<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 22, 1995
Crown Cork & Seal Company, Inc.
-----------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Pennsylvania 1-2227 23-1526444
- --------------- -------------- --------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
9300 Ashton Road, Philadelphia, PA 19136
- --------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 698-5100
--------------
<PAGE>
Item 5. Other Events.
------------
On May 22, 1995, Crown Cork & Seal Company, Inc. (the "Company")
entered into an Exchange Offer Agreement, dated as of May 22, 1995 (the
"Agreement"), between the Company and Compagnie Generale d'Industrie et de
Participations, a societe anonyme organized under the laws of the Republic of
---------------
France ("Shareholder").
Pursuant to the Agreement and subject to the terms and conditions
thereof, the Company has agreed to make (or cause a wholly-owned subsidiary of
the Company to make) a public exchange offer (the "Offer") in France for all the
outstanding shares of common stock, FF 10 par value per share (the "Common
Stock"), of CarnaudMetalbox, a societe anonyme organized under the laws of the
---------------
Republic of France ("CMB"), and Shareholder has agreed to tender all shares of
Common Stock beneficially owned by Shareholder pursuant to the Offer and to
elect irrevocably to receive only Units (as defined below) in consideration for
such shares. The Company has also agreed, subject to the terms and conditions
of the Agreement, to make (or cause a wholly-owned subsidiary to make) an
exchange offer in the United Kingdom on terms identical to the Offer.
Subject to the terms and conditions of the Agreement, shareholders of
CMB will be offered, for each share of Common Stock tendered and not withdrawn,
a choice between (i) 1.065 units (each, a "Unit"), each Unit consisting of (x)
.75 shares of Company common stock, par value $5.00 per share ("Crown Common
Stock"), and (y) .25 shares of Company 4.5% cumulative convertible preferred
stock, with a par value per share equal to the average of the Market Closing
Price (as defined in the Agreement) per share of Crown Common Stock for the most
recent 20 business days on which trading of Crown Common Stock has occurred
prior to the Measurement Date (as defined in the Agreement) (the "Crown
Preferred Stock"), and (ii) cash in an amount of FF 225.
The ratio of 1.065 Units for each share of Common Stock is subject to
adjustment to the extent set forth in the Agreement based on, among other
things, the Average Crown Common Stock Price (as defined in the Agreement).
The Agreement includes other provisions, including, without limitation,
a provision effective on the closing of the Offer (the "Closing Date") relating
to the formation of a strategic committee of the Company's Board of Directors
and the chairmanship of such committee by a director designated by Shareholder.
- 2 -
<PAGE>
On the Closing Date, the Company and Shareholder will enter into a
Shareholders Agreement in the form attached as Annex 3 to the Agreement or such
other form as may be agreed to by the parties (the "Shareholders Agreement").
The Shareholders Agreement contains, among other things, standstill provisions
as well as provisions relating to voting rights, Shareholder's right to
designate certain directors, restrictions on Shareholder's transfer of
securities of the Company, and registration rights.
The foregoing description of the Agreement, the Crown Preferred Stock
and the Shareholders Agreement is qualified in its entirety by reference to the
text of the Agreement, the form of proposed Amendment to the Articles of
Incorporation of the Company and the form of Shareholders Agreement, which are
filed as Exhibit 2.1 hereto and which are incorporated herein by reference.
Item 7(c). Exhibits.
--------
2.1 Exchange Offer Agreement, dated as of May 22, 1995, between Crown Cork
& Seal Company, Inc. and Compagnie Generale d'Industrie et de
Participations (including the proposed Amendment to the Articles of
Incorporation of the Company attached as Annex 1 thereto, the Amendment
to the By-Laws of the Company attached as Annex 2 thereto, the form of
Shareholders Agreement attached as Annex 3 thereto, and certain
statements in respect of CMB attached as Annex 4 thereto).
- 3 -
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CROWN CORK & SEAL COMPANY, INC.
By /s/ Alan W. Rutherford
---------------------------
Alan W. Rutherford
Executive Vice President and
Chief Financial Officer
Date: June 15, 1995
- 4 -
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No.,
As provided Page in
in Item 601 Sequentially
Exhibit Number Description Numbered Copy
- -------------- ----------- -------------
<S> <C> <C>
2.1 Exchange Offer Agreement, 6
dated as of May 22, 1995,
between Crown Cork & Seal
Company, Inc. and Compagnie
Generale d'Industrie et de
Participations (including
the proposed Amendment to the
Articles of Incorporation of
the Company attached as Annex
1 thereto, the Amendment to
the By-Laws of the Company
attached as Annex 2 thereto,
the form of Shareholders
Agreement attached as Annex 3
thereto, and certain statements
in respect of CMB attached as
Annex 4 thereto)
</TABLE>
<PAGE>
EXECUTION COPY
Exhibit 2.1
- --------------------------------------------------------------------------------
Crown Cork & Seal Company, Inc.
and
Compagnie Generale d'Industrie et de Participations
________________
EXCHANGE OFFER AGREEMENT
Dated as of May 22, 1995
________________
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Parties.................................................................... 1
BACKGROUND................................................................. 1
TERMS...................................................................... 2
1. Agreement to Make Offer.............................................. 2
(a) Agreement to Make Offer......................................... 2
(b) Terms; Exchange Ratio........................................... 3
(c) Conduct of the Offer; Amendment; Waiver......................... 4
(d) Restrictions on Amendment or
Waiver of Offer............................................... 4
(e) Fractional Shares............................................... 5
(f) Adjustments to Exchange Ratio, etc.............................. 5
(g) The U.K. Exchange Offer......................................... 5
(h) Company Options................................................. 6
2. Agreement to Tender.................................................. 7
(a) Tender.......................................................... 7
(b) Third-Party Bids................................................ 7
3. Voting............................................................... 7
4. Expiration........................................................... 8
5. Warranties of Crown.................................................. 8
(a) Organization and Qualification.................................. 8
(b) Capitalization.................................................. 8
(c) SEC Filings..................................................... 9
(d) Financial Statements............................................ 9
(e) Absence of Certain Changes or Events............................ 10
(f) Absence of Litigation........................................... 10
(g) Employee Benefit Plans.......................................... 11
(h) Articles of Incorporation and By-laws........................... 12
(i) Taxes and Social Obligations.................................... 12
(j) Authority Relative to this Agreement............................ 13
(k) Consents and Approvals; No Violation............................ 13
(l) Financial Advisors.............................................. 14
(m) Delivery of Crown Common Stock and
Crown Preferred Stock......................................... 15
(n) Registration Statement; Proxy Statement......................... 15
(o) Note d'Information, U.K. Filing; Etc............................ 16
</TABLE>
-i-
<PAGE>
<TABLE>
Page
----
<S> <C>
6. Warranties of Shareholder............................................ 16
(a) Ownership of Shares............................................. 16
(b) Authority Relative to this Agreement............................ 17
(c) Consents and Approvals; No Violation............................ 17
(d) Ownership of Crown Common Stock................................. 18
(e) Investment Intent............................................... 18
(f) Financial Advisors.............................................. 19
(g) Note d'Information, U.K. Filing; Etc............................ 19
(h) Registration Statement; Proxy Statement......................... 19
(i) Organizational Documents........................................ 20
(j) Agreements...................................................... 20
7. Additional Covenants of Shareholder.................................. 20
(a) Restriction on Transfer, Proxies and
Non-Interference.............................................. 20
(b) Additional Shares............................................... 20
(c) Dividends or Distributions...................................... 20
(d) Proxy; Registration Statement; Note
d'Information; Etc............................................ 21
(e) Conduct of Company's Business................................... 21
(f) Access to Information Confidentiality........................... 22
(g) Tax Position; Restructuring..................................... 23
(h) Accountants..................................................... 23
(i) Supervisory Board............................................... 24
(j) Public Filings.................................................. 24
8. Additional Covenants of Crown........................................ 24
(a) Crown Shareholder Meeting....................................... 24
(b) Listing......................................................... 25
(c) Conduct of Crown's Business..................................... 25
(d) Access to Information; Confidentiality.......................... 26
(e) CBV Filing...................................................... 26
(f) Proxy Statement and Registration Statement...................... 27
(g) Note d'Information.............................................. 27
(h) U.K. Exchange Offer............................................. 27
(i) Amendments...................................................... 28
(j) By-Law Amendment................................................ 28
(k) Accountants..................................................... 28
9. Additional Covenants of Shareholder and Crown........................ 28
(a) No Solicitation................................................. 28
(b) Filings......................................................... 29
(c) Consents; Approvals............................................. 30
(d) Cooperation..................................................... 31
(e) Disclosure...................................................... 31
</TABLE>
-ii-
<PAGE>
<TABLE>
Page
----
<S> <C>
(f) Shareholders Agreement.......................................... 31
(g) Notification.................................................... 31
10. Conditions to Obligations of Crown................................... 32
10.1. Conditions to Obligation of Crown
to Make the Exchange Offers.................................. 32
(a) Warranties................................................ 32
(b) Agreements and Covenants.................................. 32
(c) Consents Obtained......................................... 32
(d) Shareholder Approval...................................... 32
(e) Registration Statement;
Securities Laws......................................... 33
(f) No Injunctions or Restraints;
Illegality.............................................. 33
(g) Due Diligence............................................. 33
(h) Status of the Company..................................... 33
(i) Access to Information;
Confidentiality......................................... 34
(j) Dividends and Other Distributions......................... 34
(k) Market Matters............................................ 35
(l) Listing................................................... 35
(m) Change of Control......................................... 35
10.2. Conditions to the Obligations of
Crown to Acquire the Common Stock
Tendered Pursuant to the Exchange
Offers....................................................... 35
11. Conditions to Obligations of Shareholder............................. 36
(a) Warranties...................................................... 36
(b) Agreements and Covenants........................................ 36
(c) Consents Obtained............................................... 36
(d) Shareholder Approval............................................ 36
(e) Registration Statement; Securities Laws......................... 37
(f) No Injunctions or Restraints; Illegality........................ 37
(g) Due Diligence................................................... 37
(h) Access to Information; Confidentiality.......................... 37
(i) Rating.......................................................... 38
(j) Miscellaneous................................................... 38
(k) Listing......................................................... 38
(l) SLF............................................................. 38
(m) Change of Control............................................... 39
12. Further Assurances................................................... 39
13. Termination.......................................................... 39
</TABLE>
-iii-
<PAGE>
<TABLE>
Page
----
<S> <C>
14. Expenses............................................................. 44
15. Miscellaneous........................................................ 46
(a) Entire Agreement; Assignment; No
Third-Party Beneficiaries..................................... 46
(b) Amendments...................................................... 46
(c) Governing Law................................................... 46
(d) Specific Performance............................................ 46
(e) Counterparts.................................................... 46
(f) Descriptive Headings............................................ 47
(g) Severability.................................................... 47
(h) Notices......................................................... 47
(i) No Waiver....................................................... 48
(j) Nonsurvival of Warranties....................................... 48
(k) Consent to Jurisdiction and Service
of Process.................................................... 49
16. Definitions.......................................................... 49
(a) Additional Crown Information.................................... 49
(b) Additional Company Information.................................. 50
(c) Affiliate....................................................... 50
(d) BALO Announcement............................................... 50
(e) Beneficial Owner................................................ 50
(f) Business Day.................................................... 50
(g) CBV............................................................. 51
(h) Closing......................................................... 51
(i) Closing Date.................................................... 51
(j) COB............................................................. 51
(k) Commencement Date............................................... 51
(l) Company Disclosure Information.................................. 51
(m) Due Diligence Period............................................ 51
(n) Exchange Act.................................................... 51
(o) Filing Date..................................................... 51
(p) London Stock Exchange........................................... 52
(q) French Market Day............................................... 52
(r) Group........................................................... 52
(s) Market Closing Price............................................ 52
(t) Material Adverse Effect......................................... 52
(u) Noon Buying Rate................................................ 52
(v) NYSE............................................................ 52
(w) Outstanding Common Stock........................................ 52
(x) Paris Stock Exchange............................................ 52
(y) Person.......................................................... 53
(z) SBF............................................................. 53
(aa) SEC............................................................. 53
(ab) Securities Act.................................................. 53
(ac) Subsidiaries.................................................... 53
</TABLE>
-iv-
<PAGE>
<TABLE>
Page
----
<S> <C>
(ad) SLF............................................................. 53
(ae) United States GAAP
(af) Voting Power.................................................... 53
(ag) $............................................................... 53
</TABLE>
Annex 1 - Amendments to Articles of Incorporation
Annex 2 - Amendments to By-Laws
Annex 3 - Shareholders Agreement
Annex 4 - Certain Statements Regarding the Company
-v-
<PAGE>
EXCHANGE OFFER AGREEMENT
------------------------
This is an EXCHANGE OFFER AGREEMENT (this "Agreement"), dated as of
May 22, 1995, between Crown Cork & Seal Company, Inc., a corporation organized
under the laws of the Commonwealth of Pennsylvania, U.S.A. ("Crown"), and
Compagnie Generale d'Industrie et de Participations, a societe anonyme (Registre
--------------- --------
du Commerce et des Societes No. B 308 389 519) organized under the laws of the
- ---------------------------
Republic of France ("Shareholder").
Background
----------
A. Shareholder, directly and through its Subsidiaries, is the record
and beneficial owner of 26,188,956 shares of common stock, FF10 par value per
share (the "Common Stock") of CarnaudMetalbox, a societe anonyme (Registre du
------- ------- -----------
Commerce et des Societes No. B 775 721 996) organized under the laws of the
- ------------------------
Republic of France (the "Company"). Crown and Shareholder desire that, as part
of a business combination of Crown and the Company, Crown (or a wholly-owned
Subsidiary of Crown) make a public exchange offer in France as an Offre Publique
--------------
d'Echange (the "Offer", which term shall include any subsequent public exchange
- ---------
offer made by Crown (or such Subsidiary) on the same terms as the original Offer
or such modified terms as would be permitted pursuant to this Agreement in the
case of a modification of the terms of the original Offer), for all of the
Outstanding Common Stock. Shareholders of the Company will be offered a choice
in the Offer for each then outstanding share of Common Stock between (i) 1.065
units (each, a "Unit"), each consisting of (x) .75 shares of Crown's Common
Stock, $5.00 par value per share (the "Crown Common Stock"), and (y) .25 shares
of Crown's 4.5% Cumulative Convertible Preferred Stock, with a par value per
share equal to the average of the Market Closing Price per share of Crown Common
Stock for the most recent 20 business days on which trading of Crown Common
Stock has occurred prior to the Measurement Date (in each case, as defined
below), the terms of which are set forth in Annex 1 hereto (the "Crown Preferred
Stock"), and (ii) cash in an amount of FF 225 per share of Common Stock (the
"Cash Election Price"). The Crown Common Stock and the Crown Preferred Stock
making up each Unit will be separately transferrable. The ratio of 1.065 Units
for each share of Common Stock, as such ratio shall be adjusted pursuant to the
terms of this Agreement, is hereinafter referred to as the "Exchange Ratio".
-1-
<PAGE>
B. In addition to the Offer, Crown has undertaken, subject to the
terms of this Agreement, to launch an exchange offer in the United Kingdom (the
"U.K. Exchange Offer") which, to the extent permitted by law, shall be on terms
identical to the Offer (the Offer and the U.K. Exchange Offer are together
referred to as the "Exchange Offers").
C. As of the date hereof, Shareholder beneficially owns, directly
and through its indirectly wholly-owned Subsidiary Camebo B.V. ("Camebo"), the
number of shares of Common Stock set forth in Section A above (such shares of
Common Stock together with any other shares of Common Stock acquired after the
date hereof and prior to the termination hereof, whether arising from exercise
of options, receipt of dividends, conversion of convertible securities or
otherwise, and as adjusted by any stock split or similar event, being
collectively referred to herein as the "Shares").
D. As a condition to its willingness to make the Offer, Crown has
asked that Shareholder agree, and Shareholder has agreed, all as more fully set
forth herein and subject to the terms and conditions hereof, to (i) validly
tender its Shares, and cause its Subsidiaries to validly tender their shares, in
the Offer and elect to receive only Units and (ii) enter into a Shareholders'
Agreement with Crown with respect to Shareholder's relationship with Crown.
TERMS
-----
In consideration of the mutual covenants and agreements contained
herein, and intending to be legally bound hereby, Crown and Shareholder agree as
follows:
1. Agreement to Make Offer.
-----------------------
(a) Agreement to Make Offer. Subject to the satisfaction or waiver
-----------------------
of the conditions set forth in Section 10.1 hereof, Crown or a wholly-owned
Subsidiary of Crown shall undertake the Offer in accordance with articles 5-1-1
to 5-2-27 of the Reglement General of the Conseil des Bourses de Valeurs and all
-------------------------------------------------------
other applicable provisions of French law and regulation for all of the
Outstanding Common Stock. The Offer shall remain open for the minimum number of
days required by applicable French law and regulation. The Offer shall provide
that the acceptance by Crown of Common Stock tendered in the Offer shall be
conditioned only upon the number of shares of Common Stock validly tendered and
not withdrawn prior to the expiration
-2-
<PAGE>
of the Offer being at least equal to a majority of the Voting Power based on the
number of shares of Outstanding Common Stock on the date prior to the Filing
Date, assuming loss of all double voting rights with respect to the shares of
Common Stock acquired by Crown or its Subsidiaries (the "Minimum Condition").
(b) Terms; Exchange Ratio. (i) The terms of the Offer shall provide
---------------------
that all of the Outstanding Common Stock may be tendered by the holder thereof
and, subject to the terms and conditions set forth in the Offer, shall entitle
such tendering holder to receive for each share of Common Stock validly tendered
and not withdrawn, at such holder's election, (x) a number of Units equal to the
Exchange Ratio as adjusted pursuant to this Section 1(b) or (y) the Cash
Election Price in cash, in French francs and without interest.
(ii) If the Average Crown Common Stock Price is greater than FF 211.27
per share (the "Initial Price") but less than FF 232.39 per share (110% of the
Initial Price), then the Exchange Ratio will be adjusted downward accordingly.
If the Average Crown Common Stock Price is greater than or equal to FF 232.39
per share (110% of the Initial Price), the Exchange Ratio will be adjusted as
though the Average Crown Common Stock Price were equal to FF 232.39 (110% of the
Initial Price).
(iii) If the Average Crown Common Stock Price is less than the Initial
Price but greater than FF 190.14 per share (90% of the Initial Price), then the
Exchange Ratio will be adjusted upward accordingly. If the Average Crown Common
Stock Price is equal to or less than FF 190.14 per share (90% of the Initial
Price), the Exchange Ratio will be adjusted as though the Average Crown Common
Stock Price were equal to FF 190.14 (90% of the Initial Price).
(iv) In any case where the Exchange Ratio is to be adjusted pursuant to
subparagraph (ii) or (iii) of this paragraph (b), the adjusted Exchange Ratio
will be calculated by applying the following formula: the adjusted Exchange
Ratio equals the Exchange Ratio multiplied by the fraction of which the
numerator is the Initial Price and the denominator of which is the Average Crown
Common Stock Price.
(v) For purposes of this Agreement: the "Average Crown Common Stock
Price" shall be the average French franc Crown Common Stock Price (as defined
below) for the most recent 20 business days on which trading of Crown Common
Stock has occurred prior to the Measurement Date; and the
-3-
<PAGE>
"Measurement Date" shall be the business day before the Filing Date. The
"French Franc Crown Common Stock Price", for any particular business day, shall
be the product of (x) the Market Closing Price per share of Crown Common Stock,
in U.S. dollars, and (y) the Noon Buying Rate for such business day (or if there
was no trading in such currencies on such business day, the most recent day on
which trading of the French franc and U.S. dollar has occurred).
(c) Conduct of the Offer; Amendment; Waiver. Subject to the
---------------------------------------
applicable securities and takeover laws and the regulations of the SEC, COB,
CBV, SBF and any other administrative, governmental or regulatory authority with
jurisdiction over the subject matter hereof, Crown expressly reserves the right,
in its sole discretion, at any time and from time to time, and regardless of
whether or not any of the conditions set forth in Sections 10.1 and 10.2 hereof
shall have been satisfied or waived by Crown, to (i) extend the period of time
during which the Offer is open and thereby delay acceptance for payment of, and
the payment for, any Common Stock validly tendered and not withdrawn, and (ii)
subject to Section 1(d) below, amend the Offer (including the Exchange Ratio and
the Minimum Condition) in any respect by surenchere or otherwise. In any case
----------
where the terms of the Offer are modified, any such modification shall be
effected such that the implied value of the number of Units offered in exchange
for one share of Common Stock remains equal to the Cash Election Price per share
of Common Stock under terms of the Offer as so modified. Subject to the
provisions of this Agreement, if by the expiration of the Offer any or all of
the conditions to the Offer have not been satisfied, Crown reserves the right
(but shall not be obligated) to (i) terminate the Offer and return all tendered
Common Stock to tendering shareholders, (ii) extend the Offer and, subject to
the terms of the Offer (including the rights of shareholders to withdraw their
Common Stock), retain the Common Stock which has been tendered and is not
subsequently withdrawn until the termination of the Offer, as extended, or (iii)
commence another Offer. Crown shall have no obligation to pay interest on the
purchase price of tendered Common Stock.
(d) Restrictions on Amendment or Waiver of Offer. Without the prior
--------------------------------------------
written consent of Shareholder, Crown will not decrease the Cash Election Price
or the Exchange Ratio as adjusted pursuant to Sections 1(b)(ii) or (iii),
decrease the number of shares of Common Stock being sought in the Offer, change
the form of consideration payable in the Offer or make any other change in the
terms or conditions of the Offer which is adverse to the holders of Common Stock
-4-
<PAGE>
(including, without limitation, any change that would cause Shareholder or
Camebo to recognize taxable gain or loss in the Offer or in any subsequent
conversion of the Crown Preferred Stock into Crown Common Stock); provided, that
an increase in the value of the consideration offered in the Offer shall not be
deemed to constitute an adverse change solely because it increases the gain or
diminishes the loss that holders of Common Stock would otherwise be required to
recognize for tax purposes irrespective of such increase in consideration.
Except as provided below with respect to the Minimum Condition, the parties
agree that a waiver by Crown of any condition to the Offer in whole or in part
at any time and from time to time in its discretion shall not be deemed to be
adverse to any holder of Common Stock. Notwithstanding anything in paragraph
(c) above or this paragraph (d) to the contrary, Crown shall not reduce or waive
the Minimum Condition.
(e) Fractional Shares. No fraction of a share of Crown Common Stock
-----------------
or Crown Preferred Stock will be issued in the Offer, but, in lieu thereof, each
holder of Common Stock who would otherwise be entitled to a fraction of a share
of Crown Common Stock or Crown Preferred Stock (after aggregating all fractional
shares of Crown Common Stock or Crown Preferred Stock to be received by the
holder), as the case may be, will be entitled to receive from Crown an amount of
cash in French francs (rounded to the nearest whole French franc) equal to the
product of (i) such fraction and (ii)(a) 75% of the Cash Election Price, in the
case of a fractional share of Crown Common Stock or (b) 25% of the Cash Election
Price, in the case of a fractional share of Crown Preferred Stock.
(f) Adjustments to Exchange Ratio, etc. The Exchange Ratio, the
----------------------------------
components of a Unit, the Cash Election Price and the other terms of the Offer
will be adjusted to reflect the effect of any stock split, reverse stock split,
stock dividend (including any dividend or distribution to shareholders of
securities convertible into Crown Common Stock or Crown Preferred Stock or
Common Stock), recapitalization, or other like change with respect to Crown
Common Stock or Crown Preferred Stock or Common Stock occurring after the date
of this Agreement and prior to the Filing Date.
(g) The U.K. Exchange Offer. Crown or a wholly-owned Subsidiary of
-----------------------
Crown shall launch the U.K. Exchange Offer on, or as promptly as practicable
after, the Commencement Date (unless Crown shall have determined in its good
faith judgment that such U.K. Exchange Offer is not necessary after consultation
with Shareholder). The U.K.
-5-
<PAGE>
Exchange Offer shall be made, to the extent legally permissible, on the same
terms as the Offer, provided that the Cash Election Price in the U.K. Exchange
--------
Offer shall be payable in French francs or, at Crown's option, in pounds
sterling (translated from French francs at the exchange rate in effect on the
Closing Date (as published in the Dow Jones Telerate Inc. currency cross-rates
published in the Wall Street Journal (U.S. edition)). Crown shall cause the
U.K. Exchange Offer to be carried out in accordance with all applicable
requirements of United Kingdom law and regulation. In the event that it is
determined that a U.K. Exchange Offer is not required, all references to the
U.K. Exchange Offer in this Agreement shall be null and void.
(h) Company Options. Subject to applicable law and regulation, and
---------------
subject to the terms of the Company's employee stock options, Crown shall make
an offer to each holder of the Company's employee stock options outstanding on
the date of this Agreement, and each holder of the New Options and the 1994
Options to the extent issued in accordance with this Agreement (the outstanding
options, the New Options and the 1994 Options are collectively referred to as
the "Outstanding Options") in respect of the Common Stock for which such
Outstanding Options have not been exercised as of the Closing Date, to settle
such holder's options, at the sole discretion of Crown, (i) for cash at a price
per share of Common Stock equal to the Cash Election Price to the extent such
options are "in the money", provided that Crown shall indemnify the holder
--------
against all tax claims and liabilities resulting from such settlement, (ii) by
issuing options on Crown Common Stock that are exercisable at such price as
Crown determines not in excess of the then current market price for Crown Common
Stock that preserve, to the fullest extent practical, the provisions of such
holder's options as to the duration of such options, the conditions for vesting
of such options and the conditions for exercise of such options or (iii) by
offering a choice to the holder of (i) or (ii), or a combination of (i) and (ii)
in a proportion to be agreed between Crown and the option holder, provided that
--------
in the cases described in this clause (iii) Crown shall have no obligation to
indemnify a holder who elects cash from any tax claims and liabilities resulting
from such settlement. In addition, subject to applicable law and regulation, to
the extent any employee or former employee of the Company is prohibited under
applicable law or regulation from transferring Common Stock received upon
exercise of options, Crown shall, on the date such employee or former employee
is permitted to transfer such Common Stock, offer such employee or former
employee the right to tender such Common Stock to Crown for Units (in an amount
determined by applying the Exchange
-6-
<PAGE>
Ratio as adjusted on the Measurement Date, and provided Crown Preferred Stock is
then outstanding) or cash in an amount equal to the Cash Election Price, in each
case on the same basis offered in the Offer. Subject to compliance with the
foregoing, nothing herein shall limit Crown with respect to restricting or
terminating such options as agreed between Crown and the holders of such
options.
2. Agreement to Tender.
-------------------
(a) Tender. Subject to the satisfaction or waiver on or prior to the
------
Filing Date of the conditions set forth in Section 11 hereof, Shareholder will
validly tender, and will cause Camebo to validly tender, and not withdraw all
Shares beneficially owned by Shareholder and Camebo pursuant to the Offer on or
before the second French Market Day after the Commencement Date and will
irrevocably elect, and cause Camebo to irrevocably elect (pursuant to the
procedures specified in the Offer and described in Section 1(b) hereof), to
receive only Units in consideration for such Shares. Notwithstanding the
foregoing, Shareholder agrees that, at the direction of Crown, it will elect
pursuant to the Offer to receive the Cash Election Price in consideration for
one Share validly tendered and not withdrawn and to receive Units in
consideration for the remainder of the Shares validly tendered and not
withdrawn.
(b) Third-Party Bids. Notwithstanding anything to the contrary
----------------
contained herein, Shareholder shall at all times retain the right to withdraw
its shares previously tendered into the Offer and to tender its Shares, and to
cause Camebo to tender their Shares, into a tender offer or exchange offer
launched by a third party for all of the outstanding Common Stock (a "Third
Party Bid") provided that (i) the Third Party Bid has a greater value than the
value of the Offer and Crown has not increased the Offer, as permitted under
Sections 1(c) and 1(d) above, to match the Third Party Bid; and (ii) Crown is
---
unable to demonstrate to Shareholder that, immediately prior to the scheduled
expiration of the Offer, the Minimum Condition will be satisfied (taking into
account the Shares).
3. Voting. At any annual or special, ordinary or extraordinary
------
meeting of the shareholders of the Company however called, Shareholder shall
vote the Shares against (i) any extraordinary corporate transaction, such as a
merger, consolidation or other business combination involving the Company or any
of its Subsidiaries; (ii) a sale or transfer of a material amount of assets of
the Company or any of its Subsidiaries or a reorganization, recapitalization or
liquidation of the Company or any of its
-7-
<PAGE>
Subsidiaries; (iii) any change in a majority of the directors or the Supervisory
Board of the Company, except as otherwise agreed to in writing by Crown; (iv)
any material change in the present capitalization of the Company (other than (x)
relating to the Faba transaction, (y) the issuance of New Options and the 1994
Options in accordance with this Agreement and (z) the amendment to the statuts,
-------
in each case described in the BALO Announcement) or any material change in the
dividend policy of the Company; (v) any action which would cause any of
Shareholder's representations and warranties to become untrue in any material
respect or any condition to the obligations of Shareholder or Crown to remain
unsatisfied; and (vi) any other material change in the Company's corporate
structure or business, in each case (i) to (vi) to the extent such action or
agreement would impede, interfere with, delay, postpone or attempt to discourage
the Offer or the consummation of the transactions contemplated by this
Agreement.
4. Expiration. This Agreement, Crown's obligation to make the
----------
Exchange Offers pursuant hereto, and Shareholder's obligation to tender its
Shares and to cause Camebo to tender its Shares pursuant to the Offer, shall
terminate on the Expiration Date. As used herein, the term "Expiration Date"
means the first to occur of (i) the first date on which the Offer has been
successfully consummated (and the Closing Date with respect thereto shall have
occurred) or has expired, and (ii) termination in accordance with Section 13.
5. Warranties of Crown. Crown hereby warrants to Shareholder as
-------------------
follows:
(a) Organization and Qualification. Crown is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power and
authority to carry on its business as it is now being conducted. Crown is duly
qualified as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of its properties owned or leased or the
nature of its activities make such qualification necessary, except where the
failure to be so qualified would not, individually or in the aggregate, result
in a Material Adverse Effect on Crown.
(b) Capitalization. As of the date of this Agreement, the authorized
--------------
capital stock of Crown consists of 120,000,000 shares of Crown Common Stock. As
of the date of this Agreement, (i) 90,220,924 shares of Crown Common Stock were
issued and outstanding, all of which are duly
-8-
<PAGE>
authorized, validly issued, fully paid, and nonassessable, (ii) 28,269,890
shares of Crown Common Stock were held in the treasury of Crown or owned by
Subsidiaries of Crown, and (iii) 2,119,900 options to acquire shares of Crown
Common Stock have been granted and are outstanding under Crown's various
employee stock option plans. Except as set forth in this paragraph (b), as of
the date hereof, there are no subscriptions, options, warrants, or other
rights, convertible securities, agreements, arrangements, or commitments of any
character relating to the issued or unissued capital stock of Crown to which
Crown or any of its material Subsidiaries is a party, or by which any of their
properties are bound or affected, or obligating Crown or any of its Subsidiaries
to issue or sell any shares of capital stock of, or other equity interests in,
Crown.
(c) SEC Filings. Crown has filed all forms, reports, and documents
-----------
required to be filed with the SEC since December 31, 1993, and has made
available to Shareholder (i) its Annual Reports on Form 10-K for the fiscal
years ended December 31, 1993 and 1994, (ii) all proxy statements relating to
meetings of Crown's shareholders (whether annual or special) held since December
31, 1993, (iii) all quarterly reports on Form 10-Q and current reports on Form
8-K filed by Crown with the SEC since December 31, 1993, (iv) all registration
statements filed by Crown with the SEC since December 31, 1993 (other than
registration statements on Form S-8 relating to employee benefit plans of Crown
and Form S-3 Registration Statements relating solely to the issuance of non-
convertible debt securities), and (v) all amendments and supplements to these
reports and registration statements filed by Crown with the SEC. Crown will
file with the SEC and make available to the Company all forms, reports, and
documents required to be filed with the SEC between the date of this Agreement
and the Expiration Date. The forms, reports, and documents referred to in this
paragraph are referred to collectively as the "Crown SEC Reports". The Crown
SEC Reports (including, without limitation, any financial statements or
schedules included therein) (i) were and will be prepared in compliance, in all
material respects, with the requirements of the Securities Act or the Exchange
Act, as the case may be, and (ii) did not and will not at the time of filing
(or, if amended, supplemented, or superseded by a filing prior to the date of
this Agreement, on the date of that filing) contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. As of the date
-9-
<PAGE>
hereof, none of Crown's Subsidiaries is required to file any forms, reports, or
other documents with the SEC.
(d) Financial Statements. Each of the consolidated financial
--------------------
statements (including, in each case, any related notes and schedules thereto)
contained in the Crown SEC Reports was or will be prepared in accordance with
United States GAAP applied on a consistent basis throughout the periods involved
(except as may be indicated in the notes thereto), and each of them does or will
present fairly in all material respects the consolidated financial position of
Crown and its Subsidiaries at their respective dates and the consolidated
results of their operations and cash flows for the periods indicated, except
that the unaudited interim financial statements included in any Quarterly
Reports on Form 10-Q were or are subject to normal and recurring year-end
adjustments that were not or are not expected to be material in amount.
(e) Absence of Certain Changes or Events. Except as disclosed in the
------------------------------------
Crown SEC Reports filed with the SEC prior to the date of this Agreement,
disclosed in the Additional Crown Information or as contemplated by this
Agreement, since December 31, 1994, (i) there has been no Material Adverse
Effect on Crown, (ii) the businesses of Crown and each of its Subsidiaries have
been conducted only in the ordinary course, consistent with past practice; (iii)
neither Crown nor any of its Subsidiaries has incurred any material liabilities
(direct, contingent or otherwise) or engaged in any material transaction or
entered into any material agreement outside the ordinary course of business;
(iv) Crown and its Subsidiaries have not increased in any material respect the
compensation of any officer or granted any general salary or benefits increase
to their employees other than in the ordinary course of business; and (v) there
has been no declaration, setting aside or payment of any dividend or other
distribution with respect to the capital stock of Crown.
(f) Absence of Litigation. There are no civil, criminal, or
---------------------
administrative claims, actions, suits, proceedings, or investigations pending
or, to the knowledge of Crown, threatened against Crown or any of its
Subsidiaries, or involving any properties or rights of Crown or any of its
Subsidiaries, before any court, arbitrator, or administrative, governmental, or
regulatory authority, domestic or foreign, that, individually or in the
aggregate, have had or are likely to have a Material Adverse Effect on Crown.
There are no judgments, decrees, injunctions, rules, or orders of any
governmental entity or arbitrator outstanding against Crown or any of its
Subsidiaries that
-10-
<PAGE>
have had or are likely to have a Material Adverse Effect on Crown.
(g) Employee Benefit Plans.
----------------------
(i) The obligations and liabilities of Crown and its Subsidiaries
under retirement, pension, profit sharing, savings, deferred compensation,
supplemental retirement, bonus, incentive, stock purchase, stock ownership,
stock option, severance, health, life insurance, disability, fringe benefit and
other material employee benefit plans, programs, or arrangements, and any
current or former executive employment, compensation, severance, consulting,
noncompetition, or indemnification agreements, whether written or unwritten,
funded or unfunded (x) maintained, sponsored, administered or contributed to by
Crown or any of its Subsidiaries, or (y) with respect to which Crown or any of
its Subsidiaries has any liability (together, the "Crown Employee Plans") have
been properly accrued and reflected in the financial statements of Crown and its
consolidated Subsidiaries for the fiscal year ended December 31, 1994 (the "1994
Financial Statements") in accordance with United States GAAP in all material
respects.
(ii) Except for the liabilities accrued and reflected in the 1994
Financial Statements, there are no material unfunded liabilities existing with
respect to any Crown Employee Plan.
(iii) All of the Crown Employee Plans have been operated and
administered in material compliance with their terms and are in material
compliance with the laws and governmental rules and regulations applicable to
them (including all applicable requirements for notification to participants and
governmental or regulatory authorities), and Crown and each of its Subsidiaries
have performed all material obligations required to be performed by them under,
are not in any material respect in default under or in violation of, any of the
Crown Employee Plans.
(iv) All contributions to, and payments from, any Crown Employee Plan
required pursuant to applicable laws, rules and regulations, the terms of the
Crown Employee Plan, or any collective bargaining agreement have been made on or
before their due dates. All such contributions to, and all payments from, the
Crown Employee Plans have been properly accrued in accordance with United States
GAAP.
(v) Neither Crown nor any of its Subsidiaries has taken any action
with respect to any Crown Employee Plan that will increase materially the
expense of maintaining
-11-
<PAGE>
such Crown Employee Plan above the level of expense reflected in the 1994
Financial Statements.
(vi) Except for claims for benefits in the normal operation of the
Crown Employee Plans, there is no litigation, proceeding, investigation, audit,
assessment, complaint or proceeding of any kind in any court or governmental
agency with respect to any Crown Employee Plan which is reasonably likely to
have a Material Adverse Effect on Crown and its Subsidiaries, taken as a whole.
(vii) Neither Crown nor any of its Subsidiaries has taken any action
with respect to any Crown Employee Plan (including but not limited to the
recognition of the transaction contemplated by this Agreement as a change of
control) that will cause a material discretionary acceleration or increase in
the vesting, exercisability, or benefits provided by any such Crown Employee
Plan.
(h) Articles of Incorporation and By-laws. Crown has heretofore
-------------------------------------
delivered to Shareholder a complete and correct copy of its Articles of
Incorporation and of its By-laws, each as amended to the date hereof. Crown is
not in violation of any of the provisions of its Articles of Incorporation or
By-laws, and its Articles of Incorporation and By-laws as so delivered, have not
been amended, modified, or rescinded and remain in full force and effect;
provided that Crown's Articles of Incorporation will have been amended as set
- --------
forth on Annex 1 hereto and to include an "opt out" from the provisions of
Chapter 25, Subchapter E of the Pennsylvania Business Corporation Law in a form
to be mutually agreed between the parties to this Agreement (the "New Articles")
prior to the successful consummation of the Offer and Crown's By-laws will be
amended on and as of the Closing Date as set forth in Annex 2 hereto (the "By-
law Amendment"), and except as contemplated pursuant to Section 8(c) hereof.
(i) Taxes and Social Obligations. Crown and each of its material
----------------------------
Subsidiaries (i) has timely and correctly filed all material returns and reports
relating to Taxes (as defined below) required to be filed by it in the manner
required by the relevant taxing authorities (collectively, "Returns") and (ii)
has timely paid all Taxes shown to be due on such Returns and all material Taxes
for which no return was required to be filed. The financial statements included
in the Crown SEC Reports and the 1994 Financial Statements, to the extent
required by United States GAAP, each reflect an adequate reserve for all Taxes
payable by Crown and its Subsidiaries for all taxable periods and portions
thereof through the date of such financial state-
-12-
<PAGE>
ments. No material deficiencies for any Taxes have been proposed, asserted or
assessed against Crown or any of its Subsidiaries and no requests for waivers of
the time to assess such Taxes are pending. "Taxes" shall include, but not be
limited to, all income, property, sales, excise, social security and other
taxes, tariffs or governmental charges of any nature whatsoever.
Neither Crown nor any of its material Subsidiaries (i) is, as of the
date of this Agreement, the subject of any inquiry, investigation or audit
relating to Taxes or (ii) has received notice of any proposed inquiry,
investigation or audit relating to Taxes which is reasonably likely to have a
Material Adverse Effect on Crown.
(j) Authority Relative to this Agreement. Crown has all requisite
------------------------------------
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery by
Crown of this Agreement and the consummation by Crown of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of Crown (including the approval by the Board of
Directors of Crown of the transactions contemplated by this Agreement and all
subsequent conversions of the Preferred Stock such that Shareholder shall not be
subject to Subchapter F of Chapter 25 of the Pennsylvania Business Corporation
Law) subject to obtaining the requisite shareholder approvals and, except for
such shareholder approvals, no other corporate proceedings on the part of Crown
are necessary to authorize this Agreement or to consummate the transactions so
contemplated by this Agreement. This Agreement has been duly and validly
executed and delivered by Crown and, assuming this Agreement constitutes a valid
and binding obligation of Shareholder, this Agreement constitutes a valid and
binding agreement of Crown enforceable against Crown in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditor's rights and to general equity principles.
(k) Consents and Approvals; No Violation. Neither the execution and
------------------------------------
delivery of this Agreement by Crown nor the performance by Crown of its
obligations hereunder will (i) conflict with or result in any breach of any
provision of the Articles of Incorporation or By-laws of Crown, except that the
------
transactions contemplated hereby may not be consummated without receipt of the
Crown Shareholder Approvals (as defined below); (ii) require any consent,
approval, authorization or permit of, or filing with or
-13-
<PAGE>
notification to, any governmental or regulatory authority, except (v) such
articles of amendment as may be required to be filed with the Secretary of State
of the Commonwealth of Pennsylvania in connection with the adoption of the New
Articles at the Crown Shareholder Meeting (as defined below), (w) in connection
with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), EC Council Regulation 4064/89 and such other filings as may be
required by the antitrust or competition laws, rules or regulations of the
United States, France, the European Union and any other applicable jurisdiction,
(x) as may be required to be filed with the Direction du Tresor in connection
-------------------
with the approval of Crown's acquisition of the Shares or the Common Stock or as
may be required to be filed by the investment laws, rules or regulations of any
other applicable jurisdiction, (y) such filings and approvals as may be required
under the "blue sky", takeover, company or securities and stock exchange laws,
rules or regulations of the United States, France (including the regulations of
the COB, CBV and SBF), the United Kingdom, the European Union, and any other
applicable jurisdiction, or (z) where the failure to obtain such consent,
approval, authorization or permit, or to make such filing or notification, would
not (A) prevent or delay consummation of the transactions contemplated by this
Agreement, (B) otherwise prevent or delay Crown from performing its obligations
under this Agreement, or (C) individually or in the aggregate, have a Material
Adverse Effect on Crown; (iii) except as disclosed in writing by Crown to
Shareholder prior to the execution of this Agreement, result in a default (or
give rise to any right of termination, cancellation or acceleration) under any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise, or other instrument or
obligation to which Crown or any of its Subsidiaries is a party or by which any
of its Subsidiaries or any of their respective assets may be bound, except for
such defaults (or rights of termination, cancellation or acceleration) as to
which requisite waivers or consents have been obtained or which, in the
aggregate, would not result in a Material Adverse Effect on Crown or materially
impair or delay Crown's ability to perform its obligations hereunder; or (iv)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Crown, any of its Subsidiaries or any of their respective assets,
except for violations which would not result in a Material Adverse Effect on
Crown or materially impair or delay Crown's ability to perform its obligations
hereunder.
(l) Financial Advisors. No investment banker, broker, finder, or
------------------
financial advisor other than CS First
-14-
<PAGE>
Boston Inc. is entitled to any brokerage, finder's, or other fee or commission
in connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Crown and, except as provided in Section
14(c)(2), such fees or commissions of CS First Boston Inc. shall be paid by
Crown.
(m) Delivery of Crown Common Stock and Crown Preferred Stock. The
---------------------------------------------------------
issue and delivery to Shareholder of shares of Crown Common Stock and Crown
Preferred Stock in connection with the transactions contemplated hereby have
been duly authorized by all requisite corporate action of Crown, subject to the
receipt by Crown of the requisite approvals of its shareholders. The shares of
Crown Common Stock and Crown Preferred Stock, as and when issued and delivered
to Shareholder pursuant to this Agreement, and upon receipt by Crown of the
Common Stock tendered and exchanged therefor, will be validly issued and
outstanding, fully paid and non-assessable, and the holders of Common Stock who
tender for Units will receive good and marketable title to such shares of Crown
Common Stock and Crown Preferred Stock, free and clear of all security
interests, liens, claims, pledges, agreements, limitations on voting rights,
charges, preemptive rights or other encumbrances of any nature whatsoever,
except such as may have been created by such tendering holder.
(n) Registration Statement; Proxy Statement. The information to be
---------------------------------------
supplied by or on behalf of Crown for inclusion in the Registration Statement
will not, at the time the Registration Statement is declared effective, at the
Filing Date, the Commencement Date or the Closing Date, 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 the
light of the circumstances under which they were made, not misleading. The
information to be supplied by or on behalf of Crown for inclusion in the Proxy
Statement will not, on the date the Proxy Statement (or any amendment thereof or
supplement thereto) is first mailed to shareholders, at the time of the Crown
Shareholder Meeting, at the Filing Date, the Commencement Date and the Closing
Date, contain any statement that, in light of the circumstances under which it
is made, is false or misleading with respect to any material fact, omits to
state any material fact necessary in order to make the statements made therein
not false or misleading, or omits to state any material fact necessary to
correct any statement in any earlier communication with respect to the
solicitation of proxies for the Crown Shareholder Meeting that has become false
or misleading. If any event relating to Crown or any of its affiliates,
officers, or directors is
-15-
<PAGE>
discovered by Crown that should be set forth in an amendment to the Registration
Statement or a supplement to the Proxy Statement, Crown will promptly inform
Shareholder.
(o) Note d'Information, U.K. Filing; Etc. The information supplied
-------------------------------------
by or on behalf of Crown for inclusion in the Note d'Information to be filed in
connection with the Exchange Offers (the "Note d'Information"), the CBV Filing,
the U.K. Filing and all other filings made in connection with the Exchange
Offers will not, at the time such filings receive the regulatory approval or
clearance required by applicable law, at the Filing Date, the Commencement Date
or the Closing Date, 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 the light of the circumstances under which they
were made, not misleading.
6. Warranties of Shareholder. Shareholder hereby warrants to Crown
-------------------------
as follows:
(a) Ownership of Shares. The Shares are owned, directly and through
-------------------
Camebo, of record and beneficially by Shareholder, free and clear of all
security interests, liens, claims, pledges, agreements, limitations on voting
rights, charges, or other encumbrances of any nature whatsoever; provided,
--------
however, that 2,464,000 Shares held of record through Camebo are pledged (the
- -------
"Pledge") to secure outstanding indebtedness of Shareholder's Subsidiaries;
provided, further, that the Pledge will not exist on the Closing Date. The
- -------- -------
Shares constitute all of the shares of Common Stock owned of record or
beneficially by Shareholder and its affiliates. The transfer of the Shares to
Crown against payment therefor on the Closing Date pursuant to the Offer as
provided in this Agreement, will pass good and marketable title to such Shares,
free and clear of all security interests, liens, claims, pledges, agreements,
limitations on voting rights, charges, or other encumbrances of any nature
whatsoever other than those created by Crown. Shareholder has sole voting power
and sole power of disposition, in each case directly or through its
Subsidiaries, with respect to all of the Shares, and there are no restrictions
on Shareholder's rights of disposition pertaining thereto, other than in the
shareholders' agreement, dated April 1, 1993, with Parfinance, a copy of which
has been provided to Crown prior to the date of this Agreement. The
transactions contemplated by this Agreement will not affect the voting rights of
any of the Shares; provided, however, that Crown shall not be entitled to double
-------- -------
voting rights with respect to the Shares. Shareholder is not a party to or
otherwise bound by any
-16-
<PAGE>
voting agreement or restriction which affects the voting rights of the Shares.
Shareholder has entered into an amendment agreement with Parfinance amending
their agreement of April 1, 1993, whereunder Shareholder has obtained from
Parfinance a waiver from any right of first refusal with respect to, or other
right to purchase, the Shares which may arise as a result of the execution of
this Agreement or the consummation of the transactions contemplated hereby, and
has agreed with Parfinance to a termination of their shareholders' agreement
dated April 1, 1993, upon the successful completion of the Offer as indicated by
the publication of the avis of the SBF. A copy of such amendment agreement has
----
been provided to Crown prior to the date of this Agreement.
(b) Authority Relative to this Agreement.
------------------------------------
Shareholder is a societe anonyme duly organized, validly existing and
------- -------
in good standing under the laws of the Republic of France and has the requisite
corporate power and authority to carry on its business as it is now being
conducted. Shareholder has all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery by Shareholder of this
Agreement and the consummation by Shareholder of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate action
on the part of Shareholder and no other corporate proceedings on the part of
Shareholder are necessary to authorize this Agreement or to consummate the
transactions so contemplated by this Agreement. This Agreement has been duly
and validly executed and delivered by Shareholder and, assuming this Agreement
constitutes a valid and binding obligation of Crown, this Agreement constitutes
a valid and binding agreement of Shareholder enforceable against Shareholder in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditor's rights and to general
equity principles.
(c) Consents and Approvals; No Violation. Neither the execution and
------------------------------------
delivery of this Agreement by Shareholder nor the performance by Shareholder of
its obligations hereunder will (i) conflict with or result in any breach of any
provision of the statuts or similar organizational documents of Shareholder,
-------
(ii) require any consent, approval, authorization or permit of, or filing with
or notification to, any governmental or regulatory authority, except (w) in
connection with the HSR Act, EC
-17-
<PAGE>
Council Regulation 4064/89 and such other filings as may be required by the
antitrust or competition laws, rules or regulations of the United States,
France, the European Union and any other applicable jurisdiction, (x) as may be
required to be filed by the investment laws, rules or regulations of any
applicable jurisdiction, (y) such filings and approvals as may be required under
the "blue sky", takeover, company or securities and stock exchange laws, rules
or regulations of the United States, France (including the regulations of the
COB, CBV and SBF), the United Kingdom, the European Union, and any other
applicable jurisdiction, or (z) where the failure to obtain such consent,
approval, authorization or permit, or to make such filing or notification, would
not (A) prevent or delay consummation of the transactions contemplated by this
Agreement, (B) otherwise prevent or delay Shareholder from performing its
obligations under this Agreement, and (C) individually or in the aggregate, have
a Material Adverse Effect on Shareholder; (iii) except as disclosed in writing
by Shareholder to Crown prior to the execution of this Agreement result in a
default (or give rise to any right of termination, cancellation or acceleration)
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise, or other
instrument or obligation to which Shareholder or any of its Subsidiaries is a
party or by which any of its Subsidiaries or any of their respective assets may
be bound, except for such defaults (or rights of termination, cancellation or
acceleration) as to which requisite waivers or consents have been obtained or
which, in the aggregate, would not result in a Material Adverse Effect on
Shareholder or materially impair or delay Shareholder's ability to perform its
obligations hereunder; (iv) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Shareholder, any of its Subsidiaries
or any of their respective assets, except for violations which would not result
in a Material Adverse Effect on Shareholder or the Company or materially impair
or delay Shareholder's ability to perform its obligations hereunder or (v)
result in Shareholder being required to commence a tender offer for any shares
of Common Stock.
(d) Ownership of Crown Common Stock. None of Shareholder, its
-------------------------------
controlled affiliates or Subsidiaries beneficially owns any shares of Crown
Common Stock (other than any beneficial ownership thereof that results from the
execution and performance of this Agreement).
(e) Investment Intent. Shareholder is acquiring the Crown Common
-----------------
Stock, Crown Preferred Stock (and the underlying Crown Common Stock into which
such Crown
-18-
<PAGE>
Preferred Stock may be converted) for investment, and not with a view to any
distribution that would violate the Securities Act or any applicable state
securities law. Shareholder is not a "U.S. person" as such term is used in
Regulation S under the Securities Act.
(f) Financial Advisors. No investment banker, broker, finder, or
------------------
financial advisor other than Lazard Freres & Co. LLC and Lazard Freres & Cie. is
entitled to any brokerage, finder's, or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Shareholder. Except as provided in Sections 14(a) and
14(c)(i), such fees or commissions of Lazard Freres & Co. LLC and Lazard Freres
& Cie shall be paid by Shareholder.
(g) Note d'Information, U.K. Filing; Etc. The information to be
-------------------------------------
supplied by or on behalf of Shareholder for inclusion in the Note d'Information,
the CBV Filing, the U.K. Filing and all other filings to be made in connection
with the Exchange Offers will not, at the time such filings receive the
regulatory approval or clearance required by applicable law, at the Filing Date,
the Commencement Date or the Closing Date, 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 the light of the
circumstances under which they were made, not misleading.
(h) Registration Statement; Proxy Statement. The information to be
---------------------------------------
supplied by or on behalf of Shareholder for inclusion in the Registration
Statement will not, at the time the Registration Statement is declared
effective, at the Filing Date, the Commencement Date or the Closing Date,
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 the light of the circumstances under which they were made, not
misleading. The information to be supplied by or on behalf of Shareholder for
inclusion in the Proxy Statement will not, on the date the Proxy Statement (or
any amendment thereof or supplement thereto) is first mailed to shareholders, at
the time of the Crown Shareholder Meeting or at the Filing Date, the
Commencement Date or the Closing Date, contain any statement that, in light of
the circumstances under which it is made, is false or misleading with respect to
any material fact, omits to state any material fact necessary in order to make
the statements made therein not false or misleading, or omits to state any
material fact necessary to correct any statement in any earlier communication
with respect to the solicitation of
-19-
<PAGE>
proxies for the Crown Shareholder Meeting that has become false or misleading.
If any event relating to the Company or any of its affiliates, officers, or
directors is discovered by Shareholder that should be set forth in an amendment
to the Registration Statement or a supplement to the Proxy Statement,
Shareholder will promptly inform Crown.
(i) Organizational Documents. Shareholder has heretofore delivered
------------------------
to Crown a complete and correct copy of the statuts, and other organizational
-------
documents of the Company, each as amended to the date of this Agreement.
(j) Agreements. There are no material agreements between
----------
Shareholder, on the one hand, and the Company and its Subsidiaries, on the other
hand, other than the letter agreement from Shareholder to the Company, dated May
20, 1995, relating to the payment of fees for services provided to the Company
by Shareholder, a copy of which has been provided to Crown prior to the date of
this Agreement.
7. Additional Covenants of Shareholder. Except in accordance with
-----------------------------------
the terms of this Agreement, Shareholder hereby covenants and agrees as follows:
(a) Restriction on Transfer, Proxies and Non-Interference. While
-----------------------------------------------------
this Agreement is in effect, and except as permitted hereby, Shareholder will
not (i) sell, transfer, pledge, encumber, assign or otherwise dispose of, or
enter into any contract, option or other arrangement or understanding with
respect to the sale, transfer, pledge, encumbrance, assignment or other
disposition of any of the Shares or (ii) grant any proxies, deposit any Shares
into a voting trust or enter into a voting agreement with respect to any Shares.
(b) Additional Shares. While this Agreement is in effect,
-----------------
Shareholder will promptly notify Crown of the number of any new
shares of Common Stock or any other equity interests in the Company acquired by
Shareholder, if any, after the date hereof. Any such shares of Common Stock
shall become Shares for purposes of this Agreement.
(c) Dividends or Distributions. In the event that Shareholder
--------------------------
receives any dividend or other distribution in respect of the Shares after the
date hereof (other than the Company's regular dividend of FF 4.40 per share
proposed to be paid after approval thereof at the Company's annual general
meeting of shareholders to be held on June 2, 1995) and the Shares are
subsequently acquired by Crown in the Offer, Shareholder agrees that any such
dividend or other distribution shall be deemed to be included in the Shares
-20-
<PAGE>
and shall be transferred or paid over to Crown at the time of Closing or, in the
event such dividend or distribution is received by Shareholder after such
Closing, immediately upon receipt by Shareholder.
(d) Proxy; Registration Statement; Note d'Information; Etc.
------------------------------------------------------
Shareholder shall provide, and shall use its reasonable best efforts, to the
extent practicable and to the extent permitted under French law and regulation,
to cause the Company to provide, to Crown all information relating to
Shareholder and the Company, respectively, required in order for Crown to
prepare the Proxy Statement, the Registration Statement, the Note d'Information,
the CBV Filing, the U.K. Filing and all other filings required to be made in
connection with the Exchange Offers and the laws and regulations applicable
thereto, including the requirements of any stock exchange or similar self-
regulatory body. If, at any time prior to the date of closing of each of the
Exchange Offers or such later date as shall be necessary to consummate the
transactions contemplated hereby, Shareholder shall become aware that any event
has occurred as a result of which the Registration Statement (including the
Prospectus contained therein), the Proxy Statement, the Note d'Information, the
CBV Filing, the U.K. Filing or any other filing required in connection with the
Exchange Offers, in each case as then amended or supplemented, would include an
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, in each case relating to the information
provided by or on behalf of Shareholder or the Company, or, if for any other
reason it shall be necessary during such period to amend or supplement any such
document relating to Shareholder or the Company in order to comply with
applicable law or regulation, Shareholder shall notify, and shall use its
reasonable best efforts, to the extent practicable and to the extent permitted
under French law and regulation, to cause the Company to notify Crown and shall
provide or cause to be provided to Crown the information necessary to prepare
such amendments or supplements which will correct such statement or omission or
effect such compliance. Shareholder shall cause its designees for the Board of
Crown to deliver consents to be named in the Registration Statement and the
Proxy Statement.
(e) Conduct of Company's Business. Shareholder shall use its
-----------------------------
reasonable best efforts, to the extent practicable and to the extent permitted
under French law and regulation, to cause the Company and its Subsidiaries to
conduct their respective businesses in the ordinary course, consistent with past
practice; provided, however, that this
-------- -------
-21-
<PAGE>
paragraph shall not in any way require Shareholder to restrict or prohibit the
Company from taking any action (x) which will not result in a Material Adverse
Effect on the Company or (y) contemplated by this Agreement or the Shareholders
Agreement. Between the date of this Agreement and the Closing Date, Shareholder
shall use its reasonable best efforts, to the extent practicable and to the
extent permitted under French law and regulation (and except as Crown shall
agree in writing), to cause the Company not to: (i) except as described in the
BALO Announcement, amend or otherwise change the statuts (or similar
-------
organizational documents) of the Company or any of its material Subsidiaries;
(ii) sell, encumber, pledge, or otherwise dispose of any material operating
assets of the Company or any of its Subsidiaries, except for sales of assets in
the ordinary course of business consistent with past practices; (iii) issue,
sell, pledge, dispose of, or encumber, or authorize the issuance, sale, pledge,
disposition, or encumbrance of, any shares of capital stock of, any options
(including employee stock options), warrants, convertible securities, or other
rights to acquire any shares of capital stock of, or any other ownership
interest in, the Company or any of its Subsidiaries, or otherwise alter its
capital structure, except for the issuance of shares of Common Stock upon
exercise of options that were authorized to be granted under the Company's stock
option plans prior to the date of this Agreement and are outstanding on the date
of this Agreement, the issuance of shares of Common Stock in connection with the
Faba transaction described in the BALO Announcement and the issuance of
additional options referred to in the BALO Announcement; (iv) amend the terms
of, split, combine, or reclassify any of its capital stock or issue, or
authorize or propose the issuance of, any other securities in respect of, in
lieu of, or in substitution for shares of its capital stock, except the issuance
of shares of Common Stock in connection with the Faba transaction described in
the BALO Announcement and the issuance of additional shares of Common Stock
resulting from the exercise of the options referred to in the BALO Announcement;
(v) acquire (by merger, purchase of stock or assets, joint venture, or
otherwise) any corporation, partnership, or other business organization or
division thereof; (vi) materially change its method of accounting as in effect
at December 31, 1994 except as may be required by International Accounting
Standards and as is concurred to by the Company's independent auditors, other
than to convert the Company's accounts to United States GAAP or to modify the
Company's accounts to comply with modifications to International Accounting
Standards; and (vii) change the annual accounting period.
-22-
<PAGE>
(f) Access to Information Confidentiality. Prior to the Expiration
-------------------------------------
Date, Shareholder shall use its reasonable best efforts, to the extent
practicable and to the extent permitted under French law and regulation, to
cause the Company and its Subsidiaries to, (i) give the officers, employees,
accountants, counsel, and other representatives of Crown reasonable access to
the properties, books, contracts, and records of the Company and its
Subsidiaries, (ii) furnish promptly to Crown all information concerning the
business, properties, and personnel of the Company and its Subsidiaries as Crown
may reasonably request, and (iii) make available to Crown appropriate
individuals for the discussion of the business, properties, and personnel of the
Company and its Subsidiaries as Crown may reasonably request. Information
obtained by Crown pursuant to this paragraph shall be subject to the provisions
of the letter agreement dated May 18, 1995 addressed to Crown by the Company
(the "Company Confidentiality Agreement").
(g) Tax Position; Restructuring. Shareholder shall use its
---------------------------
reasonable best efforts, to the extent practicable and to the extent permitted
under French law and regulation, to cause the Company and its Subsidiaries to
(i) provide such information to Crown as Crown shall request relating to the tax
position of the Company and its Subsidiaries and (ii) engage in such internal
corporate restructuring transactions immediately prior to the Closing, including
but not limited to mergers or liquidations of Subsidiaries and distributions or
sales of the stock of Subsidiaries, as Crown shall identify in order to minimize
Taxes payable by Crown and its affiliates (including the Company and its
Subsidiaries) following completion of the Offer, provided that such transactions
shall not have an adverse effect on the Company or Shareholder. Shareholder
shall use its reasonable best efforts, to the extent practicable and to the
extent permitted under French law and regulation, to cause the Company and its
Subsidiaries to cooperate with Crown in connection with the restructuring or
refinancing of, or the obtaining of required waivers or consents in connection
with, any indebtedness or material contracts or agreements of the Company and
its Subsidiaries which may be in default or which may become in default as a
result of the consummation of the transactions contemplated hereby.
(h) Accountants. Shareholder shall use its reasonable best efforts,
-----------
to the extent practicable and to the extent permitted under French law and
regulation, to cause the Company to cause to be delivered to Crown (i) a report
of the Company's independent accountants that complies in form and substance
with the requirements for
-23-
<PAGE>
such a report included in a registration statement on Form S-4, (ii) the consent
of such accountants to include such report in the Registration Statement and
Proxy Statement and (iii) a comfort letter from such accountants with respect to
the financial information regarding the Company included in the Proxy Statement
and the Registration Statement.
(i) Supervisory Board. Promptly following the purchase by Crown of
-----------------
Common Stock pursuant to the Exchange Offers, Shareholder shall cooperate fully
in assisting Crown to cause such number of persons designated by Crown, rounded
up to the next whole number, to be elected to the Supervisory Board of the
Company as will give Crown representation on the Supervisory Board (giving
effect to the persons designated and elected pursuant to this paragraph)
multiplied by the percentage that the aggregate number of shares of Common Stock
beneficially owned by Crown and its affiliates bears to the total number of
shares of Common Stock then outstanding. Shareholder shall use its best efforts
to obtain the resignation of the number of members of the Supervisory Board as
are necessary to permit the Crown designees to be elected.
(j) Public Filings. Shareholder shall use its reasonable best
--------------
efforts to the extent practicable and to the extent permitted under French law
and regulation to cause the Company to file with the French and U.K. Securities
Authorities and make available to Crown all forms, reports, and documents
required to be filed with the French and U.K. Securities Authorities between the
date of this Agreement and the Expiration Date. The forms, reports and
documents referred to in this paragraph or otherwise filed with the French and
U.K. Authorities since December 31, 1993 are referred to collectively as the
"Company Public Reports".
8. Additional Covenants of Crown.
-----------------------------
(a) Crown Shareholder Meeting. Crown will take all action necessary
-------------------------
in accordance with applicable law and its Articles of Incorporation and By-laws
to convene a meeting of its shareholders (the "Crown Shareholder Meeting") as
promptly as practicable to consider and vote upon the approval of the
transactions contemplated hereby and the adoption of the New Articles (including
the increase in the number of authorized shares of Crown Common Stock, the
authorization of shares of Crown Preferred Stock and the "opt-out" from the
provisions of Chapter 25, Subchapter E of the Pennsylvania Business Corporation
Law thereby rendering such provisions inapplicable to the transactions
contemplated hereby) and the issuance of the Crown Common Stock
-24-
<PAGE>
and Crown Preferred Stock pursuant to the Exchange Offers and the issuance of
the Crown Common Stock upon conversion of the Crown Preferred Stock. The Board
of Directors of Crown shall recommend the approval by the Crown Shareholders of
the transactions contemplated hereby and the adoption of the New Articles and
shall take all lawful action to solicit, and use its reasonable best efforts to
obtain, such approvals. The Board of Directors acting on behalf of Crown may at
any time prior to the adjournment of the Crown Shareholder Meeting withdraw,
modify, or change any recommendation if the Board of Directors determines that
the failure to so withdraw, modify, or change its recommendation and declaration
would cause the Board of Directors to breach its fiduciary duties to Crown's
shareholders under applicable law and, notwithstanding anything contained in
this Agreement to the contrary, any such withdrawal, modification, or change of
recommendation shall not constitute a breach of this Agreement by Crown.
(b) Listing. Crown will file listing applications (subject to
-------
applicable listing rules), (i) as promptly as practicable, with the NYSE and
(ii) in connection with the CBV Filing with the Paris Stock Exchange, with
respect to, and Crown shall use its reasonable best efforts to cause the NYSE
and the Paris Stock Exchange to list, the Crown Common Stock and Crown Preferred
Stock issuable in connection with the Exchange Offers and the Crown Common Stock
issuable upon conversion of the Crown Preferred Stock.
(c) Conduct of Crown's Business. Crown shall conduct and shall cause
---------------------------
its Subsidiaries to conduct their respective businesses in the ordinary course
of business, consistent with past practice; provided, however, that this
paragraph -------- -------
shall not in any way restrict or prohibit Crown from taking any action (x) which
will not result in a Material Adverse Effect on Crown or adversely affect
Crown's ability to comply with its obligations under this Agreement or the
Shareholders' Agreement, or (y) contemplated by this Agreement or the
Shareholders' Agreement. Between the date of this Agreement and the Closing
Date, Crown shall not, without the prior written consent of Shareholder: (i)
amend or otherwise change the Articles of Incorporation or By-laws (or similar
organizational documents) of Crown or any of its material Subsidiaries (except
for the amendment to the Articles of Incorporation to be effected by the New
Articles and the amendment to the By-laws to be effected by the By-law
Amendment), provided that Crown may amend the provisions of its By-laws relating
--------
to (x) indemnification of directors and (y) the percentage vote of the Board of
Directors of Crown required to approve any amendment to the By-laws
-25-
<PAGE>
previously provided to Shareholder and provided, further, that Crown and
-------- -------
Shareholder will discuss in good faith any other amendments to the By-laws Crown
may wish to effect on or prior to the Closing Date (including those provided to
Shareholder prior to the date hereof), or (ii) issue, sell, pledge, dispose of,
or encumber, or authorize the issuance, sale, pledge, disposition, or
encumbrance, or authorize the issuance of, any shares of capital stock of, any
options (including employee stock options), warrants, convertible securities, or
other rights to acquire any shares of capital stock of, or any other ownership
interest in, Crown or otherwise alter its capital structure, except for the
issuance of shares pursuant to options that were granted under Crown's stock
option plans prior to the date of this Agreement and are outstanding on the date
of this Agreement, it being understood that Crown intends to adopt a shareholder
protection rights plan (possibly including the authorization of a series of
junior preferred stock in connection therewith, which junior preferred stock
shall be junior to the Crown Preferred Stock), in a form reasonably acceptable
to Shareholder. Shareholder consents to any amendment of Crown's Articles of
Incorporation to authorize the issuance of shares of preferred stock junior to
the Crown Preferred Stock (in a form reasonably acceptable to Shareholder) to be
submitted to the shareholders of Crown at the Crown Shareholder Meeting.
(d) Access to Information; Confidentiality. Prior to the Expiration
--------------------------------------
Date, Crown will, and will cause each of its Subsidiaries to (i) give the
officers, employees, accountants, counsel, and other representatives of
Shareholder and the Company reasonable access to the properties, books,
contracts, and records of Crown and its Subsidiaries, (ii) furnish promptly to
Shareholder and the Company all information concerning the business, properties,
and personnel of Crown and its Subsidiaries as Shareholder or the Company may
reasonably request, and (iii) make available to Shareholder and the Company
appropriate individuals for the discussion of the business, properties and
personnel of Crown and its Subsidiaries as Shareholder or the Company may
reasonably request. Information obtained by Shareholder or the Company pursuant
to this paragraph shall be subject to the provisions of the letter agreement
dated April 18, 1995 addressed to Shareholder by Crown (the "Crown
Confidentiality Agreement") and the Company Confidentiality Agreement.
(e) CBV Filing. Upon the terms and subject to the conditions set
----------
forth in this Agreement, Crown will prepare and file a dossier and projet
------
d'offre with the CBV (the "CBV Filing") which complies with applicable French
- -------
law
-26-
<PAGE>
and regulation. The CBV Filing shall be made at the earliest practicable time
following satisfaction of the conditions set forth in Section 10.1 and in no
event later than five French Market Days after Shareholder notifies Crown in
writing that, to the best of Shareholder's knowledge, such conditions and its
conditions in Section 11 have been satisfied unless within such period of time
Crown notifies Shareholder in writing that, to the best of its knowledge, such
conditions have not been satisfied. After the date of the CBV Filing, Crown
will use its reasonable best efforts to cause the dossier and projet d'offre to
--------------
be approved as promptly as practicable; provided, however, that it shall not be
-------- -------
deemed "reasonable" to require Crown to amend the terms of, or increase the
consideration payable in, the Offer.
(f) Proxy Statement and Registration Statement. Crown will prepare
------------------------------------------
and file with the SEC a proxy statement (the "Proxy Statement") complying with
Regulation 14A under the Exchange Act ("Regulation 14A") for use in connection
with the Crown Shareholder Meeting and a registration statement (the
"Registration Statement") in connection with the registration under the
Securities Act of the Crown Common Stock and Crown Preferred Stock issuable in
connection with the Exchange Offers and the Crown Common Stock issuable upon
conversion or exchange of the Crown Preferred Stock. Crown will use its
reasonable best efforts to cause the Registration Statement to be declared
effective, and to maintain effectiveness through the date of closing of each of
the Exchange Offers and also will take any other action required to be taken
under United States federal or state securities laws, and to cause the Proxy
Statement to be mailed to shareholders of Crown.
(g) Note d'Information. Upon the terms and subject to the conditions
------------------
set forth in this Agreement, Crown will prepare and file a Note d'Information
with the COB which complies with applicable French law. After the date of the
CBV Filing, Crown will use its reasonable best efforts to cause the Note
d'Information to be approved as promptly as practicable, and also will take any
other action required to be taken under French and other securities laws with
respect to the Offer; provided, however, that it shall not be deemed
-------- -------
"reasonable" to require Crown to amend the terms of, or increase the
consideration payable in, the Offer.
(h) U.K. Exchange Offer. Crown will make all filings required with
-------------------
the London Stock Exchange (the "U.K. Filing") and take such other actions in the
United Kingdom
-27-
<PAGE>
as are required under applicable laws, rules and regulations in the U.K. in
connection with the U.K. Exchange Offer.
(i) Amendments. If, at any time prior to the date of closing of each
----------
of the Exchange Offers or such later date as shall be necessary to consummate
the transactions contemplated hereby, Shareholder shall become aware that any
event has occurred as a result of which the Registration Statement (including
the Prospectus contained therein), the Proxy Statement, the Note d'Information,
the CBV Filing, the U.K. Filing or any other filing required in connection with
the Exchange Offers, in each case as then amended or supplemented, would include
an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or, if for any other
reason it shall be necessary during such period to amend or supplement any such
document in order to comply with applicable law or regulation, Crown shall
notify the Company and Shareholder and shall prepare and, if required, file such
amendments or supplements which will correct such statement or omission or
effect such compliance.
(j) By-Law Amendment. Effective as of the Closing, the Board of
----------------
Directors of Crown shall adopt the By-law Amendment.
(k) Accountants. Crown shall use its reasonable best efforts to
-----------
cause Crown's independent accountants to deliver to Shareholder and each of its
designees for election to the Board of Directors of Crown a comfort letter in
customary form from such accountants with respect to the financial information
regarding Crown included in the Registration Statement, provided that if any
such letter is delivered to Crown or a director of Crown, Crown shall cause
Crown's Independent Accountants to deliver such letter to Shareholder and each
of its designees and authorize Shareholder and each of such designees to rely
thereon.
9. Additional Covenants of Shareholder and Crown.
---------------------------------------------
(a) No Solicitation. Shareholder will not, and will use its
---------------
reasonable best efforts, to the extent practicable and to the extent permitted
under French law and regulation, to cause the Company not to, directly or
indirectly, solicit (including by way of furnishing information) any inquiries
or the making of any proposal by any person or entity (other than Crown or any
affiliate of Crown) or enter into any agreement, arrangement or understanding,
or any negotiations or discussions which
-28-
<PAGE>
might lead to such agreement, arrangement or understanding, which constitutes,
or may reasonably be expected to lead to, any direct or indirect sale or other
transfer of the Shares (or other equity interests in the Company) or any other
extraordinary transaction involving the Shares (or other equity interests in the
Company) or the Company, including without limitation the acquisition or sale of
a material amount of assets, the sale, issuance or transfer of any equity
securities (other than pursuant to employee benefit arrangements in the ordinary
course of business and other than as disclosed by the Company in the Company
Disclosure Information), or any tender or exchange offer, merger or other
business combination, involving the Company or any of its Subsidiaries. If
Shareholder or the Company receives an inquiry or proposal with respect to any
such sale of Shares or other extraordinary transaction involving the Shares or
the Company, then Shareholder or the Company, as the case may be, shall promptly
inform Crown of the terms and conditions, if any, of such inquiry or proposal
and the identity of the person making it. Shareholder will immediately cease,
and will use its reasonable best efforts, to the extent practicable and to the
extent permitted under French law and regulation, will cause the Company to
terminate any existing activities, discussions or negotiations with any parties
conducted heretofore with respect to any of the foregoing.
(b) Filings. Upon the terms and subject to the conditions set forth
-------
in this Agreement, each of Shareholder and Crown will, and Shareholder will use
its reasonable best efforts to the extent practicable and to the extent
permitted under French law to cause the Company to, make all necessary filings
with respect to the Exchange Offers and the transactions contemplated by this
Agreement under the applicable United States, French, United Kingdom and
European Union or other foreign securities laws, rules and regulations and will
use their reasonable best efforts to obtain any required approvals and
clearances with respect thereto under such securities laws, rules and
regulations. Notwithstanding the preceding sentence, if an exemption from the
registration requirements under the Securities Act is available on a basis that
would not (A) impede, impair or delay the Exchange Offers, (B) prevent the
listing of the Crown Common Stock and Crown Preferred Stock to be delivered in
the Exchange Offers on the NYSE, or (C) adversely affect the value of the Crown
Common Stock and Crown Preferred Stock to be received by Shareholder and its
Subsidiaries pursuant to the Exchange Offers due to restrictions on transfer,
lack of liquidity, limitations on marginability and similar limitations, there
shall be no requirement to prepare or file a Registration Statement with respect
to the
-29-
<PAGE>
Crown Common Stock or Crown Preferred Stock under this Agreement (and the
warranties, covenants and conditions contained herein with respect to the
Registration Statement shall be deemed to be modified accordingly).
(c) Consents; Approvals. Upon the terms and subject to the
-------------------
conditions set forth in this Agreement, Shareholder and Crown will, and
Shareholder will use its reasonable best efforts to the extent practicable and
to the extent permitted under French law and regulation to cause the Company to,
use their respective reasonable best efforts to obtain all consents, waivers,
approvals, authorizations, or orders (including, without limitation, all
approvals and orders by governmental and regulatory authorities, domestic or
foreign) and Crown and Shareholder will make or cause to be made all filings
(including, without limitation, all filings required under the HSR Act and EC
Council Regulation 4064/89 and under any other antitrust or competition laws and
all other filings with governmental or regulatory authorities, domestic and
foreign) required in connection with the authorization, execution, and delivery
of this Agreement by Crown and Shareholder and the consummation by them of the
transactions contemplated by it. Notwithstanding the foregoing, and provided
Crown has complied fully with its obligations in the next succeeding sentence of
this Section 9(c), nothing contained in this Agreement will require or obligate
Crown (i) to agree to or otherwise become subject to any material limitations on
(A) the right of Crown, or its affiliates effectively to control or operate the
business, assets or operations of Crown, the Company or any of their respective
Subsidiaries as a result of any consent, waiver, approval, authorization or
order of a governmental or regulatory authority obtained in order to satisfy a
condition set forth in Section 10.1 hereof, (B) the right of Crown or its
affiliates to acquire or hold the business, assets or operations of the Company,
(C) the right of Crown to exercise full rights of ownership of the Common Stock
acquired by Crown including, without limitation, the right to vote any Common
Stock held by Crown on all matters properly presented to the Company's
shareholders, or (ii) to agree to divest itself of any Common Stock.
Notwithstanding the foregoing, if required by any such governmental or
regulatory authorities in order to obtain a necessary consent, waiver, approval,
authorization or order thereof, Crown shall agree to sell or otherwise dispose
of, hold separate (through the establishment of a trust or otherwise), or divest
itself of all or any portion of the business, assets, or operations of the
Company or Crown (or its affiliates) as shall be required to obtain such
consent, waiver, approval, authorization or order; provided, however, that Crown
-------- -------
shall not be required so to
-30-
<PAGE>
agree, if such action will result in a material diminution in the value of Crown
and the Company as a combined entity.
(d) Cooperation. 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, and to do, or cause to be
done, and to assist and cooperate with the other party in doing, all things
necessary, proper or advisable to consummate, in the most expeditious manner
practicable, the transactions contemplated by this Agreement. Crown and
Shareholder will use their best efforts and cooperate with one another (i) in
promptly determining whether any additional filings are required to be made or
consents, approvals, waivers, permits or authorizations are required to be
obtained (or, which if not obtained, would result in an event of default,
termination or acceleration of any agreement or any put right under any
agreement) under any applicable law or regulation or from any governmental
authorities or third parties, and (ii) in promptly making any such filings, in
furnishing information required in connection therewith and in timely seeking to
obtain any such consents, approvals, permits or authorizations.
(e) Disclosure. Crown and Shareholder will consult with each other
----------
before issuing any press release or making any public filing relating to this
Agreement or the transactions contemplated hereby and shall not issue any such
press release prior to such consultation.
(f) Shareholders Agreement. On the Closing Date, Crown and
----------------------
Shareholder shall execute and deliver the Shareholders Agreement in the form
attached hereto as Annex 3 with such changes therein as shall be mutually agreed
by Crown and Shareholder (the "Shareholders Agreement").
(g) Notification. Each of Crown and Shareholder will, in the event
------------
of, or promptly after obtaining knowledge of the occurrence (or non-occurrence)
or threatened occurrence (or non-occurrence) of, any fact or event which would
cause or constitute a material breach of any of its representations and
warranties or covenants set forth herein or the failure of the conditions to the
other party's obligations set forth herein, would constitute or result in a
Material Adverse Effect on it or could result in a delay in carrying out the
transactions contemplated hereby, give notice thereof to the other party hereto
and will use its reasonable best efforts to prevent or promptly to remedy such
breach or satisfy such conditions; provided, however, that the delivery of, or
-------- -------
failure to deliver, any notice
-31-
<PAGE>
pursuant to this Section 9(g) shall not limit or otherwise affect the remedies
available hereunder.
10. Conditions to Obligations of Crown.
----------------------------------
10.1. Conditions to Obligation of Crown to Make
the Exchange Offers
----------------------------------------
The obligation of Crown to make the Exchange Offers is subject to the
satisfaction or waiver of the following conditions:
(a) Warranties. The warranties of Shareholder contained in this
----------
Agreement that are not qualified by materiality shall be true and correct in all
material respects, and the warranties of Shareholder contained in this Agreement
that are qualified by materiality shall be true and correct, in each case on and
as of the Filing Date with the same force and effect as if made on and as of the
Filing Date, except for (i) changes contemplated by this Agreement, (ii) those
warranties that address matters only as of a particular date (which will remain
true and correct as of that date), and (iii) breaches or inaccuracies of
warranties contained in Section 6(a) and 6(b) which shall be absolutely true and
correct; and Crown shall have received a certificate to this effect signed by
the President of Shareholder.
(b) Agreements and Covenants. Shareholder shall have performed or
------------------------
complied in all material respects with all of its obligations under this
Agreement to be performed or complied with on or prior to the Filing Date; and
Crown shall have received a certificate to this effect signed by the President
of Shareholder.
(c) Consents Obtained. All material consents, waivers, approvals,
-----------------
authorizations, or orders required to be obtained by Shareholder or the Company,
and all filings required to be made by Shareholder or the Company, for the
authorization, execution, and delivery of this Agreement by Shareholder, the
performance of Shareholder's and the Company's obligations under this Agreement
and the consummation by the Company and Shareholder of the transactions
contemplated hereby shall have been obtained and made by Shareholder or the
Company, as the case may be.
(d) Shareholder Approval. The transactions contemplated hereby and
--------------------
the New Articles (including the increase in the number of authorized shares of
Crown Common Stock, the authorization of shares of Crown Preferred Stock and the
"opt-out" from the provisions of Chapter 25,
-32-
<PAGE>
Subchapter E of the Pennsylvania Business Corporation Law thereby rendering such
provisions inapplicable to the transactions contemplated hereby) and the
issuance of the Crown Common Stock and the Crown Preferred Stock (and any Crown
Common Stock into which such Crown Preferred Stock is convertible) pursuant to
this Agreement shall have been adopted and approved by the requisite vote of the
shareholders of Crown in accordance with applicable law, the Pennsylvania
Business Corporation Law, Crown's Articles of Incorporation and By-laws and any
applicable rules or regulations of the NYSE (collectively, the "Crown
Shareholder Approvals").
(e) Registration Statement; Securities Laws. Subject to Section 9(b)
---------------------------------------
hereof, the Registration Statement shall have been declared effective and no
stop order suspending effectiveness shall have been issued, no action, suit,
proceeding or investigation by the SEC to suspend the effectiveness thereof
shall have been threatened or initiated, and all necessary approvals under
United States federal or state securities laws (including the Securities Act or
Exchange Act) or French securities laws (including all required approvals of the
COB, CBV or SBF) relating to the Offer or the issuance or trading of the Crown
Common Stock, Crown Preferred Stock or the Crown Common Stock to be issued upon
the conversion of the Crown Preferred Stock shall have been received (it being
understood that the approvals of the U.K. Exchange Offer and the listing of the
Crown Common Stock and Crown Preferred Stock on the London Stock Exchange shall
not be a condition to Crown's obligation to launch the Offer).
(f) No Injunctions or Restraints; Illegality. There shall not exist
----------------------------------------
any temporary restraining order, preliminary or permanent injunction, other
order issued by any court of competent jurisdiction, or other legal restraint or
prohibition (including any antitrust authority with jurisdiction over the Offer)
prohibiting Crown from launching the Offer.
(g) Due Diligence. The due diligence and other procedures set forth
-------------
in Section 13(j) shall not be pending.
(h) Status of the Company. Except with respect to matters disclosed
---------------------
in the Company's annual reports for fiscal years ended December 31, 1993 and
December 31, 1994, copies of which were provided to Crown prior to the execution
of this Agreement, the statements regarding the Company contained in Annex 4
hereto that are not qualified by materiality shall be true and correct in all
material respects and the statements regarding the Company contained
-33-
<PAGE>
in Annex 4 hereto that are qualified by materiality shall be true and correct,
on and as of the date hereof and the Filing Date, except for (i) changes
contemplated by this Agreement, and (ii) those statements that address matters
only as of a particular date (which will remain true and correct as of that
date). For purposes of determining whether this condition is satisfied as to
any statement included in Annex 4, Additional Company Information shall not be
taken into account unless further information that is not Additional Company
Information when considered together with such Additional Company Information
(taking into account any materiality standards included in such statement)
results in a breach of such statement; and Shareholder shall use its reasonable
best efforts, to the extent practicable and to the extent permitted under French
law and regulations, to cause the Company to provide a certificate to this
effect (if true) signed by the President or a Vice President of the Company.
(i) Access to Information; Confidentiality. During the Due Diligence
--------------------------------------
Period, the Company and its Subsidiaries shall have, (i) given the officers,
employees, accountants, counsel, and other representatives of Crown reasonable
access to the properties, books, contracts, and records of the Company and its
Subsidiaries, (ii) furnished promptly to Crown all information concerning the
business, properties, and personnel of the Company and its Subsidiaries as
Crown may reasonably request, and (iii) made available to Crown appropriate
individuals for the discussion of the business, properties, and personnel of the
Company and its Subsidiaries as Crown may reasonably request. Information
obtained by Crown as described in the prior sentence shall be subject to the
provisions of the Company Confidentiality Agreement.
(j) Dividends and Other Distributions. The Company shall not have
---------------------------------
(x) declared, set aside, or paid any dividend or other distribution (whether in
cash, stock, property, or any combination thereof) in respect of any of its
capital stock between the date hereof and the Filing Date, or indicated its
intention to do so within three months of the Filing Date, except that (A) the
Company may pay its regular dividend of FF 4.40 per share of Common Stock
proposed to be paid after approval thereof at the Company's annual general
meeting of Shareholders to be held on June 2, 1995, (B) a direct or indirect
wholly-owned subsidiary of the Company may declare and pay a dividend to its
parent, and (C) other Subsidiaries may declare and pay customary, regular
dividends in the ordinary course, consistent with past practice or (y) amended
the terms of, repurchased, redeemed, or otherwise acquired, or permitted
-34-
<PAGE>
any subsidiary to amend the terms of, repurchase, redeem, or otherwise acquire,
any of its capital stock.
(k) Market Matters. There shall not have occurred (i) any general
--------------
suspension of trading in, or limitation on prices for, securities on the NYSE or
Paris Stock Exchange, (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States or France, or
(iii) any material limitation by any French or United States governmental,
administrative or regulatory authority or agency on the extension of credit by
banks or other lending institutions.
(l) Listing. The shares of Crown Common Stock and Crown Preferred
-------
Stock issuable in connection with the Offer and the Crown Common Stock issuable
upon conversion of the Crown Preferred Stock shall have been accepted for
listing on the NYSE subject to official notice of issuance (provided Crown has
complied with its obligations in Section 8(b)).
(m) Change of Control. (i) Shareholder shall not have been a party
-----------------
to any merger, consolidation or share exchange, and shall not have sold all or
substantially all of its assets, under circumstances in which Persons who were
members of the Shareholder's Board of Directors at the date of this Agreement do
not constitute a majority of Shareholder's Board of Directors (or body
performing similar functions) of the corporation or other entity surviving such
transaction, and (ii) it shall not have been publicly disclosed that 25% or more
of the outstanding shares of Shareholder's Common Stock have been acquired by
any Person or Group (other than Crown and its Affiliates).
10.2. Conditions to the Obligations of Crown
to Acquire the Common Stock Tendered
Pursuant to the Exchange Offers.
-------------------------------------
The obligation of Crown to acquire the Common Stock tendered pursuant
to the Exchange Offers is subject to the satisfaction or waiver of the following
conditions:
(a) Upon completion of the Offer, the SBF shall have published a
notice (avis de resultat) confirming that the number of shares of Common Stock
----------------
validly tendered to the Offer, when added together with the Common Stock
acquired by Crown in the U.K. Exchange Offer and any other contemporaneous
exchange offer made by Crown or one of its subsidiaries in another jurisdiction,
equals or exceeds the Minimum Condition.
-35-
<PAGE>
(b) With respect to the U.K. Exchange Offer, the Closing of the Offer
shall have occurred or shall occur contemporaneously with the closing thereof.
11. Conditions to Obligations of Shareholder. The obligation of
----------------------------------------
Shareholder to tender its Shares pursuant to the Offer is subject to the
satisfaction or waiver of the following conditions on or prior to the Filing
Date:
(a) Warranties. Except to the extent disclosed in writing by Crown
----------
to Shareholder prior to the date of the Agreement, the warranties of Crown
contained in this Agreement that are not qualified by materiality shall be true
and correct in all material respects, and the warranties of Crown contained in
this Agreement that are qualified by materiality are true and correct, on and as
of the Filing Date with the same force and effect as if made on and as of the
Filing Date, except for (i) changes contemplated by this Agreement, (ii) those
warranties that address matters only as of a particular date (which will remain
true and correct as of that date), and (iii) breaches or inaccuracies of
warranties contained in Section 5(j) and 5(m) which shall be absolutely true and
correct; and Shareholder shall have received a certificate to this effect signed
by the President or any vice president of Crown. For purposes of determining
whether this condition is satisfied as to any warranty, Additional Crown
Information shall not be taken into account unless further information that is
not Additional Crown Information when considered together with such Additional
Crown Information (taking into account any materiality standards included in
such warranty) results in a breach of such warranty.
(b) Agreements and Covenants. Crown shall have performed or complied
------------------------
in all material respects with all of the obligations under this Agreement to be
performed or complied with by it on or prior to the Filing Date; and Shareholder
shall have received a certificate to this effect signed by the President or any
vice president of Crown.
(c) Consents Obtained. All material consents, waivers, approvals,
-----------------
authorizations, or orders required to be obtained under, and all filings
required to be made, by Crown for the authorization, execution, and delivery of
this Agreement by Crown, the performance of Crown's obligations under this
Agreement and the consummation by Crown of the transactions contemplated hereby
shall have been obtained and made by Crown.
(d) Shareholder Approval. The Crown Shareholder Approvals shall have
--------------------
been obtained.
-36-
<PAGE>
(e) Registration Statement; Securities Laws. Subject to Section 9(b)
---------------------------------------
hereof, the Registration Statement shall have been declared effective and no
stop order suspending effectiveness shall have been issued, no action, suit,
proceeding or investigation by the SEC to suspend the effectiveness thereof
shall have been threatened or initiated, and all necessary approvals under
United States federal or state securities laws (including the Securities Act or
Exchange Act) or French securities laws (including all required approvals of the
COB, CBV or SBF) relating to the Offer or the issuance or trading of the Crown
Common Stock, Crown Preferred Stock or the Crown Common Stock to be issued upon
the conversion of the Crown Preferred Stock shall have been received (it being
understood that the approvals of the U.K. Exchange Offer and the listing of the
Crown Common Stock and Crown Preferred Stock on the London Stock Exchange shall
not be a condition to Shareholder's obligation to tender its Shares pursuant to
the Offer).
(f) No Injunctions or Restraints; Illegality. There shall not exist
----------------------------------------
any temporary restraining order, preliminary or permanent injunction, other
order issued by any court of competent jurisdiction, or other legal restraint or
prohibition (including any antitrust authority with jurisdiction over the Offer)
prohibiting Shareholder from tendering into the Offer.
(g) Due Diligence. The due diligence and other procedures set forth
-------------
in Section 13(j) shall not be pending.
(h) Access to Information; Confidentiality. During the Due Diligence
--------------------------------------
Period, Crown and its Subsidiaries shall have caused each of its Subsidiaries to
have, (i) given the officers, employees, accountants, counsel, and other
representatives of Shareholder reasonable access to the properties, books,
contracts, and records of Crown and its Subsidiaries, (ii) furnished promptly to
Shareholder all information concerning the business, properties, and personnel
of Crown and its Subsidiaries as Shareholder may reasonably request, and (iii)
made available to Shareholder appropriate individuals for the discussion of the
business, properties, and personnel of Crown and its Subsidiaries as Shareholder
may reasonably request. Information obtained by Shareholder as described in the
prior sentence shall be subject to the provisions of the Crown Confidentiality
Agreement.
-37-
<PAGE>
(i) Rating. The long-term unsecured senior debt securities of Crown
------
shall not have been downgraded (a "Downgrade") by either Moody's Investors
Services Inc. or Standard and Poor's to a rating below "investment grade",
provided that
- --------
Shareholder shall not be entitled to rely on this condition unless it shall,
prior to such reliance, have entered into good faith negotiations with Crown for
a reasonable period of time in an effort to modify the terms of the transaction
in a manner sufficient to alleviate such Downgrade. "Investment grade" shall
mean either Moody's Investors Services Inc. or Standard and Poor's shall have
rated the security in one of its generic rating categories which signifies
investment grade (typically the four highest categories).
(j) Miscellaneous. There shall not have occurred (i) any general
-------------
suspension of trading in, or limitation on prices for, securities on the NYSE or
Paris Stock Exchange, (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States or France, or
(iii) any material limitation by any French or United States governmental,
administrative or regulatory authority or agency on the extension of credit by
banks or other lending institutions.
(k) Listing. The shares of Crown Common Stock and Crown Preferred
-------
Stock issuable in connection with the Offer and the Crown Common Stock issuable
upon conversion of the Crown Preferred Stock shall have been accepted for
listing on the NYSE subject to official notice of official issuance, and Crown
shall have applied for the listing thereof on the Paris Stock Exchange.
(l) SLF. Within 60 calendar days from the date of this Agreement,
---
the SLF shall have confirmed that French corporate shareholders of the Common
Stock, including Shareholder, (i) shall be entitled to defer recognition of any
gain or loss on the Common Stock upon tendering the Common Stock into the Offer
and electing to receive Units until the sale by such corporate shareholders of
the Crown Common Stock and the Crown Preferred Stock received in the Offer and
(ii) shall be entitled to defer recognition of any gain or loss on any such
Crown Preferred Stock upon conversion of the Crown Preferred Stock into Crown
Common Stock until the sale by such corporate holders of such Crown Common
Stock. Promptly following the date of this Agreement, and in any case within 15
calendar days, Shareholder shall make a submission to the SLF seeking the
foregoing confirmation and shall use its reasonable best efforts to secure the
requested confirmation as soon thereafter as practicable. Shareholder shall
furnish to
-38-
<PAGE>
Crown copies of its submission and, promptly upon receipt thereof, any response
received from the SLF. In the event that Shareholder shall be notified by the
SLF that the requested confirmation will not be forthcoming, such that the
condition provided for in this paragraph (l) cannot be satisfied, Shareholder
shall notify Crown as promptly as practicable. If requested by Crown in
writing, Shareholder shall advise Crown within 10 calendar days after receipt of
such request whether Shareholder is willing to waive the condition provided for
in this paragraph (l) and, if Shareholder is not willing to waive such
condition, Shareholder shall terminate this Agreement pursuant to Section 13
(f).
(m) Change of Control. (i) Crown shall not have been a party to any
-----------------
merger, consolidation or share exchange, and shall not have sold all or
substantially all of its assets, under circumstances in which Persons who were
members of the Crown's Board of Directors at the date of this Agreement do not
constitute a majority of Crown's Board of Directors (or body performing similar
functions) of the corporation or other entity surviving such transaction, and
(ii) it shall not have been publicly disclosed that 25% or more of the
outstanding shares of Crown Common Stock have been acquired by any Person or
Group (other than Shareholder and its Affiliates).
12. Further Assurances. From time to time, at any other party's
------------------
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement.
13. Termination. This Agreement may be terminated, by written notice
-----------
to the other party hereto, at any time:
(a) Prior to the Filing Date by Crown if there has been (i) a breach
of any covenant or agreement herein on the part of Shareholder that would result
in a failure of the conditions set forth in Section 10.1(a) or Section 10.1(b)
and which has not been cured within 30 calendar days following receipt of notice
of such breach or (ii) a material breach of a warranty herein on the part of
Shareholder that would result in a failure of the condition set forth in Section
10.1(a) which breach by its nature is not reasonably likely to be cured prior to
March 31, 1996; Shareholder, Camebo, the Company or any of the Company's
material Subsidiaries makes a general assignment for the
-39-
<PAGE>
benefit of creditors, or any proceeding shall be instituted by or against
Shareholder, Camebo, the Company or any of its material Subsidiaries seeking to
adjudicate any of them a bankrupt or insolvent, or seeking liquidation, winding
up or reorganization, arrangement, adjustment, protection, relief or composition
of its debts under any law relating to bankruptcy, insolvency or reorganization
(and if such proceeding is against Shareholder, Camebo, the Company or any of
the Company's material Subsidiaries, it remains unstayed and in effect for sixty
consecutive days after institution of such proceeding).
(b) By Crown if (i) Crown has commenced the Offer and the Offer is
terminated or expires in accordance with its terms without Crown having
purchased any Common Stock thereunder due to a failure of the conditions of the
Offer (including the Minimum Condition) to be satisfied or (ii) Shareholder
tenders any of its Shares to a Third Party Bid.
(c) Prior to the Filing Date by Shareholder if (i) there has been (A)
a breach of any covenant or agreement herein on the part of Crown that would
result in a failure of the condition set forth in Section 11(a) or Section 11(b)
and which has not been cured within 30 calendar days following receipt of notice
of such breach or (B) a material breach of a warranty herein on the part of
Crown that would result in a failure of the condition set forth in Section 11(a)
which breach by its nature cannot be cured prior to March 31, 1996; or (ii)
Crown or any of its material Subsidiaries makes a general assignment for the
benefit of creditors, or any proceeding shall be instituted by or against Crown
or any of its material Subsidiaries seeking to adjudicate any of them a bankrupt
or insolvent, or seeking liquidation, winding up or reorganization, arrangement,
adjustment, protection, relief or composition of its debts under any law
relating to bankruptcy, insolvency or reorganization (and if such proceeding is
against Crown or any such material Subsidiary, it remains unstayed and in effect
for sixty consecutive days after the institution of such proceeding).
(d) By Shareholder if Crown has commenced the Offer and the Offer (as
the same may have been modified or extended in accordance with this Agreement or
replaced by a New Offer) is terminated or expires in accordance with its terms
without Crown having purchased any Common Stock thereunder due to a failure of
the conditions of the Offer (including the Minimum Condition) to be satisfied.
(e) By either Shareholder or Crown if (i) the Closing Date shall not
have occurred on or prior to
-40-
<PAGE>
March 31, 1996 (the "Final Termination Date"); provided, however, that if Crown
-------- -------
shall have commenced the Offer prior to the Final Termination Date and the Offer
shall not have terminated or expired prior to the Final Termination Date, then
the Final Termination Date shall be extended until the termination or expiration
of the Offer in accordance with its terms, provided that Crown shall not have
--------
voluntarily extended the time period of the Offer if the Final Termination Date
would occur prior to such extension (unless such extension is in connection with
an increase in the amount of consideration payable to shareholders of the
Company (including Shareholder) tendering in the Offer in response to a Third
Party Bid provided that the Final Termination Date shall not be later than the
termination date of such Third Party Bid), and, provided, further that the right
-------- -------
to terminate this Agreement under this paragraph (e)(i) shall not be available
to any party whose failure to fulfill any obligation or condition under this
Agreement shall have been the cause of, or shall have resulted in, the failure
of the Closing Date to occur on or prior to such date, or (ii) the Crown
Shareholder Approvals have not been obtained by reason of the failure to obtain
the required votes upon the vote of Crown's shareholders at the Crown
Shareholder Meeting, provided that, with respect to any termination by Crown
--------
under this paragraph (e)(ii) that Crown shall have complied with its obligations
under Section 8(a) hereof.
(f) Prior to the Filing Date by either Shareholder or Crown in the
event that any governmental, regulatory or judicial authority or tribunal shall
have issued a final, non-appealable order, decree or ruling or taken any other
final, non-appealable action restraining, enjoining or otherwise prohibiting the
Offer by Crown or the tender by Shareholder of the Shares into the Offer.
(g) By the mutual written consent of Shareholder and Crown.
(h) On the date immediately prior to the Filing Date by Crown if, on
the preceding NYSE trading day (the "Final Determination Date"), the Average
Crown Common Stock Price (computed with the Final Determination Date being
deemed the Measurement Date) is greater than FF 242.96 (115% of the Initial
Price).
(i) On the date immediately prior to the Filing Date by Shareholder
if, on the Final Determination Date, the Average Crown Common Stock Price
(computed with the Final Determination Date being deemed the Measurement Date)
is less than FF 179.58 and Crown shall not by 12:00 Midnight,
-41-
<PAGE>
New York City time, on the date prior to the Filing Date have delivered to
Shareholder a written agreement by Crown to amend the Exchange Ratio such that
the implied value of the number of shares of Crown Common Stock and the number
of shares of Crown Preferred Stock deliverable in exchange for one share of
Common Stock is not less than FF 212.50. For this purpose, such implied value
shall be computed on the basis of the Average Crown Common Stock Price, with the
Final Determination Date being deemed to be the Measurement Date, and the ratio
of the number of shares of Crown Common Stock to the number of shares of Crown
Preferred Stock per Unit shall remain constant at .75 to .25.
(j)(i) By Shareholder on the last day of the Due Diligence Period if
Shareholder's outside accountants (the "Shareholder Accountants") have
advised Shareholder that, based solely upon such accountants' analysis (the
"Shareholder Accountants Analysis") of the total mix of Additional Crown
Information, which shall be reflected in such accountants' written opinion
delivered to Crown and to Shareholder, and after having reviewed its
analysis and evaluation with Crown's outside accountants (the "Crown
Accountants"), the Shareholder Accountants are of the good faith judgment
(the "Shareholder Accountants Judgment") that the net adverse effect on the
value of Crown attributable to the Additional Crown Information, after
giving effect to any increases in value attributable to positive aspects of
the Additional Crown Information, exceeds $250 million; provided that
--------
within five days after receipt of notice of termination, Crown may deliver
to Shareholder notice that Crown disagrees with the Shareholder Accountants
Judgment (in which case the provisions of subparagraph (iv) below shall
apply) and provided, further, that if Crown does not deliver such notice of
-------- -------
disagreement within five days after receipt of the notice of termination,
this Agreement shall terminate.
(ii) By Crown on the last day of the Due Diligence Period if the
Crown Accountants have advised Crown that, based solely upon such
accountants' analysis (the "Crown Accountants Analysis") of the total mix
of Additional Company Information, which shall be reflected in such
accountants' written opinion delivered to Shareholder and Crown, and after
having reviewed its analysis and evaluation with the Shareholder
Accountants, the Crown Accountants are of the good faith judgment (the
"Crown Accountants Judgment") that the net adverse effect on the value of
the Company attributable to the Additional Company
-42-
<PAGE>
Information, after giving effect to any increases in value attributable to
positive aspects of the Additional Company Information, exceeds $250
million; provided that within five days after receipt of notice,
--------
Shareholder may deliver to Crown notice that Shareholder disagrees with the
Crown Accountants Judgment (in which case the provisions of subparagraph
(iv) below shall apply) and provided, further, that if Shareholder does not
-------- -------
deliver such notice of disagreement within five days after receipt of the
notice of termination, this Agreement shall terminate.
(iii) For purposes of this Section 13(j), it is the intention of the
parties that the differences between book value and fair market value and
between United States GAAP and International Accounting Standards shall
not, in and of themselves, give rise to increases or decreases in value of
Crown or the Company, as the case may be.
(iv) If Crown or Shareholder delivers notice that it disagrees with
the Shareholder Accountants Judgment or the Crown Accountants Judgment,
respectively, within the five day period specified above, Crown and
Shareholder shall mutually select an independent accounting firm of
recognized international standing to act as arbitrator (such firm, the
"Independent Accountant") and shall provide to the Independent Accountant
all information which the Independent Accountant may reasonably request and
which is available to Crown and Shareholder. The Independent Accountant
shall, within 10 Business Days thereof, advise Crown and Shareholder
whether the Independent Accountant agrees with the Shareholder Accountants
Judgment or the Crown Accountants Judgment, as the case may be. In
expressing such judgment, the Independent Accountant shall not consider any
differences in the businesses of Crown, the Company and their respective
Subsidiaries resulting from public dissemination of the termination notice
or changes, whether actual or prospective, in general conditions applicable
to the industry in which Crown, the Company and their respective
Subsidiaries are involved or general economic conditions. If the
Independent Accountant agrees that the net adverse effect on the value of
Crown arising from the Additional Crown Information or on the value of the
Company arising from the Additional Company Information, after giving
effect to any increases in value that are attributable to positive aspects
of the Additional Crown Information or Additional Company Information, as
the case may be,
-43-
<PAGE>
exceeds $250 million, this Agreement shall terminate. If the Independent
Accountant does not agree that the net adverse effect on value of Crown
arising from the Additional Crown Information or on the value of the
Company arising from the Additional Company Information, after giving
effect to any increases in value that are attributable to positive aspects
of the Additional Crown Information or the Additional Company Information,
as the case may be, exceeds $250 million, the termination right of Crown or
Shareholder, as the case may be, pursuant to this paragraph (j) shall
expire. The expiration of the termination right provided by this paragraph
(j) shall be without prejudice to any other right of termination provided
to any party pursuant to this Section 13.
(v) The fees and expenses of the Independent Accountant shall be
borne one-half by Crown and one-half by Shareholder.
(vi) In acting under this Agreement, the Independent Accountant shall
be entitled to the privileges and immunities of arbitrators.
(k) By Shareholder if the Board of Directors of Crown shall withdraw,
or adversely modify or adversely change its recommendation as contemplated by
the last sentence of Section 8(a) hereof and, thereafter, the Crown Shareholder
Approvals are not obtained at the Crown Shareholder Meeting provided that this
Agreement is not terminable at such time by Crown for a reason other than the
failure to obtain such Crown Shareholder Approvals.
(l) Effect of Termination. In the event of termination of this
---------------------
Agreement as provided in this Section 13, this Agreement shall forthwith become
void and there shall be no liability on the part of either party hereto except
that nothing herein shall relieve either party from liability for any willful
breach of this Agreement.
14. Expenses.
--------
(a) Each of Crown, on the one hand, and Shareholder and the Company,
on the other hand, shall bear and pay all costs and expenses incurred by it or
them or on its or their behalf in connection with the transactions contemplated
hereunder, including fees and expenses of its own financial or other
consultants, investment bankers, accountants and counsel, except as set forth in
Section 13(j)(v) hereof and except that, to the fullest extent permitted under
law, in the event the Offer is successful
-44-
<PAGE>
Crown or its designee shall reimburse Shareholder for 80% of the total amount of
the documented fees and expenses of Shareholder's legal and financial advisers
with respect to the transactions contemplated by this Agreement, up to a maximum
reimbursement amount of $15 million.
(b) Each of the parties has represented and warranted that neither it
nor any of its officers, directors, employees, affiliates, or Subsidiaries has
employed any broker or finder or incurred any liability for any financial
advisory fees, investment bankers' fees, brokerage fees, commissions, or
finders' fees in connection with this Agreement or the transactions contemplated
hereby, except as expressly provided in such representations and warranties. In
the event of a claim by any broker or finder based upon his or its representing
or being retained by or allegedly representing or being retained by either Crown
or Shareholder, each party agrees to indemnify and hold the other party harmless
of and from any such claim.
(c)(i) Upon any termination by Shareholder under Section 13(k), Crown
shall pay Shareholder $10 million (in recognition of the expenses and
effort devoted to the proposed transaction), provided that Shareholder
--------
shall give notice of such termination within ten business days following
the date of the Crown Shareholder Meeting.
(ii) In the event that, pursuant to Section 2(b) hereof, Shareholder
tenders any of its Shares to a Third Party Bid, Shareholder shall pay Crown
$10 million (in recognition of the expenses and effort devoted to the
proposed transaction).
(iii) Section 14(c)(i) and 14(c)(ii) above are subject to prior
approval of the COB. In the event that obtaining such COB approval
requires modification to one or both of such Sections, Crown and
Shareholder may mutually agree to modify the obligations set forth herein.
(iv) The dollar amount set forth in Section 14(c)(i) and 14(c)(ii)
above shall not be construed to be liquidated damages, and, in the event of
a breach of this Agreement by either party hereto, the other party shall be
entitled to such damages and remedies as are available under this Agreement
and applicable law.
-45-
<PAGE>
15. Miscellaneous.
-------------
(a) Entire Agreement; Assignment; No Third-Party Beneficiaries. This
----------------------------------------------------------
Agreement, together with the Shareholders Agreement, the Crown Confidentiality
Agreement the Company Confidentiality Agreement and the Shareholder
Confidentiality Agreement, (i) constitutes the entire agreement among the
parties with respect to the subject matter hereof and supersedes all other prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof, provided that on the Closing Date each of
--------
the Crown Confidentiality Agreement, the Company Confidentiality Agreement and
the Shareholder Confidentiality Agreement shall be superseded by the provisions
of the Shareholders Agreement (except that the confidentiality provisions of
such agreements shall survive) and (ii) shall not be assigned by operation of
law or otherwise, provided that Crown may assign any of its rights and
obligations hereunder to any wholly-owned Subsidiary of Crown that agrees in
writing to assume such rights and obligations and to be bound by this Agreement;
provided that Crown shall remain jointly and severally liable for the
performance of all obligations so assigned. This Agreement shall not confer
upon any person other than the parties hereto any rights or remedies hereunder.
(b) Amendments. This Agreement may not be modified, amended, altered
----------
or supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.
(c) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of New York.
(d) Specific Performance. Each of the parties hereto recognizes and
--------------------
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
(e) Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
-46-
<PAGE>
(f) Descriptive Headings. The descriptive headings used herein are
--------------------
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
(g) Severability. Whenever possible, each provision or portion of
------------
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law, rule or regulation in any jurisdiction,
such invalidity, illegality or unenforceability will not affect any other
provision or portion of any provision in such jurisdiction, and this Agreement
will be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision or portion of any provision shall
have been replaced with a provision which shall, to the maximum extent
permissible under such applicable law, rule or regulation, give effect to the
intention of the parties as expressed in such invalid, illegal or unenforceable
provision.
(h) Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in writing and shall be deemed to have been duly given
when delivered in person, by cable, telegram, facsimile transmission with
confirmation of receipt, or telex, or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties as follows:
if to Crown:
Crown Cork & Seal Company, Inc.
9300 Ashton Road
Philadelphia, Pennsylvania 19136
Attention: William J. Avery
Chairman, President and Chief
Executive Officer
Telecopy: (215) 698.5206
-47-
<PAGE>
with a copy to:
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, Pennsylvania 19103
Attention: Thomas A. Ralph and
William G. Lawlor
Telecopy: (215) 994.2222
if to Shareholder:
CGIP
89, rue Taitbout
75009 Paris, France
Attention: Michel Renault
Telecopy: (011) 33.1.42.80.68.67
with a copy to:
Sullivan & Cromwell
250 Park Avenue
New York, New York 10177
Attention: Allan M. Chapin
Telecopy: (212) 558.4915
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
(i) No Waiver. Any waiver by any party of a breach of any provision
---------
of this Agreement shall not operate as or be construed to be a waiver of any
other breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term
of this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
(j) Nonsurvival of Warranties. Except for Sections 5(j), 5(m), 6(a)
-------------------------
and 6(b), none of the representations and warranties contained in this Agreement
shall survive the Expiration Date. This paragraph shall not limit any covenant
or agreement of the parties which by its terms contemplates performance after
the Expiration Date. It being understood that the inclusion of the warranties
of Crown set forth in Sections 5(c), 5(d), 5(e), 5(f), 5(g) and 5(i) are for the
purpose of establishing the condition to
-48-
<PAGE>
Shareholder's obligation to tender set forth in Section 11.1(a), Crown shall
have no liability for any breach of such warranties in the event that this
Agreement is terminated due to the non-occurrence of the Offer as a result of a
failure to satisfy such condition, provided that the foregoing shall not limit
any liability of Crown for breach of its other obligations hereunder (including
its obligations under Section 9(d)).
(k) Consent to Jurisdiction and Service of Process. Any legal action
----------------------------------------------
or proceeding with respect to this Agreement or any matters arising out of or in
connection with this Agreement (other than the Shareholders Agreement, which
shall be governed solely by the analogous provisions thereof), and any action
for enforcement of any judgment in respect thereof shall be brought exclusively
in the courts of the State of New York or of the United States of America for
the Southern District of New York, unless such court shall not have jurisdiction
in which case it shall be brought in the Supreme Court of the State of New York
sitting in New York County and, by execution and delivery of this Agreement,
Crown and Shareholder each irrevocably consent to service of process out of any
of the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, or by
recognized international express carrier or delivery service, to Crown or
Shareholder at their respective addresses referred to herein. Crown and
Shareholder each hereby irrevocably waives any objection which it may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement (other than the
Shareholders Agreement, which shall be governed solely by the analogous
provisions thereof) brought in the courts referred to above and hereby further
irrevocably waives and agrees, to the extent permitted by applicable law, not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum. Nothing herein shall
affect the right of any party hereto to serve process in any other manner
permitted by law.
16. Definitions. Unless otherwise specified all references to "days"
-----------
shall be deemed to be references to calendar days. For purposes of this
Agreement, the following terms shall have the following meanings:
(a) Additional Crown Information. "Additional Crown Information"
----------------------------
shall mean information affecting the consolidated stockholders' equity and
contingencies related to assets or contingent liabilities of Crown and its
-49-
<PAGE>
Subsidiaries (whether or not required to be recorded or reserved against under
United States GAAP) of Crown and its Subsidiaries, measured in accordance with
United States GAAP, provided to Shareholder by or on behalf of Crown after the
date of this Agreement and which is not publicly available prior to the date of
this Agreement.
(b) Additional Company Information. "Additional Company Information"
------------------------------
shall mean information affecting the consolidated stockholders' equity and
contingencies related to assets or contingent liabilities (whether or not
required to be recorded or reserved against under International Accounting
Standards) of the Company and its Subsidiaries, in each case measured in
accordance with International Accounting Standards, provided to Crown by or on
behalf of Shareholder or the Company after the date of this Agreement and which
is not publicly available prior to the date of this Agreement; provided,
--------
however, that Additional Company Information shall not include Company
- -------
Disclosure Information.
(c) Affiliate. An "affiliate" of a person shall have the meaning set
---------
forth in Rule 12b-2 of the Exchange Act as in effect on the date hereof and, in
addition, shall include "associates" (as defined in Rule 12b-2 of the Exchange
Act as in effect on the date hereof) of such person and its affiliates.
(d) BALO Announcement. "BALO Announcement" shall mean the
-----------------
announcement regarding the Company published in the Bulletin des Annonces
---------------------
Legales Obligatoires on April 12, 1995.
- --------------------
(e) Beneficial Owner. A person shall be deemed to "beneficially
----------------
own," or to have "beneficial ownership" of any securities in accordance with the
term "beneficial ownership" as defined in Rule 13d-3 under the Exchange Act as
in effect on the date hereof and, in addition, such terms shall include
securities which such person has the right to acquire (irrespective of whether
such right is exercisable immediately or only after the passage of time,
including the passage of time in excess of sixty (60) days) pursuant to any
agreement, arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise.
(f) Business Day. "Business Day" shall mean any date on which
------------
banking institutions in the City of New York are not authorized or obligated by
law or executive order to close.
-50-
<PAGE>
(g) CBV. "CBV" shall mean the French Conseil des Bourses de Valeurs.
--- ------------------------------
(h) Closing. "Closing" shall mean the closing of the Offer.
-------
(i) Closing Date. "Closing Date" shall mean the date on which the
------------
Offer is successfully consummated as evidenced in the avis de resultat issued by
----------------
the CBV.
(j) COB. "COB" shall mean the French Commission des Operations de
--- ----------------------------
Bourse.
- ------
(k) Commencement Date. "Commencement Date" shall mean the date on
-----------------
which the SBF has released an opening notice (avis d'ouverture) relating to the
----------------
Offer.
(l) Company Disclosure Information. "Company Disclosure Information"
------------------------------
shall mean the information contained in the following documents, copies of all
of which were delivered to Crown prior to the signature of the Agreement: (i)
the Company's annual reports for the fiscal years ended December 31, 1993 and
December 31, 1994 and (ii) the matters disclosed at the meeting on May 20, 1995
with Bernard Rolley, Chief Financial Officer of the Company, Alan Rutherford,
Chief Financial Officer of Crown, James Clancy, partner of Price Waterhouse LLP,
independent accountants to Crown, and Christian Christiani, partner of Arthur
Andersen, independent accountants to the Company, as memorialized in the Notes,
dated May 22, 1995 provided to Crown prior to the execution of this Agreement.
In determining the extent to which particular issues were disclosed as part of
the Company Disclosure Information, consideration shall be given to the degree
of detail of the description of the issues (including the specific amounts
actually furnished) summarized therein and the extent to which Crown was able to
form a view with respect to such issues in discussions with representatives of
the Company and its accountants.
(m) Due Diligence Period. "Due Diligence Period" shall mean the
--------------------
period of 30 days commencing on June 12, 1995 or such later date as the parties
shall agree.
(n) Exchange Act. "Exchange Act" shall mean the U.S. Securities
------------
Exchange Act of 1934, as amended.
(o) Filing Date. "Filing Date" shall mean the date on which the CBV
-----------
Filing is filed with the CBV.
-51-
<PAGE>
(p) London Stock Exchange. "London Stock Exchange" shall mean the
---------------------
International Stock Exchange of Great Britain and the Republic of Ireland,
Limited.
(q) French Market Day. "French Market Day" shall mean a day on which
-----------------
the Paris Stock Exchange is open for trading.
(r) Group. "Group" shall mean a group (as such term is used in
-----
Section 13(d)(3) of the Exchange Act as in effect on the date hereof).
(s) Market Closing Price. "Market Closing Price" shall mean, for
--------------------
shares of Crown Common Stock, the closing price per share on the trading day in
question as reported by the NYSE for composite transactions.
(t) Material Adverse Effect. "Material Adverse Effect", when used in
-----------------------
connection with Shareholder, the Company, or Crown, means any significant and
substantial adverse effect on the business, operations, or financial condition,
or results of operations of Shareholder, the Company or Crown, as the case may
be, and its consolidated Subsidiaries, taken as a whole, or on the ability of
Shareholder or Crown, as the case may be, to perform its obligations hereunder
or to consummate the transactions contemplated hereby; provided, however, that
-------- -------
"Material Adverse Effect" does not include events caused by general changes in
the economy or in the industries served by Shareholder, the Company or Crown, as
the case may be.
(u) Noon Buying Rate. "Noon Buying Rate" shall mean the noon buying
----------------
rate in the City of New York for cable transfers payable in French francs
(expressed in French francs per U.S. $1.00) as announced by the Federal Reserve
Bank of New York for customs purposes.
(v) NYSE. "NYSE" shall mean the New York Stock Exchange, Inc.
----
(w) Outstanding Common Stock. "Outstanding Common Stock" shall mean
------------------------
all the shares of Common Stock currently outstanding, together with all shares
under option from time to time on the date of this Agreement plus all shares to
be issued in the Faba transaction as described in the BALO Announcement and
shares issued pursuant to the New Options and the 1994 Options.
(x) Paris Stock Exchange. "Paris Stock Exchange" shall mean the
--------------------
Bourse de Paris.
- ---------------
-52-
<PAGE>
(y) Person. "Person" shall mean any individual, Group, corporation,
------
partnership, firm, government or agency or political subdivision thereof, or
other entity of whatever nature.
(z) SBF. "SBF" shall mean the French Societe des Bourses Francaises.
--- ------------------------------
(aa) SEC. "SEC" shall mean the U.S. Securities and Exchange
---
Commission.
(ab) Securities Act. "Securities Act" shall mean the U.S. Securities
--------------
Act of 1933, as amended.
(ac) Subsidiaries. "Subsidiaries" shall mean all direct and indirect
------------
subsidiaries as the context requires.
(ad) SLF. "SLF" shall mean the French Service de la Legislation
--- -------------------------
Fiscale.
- -------
(ae) United States GAAP. "United States GAAP" shall mean United
------------------
States generally accepted accounting principles.
(af) Voting Power. "Voting Power" shall mean the voting power in the
------------
general election of members of the Conseil de Surveillance, and shall be
-----------------------
calculated for options to acquire shares of Common Stock and for securities
convertible into (or exercisable or exchangeable for) shares of Common Stock by
reference to the votes attributable to the number of shares of Common Stock for
which such options are exercisable or into which or for which such other
securities are convertible, exercisable or exchangeable.
(ag) $. "$" and "dollars" shall mean U.S. dollars.
-
In addition, the following terms have the definitions specified in the
Sections noted:
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
1994 Financial Statements Section 5(g)
1994 Options Annex 4(c)
Agreement Preamble
Average Crown Common Stock Price Section 1(b)
BALO Announcement Section 16(d)
</TABLE>
-53-
<PAGE>
<TABLE>
<S> <C>
By-law Amendment Section 5(h)
Camebo Section C.
Cash Election Price Section A.
CBV Filing Section 8(e)
Common Stock Section A.
Company Section A.
Company Confidentiality Agreement Section 7(f)
Company Employee Plans Annex 4(j)
Company Public Reports Section 7(j)
Crown Preamble
Crown Accountants Section 13(j)(i)
Crown Accountants Analysis Section 13(j)(ii)
Crown Accountants Judgment Section 13(j)(ii)
Crown Common Stock Section A.
Crown Confidentiality Agreement Section 8(d)
Crown Employee Plans Section 5(g)
Crown Preferred Stock Section A.
Crown SEC Reports Section 5(c)
Crown Shareholder Approvals Section 10.1(d)
Crown Shareholder Meeting Section 8(a)
days Section 16
Downgrade Section 11(i)
Exchange Offers Section B.
Exchange Ratio Section A.
Expiration Date Section 4
Final Determination Date Section 13(h)
Final Termination Date Section 13(e)
Financial Statements Annex 4(e)
French and U.K. Securities Authorities Annex 4(d)
French Franc Crown Common Stock Price Section 1(b)
Group Section 16(r)
</TABLE>
-54-
<PAGE>
<TABLE>
<S> <C>
HSR Act Section 5(k)
Independent Accountant Section 13(j)(iv)
International Accounting Standards Annex 4(e)
Investment Grade Section 11(i)
Measurement Date Section 1(b)
Minimum Condition Section 1(a)
New Articles Section 5(h)
New Options Annex 4(c)
Note d'Information Section 5(o)
Offer Section A.
Outstanding Options Section 1(h)
Pledge Section 6(a)
Proxy Statement Section 8(f)
Registration Statement Section 8(f)
Regulation 14A Section 8(f)
Returns Section 5(i)
Shareholder Preamble
Shareholder Accountants Section 13(j)(i)
Shareholder Accountants Analysis Section 13(j)(i)
Shareholder Accountants Judgment Section 13(j)(i)
Shareholder Designee Exh. 1, Section 13
Shareholders Agreement Section 9(f)
Shares Section C.
Strategic Committee Exh. 1, Section 13
Subsidiaries Section 16(x)
Taxes Section 5(i)
Third Party Bid Section 2(b)
U.K. Exchange Offer Section B.
U.K. Filing Section 8(h)
Unit Section A.
</TABLE>
-55-
<PAGE>
IN WITNESS WHEREOF, Crown and Shareholder have caused this Agreement
to be duly executed as of the day and year first above written.
CROWN CORK & SEAL COMPANY, INC.
By: /s/ Alan W. Rutherford
-------------------------------
Alan W. Rutherford
Executive Vice President
and Chief Financial Officer
COMPAGNIE GENERALE D'INDUSTRIE
ET DE PARTICIPATIONS
By: /s/ Ernest-Antoine Seilliere
-------------------------------
Ernest-Antoine Seilliere
Chairman and Chief
Executive Officer
-56-
<PAGE>
ANNEX 1
Article THIRD of the Corporation's Articles of Incorporation is amended to read
in its entirety as follows:
THIRD: The total number of shares which may be issued by the
Corporation is 650,000,000 shares of Common Stock, at a par value per share of
$5.00 (the "Common Stock") and ___________* shares of 4.5% Cumulative Preferred
Stock (Liquidation Preference $_____** per share), at a par value of $_____**
per share (the "Preferred Stock").
A. Common Stock: The designations, voting powers, restrictions and
------------
rights of the Common Stock are as follows:
1. Dividends. Holders of Common Stock will be entitled to receive
----------
such dividends as may be declared by the Board of Directors.
2. Liquidation. In any liquidation, dissolution or winding up of the
-----------
Corporation, whether voluntary or involuntary, after the debts of the
Corporation and obligations with respect to the Preferred Stock shall have been
paid or provided for, all of the remaining assets of the Corporation shall
belong to and shall be distributed ratably among the holders of the Common
Stock.
3. Reacquired Shares. The Board of Directors shall have the power to
-----------------
eliminate reacquired shares of Common Stock from the authorized number of shares
of the Corporation or to restore such shares to the status of authorized but
unissued shares.
4. Voting Rights. Except as may otherwise be required by law in any
-------------
case and as provided in Section C.6 below, the holders of shares of Common Stock
possess the
___________________
* Insert the number of Preferred Shares to be issued in the Exchange
Offers.
** Insert the average Market Closing Price (as defined in the Exchange Offer
Agreement) per share of Common Stock (as defined in the Exchange Offer
Agreement), in U.S. dollars, for the most recent 20 business days on
which trading of Crown Common Stock has occurred prior to the Measurement
Date (as defined in the Exchange Offer Agreement).
1-1
<PAGE>
ANNEX 1
exclusive voting powers of the Corporation. At every meeting of stockholders of
the Corporation, the holders of record of shares of Common Stock entitled to
vote thereat shall be entitled to one vote for each share held. The holders of
Common Stock shall not be entitled to cumulative voting in the election of
directors of the Corporation.
B. Capital Stock Generally. The following provisions shall apply to all
------------------------
classes of the Corporation's capital stock:
1. Additional or Increased Stock. No holder of stock of the
-----------------------------
Corporation of any class shall be entitled as of right to subscribe for any
additional or increased stock of any class or any obligations convertible into
any class or classes of stock, and the Corporation may, without offering any
such increased or additional stock or obligations to stockholders of any class,
sell or dispose of the same to such persons and for such consideration permitted
by law as the Board of Directors from time to time in its absolute discretion
determines.
2. Authorized Shares. The Corporation may issue and sell its
-----------------
authorized shares, if any, without par value from time to time for such
consideration as may from time to time be fixed by the Board of Directors, and
sell and dispose of any stock having a par value, for such consideration
permitted by law, as the Board of Directors may from time to time determine,
without other authority, consent or vote of the stockholders of the Corporation
of any class or classes, except as otherwise provided herein or under applicable
law.
C. Preferred Stock. The designations, voting powers, restrictions and
----------------
rights of the Preferred Stock are as follows:
1. Designation and Amount. The shares of Preferred Stock shall be
----------------------
designated as 4.5% Cumulative Preferred Stock and the number of shares
constituting such
1-2
<PAGE>
ANNEX 1
class shall be ___________.* The par value of the Preferred Stock shall be
$_____________** per share.
2. Rank. All shares of Preferred Stock shall, with respect to
----
dividend rights and rights upon liquidation, dissolution and winding-up, rank
senior to all of the Corporation's now or hereafter issued Junior Securities (as
hereinafter defined) and on a parity with the Parity Securities (as hereinafter
defined), unless the issuance of a new class of preferred stock that ranks
senior in respect of dividend rights or rights upon liquidation, dissolution and
winding-up is specifically approved by the holders of Preferred Stock as
provided under Section C.6(d). The Common Stock and other equity securities
(other than any senior securities specifically approved by the holders of
Preferred Stock as provided under Section C.6(d)) of the Corporation shall be
"Junior Securities" for all purposes hereunder unless, with respect to any class
of equity securities other than the Common Stock such securities expressly
provide that they rank on a parity with the Preferred Stock with respect to
dividends and upon liquidation, dissolution or winding-up, in which case such
class of equity securities shall be "Parity Securities". The terms of the
Preferred Stock do not restrict the creation of Junior Securities and Parity
Securities other than as provided in Section C.6(d).
3. Preferred Dividends. The holders of Preferred Stock shall be
-------------------
entitled to receive, when, as and if declared by the Board of Directors out of
funds at the time legally available therefor, dividends at the rate of
$________*** per annum per share (the "Preferred Dividends"), and no more, which
shall be fully cumulative and shall be payable in cash (except as provided in
Section C.5(i)) quarterly in arrears on ___________, ___________,
______________________
* Insert the number of Preferred Shares to be issued in the Exchange
Offers.
** Insert the average Market Closing Price (as defined in the Exchange Offer
Agreement) per share of Common Stock (as defined in the Exchange Offer
Agreement), in U.S. dollars, for the most recent 20 business days on
which trading of Crown Common Stock has occurred prior to the Measurement
Date (as defined in the Exchange Offer Agreement).
*** Insert 0.045 x the par value of the Preferred Stock
1-3
<PAGE>
___________ and ___________ of each year (each a "Dividend Payment Date")
(except that if any such date is a Saturday, Sunday or legal holiday, then such
dividend shall be payable on the next day that is not a Saturday, Sunday or
legal holiday) to holders of record as they appear upon the stock transfer books
of the Corporation on such record dates, not more than sixty days nor less than
ten days preceding the respective Dividend Payment Dates, as are fixed by the
Board of Directors (or, to the extent permitted by applicable law, a duly
authorized committee thereof).
The first dividend period shall be from the date of initial issuance
of the Preferred Stock to but excluding _____ and the first Dividend Payment
Date in respect of the Preferred Stock shall be ________. Dividends on the
Preferred Stock shall accrue (whether or not declared and whether or not such
amounts would be available, legally or otherwise, at that time for distribution
to holders of Preferred Stock) on a daily basis from the date of original
issuance of the Preferred Stock or from the most recent Dividend Payment Date to
which full dividends have been paid. Dividends will cease to accrue in respect
of any shares of the Preferred Stock on the effective date of a mandatory
conversion pursuant to Section C.5(e) or on the date of their earlier voluntary
conversion. Dividends (or cash amounts equal to accrued and unpaid dividends)
payable on the Preferred Stock for any period shorter than a quarterly dividend
period shall be computed on the basis of a 360-day year of twelve 30-day months.
For purposes hereof, the term "legal holiday" shall mean any day on
which banking institutions are authorized to close in New York, New York or in
Philadelphia, Pennsylvania. Subject to the next Paragraph of this Section C.3,
payments on account of accrued and unpaid dividends for any past dividend period
may be declared and paid at any time, without reference to any regular Dividend
Payment Date. The amount of dividends payable per share of Preferred Stock for
each quarterly dividend period shall be computed by dividing the annual dividend
amount by four. No interest shall be payable in respect of any accrued and
unpaid dividends on the Preferred Stock. Holders of the shares of Preferred
Stock, as such, shall not be entitled to any dividends, whether payable in cash,
property or stock, in excess of full cumulative cash dividends as provided in
this Section C.3.
No dividends or other distributions shall be declared, paid or set
apart for payment or otherwise made on shares of any Junior Securities (other
than a dividend or distribution paid solely in shares of, or warrants, rights
1-4
<PAGE>
or options exercisable for or convertible into Junior Securities), unless and
until all accrued and unpaid dividends on the Preferred Stock for all dividend
payment periods ending on or before the payment date of such dividend or other
distribution on Junior Securities shall have been paid or declared and set apart
for payment.
No payment in cash or otherwise on account of the purchase,
redemption, retirement or other acquisition of shares of Junior Securities shall
be made unless and until all accrued and unpaid dividends on the Preferred Stock
for all dividend payment periods ending on or before such payment in respect of
such Junior Securities shall have been paid or declared and set apart for
payment; provided, however, that the restrictions set forth in this sentence
-------- -------
shall not apply to the purchase or other acquisition of Junior Securities (A)
pursuant to any employee or director incentive or benefit plan or arrangement
(including any employment, severance or consulting agreement) of the Corporation
or any subsidiary of the Corporation heretofore or hereafter adopted, (B) solely
in exchange for or upon conversion into Junior Securities or (C) pursuant to a
redemption at the stated redemption price of any rights granted to holders of
Common Stock pursuant to a shareholder's rights plan.
No full dividends shall be declared, paid or set apart for payment on
shares of any class or series of the Parity Securities for any period unless
full cumulative dividends have been, or contemporaneously are, paid or declared
and set apart for such payment on the Preferred Stock for all dividend payment
periods ending on or before the payment date of such full dividends on Parity
Securities. No dividends may be paid on Parity Securities except on dates on
which dividends are paid on the Preferred Stock. If dividends are not paid or
set apart in full upon the shares of Preferred Stock and any Parity Securities,
all dividends paid or declared and set apart for payment on the Preferred Stock
and the Parity Securities shall be paid or declared and set apart for payment
pro rata so that the amount of dividends paid or declared and set apart for
payment per share on the Preferred Stock and the Parity Securities on any date
shall in all cases bear to each other the same ratio that accrued and unpaid
dividends to the date of payment on the Preferred Stock and the Parity
Securities bear to each other.
No payment on account of the purchase, redemption, retirement or other
acquisition of shares of Parity Securities shall be made, and, other than
dividends to the extent permitted by the preceding Paragraph, no
1-5
<PAGE>
distributions shall be declared, paid or set apart for payment or otherwise made
on shares of Parity Securities, unless and until all accrued and unpaid
dividends on the Preferred Stock for all dividend payment periods ending on or
before such payment in respect of, or the payment date of such distribution on,
such Parity Securities shall have been paid or declared and set apart for
payment; provided, however, that the restrictions set forth in this sentence
-------- -------
shall not apply to the purchase or other acquisition of Parity Securities (A)
pursuant to any employee or director incentive or benefit plan or arrangement
(including any employment, severance or consulting agreement) of the Corporation
or any subsidiary of the Corporation hereafter adopted, (B) solely in exchange
for or upon conversion into other Parity Securities or Junior Securities or (C)
pursuant to a redemption at the stated redemption price of any rights granted to
holders of Common Stock pursuant to a shareholder's rights plan.
Subject to the foregoing provisions, the Board of Directors may
declare and the Corporation may pay or set apart for payment dividends and other
distributions on any Junior Securities or Parity Securities, and may redeem,
purchase or otherwise acquire any Junior Securities or Parity Securities, and
the holders of the Preferred Stock shall not be entitled to share therein.
Any dividend payment made on shares of the Preferred Stock shall first
be credited against the earliest accrued but unpaid dividend due with respect to
shares of the Preferred Stock.
All dividends paid with respect to shares of the Preferred Stock
pursuant to this Section C.3 shall be paid pro rata to the holders entitled
thereto.
Holders of shares of the Preferred Stock shall be entitled to receive
the dividends provided for in this Section C.3 in preference to and in priority
over any dividend upon any of the Junior Securities.
4. Liquidation Preference. In the event of a liquidation,
----------------------
dissolution or winding up of the Corporation, whether voluntary or involuntary,
the holders of shares of Preferred Stock shall be entitled to receive out of the
assets of the Corporation available for distribution to shareholders an amount
per share of Preferred Stock equal to all dividends accrued and unpaid on such
share to (but not including) the date of final distribution to such holders,
whether or not declared, without interest, plus a sum equal to $[See Liquidation
Preference on p.1.] per share, before
1-6
<PAGE>
any payment shall be made or any assets distributed in respect of such Junior
Securities.
If the assets of the Corporation available for distribution to
shareholders are not sufficient to pay in full the liquidation payments payable
to the holders of outstanding shares of Preferred Stock (as provided in the
preceding Paragraph of this Section C.4) and any Parity Securities, then the
holders of such shares shall share ratably in such distribution of assets in
accordance with the amounts which would be payable on such distribution if the
amounts to which the holders of outstanding shares of Preferred Stock and the
holders of outstanding shares of such Parity Securities are entitled were paid
in full.
Except as provided in this Section C.4, holders of Preferred Stock, as
such, shall not be entitled to any distribution in the event of liquidation,
dissolution or winding up of the affairs of the Corporation.
For the purposes of this Section C.4, none of the following shall be
deemed to be a voluntary or involuntary liquidation, dissolution or winding up
of the Corporation:
(i) the voluntary sale, conveyance, lease, exchange or
transfer (for cash, shares of stock, securities or other consideration)
of all or substantially all of the property or assets of the Corporation;
(ii) the consolidation or merger of the Corporation with or
into one or more other corporations, or other associations;
(iii) the consolidation or merger of one or more corporations or
other associations with or into the Corporation;
(iv) the participation by the Corporation in a share exchange;
or
(v) the division of the Corporation pursuant to 15 Pa. C.S.
Subch. 19D.
5. Conversion Privilege.
--------------------
(a) Right of Conversion. At any time after the date of initial
-------------------
issuance of the Preferred Stock, each share of Preferred Stock shall be
convertible at the option of the holder thereof into fully paid and
nonassessable shares of
1-7
<PAGE>
Common Stock, at the rate of that number of shares of Common Stock for each full
share of Preferred Stock that is equal to $[See Liquidation Preference on p.1.]
divided by the conversion price applicable per share of Common Stock. For
purposes of this Section C.5, the "conversion price" applicable per share of
Common Stock shall initially be equal to $____* and shall be adjusted from time
to time in accordance with the provisions of this Section C.5.
(b) Conversion Procedures. Any holder of shares of Preferred Stock
---------------------
desiring to convert such shares into Common Stock shall surrender the
certificate or certificates evidencing such shares of Preferred Stock at the
office of the transfer agent for the Preferred Stock, which certificate or
certificates, if the Corporation shall so require, shall be duly endorsed to the
Corporation or in blank, or accompanied by proper instruments of transfer to the
Corporation or in blank, accompanied by irrevocable written notice to the
Corporation that the holder elects so to convert such shares of Preferred Stock
and specifying the name or names (with address or addresses) in which a
certificate or certificates evidencing shares of Common Stock are to be issued.
The Corporation shall, as soon as practicable after such surrender of
certificates evidencing shares of Preferred Stock accompanied by the written
notice and compliance with any other conditions herein contained, deliver at
such office of such transfer agent to the person for whose account such shares
of Preferred Stock were so surrendered, or to the nominee or nominees of such
person, certificates evidencing the number of full shares of Common Stock to
which such person shall be entitled as aforesaid, together with a cash
adjustment without interest in respect of any fraction of a share of Common
Stock as hereinafter provided. Such conversion shall be deemed to have been
made on the date of such surrender of the shares of Preferred Stock to be
converted (the "Surrender Date"), and the person or persons entitled to receive
the Common Stock deliverable upon conversion of such Preferred Stock shall be
treated for all purposes as the record holder or holders of such Common Stock on
such date.
In the event that fewer than all shares of Preferred Stock represented
by a surrendered certificate are to be converted hereunder, a new certificate
shall be issued at the expense of the Corporation representing the shares of
Preferred Stock not so converted. No interest will be
_____________
* Insert 1.0975 x par value.
1-8
<PAGE>
payable with respect to any cash adjustment paid with respect to any fractional
shares of Common Stock as hereinafter provided. No holder of a certificate or
certificates which immediately prior to the Surrender Date represented shares of
outstanding Preferred Stock shall have any rights as a holder of such Common
Stock, including without limitation voting rights or the right to receive any
dividend or other distribution from the Corporation with respect to any Common
Stock, until surrender of such certificate or certificates that prior to the
Surrender Date represented such shares of Preferred Stock in exchange for a
certificate or certificates representing such Common Stock.
Effective on the day following the Surrender Date, dividends shall
cease to accrue on any shares of Preferred Stock surrendered for conversion,
such shares of Preferred Stock shall no longer be deemed outstanding, all rights
of the holders thereof as preferred shareholders of the Corporation shall cease
(other than the right to receive dividends declared payable to holders of record
of Preferred Stock on a record date prior to the Surrender Date) and thereupon
the certificate or certificates theretofore representing such shares of
Preferred Stock shall represent only the right to receive the Common Stock
deliverable upon conversion in respect thereof.
(c) Adjustment of Conversion Price. The conversion price at which a
------------------------------
share of Preferred Stock is convertible into Common Stock shall be subject to
adjustment from time to time as follows:
(1) In case at any time after the date of original issuance of
the Preferred Stock, the Corporation shall pay or make a dividend or other
distribution to all holders of its Common Stock or other Junior Securities of
the Corporation in shares of Common Stock, the conversion price in effect at the
opening of business on the business day following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution shall be reduced by multiplying such conversion price by a fraction
of which the numerator shall be the number of shares of Common Stock outstanding
at the close of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total number of
shares constituting such dividend or other distribution, such reduction to
become effective immediately prior to the opening of business on the day
following the date fixed for such determination. For the purposes of this
Subparagraph (1), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Corporation but shall
1-9
<PAGE>
include shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Corporation will not pay any dividend
or make any distribution on shares of Common Stock held in the treasury of the
Corporation.
(2) In case at any time after the date of original issuance of
the Preferred Stock, the Corporation shall issue rights or warrants to all
holders of its Common Stock entitling them to subscribe for or purchase shares
of Common Stock at a price per share less than the current market price per
share (determined as provided in Subparagraph (6) of this Paragraph) of the
Common Stock on the date fixed for the determination of stockholders entitled to
receive such rights or warrants, the conversion price in effect at the opening
of business on the day following the date fixed for such determination shall be
reduced by multiplying such conversion price by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination plus the number of shares
of Common Stock which the aggregate of the offering price of the total number of
shares of Common Stock so offered for subscription or purchase would purchase at
such current market price (determined by multiplying such total number of shares
by the exercise price of such rights or warrants and dividing the product so
obtained by such current market price) and the denominator shall be the number
of shares of Common Stock outstanding at the close of business on the date fixed
for such determination plus the number of shares of Common Stock so offered for
subscription or purchase, such reduction to become effective immediately prior
to the opening of business on the day following the date fixed for such
determination. For the purposes of this Subparagraph (2), the number of shares
of Common Stock at any time outstanding shall not include shares held in the
treasury of the Corporation but shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of Common Stock. The
Corporation will not issue any rights or warrants in respect of shares of Common
Stock held in the treasury of the Corporation. The foregoing provision shall not
apply to issuances of rights pursuant to a shareholder rights plan provided that
such rights are issued together with the Common Stock upon conversion of the
Preferred Stock. In the event that all the shares of Common Stock offered for
subscription or purchase are not delivered upon the exercise of such rights or
warrants, upon the expiration of such rights or warrants the conversion price
shall be adjusted to the conversion price which would have been in effect had
the numerator and the denominator of the foregoing fraction and the resulting
1-10
<PAGE>
adjustment been made based upon the number of shares of Common Stock actually
delivered upon the exercise of such rights or warrants rather than upon the
number of shares of Common Stock offered for subscription or purchase; provided,
--------
however, that no such readjustment upon expiration of such rights or warrants
- -------
shall affect the number of shares of Common Stock issued upon any conversion of
Preferred Stock prior to such readjustment.
(3) In case at any time after the date of original issuance of
the Preferred Stock, outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock, the conversion price in effect at
the opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately reduced, and, conversely, in case at
any time after the date of original issuance of the Preferred Stock outstanding
shares of Common Stock shall each be combined into a smaller number of shares of
Common Stock, the conversion price in effect at the opening of business on the
day following the day upon which such combination becomes effective shall be
proportionately increased, such reduction or increase, as the case may be, to
become effective immediately prior to the opening of business on the day
following the day upon which such subdivision or combination becomes effective.
(4) In case at any time after the date of original issuance of
the Preferred Stock, the Corporation shall, by dividend or otherwise, distribute
to all holders of its Common Stock evidences of its indebtedness or assets
(including securities, but excluding any rights or warrants referred to in
Subparagraph (2) of this Paragraph, any dividend or distribution in cash solely
out of the retained earnings of the Corporation (retained earnings of the
Corporation for this purpose being calculated at any date to exclude the one-
time impact of the Corporation's adopting changes in accounting principles
required by changes in (i) United States generally accepted accounting
principles or (ii) the application or interpretation of United States generally
accepted accounting principles by any applicable governmental or regulatory
authority, provided that only changes occurring in the fiscal year with respect
to which retained earnings is being determined shall be excluded for this
purpose) and any dividend or distribution referred to in Subparagraph (1) of
this Paragraph), then in each such case, unless the Corporation elects to
reserve shares or other units of such securities or assets for distribution to
the holders of the Preferred Stock upon the conversion of the shares of
Preferred Stock so that any holder of Preferred Stock will receive upon such
conversion, in
1-11
<PAGE>
addition to the shares of the Common Stock to which such holder is entitled, the
kind and amount of such securities or assets which such holder would have
received if such shares of Preferred Stock had been converted into shares of
Common Stock immediately prior to the date fixed for the determination of
stockholders entitled to receive such distribution, the conversion price shall
be adjusted so that the same shall equal the price determined by multiplying the
conversion price in effect immediately prior to the close of business on the
date fixed for the determination of stockholders entitled to receive such
distribution by a fraction of which the numerator shall be the current market
price per share (determined as provided in Subparagraph (6) of this Paragraph)
of the Common Stock on the date fixed for such determination less the then fair
market value (as determined by the Board of Directors, whose determination, if
made in good faith, shall be conclusive and described in a resolution of the
Board of Directors filed with the transfer agent for the Preferred Stock and
mailed to the holders of record of the Preferred Stock) on the date fixed for
such determination of the portion of the assets or evidences of indebtedness so
distributed applicable to one share of Common Stock and the denominator shall be
such current market price per share of the Common Stock, such adjustment to
become effective immediately prior to the opening of business on the day
following the date fixed for the determination of stockholders entitled to
receive such distribution.
(5) The reclassification of Common Stock into securities other
than Common Stock (other than any reclassification upon a consolidation or
merger to which Section C.5(f) applies) shall be deemed to involve (a) a
distribution of such securities other than Common Stock to all holders of Common
Stock (and the effective date of such reclassification shall be deemed to be
"the date fixed for the determination of stockholders entitled to receive such
distribution" and "the date fixed for such determination" within the meaning of
Subparagraph (4) of this Paragraph), and (b) a subdivision or combination, as
the case may be, of the number of shares of Common Stock outstanding immediately
prior to such reclassification into the number of shares of Common Stock, if
any, outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the day upon which such subdivision
becomes effective" or "the day upon which such combination becomes effective",
as the case may be, and "the day upon which such subdivision or combination
becomes effective" within the meaning of Subparagraph (3) of this Paragraph).
1-12
<PAGE>
(6) For the purpose of any computation under Subparagraphs (2)
and (4) of this Paragraph, the current market price per share of Common Stock on
any day shall be deemed to be the average of the "market prices" (as defined
below) for shares of Common Stock for any five consecutive Business Days
selected by the Corporation commencing not more than 20 Business Days before the
date in question, provided, however, that if the "ex" date (as defined later in
-------- -------
this Subparagraph (6)) for any event (other than the issuance or distribution
requiring such computation) that requires an adjustment to the conversion price
pursuant to Subparagraph (1), (2), (3) or (4) above occurs on or after the 20th
Business Day prior to the day in question and prior to the "ex" date for the
issuance or distribution requiring such computation, the market price for each
Business Day prior to the "ex" date for such other event shall be adjusted by
multiplying such market price by the same fraction by which the conversion price
is required to be adjusted as a result of such other event. For purposes of this
Paragraph, the term "'ex' date", (i) when used with respect to any issuance or
distribution, means the first day on which the Common Stock trades regular way
on the relevant exchange or in the relevant market from which the market price
was obtained without the right to receive such issuance or distribution and (ii)
when used with respect to any subdivision or combination of shares of Common
Stock, means the first date on which the shares of Common Stock trade regular
way on such exchange or in such market after the time at which such subdivision
or combination becomes effective. The term "market price" as used in this
Paragraph means, the last reported sales price regular way or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices regular way, in either case of the Common Stock on the New York
Stock Exchange or, if the Common Stock is not listed or admitted to trading on
such exchange, on the principal national securities exchange on which the Common
Stock is listed or admitted to trading or, if not listed or admitted to trading
on any national securities exchange, on the National Association of Securities
Dealers Automated Quotations National Market System or, if the Common Stock is
not listed or admitted to trading on any national securities exchange or quoted
on such National Market System, the average of the closing bid and asked prices
in the over-the-counter market as furnished by any New York Stock Exchange
member firm selected from time to time by the Corporation for that purpose. If
none of the conditions set forth above is met, the closing price of Common Stock
on any day or the average of such closing prices for any period shall be the
fair market value of such class of stock as determined by a
1-13
<PAGE>
member firm of the New York Stock Exchange, Inc. selected by the Corporation.
(7) In any case in which this Paragraph shall require that an
adjustment be made immediately following a record date, the Corporation may
elect to defer the implementation of such adjustment (but in no event until a
date later than the effective time of the event giving rise to such adjustment),
in which case the Corporation shall, with respect to any share of Preferred
Stock converted after such record date and before such adjustment shall have
become implemented (i) defer paying any cash payment pursuant to Paragraph (d)
below in respect of fractional shares or issuing to the holder of such share of
Preferred Stock the number of shares of Common Stock issuable upon such
conversion in excess of the number of shares of Common Stock issuable thereupon
only on the basis of the conversion price prior to adjustment, and (ii) not
later than five Business Days after such adjustment shall be implemented, pay to
such holder the appropriate cash payment pursuant to Paragraph (d) and issue to
such holder the additional shares of Common Stock and other capital stock and
securities of the Corporation issuable on such conversion and deliver to such
holder such other assets deliverable on such conversion. If an event otherwise
requiring that an adjustment be made pursuant to this Paragraph never becomes
effective, no such adjustment shall be required to be implemented.
(8) Notwithstanding anything to the contrary herein, no
adjustment in the Conversion Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in such price; provided,
--------
that any adjustments which by reason of this Subparagraph (8) are not required
to be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Paragraph shall be made by the
Corporation to the nearest cent or the nearest one-hundredth of a share, as the
case may be.
(9) The Corporation may make such reductions in the conversion
price, in addition to those required by Subparagraphs (1), (2), (3) and (4) of
this Paragraph, as it considers to be advisable in order that any event treated
for Federal income tax purposes as a dividend of stock or stock rights shall not
be taxable to the recipients. Any determination by the Board of Directors of
the Corporation in connection with the foregoing, if made in good faith, shall
be conclusive and described in a resolution of the Board of Directors filed with
the transfer agent for the
1-14
<PAGE>
Preferred Stock and mailed to the holders of record of the Preferred Stock.
(10) As used in this Section C.5 "Business Day" means any day
other than a Saturday, Sunday or a day on which banking institutions in the
State of New York are authorized by law or executive order to close.
(11) Whenever the conversion price is adjusted as herein
provided, the Corporation shall:
(i) forthwith compute the adjusted conversion price in
accordance with this Section C.5(c) and prepare a certificate signed
by the Chief Financial Officer, any Vice President, the Treasurer or
Controller of the Corporation setting forth the adjusted conversion
price, the method of calculation thereof in reasonable detail and the
facts requiring such adjustment and upon which such adjustment is
based, which certificate shall be conclusive, final and binding
evidence of the correctness of the adjustment, and file such
certificate forthwith with the transfer agent or agents for the
Preferred Stock and the Common Stock; and
(ii) mail a notice stating that the conversion price has been
adjusted, the facts requiring such adjustment and the facts upon which
such adjustment is based and setting forth the adjusted conversion
price to the holders of record of the outstanding shares of the
Preferred Stock at or prior to the time the Corporation mails an
interim statement to its shareholders covering the fiscal quarter
during which the facts requiring such adjustment occurred, but in any
event within 45 days of the end of such fiscal quarter for the first
three quarters of each year and within 90 days of the end of the last
fiscal quarter of each year.
(d) No Fractional Shares. No fractional shares or scrip representing
--------------------
fractional shares of Common Stock shall be issued upon conversion of Preferred
Stock. If more than one certificate evidencing shares of Preferred Stock shall
be surrendered for conversion at one time by the same holder, the number of full
shares issuable upon conversion thereof shall be computed on the basis of the
aggregate number of shares of Preferred Stock so surrendered. Instead of any
fractional share of Common Stock that would otherwise be issuable to a holder
upon conversion of any shares of
1-15
<PAGE>
Preferred Stock, the Corporation shall pay a cash adjustment without interest in
respect of such fractional share in an amount equal to the same fraction of the
market price per share of Common Stock (as determined by the Board of Directors,
which, so long as the Common Stock is listed on the New York Stock Exchange,
shall be the reported last sale price regular way on the New York Stock
Exchange) at the close of business on the day of conversion.
(e) Mandatory Conversion. On the fourth anniversary of the date of
--------------------
original issuance of the Preferred Stock (the "Latest Mandatory Conversion
Date") all of the Preferred Stock shall convert into shares of Common Stock on
the basis provided in Subparagraph (iii) of this Paragraph (e). If, at any time
prior to the Latest Mandatory Conversion Date less than 30% of the number of
shares of Preferred Stock initially issued remain outstanding, the remaining
shares of Preferred Stock shall, at the election of the Corporation and after
notice has been provided as set forth below, convert into shares of Common Stock
on the basis provided in Subparagraph (iii) of this Paragraph (e).
(i) Notice of Conversion. If the Corporation has elected to
--------------------
convert the Preferred Stock into Common Stock pursuant to the second
sentence of this Paragraph (e), the Corporation will provide notice of
mandatory conversion of shares of Preferred Stock pursuant to this
Paragraph (e) (other than any conversion on the Latest Mandatory
Conversion Date) to holders of record of the Preferred Stock to be
converted not less than 15 nor more than 60 days prior to the date fixed
for conversion. Such notice shall be provided by mailing notice of such
conversion first class air mail postage prepaid, to each holder of record
of the Preferred Stock to be converted, at such holder's address as it
appears on the stock register of the Corporation; provided, however, that
no failure to give such notice nor any defect therein shall affect the
validity of the preceding notice for the conversion of any shares of
Preferred Stock except as to the holder to whom the Corporation has
failed to give said notice or except as to the holder whose notice was
defective. Such notice shall specify the date fixed for conversion, the
conversion price then in effect and that on and after the date fixed for
conversion dividends will cease to accrue on such shares.
(ii) Deposit of Shares and Funds. The Corporation's obligation
---------------------------
to deliver shares of Common Stock and provide funds in accordance with
this
1-16
<PAGE>
Paragraph (e) shall be deemed fulfilled if, on the mandatory conversion
date, the Corporation shall deposit, with a bank or trust company, having
an office or agency in New York, New York and having a capital and
surplus of at least $50,000,000, such number of shares of Common Stock as
are required to be delivered by the Corporation pursuant to this
Paragraph (e) upon the conversion (including the payment of fractional
share amounts), together with funds sufficient to pay all accrued and
unpaid dividends on the shares to be converted to (but not including) the
effective date of the conversion, in trust for the account of the holders
of the shares to be converted (and so as to be and continue to be
available therefor), with irrevocable instructions and authority to such
bank or trust company that such shares and funds be delivered upon
conversion of the shares of Preferred Stock so called for conversion,
provided that the Corporation shall not deposit such shares of Common
--------
Stock or such funds on any date prior to the mandatory conversion date.
Any interest accrued on such funds shall be paid to the Corporation from
time to time. Any shares of Common Stock or funds so deposited and
unclaimed at the end of two years from such conversion date shall be
repaid and released to the Corporation, after which the holder or holders
of such shares of Preferred Stock so called for conversion shall look
only to the Corporation for delivery of such shares of Common Stock or
funds.
(iii) Effective Date. Provided that the Corporation has
--------------
fulfilled its obligations to deposit shares and funds as provided in
Subparagraph (ii) of this Paragraph (e), then effective on the conversion
date fixed by the Corporation and notified to the holders of Preferred
Stock pursuant to Subparagraph (i) of this Paragraph (e) (or on the
Latest Mandatory Conversion Date, as the case may be), each outstanding
share of Preferred Stock shall be converted into fully paid and
nonassessable shares of Common Stock at the conversion price then in
effect, automatically and without any action on the part of any holder of
shares of Preferred Stock, and such shares of Common Stock shall be
deemed outstanding from and after the conversion date.
(iv) Surrender of Certificates; Status. Each holder of shares
---------------------------------
of Preferred Stock to be converted pursuant to this Paragraph (e) shall
surrender the certificates evidencing such shares to the Corporation at
the place designated in the notice of such conversion or, if such
conversion occurs on the
1-17
<PAGE>
Latest Mandatory Conversion Date, then such conversion shall, unless the
Corporation has notified each holder otherwise, take place at [ ], and
shall thereupon be entitled to receive certificates evidencing shares of
Common Stock and to receive any funds payable following such surrender
and following the date of such conversion. If any required notice of
conversion shall have been given or no such notice is required by the
terms hereof, and if on the date fixed for conversion, shares of Common
Stock and funds necessary for the conversion shall have been deposited
with a bank or trust company as provided in Subparagraph (ii) of this
Paragraph (e), then, notwithstanding that the certificates evidencing any
shares of Preferred Stock subject to conversion shall not have been
surrendered, the shares represented thereby subject to conversion shall
be deemed no longer outstanding, dividends with respect to the shares
subject to conversion shall cease to accrue after the date fixed for
conversion and all rights with respect to the shares subject to
conversion shall forthwith after such date cease and terminate, except
for the right of the holders to receive the shares of Common Stock and
funds, if any, to which they are entitled without interest upon surrender
of their certificates therefor.
(f) Reclassification, Consolidation, Merger or Sale of Assets. In
---------------------------------------------------------
case of any consolidation of the Corporation with, or merger of the Corporation
or share exchange into, any other Person (as hereinafter defined), any merger of
another Person into the Corporation (other than a merger or share exchange which
does not result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock) or any sale or transfer of all or
substantially all of the assets of the Corporation, lawful provision shall be
made as a part of the terms of such consolidation, merger, sale or transfer
whereby the holder of each share of the Preferred Stock shall have the right to
convert such share into the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer by a
holder of the number of shares of Common Stock of the Corporation into which a
share of the Preferred Stock might have been converted at the conversion price
in effect immediately prior to such consolidation, merger, sale or transfer
(including aggregation rights with respect to fractional shares equivalent to
those set forth in Paragraph (d) above), assuming such holder of Common Stock of
the Corporation (i) is not a Person with which the Corporation consolidated or
into which the Corporation
1-18
<PAGE>
merged or which merged into the Corporation or exchanged its shares or to which
such sale or transfer was made, as the case may be (a "constituent Person"), or
an Affiliate (as hereinafter defined) of a constituent Person, and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of
securities, cash or other property receivable upon such consolidation, merger,
sale or transfer by other than a constituent Person or an Affiliate thereof and
in respect of which such rights of election shall not have been exercised;
provided, however, that if the kind or amount of securities, cash and other
- -------- -------
property receivable upon such consolidation, merger, sale or transfer is not the
same for each share of Common Stock of the Corporation held immediately prior to
such consolidation, merger, sale or transfer by others than a constituent Person
or an Affiliate thereof and in respect of which such rights of election shall
not have been exercised ("non-electing share"), then for the purpose of this
Paragraph the kind and amount of securities, cash and other property receivable
upon such consolidation, merger, sale or transfer by each non-electing share
shall be deemed to be the kind and amount so receivable per share by a plurality
of the non-electing shares. It is understood for purposes of this Paragraph
that, if the shareholders of the Corporation have approved any such
consolidation, merger, sale or transfer which makes provision for the Preferred
Stock under the terms of such consolidation, merger, sale or transfer (such
approval to include the necessary approval, if any, of the holders of the
Preferred Stock under this Section C), then the holders of Preferred Stock shall
be deemed to have waived the benefits of this Paragraph.
Such provision shall also provide, as a part of the terms of such
consolidation, merger, share exchange, sale or transfer, for adjustments for
subsequent events equivalent to the adjustments provided for in Section C.6.
The above provisions of this Paragraph (f) shall similarly apply to successive
consolidations, mergers, share exchanges, sales or transfers.
For purposes of this Paragraph (f), "Person" means any individual,
corporation, partnership, joint venture, trust, unincorporated organization,
government or any agency or political subdivision thereof, or any other entity
and "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting
1-19
<PAGE>
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
With respect to any consolidation, merger, share exchange, sale or
transfer in which the Corporation is not the surviving Person, the surviving
Person shall be a Person organized under the laws of a State of the United
States.
(g) Reservation of Shares; Etc. The Corporation shall at all times
--------------------------
reserve and keep available, free from preemptive rights out of its authorized
and unissued stock, solely for the purpose of effecting the conversion of the
Preferred Stock, such number of shares of its Common Stock as shall from time to
time be sufficient to effect the conversion of all shares of Preferred Stock
from time to time outstanding. The Corporation shall from time to time, in
accordance with the laws of the Commonwealth of Pennsylvania, increase the
authorized number of shares of Common Stock if at any time the number of shares
of authorized and unissued Common Stock shall not be sufficient to permit the
conversion of all the then-outstanding shares of Preferred Stock.
If any shares of Common Stock required to be reserved for purposes of
conversion of the Preferred Stock hereunder require registration with or
approval of any governmental authority under any Federal or State law before
such shares may be issued upon conversion, the Corporation will in good faith
and as expeditiously as possible endeavor to cause such shares to be duly
registered or approved as the case may be. If the Common Stock is listed on the
New York Stock Exchange, the London Stock Exchange, the Paris Stock Exchange or
any other national or foreign securities exchange, the Corporation will, if
permitted by the rules of such exchange, list and keep listed on such exchange,
upon official notice of issuance, all shares of Common Stock issuable upon
conversion of the Preferred Stock.
(h) Prior Notice of Certain Events. In case:
------------------------------
(i) the Corporation shall declare any dividend (or any other
distribution) on its Common Stock other than ordinary quarterly dividends in
accordance with the Corporation's dividend policy (and other than dividends and
distributions described in clauses (ii) and (iii) below); or
(ii) the Corporation shall authorize the granting to all holders
of Common Stock of rights or warrants to subscribe for or purchase any shares of
stock of
1-20
<PAGE>
any class or series or of any other rights or warrants other than pursuant to a
shareholder rights plan provided that such rights are issuable together with
Common Stock upon conversion of the Preferred Stock; or
(iii) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a change in par
value, or from par value to no par value, or from no par value to par value), or
of any division or consolidation or merger to which the Corporation is a party
and for which approval of any shareholders of the Corporation shall be required,
or of the sale or transfer of all or substantially all of the assets of the
Corporation or of any compulsory share exchange whereby the Common Stock is
converted into other securities, cash or other property; or
(iv) of the voluntary or involuntary dissolution, liquidation or
winding up of the Corporation;
then the Corporation shall cause to be filed with the transfer agent for the
Preferred Stock, and shall cause to be mailed to the holders of record of the
Preferred Stock, at their last addresses as they shall appear upon the stock
transfer books of the Corporation, at least fifteen days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on
which a record (if any) is to be taken for the purpose of such dividend,
distribution, redemption, repurchase, rights or warrants or, if a record is not
to be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution, redemption, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, share exchange, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up (but no failure to mail such notice or
any defect therein or in the mailing thereof shall affect the validity of the
corporate action required to be specified in such notice).
(i) Accrued and Unpaid Dividends. Notwithstanding the provisions of
----------------------------
Paragraph (b) above, the holder of each share of Preferred Stock shall, upon the
conversion of shares of Preferred Stock pursuant to Paragraph (e) above, convert
all accrued and unpaid
1-21
<PAGE>
dividends in respect of such shares of Preferred Stock into Common Stock at the
conversion price.
6. Voting Rights. Other than as set forth below and except as
-------------
provided under applicable law, the holders of Preferred Stock shall be entitled
to vote together with the holders of Common Stock on all matters to be voted on
by the Corporation's holders of Common Stock. When voting together with the
holders of Common Stock on any matter, each share of Preferred Stock shall be
entitled to the number of votes equal to the number of shares of Common Stock
into which such share of Preferred Stock is convertible as provided under
Section C.5 as of the record date applicable to such vote. The holders of
Preferred Stock as a class shall have the following additional voting rights:
(a) Required Votes. Except as provided below, a vote of at least a
--------------
majority of Preferred Stock then outstanding shall be sufficient to take any
action requiring the vote of the Preferred Stock as a separate class. The
Common Stock shall not vote together with the Preferred Stock on any such
matters. At any meeting where the Preferred Stock shall have the right to vote
as a separate class, the presence, in person or by proxy, of a majority of the
outstanding shares of the Preferred Stock shall constitute a quorum of such
class.
(b) Default Voting Rights. Whenever dividends accrued on the
---------------------
Preferred Stock shall be in arrears and unpaid for at least six consecutive
quarterly dividend periods, (i) the number of members constituting the Board of
Directors shall be increased by two, effective as of the time of election of
such directors as hereinafter provided and (ii) the holders of shares of
Preferred Stock (voting separately as a class together with holders of any
Parity Securities upon which like voting rights have been conferred and are then
exercisable) will have the exclusive right to vote for and elect such two
additional directors of the Corporation (the "Preferred Stock Directors") to
fill such newly-created directorships. Such right to elect two Preferred Stock
Directors shall become effective at the earlier of (x) the next meeting of
shareholders of the Corporation at which directors are to be elected held after
such dividends have been in arrears and unpaid for six consecutive quarterly
dividend periods and (y) the special meeting of holders of Preferred Stock (and
of Parity Securities on which similar voting rights have been conferred) called
as provided below in this Paragraph (b), and shall terminate when all accrued
and unpaid dividends on the Preferred Stock have been declared and paid or set
apart for payment in full, subject to re-vesting in the event of
1-22
<PAGE>
each and every subsequent failure of the Corporation to pay dividends for the
requisite number of quarterly dividend periods as described above.
Each of the two Preferred Stock Directors shall serve until the next
annual meeting of shareholders of the Corporation and until his or her successor
shall be elected and shall have qualified or the earlier expiration of his or
her term as provided in this Paragraph (b). No Preferred Stock Director may be
removed without the vote of holders of a majority of the shares of Preferred
Stock voting as a class, or the holders of a majority of shares of Preferred
Stock and Parity Securities having the right to vote in the election of the
Preferred Stock Directors in case holders of shares of Parity Securities shall
also have the right to elect such directors voting together as a single class,
as the case may be. If, prior to the expiration of the term of any Preferred
Stock Director, a vacancy in the office of such director shall occur, such
vacancy shall, until the expiration of such term, in each case be filled by the
vote of the holders of record of a majority of the then outstanding shares of
Preferred Stock voting as a class, or the holders of a majority of the shares of
Preferred Stock and Parity Securities who are then entitled to participate in
the election of the Preferred Stock Directors in case holders of such Parity
Securities shall also have the right to elect such directors voting together as
a single class, as the case may be.
Upon any termination of the right of the holders of Preferred Stock
voting as a class to elect the Preferred Stock Directors as herein provided, the
term of office of the Preferred Stock Directors then in office shall terminate
immediately. Upon such termination the number of directors constituting the
Board of Directors shall, without further action, be reduced by two.
At elections for Preferred Stock Directors, each holder of Preferred
Stock shall be entitled to one vote per share. In the event that the holders of
any Parity Securities shall be entitled to participate in the election of the
Preferred Stock Directors, the holders of such Parity Securities shall be
entitled to cast one vote for each $[Insert Liquidation Value of Preferred
Stock] in liquidation value of such Parity Securities.
The foregoing right of the holders of shares of Preferred Stock with
respect to the election of the Preferred Stock Directors may be exercised at any
annual meeting of shareholders or at any special meeting of shareholders held
for such purpose. If the right to elect
1-23
<PAGE>
directors shall have accrued to the holders of shares of Preferred Stock more
than ninety days preceding the date established for the next annual meeting of
stockholders, the President of the Corporation shall, within twenty days after
the delivery to the Corporation at its principal office of a written request for
a special meeting signed by the holders of at least 10% of all outstanding
shares of Preferred Stock, call a special meeting of the holders of Preferred
Stock (and of any Parity Securities on which similar voting rights have been
conferred) to be held within sixty days after the delivery of such request for
the purpose of electing the Preferred Stock Directors.
(c) Removal. The holders of shares of Preferred Stock (together with
-------
the holders of any Parity Securities on which similar voting rights have been
conferred), voting as a class shall have the right to remove without cause at
any time and replace the Preferred Stock Directors.
(d) Class Voting Rights. So long as any Preferred Stock is
-------------------
outstanding (except when notice of the mandatory conversion of all outstanding
shares of Preferred Stock has been duly given by the Corporation or as of the
Latest Mandatory Conversion Date and, in each case, shares of Common Stock and
any necessary funds have been deposited in trust for such conversion pursuant to
Section C.5(e)), the Corporation shall not, without the affirmative vote or
consent of the holders of at least a majority (unless a higher percentage shall
then be required by applicable law) of all outstanding shares of Preferred Stock
voting separately as a class, given in person or by proxy, either in writing or
by resolution adopted at an annual or special meeting called for this purpose,
(i) amend, alter or repeal any provision of the Articles of Incorporation of the
Corporation, as amended, so as to affect, in any manner adverse to the holders
of the Preferred Stock, the relative rights, preferences, qualifications,
limitations or restrictions of the Preferred Stock; (ii) create, authorize, or
reclassify any authorized stock of the Corporation into, or increase the
authorized amount of, any class or series of the Corporation's capital stock
ranking prior to the Preferred Stock as to dividends or as to distributions of
assets upon liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, or any security convertible into shares of such a
class or series; or (iii) take any other action on which the holders of the
Preferred Stock shall be entitled by law to vote separately as a class.
For purposes of Paragraph C.6(d), without limitation, (i) the
creation, authorization or issuance of
1-24
<PAGE>
any shares of any Junior Securities or Parity Securities and (ii) the creation
of any indebtedness of the Corporation (other than indebtedness convertible into
or exchangeable for capital stock of the Corporation other than Junior
Securities or Parity Securities), shall not require the consent of the holders
of the Preferred Stock voting as a class.
(e) Limitations. Except as may otherwise be required by law, the
-----------
shares of Preferred Stock shall not have any powers, preferences or relative,
participating, optional or other special rights other than those specifically
set forth in the Articles of Incorporation of the Corporation (as the same may
be amended from time to time).
(f) No Cumulative Voting. The holders of Preferred Stock shall not
--------------------
be entitled to cumulative voting in the election of directors of the Corporation
whether voting as a class or voting together with the holders of Common Stock.
7. Status of Acquired Shares and Further Issuances of Preferred
------------------------------------------------------------
Stock. Shares of Preferred Stock received upon conversion pursuant to Section
- -----
C.5 or otherwise acquired by the Corporation, shall be cancelled and shall not
be reissued by the Corporation, and the number of authorized shares of Preferred
Stock shall be correspondingly reduced.
Following the initial issuance of Preferred Stock, no further shares
of Preferred Stock shall be issued and, in the event that any shares of
Preferred Stock are authorized but unissued, the number of authorized shares of
Preferred Stock shall be reduced accordingly.
8. Severability of Provisions. Whenever possible, each provision
--------------------------
hereof shall be interpreted in a manner as to be effective and valid under
applicable law, but if any provision hereof is held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.
1-25
<PAGE>
9. Miscellaneous. (a) The Corporation shall pay any and all stock
-------------
transfer and documentary stamp taxes that may be payable in respect of any
issuance or delivery of shares of Preferred Stock or shares of Common Stock or
other securities issued on account of Preferred Stock pursuant hereto or
certificates or instruments evidencing such shares or securities. The
Corporation shall not, however, be required to pay any such tax which may be
payable in respect of any transfer involved in the issuance or delivery of
shares of Preferred Stock or Common Stock or other securities in a name other
than that in which the shares of Preferred Stock with respect to which such
shares or other securities are issued or delivered were registered, or in
respect of any payment to any person with respect to any such shares or
securities other than a payment to the registered holder thereof, and shall not
be required to make any such issuance, delivery or payment unless and until the
person otherwise entitled to such issuance, delivery or payment has paid to the
Corporation the amount of any such tax or has established, to the satisfaction
of the Corporation, that such tax has been paid or is not payable.
(b) In the event that a holder of shares of Preferred Stock shall not
by written notice designate the name in which shares of Common Stock to be
issued upon conversion of such shares should be registered or to whom payment
upon redemption of shares of Preferred Stock should be made or the address to
which the certificates evidencing such shares, or such payment, should be sent,
the Corporation shall be entitled to register such shares, and make such
payment, in the name of the holder of such Preferred Stock as shown on the
records of the Corporation and to send the certificates evidencing such shares,
or such payment, to the address of such holder shown on the records of the
Corporation.
A new Article 11 of the Corporation's Articles of Incorporation shall
be added to read as follows:
ELEVENTH: Subchapter E, Control Transactions, of Chapter 25 of the
Pennsylvania Business Corporation Law, as amended, shall not be applicable to
the Corporation.
1-26
<PAGE>
ANNEX 2
AMENDMENTS TO BY-LAWS
---------------------
The following Sections of Article II of the Corporation's Bylaws are amended to
insert a new Section 13 as follows:
SECTION 13: Strategic Committee; Numbers; Qualifications. The Board of
---------------------------------------------
Directors shall by resolution appoint a committee (the "Strategic Committee")
consisting of a number of directors, one-half of whom are designated by
Shareholder (each a "Shareholder Designee"). The Strategic Committee shall
initially consist of six members, three of whom shall be Shareholder Designees.
SECTION 13.1: Powers. The Strategic Committee shall consider all issues
-------
regarding: (i) changes in the dividend and debt rating policies of the
Corporation as such policies are set forth in Sections 3.7 and 3.8 of the
Shareholders Agreement; (ii) the approval of any merger, consolidation or
similar transaction of the Corporation or any material subsidiary of the
Corporation (other than pursuant to internal reorganizations); (iii) any
recapitalization or any share exchange involving the Corporation; (iv) the
sale by the Corporation or any subsidiary of the Corporation of a material
amount of assets; (v) the issuance of Common Stock or other securities or
the incurrence of indebtedness in any transaction in which a vote of the
Corporation's shareholders is required under New York Stock Exchange Rules
or Pennsylvania law or which involves a material amount of securities or
indebtedness; (vi) an acquisition by the Corporation of a material amount
of assets; and (vii) succession planning. Unless the Strategic Committee
decides not to consider any such issues, no such issue may be voted on by
the Board of Directors until the Strategic Committee has voted to recommend
passage or rejection by the Board of Directors or the Strategic Committee
deadlocks on such issue and can make no recommendation to the Board of
Directors; and provided that if a meeting of the Strategic Committee is not
--------
held to consider any such issue within seven days of notice being given
pursuant to Section 13.2, the Board of Directors shall be free to vote on
any such issue without having received the vote of the Strategic Committee.
The Board of Directors shall consider the vote of the Strategic Committee
in determining whether to pass or reject any such item but shall not be
bound to follow the vote of the Strategic Committee. The validity,
authorization or enforceability of any contract, agreement or instrument
entered into by the
2-1
<PAGE>
Corporation or any of its subsidiaries shall not be affected by the
operation of this Section 13.
The Board shall call a meeting of the Strategic Committee to review the
Corporation's response to any third party action or proposal described in
Section 2.1 of the Shareholders Agreement, if such section is then
currently in effect. The Strategic Committee shall consider and evaluate
the appropriate response to such proposal and make a recommendation to the
full Board.
SECTION 13.1: Chairman of Strategic Committee. A chairman of the
--------------------------------
Strategic Committee shall be appointed from among the Shareholder Designees
who serve on such committee. The Chairman of the Strategic Committee shall
preside at all meetings of the Strategic Committee at which he or she shall
be present and shall have and may exercise such powers as may, from time to
time, be assigned to him or her by the Board of Directors or as may be
provided by law.
SECTION 13.2: Meetings. Meetings of the Strategic Committee may be held
---------
at any time, in Philadelphia or Paris or any other place within or without
the State of Pennsylvania as the Chairman of the Board of Directors and
Chairman of the Strategic Committee shall mutually agree from time to time,
whenever called by the Chairman of the Strategic Committee, or by any two
members serving on the Strategic Committee. Reasonable notice thereof
shall be given by the person or persons calling the meeting.
SECTION 13.3: Participation in Meetings by Conference Telephone Permitted.
-----------------------------------------------------------
Members of the Strategic Committee may participate in a meeting of such
committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can
hear each other, and participation in a meeting pursuant to this By-law
shall constitute presence in person at such meeting.
SECTION 13.4: Quorum; Vote Required for Action. At all meetings of the
---------------------------------
Strategic Committee a majority of the entire Strategic Committee shall
constitute a quorum for the transaction of business. The vote of a
majority of the members of the Strategic Committee present at a meeting at
which a quorum is present and at which at least one half of the members
present are Shareholder Designees shall be the act of the Strategic
Committee. In case at any meeting of the Strategic Committee a quorum
shall not be present, the members of
2-2
<PAGE>
the Strategic Committee present may adjourn the meeting from time to time
until a quorum shall attend.
SECTION 13.5: Organization. Meetings of the Strategic Committee shall be
-------------
presided over by the Chairman of the Strategic Committee or in the absence
of the Chairman by a chairman chosen from among the other Shareholder
Designees at the meeting. The Secretary of the meeting shall be a liaison
officer of Shareholder who shall be subject to the appropriate
confidentiality provisions. If no such officer is available to attend a
meeting, the Strategic Committee Chairman or any acting chairman of the
meeting may appoint any person to act as secretary of such meeting.
SECTION 13.6: Action by Strategic Committee Without a Meeting. Unless
------------------------------------------------
otherwise restricted by the Articles of Incorporation or these Bylaws, any
action required or permitted to be taken at any meeting of the Strategic
Committee may be taken without a meeting if all members of the Strategic
Committee consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Strategic Committee.
2-3
<PAGE>
Annex 3
-------
This Shareholders Agreement (the "Agreement"), dated as of _____, 199_,
is between Crown Cork & Seal Company, Inc. a corporation organized under the
laws of the Commonwealth of Pennsylvania (the "Company"), and Compagnie Generale
d'Industrie et de Participations, a societe anonyme organized under the laws of
the Republic of France ("Shareholder").
WHEREAS, simultaneously with the execution of this Agreement, Shareholder
is acquiring __________ shares of the Company's 4.5% Cumulative Convertible
Preferred Stock, par value $_____ per share (the "Preferred Shares"), and _____
shares of the Company's common stock, par value $ 5.00 per share (the "Common
Stock"), pursuant to an Exchange Offer Agreement, dated as of May 22, 1995 (the
"Exchange Offer Agreement"), between the Company and Shareholder;
WHEREAS, Shareholder recognizes the significant contributions of the
current management of the Company in creating shareholder value;
WHEREAS, in recognition of Shareholder's significant share ownership in
the Company, the Company has determined to grant to Shareholder the right to
designate three persons for election to the Board of Directors of the Company;
WHEREAS, the Company has determined to form a new Strategic Committee of
the Board of Directors, which will be chaired initially by the chairman and
chief executive officer of Shareholder;
WHEREAS, in view of the foregoing and the parties' intention that
Shareholder shall influence, but not control, the business and affairs of the
Company, Shareholder has agreed to certain restrictions on the acquisition and
disposition of the Preferred Shares and the Common Stock and the conduct of
Shareholder with respect to the Company.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and in the Exchange Offer Agreement and intending to be
legally bound hereby, the parties hereto agree as follows:
<PAGE>
ARTICLE 1
DEFINITIONS; REPRESENTATIONS AND WARRANTIES
-------------------------------------------
Section 1.1 Definitions. Except as otherwise specified herein,
-----------
defined terms used in this Agreement shall have the respective meanings assigned
to such terms in the Exchange Offer Agreement. Unless otherwise specified all
references to "days" shall be deemed to be references to calendar days. For
purposes of this Agreement, the following terms shall have the following
meanings:
(a) Affiliate. An "Affiliate" of a Person shall have the meaning set
---------
forth in Rule 12b-2 of the Exchange Act as in effect on the date hereof.
(b) Bankruptcy Event. A "Bankruptcy Event" shall mean (i) the entry
----------------
by a court having jurisdiction in the premises of (x) a decree or order for
relief in respect of the Company in an involuntary case or proceeding under any
applicable United States or state bankruptcy, insolvency, reorganization or
other similar law or (y) a decree or order adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company under any
applicable United States or state law or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or of any of the Company's property, or ordering the winding-up or
liquidation of the Company's affairs; and the continuance of any such decree or
order of relief or any such other decree or order unstayed and in effect for a
period of ninety (90) consecutive days; or (ii) the commencement by the Company
of a voluntary case or proceeding under any applicable United States or state
bankruptcy, insolvency, reorganization or other similar law or any case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by the
Company to the entry of a decree or order for relief in respect of the Company
in an involuntary case or proceeding under any applicable United States or state
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against the
Company or the filing by the Company of a petition or answer or consent seeking
reorganization or relief under any applicable United States or state law, or the
consent by the Company to the filing of such a petition or to the appointment of
or taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial part
of the Company's property, the making by the Company of a general assignment for
the benefit of creditors or the admission by the Company of the Company's
inability to pay its debts generally as they become due, or the taking of
corporate action by the Company with the intent of causing any of the foregoing.
3-2
<PAGE>
(c) Beneficial Owner. A Person shall be deemed to "beneficially
----------------
own," or to have "beneficial ownership" of, any Voting Securities in accordance
with the term "beneficial ownership" as defined in Rule 13d-3 under the Exchange
Act as in effect on the date hereof and, in addition, such terms shall include
securities which such Person has the right to acquire (irrespective of whether
such right is exercisable immediately or only after the passage of time,
including the passage of time in excess of sixty (60) days) pursuant to any
agreement, arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise. For purposes of this
Agreement, Shareholder shall be deemed to beneficially own any Voting Securities
beneficially owned by its Controlled Affiliates or any Group of which
Shareholder or any such Controlled Affiliate is a member.
(d) Board of Directors. "Board of Directors" shall mean the Board of
------------------
Directors of the Company.
(e) Closing Date. "Closing Date" shall mean the date of the
------------
consummation of the OPE.
(f) Company Stock. "Company Stock" shall mean the Preferred Shares
-------------
and the Common Stock.
(g) Commission. "Commission" shall mean the Securities and Exchange
----------
Commission.
(h) Controlled Affiliate. "Controlled Affiliate" shall mean, with
--------------------
respect to any Person, any other Person more than fifty percent (50%) of the
outstanding Voting Securities of which is beneficially owned, and any other
Person which is actually controlled, directly or indirectly, by such Person or
one or more of its Controlled Affiliates. For purposes of this Agreement, each
of MW and Ernest-Antoine Seilliere shall be deemed to be Controlled Affiliates
of Shareholder.
(i) Exchange Act. "Exchange Act" shall mean the Securities Exchange
------------
Act of 1934, as amended.
(j) Group. "Group" shall mean a "group" as such term is used in
-----
Section 13(d)(3) of the Exchange Act as in effect on the date hereof.
3-3
<PAGE>
(k) MW. "MW" shall mean Marine-Wendel, a societe anonyme organized
--
under the laws of the Republic of France.
(l) NYSE. "NYSE" shall mean the New York Stock Exchange, Inc.
----
(m) OPE. "OPE" shall mean the offre publique d'echange undertaken by
---
the Company as provided in the Exchange Offer Agreement.
(n) Person. "Person" shall mean any individual, Group, corporation,
------
general or limited partnership, limited liability company, governmental entity,
joint venture, estate, trust, association, organization or other entity of any
kind or nature.
(o) Securities Act. "Securities Act" shall mean the Securities Act
--------------
of 1933, as amended.
(p) Shareholder Designee. "Shareholder Designee" shall mean a person
--------------------
designated for election to the Board of Directors by Shareholder as provided in
Section 3.2.
(q) Strategic Committee. "Strategic Committee" shall mean the
---------------------
Strategic Committee of the Board of Directors to be formed as provided in the
Exchange Offer Agreement.
(r) Specified Event. "Specified Event" shall mean any unsolicited
---------------
tender or exchange offer commenced by a Person (other than Shareholder or its
Controlled Affiliates or any Group of which Shareholder or any such Controlled
Affiliate is a member) for Voting Securities representing more of the Total
Voting Power of the Company than the amount beneficially owned by Shareholder
(but in any event for Voting Securities representing not less than twenty
percent (20%) of the Total Voting Power of the Company), or an unsolicited proxy
or consent solicitation by any such Person in order to replace at least a
majority of the Continuing Directors, or any unsolicited tender or exchange
offer for voting securities representing at least twenty percent (20%) of the
Total Voting power of any material subsidiary of the Company.
(s) Takeover Proposal. "Takeover Proposal" shall mean (i) any
------------------
Specified Event, (ii) any other proposal to take-over control of the Company or
a merger, share exchange, other business combination, recapitalization,
restructuring, liquidation or similar transaction involving the Company or any
of its material subsidiaries, or any proposal or offer to acquire in any manner
Voting Securities representing more than twenty percent (20%) of the Total
Voting Power of the Company or any of its material subsidiaries, a
3-4
<PAGE>
substantial equity interest in any of the Company's material subsidiaries or a
substantial portion of the assets of the Company or any of its material
subsidiaries, (iii) any request to invite any Person to effect any of the
actions specified in Section 3.1 or any request to challenge the validity of,
waive the benefit of, opt out of, or amend any provision of, the shareholder
rights plan of the Company contemplated by Section 3.6 or any rights plan
approved by the Strategic Committee or any anti-takeover statutes or other anti-
takeover provisions applicable to the Company, or (iv) a proposal having similar
effect.
(t) Total Voting Power. The term "Total Voting Power" shall mean the
------------------
total combined Voting Power, on a fully diluted basis, of all the Voting
Securities then outstanding.
(u) Voting Power. The term "Voting Power" shall mean the voting power
------------
in the general election of directors of the Company, and shall be calculated for
each Voting Security by reference to the maximum number of votes such Voting
Security is or would be entitled to cast in the general election of directors,
and, in the case of convertible (or exercisable or exchangeable) securities, by
reference to the maximum number of votes such Voting Security is entitled to
cast in unconverted or converted (or exercised, unexercised, exchanged or
unexchanged) status. For purposes of determining Voting Power under this
Agreement, a Voting Security which is convertible into or exchangeable for a
Voting Security shall be counted as having the greater of (i) the number of
votes to which such Voting Security is entitled prior to conversion or exchange
and (ii) the number of votes to which the Voting Security into which such Voting
Security is convertible or exchangeable is entitled. Notwithstanding anything
else to the contrary contained herein, there shall not be included in
calculating Voting Power any votes which a Person shall have upon the non-
payment of dividends on the Preferred Shares in accordance with the terms of the
Preferred Shares.
(v) Voting Securities. "Voting Securities" shall mean, without
-----------------
duplication, (x) any securities entitled, or which may be entitled, to vote
generally in the election of directors of the Company, (y) any securities
convertible or exercisable into or exchangeable for such securities (whether or
not the right to convert, exercise or exchange is subject to the passage of time
or contingencies or both) (including the Preferred Shares), or (z) any direct or
indirect rights or options to acquire any such securities; provided that
--------
unexercised options granted pursuant to any employment benefit or similar plan
and rights issued pursuant to any shareholder rights plan (including that
contemplated under Section 3.6) shall be deemed not to be "Voting Securities"
(or to have Voting Power).
3-5
<PAGE>
In addition, the following terms have the definitions specified in the
Sections noted:
<TABLE>
<CAPTION>
Term Section
- ---- -------
<S> <C>
acquire 3.1(a)
Agreement recitals
Beneficial Ownership Thresholds 3.2 (a)
Cap 4.5(a)
Company recitals
Common Stock recitals
Designated Company Breach 2.1(v)
Designated Shareholder Breach 2.1
Continuing Director 4.1(f)
Disposition 4.1
Exchange Offer Agreement recitals
Exercise Notice 4.2(a)
Losses 5.5
Market Price 4.2 (b)(i)
Moving Party 7.4
NASD 4.2(b)(i)
Preferred Shares recitals
Preliminary Transfer Notice 4.2(a)
Private Sale 4.1(d)
Purchase Price 4.2(b)
Purchasing Person 4.1(b)
Required Disposition 4.5(a)
Rule 144 Sale 4.1(c)
Section 4.2 Closing 4.2(a)
Shareholder recitals
Standstill Period 2.1
Subject Stock 5.1
Third Party Offeror 4.1(f)
Transfer Notice 4.2(a)
Underwritten Offering 4.1(b)
</TABLE>
Section 1.2 Representations and Warranties of the Company. The Company
---------------------------------------------
represents and warrants to Shareholder as follows:
3-6
<PAGE>
(a) The execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the transactions contemplated
by this Agreement are within its corporate powers and have been duly authorized
by all necessary corporate action on its part. This Agreement constitutes a
legal, valid and binding agreement of the Company enforceable against the
Company in accordance with its terms, subject, as to enforcement, to bankruptcy,
and insolvency, fraudulent transfer reorganization, moratorium and similar laws
of general applicability relating to or affecting creditor's rights and to
general equity principles (it being understood that such exception shall not in
itself be construed to mean that the Agreement is not enforceable in accordance
with its terms).
(b) The execution, delivery and performance of this Agreement by the
Company does not and will not contravene or conflict with or constitute a
default under the Company's Articles of Incorporation or Bylaws.
Section 1.3 Representations and Warranties of Shareholder. Shareholder
---------------------------------------------
represents and warrants to the Company as follows:
(a) The execution, delivery and performance by Shareholder of this
Agreement and the consummation by Shareholder of the transactions contemplated
by this Agreement are within its corporate powers and have been duly authorized
by all necessary corporate action on its part. This Agreement constitutes a
legal, valid and binding agreement of Shareholder enforceable against
Shareholder in accordance with its terms, subject, as to enforcement, to
bankruptcy, and insolvency, fraudulent transfer reorganization, moratorium and
similar laws of general applicability relating to or affecting creditor's rights
and to general equity principles (it being understood that such exception shall
not in itself be construed to mean that the Agreement is not enforceable in
accordance with its terms).
(b) The execution, delivery and performance of this Agreement by
Shareholder does not and will not contravene or conflict with or constitute a
default under Shareholder's statuts or similar governing documents.
(c) As of the date hereof, Shareholder beneficially owns __________
Preferred Shares and ____________ shares of Common Stock and Shareholder does
not beneficially own any other Voting Securities.
3-7
<PAGE>
ARTICLE 2
STANDSTILL PERIOD
-----------------
Section 2.1 Standstill Period. The "Standstill Period" shall be the
-----------------
period commencing on the date hereof and ending on the earliest of:
(i) the date that is the later of (i) three (3) years after the date hereof
and (ii) the date on which Shareholder beneficially owns Voting
Securities (whether now owned or hereafter acquired) having Voting Power
representing, in the aggregate, less than three and one-half percent
(3.5%) of the Total Voting Power of the Company;
(ii) the date the Board of Directors agrees to recommend (or ceases to oppose)
the consummation of a Specified Event, or takes any action designed to
induce or materially facilitate such Specified Event, such as redeeming
any rights issued under a shareholder rights plan outstanding on the date
a third party initiates a Specified Event (provided that the sharing of
--------
confidential information with, or discussing the possible sale of the
Company to, or the merger or consolidation with, a potential "white
knight" shall not constitute taking action designed to induce or
materially facilitate a Specified Event or result in a termination of the
Standstill Period, but provided further, that in order to permit
-------- -------
Shareholder to have a reasonable period of time to pursue other
opportunities before such sale, merger or consolidation, if the Board of
Directors resolves to proceed with such sale, merger or consolidation
opposed by a majority of the Shareholder Designees, then such Standstill
Period may be terminated by Shareholder);
(iii) the date that Voting Securities representing twenty five percent (25%) of
the Total Voting Power of the Company have been acquired by any Person or
Group other than Shareholder, its Controlled Affiliates or any Group of
which Shareholder or any such Controlled Affiliate is a member;
(iv) the date that the Company has entered into an agreement with respect to
the merger or consolidation of the Company or the sale of all or
substantially all of the assets of the Company, or any tender or exchange
offer for Voting Securities representing twenty five percent (25%) or
more of the Total Voting Power of the Company, after which the surviving
company in any such transaction would have a board of directors of which
the majority of its members would not be Continuing Directors (and, in
addition, in respect of an asset sale, in which the shareholders of the
Company do not
3-8
<PAGE>
receive capital stock of the successor company), or the Company takes
material steps to solicit any such transaction;
(v) the date that the Company materially breaches the provisions of Sections
3.2 or 5.1 hereof, and such breach remains uncured for fifteen (15) days,
in the case of breaches of Section 3.2, and thirty (30) days, in the case
of breaches of Section 5.1 after written notice of such breach has been
given by Shareholder to the Company (a "Designated Company Breach");
(vi) the date that any Shareholder Designee fails to be elected in any
election to the Board of Directors, unless the Company shall not have
taken appropriate action within thirty (30) days thereafter to cause
another Shareholder Designee to become a member of the Board of
Directors, or to otherwise adjust the size of the Board of Directors to
preserve the proportionate representation on the Board of Directors to
which Shareholder is then entitled as specified in Section 3.2;
(vii) the date that the Company breaches the dividend payment requirement of
Section 3.7(a) hereof (if such payment is not excused by the provisions
of Section 3.7(b) hereof), unless the Company shall have elected to its
Board of Directors one (1) Shareholder Designee in excess of the number
of such Shareholder Designees provided for in Section 3.2(a) hereof, in
which case the Company shall have an additional period of one (1) year to
cure such dividend payment breach (it being understood that Shareholder
shall cause such Shareholder Designee to resign from the Board of
Directors promptly after the earlier of (x) the date of such cure and (y)
the date of termination of the Standstill Period); or
(viii) the date that the Company breaches the debt rating maintenance provisions
of Section 3.8 hereof.
Notwithstanding the foregoing, the Standstill Period shall not terminate
if, at the time the Standstill Period would otherwise have terminated in
accordance with clause (i) through (viii) above, Shareholder is in material
breach of the provisions of Sections 3.1, 3.2, 3.3 or 4.1 of this Agreement (a
"Designated Shareholder Breach").
3-9
<PAGE>
ARTICLE 3
STANDSTILL AND VOTING PROVISIONS
--------------------------------
Section 3.1 Restrictions of Certain Actions by Shareholder. During the
----------------------------------------------
Standstill Period, Shareholder agrees that none of Shareholder, any of its
Controlled Affiliates, or any Group of which Shareholder or any such Controlled
Affiliate is a member, will in any manner, directly or indirectly, effect or
seek, initiate or propose (whether publicly or otherwise) to effect, or cause or
participate in, or in any way induce, assist or encourage any other Person to
effect, seek, offer, initiate or propose (whether publicly or otherwise) to
effect or participate in, any Takeover Proposal, or including without limitation
any action described in (a) through (c) below, unless in any such case invited
in writing to do so by the Board of Directors as specifically expressed in a
resolution adopted by a majority of the Continuing Directors who are not
Shareholder Designees:
(a) acquire, offer or propose to acquire, or agree to acquire,
whether by purchase, tender or exchange offer, gift or otherwise (any such act,
to "acquire"), beneficial ownership of any Voting Securities or any rights to
acquire (whether currently, upon lapse of time, following the satisfaction of
any conditions, upon the occurrence of any event or any combination of the
foregoing) any Voting Securities except for (x) the acquisition of Voting
Securities which would not, after giving effect to such acquisition, result in
beneficial ownership of Voting Securities representing Voting Power in excess of
[Shareholder's Voting Power percentage at execution hereof] % of the Total
Voting Power of the Company, (y) pursuant to a stock split, stock dividend,
rights offering, recapitalization, reclassification or similar transaction made
available to holders of any Voting Securities generally or (z) upon conversion
of the Preferred Shares in accordance with their terms; provided, that any such
--------
Voting Securities shall be subject to the restrictions of this Agreement (it
being understood that if Shareholder beneficially owns or acquires any Voting
Securities in violation of this Agreement, such Voting Securities shall
immediately be disposed of to Persons who are not Affiliates thereof but only in
compliance with the provisions of this Agreement; provided however, that the
-------- -------
Company may also pursue any other available remedy to which it may be entitled
as a result of such violation); provided further that the provisions of this
-------- -------
Section 3.1(a) shall not prohibit any Shareholder Designee from acquiring Voting
Securities pursuant to any Company restricted stock plan, option plan or similar
plan available to directors of the Company,
(b) form, join, participate in or encourage the formation of, any
Group with respect to any Voting Securities or deposit any Voting Securities
into a voting trust or subject any such Voting Securities to a voting agreement
or any other arrangement
3-10
<PAGE>
or agreement with respect to the voting thereof; provided however that, subject
--------
to Section 4.1 hereof, Shareholder may enter into one or more bona fide pledges
of Voting Securities with major brokerage firms and financial institutions; or
(c) request the Company (or its directors, officers, employees or
agents) to amend or waive any provision of this Agreement (including this
paragraph);
Notwithstanding the foregoing, Shareholder's ability to vote its shares shall be
governed exclusively by the provisions of Section 3.3 hereof and the provisions
of this Agreement shall not restrict the Shareholder Designees from acting in
their capacity as directors of the Company.
Section 3.2 Board Representations. (a) The Company will cause
---------------------
________, ________ and ________ or, subject to Section 3.2(e), such other
substitute persons as may be designated by Shareholder, to be elected to the
Board of Directors on the Closing Date. Thereafter, during the Standstill Period
and subject to the further provisions hereof, the Company agrees to support the
nomination of, and the Company's nominating committee (or any other committee
exercising a similar function) shall recommend to the Board of Directors that
(i) one Shareholder Designee, so long as Shareholder beneficially owns Voting
Securities having Voting Power equal to or greater than five percent (5%) of the
Total Voting Power and less than ten percent (10%) of the Total Voting Power,
(ii) two Shareholder Designees, so long as Shareholder beneficially owns Voting
Securities having Voting Power equal to or greater than ten percent (10%) of the
Total Voting Power and less than fifteen percent (15%) of the Total Voting
Power, and (iii) three Shareholder Designees, so long as Shareholder
beneficially owns Voting Securities having Voting Power equal to or greater than
fifteen percent (15%) of the Total Voting Power (collectively the "Beneficial
Ownership Thresholds"), be included in the slate of nominees recommended by the
Board of Directors to shareholders for election as directors at each annual
meeting of shareholders of the Company commencing with the next annual meeting
of shareholders. In the event that any of such designees shall cease to serve
as a director for any reason, the Board of Directors shall fill the vacancy
resulting thereby, subject to the terms of this Agreement, with a person
designated by Shareholder (and such person shall be a "Shareholder Designee" for
purposes hereof). Notwithstanding the foregoing, the Company shall not have any
obligation to support the nomination, recommendation or election of any
Shareholder Designee pursuant to this Section 3.2(a) to the extent any of the
Beneficial Ownership Thresholds is met or exceeded by Shareholder as a result of
its acquisition of beneficial ownership of Voting Securities after the date
hereof (except for such acquisitions to the extent necessary to maintain
Shareholder's beneficial ownership of Voting Securities solely to the extent
such ownership has decreased as a result of the primary issuance of
3-11
<PAGE>
Voting Securities by the Company or sale by the Company of Voting Securities
held in treasury prior to any such acquisition of Voting Securities by
Shareholder).
(b) During such time as Shareholder is entitled pursuant to Section
3.2(a) above to have at least one Shareholder Designee on the Board of
Directors, Shareholder shall also be entitled to have one Shareholder Designee
appointed to serve on each committee of the Board of Directors, including any
special committee, and the Company agrees to cause one such Shareholder Designee
to be so appointed. Notwithstanding the foregoing, if none of the Shareholder
Designees would be considered "independent" of the Company or "disinterested"
(i) for purposes of any applicable rule of the NYSE, the Paris Stock Exchange,
the London Stock Exchange or any other securities exchange or other self
regulating organization (such as the NASD) requiring that members of the Audit
Committee be independent of the Company, (ii) for purposes of any law or
regulation that requires, in order to obtain or maintain favorable tax,
securities, corporate law or other material legal benefits with respect to any
plan or arrangement for employee compensation or benefits, that the members of
the committee of the Board of Directors charged with responsibility for such
plan or arrangement be "independent" of the Company or "disinterested", or (iii)
for purposes of any special committee formed in connection with any transaction
or potential transaction involving the Company and any of Shareholder, its
Controlled Affiliates or any Group of which Shareholder is a member or such
other transaction or potential transaction which would involve a conflict of
interest on the part of the Shareholder Designees, then a Shareholder Designee
shall not be required to be appointed to any such committee; provided that, the
--------
committees of the Board shall be organized such that, to the extent practicable,
the only items to be considered by any committee on which no Shareholder
Designee may serve will be those items which prevent the Shareholder Designee
from serving on such committee.
(c) Upon expiration of the Standstill Period pursuant to Section 2.1
(i) hereof or in the event of a Designated Shareholder Breach, Shareholder shall
have no further rights under this Section 3.2 and shall cause its designees on
the Board of Directors to resign promptly from the Board of Directors and any
committees thereof. In addition, if at any time Shareholder beneficially owns
Voting Securities in an amount not sufficient to entitle Shareholder to
designate the number of Shareholder Designees then currently serving on the
Board of Directors pursuant to Section 3.2(a), then Shareholder shall cause to
resign promptly from the Board of Directors that number of Shareholder Designees
as shall exceed the number of directors that Shareholder would then be entitled
to designate pursuant to Section 3.2(a); provided, however, that to the extent
-------- -------
Shareholder's beneficial ownership of Voting Securities has decreased as a
result of the primary issuance of Voting Securities by the Company or sale by
the Company of Voting Securities held in treasury, Shareholder shall
3-12
<PAGE>
not be required to cause any Shareholder Designee to resign for a period of
eighteen (18) months after the date of the primary issuance or sale of Voting
Securities which triggered the resignation requirement set forth in this
sentence and, in the event that at the end of such eighteen (18) month period
Shareholder then beneficially owns sufficient Voting Securities to entitle
Shareholder to designate a number of Shareholder Designees then sitting on the
Board of Directors, Shareholder shall cause only the Shareholder Designees in
excess of that number to resign from the Board of Directors.
(d) As of the Closing Date, the Board of Directors shall consist of
eighteen (18) directors and shall be reduced to sixteen (16) directors by no
later than immediately after the time of the Company's next annual meeting of
Shareholders. In the event that the size of the Board of Directors is
thereafter increased or decreased, the number of directors Shareholder shall be
entitled to designate shall be adjusted ratably. In the event the increase in
the number of directors was approved by a majority of the Shareholder Designees
serving on the Board of Directors, any fraction shall be rounded down to the
nearest whole number. In the event the increase in the number of directors was
not approved by a majority of such Shareholder Designees, any fraction shall be
rounded up to the nearest whole number. When required by this paragraph,
Shareholder shall promptly cause the appropriate number of Shareholder Designees
to resign from the Board of Directors and any committees thereof, or the Company
shall promptly cause to be elected the appropriate number of Shareholder
Designees to give effect to this paragraph, as the case may be.
(e) Notwithstanding the provisions of this Section 3.2, Shareholder
shall not be entitled to designate any person to the Company's Board of
Directors (or any committee thereof) in the event that the Company receives a
written opinion of its outside counsel that a Shareholder Designee would not be
qualified under any applicable law, rule or regulation to serve as a director of
the Company or if the Company objects to a Shareholder Designee because such
Shareholder Designee has engaged in any adverse conduct that would require
disclosure under Item 7 of Schedule 14A (promulgated under the Exchange Act) or
if the Board of Directors determines in good faith in its reasonable judgment
that nomination or election of a Shareholder Designee would be a breach of the
fiduciary duties of the Board of Directors, and, in any such event, the
Shareholder shall withdraw the designation of such proposed Shareholder Designee
and designate a replacement therefor (which replacement Shareholder Designee
shall also be subject to the requirements of this Section). The Company shall
use its reasonable best efforts to notify the Shareholder of any objection to a
Shareholder Designee sufficiently in advance of the date on which proxy
materials are mailed by the Company in connection with such election
3-13
<PAGE>
of directors to enable the Shareholder to propose a replacement Shareholder
Designee in accordance with the terms of this Agreement.
Section 3.3. Voting. (a) Shareholder agrees that, during the
-------
Standstill Period, Shareholder shall, and shall cause its Controlled Affiliates
and any Person which is a member of any Group of which Shareholder or any of its
Controlled Affiliates is a member, to be present, in person or represented by
proxy, at all shareholder meetings of the Company so that all Voting Securities
beneficially owned by Shareholder shall be counted for the purpose of
determining the presence of a quorum at such meetings. Shareholder shall be free
to vote or cause to be voted such Voting Securities in its discretion; provided
--------
that Shareholder shall vote or cause to be voted, or consent with respect to,
all Voting Securities beneficially owned by Shareholder in the manner
recommended by the Company's Board of Directors in connection with the following
actions to be taken by holders of Voting Securities:
(i) the election of directors of the Company; provided that Shareholder
--------
shall not be obliged to vote in such manner for any nominee for election as a
director who is, pursuant to an arrangement or agreement between the Company and
a Person or Group (other than Shareholder, its Controlled Affiliates or any
Group of which the Shareholder or any of its Controlled Affiliates is a member)
holding Voting Power equal to or in excess of the Voting Power of Shareholder at
the record date for voting in such election, designated as a nominee by such
Person or Group, and
(ii) any question, resolution or proposal relating to a Takeover Proposal
which is submitted to a vote of the shareholders of the Company.
Section 3.4 Third Party Contacts.
--------------------
(a) If at any time during the Standstill Period, Shareholder or any
of its Controlled Affiliates is approached by any party concerning (i) a
Takeover Proposal which Shareholder determines in its good faith judgment is so
significant as to be considered by the Board of Directors, or (ii) a proposal to
acquire all or a substantial portion of the Voting Securities beneficially owned
by Shareholder which Shareholder determines in its good faith judgment is so
significant as to be considered by its supervisory board or directorate,
Shareholder will promptly inform the Company of the Takeover Proposal or other
such proposal, as the case may be, and in the case of a Takeover Proposal, the
Strategic Committee shall consider and evaluate a response to such Takeover
Proposal and make a recommendation to the Board of Directors.
3-14
<PAGE>
(b) If at any time during the Standstill Period, the Company is
approached by any party concerning a Takeover Proposal which the Chairman of the
Board of the Company determines in his good faith judgment is so significant as
to be considered by the Board of Directors, the Chairman of the Board of the
Company will promptly inform the Chairman of the Strategic Committee of the
Takeover Proposal and the Committee shall consider and evaluate a response to
such Takeover Proposal and make a recommendation to the Board of Directors.
Section 3.5 Notices of Dispositions of Voting Securities. Not later
--------------------------------------------
than the tenth day following the end of any calendar month during the Standstill
Period in which one or more Dispositions of Voting Securities by Shareholder or
any of its Controlled Affiliates shall have occurred, Shareholder shall use its
reasonable best efforts to give written notice to the Company of all such
Dispositions (in the case of Dispositions by Controlled Affiliates, to the
extent it has knowledge) unless any such Disposition has been reflected in a
filing on Schedule 13D or Form 4 (or any successor to such forms) under the
Exchange Act or an amendment thereto that was delivered to the Company on or in
advance of the date upon which notice thereof under this Section 3.5 would have
been due. Such notice shall state the date upon which each such Disposition was
effected, the number and type of Voting Securities involved in each such
Disposition, the means by which each such Disposition was effected and, to the
extent known, the identity of the Person acquiring Voting Securities.
Section 3.6 Shareholder Rights Plan. The Company and Shareholder agree
------------------------
that the Company may adopt a shareholder rights plan on terms and conditions set
forth in the Exchange Offer Agreement.
Section 3.7 Dividend Policy.
---------------
(a) The Company has indicated that it is the present intention of the
Board of Directors to commence regularly paying dividends on the Common Stock on
a quarterly basis, starting with the calendar quarter in which the Closing Date
occurs (and, with respect to dividends paid in the calendar quarter in which the
Closing occurs, such dividends shall be paid to holders of record of the Common
Stock as of a date after the Closing Date). With respect to dividends paid in
1995, if any, such dividends will be paid in an annualized amount equal to $
0.80 per share of Common Stock ($ 0.20 per quarter). With respect to dividends
paid in 1996, such dividends will be paid in an annualized amount of $ 1.00 per
share ($ 0.25 per quarter). All such dividend rates shall be subject to
adjustment for any stock splits, reverse stock splits, stock dividends and
similar events after the date of the Exchange Offer Agreement. The Company has
indicated that it is the present intention of the Board of Directors to increase
the amount of such dividends over time based on the
3-15
<PAGE>
financial condition of the Company. The amount of dividends paid to Shareholder
during the four full quarters following the mandatory conversion of the
Preferred Shares shall be not less than the amount of dividends paid to
Shareholder on the Common Stock and Preferred Shares that Shareholder receives
in the OPE during the four full fiscal quarters following the OPE (assuming for
these purposes that Shareholder has neither purchased nor disposed of any
securities of the Company after the OPE is consummated), and thereafter the
Company shall maintain the policy of paying dividends generally consistent with
prior policy, it being understood that if the provisions of this sentence are
not complied with, Shareholder shall be entitled solely to the remedies set
forth in Section 2.1 (vii) hereof.
(b) Any change in the dividend payments actually made or any failure by
the Company to maintain the policy of paying dividends from that set forth in
the third sentence of Section 3.7(a) hereof that is recommended to the Board of
Directors by the Strategic Committee shall be deemed to replace the dividend
payment or policy condition in such sentence of Section 3.7(a) hereof for all
purposes under this Agreement. The Company shall be excused from its failure to
pay any dividends in such dividend payment condition and to maintain such
dividend policy condition to the extent that the Company's cash needs in
connection with the conduct of its operations are such that the Board of
Directors in its good faith judgment determines that the payment of such
dividends or the maintenance of such policy would, under the circumstances, be
materially detrimental to the Company.
Section 3.8 Debt Rating. The Company intends to conduct its business in a
-----------
manner consistent with its maintaining an "investment grade" rating for its
long-term unsecured debt securities, and agrees that any failure to maintain
such rating with at least one "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Securities Act)
for a period of longer than one year shall constitute a breach of the foregoing
requirement, provided such failure does not result from changes in general
--------
economic or industry conditions or other circumstances that could not have been
reasonably avoided by the management of the Company or from transactions,
policies or activities approved by the Strategic Committee (it being understood
that if the provisions of this sentence are not complied with, Shareholder shall
be entitled solely to the remedies set forth in Section 2.1 (viii) hereof).
ARTICLE 4
TRANSFER RESTRICTIONS
---------------------
Section 4.1 Restrictions on Dispositions. During the Standstill Period,
----------------------------
Shareholder shall not, and shall cause its Controlled Affiliates not to,
directly or indirectly
3-16
<PAGE>
(including, without limitation, through the disposition or transfer of control
of another Person), sell, assign, donate, transfer, pledge, hypothecate, grant
any option with respect to or otherwise dispose of any interest in (or enter
into an agreement or understanding with respect to the foregoing) any Voting
Securities (a "Disposition"), except as set forth below in this Section 4.1;
provided, however, that the restrictions set forth in Sections 4.1 through 4.4
- -------- -------
shall not apply to Shareholder if a Bankruptcy Event has occurred during the
Standstill Period. Without limiting the generality of the foregoing, any sale of
securities of Shareholder or any of its Controlled Affiliates which is currently
(or following the passage of time, the occurrence of any event or the giving of
notice), directly or indirectly, exchangeable or exercisable for, or convertible
into, any Voting Securities shall constitute a Disposition of such Voting
Securities.
(a) Dispositions may be made to a Controlled Affiliate of
Shareholder; provided, that such Controlled Affiliate agrees in writing to be
--------
bound by this Agreement to the same extent as Shareholder.
(b) Dispositions of Voting Securities may be made pursuant to a bona
fide public offering in a firm commitment or best efforts underwriting managed
by a United States nationally recognized underwriter, effected in accordance
with the registration rights provisions in Article 5 and which provides for a
widely distributed public offering in accordance therewith (an "Underwritten
Offering"); provided, that, prior to any such Disposition, Shareholder and its
---------
Controlled Affiliates shall have complied with the provisions of Section 4.2 or
Section 4.3 hereof, as the case may be; provided, further, that such
-------- -------
Dispositions shall not be made to any Person who or which, together with such
Person's Affiliates and the members of any Group existing with respect to Voting
Securities of which such Person is a part (any such Person and its Affiliates
and Group members being collectively referred to herein as a "Purchasing
Person"), would immediately thereafter, to the knowledge of Shareholder, any of
its Controlled Affiliates, or the managing underwriter(s) beneficially own
Voting Securities representing three and one-half percent (3.5%) or more of the
Total Voting Power.
(c) Dispositions of Voting Securities may be made pursuant to sales
effected in accordance with Rule 144 under the Securities Act (or any successor
rule) (a "Rule 144 Sale"); provided that, prior to any such Disposition,
--------
Shareholder and its Controlled Affiliates shall have complied with the
provisions of Section 4.2 or Section 4.3 hereof, as the case may be; provided,
--------
further, that such Dispositions shall not be made to any Purchasing Person who
- -------
or which would immediately thereafter, to the knowledge of Shareholder, any of
its Controlled Affiliates, or Shareholder's broker, beneficially own Voting
3-17
<PAGE>
Securities representing three and one-half percent (3.5%) or more of the Total
Voting Power.
(d) Dispositions may be made to any Purchasing Person (other than
pursuant to a tender or exchange offer) that would, following such sale,
beneficially own no more than three and one-half percent (3.5%) of the Total
Voting Power (a "Private Sale") (and such Purchasing Person shall have provided
a certificate to such effect); provided that prior to such Disposition,
--------
Shareholder shall have complied with the provisions of Section 4.2 or Section
4.3 hereof, as the case may be.
(e) Dispositions may be made to the Company in accordance with
Sections 4.2 and 4.3 hereof.
(f) Dispositions may be made pursuant to a tender offer or exchange
offer or any other transaction with a third party (a "Third Party Offeror")
which is recommended to the shareholders of the Company generally by at least a
majority of the Continuing Directors of the Company. "Continuing Director"
shall mean a member of the Board of Directors of the Company who is not a Third
Party Offeror or an Affiliate of a Third Party Offeror (or a representative or
nominee of a Third Party Offeror or any such Affiliate) and who either (i) was a
member of the Board of Directors prior to the date hereof or (ii) subsequently
became a director of the Company and whose election or nomination for election
was approved or recommended by a vote of a majority of the Board of Directors of
the Company, which majority included a majority of the Continuing Directors then
on the Board of Directors.
(g) With respect to Voting Securities which are, by their terms,
convertible into or exercisable or exchangeable for other Voting Securities
(including the Preferred Shares) such conversion, exercise or exchange shall not
be deemed a Disposition.
(h) Dispositions may be made pursuant to one or more bona fide
pledges or grants of a security interest in Voting Securities to a major
brokerage firm or financial institution to secure bona fide indebtedness, or the
sale of such Voting Securities by foreclosure on such pledge; provided that such
--------
lender is not an Affiliate of Shareholder and such lender agrees that (i) in the
case of any such pledge of Voting Securities or grant in respect of Voting
Securities representing three and one half percent (3.5%) or less of the Total
Voting Power, it will abide by the provisions of Sections 4.2 or 4.3, as the
case may be, in the event of such foreclosure and (ii) in the case of any such
pledge of Voting Securities or grant in respect of Voting Securities
representing more than three and one half percent (3.5%) of the Total Voting
Power, such lender shall be bound by all of the
3-18
<PAGE>
provisions of this Agreement in the event of such foreclosure (except that such
lender and its transferees shall not be entitled to the benefits of Section
3.2).
(i) Shareholder agrees, without the consent of the managing
underwriter(s) in an underwritten offering in respect of the Company's
securities, not to effect any sale or distribution of Voting Securities (other
than in connection with Shareholder's own registration pursuant to paragraph (b)
hereof), including a Rule 144 Sale, during the ten (10) day period prior to,
and during the ninety (90) day period beginning on, the effective date of the
registration statement filed by the Company in respect of such underwritten
offering.
Section 4.2 Company's Right to Purchase Preferred Shares. Prior to
--------------------------------------------
any Disposition of Preferred Shares pursuant to Section 4.1(b), 4.1(c) or
Section 4.1(d) hereof, the Company shall have the right, exercisable in
accordance with this Section 4.2, to purchase any or all of the Preferred Shares
intended to be subject to such Disposition by Shareholder or any of its
Controlled Affiliates.
(a) If Shareholder or any of its Controlled Affiliates wishes to
effect any Disposition of Preferred Shares pursuant to Section 4.1(b), Section
4.1(c) or Section 4.1(d) hereof, Shareholder shall give written notice (a
"Preliminary Transfer Notice") to the Company of such intended Disposition,
specifying the Preferred Shares to be subject to Disposition and the intended
method of Disposition (and including, to the extent known, the identity of any
prospective purchasers and, in respect of a proposed Private Sale, the price at
which, and the material terms upon which (including the identity of any
prospective purchaser), such sale is proposed to be made); provided that any
--------
request for registration of Subject Stock constituting Preferred Shares shall be
deemed a Preliminary Transfer Notice with respect to the Registrable Securities
requested to be registered. The Preliminary Transfer Notice shall be given not
less than twenty (20) nor more than thirty (30) trading days in advance of the
Transfer Notice. If Shareholder determines that it wishes to proceed with its
proposed Underwritten Offering, Rule 144 Sale or Private Sale, Shareholder shall
deliver to the Company a written notice to that effect containing the same scope
of information as in the Preliminary Transfer Notice (the "Transfer Notice")
within the time period prescribed in the preceding sentence. If the Company
wishes to purchase the Preferred Shares specified in the Transfer Notice, then
in the case of a proposed Private Sale within five (5) trading days, and in the
case of other such Dispositions within twenty (20) trading days, following
receipt of the Transfer Notice, the Company shall deliver a written notice (an
"Exercise Notice") to Shareholder indicating that the Company wishes to exercise
its rights hereunder to purchase such number of such Preferred Shares as
designated in the Exercise Notice, a date for the closing of such purchase,
which shall not
3-19
<PAGE>
be more than ten (10) trading days after delivery of such Exercise Notice
(subject to extension as provided herein), and a place for the closing of such
purchase (a "Section 4.2 Closing"). Upon delivery of an Exercise Notice, a
binding agreement shall be deemed to exist providing for the purchase by the
Company of the Preferred Shares to which such Exercise Notice relates, upon the
terms and subject to the conditions set forth in this Section 4.2; provided
--------
that, other than with respect to a Private Sale, the Company may rescind its
Exercise Notice (in which event it will not have obligation to purchase such
Preferred Shares) at any time within five (5) trading days following any
determination of the value of any untraded securities pursuant to Section
4.2(b)(ii) hereof.
(b) The purchase price for any such Preferred Shares (the "Purchase
Price") shall be determined as set forth below.
(i) With respect to Preferred Shares proposed to be sold
pursuant to a Private Sale, the Purchase Price per share of such
Preferred Shares shall equal the price contained in the Transfer Notice.
With respect to Preferred Shares proposed to be sold pursuant to an
Underwritten Offering or a Rule 144 Sale, the Purchase Price per share of
such Preferred Shares shall equal the average closing price per share of
the Preferred Shares during the twenty (20) consecutive trading days
immediately preceding the Company's delivery of the Exercise Notice. The
closing price (the "Market Price") for each such day shall be the last
sale price regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices regular way, in either
case on the NYSE, or, if the Preferred Shares are not listed or admitted
to trading on such exchange, on the principal national or international
securities exchange on which the Preferred Shares are listed or admitted
to trading, or, if the Preferred Shares are not listed or admitted to
trading on any national or international securities exchange but are
designated as national market system securities by the National
Association of Securities Dealers, Inc. ("NASD"), the last sale price,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, in either case as reported on the NASD
Automated Quotation/National Market System, or if the Preferred Shares
are not so designated as national market system securities, the average
of the highest reported bid and lowest reported asked prices as furnished
by the NASD or similar organization if the NASD is no longer reporting
such information.
(ii) If the Preferred Shares are not publicly traded as
contemplated pursuant to clause (i) above, the value of the Preferred
Shares
3-20
<PAGE>
shall be determined by two United States nationally recognized investment
banking firms, one firm to be selected by each of Shareholder and the
Company, or in the event such firms are unable to agree, by a third United
States nationally recognized investment banking firm selected by such
firms. Shareholder and the Company shall use their reasonable best efforts
to cause any such determination of value to be made within ten trading days
following the Company's delivery of the applicable Exercise Notice. In
connection with any determination of fair market value pursuant to this
Section 4.2(b), each party will bear the fees and expenses of the
investment banking firm selected by it and the parties will bear equally
the fees and expenses of any third investment banking firm.
(c) At any Section 4.2 Closing, the Company shall pay to Shareholder
(or its designees) the aggregate Purchase Price for the Preferred Shares by wire
transfer of immediately available funds in United States dollars, and
Shareholder shall deliver or cause to be delivered to the Company such
Preferred Shares, with documentation satisfactory to the Company evidencing the
transfer of such Preferred Shares, in form acceptable for transfer on the
Company's books.
(d) If the Company does not exercise its right to purchase Preferred
Shares specified in a Transfer Notice, or if the Company exercises its right to
rescind as described in the proviso to the last sentence of Section 4.2 (a)
hereof, then the party giving such Transfer Notice shall be free to effect the
Disposition of such Preferred Shares, subject to Section 4.1 hereof (other than
the restrictions contained therein relating to the Company's purchase rights
under this Section 4.2); provided that, in the case of a Disposition pursuant to
--------
an Underwritten Offering, Shareholder may effect such Disposition in accordance
with the provisions of this Agreement in an Underwritten Offering that is
consummated at any time within one hundred and twenty (120) days after the last
date on which the Company's Exercise Notice could have been timely delivered;
provided, further that in the case of a Disposition pursuant to a Rule 144 Sale,
- -------- -------
Shareholder may effect such Disposition in accordance with the provisions of
this Agreement in a Rule 144 Sale within thirty (30) days following the last
date on which the Company's Exercise Notice could have been timely delivered.
(e) The obligations of the parties to effect any Section 4.2 Closing
shall be subject to the satisfaction of the following conditions: (i) all
waiting periods, if any, applicable to the transactions occurring at such
Section 4.2 Closing under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, shall have expired or been terminated and (ii) no statute,
rule, regulation, executive order, decree, ruling, injunction or
3-21
<PAGE>
other order shall have been enacted, entered, promulgated or enforced by any
court or governmental authority of competent jurisdiction which prohibits such
transactions or makes such transactions illegal. If, as of any date on which a
Section 4.2 Closing is scheduled to occur, the foregoing conditions relating
thereto have not been satisfied, then such Section 4.2 Closing shall occur as
promptly as practicable following such satisfaction, and the parties shall use
their reasonable best efforts to cause the satisfaction of such conditions;
provided that if the foregoing conditions relating to any Section 4.2 Closing
- --------
are not satisfied within one hundred twenty (120) days following the delivery of
the applicable Exercise Notice, then Shareholder or the Company may terminate
the agreement deemed to exist upon delivery of the applicable Exercise Notice.
Section 4.3. Company's Right to Purchase Common Shares.
-----------------------------------------
(a) If Shareholder or any of its Controlled Affiliates wishes to effect
any Disposition of shares of Common Stock pursuant to Section 4.1(b), Section
4.1(c) or Section 4.1(d), Shareholder will so notify the Company. Such notice
shall indicate whether such Disposition will occur pursuant to Section 4.1(b),
4.1(c) or 4.1(d). In the event Shareholder has obtained a bona fide offer for
such shares at a price higher than the Market Price on the Business Day
immediately preceding such notice, the notice shall indicate such higher price,
together with the identity of the proposed purchaser and any other material
terms in the case of a Private Sale. The Company shall have the right to
purchase all (but not less than all) of the shares of Common Stock at the higher
of the Market Price on the Business Day immediately preceding such notice or the
higher price specified in such notice, if any. As promptly as practicable, and
in no event more than twenty four (24) hours after receipt of such notice from
Shareholder, the Company shall advise Shareholder if it will purchase such
shares of Common Stock.
If the Company elects not to purchase such shares of Common Stock or if
the Company fails to agree to purchase such shares of Common Stock on the terms
provided herein within twenty four (24) hours of receipt of notice, then
Shareholder shall be free to undertake the Disposition of such shares. In case
the notice shall have specified that such Disposition would occur pursuant to
Section 4.1(b), then Shareholder may effect such disposition in accordance with
the provisions of this Agreement in an Underwritten Offering that is consummated
at any time within one hundred and twenty (120) days after receipt by the
Company of such notice. In case the notice shall have specified that such
Disposition would occur pursuant to Section 4.1(c) or 4.1(d), then Shareholder
shall have twenty (20) Business Days to offer and sell such Common Stock. In any
case, any such sale may occur at a price above or below the Market Price, but in
the case of a Private Sale such sale may not occur at a price less than the
price at which such shares were offered to the Company
3-22
<PAGE>
if the price at which such shares were so offered exceeded the Market Price on
the date of such offer to the Company.
(b) If the Company agrees to purchase any shares of Common Stock
pursuant to clause (a) above, the provisions of Section 4.2(c) and Section
4.2(e) shall apply to such purchase as if it were a Section 4.2 Closing.
Section 4.4. Assignment of Rights. The Company may assign any of its
--------------------
rights under this Article 4 to any Person without the consent of Shareholder,
provided, however, that no such assignment shall relieve the Company of any of
- -------- -------
its obligations pursuant to this Article 4. In the event that the Company
elects to exercise a right to purchase any Voting Securities under this Article
4, the Company may specify another Person as the Company's designee to purchase
the Voting Securities.
Section 4.5 Required Dispositions.
---------------------
(a) The Company acknowledges that Shareholder's Voting Power relative
to Total Voting Power may from time to time exceed [Shareholder's Voting Power
percentage at execution hereof] solely as a result of the Company's repurchase
of its own outstanding Voting Securities or reclassifications by the Company of
Voting Securities. If, as a result of such Company repurchases or
reclassifications, Shareholder shall at any time during the Standstill Period
beneficially own Voting Securities having Voting Power that is more than [3.5%
of the Total Voting Power in excess of Shareholder's Voting Power percentage at
the execution hereof] of Total Voting Power (the "Cap"), then, if and to the
extent requested by the Company by written notice to Shareholder, Shareholder
shall, within eighteen (18) months after such request, dispose of or cause its
Controlled Affiliates to dispose of (a "Required Disposition") such number of
shares of Voting Securities pursuant to Article 4 hereof as shall be necessary
to reduce Shareholder's beneficial ownership of Total Voting Power to no more
than the Cap.
ARTICLE 5
REGISTRATION RIGHTS
-------------------
Section 5.1 Registration Upon Request. At any time after June 30,
-------------------------
1996, Shareholder shall have the right to make written demand upon the Company,
on not more than eight (8) separate occasions (subject to the provisions of this
Section 5.1), to register under the Securities Act, the Common Stock, the
Preferred Shares, the shares of Common Stock received by Shareholder pursuant to
the conversion of the Preferred Shares and any
3-23
<PAGE>
additional Preferred Shares or shares of Common Stock which Shareholder may have
acquired after the date hereof to the extent such additional shares were
acquired by Shareholder in compliance with the terms of this Agreement (the
shares subject to such demand hereunder being referred to as the "Subject
Stock"), and the Company shall use its reasonable efforts to cause such shares
to be registered under the Securities Act as soon as reasonably practicable so
as to permit the sale thereof; provided, however, that each such demand shall
-------- -------
cover at least five hundred thousand (500,000) shares of Subject Stock
constituting Preferred Shares or one million (1,000,000) shares of Subject Stock
constituting shares of Common Stock (subject to adjustment for stock splits,
reverse stock splits, stock dividends and similar events after the date hereof).
In connection therewith, the Company shall, as expeditiously as possible,
prepare and file with the Commission, a registration statement under the
Securities Act to effect such registration, and use reasonable efforts to cause
such registration statement to become and remain effective for at least ninety
(90) days. Shareholder agrees to provide all such information and materials and
to take all such action as may be reasonably required in order to permit the
Company to comply with all applicable requirements of the Securities Act and the
Commission and to obtain any desired acceleration of the effective date of such
registration statement. If the offering to be registered is to be underwritten,
the managing underwriter shall be selected by Shareholder and shall be
reasonably satisfactory to the Company, and Shareholder and such underwriter
shall enter into an underwriting agreement containing customary terms and
conditions. Notwithstanding the foregoing, the Company (i) shall not be
obligated to prepare or file more than one such registration statement during
any twelve (12) month period, (ii) shall be entitled to postpone for a
reasonable period of time (but in no event more than one hundred-twenty (120)
days) the filing of any registration statement otherwise required to be prepared
and filed by the Company if (x) the Company is, at such time, conducting or
about to conduct an underwritten public offering of securities and is advised by
its managing underwriter or underwriters that such offering would, in its or
their opinion, be adversely affected by the registration so requested, or (y)
the Company determines in good faith that the registration and distribution of
the shares of Subject Stock would interfere with any existing or proposed
financing, acquisition, disposition, corporate reorganization or other
transaction of a similar type involving the Company. In the event of such
postponement, Shareholder shall have the right to withdraw the request for
registration by giving written notice to the Company within ten (10) days after
receipt of the notice of postponement (and, in the event of such withdrawal,
such request shall not be counted for purposes of determining the number of
registrations to which Shareholder is entitled pursuant to this Section 5.1).
Section 5.2 Incidental Registration Rights. If the Company proposes
------------------------------
to register any of the Preferred Shares or Common Stock for sale under the
Securities Act
3-24
<PAGE>
(other than (i) pursuant to Section 5.1 hereof, (ii) securities to be issued
pursuant to a stock option or other employee benefit or similar plan, or (iii)
securities proposed to be issued in exchange for securities or assets of, or in
connection with a merger or consolidation with, another corporation) the Company
shall, as promptly as practicable and in no event less than thirty (30) days
prior to the date such registration statement is filed with the Commission, give
written notice to Shareholder of the Company's intention to effect such
registration. If, within fifteen (15) days after receipt of such notice,
Shareholder submits a written request to the Company specifying the amount of
Subject Stock that it proposes to sell or otherwise dispose of in accordance
with this Section 5.2, the Company shall use reasonable efforts to include the
shares specified in Shareholder's request in such registration. If the offering
pursuant to such registration statement is to be made by or through
underwriters, the managing underwriters shall be chosen by the Company in its
sole discretion, and the Company, Shareholder and such underwriter shall execute
an underwriting agreement in customary form. If the managing underwriter
determines in good faith and advises Shareholder that the inclusion in the
registration statement of all the Subject Stock proposed to be included would
interfere with the successful marketing of all securities proposed to be
registered, then Shareholder shall agree to downward adjustment in the number of
shares of Subject Stock to be included in such underwriting sufficient to
alleviate fully such marketing concern (provided that if securities are being
offered for the account of Persons other than the Company (other than pursuant
to demand registration rights), then the proportion by which the amount of
securities intended to be offered for the account of Shareholder is reduced
shall not exceed the proportion by which the amount of such securities intended
to be offered for the account of such other Person is reduced). If Shareholder
has been permitted to participate in a proposed offering pursuant to this
Section 5.2, the Company thereafter may determine either not to file a
registration statement relating thereto, or to withdraw such registration
statement, or otherwise not to consummate such offering, without any liability
hereunder. In connection with any offering of shares of Subject Stock registered
pursuant to Section 5.1 or 5.2 hereof, Shareholder shall comply with all other
terms of this Agreement (including Section 4.1(b), and in connection with
Section 4.1(b), Shareholder shall use all reasonable efforts to secure the
agreement of the underwriters, in connection with any underwritten offering of
its Subject Stock, to comply therewith).
Section 5.3 Registration Mechanics. In connection with any offering
----------------------
of shares of Subject Stock registered pursuant to Section 5.1 or 5.2 hereof, the
Company shall (i) furnish to Shareholder such number of copies of any prospectus
(including preliminary and summary prospectuses) and conformed copies of the
registration statement (including amendments or supplements thereto and, in each
case, all exhibits) and such other documents as it may reasonably request, but
only while the Company shall be required under
3-25
<PAGE>
the provisions hereof to cause the registration statement to remain current;
(ii) (x) use reasonable efforts to register or qualify the Subject Stock covered
by such registration statement under such blue sky or other state securities
laws for offer and sale as Shareholder shall reasonably request and (y) keep
such registration or qualification in effect for so long as the registration
statement remains in effect; provided, however, that the Company shall not be
-------- -------
obligated to qualify to do business as a foreign corporation under the laws of
any jurisdiction in which it shall not then be qualified or to file any general
consent to service of process in any jurisdiction in which such a consent has
not been previously filed or subject itself to taxation in any jurisdiction
wherein it would not otherwise be subject to tax but for the requirements of
this Section 5.3; (iii) use reasonable efforts to cause all shares of Subject
Stock covered by such registration statement to be registered with or approved
by such other federal or state government agencies or authorities as may be
necessary in the opinion of counsel to the Company to enable Shareholder to
consummate the Disposition of such shares of Subject Stock; (iv) notify
Shareholder any time when a prospectus relating thereto is required to be
delivered under the Securities Act upon discovery that, or upon the happening of
any event as a result of which, the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, in the light of the circumstances
under which they were made, and (subject to the good faith determination of the
Board of Directors as to whether to cease all sales under such registration
statement), at the request of Shareholder prepare and furnish to it a reasonable
number of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such securities,
such prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, in the light of the circumstances under which
they were made; (v) otherwise use reasonable efforts to comply with all
applicable rules and regulations of the Commission; (vi) use reasonable efforts
to list, if required by the rules of the applicable securities exchange or, if
securities of the same class are then so listed, the Subject Stock covered by
such registration statement on the NYSE, the London Stock Exchange, the Paris
Stock Exchange and on any other principal securities exchange on which such
class of Voting Securities is then listed; and (vii) before filing any
registration statement or any amendment or supplement thereto, furnish to
Shareholder and its counsel copies of such documents and permit Shareholder and
its counsel to review and comment on such documents. Upon any registration
becoming effective pursuant to Section 5.1, the Company shall use reasonable
efforts to keep such registration statement current for a period of ninety (90)
days or such shorter period as shall be necessary to effect the distribution of
the Subject Stock.
3-26
<PAGE>
Shareholder agrees that upon receipt of any notice from the Company of
the happening of any event of the kind described in clause (iv) of this Section
5.3, it will forthwith discontinue its Disposition of Subject Stock pursuant to
the registration statement relating to such Subject Stock until its receipt of
the copies of the supplemented or amended prospectus contemplated by clause (iv)
of this Section 5.3 and, if so directed by the Company, will deliver to the
Company all copies then in its possession of the prospectus relating to such
Subject Stock current at the time of receipt of such notice. If Shareholder's
Disposition of Subject Stock is discontinued pursuant to the foregoing sentence,
unless the Company thereafter extends the effectiveness of the registration
statement to permit Dispositions of Subject Stock by Shareholder at least thirty
(30) consecutive days and for an aggregate of ninety (90) days, whether or not
consecutive, the registration statement shall not be counted for purposes of
determining the number of registrations to which Shareholder is entitled
pursuant to Section 5.1.
Section 5.4 Expenses. Shareholder shall pay all agent fees and
--------
commissions and underwriting discounts and commissions related to shares of
Subject Stock being sold by Shareholder and the fees and disbursements of its
counsel and accountants and the Company shall pay all fees and disbursements of
its counsel and accountants in connection with any registration pursuant to this
Article 5; provided that all fees and disbursements in connection with any
--------
registration (excluding any withdrawn registration request) pursuant to this
Article 5 in excess of the first four (4) actual such registrations shall be
borne by the Shareholder. All other fees and expenses in connection with any
registration statement (including, without limitation, all registration and
filing fees, all printing costs, all fees and expenses of complying with
securities or blue sky laws) shall (i) in the case of a registration pursuant to
Section 5.1, be borne solely by Shareholder and (ii) in the case of a
registration pursuant to Section 5.2, be shared pro rata based upon the
--- ----
respective market values of the securities to be sold by the Company,
Shareholder and any other holders participating in such offering.
Section 5.5 Indemnification and Contribution. In the case of any
--------------------------------
offering registered pursuant to this Article 5, the Company agrees to indemnify
and hold Shareholder, each underwriter, if any, of the Subject Stock under such
registration and each Person who controls any of the foregoing within the
meaning of Section 15 of the Securities Act, and any directors and officers of
the foregoing, harmless against any and all losses, claims, damages, or
liabilities (including reasonable legal fees and other reasonable expenses
incurred in the investigation and defense thereof) to which they or any of them
may become subject under the Securities Act or otherwise (collectively
"Losses"), insofar as any such Losses shall arise out of or shall be based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in the registration statement relating to the sale of
3-27
<PAGE>
such Subject Stock, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading or (ii) any untrue statement or alleged untrue statement
of a material fact contained in the prospectus relating to the sale of such
Subject Stock, or the omission or alleged omission to state therein a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, provided, however,
-------- -------
that the indemnification contained in this Section 5.5 shall not apply to such
Losses which shall arise out of or shall be based upon any such untrue
statement, or any such omission or alleged omission, which shall have been made
in reliance upon and in conformity with information furnished in writing to the
Company by Shareholder or any such underwriter, as the case may be, specifically
for use in connection with the preparation of the registration statement or
prospectus contained in the registration statement or any such amendment thereof
or supplement therein.
In the case of each offering registered pursuant to this Article 5,
Shareholder and each underwriter, if any, participating therein shall agree,
substantially in the same manner and to the same extent as set forth in the
preceding paragraph, severally to indemnify and hold harmless the Company and
each Person, if any, who controls the Company within the meaning of Section 15
of the Securities Act, and the directors and officers of the Company, with
respect to any statement in or omission from such registration statement or
prospectus contained in such registration statement (as amended or as
supplemented, if amended or supplemented as aforesaid) if such statement or
omission shall have been made in reliance upon and in conformity with
information furnished in writing to the Company by Shareholder or such
underwriter, as the case may be, specifically for use in connection with the
preparation of such registration statement or prospectus contained in such
registration statement or any such amendment thereof or supplement thereto.
Each party indemnified under this Section 5.5 shall, promptly after
receipt of notice of the commencement of any claim against such indemnified
party in respect of which indemnity may be sought hereunder, notify the
indemnifying party in writing of the commencement thereof. The failure of any
indemnified party to so notify an indemnifying party shall not relieve the
indemnifying party from any liability in respect of such action which it may
have to such indemnified party on account of the indemnity contained in this
Section 5.5, unless (and only to the extent) the indemnifying party was
prejudiced by such failure, and in no event shall such failure relieve the
indemnifying party from any other liability which it may have to such
indemnified party. In case any action in respect of which indemnification may
be sought hereunder shall be brought against any indemnified party and it shall
notify an indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it may desire,
jointly with any
3-28
<PAGE>
other indemnifying party similarly notified, to assume the defense thereof
through counsel reasonably satisfactory to the indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under this Section 5.5 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof, other than reasonable costs of investigation (unless such indemnified
party reasonably objects to such assumption on the grounds that there may be
defenses available to it which are different from or in addition to those
available to such indemnifying party in which event the indemnified party shall
be reimbursed by the indemnifying party for the reasonable expenses incurred in
connection with retaining separate legal counsel). No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any claim or pending or threatened proceeding in respect of which
the indemnified party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party, unless such settlement includes
an unconditional release of such indemnified party from all liability arising
out of such claim or proceeding.
If the indemnification provided for in this Section 5.5 is unavailable to
an indemnified party or is insufficient to hold such indemnified party harmless
from any Losses in respect of which this Section 5.5 would otherwise apply by
its terms (other than by reason of exceptions provided herein), then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall have a joint and several obligation to contribute to the amount paid or
payable by such indemnified party as a result of such Losses, in such proportion
as is appropriate to reflect the relative fault of the indemnifying party, on
the one hand, and such indemnified party, on the other hand, in connection with
the offering to which such contribution relates as well as any other relevant
equitable considerations. The relative fault shall be determined by reference
to, among other things, each party's relative knowledge and access to
information concerning the matter with respect to which the claim was asserted,
and the opportunity to correct and prevent any statement or omission. The
amount paid or payable by a party as a result of any Losses shall be deemed to
include any legal or other fees or expenses incurred by such party in connection
with any investigation or proceeding to the extent such party would have been
indemnified for such expenses if the indemnification provided for in this
Section 5.5 was available to such party.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5.5 were determined by pro rata allocation
or by any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
3-29
<PAGE>
Section 5.6. Assignment of Registration Rights. Shareholder may, in
---------------------------------
connection with any transfer of its Voting Securities permitted by this
Agreement, assign its rights under this Article 5 to any Controlled Affiliate
without the Company's consent and, in the case of an assignment to a Person
which is not a Controlled Affiliate, with the Company's consent, which consent
shall not be unreasonably withheld (provided that if such assignment is to a
Person other than a Controlled Affiliate, any demand registration requested by
such assignee pursuant to Section 5.1 hereof shall be for a minimum of one
million (1,000,000) Preferred Shares or two million (2,000,000) shares of Common
Stock, respectively).
Section 5.7. Termination. The registration rights granted to Shareholder
------------
pursuant to this Article 5 shall terminate immediately at such time as
Shareholder owns Voting Securities having a Voting Power of less than three and
one half percent (3.5%) of the Total Voting Power or if there is a Designated
Shareholder Breach.
ARTICLE 6
STANDSTILL PROVISIONS REGARDING THE SHAREHOLDER AND CERTAIN ENTITIES
--------------------------------------------------------------------
Section 6.1 Restriction of Certain Actions by the Company. During the
----------------------------------------------
Standstill Period (it being understood that for this purpose the Standstill
Period shall terminate only pursuant to Section 2.1(i)), the Company agrees that
none of the Company, any of its Controlled Affiliates or any Group of which the
Company or any such Controlled Affiliate is a member (it being understood that,
for the purposes of this Section 6.1, the Company is not (x) a member of any
Group of which Shareholder is a member or (y) a Controlled Affiliate of
Shareholder or MW) will in any manner, directly or indirectly, effect or seek,
initiate or propose (whether publicly or otherwise), to effect, or cause or
participate in, or in any way induce, assist or encourage any other Person to
effect, seek, offer, initiate or propose (whether publicly or otherwise) to
effect or participate in, any unsolicited tender or exchange offer commenced by
a Person for voting securities representing twenty percent (20%) or more of the
total voting power of Shareholder, MW or any of their material subsidiaries, or
an unsolicited proxy or consent solicitation by any such Person in order to
replace at least a majority of the directors of Shareholder, MW or such
subsidiary, (ii) any other proposal to take over control of Shareholder or MW or
for a merger, share exchange, business combination, recapitalization,
restructuring, liquidation or similar transaction involving Shareholder, MW or
any of their material subsidiaries or any proposal or offer to acquire in any
manner voting securities representing more than twenty percent (20%) of the
total voting power of Shareholder, MW or any of their material subsidiaries, a
substantial equity interest in any of Shareholder's or MW's material
subsidiaries or a substantial portion
3-30
<PAGE>
of the assets of Shareholder or MW or any of their respective material
subsidiaries, (iii) any request to invite any Person to effect any of the
actions specified in this Section 6.1 or any request to challenge the validity
of, waive the benefit of, opt out of, or amend any provision of, any shareholder
rights plan of Shareholder or MW or any anti-takeover statutes or other anti-
takeover provisions applicable to Shareholder or MW, or (iv) a proposal having
similar effect, or (v) including without limitation any action described in (a)
through (c) below, unless in any such case invited in writing to do so by the
board of directors of Shareholder or MW, as the case may be, as specifically
expressed in a resolution adopted by a majority of the board of directors:
(a) acquire, offer or propose to acquire, or agree to acquire, whether
by purchase, tender or exchange offer, gift or otherwise, beneficial ownership
of any voting securities or any rights to acquire (whether currently, upon lapse
of time, following the satisfaction of any conditions, upon the occurrence of
any event or any confirmation of the foregoing) any voting securities of
Shareholder or MW, as the case may be (it being understood that, if the Company
beneficially owns or acquires any voting securities of Shareholder or MW, as the
case may be, in violation of this Agreement, such voting securities shall
immediately be disposed of to Persons who are not Affiliates thereof; provided,
--------
however, that Shareholder may also pursue any other available remedies to which
- -------
it may be entitled as a result of such violation.
(b) form, join, participate in or encourage the formation of, any Group
with respect to any voting securities of Shareholder or MW or deposit any voting
securities into a voting trust or subject any such voting securities to a voting
agreement or any other arrangement or agreement with respect to the voting
thereof; or
(c) request Shareholder or MW (or their respective directors, officers,
employees or agents) to amend or waive any provision of this Agreement
(including this paragraph).
Section 6.2 Termination. The provisions of Section 6.1 shall terminate
-----------
on the earlier of (a) the date of a Designated Shareholder Breach and (b) the
date on which the Standstill Period terminates pursuant Section 2.1(i).
Notwithstanding the foregoing, the provisions of Section 6.1 shall not terminate
if, at the time the provisions of Section 6.1 would have otherwise terminated in
accordance with the previous sentence, there is a Designated Company Breach.
3-31
<PAGE>
ARTICLE 7
MISCELLANEOUS
-------------
Section 7.1 Notices. All notices, requests, demands and other
-------
communications required or permitted hereunder shall be made in writing by hand-
delivery, registered first-class mail, telex, fax or air courier guaranteeing
delivery:
(a) If to the Company, to:
Crown Cork & Seal Company, Inc.
9300 Ashton Road
Philadelphia, Pennsylvania 19136
Attention : William J. Avery
Chairman, President and Chief Executive Officer
Telecopy (215) 698-5206
(with copies to):
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, Pennsylvania 19103
Attention: Thomas A. Ralph and
William G. Lawlor
Telecopy: (215) 994-2222
or to such other person or address as the Company shall furnish to Shareholder
in writing;
(b) If to Shareholder, to:
CGIP
89, rue Taitbout
75009 Paris, France
Attention : Michel Renault
Telecopy : (011) 33 1 42 80 68 67
3-32
<PAGE>
(with copies to):
Sullivan & Cromwell
250 Park Avenue
New York, New York 10177
Attention: Allan M. Chapin
Telecopy: (212)558-4915
or to such other person or address as Shareholder shall furnish to the Company
in writing.
All such notices, requests, demands and other communications shall be
deemed to have been duly given: at the time of delivery by hand, if personally
delivered; five (5) Business Days after being deposited in the mail, postage
prepaid, if mailed domestically in the United States (and seven (7) Business
Days if mailed internationally); when answered back, if telexed; when receipt
acknowledged, if telecopied; and on the Business Day for which delivery is
guaranteed, if timely delivered to an air courier guaranteeing such delivery.
Section 7.2 Survival of Representations and Warranties. The
------------------------------------------
representations and warranties made herein shall survive through the term of
this Agreement.
Section 7.3 Legends. If requested in writing by the Company,
-------
Shareholder shall present or cause to be presented promptly all certificates
representing Voting Securities beneficially owned by Shareholder or any of its
Controlled Affiliates, for the placement thereon of a legend substantially to
the following effect, which legend will remain thereon as long as such Voting
Securities are beneficially owned by Shareholder or a Controlled Affiliate :
"The securities represented by this certificate are subject to
the provisions of a Shareholders Agreement, dated as of
___________, 199_, between Compagnie Generale d'Industrie et de
Participations and Crown Cork & Seal Company, Inc. and may not be
sold, pledged, hypothecated or otherwise transferred except in
accordance therewith. A copy of said agreement is on file at the
office of the Corporate Secretary of Crown Cork & Seal Company,
Inc."
The Company may enter a stop transfer order with the transfer agent or
agents of Voting Securities against any Disposition not in compliance with the
provisions of this Agreement.
3-33
<PAGE>
Section 7.4 Enforcement. Shareholder, on the one hand, and the Company,
-----------
on the other hand, acknowledge and agree that irreparable injury to the other
party would occur in the event any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached and
that such injury would not be adequately compensable in damages. It is
accordingly agreed that, in addition to any other remedies which may be
available at law or in equity, each party hereto (the "Moving Party") shall be
entitled to specific enforcement of, and injunctive relief to prevent any
violation of, the terms hereof, and the other parties hereto will not take
action, directly or indirectly, in opposition to the Moving Party seeking such
relief on the grounds that any other remedy or relief is available at law or in
equity. The parties further agree that no bond shall be required as a condition
to the granting of any such relief.
Section 7.5 Entire Agreement. This Agreement, the second, third,
----------------
sixth and fifteenth paragraphs of the Shareholder Confidentiality Agreement (but
not to the extent such paragraphs relate to information or "Evaluation Material"
of the "Subject Company", as such terms are used in the Shareholder
Confidentiality Agreement), the second, third, seventh and seventeenth
paragraphs of the Crown Confidentiality Agreement and the Exchange Offer
Agreement constitute the entire agreement and understanding of the parties with
respect to the transactions contemplated hereby and thereby, and the Company
Confidentiality Agreement and such other provisions of the Shareholder
Confidentiality Agreement and Crown Confidentiality Agreement not expressly
referred to above shall terminate with the execution hereof. This Agreement may
be amended only by a written instrument duly executed by the parties or their
respective successors or assigns.
Section 7.6 Severability. Whenever possible, each provision or portion
------------
of this Agreement will be interpreted in such manner as to be effective and
valid under applicable law, but if any provision or portion of any provision of
this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable law, rule or regulation in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision shall have been
replaced with a provision which shall, to the maximum extent permissible under
such applicable law, rule or regulation, give effect to the intention of the
parties as expressed in such invalid, illegal or unenforceable provision.
Section 7.7 Headings. Descriptive headings contained in the Agreement
--------
are for convenience only and will not control or affect the meaning or
construction of any provision of this Agreement.
3-34
<PAGE>
Section 7.8 Counterparts. For the convenience of the parties, any number
------------
of counterparts of this Agreement may be executed by the parties, and each such
executed counterpart will be an original instrument.
Section 7.9 No Waiver. Any waiver by any party of a breach of any
---------
provision of this Agreement shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
Section 7.10 Successors and Assigns. This Agreement shall be binding
----------------------
upon and inure to the benefit of the Company and Shareholder, and to their
respective successors and assigns, including any successors to the Company or
Shareholder or their businesses or assets as the result of any merger,
consolidation, reorganization, transfer of assets or otherwise, and any
subsequent successor thereto, without the execution or filing of any instrument
or the performance of any act; provided that no party may assign this Agreement
--------
without the other party's prior written consent, except as expressly provided
herein.
Section 7.11 Governing Law. This Agreement will be governed by and
-------------
construed and enforced in accordance with the internal laws of the Commonwealth
of Pennsylvania, without giving effect to the conflict of laws principles
thereof.
Section 7.12 Further Assurances. From time to time on and after the
------------------
date hereof, the Company and Shareholder, as the case may be, shall deliver or
cause to be delivered to the other party hereto such further documents and
instruments and shall do and cause to be done such further acts as the other
party hereto shall reasonably request to carry out more effectively the
provisions and purposes of this Agreement, to evidence compliance herewith or to
assure that it is protected in acting hereunder.
Section 7.13 Consent to Jurisdiction and Service of Process. Any legal
----------------------------------------------
action or proceeding with respect to this Agreement or any matters arising out
of or in connection with this Agreement (other than the Exchange Offer
Agreement, which shall be governed solely by the analogous provisions thereof),
and any action for enforcement of any judgment in respect thereof shall be
brought exclusively in the Court of Common Pleas of Philadelphia County in the
Commonwealth of Pennsylvania or the United States District Court for the
Eastern District of Pennsylvania, and, by execution and delivery of this
Agreement, the Company and Shareholder each irrevocably consent to service of
process out of any of the
3-35
<PAGE>
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, or by recognized
international express carrier or delivery service, to the Company or Shareholder
at their respective addresses referred to herein. The Company and the
Shareholder each hereby irrevocably waives any objection which it may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement (other than the
Exchange Offer Agreement, which shall be governed solely by the analogous
provisions thereof) brought in the courts referred to above and hereby further
irrevocably waives and agrees, to the extent permitted by applicable law, not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum. Nothing herein shall
affect the right of any party hereto to serve process in any other manner
permitted by law.
Section 7.14 Confidentiality. Confidential information of the Company
---------------
on one hand, and the Shareholder on the other hand, shall be deemed "Evaluation
Material" subject to the terms of the second, third, seventh and seventeenth
paragraphs of the Crown Confidentiality Agreement, in the case of Company
information, and subject to the terms of the second, third, sixth and fifteenth
paragraphs of the Shareholder Confidentiality Agreement, in the case of
Shareholder information.
3-36
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first referred to above.
CROWN CORK & SEAL COMPANY, INC.
By:__________________________
Name:
Title:
COMPAGNIE GENERALE D'INDUSTRIE
ET DE PARTICIPATIONS
By:__________________________
Name:
Title:
3-37
<PAGE>
ANNEX 4
(a) Organization and Qualification. The Company shall be a societe
------------------------------ -------
anonyme duly organized, validly existing and in good standing under the laws of
- -------
the Republic of France and shall have the requisite corporate power and
authority to carry on its business as it is now being conducted. The Company
shall be duly qualified as a foreign corporation to do business, and be in good
standing, in each jurisdiction where the character of its properties owned or
leased or the nature of its activities make such qualification necessary, except
where the failure to be so qualified would not, individually or in the
aggregate, result in a Material Adverse Effect on the Company.
(b) Organizational Documents. The Company shall not be in violation
------------------------
of any of the provisions of its statuts, and its statuts as delivered pursuant
------- -------
to Section 6(i) of this Agreement shall not have been amended, modified, or
rescinded and remain in full force and effect other than as contemplated in the
BALO Announcement.
(c) Capitalization. As of April 30, 1995, the share capital of the
--------------
Company totalled FF 823,125,910, consisting of 82,312,591 shares of Common Stock
issued and outstanding, all of which shall have been duly authorized, validly
issued and fully paid and non-assessable, and (ii) 2,095,140 shares of Common
Stock shall have been reserved for future issuance upon exercise of outstanding
employee stock options granted under the Company's stock option plans. Between
April 30, 1995 and the date of this Agreement, there have been no additional
issuances of shares of Common Stock other than issuances upon exercises of
employee stock options outstanding on April 30, 1995. No shares of Common Stock
shall have been owned by the Company or a subsidiary of the Company. Except for
the employee stock options described in clause (ii) of the preceding sentence
and other than in respect of the Faba transaction described in the BALO
Announcement and the granting of options for 200,000 shares of the Common Stock
to the management of the Company (the "New Options"), a maximum of 50,000 of
which shall have been granted per fiscal quarter in the ordinary course of
business, and other than options for up to 44,000 shares of Common Stock to be
granted in respect of stock options authorized in 1994 by the shareholders of
the Company (the "1994 Options") there shall have been no subscriptions,
options, warrants, or other rights, convertible securities, agreements,
arrangements, or commitments of any character relating to the issued or unissued
capital stock of the Company to which the Company or any of its material
Subsidiaries is a party, or by which
4-1
<PAGE>
any of their properties are bound or affected, or obligating the Company or any
of its Subsidiaries to issue or sell any shares of capital stock of, or other
equity interests in, the Company. At the Closing Date, the share capital of the
Company shall total 88,068,398 shares on a fully-diluted basis (assuming the
grant of all New Options and the 1994 Options in accordance with this
Agreement).
(d) Public Filings. The Company shall have filed all forms, reports,
--------------
and documents required to be filed with the COB, CBV, SBF, London Stock Exchange
and other French or U.K. securities law authorities or exchanges (the "French
and U.K. Securities Authorities") since December 31, 1993. The Company Public
Reports (including, without limitation, any financial statements or schedules
included therein) filed on or prior to the Filing Date (i) shall have been
prepared in compliance, in all material respects, with the requirements of
applicable law, and (ii) shall not have at the time of filing (or, if amended,
supplemented, or superseded by a filing prior to the date of this Agreement, on
the date of that filing) contained any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. None of the Company or its Subsidiaries
shall be required to file any forms, reports or other documents with the SEC
(whether pursuant to the Securities Act, Exchange Act or otherwise) or any
United States state securities commission. None of the Company or its
Subsidiaries shall have any class of security which is, or is required to be,
registered pursuant to Securities Act or Exchange Act.
(e) Financial Statements. Each of the consolidated financial
--------------------
statements contained in the Company Public Reports filed on or prior to the
Filing Date and the Company's audited consolidated financial statements for the
years ended December 31, 1993 and December 31, 1994 (together, the "Financial
Statements") (including, in each case, any related notes thereto) shall have
been prepared in accordance with International Accounting Standards issued by
the IASC ("International Accounting Standards") applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes
thereto), and each of them shall have presented fairly in all material respects
the consolidated financial position of the Company and its Subsidiaries at their
respective dates and the consolidated results of their operations and cash flows
for the periods indicated, except that (i) unaudited interim financial
statements included in any quarterly reports may have been subject to normal and
recurring year-end adjustments that were not expected to be material in amount,
and (ii) the
4-2
<PAGE>
Company may, in its sole discretion apply United States GAAP or International
Accounting Standards in effect at December 31, 1994 and December 31, 1993 or
International Accounting Standards in effect on the date of the filing of the
Company Public Report with respect to financial statements in respect of periods
subsequent to January 1, 1995, provided that the Company shall not have changed
--------
the annual account period.
(f) Absence of Certain Changes or Events. Except as disclosed in the
------------------------------------
Company Public Reports, disclosed to Crown prior to the date of this Agreement
or as contemplated by this Agreement, since December 31, 1994, (i) there shall
have been no Material Adverse Effect on the Company, (ii) the businesses of the
Company and each of its Subsidiaries shall have been conducted only in the
ordinary course, consistent with past practice; (iii) neither the Company nor
any of its Subsidiaries shall have incurred any material liabilities (direct,
contingent or otherwise) or engaged in any material transaction or entered into
any material agreement outside the ordinary course of business; (iv) the Company
and its Subsidiaries shall not have increased in any material respect the
compensation of any officer or granted any general salary or benefits increase
to their employees other than in the ordinary course of business; and (v) there
shall have been no declaration, setting aside or payment of any dividend or
other distribution with respect to the capital stock of the Company (other than
as permitted in Section 10.1(j)). Neither the execution and delivery of this
Agreement by Shareholder nor the performance by Shareholder of its obligations
hereunder will, except as disclosed in writing by Shareholder to Crown prior to
the execution of this Agreement, result in a default (or give rise to any right
of termination, cancellation or acceleration) under any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise, or other instrument or obligation to which
the Company or any of its Subsidiaries is a party or by which any of its
Subsidiaries or any of their respective assets may be bound, except for such
defaults (or rights of termination, cancellation or acceleration) as to which
requisite waivers or consents have been obtained or which, in the aggregate,
would not result in a Material Adverse Effect on the Company.
(g) Absence of Litigation. There shall be no civil, criminal, or
---------------------
administrative claims, actions, suits, proceedings, or investigations pending
or, to the knowledge of the Company, threatened against the Company or any of
its Subsidiaries, or involving any properties or rights of the Company or any of
their Subsidiaries, before any court,
4-3
<PAGE>
arbitrator, or administrative, governmental, or regulatory authority, domestic
or foreign, that, individually or in the aggregate, shall have had or are likely
to have a Material Adverse Effect on the Company. There shall be no judgments,
decrees, injunctions, rules, or orders of any governmental entity or arbitrator
outstanding against the Company or any of its Subsidiaries that shall have had
or are likely to have a Material Adverse Effect on the Company.
(h) Employee Benefit Plans.
----------------------
(i) The obligations and liabilities of the Company and its
Subsidiaries under retirement, pension, profit sharing, savings, deferred
compensation, supplemental retirement, bonus, incentive, stock purchase, stock
ownership, stock option, severance, health, life insurance, disability, fringe
benefit and other material employee benefit plans, programs, or arrangements,
and any current or former executive employment, compensation, severance,
consulting, noncompetition, or indemnification agreements, whether written or
unwritten, funded or unfunded (x) maintained, sponsored, administered or
contributed to by the Company or any of its Subsidiaries, or (y) with respect to
which the Company or any of its Subsidiaries has any liability (together, the
"Company Employee Plans") shall have been properly accrued and reflected in the
Financial Statements in accordance with International Accounting Standards in
all material aspects.
(ii) Except for the liabilities accrued and reflected in the
Financial Statements, there shall be no material unfunded liabilities existing
with respect to any Company Employee Plan.
(iii) All of the Company Employee Plans shall have been operated and
administered in material compliance with their terms and shall be in material
compliance with the laws and governmental rules and regulations applicable to
them (including all applicable requirements for notification to participants and
governmental or regulatory authorities), and the Company and each of its
Subsidiaries shall have performed all material obligations required to be
performed by them under, are not in any material respect in default under or in
violation of, and the Company has no knowledge of any material default or
violation by any party to, any of the Company Employee Plans.
(iv) All contributions to, and payments from, any Company Employee
Plan required pursuant to applicable laws, rules and regulations, the terms of
the Company Employee Plan, or any collective bargaining agreement shall have
been made on or before their due dates. All such contributions
4-4
<PAGE>
to, and all payments from, the Company Employee Plans shall have been properly
accrued in accordance with International Accounting Standards.
(v) Neither the Company nor any of its Subsidiaries shall have taken
any action with respect to any Company Employee Plan that will increase
materially the expense of maintaining such Company Employee Plan above the level
of expense reflected in the Financial Statements (except for the granting of the
New Options and the 1994 Options in accordance with this Agreement).
(vi) Except for claims for benefits in the normal operation of the
Company Employee Plans, there shall be no litigation, proceeding, investigation,
audit, assessment, complaint or proceeding of any kind in any court or
governmental agency with respect to any Company Employee Plan which could
reasonably be expected to have a Material Adverse Effect on the Company and its
Subsidiaries, taken as a whole.
(vii) Neither the Company nor any of its Subsidiaries shall have
taken any action with respect to any Company Employee Plan (including but not
limited to the recognition of the transaction contemplated by this Agreement as
a change of control) that will cause a material discretionary acceleration or
increase in the vesting, exercisability, or benefits provided by any such
Company Employee Plan (except for the granting of the New Options and the 1994
Options in accordance with this Agreement).
(i) Taxes and Social Obligations. The Company and each of its
----------------------------
material Subsidiaries (i) shall have timely and correctly filed all material
returns and reports relating to Taxes required to be filed by it in the manner
required by the relevant taxing authorities (collectively, "Returns") and (ii)
shall have timely paid all Taxes shown to be due on such Returns and all
material Taxes for which no return was required to be filed. The financial
statements included in the Company Public Reports and the Financial Statements
shall have, to the extent required by International Accounting Standards, an
adequate reserve for all Taxes payable by the Company and its Subsidiaries for
all taxable periods and portions thereof through the date of such financial
statements. No material deficiencies for any Taxes shall have been proposed,
asserted or assessed against the Company or any of its Subsidiaries and no
requests for waivers of the time to assess any such Taxes are pending.
Neither the Company nor any of its Subsidiaries (i) shall have been at
the date of this Agreement the subject of any inquiry, investigation or audit
relating to
4-5
<PAGE>
Taxes or (ii) shall have received notice of any proposed inquiry, investigation
or audit relating to Taxes which is reasonably likely to may have a Material
Adverse Effect on the Company.
(j) Registration Statement; Proxy Statement. The information to be
---------------------------------------
supplied by or on behalf of the Company for inclusion in the Registration
Statement shall not, at the time the Registration Statement is declared
effective or at the Filing Date, 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 the light of the circumstances under
which they were made, not misleading. The information supplied by or on behalf
of the Company for inclusion in the Proxy Statement shall not have, on the date
the Proxy Statement (or any amendment thereof or supplement thereto) is first
mailed to shareholders, at the time of the Crown Shareholder Meeting, at the
Filing Date, the Commencement Date or the Closing Date, contained any statement
that, in light of the circumstances under which it is made, was false or
misleading with respect to any material fact, omitted to state any material fact
necessary in order to make the statements made therein not false or misleading,
or omitted to state any material fact necessary to correct any statement in any
earlier communication with respect to the solicitation of proxies for the Crown
Shareholder Meeting that had become false or misleading.
(k) Note d'Information, U.K. Filing; Etc. The information supplied
-------------------------------------
by or on behalf of the Company for inclusion in the Note d'Information, the CBV
Filing, the U.K. Filing and all other filings made in connection with the
Exchange Offers shall not have, at the time such filings received the regulatory
approval or clearance required by applicable law, at the Filing Date, contained
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
4-6
