of, or other equity or voting interests in, the Company or any
of its subsidiaries or any options, warrants, calls or rights to
acquire such shares or other interests, except as required by the
terms of the Company's Stock Options or the Company Series B Preferred
Stock or pursuant to share repurchases pursuant to publicly announced
programs, (iv) prior to the date of this Agreement, any split,
combination or reclassification of any of the Company's or any of its
subsidiaries' capital stock or other equity or voting interests or any
issuance or the authorization of any issuance of any other securities
in respect of, in lieu of or in substitution for shares of capital
stock of, or other equity or voting interests in, the Company or any
of its United States subsidiaries and, to the knowledge of the
Company, its non-United States subsidiaries, (v) except as provided or
made available to the Parents prior to the date of this Agreement or
in the ordinary course of business consistent with past practice or as
was required under any agreement or benefit plan in effect as of
December 31, 1999, any granting by the Company or any of its United
States subsidiaries to any current or former director, officer or
employee of any increase in compensation, bonus or other benefits or
any such granting of any type of compensation or benefits to any
current or former director, officer or employee not previously
receiving or entitled to receive such type of compensation or benefit,
(vi) any payment of any benefit or the grant or amendment of any award
(including in respect of stock options, stock appreciation rights,
performance units, restricted stock or other stock-based or
stock-related awards or the removal or modification of any
restrictions in any Company Benefit Agreement or Company Benefit Plan
or awards made thereunder) except as required to comply with any
applicable law or any Company Benefit Agreement or Company Benefit
Plan existing on such date and except as provided or made available to
the Parents prior to the date of this Agreement or in the ordinary
course of business consistent with past practice, (vii) any damage,
destruction or loss, whether or not covered by insurance, that
individually or in the aggregate would reasonably be expected to have
a Material Adverse Effect, (viii) any change in financial or tax
accounting methods, principles or practices by the Company or any of
its subsidiaries, except insofar as may have been required by a change
in GAAP or applicable law or (ix) any revaluation by the Company or
any of its subsidiaries of any assets that are material to the Company
and its subsidiaries, taken as a whole.
(g) Litigation. There is no suit, claim, action, investigation or
proceeding pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its subsidiaries or any of
their respective assets that individually or in the aggregate would
reasonably be expected to have a Material Adverse Effect, nor is there
any statute, law, ordinance, rule, regulation, judgment, order or
decree, of any Governmental Entity or arbitrator outstanding against,
or, to the knowledge of the Company, investigation, proceeding, notice
of violation, order of forfeiture or complaint by any Governmental
Entity involving, the Company or any of its subsidiaries that
individually or in the aggregate would reasonably be expected to have
a Material Adverse Effect.
(h) Compliance with Laws. Except with respect to Environmental
Laws (as defined in Section 3.01(j)) and taxes, which are the subject
of Sections 3.01(j) and 3.01(l), respectively, the Company and its
subsidiaries and their relevant personnel and operations are, and
since January 1, 1998 have been, in compliance with all statutes,
laws, ordinances, rules, regulations, judgments, orders and decrees of
any Governmental Entity applicable to their businesses or operations,
except for instances of noncompliance that individually or in the
aggregate would not reasonably be expected to have a Material Adverse
Effect. None of the Company or any of its subsidiaries has received,
since January 1, 1998, a notice or other written communication
alleging or relating to a possible violation of any statute, law,
ordinance, rule, regulation, judgment, order or decree of any
Governmental Entity applicable to its businesses or operations, except
for notices or other written communications alleging or relating to
possible violations that individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect. The Company
and its subsidiaries have in effect all permits, licenses, variances,
exemptions, authorizations, franchises, orders and approvals of all
Governmental Entities (collectively, "Permits"), necessary or
advisable for them to own, lease or operate their properties and
assets and to carry on their businesses as now conducted, and there
has occurred no violation of, default (with or without notice or lapse
of time or both) under, or event giving to others any right of
termination, amendment or cancelation of, with or without notice or
lapse of time or both, any such Permit, except for any such failures
to have in effect, violations, defaults or events that individually or
in the aggregate would not reasonably be expected to have a Material
Adverse Effect.
(i) Absence of Changes in Company Benefit Plans; Employment
Agreements. Except as disclosed in the Filed SEC Documents or as
provided or made available to the Parents prior to the date of
this Agreement, since December 31, 1999, none of the Company or
any of its United States subsidiaries has terminated, adopted,
amended or agreed to amend in any material respect any bonus,
pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock
appreciation, restricted stock, stock option, phantom stock,
performance, retirement, thrift, savings, stock bonus, cafeteria,
paid time-off, perquisite, fringe benefit, vacation, severance,
disability, death benefit, hospitalization, medical, welfare
benefit or other plan, program, policy, arrangement or
understanding providing benefits to any of the current or former
directors, officers or employees of the Company or any of its
United States subsidiaries (collectively, "Company Benefit
Plans") or any change in any actuarial or other assumption used
to calculate funding obligations with respect to any Company
Pension Plan (as defined in Section 3.01(k)) or any change in the
manner in which contributions to any Company Pension Plan are
made or the basis on which such contributions are determined.
Except as disclosed in the Filed SEC Documents or as provided or
made available to the Parents prior to the date of this
Agreement, there exist no employment, deferred compensation,
severance or termination agreements or arrangements between the
Company or any of its United States subsidiaries, on the one
hand, and either (i) any current or former director or executive
officer of the Company, on the other hand, or (ii) any current or
former director or executive officer or employee of the Company
or its United States subsidiaries, which in the case of this
clause (ii) is material to the Company or such United States
subsidiary (collectively, "Company Benefit Agreements"), and no
Company Benefit Agreement or Company Benefit Plan provides
benefits that are contingent, or the terms of which are
materially altered, upon the occurrence of a transaction
involving the Company or its subsidiaries of the nature
contemplated by this Agreement. The Company and its United States
subsidiaries have consulting agreements with no more than seven
individuals, none of which provide for compensation in excess of
one million dollars per annum.
(j) Environmental Matters. Except for such matters that
individually or in the aggregate would not reasonably be expected to
have a Material Adverse Effect and except as set forth in the Filed
SEC Documents: (i) each of the Company and its subsidiaries possesses
all Environmental Permits (as defined below) necessary to conduct its
businesses and operations as currently conducted; (ii) each of the
Company and its subsidiaries is in compliance with all applicable
Environmental Laws and all applicable Environmental Permits, and none
of the Company or its subsidiaries has received any (A) written
communication from any Governmental Entity or other person that
alleges that the Company or any of its subsidiaries has violated or is
liable under any Environmental Law or (B) written request for
information pursuant to applicable Environmental Laws concerning the
disposal of Hazardous Materials (as defined below); (iii) there are no
Environmental Claims (as defined below) pending or, to the knowledge
of the Company, threatened (A) against the Company or any of its
subsidiaries or (B) against any person whose liability for any
Environmental Claim the Company or any of its subsidiaries has
retained or assumed, either contractually or by operation of law, and
none of the Company or its subsidiaries has contractually retained or
assumed any liabilities or obligations that could reasonably be
expected to provide the basis for any Environmental Claim; and (iv)
there have been no Releases (as defined below) of any Hazardous
Materials that could reasonably be expected to form the basis of any
Environmental Claim.
For the purposes of this Agreement: (A) "Environmental Claims"
means any and all administrative, regulatory or judicial actions, orders,
decrees, suits, demands, demand letters, directives, claims, liens,
investigations, proceedings or notices of noncompliance or violation by any
Governmental Entity or other person alleging liability arising out of,
based on or related to (x) the presence, Release or threatened Release of,
or exposure to, any Hazardous Materials at any location, whether or not
owned, operated, leased or managed by the Company or any of its
subsidiaries, or (y) circumstances forming the basis of any violation or
alleged violation of any Environmental Law or Environmental Permit; (B)
"Environmental Laws" means all laws, rules, regulations, orders, decrees,
common law, judgments or binding agreements issued, promulgated or entered
into by or with any Governmental Entity relating to pollution or protection
of the environment (including ambient air, surface water, groundwater,
soils or subsurface strata) or protection of human health as it relates to
the environment, including laws and regulations relating to Releases or
threatened Releases of Hazardous Materials or otherwise relating to the
generation, manufacture, processing, distribution, use, treatment, storage,
transport, handling of or exposure to Hazardous Materials; (C)
"Environmental Permits" means all permits, licenses, registrations,
waivers, exemptions and other authorizations required under applicable
Environmental Laws; (D) "Hazardous Materials" means all hazardous, toxic,
explosive or radioactive substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing
material, and all other substances or wastes of any nature regulated
pursuant to any Environmental Law; and (E) "Release" means any release,
spill, emission, leaking, dumping, injection, pouring, deposit, disposal,
discharge, dispersal, leaching or migration into or through the environment
(including ambient air, surface water, groundwater, land surface or
subsurface strata) or within any building, structure, facility or fixture.
(k) ERISA Compliance. (i) Section 3.01(k)(i) of the Company
Disclosure Schedule contains a true and complete list of all material
United States "employee welfare benefit plans" (as defined in Section
3(1) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")), material United States "employee pension benefit
plans" (as defined in Section 3(2) of ERISA) (together, "Company
Pension Plans") and all other Company Benefit Plans maintained or
contributed to by the Company or any of its United States subsidiaries
or any person or entity that, together with the Company or any of its
United States subsidiaries, is treated as a single employer (a
"Commonly Controlled Entity") under Section 414(b), (c), (m) or (o) of
the Internal Revenue Code of 1986, as amended (the "Code"), for the
benefit of any current or former directors, officers or employees of
the Company or any of its United States subsidiaries. Other than those
filed with the Filed SEC Documents, the Company has provided or made
available to the Parents true and complete copies of (1) each Company
Benefit Plan, (2) the most recent annual report on Form 5500 required
to be filed with the Internal Revenue Service (the "IRS") with respect
to each Company Benefit Plan (if any such report was required), (3)
the most recent summary plan description for each Company Benefit Plan
for which such summary plan description is required and (4) each trust
agreement and group annuity contract relating to any Company Benefit
Plan. Each Company Benefit Plan has been administered in accordance
with its terms, except where the failure so to be administered
individually or in the aggregate would not reasonably be expected to
have a Material Adverse Effect. The Company and its subsidiaries and
all the Company Benefit Plans are in compliance with all applicable
provisions of ERISA and the Code, except for instances of possible
noncompliance that individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect. All Company
Pension Plans (other than the Company's Cash Balance Pension Plan for
Salaried Employees) that are intended to be qualified under Section
401(a) of the Code have received favorable determination letters from
the Internal Revenue Service with respect to "TRA" (as defined in
Section 1 of Rev. Proc. 91-66 or 93-39), to the effect that such
Company Pension Plans are qualified and exempt from Federal income
taxes under Sections 401(a) and 501(a), respectively, of the Code, and
no such determination letter has been revoked nor, to the knowledge of
the Company, has revocation been threatened, nor has any such Company
Pension Plan been amended since the date of its most recent
determination letter or application therefor in any respect that would
adversely affect its qualification or materially increase its costs.
Except as, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect, there is no pending or, to
the knowledge of the Company, threatened litigation relating to the
Company Benefit Plans.
(ii) Except as, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect, neither
the Company nor any Commonly Controlled Entity has maintained,
contributed to or been obligated to contribute to any Company
Pension Plan that is subject to Title IV of ERISA (other than a
multiemployer plan within the meaning of Section 3(37) of ERISA)
with respect to which the Company or any Commonly Controlled
Entity has unfunded liabilities based upon the assumptions
utilized in the audited financial statements of the Company
included in the Filed SEC Documents under any Company Benefit
Plan subject to ERISA. Neither the Company nor any of its
subsidiaries, nor to the knowledge of the Company, any officer of
the Company or any of its subsidiaries or any of the Company
Benefit Plans which are subject to ERISA, including the Company
Pension Plans, any trusts created thereunder or any trustee or
administrator thereof, has engaged in a "prohibited transaction"
(as such term is defined in Section 406 of ERISA or Section 4975
of the Code) or any other breach of fiduciary responsibility that
would reasonably be expected to subject the Company, any of its
subsidiaries or any officer of the Company or any of its
subsidiaries to the tax or penalty on prohibited transactions
imposed by such Section 4975 or to any liability under Section
502(i) or 502(1) of ERISA, except for any such tax, penalty or
liability that individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect. Except
as, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect, all contributions and
premiums required to be made under the terms of any Company
Benefit Plan as of the date hereof have been timely made or have
been reflected on the most recent consolidated balance sheet
filed or incorporated by reference in the Filed SEC Documents.
(iii) Except as, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect, each
Company Benefit Plan that is a welfare benefit plan, to the
extent applicable, complies in all material respects with the
applicable requirements of Section 4980B(f) of the Code.
(iv) Except as, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect, the
deduction of any amount payable pursuant to the terms of the
Company Benefit Plans or Company Benefit Agreements (including by
reason of the transactions contemplated hereby) will not be
subject to disallowance under Section 162(m) of the Code.
(v) The consummation of the Merger or any other transaction
contemplated by this Agreement will not (x) entitle any employee,
officer or director of the Company or any of its subsidiaries to
severance pay or (y) accelerate the time of payment or vesting or
trigger any payment or funding (whether through a grantor trust
or otherwise) of compensation or benefits under, increase the
amount payable or trigger any other material obligation pursuant
to, any of the Company Benefit Plans or Company Benefit
Agreements.
(vi) Except as, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect, to the
knowledge of the Company all employee benefit plans established
or maintained by non-United States subsidiaries of the Company
("Foreign Employee Plans") are in compliance with applicable
foreign law. As of December 31, 1999, except as, individually or
in the aggregate, would not reasonably be expected to have a
Material Adverse Effect, to the knowledge of the Company there
are no unfunded or unaccrued liabilities with respect to Foreign
Employee Plans in excess of the amount reflected in the most
recent audited financial statements contained in the Filed SEC
Documents.
(l) Taxes. (i) Each of the Company and its subsidiaries has
timely filed or caused to be filed all tax returns required to be
filed by it and all such tax returns are true and complete, except for
such failures to file and such incompleteness or inaccuracies that
individually or in the aggregate would not reasonably be expected to
have a Material Adverse Effect. Each of the Company and its
subsidiaries has (a) timely paid or duly provided for in its most
recent financial statements contained in the Filed SEC Documents all
taxes due with respect to the taxable periods covered by such tax
returns and all other taxes otherwise due, and (b) duly provided for
on its most recent financial statements included in the Filed SEC
Documents all taxes not yet due but that are payable for periods or
portions thereof through the date of such financial statements, except
for such failures to timely pay or duly provide for that individually
or in the aggregate would not reasonably be expected to have a
Material Adverse Effect.
(ii) There is no deficiency, refund litigation, proposed
adjustment or matter in controversy with respect to any taxes
alleged to be due and owing by the Company or any of its
subsidiaries whether or not with respect to a tax return filed by
the Company or any of its subsidiaries, except for such
deficiencies, refund litigation, proposed adjustments or matters
in controversy that individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect. No
issues relating to taxes were raised by the relevant taxing
authority in any audit or examination presently pending or
completed in the last three years, that could reasonably be
expected to have a material effect on the Company or any of its
subsidiaries. The relevant statute of limitations is closed with
respect to all United States Federal income tax returns of the
Company and its subsidiaries to the extent set forth in the
Company Disclosure Schedule.
(iii) None of the Company or any of its subsi diaries is a
party to or bound by any tax sharing agreement, tax indemnity
obligation or similar agreement, arrangement or practice
(including any liability for taxes of any other person under
Treasury Regulation 1.1502-6 or comparable provision of foreign,
state or local law) except for any agreement or liability solely
among the Company and its subsidiaries.
(iv) Neither the Company nor any of its subsidiaries has
entered into any (A) advance pricing agreement, closing agreement
or similar agreement with the IRS or (B) similar material
agreement with any other taxing authority, in either case which
is effective as of the date of this Agreement.
(v) None of the Company or any of its subsidiaries has
constituted either a "distributing corporation" or a "controlled
corporation" (within the meaning of Section 355(a)(1)(A) of the
Code) in a distribution of stock qualifying or intended to
qualify for tax-free treatment under Section 355 of the Code in
the three years prior to the date of this Agreement.
(vi) As used in this Agreement, (A) "taxes" shall mean all
forms of taxation imposed by any Federal, state, local, foreign
or other governmental authority, including income, franchise,
property, sales, use, excise, employment, unemployment, payroll,
social security, estimated, value added, ad valorem, transfer,
recapture, withholding and other taxes of any kind, including any
interest, penalties and additions thereto and (B) "tax return"
shall mean any return, declaration, report, document, claim for
refund, information return or other statement or information
required to be filed or supplied to any taxing authority or
jurisdiction with respect to taxes, including any schedule or
attachment thereto, and including any amendment thereof.
(m) State Takeover Statutes. No state takeover or similar statute
or regulation is applicable to this Agreement, the Merger or the other
transactions contemplated hereby.
(n) Voting Requirements. The affirmative vote at the Stockholders
Meeting or any adjournment or postponement thereof of the holders of a
majority of the voting power represented by the outstanding shares of
Company Common Stock and Company Series B Preferred Stock, voting
together as a single class, in favor of adopting this Agreement (the
"Company Stockholder Approval") is the only vote of the holders of any
class or series of the Company's capital stock necessary to approve or
adopt this Agreement or the Merger. The affirmative vote of the
holders of the Company Common Stock or the Company Series B Preferred
Stock is not necessary to approve any transaction contemplated by this
Agreement other than the consummation of the Merger.
(o) Brokers; Schedule of Fees and Expenses. No broker, investment
banker, financial advisor or other person, other than Merrill Lynch &
Co. and Salomon Smith Barney, Inc., the fees and expenses of which
will be paid by the Company, is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company. The Company has
delivered to the Parents true and complete copies of all agreements
under which any such fees or expenses are payable and all
indemnification and other agreements related to the engagement of the
persons to whom such fees are payable. The Company has previously
provided the Parents with its good faith current estimate of the
aggregate of the fees and expenses of any accountant, broker,
financial advisor (other than Merrill Lynch & Co. and Salomon Smith
Barney, Inc.), consultant, legal counsel or other person retained by
the Company or any of its subsidiaries in connection with this
Agreement or the transactions contemplated hereby which will be paid
by or on behalf of the Company in connection with this Agreement and
the transactions contemplated hereby.
(p) Opinions of Financial Advisors. The Company has received the
oral opinion (to be subsequently confirmed in writing) of each of
Merrill Lynch & Co. and Salomon Smith Barney, Inc., to the effect
that, as of the date of this Agreement, the consideration to be
received in the Merger by the Company's stockholders is fair to the
Company's stockholders from a financial point of view. The Company has
requested that such written opinions be delivered to it as promptly as
practicable following the execution of this Agreement, and a copy of
each such written opinion will be delivered to the Parents promptly
after such written opinions have been received by the Company.
SECTION 3.02. Representations and Warranties of the Parents, New
York Sub and Delaware Sub. The Parents, New York Sub and Delaware Sub,
jointly and severally, represent and warrant to the Company as follows:
(a) Organization. Each of PLC, N.V., New York Sub and Delaware
Sub is duly organized, validly existing and in good standing under the
laws of the jurisdiction in which it is organized and has the
requisite corporate power and authority to carry on its business as
now being conducted.
(b) Authority; Noncontravention. Each of PLC, N.V., New York Sub
and Delaware 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
the Parents, New York Sub and Delaware Sub and the consummation by the
Parents, New York Sub and Delaware Sub of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Parents, New York Sub and Delaware
Sub and no other corporate proceedings on the part of the Parents, New
York Sub or Delaware Sub are necessary to approve this Agreement or to
consummate the transactions contemplated hereby (other than the
passing of a resolution at an extraordinary general meeting of
shareholders of PLC approving this Agreement and the Merger (the "PLC
Shareholder Approval") and the passing of a resolution at an
extraordinary general meeting of shareholders of N.V. approving this
Agreement and the Merger (the "N.V. Shareholder Approval" and,
together with the PLC Shareholder Approval, the "Parents Shareholder
Approval")). This Agreement has been duly executed and delivered by
the Parents, New York Sub and Delaware Sub and constitutes a valid and
binding obligation of the Parents, New York Sub and Delaware Sub, as
applicable, enforceable against the Parents, New York Sub and Delaware
Sub, as applicable, in accordance with its terms, except that such
enforcement may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or relating
to enforcement of creditors' rights generally and (ii) general
equitable principles. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby and
compliance with the provisions of this Agreement do not and will not
conflict with, or result in any violation or breach of, or default
(with or without notice or lapse of time, or both) under, or give rise
to a right of, or result in, termination, cancelation or acceleration
of any obligation or to loss of a material benefit under, or result in
the creation of any Lien upon any of the properties or assets of the
Parents or New York Sub under, or give rise to any increased,
additional, accelerated or guaranteed rights or entitlements under,
any provision of (i) the organizational documents of either of the
Parents or the Certificate of Incorporation or By-laws of New York Sub
or the Certificate of Incorporation or By-laws of Delaware Sub, (ii)
any Contract applicable to the Parents, New York Sub or Delaware Sub
or their respective properties or assets or (iii) subject to the
governmental filings and other matters referred to in the following
sentence, any (A) statute, law, ordinance, rule or regulation or (B)
judgment, order or decree, in each case applicable to the Parents, New
York Sub or Delaware Sub or their respective properties or assets,
other than, in the case of clauses (ii) and (iii), any such conflicts,
violations, defaults, rights, losses or Liens that individually or in
the aggregate would not reasonably be expected to prevent or
materially impede or delay the consummation of the Merger or the other
transactions contemplated hereby. No consent, approval, order or
authorization of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to the Parents, New
York Sub or Delaware Sub in connection with the execution and delivery
of this Agreement or the consummation by the Parents, New York Sub and
Delaware Sub of the transactions contemplated hereby or the compliance
with the provisions of this Agreement, except for (1) the receipt of a
decision under Article 6(1)(b) or 8(2) of the EC Merger Regulation
declaring the Merger compatible with the EC common market, the filing
of a premerger notification and report form under the HSR Act, and the
receipt, termination or expiration, as applicable, of such other
approvals or waiting periods required under any other applicable
competition, merger control, antitrust or similar law or regulation,
(2) the filing with, or furnishing to, the SEC of such reports under
the Exchange Act as may be required in connection with this Agreement,
the Merger and the other transactions contemplated hereby, (3) the
filing of the Certificate of Merger with the Secretary of State of the
State of Delaware and appropriate documents with the relevant
authorities of other states in which the Company is qualified to do
business, (4) the PLC Shareholder Approval, (5) any filings required
under the listing rules of the U.K. Listing Authority in relation to
the London Stock Exchange or the listing rules and regulations of any
other applicable securities exchange and (6) such other consents,
approvals, orders, authorizations, registrations, declarations and
filings the failure of which to be obtained or made individually or in
the aggregate would not impair in any material respect the ability of
the Parents, New York Sub or Delaware Sub to perform its obligations
under this Agreement or prevent or materially delay the consummation
of the Merger. Each of the PLC Shareholder Approval and the N.V.
Shareholder Approval shall require only that the majority of the votes
cast by or on behalf of the holders of the issued ordinary shares of
each of PLC and N.V., respectively, that are entitled to vote upon the
resolution to approve this Agreement and the Merger and are present or
represented by proxy at an extraordinary general meeting of the
shareholders of each of PLC and N.V., respectively, are cast in favor
of such resolution.
(c) Interim Operations of Delaware Sub. Delaware Sub was formed
solely for the purpose of engaging in the transactions contemplated
hereby and has engaged in no business other than in connection with
the transactions contemplated by this Agreement. Delaware Sub is a
wholly owned subsidiary of New York Sub.
(d) Capital Resources. On or prior to the Closing Date, the
Parents will have sufficient cash to provide for payment of the Merger
Consideration.
ARTICLE IV
Covenants Relating to Conduct of Business
-----------------------------------------
SECTION 4.01. Conduct of Business. (a) Conduct of Business by the
Company. During the period from the date of this Agreement to the Effective
Time, except as consented to in writing by the Parents or as specifically
contemplated by this Agreement, the Company shall, and shall cause its
subsidiaries to, carry on their respective businesses in the ordinary
course consistent with past practice and, to the extent consistent
therewith, use their reasonable best efforts to preserve their assets and
technology and preserve their relationships with customers, suppliers,
licensors, licensees, distributors and others having business dealings with
them. Without limiting the generality of the fore going, during the period
from the date of this Agreement to the Effective Time, except as consented
to in writing by the Parents, as specifically contemplated by this
Agreement or as set forth in Section 4.01(a) of the Company Disclosure
Schedule, the Company shall not, and shall not permit any of its
subsidiaries to:
(i) (x) declare, set aside or pay any dividends on, or make
any other distributions (whether in cash, stock or property) in
respect of, any of its capital stock or other equity or voting
interests except for (A) dividends by a direct or indirect wholly
owned subsidiary of the Company to its parent, (B) regular
quarterly cash dividends with respect to the Company Common
Stock, not in excess of $0.265 per share, with usual declaration,
record and payment dates and in accordance with the Company's
past dividend policy and (C) regular cash dividends with respect
to outstanding shares of Company Series B Preferred Stock in
accordance with the terms thereof as in effect on the date of
this Agreement, (y) purchase, redeem or otherwise acquire any
shares of capital stock of, or other equity or voting interests
in, the Company or its subsidiaries or any options, warrants,
calls or rights to acquire any such shares or other interests,
except as required by the terms thereof as in effect on the date
of this Agreement, or (z) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for
shares of its capital stock or other equity or voting interests
(other than upon the conversion of shares of Company Series B
Preferred Stock into shares of Company Common Stock in accordance
with the Restated Certificate of Incorporation of the Company, as
amended to the date of this Agreement);
(ii) issue, deliver, sell, pledge or otherwise encumber any
shares of its capital stock, any other equity or voting interests
or any securities convertible into, or exchangeable for, or any
options, warrants, calls or rights to acquire, any such shares,
interests or securities or any stock appreciation rights or other
rights that are linked to the price of Company Common Stock
(other than the issuance of shares of Company Common Stock (and
associated Company Rights) (1) upon the exercise of Company Stock
Options and settlement of Company Stock Issuance Rights in
accordance with the terms of such Company Stock Options and
Company Stock Issuance Rights as in effect on the date of this
Agreement or (2) upon the conversion of shares of Company Series
B Preferred Stock into shares of Company Common Stock in
accordance with the Restated Certificate of Incorporation of the
Company, as amended to the date of this Agreement);
(iii) amend its certificate of incorporation or by-laws (or
similar organizational documents);
(iv) directly or indirectly acquire or agree to acquire (A)
by merging or consolidating with, or by purchasing all or a
substantial portion of the assets of, or by any other manner, any
assets constituting a business or any corporation, partnership,
joint ven ture, association, limited liability company or other
entity or division thereof, or any direct or indirect interest in
any of the foregoing, or (B) any assets that are material,
individually or in the aggregate, to the Company and its
subsidiaries, taken as a whole, other than purchases of inventory
in the ordinary course of business consistent with past practice;
(v) directly or indirectly sell, lease, license, sell and
leaseback, mortgage or otherwise encumber or subject to any Lien
or otherwise dispose of any properties or assets or any interest
therein that are material, individually or in the aggregate, to
the Company and its subsidiaries, taken as a whole, except sales
of inventory and excess or obsolete assets in the ordinary course
of business consistent with past practice;
(vi) (x) repurchase or incur any material indebted ness or
guarantee any material indebtedness of another person or issue or
sell any debt securities or options, warrants, calls or other
rights to acquire any debt securities of the Company or any of
its subsidiaries, guarantee any material debt securities of
another person, enter into any "keep well" or other agreement to
maintain any financial statement condition of another person or
enter into any arrangement having the economic effect of any of
the foregoing, except for short-term borrowings incurred in the
ordinary course of business consistent with past practice and
borrowings to refinance existing indebtedness on terms which are
reasonably acceptable to the Parents, or (y) make any loans,
advances or capital contributions to, or investments in, any
other person, other than the Company or any direct or indirect
wholly owned subsidiary of the Company;
(vii) incur or commit to incur any capital expenditures, or
any obligations or liabilities in connection therewith, (x) with
respect to 2000, in any manner materially inconsistent with the
Company's current overall capital budget for 2000, a true and
complete copy of which has been provided to the Parents prior to
the date of this Agreement and (y) with respect to 2001, in any
manner materially inconsistent with the Company's overall capital
budget for 2001, as reasonably approved in advance by the
Parents;
(viii) pay, discharge, settle or satisfy any material claims
(including claims of stockholders), liabilities or obligations
(whether absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in
the ordinary course of business consistent with past practice or
as required by their terms as in effect on the date of this
Agreement of claims, liabilities or obligations reflected or
reserved against in the most recent audited financial statements
(or the notes thereto) of the Company included in the Filed SEC
Documents (for amounts not in excess of such reserves) or
incurred since the date of such financial statements in the
ordinary course of business consistent with past practice, or
waive, release, grant or transfer any right of material value,
other than in the ordinary course of business consistent with
past practice, or waive any material benefits of, or agree to
modify in any adverse respect, or fail to enforce, or consent to
any matter with respect to which its consent is required under,
any confidentiality, standstill or similar agreement to which the
Company or any of its subsidiaries is a party;
(ix) except as required to comply with applicable law or as
permitted by any provision of any Company Benefit Agreement,
Company Benefit Plan or other Contract as in effect on the date
of this Agreement, (A) take any action to fund or in any other
way secure the payment of compensation or benefits under any
Company Benefit Agreement, Company Benefit Plan or other
Contract, (B) take any action to accelerate the vesting or
payment of any compensation or benefit under any Company Benefit
Agreement, Company Benefit Plan or other Contract or (C) increase
the compensation of any current or former director, officer or
other employee of the Company or any of its subsidiaries except
in the ordinary course of business consistent with past practice;
(x) take any action that would or could reasonably be
expected to result in (A) any representation and warranty of the
Company set forth in this Agreement that is qualified as to
materiality becoming untrue, (B) any such representation and
warranty that is not so qualified becoming untrue in any material
respect or (C) any condition to the Merger set forth in Article
VI not being satisfied; or
(xi) authorize any of, or commit, resolve or agree to take
any of, the foregoing actions.
(b) Certain Tax Matters. During the period from the date of this
Agreement to the Effective Time, the Company shall, and shall cause
each of its subsidiaries to, not make any material tax election except
pursuant to existing commitments without the Parents' consent (which
will not be unreasonably withheld).
(c) Advice of Changes; Filings. The Company shall (i) confer with
the Parents upon their reasonable request to report on operational
matters and other matters requested by the Parents and (ii) as
promptly as reasonably practicable advise the Parents in writing of
any change or event that would reasonably be expected to have a
Material Adverse Effect. The Company, on the one hand, and the
Parents, on the other hand, shall each promptly provide the other with
copies of all filings made by such party with any Governmental Entity
in connection with this Agreement and the transactions contemplated
hereby, other than the portions of such filings that include
confidential information not directly related to the transactions
contemplated by this Agreement or which they are not permitted to
provide to the other by applicable laws or regulations.
SECTION 4.02. No Solicitation. (a) The Company shall not, nor
shall it permit any of its subsidiaries to, or authorize or permit any
director, officer or employee of the Company or any of its subsidiaries or
any investment banker, attorney, accountant or other advisor or representa
tive of the Company or any of its subsidiaries (collectively, the
"Representatives") to, directly or indirectly, (i) solicit, initiate or
encourage, or take any other action knowingly to facilitate, any Takeover
Proposal (as defined below) or (ii) enter into, continue or otherwise
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or otherwise cooperate in any way
with, any Takeover Proposal, in each case other than a Takeover Proposal
made by the Parents; provided, however, that, at any time prior to
obtaining the Company Stockholder Approval, the Board of Directors of the
Company may, in response to a bona fide written Takeover Proposal that the
Board of Directors of the Company determines in good faith constitutes or
could reasonably be expected to lead to a Takeover Proposal that is more
favorable to the stockholders of the Company (taking into account the
person making the Takeover Proposal, the consideration offered, the
likelihood of consummation (including the legal, financial and regulatory
aspects of the Takeover Proposal) as well as any other factors deemed
relevant by the Board of Directors of the Company) than this Agreement (a
"Competitive Proposal"), and which was unsolicited and did not otherwise
result from a breach of this Section 4.02, and subject to compliance with
Section 4.02(c) and (d), (x) furnish information with respect to the
Company and its subsidiaries to the person making such Competitive Proposal
(and its representatives) pursuant to a customary confidentiality agreement
(which confidentiality agreement contains terms that are equivalent to, and
in no respect less favorable to the Company than, the terms of the
Confidentiality Agreement dated June 2, 2000, between New York Sub and the
Company (as it may be amended from time to time, the "Confidentiality
Agreement")), provided that all such information is provided on a prior or
substantially concurrent basis to the Parents, and (y) participate in
discussions or negotiations with the person making such Competitive
Proposal (and its representatives) regarding such Competitive Proposal. As
of the date of this Agreement, the Company has, and has caused each of its
subsidiaries and each of the Representatives to have, (i) terminated all
discussions or negotiations with all third parties regarding any Takeover
Proposal and (ii) requested the prompt return of all confidential
information relating to the Company or any of its subsidiaries previously
furnished to any such third parties.
The term "Takeover Proposal" means any inquiry, proposal or offer
from any person relating to, or that is reasonably likely to lead to, any
direct or indirect acquisition, in one transaction or a series of
transactions, including by way of any merger, consolidation, tender offer,
exchange offer, binding share exchange, business combination,
recapitalization, liquidation, dissolution, joint venture or similar
transaction, of (A) assets or businesses that constitute or represent 20%
or more of the total revenue, operating income, EBITDA or assets of the
Company and its subsidiaries, taken as a whole, or (B) 20% or more of the
outstanding shares of Company Common Stock or capital stock of, or other
equity or voting interests in, any of the Company's subsidiaries directly
or indirectly holding the assets or businesses referred to in clause (A)
above.
(b) Neither the Board of Directors of the Company nor any
committee thereof shall (i) withdraw (or modify in a manner adverse to
the Parents, New York Sub or Delaware Sub) or propose publicly to
withdraw (or modify in a manner adverse to the Parents, New York Sub
or Delaware Sub) the recommendation or declaration of advisability by
such Board of Directors of the Company or any such committee of this
Agreement or the Merger, or recommend, or propose publicly to
recommend, the approval or adoption of any Takeover Proposal (other
than a Takeover Proposal made by the Parents) (each such action being
referred to herein as a "Company Adverse Recommendation Change"),
unless the Board of Directors of the Company determines in good faith,
based on such matters as it deems appropriate, after consulting with
legal counsel, that the failure to take such action would be
reasonably likely to result in a breach of its fiduciary duties under
applicable law, (ii) adopt or approve, or propose publicly to adopt or
approve, any Takeover Proposal (other than a Takeover Proposal made by
the Parents), or withdraw its approval of the Merger, or propose
publicly to withdraw its approval of the Merger, (iii) cause or permit
the Company to enter into any letter of intent, memorandum of
understanding, agreement in principle, acquisition agreement, merger
agreement, option agreement, joint venture agreement, partnership
agreement or other agreement (each, an "Acquisition Agreement")
constituting or related to, or which is intended to or is reasonably
likely to lead to, any Takeover Proposal (other than a confidentiality
agreement referred to in Section 4.02(a)) or (iv) agree or resolve to
take any of the actions prohibited by clauses (i), (ii) or (iii) of
this sentence. Notwithstanding anything in this Section 4.02 to the
contrary, at any time prior to obtaining the Company Stockholder
Approval, the Board of Directors of the Company may, in response to a
Superior Proposal (as defined below) that was unsolicited and that did
not otherwise result from a breach of Section 4.02(a), cause the
Company to terminate this Agreement pursuant to Section 7.01(f) and
concurrently enter into an Acquisition Agreement; provided, however,
that the Company shall not terminate this Agreement pursuant to
Section 7.01(f), and any purported termination pursuant to Section
7.01(f) shall be void and of no force or effect, unless the Company
shall have complied with all the provisions of this Section 4.02,
including the notification provisions in this Section 4.02, and with
all applicable requirements of Sections 5.06(b) (including the payment
of the Termination Fee (as defined in Section 5.06(b)) prior to or
concurrently with such termination); and provided further, however,
that the Company shall not exercise its right to terminate this
Agreement pursuant to Section 7.01(f) until after the third business
day following the Parents' receipt of written notice (a "Notice of
Superior Proposal") from the Company advising the Parents that the
Board of Directors of the Company has received a Superior Proposal,
specifying the terms and conditions of the Superior Proposal,
identifying the person making such Superior Proposal and stating that
the Board of Directors of the Company intends to exercise its right to
terminate this Agreement pursuant to Section 7.01(f) (it being
understood and agreed that, prior to any such termination taking
effect, any amendment to the price or any other material term of a
Superior Proposal shall require a new Notice of Superior Proposal and
a new three business day period).
The term "Superior Proposal" means any bona fide written offer
not solicited by or on behalf of the Company or any of its subsidiaries
made by a third party that if consummated would result in such third party
(or in the case of a direct merger between such third party and the Company
or one of its subsidiaries, the stockholders of such third party)
acquiring, directly or indirectly, substantially all of the voting power of
the Company Common Stock or all or substantially all the assets of the
Company and its subsidiaries, taken as a whole, for consideration
consisting of cash and/or securities that the Board of Directors of the
Company determines in its good faith judgment (after consultation with a
financial advisor of nationally recognized reputation) (taking into account
the person making the offer, the consideration offered, the likelihood of
consummation (including the legal, financial and regulatory aspects of the
offer) as well as any other factors deemed relevant by the Board of
Directors of the Company) to have a higher value than the consideration
payable in the Merger, taking into account any changes to the terms of this
Agreement proposed by the Parents in response to such Superior Proposal or
otherwise.
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 4.02, the Company promptly
shall advise the Parents orally and in writing of any request for
information that the Company reasonably believes could lead to or
contemplates a Takeover Proposal or of any Takeover Proposal, or any
inquiry the Company reasonably believes could lead to any Takeover
Proposal, the terms and conditions of such request, Takeover Proposal
or inquiry (including any subsequent amendment or other modification
to such terms and conditions) and the identity of the person making
any such request, Takeover Proposal or inquiry. The Company shall keep
the Parents informed in all material respects of the status and
details (including material amendments or proposed amendments) of any
such request, Takeover Proposal or inquiry.
(d) Nothing contained in this Section 4.02 or elsewhere in this
Agreement shall prohibit the Company from (i) taking and disclosing to
its stockholders a position contemplated by Rule 14e-2(a) promulgated
under the Exchange Act or (ii) making any disclosure to the Company's
stockholders if, in the good faith judgment of the Board of Directors
of the Company, after consultation with outside counsel, failure so to
disclose would be inconsistent with applicable law; provided, however,
that in no event shall the Company or its Board of Directors or any
committee thereof take, agree or resolve to take any action prohibited
by Section 4.02(b)(i) or 4.02(b)(ii), except as expressly permitted
pursuant to Section 4.02(b).
ARTICLE V
Additional Agreements
---------------------
SECTION 5.01. Preparation of the Proxy Statement; Stockholders
Meeting. (a) As promptly as practicable following the date of this
Agreement, the Company and the Parents shall prepare and file with the SEC
the Proxy Statement and the Company shall use its reasonable best efforts
to respond as promptly as practicable to any comments of the SEC with
respect thereto and to cause the Proxy Statement to be mailed to the
Company's stockholders as promptly as practicable following the date of
this Agreement. The Company shall with reasonable promptness notify the
Parents upon the receipt of any comments from the SEC or its staff or any
request from the SEC or its staff for amendments or supplements to the
Proxy Statement and shall provide the Parents with copies of all
correspondence between the Company and its representatives, on the one
hand, and the SEC and its staff, on the other hand. Notwithstanding the
foregoing, prior to filing or mailing the Proxy Statement (or any amendment
or supplement thereto) or responding to any comments of the SEC with
respect thereto, the Company (i) shall provide the Parents an opportunity
to review and comment on such document or response and (ii) shall include
in such document or response all comments reasonably proposed by the
Parents.
(b) The Company shall establish a record date for, duly call,
give notice of, convene and hold a meeting of its stockholders (the
"Stockholders Meeting") for the purpose of obtaining the Company
Stockholder Approval with the purpose of holding the Stockholders
Meeting as promptly as reasonably practicable following the date of
this Agreement. Except as expressly permitted pursuant to Section
4.02(b), the Company shall, through its Board of Directors, recommend
to its stockholders that they adopt this Agreement, and shall include
such recommendation in the Proxy Statement. Without limiting the
generality of the foregoing, the Company agrees that its obligations
pursuant to this Section 5.01(b) shall not be affected by the
commencement, public proposal, public disclosure or communication to
the Company or any other person of any Takeover Proposal.
SECTION 5.02. Access to Information; Confidentiality. Subject to
applicable law, the Company shall, and shall cause each of its subsidiaries
to, afford to the Parents, and to either of the Parent's or their
subsidiaries' officers, employees, investment bankers, attorneys,
accountants and other advisors and representatives, reasonable access
during normal business hours with reasonable prior notice during the period
prior to the Effective Time or the termination of this Agreement to all
their respective properties, assets, books, contracts, commitments,
directors, officers, employees, attorneys, accountants, auditors, other
advisors and representatives and records, and, during such period, the
Company shall, and shall cause each of its subsidiaries to, make available
to the Parents on a prompt basis (a) a copy of each report, schedule, form,
statement and other document filed or received by it during such period
pursuant to the requirements of domestic or foreign supranational,
national, federal, state or provincial laws and (b) all other information
concerning its business, properties and personnel as the Parents may
reasonably request (including the work papers of KPMG LLP). Notwithstanding
the foregoing, the Company shall not be required to provide any information
to the extent that providing such information would result in a waiver of
attorney/client privilege or such information is subject to contractual
prohibitions on disclosure to third parties. Except as required by law, the
Parents will hold, and will direct their and their subsidiaries' respective
officers, employees, investment bankers, attorneys, accountants and other
advisors and representatives to hold, any and all information received from
the Company, directly or indirectly, in confidence in accordance with the
Confidentiality Agreement.
SECTION 5.03. Reasonable Best Efforts; Notifica tion. (a) Upon
the terms and subject to the conditions set forth in this Agreement, each
of the parties agrees to use its reasonable best efforts to take, or cause
to be taken, all actions that are necessary, proper or advisable to
consummate and make effective the Merger and the other transactions
contemplated by this Agreement, including using its reasonable best efforts
to accomplish the following: (i) the taking of all reasonable acts
necessary to cause the conditions precedent set forth in Article VI to be
satis fied, (ii) the obtaining of all necessary actions or nonactions,
waivers, consents, approvals, orders and authorizations from Governmental
Entities and the making of all necessary registrations, declarations and
filings and the taking of all reasonable steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by,
any Governmental Entity (reasonable steps will include, subject to the
second succeeding sentence, agreements or proffers to divest or hold
separate the assets and businesses (or portions thereof) of the parties)
and (iii) the obtaining of all necessary consents, approvals or waivers
from third parties. In connection with and without limiting the foregoing,
the Company and its Board of Directors shall, if any state takeover statute
or similar statute or regulation is or becomes applicable to this
Agreement, the Merger or any of the other transactions contemplated hereby,
use its reasonable best efforts to ensure that the Merger and the other
transactions contemplated by this Agreement may be consummated as promptly
as practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such statute or regulation on this Agreement, the
Merger and the other transactions contemplated hereby. Notwithstanding the
foregoing or any other provision of this Agreement to the contrary, in no
event shall any party hereto be required to agree or proffer to divest or
hold separate, or take any other action with respect to, any of the assets
or any portion of any business set forth in Section 5.03 of the disclosure
schedule delivered by the Parents to the Company prior to the execution of
this Agreement (the "Parents Disclosure Schedule"), and the Company shall
not, and shall not permit any of its subsidiaries to, take any such action
with respect to any such assets or portion of any such business without the
express written consent of the Parents. The Company and the Parents shall
provide such assistance, information and cooperation to each other as is
reasonably requested in connection with the foregoing and, in connection
therewith, shall notify the other person promptly following the receipt of
any comments from any Governmental Entity and of any request by any
Governmental Entity for amendments, supplements or additional information
in respect of any registration, declaration or filing with such
Governmental Entity and shall supply the other person with copies of all
correspondence between such person or any of its representatives, on the
one hand, and any Governmental Entity, on the other hand.
(b) The Company shall, as promptly as reasonably practicable,
give notice to the Parents of any representation or warranty made by
it contained in this Agreement becoming untrue or inaccurate such that
the condition set forth in Section 6.02(a) would not be satisfied;
provided, however, that no such notification shall affect the
representations, warranties, covenants or agreements of the parties or
the conditions to the obli gations of the parties under this
Agreement.
(c) Each of the Parents, New York Sub and Delaware Sub shall, as
promptly as reasonably practicable, give notice to the Company of any
representation or warranty made by it contained in this Agreement
becoming untrue or inaccurate such that the condition set forth in
Section 6.03(a) would not be satisfied; provided, however, that no
such notification shall affect the representations, warranties,
covenants or agreements of the parties or the conditions to the
obligations of the parties under this Agreement.
SECTION 5.04. Company Stock Options. (a) As soon as practicable
following the date of this Agreement, the Board of Directors of the Company
(or, if appropriate, any committee administering the Company Stock Plans)
shall adopt such resolutions or take such other actions (if any) as may be
required to provide that:
(i) each Company Stock Option outstanding immediately prior
to the Effective Time (whether vested or unvested) shall be
converted at the Effective Time into the right to receive an
amount of cash equal to (A) the excess, if any, of (1) the Merger
Consideration over (2) the exercise price per share of Company
Common Stock subject to such Company Stock Option, multiplied by
(B) the number of shares of Company Common Stock for which such
Company Stock Option shall not theretofore have been exercised;
(ii) each Company Stock Issuance Right outstanding
immediately prior to the Effective Time (whether vested or
unvested) shall be converted at the Effective Time into the right
to receive an amount of cash equal to the product of (A) the
Merger Consideration and (B) the number of shares of Company
Common Stock subject to such Company Stock Issuance Right;
(iii) each Company Performance Unit outstanding immediately
prior to the Effective Time (whether vested or unvested) shall be
converted at the Effective Time into the right to receive an
amount of cash equal to the sum of (A) the product of (1) the
Merger Consideration multiplied by (2) the percent with respect
to which such Company Performance Unit is earned or deemed earned
for its performance cycle, and (B) the excess, if any, of (1) the
Merger Consideration over (2) the fair market value (as
determined under the applicable Company Stock Plan) of each share
of Company Common Stock on the date of grant of such Company
Performance Unit; and
(iv) make such other changes to the Company Stock Plans as
the Company and the Parents may agree are appropriate to give
effect to the Merger.
(b) All amounts payable pursuant to Section 5.04(a) shall be
subject to any required withholding of taxes or proof of eligibility
of exemption therefrom, and shall be paid as soon as practicable
following the Effective Time (but in no event later than five business
days thereafter), without interest.
(c) The Company shall use its reasonable best efforts to take all
actions determined to be necessary to effectuate the provisions of
this Section 5.04 as mutually agreed by the Parents, on the one hand,
and the Company, on the other hand. Prior to the Effective Time, the
Board of Directors of the Company (or, if appropriate, any committee
administering the Company Stock Plans) shall take or cause to be taken
such actions as are required to cause (i) the Company Stock Plans to
terminate as of the Effective Time and (ii) the provisions in any
other Company Benefit Plan providing for the issuance, transfer or
grant of any capital stock of the Company or any interest on or
following the Effective Time in respect of any capital stock of the
Company to be deleted as of the Effective Time.
SECTION 5.05. Indemnification, Exculpation and Insurance. (a)
Each of the Parents, New York Sub and Delaware Sub agree that all rights to
indemnification and exculpation from liabilities for acts or omissions
occurring at or prior to the Effective Time now existing in favor of the
current or former directors or officers of the Company and its subsidiaries
as provided in their respective certificates of incorporation or by-laws
(or similar organizational documents) or in the agreements identified in
Section 5.05(a) of the Company Disclosure Schedule shall be assumed by the
Surviving Corporation, without further action, at the Effective Time and
shall survive the Merger and shall continue in full force and effect in
accordance with their terms.
(b) In the event that the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other
person and is not the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers or conveys all or
substantially all its properties and assets to any person, then, and
in each such case, the Parents 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 5.05.
(c) For six years after the Effective Time, the Parents shall
maintain in effect the Company's current directors' and officers'
liability insurance covering each person currently covered by the
Company's directors' and officers' liability insurance policy for acts
or omissions occurring prior to the Effective Time on terms with
respect to such coverage and amounts no less favorable in any material
respect to such directors and officers than those of such policy as in
effect on the date of this Agreement; provided that the Parents may
substitute therefor policies of a reputable insurance company the
material terms of which, including coverage and amount, are no less
favorable in any material respect to such directors and officers than
the insurance coverage otherwise required under this Section 5.05(c);
provided, however, that in no event shall the Parents be required to
pay aggregate annual premiums for insurance under this Section 5.05(c)
in excess of $1.5 million, provided that the Parents shall
nevertheless be obligated to provide such coverage as may be obtained
for $1.5 million.
(d) The provisions of this Section 5.05 are intended to be for
the benefit of, and will be enforceable by, each indemnified party,
his or her heirs and his or her representatives.
SECTION 5.06. Fees and Expenses. (a) All fees and expenses
incurred in connection with this Agreement, the Merger and the other
transactions contemplated by this Agreement shall be paid by the party
incurring such fees or expenses, whether or not the Merger is consummated.
(b) In the event that (i) (A) a Takeover Proposal shall have been
made to the Company or its stockholders, (B) thereafter this Agreement
is terminated by either the Parents, on the one hand, or the Company,
on the other hand, pursuant to Section 7.01(b)(i) (but only if the
Stockholders Meeting has not been held by the date that is five
business days prior to the date of such termination) or 7.01(b)(iii)
and (C) within 12 months after such termination, the Company or any of
its subsidiaries enters into any Acquisition Agreement with respect
to, or consummates, any Takeover Proposal (solely for purposes of this
Section 5.06(b)(i)(C), the term "Takeover Proposal" shall have the
meaning set forth in the definition of Takeover Proposal contained in
Section 4.02(a) except that all references to 20% shall be deemed
references to 40%), (ii) this Agreement is terminated by the Company
pursuant to Section 7.01(f) or (iii) this Agreement is terminated by
the Parents pursuant to Section 7.01(c), then the Company shall pay
the Parents a fee equal to $625 million (the "Termination Fee") by
wire transfer of same day funds to an account designated by the
Parents (x) in the case of a termination by the Company pursuant to
Section 7.01(f), concurrently with such termination, (y) in the case
of a termination by the Parents pursuant to Section 7.01(c), within
two business days after such termination and (z) in the case of a
payment as a result of any event referred to in Section 5.06(b)(i)(C),
upon the first to occur of such events.
(c) The Parents shall pay $100 million to the Company in the
event this Agreement is terminated by the Company pursuant to Section
7.01(e)(ii) or is terminated by the Parents pursuant to Section
7.01(d)(ii), within two business days after such termination, in
either case, so long as the Company is not in breach of any of its
representations, warranties or covenants contained in this Agreement.
All payments made pursuant to this Section 5.06(c) shall be made by
wire transfer in immediately available funds to an account designated
by the Company.
(d) The parties acknowledge that the agreements contained in
Section 5.06(b) and in Section 5.06(c) are an integral part of the
transactions contemplated by this Agreement, and that, without these
agreements, the parties would not enter into this Agreement;
accordingly, if the party that is required to pay fails promptly to
pay the amounts due pursuant to Section 5.06(b) or Section 5.06(c), as
the case may be, and, in order to obtain such payment, the other party
commences a suit that results in a judgment against the party that is
required to pay for the amounts set forth in Section 5.06(b) or
Section 5.06(c), as the case may be, the party that is required to pay
shall pay to the other party interest on the amounts set forth in
Section 5.06(b) or Section 5.06(c), as the case may be, from and
including the date payment of such amount was due to but excluding the
date of actual payment at the prime rate of Citibank, N.A. in effect
on the date such payment was required to be made.
SECTION 5.07. Information Supplied. (a) The Company agrees that
none of the information included or incorporated by reference in the Proxy
Statement will, at the date it is filed with the SEC or mailed to the
Company's stockholders or at the time of the Stockholders Meeting, or at
the time of any amendment or supplement thereof, 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,
except that no covenant is made by the Company with respect to statements
made in the Proxy Statement based on informa tion supplied by the Parents,
New York Sub or Delaware Sub specifically for inclusion or incorporation by
reference therein. The Company agrees that the Proxy Statement will comply
as to form in all material respects with the requirements of the Exchange
Act and the rules and regulations promulgated thereunder.
(b) The Parents, New York Sub and Delaware Sub agree that none of
the information supplied or to be supplied by the Parents, New York
Sub or Delaware Sub specifically for inclusion in the Proxy Statement
will (except to the extent revised or superseded by amendments or
supplements contemplated hereby), at the date the Proxy Statement is
filed with the SEC or mailed to the Company's stockholders or at the
time of the Stockholders Meeting, 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.
SECTION 5.08. Benefits Matters. (a) For purposes hereof,
"Affected Employees" shall mean those individuals who are employees of the
Company and its subsidiaries (including those employees who are on
vacation, leave of absence, disability or maternity leave) as of the
Effective Time.
(b) The Parents shall, and shall cause the Surviving Corporation
to, give the Affected Employees full credit, for purposes of
eligibility, early retirement subsidies, vesting and benefit accrual
under any employee benefit plans or arrangements maintained by the
Parents, the Surviving Corporation and their respective subsidiaries,
for the Affected Employees' service with the Company and its
subsidiaries to the same extent recognized by the Company and its
subsidiaries immediately prior to the Effective Time; provided,
however, that the Parents shall have the right to offset,
dollar-for-dollar, any benefit accruals under their benefit plans or
the benefit plans of their respective subsidiaries relating to service
of an Affected Employee prior to the Effective Time to the extent such
service is also recognized prior to the Effective Time under a
comparable type of benefit plan or arrangement of the Company.
(c) The Parents shall, and shall cause the Surviving Corporation
to, (i) waive all limitations as to preexisting conditions, exclusions
and waiting periods with respect to participation and coverage
requirements applicable to the Affected Employees under any welfare
benefit plans in which such employees may be eligible to participate
after the Effective Time to the extent waived under the applicable
Company Benefit Plan immediately prior to the Effective Time and (ii)
provide each Affected Employee with credit for any co-payments and
deductibles paid prior to the Effective Time in the calendar year in
which the Effective Time occurs in satisfying any applicable
deductible or out-of-pocket requirements under any welfare benefit
plans in which the Affected Employees are eligible to participate
after the Effective Time.
(d) The Parents agree to honor, and shall cause the Surviving
Corporation to honor, the Company Benefit Plans and Company Benefit
Agreements disclosed in the Filed SEC Documents or Section 3.01(k)(i)
of the Company Disclosure Schedule in accordance with their current
terms. For a period of two years immediately following the Effective
Time, the Parents shall, or shall cause the Surviving Corporation to,
provide to the Affected Employees: (i) employee benefit plans and
arrangements including salary and bonus opportunities, but excluding
equity or equity- based programs, which are substantially similar in
the aggregate to those provided to the Affected Employees immediately
prior to the Effective Time; and (ii) equity or equity-based programs
which are comparable to those provided to similarly situated employees
of the Parents or their subsidiaries (determined, for this purpose,
based upon title, position, geographical location and comparability of
business unit size) following the Effective Time.
(e) With respect to Affected Employees who are employed or
provide services outside the United States ("Non-U.S. Employees"), to
the extent required by applicable local law the Parents shall, or
shall cause the Surviving Corporation to, immediately following the
Effective Time, continue the terms and conditions of employment as in
effect for Non-U.S. Employees immediately prior to the Effective Time.
Nothing herein shall be construed to impose on the Parents or the
Surviving Corporation any obligation for the continuation of
employment of any Non-U.S. Employees or such terms and conditions of
employment beyond any period of time required by local law and such
terms and conditions of employment. Except as otherwise provided by
this Section 5.08, nothing herein shall be construed as (i)
guaranteeing any Affected Employee the right to continued employment
following the Effective Time or (ii) limiting the Parents' right to
amend, modify or terminate any Company Benefit Plan, Company Benefit
Agreement or any other plan or arrangement in which Affected Employees
are eligible to participate following the Effective Time.
(f) Prior to the Effective Time, with respect to each named
executive officer disclosed in the summary compensation table included
in the Company's 2000 proxy statement on file with the SEC who is
employed with the Company as of the date of this Agreement and who is
a party to a change in control severance agreement (each, a "Severance
Agreement"), the Company shall obtain an executed letter agreement
with such named executive officer amending the definition of good
reason under the Severance Agreement with such named executive officer
to the effect that (i) for a period of six months immediately
following the Effective Time, the named executive officer shall not
have good reason to terminate employment with the Company (or
otherwise have the right to claim that he or she has been
constructively terminated from employment) (A) due solely to the fact
that the Company shall cease to be a public company and shall become a
subsidiary of another corporation as of the Effective Time, so long as
the named executive officer retains his or her title and retains job
authorities and responsibilities consistent in all material respects
with those of his or her counterparts in the substantial subsidiaries
of the Parents or (B) due to the fact that the named executive officer
does not receive equity-based compensation or awards at least as
beneficial as the named executive officer received before the
beginning of the protection period, so long as the named executive
officer is provided with equity-based compensation which is comparable
to that provided to similarly situated employees of the Parents or
their subsidiaries (determined, for this purpose, based upon title,
position, geographical location and comparability of business unit
size), (ii) the named executive officer's death or disability (as
specified in the Severance Agreement) during such six-month period
shall be deemed a termination of employment by the named executive
officer for good reason entitling the named executive officer to all
severance benefits and payments under such Severance Agreement, (iii)
for a period of ninety days following such six-month period, any
voluntary termination by the named executive officer shall be deemed a
termination of employment by the named executive officer for good
reason entitling the named executive officer to all severance benefits
and payments under such Severance Agreement, (iv) following such
ninety-day period, the definition of good reason under the Severance
Agreement in effect prior to the execution of the letter agreement
shall apply and again be in full force and effect and (v) the letter
agreement is not intended to and does not otherwise limit the grounds
for which each named executive officer may terminate employment for
good reason under his or her Severance Agreement.
(g) With respect to the Bestfoods Savings/Retirement Plan for
Salaried Employees (the "Savings Plan"), following the Effective Time,
the Parents agree to honor, and shall cause the Surviving Corporation
to administer, the Savings Plan in conformity with its current terms,
including upon the sale for cash pursuant to the transactions
contemplated under this Agreement of all shares of Company Common
Stock to be issued upon conversion of the Company Series B Preferred
Stock, allocation of the net proceeds of such sale after payment of
the remaining balance of the Acquisition Loan (as defined in the
Savings Plan) to the accounts of the participants, and the termination
of the employee stock ownership plan provisions and distribution of
employee stock ownership accounts thereafter, as set forth in
Amendment 10 of the Savings Plan, effective May 16, 2000.
SECTION 5.09. Public Announcements. The Parents, New York Sub and
Delaware Sub on the one hand, and the Company, on the other hand, shall, to
the extent reasonably practicable, consult with each other before issuing,
and give each other a reasonable opportunity to review and comment upon,
any press release or other public statements (other than routine employee
communications) with respect to this Agreement, the Merger and the other
transactions contemplated by this Agreement. The parties agree that the
initial press release to be issued with respect to the transactions
contemplated by this Agreement shall be in the form heretofore agreed to by
the parties.
SECTION 5.10. Rights Agreement; Consequences if Rights Triggered.
The Board of Directors of the Company shall take all action requested by
the Parents in order to render the Company Rights inapplicable to the
Merger and the other transactions contemplated hereby. Except as approved
in writing by the Parents, the Board of Directors of the Company shall not
(i) amend the Company Rights Agreement, (ii) redeem the Company Rights or
(iii) take any action with respect to, or make any determination under, the
Company Rights Agreement.
SECTION 5.11. Parents' Shareholders' Meetings. Each of PLC and
N.V. shall cause extraordinary general meetings of their respective
shareholders to be duly called and held as soon as reasonably practicable
after the date of this Agreement for the purpose of obtaining the Parents
Shareholder Approval.
SECTION 5.12. Stockholder Litigation. The Company agrees that it
shall not settle or offer to settle any litigation commenced prior to or
after the date hereof against the Company or any of its directors or
executive officers by any stockholder of the Company relating to this
Agreement, the Merger, any other transaction contemplated hereby or
otherwise, without the prior written consent of the Parents (not to be
unreasonably withheld). In addition, the Company shall not voluntarily
cooperate with any third party that may hereafter seek to restrain or
prohibit or otherwise oppose the Merger and shall cooperate with the
Parents, New York Sub and Delaware Sub to resist any such effort to
restrain or prohibit or otherwise oppose the Merger. None of the Parents,
New York Sub or Delaware Sub, or, after the Effective Time, the Surviving
Corporation, shall settle any such litigation unless such settlement
provides for the full and unconditional release of the Company's directors
and executive officers as of the date of this Agreement.
SECTION 5.13. Control of the Company's Operations. Nothing
contained in this Agreement shall give to any of the Parents, New York Sub
or Delaware Sub, directly or indirectly, rights to control or direct the
Company's operations prior to the Effective Time. Prior to the Effective
Time, the Company shall exercise, consistent with the terms and conditions
of this Agreement, complete control and supervision of its operations.
SECTION 5.14. Parents' Conduct. During the period from the date
of this Agreement to the earlier of the Effective Time and the termination
of this Agreement in accordance with the terms hereof, except as consented
to in writing by the Company, none of the Parents, New York Sub, Delaware
Sub or any of their controlled affiliates shall: (i) make any material
acquisition of brands or businesses (including through joint venture and
licensing agreements) which would be reasonably likely to (x) materially
impair their ability to consummate the Merger or (y) cause a material delay
of the Merger; or (ii) purchase any Company Common Stock other than (x)
pursuant to the Merger, (y) purchases made after a Takeover Proposal has
been made or (z) purchases by employee benefit plans.
ARTICLE VI
Conditions Precedent
--------------------
SECTION 6.01. Conditions to Each Party's Obligation to Effect the
Merger. The obligation of each party to effect the Merger is subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Company Stockholder Approval. The Company Stockholder
Approval shall have been obtained.
(b) Antitrust. The European Commission shall have issued a
decision under Article 6(1)(b) or 8(2) of the EC Merger Regulation (or
shall be deemed to have done so under Article 10(6) of the EC Merger
Regulation) declaring the Merger compatible with the EC common market
and any waiting period (and any extension thereof) applicable to the
Merger under the HSR Act shall have been terminated or shall have
expired. Any other approval or waiting period required prior to the
Effective Time under any other applicable competition, merger control,
antitrust or similar law or regulation shall have been obtained or
terminated or shall have expired, other than those the failure of
which to have been obtained or terminated or to have expired would not
reasonably be expected to (x) materially and adversely affect the
business of the Parents and the Surviving Corporation following the
Effective Time (it being understood for purposes of this clause (x)
that no party may rely on the failure of this condition to be
satisfied if such failure was caused by such party's failure to comply
with the terms of Section 5.03) or (y) result in the commission of a
criminal offense.
(c) No Injunctions or Legal Restraints. No temporary restraining
order, preliminary or permanent injunction or other order or decree
issued by any court of competent jurisdiction or other legal restraint
or prohibition (collectively, "Legal Restraints") that has the effect
of preventing the consummation of the Merger shall be in effect;
provided, however, that each of the parties shall have used its
reasonable best efforts to prevent the entry of any such Legal
Restraint and to appeal as promptly as possible any such Legal
Restraint that may be entered.
SECTION 6.02. Conditions to Obligations of the Parents, New York
Sub and Delaware Sub. The obligations of the Parents, New York Sub and
Delaware Sub to effect the Merger are further subject to the satisfaction
or waiver on or prior to the Closing Date of the following conditions:
(a) Representations and Warranties. The repre sentations and
warranties of the Company contained herein shall be true and correct,
in each case as of the date of this Agreement and as of the Closing
Date with the same effect as though made as of the Closing Date
(except that the accuracy of representations and warranties that by
their terms speak as of a specified date will be determined as of such
date), other than for such failures to be true and correct that,
individually and in the aggregate, would not reasonably be expected to
have a Material Adverse Effect. The Parents 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.
For purposes of determining the satisfaction of this condition, the
representations and warranties of the Company shall be deemed not
qualified by any references therein to materiality generally or to a
Material Adverse Effect.
(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 Closing Date,
and the Parents 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.
(c) Consents. The Parents shall have received evidence, in form
and substance reasonably satisfactory to them, that the Parents or the
Company shall have obtained (i) all consents, approvals,
authorizations, qualifications and orders of all Governmental Entities
(including any in connection with Environmental Laws) legally required
in connection with this Agreement and the transactions contemplated by
this Agreement and (ii) all other consents, approvals, authorizations
and qualifications of third parties required in connection with this
Agreement and the transactions contemplated by this Agreement, except
in the case of clauses (i) and (ii) for those the failure of which to
be obtained individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect. This condition shall not
be applicable to consents, approvals, authorizations, qualifications
and orders under any competition, merger control, antitrust or similar
law or regulation, which are the subject of Section 6.01(b).
(d) Parents Shareholder Approval. The Parents Shareholder
Approval shall have been obtained.
SECTION 6.03. Conditions to Obligation of the Company. The
obligation of the Company to effect the Merger is further subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Representations and Warranties. The repre sentations and
warranties of the Parents, New York Sub and Delaware Sub contained
herein that are qualified as to materiality shall be true and correct,
and the representations and warranties of the Parents, New York Sub
and Delaware Sub contained herein that are not so qualified shall be
true and correct in all material respects, in each case as of the date
of this Agreement and as of the Closing Date with the same effect as
though made as of the Closing Date, except that the accuracy of
representations and warranties that by their terms speak as of a
specified date will be determined as of such date. The Company shall
have received a certificate signed on behalf of each of the Parents by
an executive officer of such Parent to such effect.
(b) Performance of Obligations of the Parents, New York Sub and
Delaware Sub. The Parents, New York Sub and Delaware Sub shall have
performed in all material respects all obligations required to be
performed by them under this Agreement at or prior to the Closing
Date, and the Company shall have received a certificate signed on
behalf of each of the Parents by an executive officer of such Parent
to such effect.
SECTION 6.04. Frustration of Closing Conditions. None of the
Company, the Parents, New York Sub and Delaware Sub may rely on the failure
of any condition set forth in Section 6.01, 6.02 or 6.03, as the case may
be, to be satisfied if such failure was caused by such party's failure to
use its reasonable best efforts to consummate the Merger and the other
transactions contemplated by this Agreement, as required by and subject to
Section 5.03.
ARTICLE VII
Termination, Amendment and Waiver
---------------------------------
SECTION 7.01. Termination. This Agreement may be terminated, and
the Merger contemplated hereby may be abandoned, at any time prior to the
Effective Time, whether before or after the Company Stockholder Approval
has been obtained:
(a) by mutual written consent of the Parents, New York Sub,
Delaware Sub and the Company;
(b) by either the Parents or the Company:
(i) if the Merger shall not have been consummated by March
6, 2001; provided, however, that the right to terminate this
Agreement pursuant to this Section 7.01(b)(i) shall not be
available to any party whose breach of this Agreement has been a
principal reason the Merger has not been consummated by such
date;
(ii) if any Legal Restraint set forth in Section 6.01(c)
shall be in effect and shall have become final and nonappealable;
or
(iii) if, upon a vote at a duly held meeting to obtain the
Company Stockholder Approval, the Company Stockholder Approval
shall not have been obtained.
(c) by the Parents in the event a Company Adverse Recommendation
Change has occurred in accordance with Section 4.02(b)(i);
(d) by the Parents (i) if the Company shall have breached any of
its representations, warranties or covenants contained in this
Agreement, which breach (A) would give rise to the failure of a
condition set forth in Section 6.02(a) or 6.02(b), and (B) has not
been or is incapable of being cured by the Company within 20 business
days after its receipt of written notice thereof from the Parents; or
(ii) if, upon the votes at the duly held meetings to obtain the
Parents Shareholder Approval, the Parents Shareholder Approval shall
not have been obtained;
(e) by the Company (i) if the Parents, New York Sub or Delaware
Sub shall have breached any of their respective representations,
warranties or covenants contained in this Agreement, which breach (x)
would give rise to the failure of a condition set forth in Section
6.03(a) or 6.03(b), and (y) has not been or is incapable of being
cured by the Parents, New York Sub or Delaware Sub within 20 business
days after their receipt of written notice thereof from the Company or
(ii) if, upon the votes at the duly held meetings to obtain the
Parents Shareholder Approval, the Parents Shareholder Approval shall
not have been obtained; or
(f) by the Company in accordance with the terms and subject to
the conditions of Section 4.02(b).
SECTION 7.02. Effect of Termination. In the event of termination
of this Agreement by either the Company or the Parents as provided in
Section 7.01, this Agreement shall forthwith become void and have no
effect, without any liability or obligation on the part of the Parents, New
York Sub, Delaware Sub or the Company, other than the provisions of Section
3.01(o), the last sentence of Section 5.02, Section 5.06, this Section 7.02
and Article VIII; provided, however, that no such termination shall relieve
any party hereto from any liability or damages resulting from a wilful
breach by such party of any of its representations, warranties or covenants
set forth in this Agreement.
SECTION 7.03. Amendment. This Agreement may be amended by the
parties hereto at any time, whether before or after the Company Stockholder
Approval has been obtained; provided, however, that after the Company
Stockholder Approval has been obtained, there shall be made no amendment
that by law requires further approval by stockholders without the further
approval of such stockholders and no amendment shall be made to Article II
or Sections 5.05 or 5.08 after the Effective Time. This Agreement may not
be amended except by an instrument in writing signed on behalf of each of
the parties hereto.
SECTION 7.04. Extension; Waiver. At any time prior to the
Effective Time, the parties may (a) extend the time for the performance of
any of the obligations or other acts of the other parties, (b) waive any
inaccuracies in the representations and warranties contained herein or in
any document delivered pursuant hereto or (c) waive compliance with any of
the agreements or conditions contained herein; provided, however, that
after the Company Stockholder Approval has been obtained, there shall be
made no waiver that by law requires further approval by stockholders
without the further approval of such stockholders. Any agreement on the
part of a party to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party. The
failure or delay by any party to this Agreement to assert any of its rights
under this Agreement or otherwise shall not consti tute a waiver of such
rights nor shall any single or partial exercise by any party to this
Agreement of any of its rights under this Agreement preclude any other or
further exercise of such rights or any other rights under this Agreement.
ARTICLE VIII
General Provisions
------------------
SECTION 8.01. Nonsurvival of Representations and Warranties. None
of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 8.01 shall not limit any covenant or agreement of the
parties which by its terms contemplates performance after the Effective
Time.
SECTION 8.02. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier (providing proof
of delivery) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
if to the Parents, to:
Unilever PLC
Unilever House
P. O. Box 68
Blackfriars
London EC4P 4BQ
England
Attention:Stephen G. Williams, Esq.
and
Unilever N.V.
Weena 455
3013 AL Rotterdam
The Netherlands
Attention: J. W. B. Westerburgen, Esq.
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Attention: Peter S. Wilson, Esq.
Daniel P. Cunningham, Esq.
if to New York Sub or Delaware Sub, to:
Conopco, Inc.
390 Park Avenue
New York, NY 10022
Attention: Ronald M. Soiefer, Esq.
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Attention: Peter S. Wilson, Esq. Daniel P. Cunningham, Esq.
if to the Company, to:
Bestfoods
700 Sylvan Avenue
International Plaza
Englewood Cliffs, NJ 07632-9976
Attention: General Counsel
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, NY 10004
Attention: Arthur Fleischer, Jr., Esq.
Peter Golden, Esq.
SECTION 8.03. Definitions. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, such first person;
(b) "Material Adverse Effect" means any state of facts, change,
development, effect, condition or occurrence that could reasonably be
expected to be material and adverse to the business, assets,
properties, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole, or, directly or
indirectly, to prevent or materially impede or delay the consummation
of the Merger, except for any state of facts, change, development,
effect, condition or occurrence (x) relating to the economy in general
or (y) affecting the food manufacturing industry generally and not
specifically relating to the Company or its subsidiaries;
(c) "person" means an individual, corporation, partnership, joint
venture, association, trust, limited liability company, Governmental
Entity, unincorporated organization or other entity;
(d) a "Significant Subsidiary" of any person means any subsidiary
of such person that constitutes a significant subsidiary within the
meaning of Rule 1-02 of Regulation S-X of the SEC; and
(e) a "subsidiary" of any person means another person of which
50% or more of any class of capital stock, voting securities, other
voting ownership or voting partnership interests (or, if there are no
such voting interests, 50% or more of the equity interests) are owned
or controlled, directly or indirectly, by such first person.
SECTION 8.04. Interpretation. When a reference is made in this
Agreement to a Section, Subsection or Schedule, such reference shall be to
a Section or Subsection of, or a Schedule to, this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall
be deemed to be followed by the words "without limitation". The words
"hereof", "herein" and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. The term "or" is not exclusive. The
definitions contained in this Agreement are applicable to the singular as
well as the plural forms of such terms. Any agreement or instrument defined
or referred to herein or in any agreement or instrument that is referred to
herein means such agreement or instrument as from time to time amended,
modified or supplemented. References to a person are also to its permitted
successors and assigns.
SECTION 8.05. Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other parties.
SECTION 8.06. Entire Agreement; No Third-Party Beneficiaries.
This Agreement and the Confidentiality Agreement (a) constitute the entire
agreement, and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter of
this Agreement and (b) except for the provisions of Section 5.05, are not
intended to confer upon any person other than the parties hereto (and their
respective successors and assigns) any rights or remedies.
SECTION 8.07. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
SECTION 8.08. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned or delegated,
in whole or in part (except by operation of law), by any of the parties
hereto without the prior written consent of the other parties hereto,
except that the Parents, New York Sub or Delaware Sub may assign, in their
sole discretion, any of or all their respective rights, interests and
obligations under this Agreement to N.V. or PLC or to any, direct or
indirect, at least 99% owned subsidiary of N.V. or PLC or both of them
together, but no such assignment shall relieve the Parents, New York Sub or
Delaware Sub of any of their respective obligations hereunder. Subject to
the preceding sentence, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by, the parties hereto and their respective
successors and assigns.
SECTION 8.09. 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
Delaware or in any Delaware 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 court of the United States located in the State of
Delaware or of any Delaware state court in the event any dispute arises out
of this Agreement or 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
the transactions contemplated by this Agreement in any court other than a
court of the United States located in the State of Delaware or a Delaware
state court.
IN WITNESS WHEREOF, the Parents, New York Sub, Delaware Sub and
the Company have caused this Agreement to be signed by their respective
officers thereunto duly authorized, all as of the date first written above.
UNILEVER PLC,
by /S/ NIALL FITZGERALD
-----------------------------------------
Name: Niall FitzGerald
Title: Chairman
UNILEVER N.V.,
by /S/ ANTONY BURGMANS
-----------------------------------------
Name: Antony Burgmans
Title: Chairman
CONOPCO, INC.,
by /S/ RONALD M. SOIEFER
-----------------------------------------
Name: Ronald M. Soiefer
Title: Secretary
TITAN ACQUISITION COMPANY,
by /S/ MART LAIUS
-----------------------------------------
Name: Mart Laius
Title: President
BESTFOODS,
by by /S/ CHARLES SHOEMATE
-----------------------------------------
Name: Charles R. Shoemate
Title: Chairman & CEO
<PAGE>
ANNEX I
TO THE MERGER AGREEMENT
Index of Defined Terms
----------------------
Term Section
---- -------
Acquiring Person 3.01(d)
Acquisition Agreement 4.02(b)
Affected Employees 5.08(a)
affiliate 8.03(a)
Appraisal Shares 2.01(d)
Certificate 2.01(c)
Certificate of Merger 1.03
Closing 1.02
Closing Date 1.02
Code 3.01(k)
Commonly Controlled
Entity 3.01(k)
Company Preamble
Company Adverse
Recommendation Change 4.02(b)
Company Benefit
Agreements 3.01(i)
Company Benefit Plans 3.01(i)
Company Common Stock Recitals
Company Disclosure
Schedule 3.01
Company Pension Plans 3.01(k)
Company Performance
Units 3.01(c)
Company Preferred
Stock 3.01(c)
Company Rights 3.01(c)
Company Rights
Agreement 3.01(c)
Company Series B
Preferred Stock 3.01(c)
Company Stockholder
Approval 3.01(n)
Company Stock Issuance
Rights 3.01(c)
Company Stock Options 3.01(c)
Company Stock Plans 3.01(c)
Competitive Proposal 4.02(a)
Confidentiality
Agreement 4.02(a)
Contract 3.01(d)
Delaware Sub Preamble
DGCL 1.01
Distribution Date 3.01(d)
EC Merger Regulation 3.01(d)
Effective Time 1.03
Environmental Claims 3.01(j)
Environmental Laws 3.01(j)
Environmental Permits 3.01(j)
ERISA 3.01(k)
Exchange Act 3.01(d)
Exchange Fund 2.02(a)
Filed SEC Document 3.01(e)
Foreign Employee Plans 3.01(k)
GAAP 3.01(e)
Governmental Entity 3.01(d)
Hazardous Materials 3.01(j)
HSR Act 3.01(d)
IRS 3.01(k)
Legal Restraints 6.01(c)
Liens 3.01(b)
Material Adverse
Effect 8.03(b)
Merger Recitals
Merger Consideration 2.01(c)
New York Sub Preamble
Non-U.S. Employees 5.08(e)
Notice of Superior
Proposal 4.02(b)
N.V. Preamble
N.V. Shareholder
Approval 5.11
NYSE 3.01(d)
Parents Preamble
Parents Disclosure
Schedule 5.03(a)
Parents Shareholder
Approval 3.02(b)
Paying Agent 2.02(a)
Permits 3.01(h)
person 8.03(c)
PLC Preamble
PLC Shareholder
Approval 3.02(b)
Proxy Statement 3.01(d)
Release 3.01(j)
Representatives 4.02(a)
SEC 3.01(b)
SEC Documents 3.01(e)
Section 262 2.01(d)
Securities Act 3.01(e)
Significant
Subsidiary 8.03(d)
Stockholders Meeting 5.01(b)
subsidiary 8.03(e)
Superior Proposal 4.02(b)
Surviving
Corporation 1.01
Takeover Proposal 4.02(a)
taxes 3.01(l)
tax return 3.01(l)
Termination Fee 5.06(b)
TRA 3.01(k)
<PAGE>
EXHIBIT A
CERTIFICATE OF INCORPORATION
OF
SURVIVING CORPORATION
ARTICLE I
The name of the corporation (hereinafter called the
"Corporation") is Bestfoods.
ARTICLE II
The address of the Corporation's registered office in the State
of Delaware is 1209 Orange Street, City of Wilmington, County of New
Castle. The name of the Corporation's registered agent at such address is
The Corporation Trust Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
ARTICLE IV
The total number of shares of all classes of stock that the
Corporation shall have authority to issue is 1,000 shares of Common Stock
having the par value of $1.00 per ..share.
ARTICLE V
The number of directors of the Corporation shall be fixed from
time to time by the Board of Directors of the Corporation.
ARTICLE VI
In furtherance and not in limitation of the powers conferred upon
it by law, the Board of Directors of the Corporation is expressly
authorized to adopt, amend or repeal the By-laws of the Corporation.
ARTICLE VII
Unless and except to the extent that the By-laws of the
Corporation so require, the election of directors of the Corporation need
not be by written ballot.
ARTICLE VIII
To the fullest extent from time to time permitted by law, no
director of the Corporation shall be personally liable to any extent to the
Corporation or its stockholders for monetary damages for breach of his
fiduciary duty as a director.
ARTICLE IX
Each person who is or was or had agreed to become a director or
officer of the Corporation, and each such person who is or was serving or
who had agreed to serve at the request of the Corporation as a director,
officer, partner, member, employee or agent of another corporation,
partnership, limited liability company, joint venture, trust or other
enterprise (including the heirs, executor, administrators or estate of such
person), shall be indemnified by the Corporation to the fullest extent
permitted from time to time by applicable law.
