_____________________
| OMB APPROVAL |
|_____________________|
|OMB NUMBER: 3235-0145|
UNITED STATES |EXPIRES: |
SECURITIES AND EXCHANGE COMMISSION | AUGUST 31, 1999|
Washington, D.C. 20549 |ESTIMATED AVERAGE |
|BURDEN HOURS |
|PER RESPONSE ...14.90|
|_____________________|
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)
Pioneer Hi-Bred International, Inc.
____________________________________________________________
(Name of Issuer)
Common Stock,
par value $1.00 per share
____________________________________________________________
(Title of Class and Securities)
723686101
____________________________________________________________
(CUSIP Number)
Mary E. Bowler
Senior Counsel
E.I. du Pont de Nemours and Company
1007 Market Street
Wilmington, Delaware 19898
(302) 774-5303
____________________________________________________________
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
Copy to:
Lou R. Kling, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
(212) 735-3000
March 15, 1999
____________________________________________________________
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or
240.13d-1(g), check the following box. [ ]
SCHEDULE 13D
CUSIP No. 723686101
___________________________________________________________________
1. NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only)
E.I. DU PONT DE NEMOURS AND COMPANY
51-0014090
___________________________________________________________________
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) ( )
___________________________________________________________________
3. SEC USE ONLY
___________________________________________________________________
4. SOURCE OF FUNDS*
WC, OO
___________________________________________________________________
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
___________________________________________________________________
6. CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
___________________________________________________________________
7. SOLE VOTING POWER
NUMBER OF None
SHARES _____________________________________
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 49,334,358 shares of Common Stock
EACH _____________________________________
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON None
WITH _____________________________________
10. SHARED DISPOSITIVE POWER
49,334,358 shares of Common Stock
___________________________________________________________________
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
49,334,358 shares of Common Stock
___________________________________________________________________
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES ( )
___________________________________________________________________
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
49,334,358 shares of Common Stock represent approximately 20.6%
of the Common Stock outstanding as of December 29, 1998 (as
adjusted
for the subsequent issuance of Common Stock discussed herein)
___________________________________________________________________
14. TYPE OF REPORTING PERSON
CO
___________________________________________________________________
This Amendment No. 3 to the Schedule 13D, filed pursuant to Rule 13d-1
of the Rules and Regulations under the Securities Act of 1934, as amended
(the "Exchange Act") by E.I. du Pont de Nemours and Company, a Delaware
corporation ("DuPont"), and Du Pont Chemical and Energy Operations, Inc.
("DCEO"), amends and supplements the Schedule 13D filed by DuPont on August
18, 1997 (the "Original Schedule 13D"), as amended and restated by
Amendment No. 1 to the Original Schedule 13D, filed on September 29, 1997,
and as subsequently amended and restated by Amendment No. 2 to the Original
13D, filed on February 2, 1998:
Item 2 is amended as follows:
The second sentence of the second paragraph of Item 2 shall be
amended to be the following:
"With the exception of Goro Watanabe, who is a Japanese citizen,
and Eduard Van Wely, who is a Dutch citizen, each person listed below is a
citizen of the United States of America."
The following persons (and information with respect thereto) are
deleted from the list of directors and executive officers of DuPont:
Percy N. Barnevik
Andrew F. Brimmer
Charles M. Harper
John A. Krol
The following persons are added to the list of directors and
executive officers of DuPont:
Curtis J. Crawford President and CEO -
ZiLOG Inc. ZiLOG Inc.; Director
151 Almendral Avenue
Atherton, CA 94027
Sanford I. Weill Chairman and Co-CEO -
Citigroup Inc. Citigroup Inc.; Director
388 Greenwich Street
New York, NY 10013
Dennis H. Reilly Senior Vice President
DuPont Differentiated
Businesses
D-9000
1007 Market Street
Wilmington, DE 19898
Eduard Van Wely Senior Vice President
DuPont Foundation
Businesses
D-9000
1007 Market Street
Wilmington, DE 19898
The following persons are deleted from the list of directors and
executive officers of DCEO:
Robert Gachot
John C. Sargent
The following persons are added to the list of directors and
executive officers of DCEO:
A. Lloyd Adams Vice President and Assistant
Du Pont Chemical and Treasurer; Director
Energy Operations, Inc.
1007 Market Street
Wilmington, DE 19898
Susan Stalnecker President; Director
Du Pont Chemical and
Energy Operations, Inc.
1007 Market Street
Wilmington, DE 19898
Item 3 is supplemented as follows:
The following sentence shall be added as the last sentence of
Item 3: "The cash portion of the consideration paid by DuPont in connection
with the merger (as described in Item 6 below) is anticipated to come from
cash on hand and, to the extent deemed appropriate at the time, debt
financing including the sale of commercial paper; the other portion of the
consideration paid by DuPont in connection with the merger will be DuPont
common stock.
Item 4 is supplemented as follows:
The following paragraph shall be inserted prior to the last
paragraph of Item 4:
"As described in Item 6 below, pursuant to an Agreement and Plan
of Merger, dated March 15, 1999 (the "Merger Agreement"), between DuPont,
Pioneer and Delta Acquisition Sub, Inc., a wholly owned subsidiary of
DuPont ("Delta"), Pioneer will be merged with and into Delta and each share
of Common Stock (other than shares held by DuPont and any shares as to
which appraisal rights are perfected) will be converted in the merger, at
the election of the holders thereof, into either (i) a fraction of a share
of DuPont common stock with an average trading price (calculated over a ten
trading day period preceding the Pioneer stockholder meeting) of $40 or
(ii) the right to receive $40 in cash, subject to certain limitations set
forth in the Merger Agreement The closing of the merger is subject to
various conditions set forth in the Merger Agreement. The purpose of the
transactions contemplated by the Merger Agreement is for DuPont to obtain
control of Pioneer."
Item 5 is amended and supplemented as follows:
The first paragraph of Item 5 shall be replaced by the following:
"(a) and (b) As of the date hereof, DuPont, through its wholly -
owned subsidiary DCEO, beneficially owns an aggregate of 49,333,758 shares
of Common Stock. Such shares represent approximately 20% of the shares of
Common Stock outstanding as of December 29, 1998, as set forth in Pioneer's
Quarterly Report on Form 10-Q, filed January 7, 1999. DuPont and DCEO
share the power to vote and to dispose of such shares subject to the terms
and conditions of the Investment Agreement and the Merger Agreement. Such
shares are entitled to five votes per share, but DuPont has agreed that the
number of votes that DuPont is entitled to vote in its sole discretion with
respect to such shares will not exceed (i) except under certain
circumstances, 20 percent of all of the votes which may be cast by holders
of Common Stock and (ii) the percentage of outstanding shares of Common
Stock represented by such shares unless Pioneer permits a person owning a
greater percentage of Common Stock than DuPont to have voting power in
excess of such person's economic interest. As described in Item 6, on the
closing of the merger all of the remaining Common Stock outstanding will be
converted into DuPont common stock or cash, and the surviving corporation
will be a wholly owned subsidiary of DuPont."
The fourth paragraph of Item 5 shall be replaced by the
following:
"Pursuant to the terms of the Merger Agreement, DuPont exchanged
49,333,758 shares of Class B Common Stock for 49,333,758 shares of Common
Stock on March 17, 1999. Other than the transactions contemplated by the
Merger Agreement and the foregoing exchange, neither DuPont nor DCEO, nor
to the best knowledge of DuPont and DCEO, any director or executive officer
of DuPont or DCEO, has effected any transactions in Preferred Stock or
Common Stock during the past 60 days."
Item 6 shall be supplemented as follows:
The following paragraphs shall inserted prior to the last
paragraph of Item 6:
"On March 15, 1999, DuPont and Pioneer entered into the Merger
Agreement pursuant to which Pioneer will be merged with and into Delta and
each share of Pioneer Common Stock (other than shares held by DuPont and
any shares as to which appraisal rights are perfected) will be converted in
the merger, at the election of the holders thereof, into either (i) a
fraction of a share of DuPont common stock with an average trading price
(calculated over a ten trading day period preceding the Pioneer stockholder
meeting) of $40 or (ii) the right to receive $40 in cash, subject to the
overall limitation that 45% of the consideration paid to Pioneer
stockholders will be cash and the remainder will be DuPont common stock.
Holders of Pioneer options have similar election rights in the merger with
respect to such options, except that there will be no limit on the number
of options which holders will be permitted to convert into DuPont options.
The closing of the merger is subject to various conditions, including the
approval of Pioneer stockholders and the expiration of the applicable
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder.
The Merger Agreement provides that the number of votes that
DuPont will be entitled to vote in its sole discretion with respect to
shares of Common Stock held by DuPont and received in exchange for the
shares of Class B Common Stock will not exceed (i) except under certain
circumstances, 20 percent of all of the votes which may be cast by holders
of Common Stock and (ii) the percentage of shares of outstanding Common
Stock represented by such shares unless Pioneer permits a person owning a
greater percentage of Common Stock than DuPont to have voting power in
excess of such person's economic interest.
The Merger Agreement provides that the Investment Agreement will
terminate if DuPont terminates the Merger Agreement in certain
circumstances, including in the event that Pioneer's Board determines that
a third party proposal is more favorable to Pioneer shareholders than the
transactions contemplated by the Merger Agreement, or if Pioneer terminates
the Merger Agreement within the first 45 days following the entering into
of the Merger Agreement in order to accept a "superior" third party
proposal; provided that, notwithstanding the foregoing, certain of DuPont's
rights contained in the Investment Agreement as described in the seventh
paragraph of this Item 6 with respect to the purchase of the commercial
joint venture established pursuant to the Joint Venture Agreement Formation
Agreements in the event of an acquisition by a third party of a specified
equity interest in Pioneer will survive such termination of the Investment
Agreement.
The preceding summary of certain provisions of the Merger
Agreement is not intended to be complete and is qualified in its entirety
by reference to the full text of the Merger Agreement, a copy of which is
filed as an Exhibit hereto."
Item 7 is supplemented to add the following to the Exhibit list:
"(e) Agreement and Plan of Merger, dated as of March 15, 1999,
by and among Pioneer, DuPont and Delta"
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
DATED: March 17, 1999
E.I. DU PONT DE NEMOURS
AND COMPANY
By: /s/ Gary M. Pfeiffer
_____________________
Gary M. Pfeiffer
Senior Vice President -
DuPont Finance and
Chief Financial Officer
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
DATED: March 17, 1999
DU PONT CHEMICAL AND
ENERGY OPERATIONS, INC.
By: /s/ Charles L. Downing
_____________________
Charles L. Downing
Vice President and
Treasurer
Du Pont Chemical and Energy
Operations, Inc.
EXHIBIT INDEX
Ex. E - Agreement and Plan of Merger, dated March 15, 1999, by and among
Pioneer, DuPont and Delta.
EXHIBIT E
===========================================================================
AGREEMENT AND PLAN OF MERGER
by and among
PIONEER HI-BRED INTERNATIONAL, INC.,
E. I. DU PONT DE NEMOURS AND COMPANY
and
DELTA ACQUISITION SUB, INC.
Dated as of March 15th, 1999
===========================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE I
THE MERGER
SECTION 1.1 The Merger..................................................2
SECTION 1.2 Effect on Common Stock......................................2
SECTION 1.3 Share Election..............................................4
SECTION 1.4 Proration...................................................6
SECTION 1.5 Exchange of Certificates....................................7
SECTION 1.6 Transfer Taxes; Withholding................................11
SECTION 1.7 Stock Options; Other Equity Awards.........................11
SECTION 1.8 Lost Certificates..........................................14
SECTION 1.9 Dissenting Shares..........................................14
SECTION 1.10 Merger Closing.............................................14
SECTION 1.11 Class B Common Stock Exchange..............................15
ARTICLE II
THE SURVIVING CORPORATION
SECTION 2.1 Articles of Incorporation..................................16
SECTION 2.2 By-laws....................................................16
SECTION 2.3 Officers and Directors.....................................16
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.1 Corporate Existence and Power..............................16
SECTION 3.2 Corporate Authorization....................................17
SECTION 3.3 Consents and Approvals; No Violations......................18
SECTION 3.4 Capitalization.............................................19
SECTION 3.5 Subsidiaries...............................................20
SECTION 3.6 SEC Documents..............................................21
SECTION 3.7 Financial Statements.......................................22
SECTION 3.8 Proxy Statement, Form S-4, etc.............................22
SECTION 3.9 Absence of Material Adverse Changes, etc...................23
SECTION 3.10 Taxes......................................................24
SECTION 3.11 Employee Benefit Plans.....................................25
SECTION 3.12 Litigation; Compliance with Laws...........................27
SECTION 3.13 Intellectual Property......................................28
SECTION 3.14 Opinion of Financial Advisors..............................30
SECTION 3.15 Tax Treatment..............................................30
SECTION 3.16 Finders' Fees..............................................30
SECTION 3.17 Rights Amendment...........................................30
SECTION 3.18 Board Recommendation.......................................30
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF DUPONT AND NEWCO
SECTION 4.1 Corporate Existence and Power..............................31
SECTION 4.2 Authorization..............................................31
SECTION 4.3 Consents and Approvals; No Violations......................32
SECTION 4.4 Capitalization.............................................33
SECTION 4.5 SEC Documents..............................................33
SECTION 4.6 Financial Statements.......................................34
SECTION 4.7 Absence of Material Adverse Changes, etc...................34
SECTION 4.8 Proxy Statement, Form S-4, etc.............................34
SECTION 4.9 Share Ownership............................................35
SECTION 4.10 Newco's Operations.........................................35
SECTION 4.11 Tax Treatment..............................................35
SECTION 4.12 Finders' Fees..............................................35
SECTION 4.13 Acquisition for Investment.................................36
SECTION 4.14 Litigation; Compliance with Laws...........................36
ARTICLE V
COVENANTS OF THE PARTIES
SECTION 5.1 Conduct of the Business of the Company.....................36
SECTION 5.2 Conduct of the Business of DuPont, etc.....................42
SECTION 5.3 Shareholders' Meeting; Proxy Material......................44
SECTION 5.4 Access to Information......................................46
SECTION 5.5 No Solicitation............................................46
SECTION 5.6 Director and Officer Liability.............................48
SECTION 5.7 Reasonable Best Efforts....................................49
SECTION 5.8 Certain Filings............................................49
SECTION 5.9 Public Announcements.......................................52
SECTION 5.10 Further Assurances.........................................52
SECTION 5.11 Employee Matters...........................................53
SECTION 5.12 Tax-Free Reorganization Treatment..........................54
SECTION 5.13 Blue Sky Permits...........................................54
SECTION 5.14 Listing....................................................55
SECTION 5.15 State Takeover Laws........................................55
SECTION 5.16 Certain Notifications......................................55
SECTION 5.17 Affiliate Letters..........................................55
SECTION 5.18 The Investment Agreement...................................55
ARTICLE VI
CONDITIONS TO THE MERGER
SECTION 6.1 Conditions to Each Party's Obligations.....................56
SECTION 6.2 Conditions to the Company's Obligation
to Consummate the Merger.................................57
SECTION 6.3 Conditions to DuPont's and Newco's
Obligations to Consummate the Merger.....................58
ARTICLE VII
TERMINATION
SECTION 7.1 Termination................................................59
SECTION 7.2 Effect of Termination......................................63
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Notices....................................................63
SECTION 8.2 Survival of Representations and Warranties.................64
SECTION 8.3 Interpretation.............................................64
SECTION 8.4 Amendments, Modification and Waiver........................65
SECTION 8.5 Successors and Assigns.....................................66
SECTION 8.6 Specific Performance.......................................66
SECTION 8.7 Governing Law..............................................66
SECTION 8.8 Severability...............................................66
SECTION 8.9 Third Party Beneficiaries..................................67
SECTION 8.10 Entire Agreement...........................................67
SECTION 8.11 Counterparts; Effectiveness................................67
SECTION 8.12 Petroleum Subsidiaries.....................................67
Exhibits
- --------
Exhibit A - Rights Amendment
Exhibits B-1 and B-2 - Form of Representation Letters
Index of Defined Terms
----------------------
Page
----
Acquisition Proposal.....................................................48
Active Company Subsidiary................................................20
Adverse Change in the Company Recommendation.............................61
Affiliate Agreements.....................................................55
Agreement.................................................................1
Articles of Merger........................................................2
Benefit Plans of DuPont..................................................42
Cash Electing Option.....................................................11
Cash Number...............................................................6
Cash Proration Factor.....................................................7
Certificate of Incorporation.............................................16
Certificates..............................................................8
Class B Common Stock.....................................................19
Closing..................................................................14
Closing Date.............................................................15
Code......................................................................1
Common Stock..............................................................1
Company...................................................................1
Company Disclosure Schedule..............................................16
Company Group............................................................24
Company Material Adverse Effect..........................................17
Company Recommendation...................................................45
Company SEC Documents....................................................21
Company Securities.......................................................20
Company Voting Debt......................................................38
Confidentiality Agreement................................................46
Conoco...................................................................33
Continuing Employees.....................................................53
DuPont....................................................................1
DuPont Disclosure Schedule...............................................32
DuPont Material Adverse Effect...........................................31
DuPont SEC Reports.......................................................33
DuPont Share Election.....................................................3
DuPont Share Election Shares..............................................3
DuPont Shares.............................................................1
DuPont Shares Trust......................................................10
DuPont's Representatives.................................................46
Dissenting Shares........................................................14
EC Merger Regulations....................................................52
Effective Time............................................................2
Election Date.............................................................5
ERISA....................................................................26
ERISA Affiliate..........................................................26
Excess DuPont Shares......................................................9
Exchange Act.............................................................19
Exchange Agent............................................................4
Exchange Fund............................................................10
Exchange Ratio............................................................3
Form of Election..........................................................4
Form S-4.................................................................23
GAAP.....................................................................22
Governmental Entity......................................................18
HSR Act..................................................................19
IBCA......................................................................1
Indemnitees..............................................................48
Intellectual Property....................................................29
Investment Agreement.....................................................55
Licenses.................................................................16
Lien.....................................................................21
Liquidated Damages Termination...........................................62
Listed Companies.........................................................42
Material Adverse Consequence.............................................59
Material Delay...........................................................43
Maximum Amount...........................................................49
Merger....................................................................2
Merger Consideration......................................................3
Merger Price..............................................................3
Newco.....................................................................1
Non-Cash Proration Factor.................................................6
Non-Electing Shares.......................................................3
Non-Proration Decision....................................................7
NYSE......................................................................5
Option...................................................................11
Option Cash Limit........................................................12
Option Proration Factor..................................................12
Other Awards.............................................................13
Person....................................................................4
Plans....................................................................26
Preferred Stock..........................................................19
Proxy Statement..........................................................45
Regulatory Law...........................................................52
Representation Letters...................................................54
Required Company Vote....................................................18
Restricted Period........................................................42
Rights....................................................................1
Rights Agreement..........................................................1
Rights Amendment..........................................................1
Schedule 13E-3...........................................................22
SEC......................................................................13
Secretary of State........................................................2
Securities Act...........................................................19
Seed Operations..........................................................44
Special Meeting..........................................................44
Subsidiary...............................................................20
Substitute Option........................................................11
Superior Proposal........................................................48
Surviving Corporation.....................................................2
Tax Return...............................................................25
Taxes....................................................................25
Termination Date.........................................................60
Transaction..............................................................43
Valuation Period..........................................................3
AGREEMENT AND PLAN OF MERGER, dated as of March 15, 1999 (this
"Agreement"), by and among Pioneer Hi-Bred International, Inc., an Iowa
corporation (the "Company"), E.I. du Pont de Nemours and Company, a
Delaware corporation ("DuPont"), and Delta Acquisition Sub, Inc., an Iowa
corporation and a direct wholly-owned subsidiary of DuPont ("Newco").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, in furtherance of the acquisition of the Company by
DuPont, the respective Boards of Directors of DuPont, Newco and the
Company, and DuPont as sole shareholder of Newco, have each approved this
Agreement and the merger of the Company with and into Newco, upon the terms
and subject to the conditions and limitations set forth herein, and in
accordance with the Iowa Business Corporation Act (the "IBCA"), whereby
each share of the issued and outstanding shares of common stock, par value
$1.00 per share (the "Common Stock") of the Company, together with the
associated share purchase rights (the "Rights") issued pursuant to the
Amended and Restated Rights Agreement, dated December 13, 1996, between the
Company and Bank Boston N.A. (formally known as The First National Bank of
Boston), as amended, including pursuant to the Rights Amendment referred to
below (the "Rights Agreement") will, upon the terms and subject to the
conditions and limitations set forth herein, either (A) at the election of
the holders thereof be converted into a fraction of a share of common
stock, par value $0.30 per share of DuPont (the "DuPont Shares") as
determined in accordance with Article I hereof or (B) be converted into the
right to receive the Merger Price (as hereinafter defined) in cash;
WHEREAS, for federal income tax purposes, the Merger (as defined
in Section 1.1(a) hereof) is intended to qualify as a reorganization under
the provisions of Section 368(a) of the United States Internal Revenue Code
of 1986, as amended (the "Code");
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Company is amending the Rights Agreement in the form
attached hereto as Exhibit A (the "Rights Amendment").
NOW, THEREFORE, in consideration of the representations,
warranties, covenants, agreements and conditions set forth herein, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I.
THE MERGER
----------
SECTION 1.1 The Merger.
----------
(a) Upon the terms and subject to the conditions of this
Agreement, and in accordance with the IBCA, at the Effective Time, the
Company shall be merged (the "Merger") with and into Newco, whereupon the
separate existence of the Company shall cease, and Newco shall continue as
the surviving corporation (sometimes referred to herein as the "Surviving
Corporation") and shall continue to be governed by the laws of the State of
Iowa and shall continue under the name "Pioneer Hi-Bred International,
Inc."
(b) Concurrently with the Closing (as defined in Section 1.10
hereof), the Company, DuPont and Newco shall cause articles of merger (the
"Articles of Merger") with respect to the Merger to be executed and filed
with the Secretary of State of the State of Iowa (the "Secretary of State")
as provided in the IBCA. The Merger shall become effective on the date and
time at which the Articles of Merger has been duly filed with the Secretary
of State or at such other date and time as is agreed between the parties
and specified in the Articles of Merger, and such date and time is
hereinafter referred to as the "Effective Time."
(c) From and after the Effective Time, the Surviving Corporation
shall possess all rights, privileges, immunities, powers and franchises and
be subject to all of the obligations, restrictions, disabilities,
liabilities, debts and duties of the Company and Newco.
SECTION 1.2 Effect on Common Stock. At the Effective Time:
----------------------
(a) Cancellation of Shares of Common Stock.
(i) Each share of Common Stock held by the Company as
treasury stock immediately prior to the Effective Time shall
automatically be cancelled and retired and cease to exist, and no
consideration or payment shall be delivered therefor or in respect
thereto; and
(ii) each share of Common Stock received by DuPont in
exchange for Class B Common Stock (as defined in Section 3.4 hereof)
shall be converted into DuPont Shares and such Common Stock shall
automatically be cancelled and retired and cease to exist.
(b) Conversion of Shares of Common Stock. Except as otherwise
provided in this Agreement and subject to Section 1.4 hereof, each share of
Common Stock issued and outstanding immediately prior to the Effective Time
(other than shares cancelled pursuant to Section 1.2(a) hereof (including,
without limitation, Common Stock received by DuPont in exchange for Class B
Common Stock) and Dissenting Shares (as defined in Section 1.9 hereof))
shall be converted into the following (the "Merger Consideration"):
(i) for each share of Common Stock with respect to which an
election to receive DuPont Shares has been effectively made and not
revoked or lost, pursuant to Section 1.3 hereof (a "DuPont Stock
Election"), a fraction of a DuPont Share equal to the Exchange Ratio
(as defined below) (collectively, "DuPont Stock Election Shares"). For
purposes of this Agreement, the "Exchange Ratio" shall be equal to the
result obtained by dividing $40 (the "Merger Price") by the average
closing sales price, rounded to four decimal points, of DuPont Shares,
as reported on the NYSE Composite Tape, for the ten consecutive
trading days (the "Valuation Period") ending on the third full trading
day prior to the date on which the Company shareholders vote with
respect to the approval of the Merger. In the event that DuPont
declares a stock split, stock dividend or other reclassification or
exchange with respect to the DuPont Shares with a record or
ex-dividend date occurring during the Valuation Period or for the
period between the termination of the Valuation Period and the
Effective Time, there will be an appropriate adjustment made to the
closing sales prices during the Valuation Period for purposes of
calculating the Exchange Ratio; and
(ii) for each share of Common Stock other than DuPont Stock
Election Shares, the right to receive in cash an amount equal to the
Merger Price (collectively, "Non-Electing Shares").
All shares of Common Stock to be converted into the Merger Consideration
(as defined in Section 1.2(b) hereof) pursuant to this Section 1.2 shall,
by virtue of the Merger and without any action on the part of the holders
thereof, cease to be outstanding, be cancelled and retired and cease to
exist; and each holder of a certificate representing prior to the Effective
Time any such shares of Common Stock and Rights shall thereafter cease to
have any rights with respect to such shares of Common Stock, except the
right to receive (i) the Merger Consideration, (ii) any dividends and other
distributions in accordance with Section 1.5(c) hereof and (iii) any cash
to be paid in lieu of any fractional DuPont Share in accordance with
Section 1.5(d) hereof.
(c) Unless the context indicates otherwise, all references herein
to shares of Common Stock shall be deemed to include any accompanying
Rights.
(d) Capital Stock of Newco. No shares of Newco stock will be
issued directly or indirectly in the Merger. Each share of common stock of
Newco issued and outstanding immediately prior to the Effective Time shall
remain outstanding following the Effective Time.
SECTION 1.3 Share Election.
--------------
(a) Each Person (as defined in Section 1.3(b) hereof) who, on or
prior to the Election Date referred to in subsection (c) below is a record
holder of shares of Common Stock shall have the right to submit a Form of
Election (as defined in Section 1.3(c) hereof) specifying the number of
shares of Common Stock that such Person desires to be converted into DuPont
Shares pursuant to the DuPont Stock Election.
(b) Prior to the mailing of the Proxy Statement (as defined in
Section 5.3(b) hereof), First Chicago Trust Company of New York or such
other bank, trust company, Person or Persons shall be designated by DuPont
and reasonably acceptable to the Company to act as exchange agent (the
"Exchange Agent") for payment of the Merger Consideration. For purposes of
this Agreement, "Person" means any natural person, firm, individual,
corporation, limited liability company, partnership, association, joint
venture, company, business trust, trust or any other entity or
organization, whether incorporated or unincorporated, including a
government or political subdivision or any agency or instrumentality
thereof.
(c) DuPont shall prepare and mail a form of election, which form
shall be subject to the reasonable approval of the Company (the "Form of
Election") with the Proxy Statement to the record holders of shares of
Common Stock as of the record date for the Special Meeting (as defined in
Section 5.3(a) hereof), which Form of Election shall be used by each record
holder of shares of Common Stock who wishes to elect to receive DuPont
Shares for any or all shares of Common Stock held, subject to the
provisions of Section 1.4 hereof, by such holder. The Company shall use its
reasonable best efforts to make the Form of Election and the Proxy
Statement available to all Persons who become holders of shares of Common
Stock during the period between such record date and the Election Date. Any
such holder's election to receive DuPont Shares shall have been properly
made only if the Exchange Agent shall have received at its designated
office, by 5:00 p.m., New York City time on the business day (the "Election
Date") next preceding the date of the Special Meeting, a Form of Election
properly completed and signed and accompanied by certificate(s) for the
share(s) of Common Stock to which such Form of Election relates, duly
endorsed in blank or otherwise in form acceptable for transfer on the books
of the Company (or by an appropriate guarantee of delivery of such
certificate(s) as set forth in such Form of Election from a firm which is a
member of a registered national securities exchange or of the New York
Stock Exchange ("NYSE") or a commercial bank or trust company having an
office or correspondent in the United States, provided such certificate(s)
are in fact delivered to the Exchange Agent within five NYSE trading days
after the date of execution of such guarantee of delivery).
(d) Any Form of Election may be revoked by the holder of Common
Stock submitting it to the Exchange Agent only by written notice received
by the Exchange Agent prior to 5:00 p.m., New York City time on the
Election Date. In addition, all Forms of Election shall automatically be
revoked if the Exchange Agent is notified in writing by DuPont and the
Company that the Merger has been abandoned. If a Form of Election is
revoked, the certificate(s) (or guarantee(s) of delivery, as appropriate)
for the share(s) of Common Stock, if any, to which such Form of Election
relates shall promptly be returned to the shareholder submitting the same
to the Exchange Agent.
(e) The determination of the Exchange Agent shall be binding as
to whether or not elections have been properly made or revoked pursuant to
this Section 1.3 with respect to shares of Common Stock and when elections
and revocations were received by it. If the Exchange Agent determines that
any DuPont Stock Election was not properly made with respect to such shares
of Common Stock, then, subject to Section 1.4 hereof, such shares of Common
Stock shall be treated by the Exchange Agent at the Effective Time as
Non-Electing Shares, and such shares shall be exchanged in the Merger for
cash pursuant to Section 1.2(b)(ii) hereof. The Exchange Agent shall also
make all computations as to the allocation and the proration contemplated
by Section 1.4 hereof, and any such computation shall be conclusive and
binding on the holder of shares of Common Stock. The Exchange Agent may,
with the mutual agreement of DuPont and the Company, make such rules as are
consistent with this Section 1.3 for the implementation of the elections
provided for herein as shall be necessary or desirable to effect such
elections fully.
SECTION 1.4 Proration.
---------
(a) Notwithstanding anything in this Agreement to the contrary,
the number of shares of Common Stock which shall be converted into cash in
the Merger shall be equal to, or in the event of a Non-Proration Decision
(as defined in Section 1.4(c)(ii) hereof) shall not exceed 85,552,580 less
any shares of Common Stock ("Potential Dissenting Shares") in respect of
which the holders have taken all steps required to be taken prior to the
Effective Time, to the extent such steps are necessary, to permit such
shares to be deemed Dissenting Shares (the "Cash Number"). For purposes of
calculations pursuant to Section 1.4 insofar as all shares other than
Potential Dissenting Shares are concerned Potential Dissenting Shares shall
not be taken into account.
(b) If the number of Non-Electing Shares exceeds the Cash Number,
then each Non-Electing Share shall either (x) be converted into the right
to receive cash or (y) be converted into DuPont Shares in the following
manner:
(i) A proration factor (the "Non-Cash Proration Factor")
shall be determined by dividing the Cash Number by the total number of
Non-Electing Shares;
(ii) The number of Non-Electing Shares which are converted
into the right to receive cash shall be determined by multiplying the
Non-Cash Proration Factor by the total number of Non-Electing Shares;
and
(iii) All Non-Electing Shares other than those shares which
are converted into the right to receive cash in accordance with
Section 1.4(b)(ii) hereof, shall be converted into DuPont Shares on a
consistent basis among holders of Common Stock who failed to make the
DuPont Stock Election referred to in Section 1.2(b)(i) hereof, pro
rata to the number of shares of Common Stock as to which they failed
to make such election, as if such shares of Common Stock were DuPont
Stock Election Shares in accordance with the terms of Section
1.2(b)(i) hereof.
(c) If the number of Non-Electing Shares is less than the Cash
Number, then:
(i) All Non-Electing Shares shall be converted into cash in
accordance with the terms of Section 1.2(b)(ii) hereof;
(ii) Unless DuPont determines otherwise at least three
business days prior to the scheduled date for the Special Meeting (a
"Non-Proration Decision"), additional shares of Common Stock, other
than Non-Electing Shares shall be converted into cash in accordance
with the terms of Section 1.2(b) hereof in the following manner:
(A) A proration factor (the "Cash Proration Factor")
shall be determined by dividing (1) the difference between the
Cash Number and the number of Non-Electing Shares by (2) the
total number of shares of Common Stock other than Non-Electing
Shares; and
(B) The number of shares of Common Stock, in addition
to Non-Electing Shares, to be converted into cash shall be
determined by multiplying the Cash Proration Factor by the total
number of shares of Common Stock other than Non-Electing Shares;
and
(iii) Subject to Section 1.9 hereof, shares of Common Stock
as calculated pursuant to clause (ii) of this paragraph (c), shall be
converted into cash in accordance with Section 1.2(b)(ii) hereof (on a
consistent basis among holders of Common Stock who held shares as to
which they made the DuPont Stock Election referred to in Section
1.2(b)(i) hereof, pro rata to the number of shares of Common Stock as
to which they made such election).
(d) DuPont Shares to be issued to DuPont in exchange for Common
Stock received by DuPont in exchange for Class B Common Stock shall be
excluded from all calculations relating to elections and prorations set
forth in Sections 1.3 and 1.4 hereof.
SECTION 1.5 Exchange of Certificates.
------------------------
(a) As of the Effective Time, DuPont shall deposit, or cause to
be deposited with the Exchange Agent for the benefit of holders of shares
of Common Stock, cash and certificates representing DuPont Shares,
constituting the Merger Consideration.
(b) As of or promptly following the Effective Time and the final
determination of the Non-Cash Proration Factor, the Surviving Corporation
shall cause the Exchange Agent to mail (and to make available for
collection by hand) to each holder of record of a certificate or
certificates, which immediately prior to the Effective Time represented
outstanding shares of Common Stock (the "Certificates"), (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk
of loss and title to the Certificates shall pass, only upon proper delivery
of the Certificates to the Exchange Agent and which shall be in the form
and have such other provisions as DuPont and the Company may reasonably
specify) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for (A) a certificate or certificates representing
that number of whole DuPont Shares, if any, into which the number of shares
of Common Stock previously represented by such Certificate shall have been
converted pursuant to this Agreement and (B) the amount of cash, if any,
into which all or a portion of the number of shares of Common Stock
previously represented by such Certificate shall have been converted
pursuant to this Agreement (which instructions shall provide that at the
election of the surrendering holder, Certificates may be surrendered, and
the Merger Consideration in exchange therefor collected, by hand delivery).
Upon surrender of a Certificate for cancellation to the Exchange Agent,
together with a letter of transmittal duly completed and validly executed
in accordance with the instructions thereto, and such other documents as
may be required pursuant to such instructions, the holder of such
Certificate shall be entitled to receive in exchange therefor the Merger
Consideration for each share of Common Stock formerly represented by such
Certificate, to be mailed (or made available for collection by hand if so
elected by the surrendering holder) within three business days of receipt
thereof (but in no case prior to the Effective Time), and the Certificate
so surrendered shall be forthwith cancelled. The Exchange Agent shall
accept such Certificates upon compliance with such reasonable terms and
conditions as the Exchange Agent may impose to effect an orderly exchange
thereof in accordance with normal exchange practices. No interest shall be
paid or accrued for the benefit of holders of the Certificates on the
Merger Consideration (or the cash pursuant to subsections (c) and (d)
below) payable upon the surrender of the Certificates.
(c) No dividends or other distributions with respect to DuPont
Shares with a record date on or after the Effective Time shall be paid to
the holder of any unsurrendered Certificate with respect to the DuPont
Shares represented thereby by reason of the conversion of shares of Common
Stock pursuant to Sections 1.2(b), 1.3 and 1.4 hereof and no cash payment
in lieu of fractional DuPont Shares shall be paid to any such holder
pursuant to Section 1.5(d) hereof until such Certificate is surrendered in
accordance with this Article I. Subject to the effect of applicable laws,
following surrender of any such Certificate, there shall be paid, without
interest, to the Person in whose name the DuPont Shares representing such
securities are registered (i) at the time of such surrender or as promptly
after the sale of the Excess DuPont Shares (as defined in Section 1.5(d)
hereof) as practicable, the amount of any cash payable in lieu of
fractional DuPont Shares to which such holder is entitled pursuant to
Section 1.5(d) hereof and the proportionate amount of dividends or other
distributions with a record date after the Effective Time theretofore paid
with respect to DuPont Shares issued upon conversion of Common Stock, and
(ii) at the appropriate payment date or as promptly as practicable
thereafter, the proportionate amount of dividends or other distributions
with a record date after the Effective Time but prior to such surrender and
a payment date subsequent to such surrender payable with respect to such
DuPont Shares.
(d) Notwithstanding any other provision of this Agreement, no
fraction of a DuPont Share will be issued and no dividend or other
distribution, stock split or interest with respect to DuPont Shares shall
relate to any fractional DuPont Share, and such fractional interest shall
not entitle the owner thereof to vote or to any rights as a security holder
of the DuPont Shares. In lieu of any such fractional security, each holder
of shares of Common Stock otherwise entitled to a fraction of a DuPont
Share will be entitled to receive in accordance with the provisions of this
Section 1.5 from the Exchange Agent a cash payment representing such
holder's proportionate interest in the net proceeds from the sale by the
Exchange Agent on behalf of all such holders of the aggregate of the
fractions of DuPont Shares which would otherwise be issued (the "Excess
DuPont Shares"). The sale of the Excess DuPont Shares by the Exchange Agent
shall be executed on the NYSE through one or more member firms of the NYSE
and shall be executed in round lots to the extent practicable. Until the
net proceeds of such sale or sales have been distributed to the holders of
shares of Common Stock, the Exchange Agent will, subject to Section 1.5(e)
hereof, hold such proceeds in trust for the holders of shares of Common
Stock (the "DuPont Shares Trust"). The Company shall pay all commissions,
transfer taxes (other than those transfer taxes for which the Company's
shareholders are solely liable) and other out-of-pocket transaction costs,
including the expenses and compensation, of the Exchange Agent incurred in
connection with such sale of the Excess DuPont Shares. As soon as
practicable after the determination of the amount of cash, if any, to be
paid to holders of shares of Common Stock in lieu of any fractional DuPont
Share interests, the Exchange Agent shall make available such amounts to
such holders of shares of Common Stock without interest.
(e) Any portion of the Merger Consideration deposited with the
Exchange Agent pursuant to this Section 1.5 (the "Exchange Fund") which
remains undistributed to the holders of the Certificates for six months
after the Effective Time shall be delivered to DuPont, upon demand, and any
holders of shares of Common Stock prior to the Merger who have not
theretofore complied with this Article I shall thereafter look for payment
of their claim, as general creditors thereof, only to DuPont for their
claim for (1) cash, if any, (2) DuPont Shares, if any, (3) any cash without
interest, to be paid, in lieu of any fractional DuPont Shares and (4) any
dividends or other distributions with respect to DuPont Shares to which
such holders may be entitled.
(f) None of DuPont, Newco or the Company or the Exchange Agent
shall be liable to any Person in respect of any DuPont Shares or cash held
in the Exchange Fund (and any cash, dividends and other distributions
payable in respect thereof) delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law. If any Certificates
shall not have been surrendered prior to one year after the Effective Time
(or immediately prior to such earlier date on which (i) any cash, (ii) any
DuPont Shares, (iii) any cash in lieu of fractional DuPont Shares or (iv)
any dividends or distributions with respect to DuPont Shares in respect of
such Certificate would otherwise escheat to or become the property of any
Governmental Entity (as defined in Section 3.3(b) hereof)), any such DuPont
Shares, cash, dividends or distributions in respect of such Certificate
shall, to the extent permitted by applicable law, become the property of
DuPont, free and clear of all claims or interest of any Person previously
entitled thereto.
(g) The Exchange Agent shall invest any cash included in the
Exchange Fund, as directed by DuPont on a daily basis. Any interest and
other income resulting from such investments shall be paid to the Company.
Nothing contained in this Section 1.5(g) shall relieve DuPont or the
Exchange Agent from making the payments required by this Article I to be
made to the holders of shares of Common Stock and to holders of Options (as
defined in Section 1.7 hereof).
SECTION 1.6 Transfer Taxes; Withholding. If any certificate for a
DuPont Share is to be issued to, or cash is to be remitted to, a Person
(other than the Person in whose name the Certificate surrendered in
exchange therefor is registered), it shall be a condition of such exchange
that the Certificate so surrendered shall be properly endorsed and
otherwise in proper form for transfer and that the Person requesting such
exchange shall pay to the Exchange Agent any transfer or other Taxes (as
defined in Section 3.10(c) hereof) required by reason of the payment of the
Merger Consideration to a Person other than the registered holder of the
Certificate so surrendered, or shall establish to the satisfaction of the
Exchange Agent that such Tax either has been paid or is not applicable.
DuPont or the Exchange Agent shall be entitled to deduct and withhold from
the DuPont Shares (or cash in lieu of fractional DuPont Shares) otherwise
payable pursuant to this Agreement to any holder of shares of Common Stock
such amounts as DuPont or the Exchange Agent are required to deduct and
withhold under the Code, or any provision of state, local or foreign Tax
law, with respect to the making of such payment. To the extent that amounts
are so withheld by DuPont or the Exchange Agent, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to
the holder of shares of Common Stock in respect of whom such deduction and
withholding was made by DuPont or the Exchange Agent.
SECTION 1.7 Stock Options; Other Equity Awards.
--------------------------------------
(a) Each holder of an option granted to a Company employee,
consultant or director of the Company or any Subsidiary (as defined in
Section 3.5(a) hereof) of the Company to acquire shares of Common Stock
(and the associated Rights), which is outstanding immediately prior to the
Effective Time (each, an "Option"), shall have the opportunity, to elect
either (X) to cause such Option to become and represent an option to
purchase DuPont Shares (a "Substitute Option"), in accordance with (b)
below, or (Y) to cause such Option ("Cash Electing Option") to be cancelled
in exchange for a single lump sum cash payment (less any applicable income
or employment tax withholding) equal to the product of (1) the number of
shares of Common Stock subject to such Option immediately prior to the
Effective Time and (2) the excess, if any, of the Merger Price over the
exercise price per share of such Company Option; provided that as set forth
in subsection (c) below there shall be a limit on the number of shares
subject to Options that will be cancelled in exchange for cash. There will
be no limit on the number of shares subject to Options that become
Substitute Options. Any election to receive cash must be made prior to the
Effective Time to be effective; failure to timely make such an election
shall result in an Option being treated as a Substitute Option. DuPont and
the Company shall cooperate to distribute and collect option forms
necessary to give effect to this Section 1.7(a).
(b) Each Substitute Option shall be an option to purchase a
number of DuPont Shares (rounded to the nearest whole share), determined by
multiplying (i) the number of shares of Common Stock subject to such Option
immediately prior to the Effective Time by (ii) the Exchange Ratio, at an
exercise price per DuPont Share (increased to the nearest whole cent) equal
to the exercise price per share of Common Stock immediately prior to the
Effective Time divided by the Exchange Ratio. After the Effective Time,
each Substitute Option shall be exercisable upon the same terms and
conditions as were applicable to the related Option prior to the Effective
Time, but giving effect to the Merger.
(c) Notwithstanding anything in this agreement to the contrary,
Cash Electing Options with respect to no more than a number of shares equal
to the product of (x) the quotient obtained by dividing the Cash Number by
the number of shares of Common Stock outstanding immediately prior to the
Effective Time (other than any shares owned by DuPont) and (y) the total
number of shares of Common Stock subject to Options outstanding immediately
prior to the Effective Time shall be cancelled in exchange for cash payment
described in Section 1.7(a)(Y) hereof (the "Option Cash Limit"). If the
number of shares subject to Cash Electing Options exceeds the Option Cash
Limit, then with respect to each optionee's Cash Electing Options, the
optionee shall either receive Substitute Options with respect to such Cash
Electing Options in accordance with Section 1.7(a)(X) hereof, or shall
receive a cash payment with respect to such Cash Electing Options in
accordance with Section 1.7(a)(Y) hereof in the following manner:
(i) A proration factor (the "Option Proration Factor") shall
be determined by dividing the Option Cash Limit by the total number of
shares of Common Stock subject to Cash Electing Options.
(ii) The number of shares subject to each optionee's Cash
Electing Options, which Options are to be converted into the right to
receive cash, shall be determined by multiplying the Option Proration
Factor by the total number of shares of Common Stock subject to such
optionee's Cash Electing Options.
(iii) All shares subject to Cash Electing Options, other
than those converted into the right to receive cash in accordance with
the terms of Section 1.7(c)(ii) hereof shall be treated as if subject
to Options which were not Cash Electing Options.
If the number of shares of Common Stock subject to Cash Electing Options is
less than the Option Cash Limit, then:
(i) All Cash Electing Options shall be converted into cash
in accordance with the terms of Section 1.7(a)(Y) hereof; and
(ii) All shares subject to Options other than Cash Electing
Options shall be converted into Substitute Options in accordance with
the terms of Section 1.7(a)(X) hereof.
(d) Each other outstanding award made pursuant to the
compensation plans of the Company which provide for grants of equity-based
awards in respect of Common Stock (the "Other Awards") shall be amended or
converted into a similar equity-based award solely in respect of DuPont
Shares, with such appropriate adjustments to the terms of such Other Awards
to preserve the value inherent therein with no detrimental effects on the
holders thereof.
(e) DuPont shall take such corporate action as may be necessary
or appropriate to, at or prior to the Effective Time, file with the
Securities and Exchange Commission (the "SEC") a registration statement on
Form S-8 (or any successor or other appropriate form) with respect to the
DuPont Shares subject to any Substitute Options or Other Awards to the
extent such registration is required under applicable law in order for such
DuPont Shares to be sold without restriction in the United States, and
DuPont shall maintain the effectiveness of such registration statement for
so long as such Substitute Options or Other Awards remain outstanding.
SECTION 1.8 Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by
the Person claiming such Certificate to be lost, stolen or destroyed and,
if required by the Surviving Corporation, the posting by such Person of a
bond, in such reasonable amount as the Surviving Corporation may direct
(but consistent with past practice of the Company), as indemnity against
any claim that may be made against it with respect to such Certificate, the
Exchange Agent will issue in exchange for such lost, stolen or destroyed
Certificate the DuPont Shares to which the holder thereof is entitled
pursuant to this Article I.
SECTION 1.9 Dissenting Shares. Notwithstanding Section 1.2
hereof, shares of Common Stock issued and outstanding immediately prior to
the Effective Time and held by a holder who has properly exercised and
perfected his or her demand for appraisal rights under Section 1302 of the
IBCA (the "Dissenting Shares"), shall not be converted into the right to
receive the Merger Consideration, but the holders of Dissenting Shares
shall be entitled to receive from the Company such consideration as shall
be determined pursuant to Section 1302 of the IBCA; provided, however, that
if any such holder shall have failed to perfect or shall effectively
withdraw or lose his or her right to appraisal and payment under the IBCA,
such holder's shares of Common Stock shall thereupon be deemed to have been
converted as of the Effective Time into the right to receive the Merger
Consideration, without any interest thereon, and such shares shall not be
deemed to be Dissenting Shares. Subject to applicable law, DuPont shall
have the right to treat such shares as Non-Electing Shares.
SECTION 1.10 Merger Closing. Subject to the satisfaction or
waiver of the conditions set forth in Article VI hereof, the closing of the
Merger (the "Closing") will take place at 10:00 a.m., New York City time,
on a date to be specified by the parties hereto, but no later than the
second business day after (i) the satisfaction or waiver of the conditions
set forth in Sections 6.1(a) and (b) hereof and (ii) subject to it not
causing the Closing to be later than the Termination Date, the consummation
of the Conoco Exchange Offer (as defined in Section 8.12 hereof) (provided
that clause (ii) shall not apply from and after such time as DuPont
delivers notice to the Company in writing that it will not effect such
Conoco Exchange Offer), at the offices of Skadden, Arps, Slate, Meagher &
Flom LLP, 919 Third Avenue, New York, New York, unless another time, date
or place is agreed to in writing by the parties hereto (such date, the
"Closing Date").
SECTION 1.11 Class B Common Stock Exchange. Concurrently with the
execution and delivery of this Agreement, the Company will exchange on a
one share for one share basis shares of Common Stock entitled to five votes
per share for all shares of Class B Common Stock owned by DuPont and its
Subsidiaries. DuPont hereby agrees (a) to vote, or to cause its
Subsidiaries to vote, at any time, pro rata with the holders of shares of
Common Stock such number of such shares of Common Stock so that the number
of such shares of Common Stock that DuPont and its Subsidiaries are
entitled to vote in their sole discretion (and not pro rata) does not
exceed the percentage of shares of the outstanding Common Stock that is
represented by such shares, to the extent still owned by DuPont and its
Subsidiaries at any such time and (b) that, so long as the Company is in
compliance with the provisions of Section 5.1(b)(iii) hereof, the maximum
number of votes in respect of the shares of Common Stock owned by DuPont
and its Subsidiaries that DuPont and its Subsidiaries will be entitled to
cast in DuPont's sole discretion will be equal to 20% of all of the votes
which may be cast by holders of Common Stock. The parties agree that the
provisions set forth in clauses (a) and (b) of the preceding sentence will
survive the termination of this Agreement and, in the case of clause (b),
will remain in full force and effect so long as the Investment Agreement
remains in full force and effect, and, in the case of clause (a), will
remain in effect indefinitely, provided that the Company will not permit,
through issuance of shares of capital stock or the amendment or waiver of
its Rights Agreement or otherwise any Person (other than a Grandfathered
Person as defined in the Investment Agreement on the date hereof) who
beneficially owns a greater number of shares of Common Stock than DuPont
and its Subsidiaries to exercise voting power in excess of the percentage
of outstanding Common Stock beneficially owned by such Person unless and to
the extent that the Company shall permit DuPont to exercise the same
proportionate voting power in excess of the percentage of outstanding
Common Stock beneficially owned by DuPont and its Subsidiaries. The shares
of Common Stock issued to DuPont pursuant to the foregoing have been
approved for listing on the NYSE. The preceding clauses (a) and (b) will
terminate immediately following the Effective Time.
ARTICLE II
THE SURVIVING CORPORATION
-------------------------
SECTION 2.1 Articles of Incorporation. The articles of
incorporation of Newco shall be the articles of incorporation of the
Surviving Corporation until thereafter amended in accordance with
applicable law.
SECTION 2.2 By-laws. The by-laws of Newco in effect at the
Effective Time shall be the by-laws of the Surviving Corporation until
thereafter amended in accordance with applicable law, the articles of
incorporation of such entity and the by-laws of such entity.
SECTION 2.3 Officers and Directors.
----------------------
(a) From and after the Effective Time, the officers of the
Company at the Effective Time shall be the officers of the Surviving
Corporation, until their respective successors are duly elected or
appointed and qualified in accordance with applicable law.
(b) The Board of Directors of the Company effective as of, and
immediately following, the Effective Time shall consist of the directors of
Newco immediately prior to the Effective Time.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to DuPont and Newco as
follows:
SECTION 3.1 Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of Iowa, and except as set forth in Schedule 3.1 of
the disclosure schedule delivered by the Company to DuPont concurrently
with the execution and delivery by the Company of this Agreement and
attached hereto (the "Company Disclosure Schedule"), has all corporate
powers and all governmental licenses, permits, authorizations, consents and
approvals (collectively, "Licenses") required to carry on its business as
now conducted, and all such Licenses are in full force and effect, except
for failures to have any such License which would not, in the aggregate,
have a Company Material Adverse Effect (as defined hereafter). The Company
is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the property owned,
leased or operated by it or the nature of its activities makes such
qualification necessary, except in such jurisdictions where failures to be
so qualified or in good standing would not reasonably be expected to, in
the aggregate, have a Company Material Adverse Effect. As used herein, the
term "Company Material Adverse Effect" means (i) a material adverse effect
on the condition (financial or otherwise), business, assets or results of
operations of the Company and its Subsidiaries, taken as a whole, or (ii) a
material adverse effect on the ability of the Company to timely perform its
obligations hereunder; provided, however, that a Company Material Adverse
Effect shall not include any change in or effect upon the business, assets
or results of operations of the Company and any of its Subsidiaries
directly or indirectly arising out of or attributable to (i) conditions,
events or circumstances generally affecting the economy as a whole or the
agricultural industry, in general, or (ii) any action permitted to be taken
or required to be taken pursuant to Section 5.8 hereof. The Company has
heretofore made available to DuPont true and complete copies of the
Articles of Incorporation and the by-laws of the Company as currently in
effect.
SECTION 3.2 Corporate Authorization.
-----------------------
(a) The Company has the requisite corporate power and authority
to execute and deliver this Agreement and, subject to approval of the
holders of Common Stock, as set forth in Section 3.2(b) hereof and as
contemplated by Section 5.3 hereof, to perform its obligations hereunder.
The execution and delivery of this Agreement and the performance of its
obligations hereunder have been duly and validly authorized, and this
Agreement has been approved, by the Board of Directors of the Company and
no other corporate proceedings, other than the approval of this Agreement
by the holders of Common Stock, on the part of the Company are necessary to
authorize the execution, delivery and performance of this Agreement. This
Agreement has been duly executed and delivered by the Company and
constitutes, assuming due authorization, execution and delivery of this
Agreement by DuPont and Newco, as applicable, a valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms.
(b) Under applicable law and the Articles of Incorporation, the
affirmative vote of the holders entitled to exercise a majority of the
votes attributable to Common Stock outstanding on the record date,
established by the Board of Directors of the Company in accordance with the
by-laws of the Company, applicable law and this Agreement, is the only vote
required to approve this Agreement (the "Required Company Vote").
SECTION 3.3 Consents and Approvals; No Violations.
-------------------------------------
(a) Except as set forth in Schedule 3.3(a) of the Company
Disclosure Schedule, neither the execution and delivery of this Agreement
nor the performance by the Company of its obligations hereunder nor the
consummation of the transactions contemplated hereby will conflict with or
result in any breach of any provision of the Articles of Incorporation or
the by-laws of the Company or any Subsidiary thereof; result in a violation
or breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, cancellation or
acceleration or obligation to repurchase, repay, redeem or acquire or any
similar right or obligation) under any of the terms, conditions or
provisions of any note, mortgage, letter of credit, other evidence of
indebtedness, guarantee, license, lease or agreement or similar instrument
or obligation to which the Company or any of its Subsidiaries is a party or
by which any of them or any of their assets may be bound or assuming that
the filings, registrations, notifications, authorizations, consents and
approvals referred to in subsection (b) below have been obtained or made,
as the case may be, violate any order, injunction, decree, statute, rule or
regulation of any Governmental Entity to which the Company or any of its
Subsidiaries is subject, excluding from the foregoing clauses (ii) and
(iii) such requirements, defaults, breaches, rights or violations (other
than of orders, injunctions and decrees) (A) that would not, in the
aggregate, reasonably be expected to have a Company Material Adverse Effect
or (B) that become applicable as a result of the business or activities in
which DuPont or Newco or any of their respective affiliates is or proposes
to be engaged or any acts or omissions by, or facts specifically pertaining
to, DuPont or Newco.
(b) Except as set forth in Schedule 3.3(b) of the Company
Disclosure Schedule, no filing or registration with, notification to, or
authorization, consent or approval of, any government or any agency, court,
tribunal, commission, board, bureau, department, political subdivision or
other instrumentality of any government (including any regulatory or
administrative agency), whether federal, state, multinational (including,
but not limited to, the European Community), provincial, municipal,
domestic or foreign (each, a "Governmental Entity") is required in
connection with the execution and delivery of this Agreement by the Company
or the performance by the Company of its obligations hereunder, except (i)
the filing of the Articles of Merger in accordance with the IBCA and
filings to maintain the good standing of the Surviving Corporation; (ii)
compliance with any applicable requirements of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the rules and
regulations thereunder (the "HSR Act"), the EC Merger Regulations (as
defined in Section 5.8(e) hereof) or any other foreign laws regulating
competition, antitrust, investment or exchange controls; (iii) compliance
with any applicable requirements of the Securities Act of 1933 and the
rules and regulations thereunder (the "Securities Act") and the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder
(the "Exchange Act"); (iv) compliance with any applicable requirements of
state blue sky, securities or takeover laws and (v) such other consents,
approvals, orders, authorizations, notifications, registrations,
declarations and filings (A) the failure of which to be obtained or made
would not, in the aggregate, reasonably be expected to have a Company
Material Adverse Effect or (B) that become applicable as a result of the
business or activities in which DuPont or Newco or any of their respective
affiliates is or proposes to be engaged or any acts or omissions by, or
facts specifically pertaining to, DuPont or Newco.
SECTION 3.4 Capitalization. The authorized capital stock of the
Company consists of 600,000,000 shares of Common Stock, 120,000,000 shares
of class B common stock, no par value per share, of the Company (the "Class
B Common Stock") and 10,000,000 shares of serial preferred stock, no par
value per share, of the Company (the "Preferred Stock"), of which 600,000
were designated as Series A Junior Participating Preferred Stock. As of
August 31, 1998 and December 29, 1998, there were (i) 190,993,634 and
190,116,845 shares, respectively, of Common Stock issued and outstanding,
(ii) 49,333,758 and 49,333,758 shares, respectively, of Class B Common
Stock issued and outstanding and (iii) no shares of Preferred Stock issued
and outstanding. All shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable and were
not issued in violation of any preemptive rights. As of August 31, 1998,
there were outstanding (i) 1,257,162 shares of restricted Common Stock that
were granted under the Amended and Restated Restricted Stock Plan -
Performance Based, (ii) 42,918 shares of restricted Common Stock that were
granted under the Amended and Restated Directors' Restricted Stock Plan and
(iii) 1,227,825 shares of restricted Common Stock that were granted under
the predecessor restricted stock plan. As of August 31, 1998, there were
outstanding Options in respect of 3,198,000 shares of Common Stock at
option prices ranging from $14 to $35 per share of Common Stock, which
Options were granted under the Amended and Restated Pioneer Hi-Bred
International, Inc. Stock Option Plan. Except as set forth in this Section
3.4 or Schedule 3.4 of the Company Disclosure Schedule, there are
outstanding (i) no shares of capital stock or other voting securities of
the Company (except for options covering approximately 1.1 million shares
of Common Stock and for 500,000 shares of restricted stock granted or
issued in the ordinary course of business since August 31, 1998, as are
otherwise permitted to be issued after the date of this Agreement pursuant
to this Agreement or were issued upon the exercise of options outstanding
on August 31, 1998), (ii) no securities of the Company or any Subsidiary of
the Company convertible into or exchangeable for shares of capital stock or
voting securities of the Company and (iii) no options or other rights to
acquire from the Company, and no obligation of the Company to issue, any
capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of the Company (the
items in clauses (i), (ii) and (iii) being referred to collectively as the
"Company Securities"). Except as set forth in Schedule 3.4 of the Company
Disclosure Schedule, there are no outstanding obligations of the Company or
any of its Subsidiaries to repurchase, redeem or otherwise acquire any
Company Securities. No Subsidiary of the Company owns any capital stock or
other voting securities of the Company.
SECTION 3.5 Subsidiaries.
------------
(a) Each Subsidiary of the Company that is actively engaged in
any business or owns any assets or has any non de minimis liabilities
(contingent or otherwise) (each, an "Active Company Subsidiary") (i) is a
corporation duly incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation, (ii) has all Licenses
required to carry on its business as now conducted and all such Licenses
are in full force and effect and (iii) is duly qualified to do business as
a foreign corporation and is in good standing in each jurisdiction where
the character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except for failures of this
representation and warranty to be true which would not, in the aggregate,
have a Company Material Adverse Effect. For purposes of this Agreement,
"Subsidiary" means with respect to any Person, any corporation or other
legal entity of which such Person owns, directly or indirectly, more than
50% of the outstanding stock or other equity interests, the holders of
which are entitled to vote for the election of the board of directors or
other governing body of such corporation or other legal entity. All Active
Company Subsidiaries and their respective jurisdictions of incorporation
are identified in Schedule 3.5 of the Company Disclosure Schedule.
(b) Except as set forth in Schedule 3.5(b) of the Company
Disclosure Schedule, all of the outstanding shares of capital stock of each
Subsidiary of the Company are duly authorized, validly issued, fully paid
and nonassessable, and such shares are owned by the Company or by a
Subsidiary of the Company free and clear of any Liens (as defined
hereafter) (other than Liens that would not be reasonably expected to have
a Company Material Adverse Effect) or limitation on voting rights. Except
as set forth in Schedule 3.5(b) of the Company Disclosure Schedule, there
are no material subscriptions, options, warrants, calls, rights,
convertible securities or other agreements or commitments of any character
relating to the issuance, transfer, sale, delivery, voting or redemption
(including any rights of conversion or exchange under any outstanding
security or other instrument) for any material amount of the capital stock
or other equity interests of any of such Subsidiaries. For purposes of this
Agreement, "Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset.
(c) Schedule 3.5(c) of the Company Disclosure Schedule sets forth
all Persons in which the Company or a Subsidiary of the Company owns 10% or
more of the outstanding voting or equity interest.
SECTION 3.6 SEC Documents. The Company has filed all reports,
proxy statements, registration statements, forms and other documents
required to be filed by it with the SEC since January 1, 1996
(collectively, including all exhibits thereto, the "Company SEC
Documents"). No Subsidiary of the Company is required to file any report,
proxy statement, registration statement, form and other document with the
SEC. None of the Company SEC Documents (other than the financial statements
contained therein, as to which representations are made in Section 3.7
hereof), as of their respective dates (and, if amended or superseded by a
filing prior to the date of this Agreement or the Closing Date, then on the
date of such filing), contained or will contain any untrue statement of a
material fact or omitted or will omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. All of such
Company SEC Documents, as of their respective dates (and as of the date of
any amendment to the respective Company SEC Document), complied as to form
in all material respects with the applicable requirements of the Securities
Act and the Exchange Act and the rules and regulations promulgated
thereunder.
SECTION 3.7 Financial Statements. The financial statements of the
Company (including, in each case, any notes and schedules thereto) included
in the Company SEC Documents (a) were prepared from the books and records
of the Company and its Subsidiaries, (b) comply as to form in all material
respects with all applicable accounting requirements and the rules and
regulations of the SEC with respect thereto, (c) are in conformity with
United States generally accepted accounting principles ("GAAP"), applied on
a consistent basis (except as may be indicated therein or in the notes
thereto and, in the case of unaudited statements, as permitted by the rules
and regulations of the SEC) during the periods involved and (d) fairly
present, in all material respects, the consolidated financial position of
the Company and its consolidated Subsidiaries as of the dates thereof and
the consolidated results of their operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments).
SECTION 3.8 Proxy Statement, Form S-4, etc.
------------------------------
(a) None of the information contained in the Proxy Statement, and
any amendments thereof and supplements thereto, will at the time of the
mailing of the Proxy Statement to the holders of Common Stock and at the
time of the Special Meeting, and none of the information contained in the
Schedule 13E-3 Transaction Statement to be filed by DuPont and the Company
under the Exchange Act (the "Schedule 13E-3") and any amendments thereof
and supplements thereto, will, at the time of its filing with the SEC,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except that no representation is made by the Company
with respect to statements made or omitted in the Proxy Statement or the
Schedule 13E-3, or any amendment or supplement thereto, relating to DuPont
or Newco based on information supplied by DuPont for inclusion or
incorporated by reference therein. The Proxy Statement and the Schedule
13E-3, and any amendments thereof and supplements thereto, will comply as
to form in all material respects with the provisions of the Exchange Act
and the rules and regulations promulgated thereunder, except that no
representation is made by the Company with respect to the statements made
or omitted in the Proxy Statement or the Schedule 13E-3, as the case may
be, or any amendments thereof or supplements thereto, relating to DuPont or
Newco based on information supplied by DuPont for inclusion or incorporated
by reference therein.
(b) None of the information supplied or to be supplied by the
Company for inclusion or incorporation by reference in the registration
statement on Form S-4 (and/or such other form as may be applicable and
used) to be filed with the SEC in connection with the issuance of DuPont
Shares and, if applicable, the deemed issuance, if any, of shares of Common
Stock by reason of the transactions contemplated by this Agreement (such
registration statement, as it may be amended or supplemented, is herein
referred to as the "Form S-4") will, with respect to information relating
to the Company, at the time the Form S-4 is filed with the SEC, and at any
time it is amended or supplemented or at the time it becomes effective
under the Securities Act, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
SECTION 3.9 Absence of Material Adverse Changes, etc. Except as
set forth in the Company SEC Documents filed prior to the date of this
Agreement or as disclosed to all members of the Board of Directors of the
Company in writing or as specified in Schedule 3.9 of the Company
Disclosure Schedule, since August 31, 1998 and until the date of this
Agreement and, in the case of clause (i) below, until the Effective Time,
the Company and its Subsidiaries have conducted their business only in the
ordinary course of business consistent with past practices, and there has
not been:
(i) any event or state of fact that, individually or in the
aggregate, has had or is reasonably likely to have a Company Material
Adverse Effect;
(ii) any declaration, setting aside or payment of any
dividend or other distribution with respect to its capital stock
(other than regular quarterly cash dividends consistent with recent
past practice) or any repurchase, redemption or any other acquisition
by the Company or its Subsidiaries of any outstanding shares of
capital stock or other securities of, or other ownership interests in,
the Company or its Subsidiaries except for acquisitions of capital
stock prior to the date of this Agreement in connection with the
Company's previously announced Common Stock repurchase program;
(iii) any material change in accounting principles,
practices or methods;
(iv) any (A) grant of any severance or termination pay to
any director or officer of the Company or any Subsidiary of the
Company, or, any employee of the Company or any Subsidiary of the
Company in an aggregate cost not to exceed $1,000,000.00, (B)
employment, deferred compensation or other similar agreement (or any
amendment to any such existing agreement) with any director, officer
or employee of the Company or any Subsidiary of the Company entered
into, (C) increase in benefits payable under any existing severance or
termination pay policies or employment agreements or (D) increase in
compensation, bonus or other benefits payable to directors, officers
or employees of the Company or any Subsidiary of the Company other
than, in the case of employees (other than directors and officers), in
the ordinary course of business; or
(v) entry by the Company into any material joint venture,
partnership or similar agreement with any Person other than a
wholly-owned Subsidiary of the Company.
SECTION 3.10 Taxes.
-----
(a) Except as set forth in Schedule 3.10 of the Company
Disclosure Schedule, (1) all Tax Returns required to be filed by or on
behalf of the Company, each of its Subsidiaries, and each affiliated,
combined, consolidated or unitary group of which the Company or any of its
Subsidiaries is or has been a member (a "Company Group") have been timely
filed in the manner prescribed by law, and all such Tax returns are true,
complete and accurate except to the extent any failures to file or failures
to be true, correct or accurate would not in the aggregate reasonably be
expected to have a Company Material Adverse Effect; (2) all Taxes due and
owing by the Company, any Subsidiary of the Company or any Company Group
have been timely paid, or adequately reserved for in accordance with GAAP,
except to the extent any failure to pay or reserve would not in the
aggregate reasonably be expected to have a Company Material Adverse Effect;
(3) there are no claims or assessments presently pending against the
Company, any Subsidiary of the Company or any Company Group, for any
alleged Tax deficiency, and the Company does not know of any threatened
claims or assessments against the Company, any Subsidiary of the Company or
any Company Group for any alleged Tax deficiency, which in either case if
upheld would reasonably be expected in the aggregate to have a Company
Material Adverse Effect; (4) there are no Liens for Taxes on any asset of
the Company or any Subsidiary of the Company, except for Liens for Taxes
not yet due and payable and Liens for Taxes that would not in the aggregate
reasonably be expected to have a Company Material Adverse Effect; and (5)
the Company and each of its Subsidiaries has complied in all respects with
all rules and regulations relating to the withholding of Taxes (including,
without limitation, employee-related Taxes), except for failures to comply
that would not in the aggregate reasonably be expected to have a Company
Material Adverse Effect.
(b) The statutes of limitations for the federal income Tax
Returns of the Company and the Subsidiaries of the Company (including,
without limitation, any Company Group) have expired or otherwise have been
closed for all taxable periods ending on or before August 31, 1986.
(c) For purposes of this Agreement, (i) "Taxes" means all taxes,
levies or other like assessments, charges or fees (including estimated
taxes, charges and fees), including, without limitation, income,
corporation, advance corporation, gross receipts, transfer, excise,
property, sales, use, value-added, license, payroll, withholding, social
security and franchise or other governmental taxes or charges, imposed by
the United States or any state, county, local or foreign government or
subdivision or agency thereof, any liability for taxes, levies or other
like assessments, charges or fees of another Person pursuant to Treasury
Regulation Section 1.1502-6 or any similar or analogous provision of
applicable law or otherwise (including, without limitation, by agreement)
and such term shall include any interest, penalties or additions to tax
attributable to such taxes, levies or other like assessments, charges or
fees and (ii) "Tax Return" means any report, return, statement, declaration
or other written information required to be supplied to a taxing or other
governmental authority in connection with Taxes.
SECTION 3.11 Employee Benefit Plans.
----------------------
(a) Except for any plan, fund, program, agreement or arrangement
that is subject to the laws of any jurisdiction outside the United States,
Schedule 3.11(a) of the Company Disclosure Schedule and the Company SEC
Documents filed prior to the date of this Agreement contain a true and
complete list of each material deferred compensation, incentive
compensation, and equity compensation plan; material "welfare" plan, fund
or program (within the meaning of section 3(1) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")); material "pension"
plan, fund or program (within the meaning of section 3(2) of ERISA); each
material employment, termination or severance agreement or arrangement; and
each other material employee benefit plan, fund, program, agreement or
arrangement, in each case, that is in writing and sponsored, maintained or
contributed to or required to be contributed to by the Company or by any
trade or business, whether or not incorporated (each, an "ERISA
Affiliate"), that together with the Company would be deemed a "single
employer" within the meaning of section 4001(b) of ERISA, or to which the
Company or an ERISA Affiliate is party, whether written or oral, for the
benefit of any employee, consultant, director or former employee,
consultant or director of the Company or any Subsidiary of the Company. The
plans, funds, programs, agreements and arrangements listed in Schedule
3.11(a) of the Company Disclosure Schedule and set forth in the Company SEC
Documents filed prior to the date of this Agreement are referred to herein
collectively as the "Plans". The Company has heretofore made available to
DuPont true and complete copies of the Plans and any amendments thereto (or
if a Plan is not a written Plan, a description thereof, and excluding any
Plan set forth in the Company SEC Documents filed prior to the date of this
Agreement), any related trust or other funding vehicle, the most recent
reports or summaries required under ERISA or the Code and the most recent
determination letter received from the Internal Revenue Service with
respect to each Plan intended to qualify under section 401 of the Code.
(b) No liability under Title IV or section 302 of ERISA that
would reasonably be expected, in the aggregate, to have a Company Material
Adverse Effect has been incurred by the Company or any ERISA Affiliate that
has not been satisfied in full, and, to the knowledge of the Company, no
condition exists that presents a material risk to the Company or any ERISA
Affiliate of incurring any such liability, other than liability for
premiums due the Pension Benefit Guaranty Corporation (which premiums have
been paid when due).
(c) No Plan is a "multiemployer plan," as defined in section
3(37) of ERISA, nor is any Plan a plan described in section 4063(a) of
ERISA.
(d) Except as set forth in Schedule 3.11(d) of the Company
Disclosure Schedule, each Plan has been operated and administered in all
material respects in accordance with its terms and applicable law,
including, but not limited to, ERISA and the Code, excluding, however,
noncompliance with the terms of a Plan or with applicable law that would
not reasonably be expected, in the aggregate, to have a Company Material
Adverse Effect.
(e) Schedule 3.11(e) of the Company Disclosure Schedule contains
a true and complete summary or list of all material employment contracts
and other employee benefit arrangements, in each case that contain "change
in control" arrangements, which are not contained in Schedule 3.11(a) of
the Company Disclosure Schedule or the Company SEC Documents filed prior to
the date of this Agreement or have not been previously delivered to DuPont.
(f) There are no pending, or to the knowledge of the Company,
threatened or anticipated, claims that would reasonably be expected to
have, in the aggregate, a Company Material Adverse Effect by or on behalf
of any Plan, by any employee or beneficiary covered under any such Plan, or
otherwise involving any such Plan (other than routine claims for benefits).
(g) With respect to each Plan that provides for the funding of a
rabbi trust upon the occurrence of a Potential Change in Control (as
defined in such Plans), the Company has amended such Plans to provide that
(i) no event has taken place that (x) constituted a Potential Change in
Control under such Plans or (y) requires the funding of any such rabbi
trust and (ii) neither the signing of this Agreement nor the consummation
of any transaction contemplated hereby shall constitute a Potential Change
in Control under such Plans or shall require the funding of any such rabbi
trust.
(h) To the knowledge of the Company, all employee benefit plans
that are subject to the laws of any jurisdiction outside the United States
are in material compliance with such applicable laws, including relevant
Tax laws, and the requirements of any trust deed under which they were
established, except for such exceptions to the foregoing which, in the
aggregate, would not reasonably be expected to have a Company Material
Adverse Effect.
SECTION 3.12 Litigation; Compliance with Laws.
--------------------------------
(a) Except as set forth in either the Company SEC Documents filed
prior to the date of this Agreement or in Schedule 3.12(a) of the Company
Disclosure Schedule or otherwise fully covered by insurance, there is no
action, suit or proceeding pending against, or to the knowledge of the
officers of the Company, through the receipt of actual (as opposed to
constructive) notice, threatened against, the Company or any Subsidiary of
the Company or any of their respective properties, or any of their
officers, employees or directors in their capacity as such, before any
court or arbitrator or any Governmental Entity except for those that would
not, in the aggregate, reasonably be expected to have a Company Material
Adverse Effect.
(b) Except as set forth in Schedule 3.12(b) of the Company
Disclosure Schedule, the Company and its Subsidiaries are (and have since
January 1, 1996 been) in compliance with all applicable laws, ordinances,
rules and regulations of any federal, state, local or foreign governmental
authority applicable to their respective businesses and operations, except
for such violations, if any, which, individually or in the aggregate, would
not reasonably be expected to have a Company Material Adverse Effect.
Neither the Company nor any Subsidiary thereof has received notification
from any Governmental Entity of any intent to revoke or terminate, or of
any proceedings therefor, any of their material Licenses, where such
revocation, termination or proceeding would reasonably be expected to have
a Company Material Adverse Effect.
SECTION 3.13 Intellectual Property.
---------------------
(a) The Company and its Subsidiaries own or have the right to use
all Intellectual Property (as defined in Section 3.13(d) hereof) used in or
reasonably necessary for the Company and its Subsidiaries to conduct their
business as it is currently conducted, except where such failure to own or
have such rights would reasonably be expected to have a Company Material
Adverse Effect.
(b) Except as set forth in Schedule 3.13 of the Company
Disclosure Schedule, to the knowledge of the Company: (i) all of the
registrations relating to material Intellectual Property owned by the
Company and its Subsidiaries are, except as would not reasonably be
expected to result in a Company Material Adverse Effect, subsisting and
unexpired, free of all Liens, and have not been abandoned; (ii) the Company
does not infringe the intellectual property rights of any third party in
any respect that would reasonably be expected to have, in the aggregate, a
Company Material Adverse Effect; (iii) no judgment, decree, injunction,
rule or order has been rendered by Governmental Entity which would limit,
cancel or question the validity of, or the Company's or its Subsidiaries'
rights in and to, any Intellectual Property owned by the Company in any
respect except for those that would not, in the aggregate, reasonably be
expected to have a Company Material Adverse Effect; and (iv) the Company
has not received notice of any pending or threatened suit, action or
adversarial proceeding that seeks to limit, cancel or question the validity
of, or the Company's or its Subsidiaries' rights in and to, any
Intellectual Property, except for those that would not, in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
(c) Each of the Company and its Subsidiaries owns or possesses
the rights to use the germplasm (including, but not limited to, lines,
varieties, inbreds and hybrids) that is used or required by it in the
conduct of its business, as conducted over the prior year (except for such
failures to own or possess the right to use such germplasm which would not
in the aggregate reasonably be expected to have a Company Material Adverse
Effect). Neither the Company nor any of its Subsidiaries has received any
written notice of, and they have no knowledge of, any challenge to the
ownership by the Company and its Subsidiaries of the germplasm used by the
Company or any of its Subsidiaries or any claim against the use by the
Company or any of its Subsidiaries of the germplasm owned, purported to be
owned or used by it.
(d) For purposes of this Agreement, "Intellectual Property" shall
mean all rights, privileges and priorities provided under U.S., state and
foreign law relating to intellectual property, including without limitation
all (x) (1) proprietary inventions, discoveries, processes, formulae,
designs, methods, techniques, procedures, concepts, developments,
technology, new and useful improvements thereof and proprietary know-how
relating thereto, whether or not patented or eligible for patent
protection; (2) copyrights and copyrightable works, including computer
applications, programs, software, databases and related items; (3)
trademarks, service marks, trade names, and trade dress, the goodwill of
any business symbolized thereby, and all common-law rights relating
thereto; (4) trade secrets and other confidential information; (y) all
registrations, applications and recordings for any of the foregoing and (z)
licenses or other similar agreements granting to the Company or any of its
Subsidiaries the rights to use any of the foregoing.
SECTION 3.14 Opinion of Financial Advisors. The Company has
received the opinion or advice of Lazard Freres & Co. LLC to the effect
that, as of such date, the consideration to be received by the Company's
shareholders in the Merger is fair to the shareholders of the Company from
a financial point of view.
SECTION 3.15 Tax Treatment. None of the Company, its affiliates
or its Subsidiaries has taken any action or knows of any fact, arrangement,
agreement, plan or other circumstance that would be reasonably likely to
prevent the Merger from qualifying as a reorganization within the meaning
of Section 368(a) of the Code.
SECTION 3.16 Finders' Fees. Except for Lazard Freres & Co. LLC,
whose fees will be paid by the Company, there is no investment banker,
broker, finder or other intermediary which has been retained by, or is
authorized to act on behalf of, the Company or any Subsidiary of the
Company that would be entitled to any fee or commission from the Company,
any Subsidiary of the Company, DuPont or any of DuPont's affiliates upon
consummation of the transactions contemplated by this Agreement.
SECTION 3.17 Rights Amendment. The Rights Amendment has been duly
authorized, executed and delivered by the Company and is valid and
enforceable in accordance with its terms. The most recent amendment to the
Rights Agreement prior to the Rights Amendment was Amendment No. 2 dated
March 10, 1998.
SECTION 3.18 Board Recommendation. At the date of this Agreement,
the Board of Directors of the Company, at a meeting duly called and held,
has approved this Agreement and (i) determined that this Agreement and the
transactions contemplated hereby, including the Merger, taken together are
fair to and in the best interests of the stockholders of the Company; (ii)
taken all actions necessary on the part of the Company to render the
restrictions on business combinations contained in Section 1110 of the IBCA
inapplicable to this Agreement and the Merger, and, following the Effective
Time, DuPont and its Subsidiaries; and (iii) resolved to recommend that the
stockholders of the Company adopt this Agreement and approve the Merger.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF DuPont AND NEWCO
--------------------------------------------------
DuPont and Newco, jointly and severally, represent and warrant to
the Company as follows:
SECTION 4.1 Corporate Existence and Power. Each of DuPont and
Newco is a corporation duly incorporated (or other entity duly organized),
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization, has all corporate or other power, as the
case may be, and all Licenses required to carry on its business as now
conducted, and all Licenses are in full force and effect except for
failures to have any such License which would not, in the aggregate, have a
DuPont Material Adverse Effect (as defined hereafter). Each of DuPont and
Newco is duly qualified to do business and is in good standing in each
jurisdiction where the character of the property owned, leased or operated
by it or the nature of its activities makes such qualification necessary,
except for those jurisdictions where failures to be so qualified or in good
standing would not reasonably be expected to, in the aggregate, have a
DuPont Material Adverse Effect. As used herein, the term "DuPont Material
Adverse Effect" means a material adverse effect on the condition (financial
or otherwise), business, assets or results of operations of DuPont and its
Subsidiaries, taken as a whole; provided, however, that a DuPont Material
Adverse Effect shall not include any change in or effect upon the business,
assets or results of operations of DuPont and its Subsidiaries, directly or
indirectly, arising out of or attributable to (i) conditions, events or
circumstances generally affecting the economy as a whole or in the
industries in which DuPont and its Subsidiaries operate, in general, or
(ii) any action permitted to be taken or required to be taken pursuant to
Section 5.8 hereof. DuPont has heretofore delivered or made available to
the Company true and complete copies of the governing documents or other
organizational documents of like import, as currently in effect, of each of
DuPont and Newco.
SECTION 4.2 Authorization. Each of DuPont and Newco has the
requisite power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution and delivery of this
Agreement and the performance of its obligations hereunder have been duly
and validly authorized by the Boards of Directors of DuPont and Newco and
approved by DuPont as the sole stockholder of Newco, this Agreement has
been adopted by the Board of Directors of Newco, and no other proceedings
on the part of DuPont or Newco are necessary to authorize the execution,
delivery and performance of this Agreement. This Agreement has been duly
executed and delivered by each of DuPont and Newco and constitutes,
assuming due authorization, execution and delivery of this Agreement by the
Company, a valid and binding obligation of each of DuPont and Newco,
enforceable against each of them in accordance with its terms.
SECTION 4.3 Consents and Approvals; No Violations.
-------------------------------------
(a) Except as set forth in Schedule 4.3(a) of the disclosure
schedule delivered by DuPont to the Company concurrently with the execution
and delivery by DuPont of this Agreement and attached hereto (the "DuPont
Disclosure Schedule"), neither the execution and delivery of this Agreement
nor the performance by each of DuPont and Newco of its obligations
hereunder will conflict with or result in any breach of any provision of
the certificate of incorporation or by-laws (or other governing or
organizational documents) of DuPont or Newco, as the case may be, or result
in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration or obligation to repurchase, repay, redeem or
acquire or any similar right or obligation) under any of the terms,
conditions or provisions of any note, mortgage, letter of credit, other
evidence of indebtedness, guarantee, license, lease or agreement or similar
instrument or obligation to which any of DuPont or Newco is a party or by
which any of them or any of the respective assets used or held for use by
any of them may be bound or assuming that the filings, registrations,
notifications, authorizations, consents and approvals referred to in
subsection (b) below have been obtained or made, as the case may be,
violate any order, injunction, decree, statute, rule or regulation of any
Governmental Entity to which either DuPont or Newco is subject, excluding
from the foregoing clauses (ii) and (iii) such requirements, defaults,
breaches, rights or violations (A) that would not, in the aggregate,
reasonably be expected to have a DuPont Material Adverse Effect or (B) that
become applicable as a result of any acts or omissions by, or facts
specifically pertaining to, the Company.
(b) Except as set forth in Schedule 4.3(b) of the DuPont
Disclosure Schedule, no filing or registration with, notification to, or
authorization, consent or approval of, any Governmental Entity is required
in connection with the execution and delivery of this Agreement by each of
DuPont and Newco or the performance by either of them of their respective
obligations hereunder, except (i) the filing of the Articles of Merger in
accordance with the IBCA and filings to maintain the good standing of the
Surviving Corporation; (ii) compliance with any applicable requirements of
the HSR Act, or the EC Merger Regulations or any other foreign laws
regulating competition, antitrust, investment or exchange controls; (iii)
compliance with any applicable requirements of the Securities Act and the
Exchange Act; (iv) compliance with any applicable requirements of state
blue sky or takeover laws and (v) such other consents, approvals, orders,
authorizations, notifications, registrations, declarations and filings (A)
the failure of which to be obtained or made would not, in the aggregate,
reasonably be expected to have a DuPont Material Adverse Effect and would
not have a material adverse effect on the ability of either DuPont or Newco
to perform their respective obligations hereunder or (B) that become
applicable as a result of any acts or omissions by, or facts specifically
pertaining to, the Company.
SECTION 4.4 Capitalization. The authorized capital stock of
DuPont consists of (i) 1,800,000,000 shares of DuPont Common Stock, par
value $0.30 per share, of which, as of December 31, 1998, 1,140,354,154
shares of DuPont Common Stock were issued and outstanding (including shares
held by the DuPont Flexitrust) and no shares of DuPont Common Stock were
issued and held in the treasury of DuPont; and (ii) 23,000,000 shares of
DuPont preferred stock, no par value per share, of which as of December 31,
1998, 1,672,594 shares of the $4.50 series were issued and outstanding and
700,000 shares of the $3.50 series were issued and outstanding. All the
issued and outstanding shares of DuPont's capital stock are, and all DuPont
Shares to be issued pursuant to this Agreement will be, when issued in
accordance with the terms hereof, duly authorized, validly issued, fully
paid and nonassessable and not issued in violation of statutory or
contractual preemptive or similar rights.
SECTION 4.5 SEC Documents. DuPont has filed all reports, proxy
statements, registration statements, forms and other documents required to
be filed by it with the SEC since January 1, 1997 (collectively, including
all exhibits thereto, the "DuPont SEC Reports"). Except for Conoco Inc.
("Conoco") and DuPont Photomask, no Subsidiary of DuPont is required to
file any report, proxy statement, registration statement, form and other
document with the SEC. None of the DuPont SEC Reports (other than the
financial statements contained therein, as to which representations are
made in Section 4.6 hereof), as of their respective dates (and, if amended
or superseded by a filing prior to the date of this Agreement or the
Closing Date, then on the date of such filing), contained or will contain
any untrue statement of a material fact or omitted or will omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading. All of such DuPont SEC Reports, as of their
respective dates (and as of the date of any amendment to the respective
DuPont SEC Report), complied as to form in all material respects with the
applicable requirements of the Securities Act and the Exchange Act and the
rules and regulations promulgated thereunder.
SECTION 4.6 Financial Statements. The financial statements of
DuPont (including, in each case, any notes and schedules thereto) included
in the DuPont SEC Documents (a) were prepared from the books and records of
DuPont and its Subsidiaries, (b) comply as to form in all material respects
with all applicable accounting requirements and the rules and regulations
of the SEC with respect thereto and (c) are in conformity with GAAP,
applied on a consistent basis (except (i) as may be indicated therein or in
the notes thereto, (ii) in the case of unaudited statements, as permitted
by the rules and regulations of the SEC and (iii) for restatements of
certain prior periods regarding discontinued operations per APB 30) during
the periods involved and (d) fairly present, in all material respects, the
consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end audit adjustments.
SECTION 4.7 Absence of Material Adverse Changes, etc. Since
December 31, 1998, there has not been any event or state of fact that,
individually or in the aggregate, has had or is reasonably likely to have a
DuPont Material Adverse Effect.
SECTION 4.8 Proxy Statement, Form S-4, etc.
------------------------------
(a) None of the information supplied or to be supplied by DuPont
or Newco, as the case may be, in writing for inclusion in the Proxy
Statement (and any amendments thereof and supplements thereto) will at the
time of the mailing of the Proxy Statement to the shareholders of the
Company and at the time of the Special Meeting, and none of the information
supplied or to be supplied by DuPont or Newco in writing for inclusion in
the Schedule 13E-3, and any amendments thereof and supplements thereto,
will, at the time of its filing with the SEC, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(b) None of the information contained in the Form S-4 will at the
time the Form S-4 is filed with the SEC, and at any time it is amended or
supplemented or at the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, except that no representation is made by DuPont or
Newco with respect to statements made or omitted in the Form S-4 relating
to the Company based on information supplied by the Company for inclusion
or incorporated by reference in the Form S-4. The Form S-4 and the Schedule
13E-3, and any amendments and supplements thereto, will comply as to form
in all material respects with the applicable provisions of the Securities
Act and the Exchange Act, except that no representation is made by DuPont
or Newco with respect to the statements made or omitted in the Form S-4 or
the Schedule 13E-3, or any amendments or supplements thereto, as the case
may be, relating to the Company based on information supplied by the
Company for inclusion therein.
SECTION 4.9 Share Ownership. Except by reason of DuPont's
ownership of Class B Common Stock and shares of Common Stock issued in
exchange therefor, neither DuPont nor Newco as of the date of this
Agreement beneficially owns shares of Common Stock.
SECTION 4.10 Newco's Operations. Newco was formed solely for the
purpose of engaging in the transactions contemplated hereby and has not (i)
engaged in any business activities, (ii) conducted any operations other
than in connection with the transactions contemplated hereby, (iii)
incurred any liabilities other than in connection with the transactions
contemplated hereby or (iv) owned any assets or property.
SECTION 4.11 Tax Treatment. None of DuPont, its affiliates or its
Subsidiaries has taken any action or knows of any fact, arrangement,
agreement, plan or other circumstance that would be reasonably likely to
prevent the Merger from qualifying as a reorganization within the meaning
of Section 368(a) of the Code.
SECTION 4.12 Finders' Fees. Except for Salomon Smith Barney Inc.
and Credit Suisse First Boston Corporation, whose fees will be paid by
DuPont, there is no investment banker, broker, finder or other intermediary
that might be entitled to any fee or commission in connection with or upon
consummation of the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of DuPont or Newco.
SECTION 4.13 Acquisition for Investment. DuPont is acquiring the
shares of Common Stock solely for its own account and not with a view to
any distribution or other disposition of such shares of Common Stock in
violation of the Securities Act.
SECTION 4.14 Litigation; Compliance with Laws.
--------------------------------
(a) Except as set forth in either the DuPont SEC Reports filed
prior to the date of this Agreement or in Schedule 4.14(a) of the DuPont
Disclosure Schedule or otherwise fully covered by insurance, there is no
action, suit or proceeding pending against, or to the knowledge of the
officers of DuPont, through the receipt of actual (as opposed to
constructive) notice, threatened against, DuPont or any Subsidiary of
DuPont or any of their respective properties, or any of their officers,
employees or directors in their capacity as such, before any court or
arbitrator or any Governmental Entity except for those that would not, in
the aggregate, reasonably be expected to have a DuPont Material Adverse
Effect.
(b) Except as set forth in Schedule 4.14(b) of the DuPont
Disclosure Schedule, DuPont and its Subsidiaries are (and have since
January 1, 1996 been) in compliance with all applicable laws, ordinances,
rules and regulations of any federal, state, local or foreign governmental
authority applicable to their respective businesses and operations, except
for such violations, if any, which, individually or in the aggregate, would
not reasonably be expected to have a DuPont Material Adverse Effect.
Neither DuPont nor any Subsidiary thereof has received notification from
any Governmental Entity of any intent to revoke or terminate, or of any
proceedings therefor, any of their material Licenses, where such
revocation, termination or proceeding would reasonably be expected to have
a DuPont Material Adverse Effect.
ARTICLE V
COVENANTS OF THE PARTIES
------------------------
SECTION 5.1 Conduct of the Business of the Company. During the
period from the date of this Agreement and continuing until the Effective
Time, the Company agrees as to itself and its Subsidiaries that (except as
expressly contemplated or permitted by this Agreement or as set forth in
the Company Disclosure Schedule or as required by a Governmental Entity of
competent jurisdiction or to the extent that DuPont shall otherwise consent
in writing or to the extent that any DuPont nominee on the Board of
Directors of the Company shall have approved):
(a) Ordinary Course.
(i) The Company and its Subsidiaries shall carry on their
respective businesses in the usual, regular and ordinary course and
shall use their reasonable best efforts to preserve intact their
present lines of business, maintain their rights and franchises and
preserve intact their relationships with customers, suppliers and
others having business dealings with them and keep available the
services of their present officers and employees, in each case to the
end that their ongoing businesses shall not be impaired in a manner
which would reasonably be expected to have a Company Material Adverse
Effect at the Effective Time.
(ii) The Company shall not, and shall not permit any of its
Subsidiaries to, enter into any new material line of business.
(b) Dividends; Changes in Share Capital. The Company shall not,
and shall not permit any of its Subsidiaries to, (i) declare, set aside or
pay any dividend or other distribution with respect to any of its capital
stock (except (A) the declaration and payment of regular quarterly cash
dividends not in excess of $0.10 per share of Common Stock and Class B
Common Stock, with usual record and payment dates for such dividends in
accordance with past dividend practice and (B) for dividends by
wholly-owned Subsidiaries of the Company), (ii) split, combine or
reclassify any of its capital stock or issue any other securities in
respect of, in lieu of or in substitution for, shares of its capital stock,
except for any such transaction by a wholly-owned Subsidiary of the Company
which remains a wholly-owned Subsidiary after consummation of such
transaction, or (iii) repurchase, redeem or otherwise acquire any shares of
its capital stock or any securities convertible into or exercisable for any
shares of its capital stock (except for the purchase from time to time by
the Company of Common Stock in the ordinary course of business consistent
with past practice in connection with the Plans at prices not in excess of
the market price of Common Stock).
(c) Issuance of Securities. Subject to Section 5.1(s) hereof, the
Company shall not, and shall not permit any of its Subsidiaries to, issue,
deliver or sell any shares of its capital stock of any class, any bonds,
debentures, notes or other indebtedness of the Company having the right to
vote on any matters on which shareholders may vote ("Company Voting Debt")
or any securities convertible into or exercisable for, or any rights,
warrants or options to acquire, any such shares of capital stock or Company
Voting Debt, other than (i) the issuance of Common Stock upon the exercise
of Options outstanding on the date of this Agreement or in connection with
the Plans, in each case in accordance with their terms as of the date of
this Agreement, (ii) the issuance of Options or restricted Common Stock
pursuant to Plans in effect as of the date of this Agreement and in the
ordinary course of business consistent with past practice (which in the
case of Options shall include having an exercise price equal to market at
the time of grant) but in no event more than 1.2 million shares of Common
Stock in the case of Options and 250,000 shares of Common Stock in the case
of restricted Common Stock, (iii) issuances by a wholly-owned Subsidiary of
the Company of capital stock to such Subsidiary's parent or another
wholly-owned Subsidiary of the Company, or (iv) issuances in accordance
with the Rights Agreement.
(d) Governing Documents; Securities. The Company shall not, and
shall not permit any of its Subsidiaries to, amend (i) their respective
certificates of incorporation, by-laws or other governing documents or (ii)
any material term of any outstanding security issued by the Company or any
Subsidiary of the Company.
(e) No Acquisitions. The Company shall not, and shall not permit
any of its Subsidiaries to, acquire (or agree to acquire or take any steps
to facilitate the acquisition of) by merging or consolidating with, or by
purchasing a substantial equity interest in or a substantial portion of the
assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof
or otherwise acquire or agree to acquire any assets, stock or operations of
another company, other than any acquisition by the Company for cash (i) in
an aggregate amount not to exceed $100 million and (ii) which do not make
it more difficult to obtain and is not likely to cause any delay in
obtaining, any approval or authorization required in connection with the
Merger under any Regulatory Law (as defined in Section 5.8(e) hereof).
(f) [Intentionally deleted.]
(g) No Liens. The Company shall not, and shall not permit any of
its Subsidiaries to, create, assume or otherwise incur any Lien or
restriction on transfer of any nature whatsoever on any asset other than
Liens which, in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect.
(h) No Relinquishment of Rights. The Company shall not, and shall
not permit any of its Subsidiaries to, (i) relinquish, waive or release any
material contractual or other right or claim, (ii) settle any material
action, suit, claim, investigation or other proceeding or (iii) knowingly
dispose of or permit to lapse any rights in any material Intellectual
Property or knowingly disclose to any Person not an employee of the Company
or any Subsidiary of the Company or otherwise knowingly dispose of any
trade secret, process or knowhow not a matter of public knowledge prior to
the date of this Agreement, except pursuant to judicial order or process.
(i) Investments. The Company shall not, and shall not permit any
of its Subsidiaries to make any loans, advances or capital contributions
to, or investments in, any other Person (other than (u) acquisitions
permitted under clause 5.1(e), (v) loans made in the ordinary course of
business consistent with current practice by PHI Financial Services, Inc.
to customers of the Company and its Subsidiaries, (w) in connection with
actions permitted by Section 5.1(e) hereof, (x) by the Company or a
Subsidiary of the Company to or in the Company or any wholly-owned
Subsidiary of the Company, (y) pursuant to any contract or other legal
obligation of the Company or any of its Subsidiaries existing at the date
of this Agreement which are set forth in Schedule 5.1(i) of the Company
Disclosure Schedule or (z) in the ordinary course of business consistent
with past practice in an aggregate amount not in excess of $50 million).
(j) Indebtedness. The Company shall not, and shall not permit any
of its Subsidiaries to, create, incur or assume any indebtedness for
borrowed money, issuances of debt securities, guarantees, loans or
advances, except (i) for intercompany loans and (ii) in the ordinary course
of business consistent with past practice not to either (1) exceed, at any
one time outstanding, $600 million in connection with the PHI Financial
Services loan program referred to in subsection (i) above and $200 million
not in connection therewith or (2) contain any prohibitions (except any
such prohibitions which exist on the date of this Agreement) on prepayment.
(k) Compensation; Severance. Other than as set forth in Schedules
5.1(c), 5.1(k), 5.1(s) or 5.11(b) of the Company Disclosure Schedule, the
Company shall not, and shall not permit any of its Subsidiaries to (A) pay
or commit to pay any severance or termination pay to any director, officer
or employee of the Company or any Subsidiary of the Company (other than
severance or termination pay (i) required pursuant to the terms of an
employee benefit plan, program or arrangement or applicable law or (ii) in
accordance with past practice of the Company or an applicable Subsidiary),
(B) enter into any employment, deferred compensation, consulting, severance
or other similar agreement (or any amendment to any such existing
agreement) with any director, officer or employee of the Company or any
Subsidiary of the Company, (C) increase or commit to increase any employee
benefits payable to any director, officer or employee of the Company or any
Subsidiary of the Company, including wages, salaries, compensation,
pension, severance, termination pay or other benefits or payments (except
in the case of employees other than officers and directors in the ordinary
course of business consistent with past practice or as required by an
existing Plan), (D) adopt or make any commitment to adopt any additional
employee benefit plan, or (E) make any contribution (other than (i)
regularly scheduled contributions and (ii) contributions required pursuant
to the terms thereof) to any Plan.
(l) Accounting Methods; Income Tax Elections. The Company shall
not, and shall not permit any of its Subsidiaries to, (i) change its
methods of accounting or accounting practice as in effect at December 31,
1998, except for any such change as required by reason of a change in GAAP,
(ii) make or rescind any material Tax election, or (iii) make any material
change to its method of reporting income, deductions or other Tax items for
Tax purposes; provided that, in the case of matters described in clauses
(ii) and (iii) above, DuPont shall not unreasonably withhold its consent.
(m) Certain Agreements. The Company shall not, and shall not
permit any of its Subsidiaries to, enter into any agreements or
arrangements that limit or otherwise restrict the Company or any of its
Subsidiaries or any of their respective affiliates or successors, or that
could, after the Effective Time, limit or restrict DuPont or any of its
affiliates (including the Surviving Corporation) or successors, from
engaging or competing in any line of business or in any geographic area
which agreement or arrangement would, in the aggregate, reasonably be
expected to have a DuPont Material Adverse Effect, after giving effect to
the Merger.
(n) Rights Agreement. Without the consent of DuPont, the Company
shall not prior to the termination of this Agreement (a) redeem the Rights,
or amend or modify or terminate the Rights Agreement, or to render it
inapplicable to (or otherwise exempt from the application of the Rights
Agreement) any Person or action, other than to delay the Distribution Date
(as defined therein) or to render the Rights inapplicable to the execution,
delivery and performance of this Agreement and the Merger or (b) permit the
Rights to become non-redeemable at the redemption price currently in
effect. Notwithstanding the foregoing, immediately prior to the Closing,
the Company shall redeem the Rights.
(o) Corporate Structure. The Company shall not, and shall not
permit any of its Subsidiaries to, alter (through merger, liquidation,
reorganization, restructuring or any other fashion) the corporate structure
or ownership of the Company or any Subsidiary, except for changes in the
corporate structure or ownership of the Company's Subsidiaries which do not
adversely affect the Company and its Subsidiaries taken as a whole.
(p) The Company shall not, and shall not permit any of its
Subsidiaries to, agree, propose, authorize or enter into any commitment to
take any action described in the foregoing subsections (a) - (o) of this
Section 5.1, except as otherwise permitted by this Agreement.
(q) The Company shall, to the extent possible, provide to DuPont
any required certifications in accordance with Section 1445 of the Code and
the Treasury Regulations promulgated thereunder regarding its status as a
U.S. real property holding corporation within the meaning of Section 897(c)
of the Code and the Treasury Regulations promulgated thereunder.
(r) From the date of this Agreement until the Effective Time, the
Company will not (and will not permit any of its Subsidiaries to) take any
action or knowingly omit to take any action that would make any of its
representations and warranties contained herein false in any material
respect at or prior to the Closing Date.
(s) Notwithstanding any provision to the contrary in this
Agreement, the Company shall be entitled to enter into employee retention
agreements substantially upon the terms and conditions specified in
Schedule 5.1(s) attached hereto. DuPont and Newco hereby acknowledge and
agree that the Company intends to offer employee retention agreements to
approximately 21 employees of the Company; provided, however, that the
Company makes no representations or warranties with respect to which
employees, if any, will enter into such employee retention agreements. The
Company shall give notice to DuPont from time to time advising DuPont as to
which employees have entered into such employee retention agreements.
SECTION 5.2 Conduct of the Business of DuPont, etc.
--------------------------------------
(a) From the date of this Agreement until the Effective Time,
DuPont will not (and will not permit any of its Subsidiaries to) take any
action or knowingly omit to take any action that would make any of its
representations and warranties contained herein false in any material
respect at or prior to the Closing Date.
(b) Neither DuPont nor any of its Subsidiaries shall purchase or
otherwise acquire any shares of DuPont Common Stock during the Valuation
Period and the immediately preceding five trading days (collectively, the
"Restricted Period"); provided that the foregoing shall not prohibit any
purchases made by any employee benefit plans of DuPont (the "Benefit Plans
of DuPont") or trusts for the benefit of employees of DuPont or its
employees, in each case, in the ordinary course of business consistent with
past practice. DuPont shall cause the closing or termination of the Conoco
Exchange Offer (if commenced) to occur prior to (and shall not make any
public announcements concerning its ownership of Conoco for the twenty
trading days commencing on the fifth trading day preceding the commencement
of the Restricted Period) five trading days prior to the commencement of
the Restricted Period and, if the Conoco Exchange Offer had not been
commenced prior to the commencement of the Restricted Period, then DuPont
agrees that it will not be commenced nor will a record date be established
for any distribution of shares of Conoco common stock until at least 10
days after the Effective Time.
(c) DuPont shall not, and shall not permit any of its
Subsidiaries to (or agree to) (i) acquire or effect a merger, consolidation
or business combination with, or acquire all or any portion of the capital
stock of, any of the companies set forth in Schedule 5.2 of the Company
Disclosure Schedule including without limitation the Subsidiaries listed on
such Schedule 5.2 (including such listed Subsidiaries, the "Listed
Companies"), (ii) enter into any joint venture with, or acquire any
division, Subsidiary or business of, any Listed Company if such transaction
directly involves Seed Operations (as defined in Section 5.2(g) hereof) of
such Listed Company or (iii) enter into any written or binding (A)
agreement, (B) commitment or (C) letter of intent to effect any transaction
prohibited or referred to in clauses (i) or (ii) of this subsection (c);
provided that the foregoing shall be subject to Section 5.2(e) hereof.
(d) Without limiting the provisions of Section 5.2(c) hereof,
DuPont shall not, and shall not permit any of its Subsidiaries to, acquire
any business, or any corporation, partnership, association or other
business organization or division thereof involved in or involving Seed
Operations or any stock or partnership or similar ownership interest
therein or enter into any joint venture relating to Seed Operations or
enter into any written or binding (A) agreement, (B) commitment or (C)
letter of intent, to effect the foregoing (collectively, a "Transaction")
which would be reasonably likely to (i) make it more difficult in any
material respect to obtain any material approval or authorization required
in connection with the Merger under any Regulatory Law (a "Material
Approval") or (ii) result in any Material Delay (as defined hereafter) in
the expiration of the HSR Act or in obtaining any Material Approval. As
used in this Agreement, a "Material Delay" shall mean a delay in the
expiration or termination of the HSR waiting period or in obtaining any
Material Approval until after the later of (x) the 120th day following the
date of the execution and delivery of this Agreement in the case of HSR (or
120 days following the date of this Agreement, subject to extension on a
day-by-day basis if and to the extent the Company fails to promptly respond
to reasonable requests by DuPont with respect to filings and information
required in connection with the Merger pursuant to Section 5.8) and (y) the
satisfaction or waiver of all conditions set forth in Article VI hereof
other than those set forth in Section 6.2(a) and (b) and those that are not
satisfied by reason of the failure of the HSR waiting period to have
expired or of any Material Approval to have been obtained.
(e) Notwithstanding Section 5.7 or subsection (c) and (d) above,
(i) DuPont may take any actions (including agreeing to and consummating any
transactions) otherwise prohibited by subsection (d)(i) above or, following
the expiration or termination of the waiting period applicable to the
Merger under the HSR Act, subsection (c) above if (I) DuPont notifies the
Company in writing that, effective immediately prior to the Termination
Date, it has irrevocably waived and will not assert the non-fulfillment of
the conditions set forth in Section 6.1(b), Section 6.1(c), 6.3(d) or
6.3(f) hereof as a basis for failing to close the Merger by reason of, but
only by reason of, such action or transaction and (II) DuPont complies with
its obligations under Sections 5.8(c) and (ii) without limiting DuPont's
obligations under clause (e)(i) above if the provisions thereof apply,
DuPont may take any action otherwise prohibited by (d)(ii) above, provided
that upon the commencement of a Material Delay, DuPont shall increase the
Merger Price by an interest rate per annum, calculated on a daily basis,
using the one-month dealer priced commercial paper rate, for the period
from the day of commencement of the Material Delay until the earlier of (A)
the end of such Material Delay, and (B) the date that the HSR waiting
period has expired or terminated and all other Material Approvals that
resulted in such Material Delay have been obtained and (C) the date that
any other condition to closing the Merger other than those set forth in
Sections 6.2(a) and (b) remains not satisfied or waived, provided that no
increase in the Merger Price as provided in this clause (e)(ii) shall occur
if and for so long as an authorized representative of the applicable
Governmental Entity responsible for administering the HSR or the law or
regulation under which such Material Approval is required has advised
DuPont in writing (and such advice has not been withdrawn) that it is not
reasonably likely that there will be a Material Delay in the timing of the
expiration or termination of the HSR Act or the obtaining of any Material
Approval.
(f) As used in this Agreement, the term "Seed Operations" shall
mean the business of seed and seed operations; downstream distribution
systems; technology materially related to the seed business; and other
businesses materially related to the seed business (exclusive of crop
protection chemicals, herbals and nutritional supplements, food
ingredients, and fermentation derived products).
(g) DuPont shall, and shall cause its Subsidiaries to, vote the
shares of Common Stock owned by each of them in favor of approval and
adoption of this Agreement and the Merger.
SECTION 5.3 Shareholders' Meeting; Proxy Material.
-------------------------------------
(a) Subject to the last sentence of this Section 5.3(a), the
Company shall, in accordance with applicable law and the Articles of
Incorporation and the by-laws of the Company duly call, give notice of,
convene and hold a special meeting of its shareholders (the "Special
Meeting") as promptly as practicable after the date hereof for the purpose
of considering and taking action upon this Agreement and the Merger. The
Board of Directors of the Company shall recommend approval and adoption of
this Agreement and the Merger by the Company's shareholders (the "Company
Recommendation"); provided that the Board of Directors of the Company may
withdraw, modify or change such recommendation if but only if (i) it
believes in good faith, based on such matters as it deems relevant,
including the advice of the Company's financial advisors, that a Superior
Proposal (as defined in Section 5.5(b) hereof) has been made and (ii) it
has determined in good faith, based on the advice of outside counsel and
after taking into account the provisions of IBCA ss.490.1108, that the
failure to withdraw, modify or change such recommendation is reasonably
likely to result in a breach of the fiduciary duties of the Board of
Directors of the Company under applicable law. The Company may, if it
receives an unsolicited Acquisition Proposal (as defined in Section 5.5(b)
hereof) delay the mailing of the Proxy Statement or the holding of the
Special Meeting, in each case for such reasonable period as would provide a
reasonable opportunity for the Company's Board of Directors to consider
such Acquisition Proposal and to determine the effect, if any, on its
recommendation in favor of the Merger.
(b) Promptly following the date of this Agreement, the Company
shall prepare a proxy statement relating to the adoption of this Agreement
and the approval of the Merger by the Company's shareholders (the "Proxy
Statement"), and DuPont shall prepare and file with the SEC, following
resolution of any comments the SEC may have with respect to the Proxy
Statement, the Form S-4, in which the Proxy Statement will be included.
DuPont and the Company shall cooperate with each other in connection with
the preparation of the foregoing documents. DuPont and the Company shall
each use its reasonable best efforts to have the Form S-4 declared
effective under the Securities Act as promptly as practicable after such
filing. The Company will use its reasonable best efforts to cause the Proxy
Statement to be mailed to the Company's shareholders as promptly as
practicable after the Form S-4 is declared effective under the Securities
Act. Notwithstanding the foregoing, the Company shall not mail the Proxy
Statement and the Form S-4 shall not have been declared effective prior to
the closing of the Conoco Exchange Offer or at any time that such mailing
would violate Regulation M under the Exchange Act. DuPont agrees that if
and when it becomes reasonably apparent that DuPont will not be able to
close the Conoco Exchange Offer in a timely manner in order to permit the
Effective Time to occur prior to the Termination Date (after giving effect
to the provisions of the immediately preceding sentence), DuPont will
promptly terminate (or will not commence) the Conoco Exchange Offer.
(c) The Company shall as promptly as practicable notify DuPont of
the receipt of any comments from the SEC relating to the Proxy Statement.
Each of DuPont and the Company shall as promptly as practicable notify the
other of (i) the effectiveness of the Form S-4, (ii) the receipt of any
comments from the SEC relating to the Form S-4 and (iii) any request by the
SEC for any amendment to the Form S-4 or for additional information. All
filings by DuPont and the Company with the SEC in connection with the
transactions contemplated hereby, including the Proxy Statement, the Form
S-4 and any amendment or supplement thereto, shall be subject to the prior
review of the other, and all mailings to the Company's shareholders in
connection with the transactions contemplated by this Agreement shall be
subject to the prior review of DuPont.
SECTION 5.4 Access to Information. Upon reasonable advance
notice, between the date of this Agreement and the Closing Date, the
Company shall (i) give DuPont, its respective counsel, financial advisors,
auditors and other authorized representatives (collectively, "DuPont's
Representatives") reasonable access during normal business hours to the
offices, properties, books and records (including, without limitation, all
Tax Returns and other Tax-related information) of the Company and its
Subsidiaries, (ii) furnish to DuPont's Representatives such financial and
operating data and other information (including, without limitation, all
Tax Returns and other Tax-related information) relating to the Company, its
Subsidiaries and their respective operations as such Persons may reasonably
request and (iii) instruct the Company's employees, counsel and financial
advisors to cooperate with DuPont in its investigation of the business of
the Company and its Subsidiaries; provided that any information and
documents received by DuPont or DuPont's Representatives (whether furnished
before or after the date of this Agreement) shall be held in strict
confidence in accordance with the Confidentiality Agreement dated March 13,
1997 between the Company and DuPont (the "Confidentiality Agreement"),
which shall remain in full force and effect pursuant to the terms thereof
as though the Confidentiality Agreement had been entered into by the
parties on the date of this Agreement, notwithstanding the execution and
delivery of this Agreement or the termination hereof; provided that the
parties shall be able to disclose information to the extent required by
law.
SECTION 5.5 No Solicitation.
---------------
(a) From the date of this Agreement until the Effective Time or,
if earlier, the termination of this Agreement, the Company shall not
(whether directly or indirectly through advisors, agents or other
intermediaries), and the Company shall cause its respective officers,
directors, advisors, representatives or other agents of the Company not to,
directly or indirectly, (a) solicit, initiate or encourage any Acquisition
Proposal or (b) except with respect to an unsolicited Acquisition Proposal
relating to a Superior Proposal to the extent required by the fiduciary
obligations of the Board of Directors of the Company, as determined in good
faith by the Board of Directors of the Company based on the advice of
outside counsel and after taking into account the provisions of IBCA
ss.490.1108, engage in discussions or negotiations with, or disclose any
non-public information relating to the Company or its Subsidiaries or
afford access to the properties, books or records of the Company or its
Subsidiaries to, any Person that has made an Acquisition Proposal or to any
Person in contemplation of an Acquisition Proposal or (c) enter into any
agreement or agreement in principle providing for or relating to an
Acquisition Proposal; provided, however, that the Company may enter into
any agreement conditional upon the concurrent exercise by the Company, and
concurrently with the effectiveness of any such agreement, the Company does
exercise, the termination right set forth in Section 7.1(i) hereof;
provided that the exception in clause (b) with respect to a Superior
Proposal shall not apply following the approval of the Merger by the
Company shareholders pursuant to the Required Company Vote. Without
limiting the provisions of the Investment Agreement then in effect, (x) the
Company will promptly inform DuPont when, in connection with an Acquisition
Proposal made by any third party, the Company is engaging in substantive
discussions or negotiations with such party or has provided such party or
representative of such party with or access to any material non-public
information properties, books or records of the Company or its material
Subsidiaries, and (y) at any time following the 45th day after the date of
this Agreement, the Company will inform DuPont within 5 business days of
its receipt thereof, of its receipt (a "Second Period Event") from a third
party of a public or private written Acquisition Proposal which, in the
judgment of the Board in the exercise of its fiduciary obligations, as
determined (and the timing of which determination is also determined) in
good faith based on the advice of outside counsel and taking into account
the provisions of IBCA ss. 490.1108, is reasonably likely to constitute a
Superior Proposal and which is reasonably likely to result in a binding
agreement within a period of 10 business days or less; provided that
nothing in clauses (x) or (y) above shall obligate the Company to disclose
the identity of any third party or the terms of any such Acquisition
Proposal. Nothing contained in this Section 5.5 shall prohibit the Company
or the Company's Board of Directors from taking and disclosing to the
Company's shareholders a position with respect to a tender or exchange
offer by a third party pursuant to Rules 14d-9 and 14e-2(a) promulgated
under the Exchange Act or from making any disclosure required by applicable
law.
(b) For purposes of this Agreement, "Acquisition Proposal" shall
have the meaning assigned to the term "Proposal" in the Investment
Agreement (as defined in Section 5.18(a) hereof) as in effect on the date
hereof. For purposes of this Agreement, "Superior Proposal" means a
"Proposal" (as such term is defined in the Investment Agreement as in
effect on the date hereof) relating to a "Change in Control Transaction"
(as such term is defined in the Investment Agreement as in effect on the
date hereof) which is made prior to the approval of this Agreement by the
shareholders of the Company, which is on terms which the Board of Directors
of the Company in good faith concludes (after consultation with its
financial advisors and outside counsel and after taking into account, among
other things, all legal, financial, regulatory and other aspects of the
proposal and the Person making the proposal), would, if consummated, result
in a transaction that provides a higher price to its shareholders (in their
capacities as shareholders), from a financial point of view, than the
transactions contemplated by this Agreement.
SECTION 5.6 Director and Officer Liability.
------------------------------
(a) DuPont and the Company agree that all rights to
indemnification and all limitations on liability existing in favor of any
Indemnitee (as defined hereafter) as provided in the Articles of
Incorporation or by-laws of the Company or an agreement between an
Indemnitee and the Company or a Subsidiary of the Company as in effect as
of the date hereof shall survive the Merger and continue in full force and
effect in accordance with its terms.
(b) For six years after the Effective Time, the Surviving
Corporation shall indemnify and hold harmless the individuals who on or
prior to the Effective Time were officers or directors of the Company and
any of its Subsidiaries (the "Indemnitees") to the same extent as set forth
in subsection (a) above. In the event any claim in respect of which
indemnification is available pursuant to the foregoing provisions is
asserted or made within such six-year period, all rights to indemnification
shall continue until such claim is disposed of or all judgments, orders,
decrees or other rulings in connection with such claim are fully satisfied.
(c) For six years after the Effective Time, the Surviving
Corporation shall provide officers' and directors' liability insurance in
respect of acts or omissions occurring prior to the Effective Time covering
each such Person currently covered by the Company's officers' and
directors' liability insurance policy on terms with respect to coverage and
amount no less favorable than those of such policy in effect on the date
hereof; provided, however, that in no event shall the Surviving Corporation
be required to expend more than an amount per year equal to 200% of current
annual premiums paid by the Company for such insurance (the "Maximum
Amount") to maintain or procure insurance coverage pursuant hereto;
provided, further, that if the amount of the annual premiums necessary to
maintain or procure such insurance coverage exceeds the Maximum Amount, the
Surviving Corporation shall maintain or procure, for such six-year period,
the most advantageous policies of directors' and officers' insurance
obtainable for an annual premium equal to the Maximum Amount.
(d) The obligations of the Surviving Corporation under this
Section 5.6 shall not be terminated or modified in such a manner as to
adversely affect any Indemnitee to whom this Section 5.6 applies without
the consent of such affected Indemnitee (it being expressly agreed that the
Indemnitees to whom this Section 5.6 applies shall be third party
beneficiaries of this Section 5.6).
SECTION 5.7 Reasonable Best Efforts. Upon the terms and subject
to the conditions of this Agreement, each party hereto shall use its
reasonable best efforts to take, or cause to be taken, all actions and to
do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate the transactions contemplated
by this Agreement; provided that the foregoing shall be subject to Section
5.8 hereof.
SECTION 5.8 Certain Filings.
---------------
(a) The Company and DuPont shall cooperate with one another (i)
in connection with the preparation of the Proxy Statement, the Schedule
13E-3 and the Form S-4 Registration Statement and any amendments or
supplements to the foregoing, (ii) in determining whether any action by or
in respect of, or filing with, any Governmental Entity is required, or any
actions, consents, approvals or waivers are required to be obtained from
parties to any material contracts, in connection with the consummation of
the transactions contemplated by this Agreement and (iii) in seeking any
such actions, consents, approvals or waivers or making any such filings,
furnishing information required in connection therewith or with the Proxy
Statement, the Schedule 13E-3 and the Form S-4 Registration Statement and
seeking timely to obtain any such actions, consents, approvals or waivers.
Without limiting the provisions of this Section 5.8, each party hereto
shall file with the Department of Justice and the Federal Trade Commission
a Pre-Merger Notification and Report Form pursuant to the HSR Act in
respect of the transactions contemplated hereby within ten (10) days of the
date of this Agreement, and, subject to Section 5.8(c) hereof, each party
will use its reasonable best efforts to take or cause to be taken all
actions necessary, including to promptly and fully comply with any requests
for information from regulatory Governmental Entities (including, in the
case of DuPont, to request, if any question or objection shall be raised by
the applicable Governmental Entity with respect thereto, that such
Governmental Entity should defer its consideration of any transaction of
the type referred to in Section 5.2(c) or (d) until after (i) any
clearance, waiver, approval or authorization relating to the HSR Act that
is necessary to enable the parties to consummate the transactions
contemplated by this Agreement and (ii) other Material Approvals have been
obtained), to obtain any clearance (including affirmatively seeking early
termination), waiver, approval or authorization relating to the HSR Act
that is necessary to enable the parties to consummate the transactions
contemplated by this Agreement. Without limiting the provisions of this
Section 5.8, each party hereto shall use its reasonable best efforts to
promptly make the filings required to be made by it with all foreign
Governmental Entities in any jurisdiction in which the parties believe it
is necessary or advisable.
(b) Subject to Section 5.8(c) hereof, (i) the Company and DuPont
shall each use its reasonable best efforts to resolve such objections, if
any, as may be asserted with respect to the Merger or any other transaction
contemplated by this Agreement under any Regulatory Law and (ii) if any
administrative, judicial or legislative action or proceeding, including any
proceeding by a private party, is instituted (or threatened to be
instituted) challenging the Merger or any other transaction contemplated by
this Agreement as violative of any Regulatory Law, the Company and DuPont
shall each cooperate in all respects and use its respective reasonable best
efforts to contest and resist any such action or proceeding and to have
vacated, lifted, reversed or overturned any decree, judgment, injunction or
other order (whether temporary, preliminary or permanent) that is in effect
and that restricts, prevents or prohibits consummation of the Merger or any
other transaction contemplated by this Agreement, including, without
limitation, by pursuing all reasonable avenues of administrative and
judicial appeal.
(c) If any objections are asserted with respect to the
transactions contemplated hereby under any Regulatory Law or if any suit is
instituted by any Governmental Entity or any private party challenging any
of the transactions contemplated hereby as violative of any Regulatory Law,
each of DuPont and the Company shall use its reasonable best efforts to
take and, in the case of actions required by reason of Section 5.2(c), (d)
and (e), shall take (including, without limitation, agreeing to hold
separate or divest, or enter into a consent decree or licensing or other
arrangement with respect to, any of the businesses, operations or assets of
DuPont or the Company or any of their Subsidiaries, in each case, subject
to the consummation of the Merger) such action as may be required in order
to resolve any such objections or challenge as such Governmental Entity or
private party may have to such transactions under such Regulatory Law so as
to permit consummation of the transactions contemplated by this Agreement;
provided, however, that notwithstanding anything to the contrary set forth
in this Agreement, neither DuPont nor the Company nor any of their
respective Subsidiaries shall be required to sell, hold separate, otherwise
dispose of or license or conduct their business in a specified manner, or
agree to sell, hold separate, otherwise dispose of or license or conduct
their business in a specified manner, or permit the sale, holding separate,
other disposition or licensing of, any assets of DuPont, the Company or
their respective Subsidiaries or the conduct of their business in a
specified manner (whether as a condition to obtaining any approval from a
Governmental Entity or any other Person or for any other reason) if such
sale, holding separate, other disposition or licensing or the conduct of
their business in a specified manner would have, unless DuPont determined
otherwise, in the aggregate, a "Significant Adverse Impact" (as defined
below) (it being understood that this proviso is not applicable insofar as
DuPont is required by this Section 5.8(c) to take any such action by reason
of Section 5.2(c), (d) and (e) hereof); and provided further, however that,
DuPont shall control all decisions (without limiting its obligations
therewith) with respect to this Section 5.8(c) and, in particular, the
Company and its Subsidiaries shall not, without the prior written consent
of DuPont, agree, but shall, if so directed by DuPont, agree, subject to
the consummation of the Merger, to hold separate or divest any of its
businesses or operations or assets used therein or enter into a consent
decree or licensing or other arrangement with respect to any such
businesses or operations or assets used therein. For purposes of this
Agreement, a "Significant Adverse Impact" shall mean any change or effect
that in DuPont's reasonable judgment is likely to have a material adverse
effect on DuPont's and its Subsidiaries' operations which are in the same
or related lines of business as those of the Company and its Subsidiaries,
taken together with the Company and its Subsidiaries as a whole.
(d) Each of the Company and DuPont shall promptly inform the
other party of any material communication received by such party from the
Federal Trade Commission, the Antitrust Division of the Department of
Justice, the Commission of the European Community or any other governmental
or regulatory authority regarding any of the transactions contemplated
hereby.
(e) "Regulatory Law" means the Sherman Act, as amended, the
Clayton Act, as amended, the HSR Act, the Federal Trade Commission Act, as
amended, Counsel regulation (EEC) No. 4064/89 of December 21, 1989 on the
Control of Concentrations Between Undertakings, OJ (1989) L 395/1 and the
regulations and decisions of the Councilor Commission of the European
Community or other organs of the European Union or the European Community
implementing such regulations (the "EC Merger Regulations") and all other
federal, state and foreign, if any, statutes, rules, regulations, orders,
decrees, administrative and judicial doctrines and other laws that are
designed or intended to prohibit, restrict or regulate (i) foreign
investment, (ii) foreign exchange or currency controls or (iii) actions
having the purpose or effect of monopolization or restraint of trade or
lessening of competition.
SECTION 5.9 Public Announcements. Neither the Company, DuPont nor
any of their respective affiliates shall issue or cause the publication of
any press release or other public announcement with respect to the Merger,
this Agreement or the other transactions contemplated hereby without the
prior consultation with the other party, except as may be required by law
or by any listing agreement with, or the policies of, a national securities
exchange.
SECTION 5.10 Further Assurances. At and after the Effective Time,
the officers and directors of the Surviving Corporation will be authorized
to execute and deliver, in the name and on behalf of the Company or Newco,
any deeds, bills of sale, assignments or assurances and to take and do, in
the name and on behalf of the Company or Newco, any other actions to vest,
perfect or confirm of record or otherwise in the Surviving Corporation any
and all right, title and interest in, to and under any of the rights,
properties or assets of the Company acquired or to be acquired by the
Surviving Corporation, as a result of, or in connection with, the Merger.
SECTION 5.11 Employee Matters.
----------------
(a) The Surviving Corporation shall, and shall cause its
Subsidiaries to, honor in accordance with their terms all agreements,
contracts and arrangements listed in Schedule 5.11 of the Company
Disclosure Schedule.
(b) DuPont agrees that, for at least one year following the
Effective Time, subject to applicable law, the Surviving Corporation and
its Subsidiaries shall continue to sponsor and maintain the Plans for the
benefit of the individuals who are, as of the Effective Time, employees of
the Company or any of its Subsidiaries (the "Continuing Employees"). The
parties have agreed to the matters set forth in Schedule 5.11(b).
(c) Pre-Existing Limitations; Deductibles; Service Credit. With
respect to any Benefit Plans of DuPont in which any Continuing Employees
first become eligible to participate, on or after the Effective Time,
DuPont shall: (i) waive all pre-existing conditions exclusions and waiting
periods with respect to participation and coverage requirements and
activity-at-work exclusions applicable to the Continuing Employees; (ii)
provide each Continuing Employee with credit for any co-payments and
deductibles paid prior to the Effective Time (to the same extent such
credit was given under the analogous Plan prior to the Effective Time) in
satisfying any applicable deductible or out-of-pocket requirements and
(iii) recognize all service of the Continuing Employees with the Company,
any of its present and former Subsidiaries, any affiliates of the Company
and their respective predecessors for all purposes (including, without
limitation, purposes of eligibility to participate, vesting credit,
entitlement to benefits, and benefit accrual), to the extent service is
taken into account under the applicable plan for employees other than the
Continuing Employees; provided that the foregoing shall not apply to the
extent it would result in duplication of benefits for the same period of
service, nor shall it apply with respect to benefit accrual under any
Benefit Plan of DuPont that is a defined benefit pension plan.
(d) DuPont and the Company hereby acknowledge that the
consummation of the Merger shall constitute a Change in Control of the
Company under the Plans, and neither the DuPont nor the Company shall take
any action inconsistent with such acknowledgment.
(e) DuPont hereby agrees, effective as of the Effective Time, to
guarantee payment of all obligations of the Surviving Corporation under the
Plans described in Section 3.11(g) hereof.
SECTION 5.12 Tax-Free Reorganization Treatment.
---------------------------------
(a) The parties intend the Merger to qualify as a reorganization
within the meaning of Section 368(a) of the Code and shall use their
reasonable best efforts (and shall cause their respective Subsidiaries to
use their reasonable best efforts) to cause the Merger to so qualify.
Neither the Company, DuPont, or any of their respective Subsidiaries shall
take any action, or fail to take any action, that would or would be
reasonably likely to adversely affect the treatment of the Merger as a
reorganization within the meaning of Section 368(a) of the Code.
(b) The Company and DuPont shall cooperate and use their
reasonable best efforts in obtaining the opinions of Fried, Frank, Harris,
Shriver & Jacobson, counsel to the Company, and Skadden, Arps, Slate,
Meagher & Flom LLP, counsel to DuPont, described in Sections 6.2(d) and
6.3(e) hereof, respectively, of this Agreement. In connection therewith,
both DuPont (together with Newco) and the Company shall deliver to Fried,
Frank, Harris, Shriver & Jacobson and Skadden, Arps, Slate, Meagher & Flom
LLP representation letters, dated and executed as of the Closing Date (and
as of such other date or dates as reasonably requested by Fried, Frank,
Harris, Shriver & Jacobson or Skadden, Arps, Slate, Meagher & Flom LLP), in
form and substance substantially identical to those attached hereto as
Exhibits B-1 and B-2, respectively (allowing for such amendments to the
representation letters as counsel deems necessary) (together, the
"Representation Letters").
SECTION 5.13 Blue Sky Permits. DuPont shall use its reasonable
best efforts to obtain, prior to the effective date of the Form S-4
Registration Statement, all material necessary state securities laws or
"blue sky" permits and approvals required to carry out the transactions
contemplated by this Agreement and the Merger, and will pay all expenses
incident thereto.
SECTION 5.14 Listing. DuPont shall use its reasonable best
efforts to cause the DuPont Shares to be issued in the Merger or upon
exercise of Substitute Options to be listed on the NYSE, subject to notice
of official issuance thereof, prior to the Closing Date.
SECTION 5.15 State Takeover Laws. If any "fair price," "business
combination" or "control share acquisition" statute or other similar
statute or regulation is or may become applicable to the Merger, the
Company and DuPont shall each take such actions as are necessary so that
the transactions contemplated by this Agreement may be consummated as
promptly as practicable on the terms contemplated hereby and otherwise act
to eliminate or minimize the effects of any such statute or regulation on
the Merger.
SECTION 5.16 Certain Notifications. Between the date hereof and
the Effective Time, each party shall promptly notify the other party hereto
in writing after becoming aware of the occurrence of any event which will,
or is reasonably likely to, result in the failure to satisfy any of the
conditions specified in Article VI hereof.
SECTION 5.17 Affiliate Letters. The Company shall, at least 15
days prior to the scheduled date of the Special Meeting, deliver to DuPont
a list reasonably satisfactory to DuPont setting forth the names and
addresses of all Persons who at the time of the Special Meeting are, in the
Company's reasonable judgment, "affiliates" of the Company for purposes of
Rule 145 under the Securities Act. The Company shall furnish such
information and documents as DuPont may reasonably request for the purpose
of reviewing such list. The Company shall use its reasonable best efforts
to cause each Person who is identified as an affiliate on such list to
execute a written agreement at least 10 days prior to the scheduled date of
the Special Meeting in customary form (collectively, the "Affiliate
Agreements").
SECTION 5.18 The Investment Agreement.
------------------------
(a) The Company hereby expressly waives any breach of Section 6.1
of the Investment Agreement (the "Investment Agreement"), dated as of
August 6, 1997, between DuPont and the Company that is caused by the
execution, delivery and/or performance of this Agreement or the events
leading to the execution and delivery of this Agreement.
(b) The Company and DuPont agree that the Investment Agreement is
hereby amended to eliminate Section 6.7(c) thereof.
(c) To the extent anything contained in this Agreement is
inconsistent or constitutes a breach of the Investment Agreement, this
Agreement shall control and any such breach is hereby waived.
(d) The Investment Agreement shall terminate in its entirety upon
the earlier of (x) the termination of this Agreement (A) in circumstances
where DuPont terminated this Agreement pursuant to Section 7.1(e), (f), (g)
or (h) hereof or (B) pursuant to Section 7.1(i) hereof; provided that,
notwithstanding the foregoing, under no circumstances shall Section 8.2(c)
of the Investment Agreement terminate, and such Section 8.2(c) shall
survive until the date that the Investment Agreement would have otherwise
survived had the Investment Agreement not terminated pursuant to this
Section 5.18(d).
ARTICLE VI
CONDITIONS TO THE MERGER
------------------------
SECTION 6.1 Conditions to Each Party's Obligations. The
respective obligations of the Company, DuPont and Newco to consummate the
Merger are subject to the satisfaction or, to the extent permitted by
applicable law, the waiver on or prior to the Effective Time of each of the
following conditions:
(a) The Required Company Vote shall have been obtained;
(b) Any applicable waiting periods (including any extensions
thereof) under the HSR Act shall have expired or been terminated. Approval
of the Merger by the European Commission shall have been obtained pursuant
to the EC Merger Regulations;
(c) No judgment, injunction, order or decree and except as would
not reasonably be expected to have in the aggregate a Company Material
Adverse Effect, a DuPont Material Adverse Effect or a Significant Adverse
Impact, no provision of any applicable law or regulation shall prohibit the
consummation of the Merger or the other transactions contemplated by this
Agreement; provided, however, that this condition shall be deemed satisfied
insofar as violations of laws and regulations are concerned if its failure
to in fact be satisfied is the result of DuPont having breached in any
material respect its obligations under Section 5.8 hereof.
(d) The Form S-4 shall have become effective under the Securities
Act and shall not be the subject of any stop order or proceedings seeking a
stop order, and any material "blue sky" and other state securities laws
applicable to the registration and qualification of the Common Stock
following the Closing shall have been complied with; and
(e) The DuPont Shares issuable in accordance with the Merger
shall have been approved for listing on the NYSE, subject to official
notice of issuance.
SECTION 6.2 Conditions to the Company's Obligation to Consummate
the Merger. The obligation of the Company to consummate the Merger shall be
further subject to the satisfaction or, to the extent permitted by
applicable law, the waiver on or prior to the Effective Time of each of the
following conditions:
(a) DuPont and Newco shall each have performed in all material
respects its respective agreements and covenants contained in or
contemplated by this Agreement that are required to be performed by it at
or prior to the Effective Time pursuant to the terms hereof;
(b) The representations and warranties of DuPont and Newco
contained in Article III hereof, without giving effect to any materiality
qualifications or limitations therein or any references therein to any
DuPont Material Adverse Effect, shall be true and correct in all respects
as of the Effective Time (or, to the extent such representations and
warranties speak as of an earlier date, they shall be true in all respects
as of such earlier date), except (i) as otherwise contemplated by this
Agreement and (ii) for such failures to be true and correct which in the
aggregate would not reasonably be expected to have a DuPont Material
Adverse Effect;
(c) The Company shall have received certificates signed by any
senior vice president of DuPont, dated the Closing Date, to the effect
that, to such officer's knowledge, the conditions set forth in Sections
6.2(a) and 6.2(b) hereof have been satisfied or waived; and
(d) The Company shall have received an opinion of Fried, Frank,
Harris, Shriver & Jacobson, its counsel, in form and substance reasonably
satisfactory to it, dated as of the Closing Date, to the effect that the
Merger will qualify for federal income tax purposes as a reorganization
within the meaning of Section 368(a) of the Code and, in rendering such
opinion, Fried, Frank, Harris, Shriver & Jacobson, shall be entitled to
rely upon the Representations Letters.
SECTION 6.3 Conditions to DuPont's and Newco's Obligations to
Consummate the Merger. The obligations of DuPont and Newco to effect the
Merger shall be further subject to the satisfaction, or to the extent
permitted by applicable law, the waiver on or prior to the Effective Time
of each of the following conditions:
(a) The Company shall have performed in all material respects
each of its agreements and covenants contained in or contemplated by this
Agreement that are required to be performed by it at or prior to the
Effective Time pursuant to the terms hereof;
(b) The representations and warranties of the Company contained
in Article IV hereof, without giving effect to any materiality
qualifications or limitations therein or any references therein to any
Company Material Adverse Effect, shall be true and correct in all respects
as of the Effective Time (or, to the extent such representations and
warranties speak as of an earlier date, they shall be true in all respects
as of such earlier date), except (i) as otherwise contemplated by this
Agreement and (ii) for such failures to be true and correct which in the
aggregate would not reasonably be expected to have a Company Material
Adverse Effect;
(c) DuPont shall have received a certificate signed by the chief
executive officer of the Company, dated the Closing Date, to the effect
that, to such officer's knowledge, the conditions set forth in Sections
6.3(a) and 6.3(b) hereof have been satisfied or waived;
(d) All foreign laws regulating competition, antitrust,
investment or exchange control shall have been complied with, and all
consents, approvals and actions of, filings with, and notices to, all
Governmental Entities required of DuPont, the Company or any of their
Subsidiaries in connection with the Merger shall have been made, obtained
or effected, as the case may be, except for those, the failure of which to
be made, obtained or effected, would not in the aggregate reasonably be
expected to have a Company Material Adverse Effect, a DuPont Material
Adverse Effect or a Significant Adverse Impact; provided, however, that
this condition shall be deemed satisfied if its failure to in fact be
satisfied is the result of DuPont having breached in any material respect
its obligations under Section 5.8 hereof.
(e) DuPont shall have received an opinion of Skadden, Arps,
Slate, Meagher & Flom LLP, its counsel, in form and substance reasonable
satisfactory to it, dated as of the Closing Date, to the effect that the
Merger will qualify for federal income tax purposes as a reorganization
within the meaning of Section 368(a) of the Code, and, in rendering such
opinion, Skadden, Arps, Slate, Meagher & Flom LLP shall be entitled to rely
upon the Representation Letters; and
(f) No suit, action, proceeding or investigation by any
Governmental Entity, including the European Commission or any organ of the
European Union, shall have been commenced (and be pending) against DuPont,
the Company or Newco or any of their respective affiliates, partners,
associates, officers or directors, or any officers or directors of such
partners, seeking (i) to prevent or delay the transactions contemplated
hereby, (ii) material damages in connection therewith, (iii) any other
remedy which would materially impair the intended benefits to DuPont of the
Merger or otherwise have a Company Material Adverse Effect, a DuPont
Material Adverse Effect or a Significant Adverse Impact or (iv) to impose
criminal liability on any of the foregoing Persons in connection with the
Merger (each of clauses (i)-(iv), a "Material Adverse Consequence") and in
each case, other than (iv), which is reasonably likely to result in a
Material Adverse Consequence; provided, however, that this condition shall
be deemed satisfied if its failure to in fact be satisfied is the result of
DuPont having breached in any material respect its obligations under
Section 5.8 hereof.
ARTICLE VII
TERMINATION
-----------
SECTION 7.1 Termination. This Agreement may be terminated at any
time prior to the Effective Time, by action taken or authorized by the
board of directors of the terminating party or parties, and except as
provided below, whether before or after approval of the matters presented
in connection with the Merger by the shareholders of the Company:
(a) By mutual written consent of DuPont and the Company;
(b) By either the Company or DuPont if the Effective Time shall
not have occurred on or before December 1, 1999 (as the same may be
extended by the second proviso below, the "Termination Date"); provided,
however, that the right to terminate this Agreement under this Section
7.1(b) shall not be available to any party whose failure to fulfill any
obligation under this Agreement (including without limitation such party's
obligations set forth in Section 5.8 hereof) has been the cause of, or
resulted in, the failure of the Effective Time to occur on or before the
Termination Date; provided, further that either party can extend the
Termination Date for up to 60 days to the extent necessary to permit the
S-4 Registration Statement to become effective, the Proxy Statement to be
mailed to Company shareholders and the Special Meeting to be held, but only
if all conditions other than those set forth in Sections 6.1(a) and (d)
hereof are satisfied prior to such extension.
(c) By either the Company or DuPont if any Governmental Entity
(i) shall have issued an order, decree or ruling or taken any other action
(which the parties shall have used their reasonable best efforts to resist,
resolve or lift, as applicable, in accordance with Section 5.8 hereof)
permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement, and such order, decree, ruling
or other action shall have become final and nonappealable or (ii) shall
have failed to issue an order, decree or ruling or to take any other action
(which order, decree, ruling or other action the parties shall have used
their reasonable best efforts to obtain, in accordance with Section 5.8
hereof), in the case of each of clause (i) and (ii) which is necessary to
fulfill the conditions set forth in subsections 6.1(b) and (c) hereof and
6.3(d) hereof, as applicable, and such denial of a request to issue such
order, decree, ruling or take such other action shall have become final and
nonappealable; provided, however, that the right to terminate this
Agreement under this Section 7.1(c) shall not be available to any party
whose failure to comply with Section 5.8 hereof has been the cause of such
action or inaction;
(d) By either the Company or DuPont if the approval by the
shareholders of the Company required for the consummation of the Merger
shall not have been obtained by reason of the failure to obtain the
Required Company Vote upon the taking of such vote at a duly held meeting
of shareholders of the Company or at any adjournment thereof;
(e) By DuPont, if the Board of Directors of the Company, prior to
obtaining the Company Required Vote, shall have (i) approved or recommended
an Acquisition Proposal or resolved to take, or announced an intention to
take, any such action, (ii) within ten business days after the receipt by
DuPont of notice of a Second Period Event, failed to unconditionally reject
and, if applicable, recommend against, the Acquisition Proposal referred to
in such notice (unless such Acquisition Proposal is a tender or exchange
offer covered by clause (iii) below), provided that DuPont shall not have
the right to exercise the termination right set forth in this clause (ii)
unless, within five business days of receipt of such notice, DuPont gives
the Company notice of its election to treat the balance of such ten
business day period (such remaining period a "New Termination Period") as a
period giving the Company an additional termination right under Section
7.1(i), or (iii) recommended acceptance of (or indicated or announced that
it is unable to take a position, will remain neutral or express no opinion
with respect to), or, within ten business days after the commencement
thereof, failed to recommend against or reject, a tender or exchange offer
for 20% of more of the outstanding shares of the Company or resolved to
take, or announced an intention to take, any such action;
(f) By DuPont, if the Board of Directors of the Company shall
have effected a withdrawal, modification or material qualification in any
manner adverse to DuPont of the Company Recommendation or take any action
or make any statement in connection with the Special Meeting materially
inconsistent with the Company Recommendation (collectively, an "Adverse
Change in the Company Recommendation")(or resolved to take such action),
whether or not any such action is in violation of this Agreement;
(g) By DuPont, (i) if a Share Acquisition Date shall have
occurred pursuant to the Rights Agreement (as in effect on the date of this
Agreement)or (ii) if the actions or events described in Section 5.1(n)
hereof shall occur without the prior written consent of DuPont, whether or
not such consent was required;
(h) By DuPont, if the Company shall have willfully and
intentionally breached any of its obligations under Section 5.5 hereof;
(i) By the Company, at any time prior to the approval of this
Agreement by the shareholders of the Company, in connection with and for
the purpose of accepting a particular Superior Proposal, if the Board of
Directors determines, after consultation with outside counsel and after
taking into account the provisions of IBCA ss.490.1108, that failure to
terminate this Agreement would be inconsistent with the Board's fiduciary
duties to shareholders; provided however that the Company shall not be
entitled to terminate this Agreement pursuant to this Section 7.1(i) after
the forty-fifth (45th) day after the date of this Agreement except during
any New Termination Period arising thereafter; or
(j) By the Company, if DuPont breaches the provisions of Section
5.2(c) hereof and such breach continues for 30 days prior to all applicable
waiting periods (including any extensions thereof) under the HSR Act
applicable to the consummation of the transactions contemplated by this
Agreement having expired or been terminated, for a period of 10 business
days after the Company learns of such breach; provided, however, that if
the applicable waiting periods (including any extensions thereof) expire or
terminate prior to a termination by the Company pursuant to this subsection
(j), the right of the Company to so terminate this Agreement pursuant to
this subsection (j) with respect to such breach shall terminate. The
parties recognize that in the event the Company terminates this Agreement
pursuant to this subsection (j) by reason of DuPont having acquired or
effected (or having entered into a written agreement or a written letter of
intent executed by DuPont (or a subsidiary thereof) and a company listed on
Schedule 7.1(j) to acquire or effect) a transaction prohibited by Section
5.2(c),(such a termination being referred to herein as a "Liquidated
Damages Termination"), the Company will suffer substantial harm that would
be difficult to measure and that could be subject to the risks and costs of
protracted litigation. Accordingly, the parties have agreed that to avoid
any such risks, it is preferable to provide for liquidated damages in the
event of such Liquidated Damages Termination. Therefore, in the event of a
Liquidated Damages Termination pursuant to this Section 7.1(j), (i) the
Company shall be entitled by giving notice to DuPont to purchase all of the
capital stock of the Company owned directly or indirectly by DuPont or its
Subsidiaries for a per share purchase price equal to 25% of the closing
price of the Common Stock on March 12, 1999 and (ii) there shall be deemed
to have occurred a Voluntary Default (as defined in the Formation
Agreement) by DuPont pursuant to Section 9.3(b) of the Formation Agreement
between DuPont and the Company, dated August 6, 1997 (the "Formation
Agreement"). The parties specifically agree that these damages are intended
to compensate the Company for its losses and are not intended to be a
penalty, and, except as otherwise provided in Section 8.6 hereof, shall be
the sole remedy of the Company and its affiliates for any such breach.
The party desiring to terminate this Agreement shall give written
notice of such termination to the other party.
SECTION 7.2 Effect of Termination. In the event of termination of
this Agreement by either the Company or DuPont as provided in Section 7.1
hereof, this Agreement shall forthwith become void and there shall be no
liability or obligation on the part of DuPont or the Company or their
respective officers or directors with respect to this Agreement or any
provision thereof except with respect to the second and third sentences of
Section 1.11 to the extent specified in such Section, Section 3.16, Section
4.12, Section 5.18 and Article VII hereof, which provisions shall survive
such termination in accordance with their terms, and except that,
notwithstanding anything to the contrary contained in this Agreement (other
than as provided in Section 7.1(j) hereof), neither DuPont nor the Company
shall be relieved or released from any liabilities or damages arising out
of its willful material breach of this Agreement.
ARTICLE VIII
MISCELLANEOUS
-------------
SECTION 8.1 Notices. All notices, requests, demands, waivers and
other communications required or permitted to be given under this Agreement
to any party hereunder shall be in writing and deemed given upon personal
delivery, transmitter's confirmation of a receipt of a facsimile
transmission, confirmed delivery by a standard overnight carrier or when
delivered by hand or when mailed in the United States by certified or
registered mail, postage prepaid, addressed at the following addresses (or
at such other address for a party as shall be specified by notice given
hereunder):
If to the Company, to:
Pioneer Hi-Bred International, Inc.
700 Capital Square
Des Moines, Iowa 50309
Attention: General Counsel
Telephone: (515) 248-4800
Facsimile: (515) 248-4844
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attention: Stephen Fraidin, P.C.
F. William Reindel
Telephone: (212) 859-8000
Facsimile: (212) 859-4000
If to DuPont or Newco, to:
E. I. du Pont de Nemours and Company
1007 Market Street
Wilmington, Delaware 19898
Attention: Roger W. Arrington, Esq.
Telephone: (302) 774-8571
Facsimile: (302) 773-5176
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022-9931
Attention: Lou R. Kling, Esq.
Eileen Nugent Simon, Esq.
Telephone: 212-735-3000
Facsimile: 212-735-2000
SECTION 8.2 Survival of Representations and Warranties. The
representations and warranties contained herein and in any certificate or
other writing delivered pursuant hereto shall not survive the Effective
Time. All other covenants and agreements contained herein which by their
terms are to be performed in whole or in part, or which prohibit actions,
subsequent to the Effective Time, shall survive the Merger in accordance
with their terms.
SECTION 8.3 Interpretation. References in this Agreement to
"reasonable best efforts" shall not require a Person obligated to use its
reasonable best efforts to obtain any consent of a third party to incur
out-of-pocket expenses or indebtedness or, except as expressly provided
herein, to institute litigation. References herein to the "knowledge of the
Company" shall mean the actual knowledge of the executive officers (as such
term is defined in Rule 3b-2 promulgated under the Exchange Act) of the
Company. Whenever the words "include," "includes" or "including" are used
in this Agreement they shall be deemed to be followed by the words "without
limitation." The phrase "made available" when used in this Agreement shall
mean that the information referred to has been made available if requested
by the party to whom such information is to be made available. As used in
this Agreement, the term "affiliate" shall have the meaning set forth in
Rule 12b-2 promulgated under the Exchange Act. Any information disclosed in
one schedule of the Company Disclosure Schedule (other than Schedules 5.2)
and 7.1(j) or the DuPont Disclosure Schedule shall be deemed disclosed for
the purposes of any other schedule of the Company Disclosure Schedule
(other than Schedules 5.2) and 7.1(j) or the DuPont Disclosure Schedule, as
the case may be. For purposes of this Agreement, DuPont shall be deemed to
own any shares of Common Stock that are owned by any wholly-owned
Subsidiary thereof.
The article and section headings contained in this Agreement are
solely for the purpose of reference, are not part of the agreement of the
parties hereto and shall not in any way affect the meaning or
interpretation of this Agreement. Any matter disclosed pursuant to any
Schedule of the Company Disclosure Schedule or the DuPont Disclosure
Schedule shall not be deemed to be an admission or representation as to the
materiality of the item so disclosed.
SECTION 8.4 Amendments, Modification and Waiver.
-----------------------------------
(a) Except as may otherwise be provided herein, any provision of
this Agreement may be amended, modified or waived by the parties hereto, by
action taken by or authorized by their respective Board of Directors, prior
to the Closing Date if, and only if, such amendment or waiver is in writing
and signed, in the case of an amendment, by the Company and DuPont or, in
the case of a waiver, by the party against whom the waiver is to be
effective; provided that after the approval of this Agreement by the
shareholders of the Company, no such amendment shall be made except as
allowed under applicable law.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 8.5 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns; provided that neither
the Company nor DuPont may assign, delegate or otherwise transfer any of
its rights or obligations under this Agreement without the consent of the
other parties hereto. Notwithstanding anything to the contrary herein,
DuPont and Newco may assign any of their rights hereunder to any
wholly-owned Subsidiary of DuPont; provided that DuPont shall be liable for
the failure of any such Subsidiary to perform its obligations hereunder.
SECTION 8.6 Specific Performance. The parties acknowledge and
agree that any breach of the terms of this Agreement, including Sections
5.2(c), (d) and (e) and 5.8 hereof, would give rise to irreparable harm for
which money damages would not be an adequate remedy and accordingly the
parties agree that, in addition to any other remedies, each shall be
entitled to enforce the terms of this Agreement by a decree of specific
performance without the necessity of proving the inadequacy of money
damages as a remedy.
SECTION 8.7 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York
(regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof) as to all matters, including, but
not limited to, matters of validity, construction, effect, performance and
remedies, except that the Merger shall be subject to, and in accordance
with, the laws of the State of Iowa.
SECTION 8.8 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated herein are not
affected in any manner materially adverse to any party hereto. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner.
SECTION 8.9 Third Party Beneficiaries. This Agreement is solely
for the benefit of the Company and its successors and permitted assigns,
with respect to the obligations of DuPont and Newco under this Agreement,
and for the benefit of DuPont and Newco, and their respective successors
and permitted assigns, with respect to the obligations of the Company under
this Agreement, and this Agreement shall not, except to the extent
necessary to enforce the provisions of Article I and Sections 5.6 and
5.11(e) hereof, be deemed to confer upon or give to any other third party
any remedy, claim, liability, reimbursement, cause of action or other
right.
SECTION 8.10 Entire Agreement. Subject to the provisions of
Section 5.18 hereof, this Agreement, including any exhibits or schedules
hereto constitutes the entire agreement among the parties hereto with
respect to the subject matter hereof and supersedes all other prior
agreements or understandings, both written and oral, between the parties or
any of them with respect to the subject matter hereof.
SECTION 8.11 Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be deemed an
original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement shall become effective when each
party hereto shall have received counterparts hereof signed by all of the
other parties hereto.
SECTION 8.12 Petroleum Subsidiaries. The Company acknowledges
that DuPont has announced its intention to dispose of the remaining shares
of capital stock of Conoco held directly or indirectly by DuPont. Neither
Conoco nor any Subsidiary of Conoco shall be deemed to be a Subsidiary of
DuPont for purposes of this Agreement. No action taken by Conoco or any of
its Subsidiaries, or DuPont or any of its Subsidiaries in connection with
Conoco, prior to or following the date hereof, including a spin-off, a
split-off (any transaction in which Conoco stock is distributed by DuPont
in exchange for DuPont Common Stock is referred to herein as a "Conoco
Exchange Offer"), sale or other disposition in one or more transactions of
the remaining shares of Conoco owned directly or indirectly by DuPont, and
any matter related to any such action, shall be limited by any of the
provisions hereof or taken into account for purposes of determining whether
there is a breach of any representation or warranty, covenant or other
obligation or agreement of DuPont in or under this Agreement. The Company
shall cooperate with DuPont to the extent reasonably requested by DuPont in
connection with any such action or transaction described in this Section
8.12.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day
and year first above written.
PIONEER HI-BRED INTERNATIONAL, INC.
By: /s/ Charles Johnson
-----------------------------------
Name:
Title:
E. I. DU PONT DE NEMOURS AND COMPANY
By: /s/ Charles O. Holliday, Jr.
-----------------------------------
Name:
Title:
DELTA ACQUISITION SUB, INC.
By: /s/ Gary M. Pfeiffer
-----------------------------------
Name:
Title:
