SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO.1
TO
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 22, 1996
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
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<PAGE>2
Item 2. Acquisition or Disposition of Assets.
Acquisition of CarnaudMetalbox
On February 26, 1996, Crown completed settlement of its
previously announced exchange offer (the "Offer") to acquire all
of the outstanding shares of common stock, par value FF 10 per
share (the "CarnaudMetalbox Shares"), of CarnaudMetalbox, a
French societe anonyme. Under the terms of the Offer, Crown offered
to exchange or purchase each CarnaudMetalbox Share validly
tendered in the Offer for, at the election of the holder, either
(1) 1.086 Units, each Unit consisting of (x) .75 shares of Crown
Common Stock, par value $5.00 per share ("Crown Common Stock")
and (y) .25 shares of Crown 4.5% Convertible Preferred Stock, par
value $41.8875 per share ("Crown Preferred Stock") or (2) FF 225
in cash. The Offer was made pursuant to the terms of the
Exchange Offer Agreement dated May 22, 1995, as amended (the
"Exchange Offer Agreement") between Crown and Compagnie Generale
d'Industrie et de Participations ("CGIP"), a French societe anonyme
and the principal shareholder of CarnaudMetalbox. A description
of the Exchange Offer Agreement was previously reported in
Crown's Current Reports on Form 8-K dated May 22, 1995 and
December 28, 1995 and Crown's Proxy Statement/Prospectus (the
"Proxy Statement") dated November 14, 1995 forming a part of
Crown's Amendment No. 1 to its Registration Statement on Form S-4
(No. 33-64167) (the "Registration Statement") filed with the
Securities and Exchange Commission on November 14, 1995.
85,923,200 CarnaudMetalbox Shares, representing
approximately 98.7% of the outstanding CarnaudMetalbox Shares,
were validly tendered into the Offer. Of the 85,923,200
CarnaudMetalbox Shares tendered, 40,125,825 were tendered for
cash (aggregating approximately FF 9.0 billion or $1.8 billion)
and 45,797,825 were exchanged for Units (resulting in Crown
issuing 37,300,898 shares of Crown Common Stock and 12,432,622
shares of Crown Preferred Stock). Pursuant to the terms of the
Exchange Offer Agreement, CGIP exchanged its CarnaudMetalbox
Shares for Units and received 21,330,903 shares of Crown Common
Stock and 7,110,300 shares of Crown Preferred Stock. CGIP's
shares of Crown Common Stock and Crown Preferred Stock are held
pursuant to the Shareholders Agreement described below.
The financing for the cash portion of the consideration
paid in the Offer was obtained pursuant to the Revolving Credit
and Term Loan Agreement dated December 1, 1995 (the "Credit
Agreement") among Crown, a syndicate of financial institutions,
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<PAGE>3
Chemical Bank as arranger and administrative agent, and Credit
Suisse and Societe Generale as arrangers and documentation agents
previously reported in Item 5 of Crown's Current Report on Form
8-K dated December 1, 1995.
In accordance with the terms of the Exchange Offer
Agreement, Crown has adopted Amended and Restated Articles of
Incorporation and the terms of Crown Preferred Stock and has
amended and restated its Bylaws, which are filed as exhibits
hereto and incorporated herein by reference to Exhibits 3.1, 3.2
and 3.3, respectively, of Crown's Registration Statement on Form
8-A dated February 20, 1996.
Shareholders Agreement
Pursuant to the Exchange Offer Agreement, Crown and
CGIP entered into the Shareholders Agreement dated as of February
22, 1996 (the "Shareholders Agreement"). Subject to the terms of
the Shareholders Agreement, CGIP has agreed to certain standstill
provisions which prohibit CGIP from acquiring beneficial
ownership of voting securities representing more than 19.95% of
the outstanding Total Voting Power (as defined in the
Shareholders Agreement) of Crown, making a Takeover Proposal (as
defined in the Shareholders Agreement) for Crown or its
subsidiaries and taking certain other actions.
The Shareholders Agreement provides that CGIP is
entitled to designate up to three persons (the "CGIP Designees")
to be nominated for election as directors of Crown at each annual
meeting of Crown shareholders, depending on the amount of Crown
voting securities beneficially owned by CGIP. On February 22,
1996, the Crown Board of Directors elected Ernest-Antoine
Seilliere, Guy de Wouters and Felix G. Rohatyn to the Crown Board
in accordance with this provision.
CGIP has also agreed to vote any Crown voting
securities beneficially owned by CGIP during the Standstill
Period (as defined in the Shareholders Agreement and described
generally below) in the manner recommended by Crown's Board of
Directors in connection with the election of directors of Crown
and any question relating to a Takeover Proposal.
The Shareholders Agreement also contains provisions
relating to Crown's dividend policy and debt rating, certain
restrictions on CGIP's sale or transfer of its shares of Crown
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<PAGE>4
Stock and CGIP's registration rights with respect to its shares
of Crown Stock.
The Standstill Period began on February 22, 1996 and
terminates under certain circumstances upon the earliest to occur
of (i) the later of February 22, 1999 and the date on which CGIP
beneficially owns voting securities of Crown representing less
than 3.5% of the outstanding Total Voting Power of Crown, (ii)
the date Crown breaches certain provisions relating to CGIP's
board representation or Crown's dividend policy or debt rating,
(iii) the date Crown agrees to recommend (or ceases to oppose)
the consummation of a Specified Event (as defined in the
Shareholders Agreement) or enters into, or takes material steps
to solicit, an agreement with respect to certain fundamental
corporate transactions involving Crown or its subsidiaries, (iv)
the date a person other than CGIP acquires 25% of the Total
Voting Power of Crown, or (v) the date any CGIP Designee fails to
be elected to Crown's Board of Directors.
A summary of the Shareholders Agreement was previously
reported under the caption "THE SHAREHOLDERS AGREEMENT" in the
Proxy Statement. In addition, the foregoing description is
qualified in its entirety by reference to the complete text of
the Shareholders Agreement, which is incorporated herein by
reference and attached hereto as Exhibit 2.2.
Item 5. Other Events.
On February 22, 1996, the Crown Board of Directors
declared a cash dividend of $0.25 per share of Crown Common Stock
payable on March 29, 1996 to shareholders of record on March 15,
1996. Dividends on the Crown Preferred Stock issued in
conjunction with the Offer will accrue from the issuance date of
February 26, 1996, but have not been declared. Such dividends
are expected to be payable on May 20, 1996.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of CarnaudMetalbox.
The audited consolidated financial statements of
CarnaudMetalbox for the years ended December 31, 1993 and 1994,
and the independent auditors' report thereon, which are required
to be filed herewith were previously reported on pages F-1
through F-46 of Crown's Proxy Statement forming a part of the
Registration Statement and such financial statements are filed as
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<PAGE>5
Exhibit 99.1 hereto and are incorporated herein by reference.
The audited consolidated financial statements of CarnaudMetalbox
for the year ended December 31, 1995 and the independent
auditors' report thereon, which are required to be filed herewith
are not included herein. Such financial statements will be filed
as soon as practicable, but no later than 60 days after the date
this report is required to be filed.
(b) Pro Forma Financial Information.
The pro forma financial information required by Article
11 of Regulation S-X in connection with the acquisition of
CarnaudMetalbox reported in Item 2 of this Form 8-K is not
included herein. Such pro forma financial information will be
filed as soon as practicable, but no later than 60 days after the
date this report is required to be filed.
(c) The following exhibits are filed as part of this report
on Form 8-K:
2.1 Exchange Offer Agreement dated as of May 22, 1995, as
amended, between Crown and Compagnie Generale d'Industrie et de
Participations, incorporated by reference to Annex A of Crown's
Proxy Statement/Prospectus dated November 14, 1995 forming a part
of Crown's Amendment No. 1 to Registration Statement on Form S-4
(No. 33-64167) filed with the Securities and Exchange Commission
on November 14, 1995, and to Exhibit 2.1 of Crown's Current
Report on Form 8-K dated December 28, 1995.
2.2 Shareholders Agreement dated February 22, 1996 between
Crown and Compagnie Generale d'Industrie et de Participations.
3.1 Amended and Restated Articles of Incorporation of
Crown, incorporated by reference to Exhibit 3.1 of Crown's
Registration Statement on Form 8-A dated February 20, 1996.
3.2 Resolution fixing the terms of Crown Preferred Stock,
incorporated by reference to Exhibit 3.2 of Crown's Registration
Statement on Form 8-A dated February 20, 1996.
3.3 Bylaws of Crown, as amended, incorporated by reference
to Exhibit 3.3 of Crown's Registration Statement on Form 8-A
dated February 20, 1996.
10.1 Revolving Credit and Term Loan Agreement, dated as of
December 1, 1995, among Crown, each of the Subsidiary Borrowers
as defined therein, the financial institutions which are
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<PAGE>6
signatories thereto (the "Lenders"), Chemical Bank, as arranger
and administrative agent for the Lenders, and Credit Suisse and
Societe Generale, as arrangers and documentation agents,
incorporated by reference to Exhibit 10.1 of Crown's Current
Report on Form 8-K (File No. 1-2227) dated December 1, 1995.
23.1 Consent of Arthur Andersen LLP, Befec-Price
Waterhouse and Claude Chevalier.
99.1 The audited consolidated financial statements of
CarnaudMetalbox for the years ended December 31, 1993 and 1994,
and the independent auditors' report thereon, which were
previously reported on pages F-1 through F-46 of Crown's Proxy
Statement/Prospectus dated November 14, 1995 forming a part of
Crown's Amendment No. 1 to Registration Statement on Form S-4
(No. 33-64167) filed with the Securities and Exchange Commission
on November 14, 1995, are hereby incorporated by reference
herein.
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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
Executive Vice President
Chief Financial Officer
Date: March 18, 1996
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EXHIBIT INDEX
Exhibit No.,
As provided Page in
in Item 601 Sequentially
Exhibit Number Description Numbered Copy
2.1 Exchange Offer Agreement
dated as of May 22, 1995,
as amended, between Crown
and Compagnie Generale
d'Industrie et de
Participations,
incorporated by reference
to Annex A of Crown's
Proxy Statement/
Prospectus dated November
14, 1995 forming a part
of Crown's Amendment No.
1 to Registration
Statement on Form S-4
(No. 33-64167) filed with
the Securities and
Exchange Commission on
November 14, 1995, and to
Exhibit 2.1 of Crown's
Current Report on Form 8-K
dated December 28, 1995.
2.2 Shareholders Agreement 12
dated February 22, 1996
between Crown and
Compagnie Generale
d'Industrie et de
Participations.
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<PAGE>9
3.1 Amended and Restated
Articles of Incorporation
of Crown, incorporated by
reference to Exhibit 3.1
of Crown's Registration
Statement on Form 8-A
dated February 20, 1996.
3.2 Resolution fixing the
terms of Crown Preferred
Stock, incorporated by
reference to Exhibit 3.2
of Crown's Registration
Statement on Form 8-A
dated February 20, 1996.
3.3 Bylaws of Crown, as
amended, incorporated by
reference to Exhibit 3.3
of Crown's Registration
Statement on Form 8-A
dated February 20, 1996.
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<PAGE>10
10.1 Revolving Credit and Term
Loan Agreement, dated as
of December 1, 1995,
among Crown, each of the
Subsidiary Borrowers as
defined therein, the
financial institutions
which are signatories
thereto (the "Lenders"),
Chemical Bank, as
arranger and
administrative agent for
the Lenders, and Credit
Suisse and Societe
Generale, as arrangers
and documentation agents,
incorporated by reference
to Exhibit 10.1 of
Crown's Current Report on
Form 8-K (File No. 1-2227)
dated December 1, 1995.
23.1 Consent of Arthur 47
Andersen LLP, Befec-
Price Waterhouse and Claude
Chevalier.
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<PAGE>11
99.1 The audited consolidated
financial statements of
CarnaudMetalbox for the
years ended December 31,
1993 and 1994, and the
independent auditors'
report thereon, which
were previously reported
on pages F-1 through F-46
of Crown's Proxy
Statement/Prospectus
dated November 14, 1995
forming a part of Crown's
Amendment No. 1 to
Registration Statement on
Form S-4 (No. 33-64167)
filed with the Securities
and Exchange Commission
on November 14, 1995, are
hereby incorporated by
reference herein.
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Exhibit 2.2
This Shareholders Agreement (the "Agreement"), dated as of February
22, 1996, 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 beneficial ownership of 7,110,300 shares of the
Company's 4.5% Convertible Preferred Stock, par value $41.8875 per share (the
"Preferred Shares"), and 21,330,903 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, as amended, (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:
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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.
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<PAGE>14
(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.
(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.
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<PAGE>15
(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
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 described in 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.
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<PAGE>16
(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 described in Section 3.6) shall be deemed not to be "Voting
Securities" (or to have Voting Power).
In addition, the following terms have the definitions specified in
the Sections noted:
Term Section
Acquire 3.1(a)
Agreement recitals
Beneficial Ownership Thresholds 3.2(a)
Cap 4.5(a)
Common Stock recitals
Company recitals
Continuing Director 4.1(f)
Designated Company Breach 2.1(v)
Designated Shareholder Breach 2.1
Disposition 4.1
Exchange Offer Agreement recitals
Exercise Notice 4.2(a)
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<PAGE>17
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)
SECTION 1.2 Representations and Warranties of the Company. The
Company represents and warrants to Shareholder as follows:
(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
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<PAGE>18
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 statutes or similar governing documents.
(c) As of the date hereof, Shareholder beneficially owns
7,100,300 Preferred Shares and 21,330,903 shares of Common Stock and
Shareholder does not beneficially own any other Voting Securities.
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
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<PAGE>19
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 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
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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").
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 (provided that there is not a Designated
Shareholder Breach in existence at the time of such acquisition) which would
not, after giving effect to such acquisition, result in beneficial ownership
of Voting Securities representing Voting Power in excess of 19.95% 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,
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<PAGE>21
(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 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
Ernest-Antoine Seilliere, Guy de Wouters and Felix G. Rohatyn 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
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<PAGE>22
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 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
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<PAGE>23
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 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 no more than 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
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<PAGE>24
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 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.
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<PAGE>25
(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 has adopted
a shareholder's rights plan on terms and conditions set forth in the Rights
Agreement dated as of August 7, 1995 between the Company and First Chicago
Trust Company of New York as Rights Agent.
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 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 financial condition of the Company. The
amount of dividends paid to Shareholder during the four full quarters
following the Latest Mandatory Conversion Date (as defined in the terms of
the Preferred Shares included as Annex
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<PAGE>26
1 to the Exchange Offer Agreement) shall not be 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 (including, without limitation, through the
disposition or transfer of control of another Person), sell, assign, donate,
transfer, pledge,
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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 Securities representing three and one-half percent
(3.5%) or more of the Total Voting Power.
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(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 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).
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(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 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
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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 shall be determined by two United States nationally
recognized investment banking
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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 other order
shall have been enacted, entered, promulgated or enforced by any court or
governmental authority of competent jurisdiction which
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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 if the price at which such shares were so offered exceeded
the Market Price on the date of such offer to the Company.
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(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 19.95% 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 23.45%
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
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
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(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 (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
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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 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
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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 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.
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
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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
such Subject Stock, or the omission or alleged omission to state
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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
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that it may desire, jointly with any 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
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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.
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
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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 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 to Section
2.1(i). Notwithstanding the foregoing, the provisions of Section 6.1 shall not
terminate if, at
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the time the provisions of Section 6.1 would have otherwise terminated in
accordance with the previous sentence, there is a Designated Company Breach.
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 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
(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.
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<PAGE>43
All such notices, requests, demands and other communi-cations 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
February 22, 1996, 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.
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
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<PAGE>44
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.
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
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</PAGE>
<PAGE>45
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 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
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</PAGE>
<PAGE>46
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.
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:/s/ William J. Avery
Name: William J. Avery
Title: Chairman of the Board and
Chief Executive Officer
COMPAGNIE GENERALE D'INDUSTRIE
ET DE PARTICIPATIONS
By:/s/ Ernest-Antoine Seilliere
Name: Ernest-Antoine Seilliere
Title: Chairman and Chief Executive
Officer
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</PAGE>
<PAGE>47
Exhbit 23.1
We hereby consent to the incorporation by reference in this Form 8-K
and in the Registration Statements on Form S-3 (No. 33-56965)
and Form S-8 (Nos. 33-01893, 33-45900, 33-39529, 33-63732, 33-61240,
33-61238, 33-50369 and 33-52699) of Crown Cork & Seal Company, Inc. of
our report dated March 29, 1995 relating to the consolidated financial
statements of CarnaudMetalbox, which report appears on page F-3 of the
Proxy Statement/Prospectus (the "Proxy Statement") dated November 14, 1995
forming a part of Crown's Registration Statement on Form S-4 (No. 33-64167).
Paris, 1st March 1996
/s/ Arthur Andersen LLP /s/ M.S. Moralee
Arthur Andersen LLP Befec-Price Waterhouse
M.S. Moralee
/s/ Claude Chevalier
Claude Chevalier
</Page>
