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As filed with the Securities and Exchange Commission on June 3, 1999
Registration No. 333-[ ]
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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DANAHER CORPORATION
(Exact name of Registrant as Specified in Its Charter)
59-1995548
Delaware 3420 (I.R.S. Employer
(State or other (Primary Standard Identification No.)
jurisdiction of Industrial Classification
incorporation or Code Number)
organization)
1250 24th Street, N.W.
Washington, D.C. 20037
(202) 828-0850
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Patrick W. Allender
Senior Vice President and Chief Financial Officer
Danaher Corporation
1250 24th Street, N.W.
Washington, D.C. 20037
(202) 828-0850
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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With copies to:
Trevor S. Norwitz, Esq. Robert O. Case, Esq.
Wachtell, Lipton, Rosen & Katz McBride Baker & Coles 500 West Madison
51 West 52nd Street Street 40th Floor
New York, NY 10019-6150 Chicago, Illinois 60661-2511(312) 715-
(212) 403-1000 5700
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement and upon
the earlier to occur of the effective time of the merger (the "Merger") of the
wholly owned subsidiary of the Registrant with Hach Company ("Hach"), which
shall occur as soon as practicable after the satisfaction or waiver of all
conditions to the closing of the Merger, or the issuance of shares in exchange
for the assets of C&K Enterprises, Ltd. ("C&K"), which shall occur as soon as
practicable after the satisfaction of all conditions to closing of the
reorganization of C&K (the "C&K Reorganization").
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If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Amount Proposed Maximum Proposed Maximum
Title of each Class of to be Offering Price Aggregate Amount of
Securities to be Registered Registered(1) Per Share Offering Price(2) Registration Fee(3)
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<S> <C> <C> <C> <C>
Common Stock, $0.01 par value........ 6,813,402 Not applicable $389,900,068.69 $37,616
</TABLE>
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(1) Represents the number of shares of Common Stock of the Registrant that may
be issued to former stockholders of Hach pursuant to the Merger, giving
effect to the exercise of outstanding options or other rights to purchase
Hach Common Stock and Hach Class A Common Stock outstanding, and to former
stockholders of C&K pursuant to the C&K Reorganization, assuming, in each
case, an exchange ratio of 0.2987 of a share of Common Stock of the
Registrant for each share of Hach Common Stock and Hach Class A Common
Stock pursuant to the Merger and the C&K Reorganization (including certain
shares that may be resold as described herein).
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(f)(1) and Rule 457(c) of the Securities Act based on
the average of the high and low sale prices of Hach Common Stock of $17 1/8
and the average of the high and low sale prices of Hach Class A Common
Stock of $17 1/16, as reported on the Nasdaq National Market System on May
27, 1999.
(3) Pursuant to Rule 457(b) of the Securities Act, the total registration fee
of $108,393 was reduced in amount by $70,777, the filing fee paid by Hach
pursuant to Exchange Act Rule 0-11 in connection with the filing of the
preliminary information statement materials of Hach with the Securities and
Exchange Commission on May 11, 1999.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until this Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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<PAGE>
HACH COMPANY
INFORMATION STATEMENT
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DANAHER CORPORATION
PROSPECTUS
We are sending you this information statement/prospectus to describe the
proposed merger between Hach Company and a wholly owned subsidiary of Danaher
Corporation. When we complete this merger, Hach will become a subsidiary of
Danaher, and you will exchange your shares of Hach common stock and Hach Class
A common stock for shares of Danaher common stock. You will receive .2987 of a
share of Danaher common stock for each of your shares of Hach common stock and
Hach Class A common stock, subject to adjustment in certain circumstances. We
will round the total number of shares of Danaher common stock you receive down
to the nearest whole number of shares, and you will receive a cash payment for
any remaining fraction.
Hach's controlling stockholders, Kathryn C. Hach-Darrow and Bruce J. Hach,
have already approved the merger by signing a written consent of stockholders.
No further vote of Hach stockholders is necessary to approve and adopt the
merger agreement and the merger. We are not asking you for a proxy and you are
requested not to send us a proxy. As we explain in this information
statement/prospectus, however, completion of the merger is still subject to
satisfaction or waiver of a number of conditions, including various regulatory
approvals. We cannot predict with certainty when we will complete the merger,
but we hope to complete it in the second or third quarter of 1999.
This information statement/prospectus is also Danaher's prospectus for the
shares of Danaher common stock that it will issue to Hach stockholders in the
merger and pursuant to related transactions. Danaher will list the shares of
its common stock to be issued in this merger on the New York Stock Exchange.
------------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved of the merger or the securities to be issued under this
information statement/prospectus or determined if the information
statement/prospectus is accurate or adequate. Any representation to the
contrary is a criminal offense.
This information statement/prospectus is dated June 3, 1999, and was first
mailed to stockholders of Hach on or about June 7, 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Page
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QUESTIONS AND ANSWERS ABOUT THE MERGER.................................... 1
SUMMARY................................................................... 3
The Companies........................................................... 3
The Controlling Stockholders............................................ 3
Reasons for the Merger.................................................. 4
No Further Stockholder Approval Required; Hach Board Approval........... 4
Fairness Opinion........................................................ 4
The Merger.............................................................. 4
The Merger Agreement.................................................. 4
What You Will Receive in the Merger................................... 4
Conditions to the Merger.............................................. 5
Regulatory Approvals.................................................. 5
Certain Federal Income Tax Consequences............................... 5
Accounting Treatment.................................................. 6
Termination........................................................... 6
Effects of the Merger on the Rights of Hach Stockholders.............. 6
Interests of Officers, Directors and the Controlling Stockholders in
the Merger........................................................... 6
No Dissenters' Rights................................................... 7
SUMMARY HISTORICAL AND UNAUDITED PRO FORMA FINANCIAL INFORMATION.......... 8
Hach Summary Historical Financial Information........................... 8
Danaher Summary Historical Financial Information........................ 9
Selected Unaudited Pro Forma Combined Summary Financial Information..... 10
Comparative Per Share Data.............................................. 11
Market Price and Dividend Data.......................................... 12
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS................ 13
THE MERGER................................................................ 14
General................................................................. 14
Background of the Merger................................................ 15
Hach's Reasons for the Merger; Recommendation of the Hach Board......... 16
Danaher's Reasons for the Merger........................................ 18
Opinion of the Investment Banker for the Hach Board..................... 18
Historical Hach Stock Price Review.................................... 19
Public Market Valuation............................................... 20
Selected Transactions Analysis........................................ 21
Discounted Cash Flow Analysis......................................... 21
Pro Forma Contribution Analysis....................................... 21
Pro Forma Merger Analysis............................................. 22
Other Analyses........................................................ 22
Special Considerations................................................ 22
Fee Calculation....................................................... 22
Interests of Certain Persons in the Merger.............................. 23
Ownership and Voting Stock............................................ 23
Hach Non-Employee Directors' Bonus Compensation Plan.................. 23
Hach Employment Agreements............................................ 23
Effective Time of the Merger............................................ 25
Certificate of Incorporation and Bylaws................................. 25
Certain Federal Income Tax Consequences................................. 25
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Accounting Treatment.................................................... 26
Regulatory Approvals.................................................... 27
Listing of Shares of Danaher Common Stock on the NYSE................... 27
Resale of Shares of Danaher Common Stock Issued in the Merger;
Affiliates............................................................. 28
No Appraisal Rights..................................................... 28
THE MERGER AGREEMENT...................................................... 29
The Merger.............................................................. 29
Consideration To Be Received In The Merger; Exchange Ratio.............. 29
Treatment of Hach Stock Held by Hach, Danaher and Merger Sub.......... 29
Procedures For Surrender Of Hach Certificates; Fractional Shares........ 29
Surrender of Hach Certificates........................................ 29
Fractional Shares..................................................... 30
Representations And Warranties.......................................... 30
Covenants............................................................... 31
Conduct of Business................................................... 31
No Solicitation....................................................... 32
Benefit Plans and Employee Matters in General......................... 32
Hach Stock Options.................................................... 32
Hach Deferred Compensation Plan....................................... 33
Hach Employee Stock Purchase Plan..................................... 33
Insurance and Indemnification......................................... 33
Fees and Expenses..................................................... 33
Tax Treatment......................................................... 33
Accounting Treatment.................................................. 33
Public Announcements.................................................. 33
All Reasonable Efforts................................................ 34
Additional Covenants.................................................. 34
Conditions.............................................................. 34
Termination............................................................. 35
Amendments.............................................................. 36
Extension; Waiver....................................................... 36
OTHER AGREEMENTS.......................................................... 37
Stockholders Support Agreement.......................................... 37
Agreement to Support Transaction...................................... 37
Covenant Not to Compete............................................... 38
Covenant Not to Solicit............................................... 38
Registration Rights Agreement........................................... 38
Agreement and Plan of Reorganization.................................... 38
COMPARISON OF STOCKHOLDER RIGHTS.......................................... 40
Summary of Material Differences Between Current Rights of Hach
Stockholders and Rights Those Stockholders Will Have as Danaher
Stockholders Following the Merger...................................... 40
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION........................ 46
UNAUDITED PRO FORMA COMBINED BALANCE SHEET................................ 46
UNAUDITED PRO FORMA COMBINED STATEMENTS OF EARNINGS....................... 47
Notes to Pro Forma Combined Financial Information (Unaudited)........... 49
EXPERTS................................................................... 50
LEGAL MATTERS............................................................. 50
WHERE YOU CAN FIND MORE INFORMATION....................................... 50
</TABLE>
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Page
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APPENDICES
APPENDIX A -- Agreement and Plan of Merger, dated as of April 21, 1999,
among Danaher, Merger Sub and Hach........................ A-1
APPENDIX B -- Stockholders Support Agreement, dated as of April 21,
1999, by and among Danaher, on the one hand, and Kathryn
C. Hach-Darrow and Bruce J. Hach, on the other hand....... B-1
APPENDIX C -- Written Consent of Controlling Stockholders of Hach dated
April 21, 1999............................................ C-1
APPENDIX D -- Form of Registration Rights Agreement between Danaher and
Kathryn C. Hach-Darrow.................................... D-1
APPENDIX E -- Agreement and Plan of Reorganization, dated as of April
21, 1999, among Danaher, C&K Enterprises, Ltd., and
Kathryn C. Hach-Darrow and Bruce J. Hach.................. E-1
APPENDIX F -- Opinion of Lazard Freres & Co. LLC........................ F-1
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This document incorporates important business and financial information
about Hach and Danaher that is neither included in nor delivered with this
document. Hach will provide you with copies of this information, without
charge, upon written or oral request to:
Hach Company
5600 Lindbergh Drive
Loveland, Colorado 80538
Tel.: (970) 669-3050
Attention: Chief Financial Officer
website: http://www.hach.com
Danaher will provide you with copies of this information relating to
Danaher, without charge, upon written or oral request to:
Danaher Corporation
1250 24th Street, N.W.
Washington, D.C. 20037
Telephone: (202) 828-0850
Attention: Corporate Secretary
Website: http://www.danaher.com
In order to receive timely delivery of the documents, you should make your
request no later than June 25, 1999.
iv
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QUESTIONS AND ANSWERS ABOUT THE MERGER
Q. What is the proposed transaction?
A. Hach will merge with a subsidiary of Danaher. As a result, Hach will become
a wholly owned subsidiary of Danaher, and Hach stockholders will exchange
their shares of Hach common stock and Hach Class A common stock for shares
of Danaher common stock.
Q. What will I receive in the merger?
A. Each share of Hach common stock and Hach Class A common stock that you own
will be exchanged for .2987 of a share of Danaher common stock, subject to
adjustment as described below. You will receive a cash payment in place of
any fractional share of Danaher common stock you would have otherwise
received.
For example, if you own 60 shares of Hach common stock and 40 shares of
Hach Class A common stock, you will receive 29 shares of Danaher common
stock plus cash equal to the market value of eighty-seven one hundredths of
a share of Danaher common stock at the time of the merger (about $53.29
based on Danaher's closing price of $61.25 on June 2, 1999). If you own
5,000 shares of Hach common stock and 5,000 shares of Hach Class A common
stock, you will receive 2,987 shares of Danaher common stock and no cash
payment. The total value of the shares of Danaher common stock Danaher will
issue in this transaction, based on the closing price per share of Danaher
common stock of $61.25 on June 2, 1999, is about $417 million.
Q. Will the exchange ratio change between now and the time the merger is
completed?
A. The .2987 exchange ratio may change. It will stay the same if the price of
Danaher common stock measured shortly before the closing of the merger
stays between $57.09 and $73.41.
If the Danaher stock price falls below $57.09 (so that the value of Danaher
common stock you would receive per share of Hach stock you hold falls below
$17.05), then Hach may elect to terminate the merger agreement. If Hach
does so elect, Danaher may prevent such a termination of the merger
agreement by increasing the exchange ratio to provide you with
approximately $17.05 in value of Danaher common stock per share of Hach
stock you hold.
If the Danaher stock price is above $73.41 (so that the value of Danaher
common stock you would receive per share of Hach stock you hold is above
$21.93), then Danaher may elect to terminate the merger agreement. If
Danaher does so elect, Hach may prevent such a termination of the merger
agreement by decreasing the exchange ratio to provide you with
approximately $21.93 in value of Danaher common stock per share of Hach
stock you hold.
You can obtain current information on the exchange ratio by calling toll-
free 1-800-568- 3476.
Q. Will the value of the transaction change between now and the time the
merger is completed?
A. In all likelihood it will. The value of the transaction may fluctuate
between the date of this information statement/prospectus and the
completion of the merger, based upon the market price for Danaher common
stock. In the merger you will receive a fraction of a share of Danaher
common stock that (within the limits described above) is fixed but may
change depending on the price of Danaher common stock. Any fluctuation in
the market price of Danaher common stock will change the value of the
shares of Danaher common stock that you will receive.
Q. Why is there no stockholder vote?
A. Immediately after Danaher, Hach and the merger subsidiary signed the merger
agreement, Kathryn C. Hach-Darrow and Bruce J. Hach, as controlling
stockholders, gave their written consent to the merger. At that time Mrs.
Hach-Darrow and Mr. Hach held and had voting power over approximately 53%
of the outstanding Hach common stock and approximately 55% of the
outstanding Hach Class A common stock, which represented
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approximately 53% of the outstanding Hach stock entitled to vote on the
merger. Their written consent to the merger met the stockholder approval
requirements for the merger under Delaware law, the Hach restated
certificate of incorporation and Hach bylaws, so no additional stockholder
vote is necessary.
Q. What will the controlling stockholders receive in the merger and what will
they be required to do?
A. Even though the controlling stockholders held a majority of shares of Hach
common stock and Hach Class A common stock at the time of the stockholder
action by written consent, they will not receive a control premium but will
exchange their shares of Hach stock for Danaher shares at the same .2987
exchange ratio as all other Hach stockholders.
In a stockholders support agreement entered into at the same time as the
merger agreement, the controlling stockholders agreed to vote to approve
and adopt the merger agreement and the merger, to take additional action in
furtherance of the merger, and to abide by certain restrictions on their
future activities with respect to Hach's businesses set forth in that
agreement.
Mrs. Hach-Darrow also agreed to a form of registration rights agreement
with Danaher, which will provide her with rights to have the shares of
Danaher common stock she will receive in the merger registered for sale
under the securities laws, so that the shares of Danaher common stock she
receives in the merger will be as freely tradable as the shares received by
other former Hach stockholders.
Pursuant to an agreement and plan of reorganization, Danaher, C&K
Enterprises, Ltd., a corporation whose only assets are shares of Hach
stock, and the controlling stockholders of C&K (who are Kathryn C. Hach-
Darrow and Bruce J. Hach), agreed that C&K will exchange its shares of Hach
stock for shares of Danaher common stock immediately before completion of
the merger. In that exchange, C&K will receive the same consideration that
the other Hach stockholders will receive in the merger.
Please see pages 37 through 39 for more information concerning these
agreements.
Q. Am I entitled to appraisal rights?
A. No. Under Delaware law, which governs the merger, you are not entitled to
appraisal rights.
Q. What do I need to do now?
A. Nothing. After the merger is completed, you will receive written
instructions and a letter of transmittal for exchanging your shares of Hach
common stock and Hach Class A common stock for shares of Danaher common
stock and receiving your cash payment in place of any fraction of a share
of Danaher common stock. Please do not send your share certificates until
you receive the instructions and letter of transmittal.
Q. Should I send in my stock certificates now?
A. No. As soon as practicable after the merger is completed, Danaher will send
Hach stockholders written instructions for exchanging their share
certificates, together with a letter of transmittal for such certificates.
Q. When do you expect to complete the merger?
A. We are working toward completing the merger as quickly as possible. We must
still obtain certain regulatory approvals before we can close, but we hope
to complete the merger in the second or third quarter of this year.
However, delays in obtaining regulatory approvals could delay the merger.
Q. Where can I find more information about Danaher and Hach?
A. More information about Danaher and Hach is available from various sources
described under "Where You Can Find More Information" on page 50 of this
information statement/prospectus.
Q. Who can help answer my questions?
If you have more questions about the merger, you should contact:
Hach Company
5600 Lindbergh Drive
Loveland, Colorado 80538
Tel.: (970) 669-3050
Attention: Chief Financial Officer
website: http://www.hach.com
To obtain Danaher common stock quotations and the exchange ratio, call toll
free 1-800-568-3476.
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SUMMARY
This summary highlights selected information from this document and may not
contain all of the information that is important to you. To better understand
the merger and for a more complete description of the legal terms of the
merger, you should read carefully this entire document and the documents to
which we have referred you.
The Companies
HACH COMPANY
Hach Corporation
5600 Lindbergh Drive
Loveland, Colorado 80538
Telephone: (970) 669-3050
Attention: Chief Financial Officer
website: http://www.hach.com
Hach, a Delaware corporation, is engaged in the manufacture and distribution
of laboratory instruments, process analyzers, test kits, test strips and
analytical reagents which are used to analyze the chemical content and other
properties of water and other aqueous solution.
DANAHER CORPORATION
1250 24th Street, N.W.
Washington, D.C. 20037
Telephone: (202) 828-0850
Attention: Corporate Secretary
Website: http://www.danaher.com
Danaher, a Delaware corporation, conducts its operations through two
business segments. The process/environmental controls segment is comprised of
the Fluke Corporation, Veeder-Root Company, Danaher Controls, Partlow/West,
Anderson Instruments, West Instruments, QualiTROL Corporation, A.L. Hyde
Company, Hengstler, McCrometer, the controls product line business units of
Joslyn Corporation and Pacific Scientific Company, Namco Controls, Dolan-
Jenner, M&M Precision Systems, Communications Technology Corporation, Gems
Sensors and Dr. Bruno Lange GmbH. These companies produce and sell compact,
professional electronic test tools, underground storage tank leak detection
systems and motion, position, speed, temperature, level and position
instruments and sensing devices, power switches and controls, communication
line products, power protection products, liquid flow and quality measuring
devices, quality assurance products and systems, safety devices and electronic
and mechanical counting and controlling devices.
Danaher's other segment--tools and components--is comprised of the Danaher
Hand Tool Group (including Special Markets, Professional Tool Division and
Asian Tool Division), Matco Tools, Jacobs Chuck Manufacturing Company, Delta
Consolidated Industries, Jacobs Vehicle Systems Company, Hennessy Industries
and the hardware and electrical apparatus lines of Joslyn Manufacturing
Company. This segment is one of the largest domestic producers and distributors
of general purpose mechanics' hand tools and automotive specialty tools. Other
products manufactured by these companies include tool boxes and storage
devices, diesel engine retarders, wheel service equipment, drill chucks, custom
designed headed tools and components, hardware and components for the power
generation and transmission industries, high quality precision socket screws,
fasteners, and high quality miniature precision parts.
H2O ACQUISITION CORP.
c/o Danaher Corporation
1250 24th Street, N.W.
Washington, D.C. 20037
Telephone: (202) 828-0850
Attention: Corporate Secretary
H2O Acquisition Corp. is a Delaware corporation and a wholly owned
subsidiary of Danaher formed solely for the purpose of effecting the merger
with Hach.
The Controlling Stockholders
Kathryn C. Hach-Darrow is the chairman of Hach. Bruce J. Hach is the
president and chief executive officer of Hach. As of April 21, 1999, the date
that Mrs. Hach-Darrow and Mr. Hach signed and delivered the written consent of
Hach stockholders approving and adopting the merger
3
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agreement and the merger to Hach, they had voting power over approximately 53%
of the outstanding Hach common stock and held approximately 55% of the
outstanding Hach Class A common stock.
Reasons for the Merger
The Board of Directors of Hach believes that the merger provides Hach
stockholders with an investment in a larger and more diversified enterprise
that is well positioned to take advantage of new opportunities and to meet
competitive challenges in a manner that will enhance stockholder value for Hach
stockholders for various reasons, including the following:
. The merger is expected to provide Hach stockholders with shares of
Danaher common stock in a tax-free exchange at a significant premium
over the market price for shares of Hach common stock and Hach Class A
common stock prior to the public announcement of the merger agreement.
. The merger will provide Hach stockholders who desire more liquidity for
their investment with access to the more active trading market for
shares of Danaher common stock.
. The merger will allow those Hach stockholders who wish to continue their
investment in the water analysis industry to do so through their
holdings of Danaher common stock.
The Board of Directors of Danaher believes that the merger is in the best
interest of Danaher and its stockholders. Danaher expects to benefit from
Hach's products, market presence and people. Danaher believes that the addition
of Hach will enable Danaher to expand its product line, thereby creating
positive prospects for both stockholder value enhancement and improved customer
satisfaction in the future.
Please note that achieving these benefits is subject to important factors
that could affect the future results of Hach and Danaher. For a discussion of
these factors, please see "Cautionary Statement Concerning Forward-Looking
Statements" on page 13.
No Further Stockholder Approval Required; Hach Board Approval
We are not asking you to vote on the merger. On April 21, 1999, the
controlling stockholders, who on that date together held about 53% of Hach's
voting power, voted by written consent to approve and adopt the merger
agreement and the merger. Their vote was sufficient for stockholder approval
and adoption of the merger agreement and the merger under Delaware law, the
Hach restated certificate of incorporation and the Hach bylaws.
The Hach Board believes that the merger is advisable and fair and in the
best interest of Hach and Hach's stockholders. The Hach Board has unanimously
approved and adopted the merger agreement and the merger.
Fairness Opinion
Lazard Freres & Co. LLC, Hach's investment banker, has given a written
fairness opinion to the Hach Board to the effect that the exchange ratio is
fair to Hach's stockholders, taken as a whole, from a financial point of view.
This opinion is subject to the qualifications and limitations referred to in
the opinion.
We have attached a copy of Lazard's fairness opinion as Appendix F to this
information statement/prospectus. We encourage you to read this opinion.
The Merger
The Merger Agreement. (See page 29)
The merger agreement is the legal document that governs the merger. It is
attached as Appendix A to this information statement/prospectus, and we
encourage you to read it carefully.
What You Will Receive in the Merger. (See page 29)
Each share of Hach common stock and Hach Class A common stock that you own
will be converted into a fraction of a share of Danaher common stock. This
fraction will be .2987 as long as the average daily last sale price of Danaher
common stock for the 15 consecutive trading days ending on the date the last of
the mutual conditions
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to the merger agreement is satisfied or waived (which is referred to as the
average Danaher stock price) is between $57.09 and $73.41.
. If the average Danaher stock price falls below $57.09, such that the
value of Danaher common stock you would receive per share of Hach stock
falls below $17.05, then Hach may elect to terminate the merger
agreement. If Hach does so elect, Danaher may prevent such a termination
of the merger agreement by increasing the exchange ratio to provide you
with $17.05 in value of Danaher common stock per share of Hach stock,
based upon the average Danaher stock price.
. If the average Danaher stock price is above $73.41, such that the value
of Danaher common stock you would receive per share of Hach stock is
above $21.93, then Danaher may elect to terminate the merger agreement.
If Danaher does so elect, Hach may prevent such a termination of the
merger agreement by decreasing the exchange ratio to provide you with
$21.93 in value of Danaher common stock per share of Hach stock, based
upon the average Danaher stock price.
Conditions to the Merger. (See page 34)
The completion of the merger depends upon meeting a number of conditions,
including:
. approval for listing on the NYSE of shares of Danaher common stock
issuable in the merger;
. no pending litigation by a governmental entity which seeks to enjoin or
prohibit completion of the merger, and no effective injunction, order or
legal restraint preventing the completion of the merger;
. expiration or termination of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended;
. other regulatory approvals and consents;
. receipt of legal opinions about certain tax consequences of the merger;
. receipt of an opinion from Danaher's independent auditor to the effect
that the merger will be required to be accounted for as a pooling-of-
interests;
. representations and warranties of each of Danaher and Hach contained in
the merger agreement remaining true and correct at the closing except
for such failures to be true and correct as could not, individually or
in the aggregate, reasonably be expected to have a material adverse
effect on the party whose representations and warranties are not true
and correct; and
. each of Danaher and Hach having complied in all material respects with
its covenants under the merger agreement.
The Danaher merger will occur, and your shares of Hach common stock and Hach
Class A common stock will be exchanged for shares of Danaher common stock, no
later than two days after Hach and Danaher satisfy or waive all of the
conditions specified in the merger agreement.
Regulatory Approvals. (See page 27)
Danaher and Hach are both required to make filings with or obtain approvals
from certain United States and international regulatory authorities in
connection with the merger, including United States antitrust authorities. The
waiting period during which the U.S. regulatory authorities review the merger
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
will expire on June 6, 1999 unless extended by a request for additional
information or documentary materials. We believe that all other material
notifications, filings and approvals have been made or obtained, or will be
made or obtained prior to the date of the merger.
Certain Federal Income Tax Consequences. (See page 25)
Danaher and Hach expect the merger to be tax free to Hach stockholders
(except for tax payable on cash received by Hach stockholders instead of
fractional shares of Danaher common stock). Hach and Danaher each must receive,
as a condition to the merger, an opinion of legal counsel that the merger will
qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code, and Hach must receive, as a condition to the merger, an
5
<PAGE>
opinion of legal counsel that neither Hach nor any of its stockholders will
recognize any gain or loss for federal income tax purposes as a result of the
merger or receipt of the merger consideration (except with respect to cash
paid instead of fractional shares).
Accounting Treatment. (See page 26)
We expect that Danaher will account for the merger as a "pooling of
interests," which means that the book value of the assets, liabilities and
stockholders' equity of Hach will be carried over to the consolidated balance
sheet of Danaher, and no new goodwill will be created for Danaher. It is a
condition to the closing of the merger that Danaher receive a letter from
Danaher's independent auditor to the effect that the merger is required to be
accounted for as a pooling-of-interests. Hach must use its reasonable best
efforts to take any action, and to cure any prior action, that would prevent
the merger being accounted for as a pooling of interests, including the
issuance of certain shares of Hach common stock and Hach Class A common stock
from Hach's treasury.
Termination. (See page 35)
The merger agreement may be terminated, and the merger abandoned, only in a
very limited number of circumstances, including, among other things, the
following:
. if the merger is not completed by October 31, 1999;
. if either Danaher or Hach breaches its representations, warranties,
covenants or agreements such that the conditions to closing would not be
able to be satisfied by October 31, 1999;
. if any governmental entity issues an order, decree or ruling or takes
any action permanently enjoining or otherwise prohibiting the completion
of the merger, and such order, ruling or other action has become final
and nonappealable;
. if the parties agree to terminate the merger agreement; or
. if the average Danaher stock price is more than $73.41 or less than
$57.09
(such termination right being subject to the right of Danaher or Hach to
prevent termination by adjusting the exchange ratio as described above).
Effects of the Merger on the Rights of Hach Stockholders. (See page 40)
As a result of the merger, you will become a stockholder of Danaher.
Danaher is governed by Delaware corporate law, like Hach, and by its
certificate of incorporation and bylaws. Your rights under these provisions
will differ in certain respects from your rights as a stockholder of Hach.
Interests of Officers, Directors and the Controlling Stockholders in the
Merger. (See page 23)
Hach executive officers, directors and controlling stockholders have
certain interests in the merger that include:
. accelerated vesting of stock options and distributions under certain
benefit plans;
. employment arrangements and change of control agreements; and
. indemnification and directors' and officers' liability insurance
policies.
The executive officers and directors have stock options that will become
immediately exercisable as a result of the merger and will be converted under
the terms of the merger agreement into Danaher common shares. As of June 2,
1999, the executive officers and directors of Hach held stock options to
purchase an aggregate of 438,087 shares of Hach stock.
Certain directors will also receive payments under a bonus compensation
plan of Hach that will terminate as a result of the merger.
Danaher has also agreed to provide Kathryn Hach-Darrow with registration
rights with respect to the Danaher common stock she will receive in the
merger, in order to make the shares of Danaher common stock she receives in
the merger as freely tradable as the shares of Danaher common stock received
by other Hach stockholders in the merger. See page 38 for a description of
these rights.
6
<PAGE>
In assessing the fairness of the merger to stockholders of Hach, the Hach
Board took into account all of these interests. These interests are different
from and in addition to your interests as stockholders.
No Dissenters' Rights
Delaware law does not provide for any dissenters' rights to an appraisal for
Hach stockholders in connection with the merger.
7
<PAGE>
SUMMARY HISTORICAL AND UNAUDITED
PRO FORMA FINANCIAL INFORMATION
Hach Summary Historical Financial Information
The summary historical financial information of Hach set forth below for
each of the years in the five-year period ended April 30, 1998 has been derived
from the historical financial statements of Hach. The summary historical
financial information for Hach for the three quarters ended January 30, 1999
and January 31, 1998 has been obtained from the unaudited financial statements
of Hach which, in the opinion of management of Hach, include all adjustments of
a normal and recurring nature that are necessary to present fairly the
information for such periods. Such financial information should be read in
conjunction with the financial statements of Hach and other financial
information incorporated by reference in this information statement/prospectus.
<TABLE>
<CAPTION>
Fiscal Year Ended April 30, Nine Months Ended
-------------------------------------------- -----------------------
January 31, January 30,
1994 1995 1996 1997 1998 1998 1999
-------- -------- -------- -------- -------- ----------- -----------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings Statement Data:
Net Revenues............ $100,369 $105,269 $114,285 $121,480 $128,058 $94,293 $103,258
Net Earnings before
cumulative effect of
change in accounting
principles............. 9,060 9,270 11,254 12,495 9,100 8,675 8,815
Earnings per share
before cumulative
effect of change in
accounting principles:
Basic................. $ 0.40 $ 0.41 $ 0.50 $ 0.55 $ 0.52 $ 0.48 $ 0.51
Diluted............... $ 0.40 $ 0.41 $ 0.50 $ 0.55 $ 0.51 $ 0.48 $ 0.51
Cash Dividends declared
per share:
Common................ $ 0.07 $ 0.09 $ 0.11 $ 0.12 $ 0.12 $ 0.09 $ 0.09
Class A............... $ 0.07 $ 0.09 $ 0.11 $ 0.12 $ 0.14 $ 0.10 $ 0.12
Balance Sheet Data:
Total Assets............ 74,358 84,258 93,655 105,580 102,350 80,866 102,144
Total Debt.............. -- -- -- -- 37,274 30,230 31,154
Stockholders' Equity.... 62,497 71,328 78,820 87,289 39,819 34,007 48,958
</TABLE>
- --------
Note 1: All share and per share amounts have been restated to give effect to
adoption of SFAS No. 128 in the third quarter of the fiscal year 1998
and the two-for-one stock split in October 1997.
8
<PAGE>
Danaher Summary Historical Financial Information
The summary historical information of Danaher set forth below has been
derived from and should be read in conjunction with the audited financial
statements and other financial information incorporated by reference in this
information statement/prospectus.
<TABLE>
<CAPTION>
Fiscal Year Ended December 31, Three Months Ended
------------------------------------------------------ -------------------
1994 1995 1996 1997 1998 03/27/98 04/02/99
---------- ---------- ---------- ---------- ---------- --------- ---------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings Statement Data:
Net Revenues............ $1,486,680 $1,899,463 $2,233,193 $2,492,002 $2,910,038 $ 646,240 $ 754,590
Net Earnings before
cumulative effect of
change in accounting
principles:
--Continuing
Operations........... 86,404 128,289 154,357 176,606 182,946 44,203 55,159
--Discontinued
Operations......... 9,331 2,550 79,811 -- -- -- --
--Total............... 95,735 130,839 234,168 176,606 182,946 44,203 55,159
Earnings per share
before cumulative
effect of change in
accounting principles:
--Continuing
Operations
Diluted.............. $ 0.65 $ 0.95 $ 1.13 $ 1.28 $ 1.32 $ 0.32 $ 0.39
Basic................ $ 0.66 $ 0.97 $ 1.16 $ 1.32 $ 1.36 $ .033 $ 0.41
--Discontinued
Operations
Diluted.............. $ 0.07 $ 0.02 $ 0.59 $ 0.00 $ 0.00 $ 0.00 $ 0.00
Basic................ $ 0.07 $ 0.02 $ 0.60 $ 0.00 $ 0.00 $ 0.00 $ 0.00
--Total
Diluted.............. $ 0.72 $ 0.96 $ 1.72 $ 1.28 $ 1.32 $ 0.32 $ 0.39
Basic................ $ 0.73 $ 0.99 $ 1.76 $ 1.32 $ 1.36 $ .033 $ 0.41
Cash Dividends declared
per share.............. $ 0.060 $ 0.070 $ 0.080 $ 0.090 $ 0.070 $ 0.018 $ 0.015
Book Value per Common
Share.................. $ 4.82 $ 5.70 $ 7.39 $ 8.27 $ 9.73 $ 8.55 $ 9.95
Balance Sheet Data:
Total Assets............ 1,343,908 1,755,978 2,046,731 2,183,875 2,738,715 2,675,429 2,746,164
Total Debt.............. 204,441 294,574 239,927 199,019 472,557 527,605 401,405
Shareholders' Equity.... 636,684 772,874 1,005,733 1,139,219 1,351,831 1,182,503 1,391,436
Shares-Diluted.......... 132,223 135,685 136,123 137,730 138,885 138,247 139,889
Shares-Basic............ 130,847 132,772 132,950 133,999 134,745 134,032 135,638
</TABLE>
9
<PAGE>
Selected Unaudited Pro Forma Combined Summary Financial Information
The selected unaudited pro forma combined summary financial information of
Danaher and Hach set forth below gives effect to the merger under the pooling-
of-interests accounting method and assumes that the merger had occurred at the
beginning of the earliest period presented. The pro forma information is
presented in accordance with Danaher's fiscal year, which ends December 31, and
Hach's balances for twelve-month periods ending approximately one month later
than the Danaher periods. The pro forma information is presented for
illustrative purposes only and is not necessarily indicative of the operating
results or financial position that would have occurred if the merger had been
consummated at such time, nor is it necessarily indicative of future operating
results or financial position. The unaudited pro forma combined summary
financial information should be read in conjunction with the "Unaudited Pro
Forma Combined Financial Information" included elsewhere in this information
statement/prospectus.
<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
--------------------------------
1996 1997 1998
---------- ---------- ----------
(in thousands, except per share
data)
<S> <C> <C> <C>
Earnings Statement Data:
Net Revenues.................................. $2,352,249 $2,619,100 $3,047,061
Net Earnings
--Continuing Operations..................... 166,511 188,576 192,186
--Discontinued Operations................... 79,811 -- --
---------- ---------- ----------
--Total..................................... $ 246,322 $ 188,576 $ 192,186
========== ========== ==========
Earnings per share
--Continuing Operations
Diluted................................... $ 1.17 $ 1.31 $ 1.33
Basic..................................... $ 1.19 $ 1.35 $ 1.37
--Discontinued Operations
Diluted................................... $ 0.56 -- --
Basic..................................... $ 0.57 -- --
--Total
Diluted................................... $ 1.72 $ 1.31 $ 1.33
Basic..................................... $ 1.76 $ 1.35 $ 1.37
Cash dividends declared per share............. $ 0.10 $ 0.10 $ 0.09
Balance Sheet Data:
Total Assets.................................. 2,148,888 2,264,741 2,840,859
Total Debt.................................... 239,927 229,095 503,639
Shareholder's Equity.......................... 1,091,258 1,173,226 1,400,789
Average Shares--Diluted....................... 142,914 143,479 143,987
Average Shares--Basic......................... 139,741 139,725 139,816
</TABLE>
10
<PAGE>
Comparative Per Share Data
Set forth below are earnings, cash dividends declared and book value per
share data for Danaher and Hach on both historical and pro forma combined bases
and on a per share equivalent pro forma basis for Hach. Pro forma combined
earnings per share are derived from the Unaudited Pro Forma Combined Financial
Information presented elsewhere in this information statement/prospectus, which
gives effect to the merger under the pooling-of-interests accounting method.
Book value per share for the pro forma combined presentation is based upon
outstanding shares of Danaher common stock, adjusted to include shares of
Danaher common stock to be issued in the merger for outstanding shares of Hach
common stock and Hach Class A common stock and outstanding Hach options at the
effective time of the merger. The per share equivalent pro forma combined data
for shares of Hach common stock and Hach Class A common stock is based on the
assumed conversion of each share of Hach common stock and Hach Class A common
stock into 0.2987 of a share of Danaher common stock. See "The Merger
Agreement--Terms of the Merger." The information set forth below should be read
in conjunction with the respective audited and unaudited financial statements
of Danaher and Hach incorporated by reference in this information
statement/prospectus and the "Unaudited Pro Forma Combined Financial
Information" and the notes thereto presented elsewhere herein. The pro forma
information is presented in accordance with Danaher's fiscal year, which ends
December 31, and Hach's balances for twelve-month periods ending approximately
one month later than the Danaher periods.
<TABLE>
<CAPTION>
At or for the Year Ended December 31, Three Months Ended
-------------------------------------- ----------------------------
1996 1997 1998 March 27, 1998 April 2, 1999
Hach--Historical ------------ ------------ ------------ -------------- -------------
Earnings per share: (in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
--Continuing Operations
Diluted................ $ 0.53 $ 0.62 $ 0.54
Basic.................. $ 0.53 $ 0.62 $ 0.54
--Discontinued
Operations
Diluted................ $ 0.00 $ 0.00 $ 0.00
Basic.................. $ 0.00 $ 0.00 $ 0.00
--Total
Diluted................ $ 0.53 $ 0.62 $ 0.54
Basic.................. $ 0.53 $ 0.62 $ 0.54
Cash dividends declared
per Hach common share.. $ 0.12 $ 0.12 $ 0.12
Cash dividends declared
per Hach Class A common
share.................. $ 0.12 $ 0.13 $ 0.16
Book value per Hach
common share and Hach
Class A common share... $ 3.76 $ 1.77 $ 2.87
Danaher--Historical
Earnings per share:
--Continuing Operations
Diluted................ $ 1.13 $ 1.28 $ 1.32 $0.32 $0.39
Basic.................. $ 1.16 $ 1.32 $ 1.36 $0.33 $0.41
--Discontinued
Operations
Diluted................ $ 0.59 $ 0.00 $ 0.00 $0.00 $0.00
Basic.................. $ 0.60 $ 0.00 $ 0.00 $0.00 $0.00
--Total
Diluted................ $ 1.72 $ 1.28 $ 1.32 $0.32 $0.39
Basic.................. $ 1.76 $ 1.32 $ 1.36 $0.33 $0.41
Cash dividends declared
per Danaher common
share.................. $ 0.08 $ 0.09 $ 0.07 $0.02 $0.01
Book value per Danaher
common share........... $ 7.39 $ 8.27 $ 9.73 $8.55 $9.95
Danaher & Hach--Pro
Forma Combined
Earnings per share:
--Continuing Operations
Diluted................ $ 1.17 $ 1.31 $ 1.33
Basic.................. $ 1.19 $ 1.35 $ 1.37
--Discontinued
Operations
Diluted................ $ 0.56 $ 0.00 $ 0.00
Basic.................. $ 0.57 $ 0.00 $ 0.00
--Total
Diluted................ $ 1.72 $ 1.31 $ 1.33
Basic.................. $ 1.76 $ 1.35 $ 1.37
Cash dividends declared
per common share....... $ 0.10 $ 0.10 $ 0.09
Book value per common
share.................. $ 7.64 $ 8.18 $ 9.73
Equivalent Pro Forma
Combined Per Hach Share
Earnings per share:
--Continuing Operations
Diluted................ $ 0.35 $ 0.39 $ 0.40
Basic.................. $ 0.35 $ 0.40 $ 0.41
--Discontinued
Operations
Diluted................ $ 0.17 $ 0.00 $ 0.00
Basic.................. $ 0.17 $ 0.00 $ 0.00
--Total
Diluted................ $ 0.51 $ 0.39 $ 0.40
Basic.................. $ 0.53 $ 0.40 $ 0.41
Cash Dividends declared
per common share....... $ 0.03 $ 0.03 $ 0.03
Book value per common
share.................. $ 2.28 $ 2.44 $ 2.91
</TABLE>
11
<PAGE>
Market Price and Dividend Data
The following table reflects (i) the range of the reported high and low last
sale prices of shares of Danaher common stock on the New York Stock Exchange,
Inc. Composite Tape and the per share dividends paid thereon and (ii) the range
of the reported high and low last sale prices of shares of Hach common stock
and Hach Class A common stock on the Nasdaq National Market tier of the Nasdaq
Stock Market (the "NASDAQ/NM") and the per share dividends paid thereon, in
each case for the calendar quarters indicated. The information in the table has
been adjusted to reflect retroactively all applicable stock splits.
<TABLE>
<CAPTION>
Danaher Hach Hach Class A
Common Stock Common Stock Common Stock
----------------------- --------------------- ------------------
High Low Div. High Low Div. High Low Div.
-------- -------- ----- -------- ------ ----- ------ ------ ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997:
First quarter......... 25 20 13/16 .0125 19 1/2 17 1/2 .06 -- -- --
Second quarter........ 25 15/16 19 13/16 .0125 19 3/4 14 1/2 .06 -- -- --
Third quarter......... 29 7/32 24 29/32 .0125 25 18 1/2 .06
Fourth quarter........ 31 7/8 26 23/32 .0125 13 5/8 10 1/4 .03 12 9 .03
1998:
First quarter......... 38 3/32 29 1/2 .0125 12 3/4 9 1/4 .03 9 3/8 8 .04
Second quarter........ 38 7/8 34 25/32 .0125 12 13/32 8 1/2 .03 10 7/8 8 .04
Third quarter......... 45 3/4 30 .0125 14 9 3/4 .03 11 1/2 9 1/8 .04
Fourth quarter........ 54 3/16 29 3/8 .015 12 9 7/8 .03 10 3/4 8 1/4 .04
1999:
First quarter......... 55 46 3/8 .015 12 10 3/4 .03 11 7 3/4 .04
Second quarter
(as of June 2,
1999)................ 67 3/4 52 1/8 19 10 .03 18 3/8 7 3/8 .04
</TABLE>
Danaher common stock is listed on the NYSE and the Pacific Exchange under
the symbol "DHR." On April 21, 1999, the last full trading day prior to the
announcement of the merger agreement, the closing price per share of Danaher
common stock was $62.3125, as reported on the NYSE Composite Tape. Hach common
stock and Hach Class A common stock are listed on the NASDAQ/NM under the
symbols "HACH" and "HACHA," respectively. The closing price per share of Hach
common stock was $10.50 and the closing price per share of Hach Class A common
stock was $7.375, as reported on the NASDAQ/NM. The value of a share of Hach
common stock and Hach Class A common stock at April 21, 1999, on an equivalent
per share basis, was $18.61 (assuming an exchange ratio of .2987). On June 2,
1999, the most recent practicable date prior to the mailing of this information
statement/prospectus, the closing prices of Danaher common stock, Hach common
stock and Hach Class A common stock were $61.25 per share, $17 per share and
$17 3/8 per share, respectively, as reported, in the case of Danaher common
stock, on the NYSE Composite Tape and, in the case of Hach stock, on the
NASDAQ/NM. Hach stockholders are encouraged to obtain current market quotations
for Danaher common stock, Hach common stock and Hach Class A common stock.
Danaher will apply for the listing on the NYSE of the shares of Danaher
common stock to be issued in the merger.
Hach has agreed in the merger agreement that it shall not declare or pay any
dividends other than Hach's regular quarterly cash dividends in amounts and
with record and payment dates in the ordinary course consistent with past
practice.
12
<PAGE>
CAUTIONARY STATEMENT CONCERNING
FORWARD-LOOKING STATEMENTS
Certain information included or incorporated by reference in this
information statement/prospectus may be deemed to be "forward looking
statements" within the meaning of Section 27A of the Securities Act and Section
21E of the Securities Exchange Act of 1934, as amended. All statements, other
than statements of historical facts, that address activities, events or
developments that Danaher or Hach intends, expects, projects, believes or
anticipates will or may occur in the future are forward looking statements.
Such statements are characterized by terminology such as "believe," "hope,"
"anticipate," "should," "intend," "plan," "will," "expects," "estimates,"
"projects," "positioned," "strategy," and similar expressions. These statements
are based on assumptions and assessments made by Danaher management or Hach
management in light of their experience and their perception of historical
trends, current conditions, expected future developments and other factors it
believes to be appropriate. These forward looking statements are subject to a
number of risks and uncertainties, including but not limited to:
. continuation of Danaher's or Hach's longstanding relationship with major
customers;
. Danaher's ability to integrate Hach's or other acquired companies'
businesses into its operations and realize planned synergies;
. the extent to which Hach's and other acquired companies' businesses are
able to meet Danaher's expectations and operate profitably;
. changes in regulations (particularly environmental regulations) which
could affect demand for Danaher's or Hach's products and unanticipated
developments that could occur with respect to contingencies such as
environmental matters and litigation.
In addition, Danaher and Hach are subject to risks and uncertainties that
affect the manufacturing sector generally, including, but not limited to,
economic, competitive, governmental and technological factors affecting
Danaher's and Hach's operations, markets, products, services and prices. Any
such forward looking statements are not guarantees of future performances, and
actual results, developments and business decisions may differ from those
envisaged by such forward looking statements. Danaher and Hach disclaim any
duty to update any forward looking statements, all of which are expressly
qualified by the foregoing.
13
<PAGE>
THE MERGER
General
We are furnishing this information statement/prospectus to you in connection
with the proposed merger of Hach with H\2\O Acquisition Corp., a Delaware
corporation and wholly owned subsidiary of Danaher formed for the purpose of
effecting the merger ("Merger Sub"), with Hach surviving the merger as a wholly
owned subsidiary of Danaher. This merger will be carried out as provided in the
Agreement and Plan of Merger, dated as of April 21, 1999, among Danaher, Merger
Sub and Hach. A copy of the merger agreement is attached as Appendix A to this
information statement/prospectus and is incorporated by reference in this
information statement/prospectus.
This information statement/prospectus has been sent to you because on April
21, 1999, the record date for determining shareholders entitled to vote on the
merger agreement and the merger, you were a holder of either:
. Hach common stock, par value $1.00 per share, or
. Hach Class A common stock, par value $1.00 per share. In referring to
both the Hach common stock and the Hach Class A common stock, we use the
term "Hach stock."
In the merger, each publicly outstanding share of Hach stock will be
converted into .2987 (the "Exchange Ratio") of a share of Danaher common stock,
par value $0.01 per share, subject to adjustment in certain circumstances. If
the shares of Danaher common stock that you would receive under the Exchange
Ratio includes a fraction of a share of Danaher common stock, Danaher will
instead pay you an amount in cash equal to that fractional interest rather than
give you a fractional share of Danaher common stock.
This information statement/prospectus is to inform you of the merger. Your
vote is not required for the merger, because the controlling stockholders of
Hach, Kathryn C. Hach-Darrow and Bruce J. Hach, executed and delivered to Hach
on April 21, 1999 a written consent in lieu of a meeting of stockholders
approving and adopting the merger agreement and the merger. At the time the
controlling stockholders signed the written consent, they held of record, in
the aggregate, 4,785,340 shares of Hach common stock (entitled to one vote per
share) and 4,769,161 shares of Hach Class A common stock (not entitled to
vote). This means that the controlling stockholders represented the requisite
majority of the votes entitled to be cast at a meeting of Hach's stockholders
to consider the merger agreement and the merger. As a result, no meeting or
further approval or consent of stockholders of Hach is necessary to effect the
merger, unless the merger agreement is proposed to be amended in a manner that
under the Delaware General Corporation Law (the "DGCL") requires a vote of Hach
stockholders. The merger will become effective no earlier than 20 business days
after this information statement/prospectus is mailed to Hach stockholders, and
only after satisfaction or waiver of the conditions to the merger contained in
the merger agreement.
This information statement/prospectus also constitutes a prospectus of
Danaher, which is a part of the Registration Statement on Form S-4 (the
"Registration Statement") filed by Danaher with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act"), in order to register the shares of Danaher common stock to
be issued to Hach stockholders both in the merger and pursuant to an Agreement
and Plan of Reorganization, dated as of April 21, 1999, among Danaher, C&K
Enterprises, Ltd., a Delaware corporation, and Mrs. Hach-Darrow and Mr. Hach,
as the controlling stockholders of C&K. See "Additional Agreements--Agreement
and Plan of Reorganization." The total aggregate amount of consideration to be
received by Hach's stockholders in the merger and pursuant to the
reorganization agreement, based on the closing price per share of Danaher
common stock on June 2, 1999 of $61.25, is approximately $417 million.
To the extent that certain holders may be required to deliver a prospectus
in connection with the reoffering and resale of shares of Danaher common stock
issued in the merger in exchange for reissued tainted treasury shares of Hach
stock (as described under "--Accounting Treatment"), the Registration Statement
will also cover any such reoffering and resale. Specific information regarding
any such potential reoffering and resale transactions, the identity of the
selling stockholders and the number of shares that may be reoffered and resold
will be provided at the time of any such transaction in a prospectus supplement
included in a post-effective amendment to the Registration Statement.
14
<PAGE>
Background of the Merger
In December 1998, George Sherman, Chief Executive Officer and President of
Danaher, phoned Mrs. Hach-Darrow, Chairman of the Board of Hach, to request a
meeting. On January 6, 1999, Mr. Sherman met with Mrs. Hach-Darrow in Seattle,
Washington, where they had a preliminary discussion of Danaher's interest in
pursuing a merger involving Hach and Danaher. They agreed to and did meet again
in Seattle on January 19, 1999. Mrs. Hach-Darrow, Mr. Hach, Hach's President
and Chief Executive Officer, Gary R. Dreher, its Vice President and Chief
Financial Officer, Mr. Sherman and Patrick Allender, Danaher's Senior Vice
President and Chief Financial Officer, attended this meeting. Messrs. Sherman
and Allender outlined for Hach's management the strategic objectives, benefits
and strategies they believed would result from a merger involving Danaher and
Hach. This meeting concluded without any commitments being made by either
party.
Following this meeting, Hach engaged Lazard Freres & Co. LLC as its
investment banker, and Hach informed Lazard of its prior discussions with
Danaher and requested Lazard to begin preparing an analysis of a possible
transaction with Danaher. On January 27, 1999, representatives of Lazard met
with Messrs. Hach and Dreher in Denver, Colorado to begin the due diligence
process.
On February 2, 1999, Mrs. Hach-Darrow discussed with the Hach Board her and
Hach management's discussions with Mr. Sherman.
At the regularly scheduled February 22, 1999 Hach Board meeting, following a
presentation on Danaher by Hach's management and Lazard, the Hach Board
authorized Hach's management and Lazard to proceed with exploratory discussions
with Danaher.
On March 1, 1999, Messrs. Hach and Dreher and Robert O. Case, General
Counsel and Secretary of Hach, together with representatives of Lazard, met
with Messrs. Sherman and Allender in Northbrook, Illinois. They discussed the
Danaher operating and financial strategy in more detail and how Hach might fit
into this strategy. At the conclusion of the meeting, Mr. Sherman expressed
Danaher's preliminary interest in merging with Hach for consideration in the
range of $16.00-$16.50 per share of Hach stock payable in Danaher common stock.
On March 3, 1999, the Hach Board met by telephone to review Danaher's
preliminary expression of interest in a merger with Hach. Hach management
updated the Board about discussions with Danaher as well as Hach's current
operating situation and the projected operating results for the next few years.
Lazard reviewed public information related to Danaher and made a preliminary
presentation to the Hach Board. The Hach Board authorized management and Lazard
to continue discussions with Danaher after the signing of a nondisclosure
agreement.
On March 5, 1999, a nondisclosure agreement with a standstill provision was
executed, and the parties began the process of due diligence.
On March 23, 1999, representatives of Hach and Danaher and their respective
investment bankers met in Chicago, Illinois where the representatives of Hach
presented Hach's business and financial plans.
Between March 31, 1999 and April 7, 1999, Lazard met and held telephone
conversations on several occasions with Salomon Smith Barney Inc., Danaher's
financial advisors, to review and discuss the transaction. On April 8, 1999,
Danaher, through Salomon Smith Barney, proposed a merger price of $17.50 per
share of Hach stock.
On April 9, 1999, Mrs. Hach-Darrow phoned Mr. Sherman directly, and they
agreed to continue discussions based on a price per share of Hach stock of
$18.50, subject to satisfactory negotiation of structural terms and to
authorization by the Danaher Board and the Hach Board.
The Danaher Board on April 9, 1999 authorized certain officers of Danaher to
finalize and execute the merger agreement.
15
<PAGE>
During the week of April 12, 1999, the parties continued their respective
due diligence reviews, with Danaher representatives making on-site plant visits
and environmental reviews of the Hach facilities. The Hach and Danaher
diligence teams met on April 13, 1999, in Loveland, Colorado and on April 15,
1999, in Washington, D.C.
Representatives of Danaher and Hach and their legal advisors and investment
bankers continued to meet during this period to discuss valuation and
transaction structure issues. An initial draft of the merger document and
related transaction documents was prepared by Danaher's counsel and first
circulated among the working group on April 13, 1999.
On April 16, 1999, the Hach Board held a special meeting in Chicago,
Illinois and was informed that Danaher had proposed a transaction structured as
a merger of a subsidiary of Danaher into Hach with Hach shareholders receiving
Danaher common stock based on a fixed exchange ratio with a collar range, and
reciprocal walk-away rights if the market price of Danaher stock rises above or
falls below certain levels. The Hach Board received a preliminary briefing from
counsel and a preliminary evaluation report from Lazard. The Hach Board
authorized management and Lazard to negotiate the economic terms of a merger
within specified parameters and to continue with the negotiation of a merger
document.
Between April 16 and April 21, 1999, representatives of Danaher and Hach, as
well as their respective counsels, negotiated and finalized the terms of the
merger agreement. Representatives of Danaher also negotiated the terms of a
stockholders support agreement and registration rights agreement during this
time with Mrs. Hach-Darrow and Mr. Hach. During this period, conversations
continued between Lazard and Salomon Smith Barney regarding the transaction
terms and structure. As a result of these discussions, on April 19, 1999,
Danaher agreed to an Exchange Ratio of 0.2987 (subject to a 12.5% collar with
reciprocal walk-away rights), subject to finalization of documentation and
approval of the Hach Board.
On April 20, 1999, the Hach Board met by phone and reviewed the final terms
and conditions of the proposed transaction with Danaher. Legal counsel for Hach
advised the Hach Board on the final terms of the definitive agreements, the
results of the legal due diligence of Danaher, and the responsibilities of the
Hach Board. Lazard then made a financial presentation in respect of the
proposed merger and advised the Hach Board that assuming execution of the
merger agreement with terms consistent with those described during such
meeting, Lazard would be prepared to render its opinion (which written opinion
was subsequently delivered dated April 21, 1999) to the effect that, as of such
date and based upon and subject to certain matters stated in such opinion, the
Exchange Ratio was fair to the holders of Hach stock, taken as a whole, from a
financial point of view. See "--Opinion of the Investment Banker for the Hach
Board." The Hach Board also discussed the accounting treatment of the merger
with a representative of PricewaterhouseCoopers LLP, Hach's independent
accountant. After discussion, the Hach Board unanimously approved the terms of
the merger agreement presented to it, and directed the officers of Hach to
finalize and execute the merger agreement.
The definitive merger agreement was finalized and executed on behalf of
Danaher, Hach and Merger Sub after the close of the stock market on April 21,
1999, along with a stockholders support agreement and a written consent of Hach
stockholders holding a majority of the Hach voting common stock. Danaher and
Hach publicly announced the merger before the commencement of business on April
22, 1999. A notice of action by written consent of stockholders was mailed to
all Hach stockholders on May 4, 1999, as required by Delaware law.
Hach's Reasons for the Merger; Recommendation of the Hach Board
The Hach Board believes that the merger provides Hach stockholders with an
investment in a larger and more diversified enterprise that is well positioned
to take advantage of new opportunities and to meet competitive challenges in a
manner that will enhance stockholder value for Hach stockholders, for various
reasons, including the following:
. The merger is expected to provide Hach stockholders with shares of
Danaher common stock in a tax-free exchange at the Exchange Ratio, which
represents a significant premium over the market price for shares of
Hach stock prior to the public announcement of the merger.
16
<PAGE>
. The merger will provide those Hach stockholders who desire more
liquidity for their investment with access to the more active trading
market for Danaher common stock.
. The merger will allow those Hach stockholders who wish to continue their
investment in the water analysis industry to do so through their
holdings of Danaher common stock.
The Hach Board made its determination after careful consideration of, and
based on, a number of factors, including, among other things, the reasons
described above and the following additional factors:
. its review of Hach's prospects of continuing as an independent company,
including trading value and liquidity issues;
. its review of other strategic alternatives;
. the judgment, advice and analysis of Hach's senior management, including
its favorable recommendation of the merger;
. presentations by and discussions with Hach's senior management, legal
advisors and investment bankers, regarding the terms of the merger
agreement and stockholders support agreement, including those provisions
which preclude consideration of alternative transactions required by
Danaher as a condition to its agreement to proceed;
. the fact that holders of Hach common stock and Hach Class A common stock
will receive equal treatment in the merger, as required by the Hach
certificate of incorporation and the absence of appraisal rights;
. the opinion of Lazard described below to the effect that, as of the date
thereof and based upon and subject to the matters contained in the
written fairness opinion, the Exchange Ratio in the merger is fair to
Hach stockholders, taken as a whole, from a financial point of view;
. information concerning the financial and operating performance and
condition, business operations, debt and capital levels, asset quality
and prospects of Hach, Danaher and the combined company;
. current industry, economic and market conditions and trends, including
the likelihood of continuing consolidation and increasing competition in
the water analysis industry (and the corresponding decrease in the
number of suitable merger partners);
. the importance of market position, significant scale and scope and
financial resources to a company's ability to compete effectively in the
changing environment in the water analysis industry;
. that the merger will be accomplished on a tax-free basis to stockholders
of Hach for federal income tax purposes;
. the ability of the parties to complete the merger, including, in
particular, the likelihood of obtaining regulatory approvals;
. the anticipated positive effects of the merger on long-term value for
Hach stockholders through their ownership of stock in a stronger, more
diversified company with greater liquidity in the market for its shares;
and
. the belief that the corporate cultures of the two companies would be
complementary.
The Hach Board also considered a number of potential countervailing factors
in its deliberations concerning the merger, including:
. the possibility of management disruption associated with the merger and
the risk that key technical and management personnel of Hach might not
continue with Hach;
. the interests of Hach's management in the merger as described in
"Interests of Certain Persons in the Merger";
17
<PAGE>
. the possibility of a decline in the value of Danaher common stock; and
. the risk that the potential benefits of the merger might not be
realized.
In the view of the Hach Board, these potential countervailing factors did
not, individually or in the aggregate, outweigh the advantages of the merger.
The above factors are not intended to be exhaustive but are believed to
include all material factors considered by the Hach Board. In reaching its
decision to approve the merger agreement and the merger and to recommend that
Hach stockholders vote to approve and adopt the merger agreement and the
merger, the Hach Board did not view any single factor as determinative and did
not find it necessary or practicable to assign any relative or specific weights
to the various factors considered. Furthermore, individual directors may have
given differing weights to different factors.
Danaher's Reasons for the Merger
The Danaher Board believes that the merger is in the best interest of
Danaher and its stockholders. Danaher expects to benefit from Hach's products,
market presence and people. Danaher believes that the addition of Hach will
enable Danaher to expand its product line, thereby creating positive prospects
for both stockholder value enhancement and improved customer satisfaction in
the future.
Opinion of the Investment Banker for the Hach Board
On April 21, 1999, Lazard delivered its written opinion to the Hach Board to
the effect that, based upon and subject to the matters set forth in its
opinion, as of April 21, 1999 the Exchange Ratio is fair to the holders of Hach
stock, taken as a whole, from a financial point of view.
The full text of Lazard's written opinion, dated April 21, 1999, which sets
forth the assumptions made, matters considered and limits on the review
undertaken, is attached to this information statement/prospectus as Appendix F.
This summary description of the Lazard opinion is qualified in its entirety by
reference to the full text of the Lazard opinion. Hach stockholders are urged
to, and should, read the Lazard opinion in its entirety. The Lazard opinion is
addressed to the Hach Board and addresses only the fairness, from a financial
point of view, of the Exchange Ratio pursuant to the merger agreement. The
Lazard opinion does not address the merits of the underlying decision by Hach
to engage in the merger. The Lazard opinion does not constitute, and should not
be construed as, a recommendation to any stockholder of Hach as to how such
holder should vote to approve or consent to, or take any other action with
respect to, the merger and the transaction contemplated by the merger
agreement, if such vote were required in connection with the merger, and did
not constitute any such recommendation.
In connection with rendering its opinion to the Hach Board, Lazard:
. reviewed the financial terms and conditions of the merger agreement;
. analyzed certain historical business and financial information relating
to Hach and Danaher;
. reviewed various financial forecasts and other data provided to Lazard
by Hach and Danaher relating to their respective businesses;
. participated in discussions with members of the senior management of
Hach and Danaher with respect to the businesses and prospects of Hach
and Danaher, respectively, and the strategic objectives of each;
. reviewed public information with respect to certain other companies in
lines of businesses Lazard believed to be generally comparable to those
of Hach and Danaher;
. reviewed the financial terms of certain business combinations involving
companies in lines of businesses Lazard believed to be generally
comparable to those of Hach and Danaher, and in other industries
generally;
18
<PAGE>
. reviewed the historical stock prices and trading volumes of shares of
Hach stock and Danaher common stock; and
. conducted such other financial studies, analyses and investigations as
it deemed appropriate.
Lazard relied upon the accuracy and completeness of all information supplied
or otherwise made available to Lazard, discussed with or reviewed by or for
Lazard, or publicly available, and Lazard did not assume any responsibility for
any independent verification of such information or any independent valuation
or appraisal of any of the assets or liabilities of Hach or Danaher. In
addition, Lazard did not conduct any physical inspection of any of the
properties or facilities of Hach or Danaher. The Lazard opinion does not
constitute a valuation or appraisal of the shares of stock, assets or
liabilities of Hach or Danaher or the solvency or fair value of either. With
respect to the financial forecasts, Lazard assumed that they were reasonably
prepared on bases reflecting the best currently available estimates and
judgments of management of Hach and Danaher as to the future financial
performance of Hach and Danaher, respectively. Lazard assumed no responsibility
for and expressed no view as to such forecasts or the assumptions on which they
were based.
The Lazard opinion was necessarily based on accounting standards,
economic, monetary, market and other conditions as in effect on, and the
information made available to Lazard as of, April 21, 1999. While subsequent
developments may affect Lazard's opinion, Lazard does not have any obligation
to update, to revise, or to reaffirm its opinion.
In rendering its opinion, Lazard assumed that:
. the transaction contemplated by the merger agreement will be consummated
on the terms described in the merger agreement, without any waiver of
any of the material rights, terms or conditions thereof by Hach;
. obtaining any necessary regulatory approvals for the transaction will
not have an adverse effect on Hach or Danaher; and
. the merger will qualify as a tax-free reorganization for United States
federal income tax purposes and will be accounted for as a pooling-of-
interests.
Lazard was not authorized to, and did not, solicit third party indications
of interest or proposals with respect to a purchase of all or any part of Hach.
The Lazard opinion did not express an opinion as to the prices at which shares
of Hach stock or Danaher common stock may trade following the date of the
Lazard opinion.
At a meeting of the Hach Board on April 20, 1999, Lazard presented certain
financial analysis, accompanied by written materials, in connection with the
Lazard opinion. The following is a summary of the material financial and
comparative analysis performed by Lazard in arriving at the Lazard opinion.
Lazard indicated that the proposed exchange ratio of .2987 (which translated
into $19.19 per share of Hach Class A common stock and Hach common stock based
on the closing price of $64.25 per share of Danaher common stock on April 19,
1999, the day immediately preceding the Hach Board meeting) implied for Hach a
diluted equity value of $363 million and an enterprise value of $375 million,
which implied enterprise value to expected fiscal 1999 sales, EBITDA (earnings
before interest, taxes, depreciation and amortization) and EBIT (earnings
before interest and taxes) multiples of 2.62x, 13.0x and 17.5x, respectively,
and a price to expected fiscal 1999 EPS (earnings per share) multiple of 25.7x.
While Lazard's written presentation materials to the Hach Board referenced the
$19.19 figure, Lazard also discussed with the Hach Board various items during
its presentation based upon Danaher's closing price of $62.25 on April 20, 1999
(which translated into $18.59 per share of Hach Class A common stock and Hach
common stock at the proposed exchange ratio of .2987). Lazard indicated that at
the $18.59 figure, the proposed exchange ratio of .2987 implied for Hach a
diluted equity value of $352 million and an enterprise value of $363 million,
which implied enterprise value to expected fiscal 1999 sales, EBITDA and EBIT
multiples of 2.54x, 12.6x and 16.9x, respectively, and a price to expected
fiscal 1999 EPS multiple of 24.9x.
Historical Hach Stock Price Review. Lazard reviewed information regarding
historical stock price performance for the Hach stock. Lazard noted that
between April 15, 1998 and April 19, 1999, the trading
19
<PAGE>
range for the Hach common stock was from an intra-day low of $8.50 per share to
an intra-day high of $14.50 and the trading range for the Hach Class A common
stock was from an intra-day low of $7.75 per share to an intra-day high of
$11.50. Lazard noted that issues affecting the valuation of the Hach stock
include, among other things, lack of public float, limited liquidity and
institutional ownership, lack of equity research analyst coverage, and the
small size of Hach.
Public Market Valuation. Lazard compared certain actual and estimated
financial, operating and stock market information for Hach and for a group of
publicly traded companies in lines of business which Lazard believed to be
reasonably comparable to those of Hach. Lazard believed that, although there
were no public companies with precisely the same mix of businesses and
financial condition as Hach, the most relevant comparable companies to Hach
were (collectively defined as the "Comparable Companies"):
. EG&G Incorporated;
. Ionics Incorporated;
. Osmonics Incorporated;
. Thermo Instrument Systems;
. VWR Scientific Products Corporation; and
. U.S. Filter Corporation (prior to its announced merger with Vivendi).
Lazard's analysis indicated that the Comparable Companies' enterprise value
multiples of calendar year 1998 and 1999 financial information were as follows:
<TABLE>
<CAPTION>
Low Median High
----- ------ -----
<S> <C> <C> <C>
1998 sales.............................................. 0.76x 1.10x 1.48x
1999 sales (estimated).................................. 0.85x 1.05x 1.45x
1998 EBITDA............................................. 7.9x 8.8x 10.2x
1999 EBITDA (estimated)................................. 7.1x 7.8x 8.5x
1998 EBIT............................................... 11.6x 12.5x 15.7x
1999 EBIT (estimated)................................... 10.0x 11.3x 13.1x
</TABLE>
Lazard's analysis indicated that the Comparable Companies' price to calendar
year estimated 1999 and 2000 EPS multiples were as follows:
<TABLE>
<CAPTION>
Low Median High
----- ------ -----
<S> <C> <C> <C>
1999 EPS (estimated).................................... 13.7x 16.8x 20.9x
2000 EPS (estimated).................................... 11.8x 15.0x 17.6x
</TABLE>
Lazard calculated the hypothetical trading values that Hach could attain
utilizing the calendar year 1998 and 1999 enterprise value multiples discussed
above applied to Hach's forecasted financial information for the fiscal years
ending April 30, 1999 and 2000. The hypothetical trading values of Hach stock
implied by multiples of the Comparable Companies' enterprise value applied to
Hach's estimated financial information for the fiscal years ending April 30,
1999 and 2000 were as follows:
<TABLE>
<CAPTION>
Low Median High
------- ------- -------
<S> <C> <C> <C>
2000 EBITDA........................................ $ 10.78 $ 11.89 $ 12.96
1999 EBITDA........................................ $ 11.36 $ 12.76 $ 14.96
2000 EBIT.......................................... $ 11.40 $ 12.98 $ 15.11
1999 EBIT.......................................... $ 12.52 $ 13.62 $ 17.24
</TABLE>
In addition, Lazard calculated the hypothetical trading values that Hach
could attain utilizing the calendar year 1999 and 2000 price to EPS multiples
discussed above applied to Hach's forecasted financial information
20
<PAGE>
for the fiscal years ending April 30, 2000 and 2001. The hypothetical trading
values of Hach Shares implied by the Comparable Companies' price to EPS
multiples applied to Hach's forecasted financial information for the fiscal
years ending April 30, 2000 and 2001 were as follows:
<TABLE>
<CAPTION>
Low Median High
------ ------ ------
<S> <C> <C> <C>
2001 EPS.............................................. $11.31 $14.42 $16.90
2000 EPS.............................................. $11.11 $13.59 $16.89
</TABLE>
Selected Transactions Analysis. Lazard reviewed certain publicly available
information on announced merger and acquisition transactions of certain
businesses since September 1996 and reviewed in particular certain publicly
available information on sixteen transactions ("Comparable Transactions").
However, Lazard noted that the reasons for, and circumstances surrounding, each
of the transactions analyzed were diverse and the characteristics of the
companies involved were not exactly comparable to those of the merger.
This analysis showed that the aggregate consideration paid in the Comparable
Transactions reviewed represented latest twelve months enterprise value
multiples as follows:
<TABLE>
<CAPTION>
Low Median High
----- ------ -----
<S> <C> <C> <C>
Sales................................................... 0.65x 1.52x 3.52x
EBITDA.................................................. 9.2x 11.6x 15.5x
EBIT.................................................... 9.5x 14.9x 26.9x
</TABLE>
This analysis showed that the aggregate consideration paid in the Comparable
Transactions reviewed represented latest twelve months price to EPS multiples
as follows:
<TABLE>
<CAPTION>
Low Median High
----- ------ -----
<S> <C> <C> <C>
EPS..................................................... 13.6x 22.5x 44.2x
</TABLE>
Lazard calculated the implied value per share of Hach stock utilizing the
multiples discussed above. The implied values per share of Hach stock implied
by the enterprise value multiples of the Comparable Transactions' target
companies applied to Hach's forecasted financial information for the fiscal
year ending April 30, 1999 were as follows:
<TABLE>
<CAPTION>
Low Median High
------ ------ ------
<S> <C> <C> <C>
EBITDA................................................ $13.45 $17.07 $22.89
EBIT.................................................. $10.20 $16.27 $29.90
</TABLE>
The implied value per share of Hach stock implied by the price to EPS
multiples of the Comparable Transactions' target companies applied to Hach's
forecasted financial information for the fiscal year ending April 30, 1999 was
as follows:
<TABLE>
<CAPTION>
Low Median High
------ ------ ------
<S> <C> <C> <C>
EPS................................................... $10.11 $16.81 $32.99
</TABLE>
Discounted Cash Flow Analysis. Based upon the forecasts prepared by the
management of Hach, Lazard derived ranges of implied equity value per share
based upon the net present value of Hach for the fiscal years 2000 to 2004,
inclusive, and the projected fiscal 2004 terminal value based upon a range of
multiples of projected fiscal 2004 EBITDA. In conducting this analysis, Lazard
applied discount rates ranging from 11.0% to 13.0% and terminal multiples of
EBITDA ranging from 8.0x to 10.0x. Based on this analysis, Lazard calculated a
range of present values of $12.68 to $16.58 per share of Hach stock.
Pro Forma Contribution Analysis. Lazard performed a contribution analysis
utilizing the Exchange Ratio of 0.2987 and closing price of Danaher common
stock on April 19, 1999 of $64.25 per share. The analysis demonstrated that
owners of Hach stock will have a pro forma diluted ownership of 4.5% of the
combined entity's pro forma diluted shares outstanding, with holders of Danaher
common stock having
21
<PAGE>
ownership of the remaining 95.5%. In addition, based on calendar 1998 results,
Hach will contribute 5.5% and 5.6% of the combined entities EBITDA and net
income, respectively.
Pro Forma Merger Analysis. Lazard analyzed the pro forma impact of the
consummation of the merger on the earnings per share of Danaher, and compared
such results to earnings per share on a stand-alone basis for Danaher. Such
analyses estimated that, utilizing the Exchange Ratio of 0.2987, projections
prepared by the management of Hach and Danaher, and closing price of Danaher
common stock on April 19, 1999 of $64.25, the merger would be accretive, with
or without expected synergies, to Danaher's earnings per share in 1999, 2000
and 2001, respectively.
Other Analyses. Lazard indicated that based on the closing stock price of
Danaher common stock on April 19, 1999 of $64.25 per share, the Exchange Ratio
implied an 85.0% premium over the closing price per share of Hach common stock
and a 139.9% premium over the closing price per share of Hach Class A common
stock, in each case, on April 19, 1999, the day immediately preceding the Hach
Board meeting. Lazard further indicated that based on the closing price per
share of Danaher common stock on April 20, 1999 of $62.25 per share, the day of
the Hach Board meeting, the Exchange Ratio implied a 79.2% premium over the
closing price per share of Hach common stock and a 139.9% premium over the
closing price per share of Hach Class A common stock in each case, on April 20,
1999, the day of the Hach Board meeting.
Special Considerations. The preparation of a fairness opinion is a complex
process and is not necessarily susceptible to partial analysis or summary
description. Selecting portions of the analyses or of the summary set forth
above without considering the analyses as a whole could create an incomplete or
misleading view of the process underlying the Lazard opinion. No company or
transaction used in the above analysis as a comparison is identical to Hach or
Danaher or the transaction contemplated by the merger agreement. The analyses
were prepared solely for purposes of Lazard providing its opinion that, as of
April 21, 1999, the Exchange Ratio is fair to the holders of Hach stock, taken
as a whole, from a financial point of view, and do not purport to be appraisals
or necessarily reflect the prices at which businesses or securities actually
may be sold, which may be significantly more or less favorable than as set
forth in these analyses. Similarly, any estimate of values or forecast of
future results contained in the analyses is not necessarily indicative of
actual values or actual future results, which may be significantly more or less
favorable than those suggested by such analyses.
In performing its analyses, Lazard made numerous assumptions with respect to
industry performance, general business and economic conditions and other
matters. Such analyses are inherently subject to uncertainty, being based upon
numerous factors or events beyond the control of the parties or their
respective advisors or investment bankers. Future results or actual values may
be materially different from those forecasts or estimates contained in the
analyses. As described above, Lazard's opinion was one of several factors taken
into consideration by the Hach Board in making its determination to approve the
merger agreement. While Hach believes that the foregoing summary covers the
material aspects of the analyses performed by Lazard, the foregoing summary
does not purport to be a complete description of such analyses and is qualified
in its entirety by reference to the written opinion of Lazard set forth in
Appendix F.
Lazard is an internationally recognized investment banking firm and is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings, secondary
distributions of listed and unlisted securities, private placements, leveraged
buyouts, and valuations for estate, corporate and other purposes. The Hach
Board selected Lazard to act as its investment banker because of Lazard's
expertise and its reputation in investment banking and mergers and
acquisitions.
Fee Calculation. In connection with Lazard's services as investment banker
to Hach, Hach will pay Lazard a base fee in respect of the execution of the
merger agreement and will pay Lazard a fee equal to a customary percentage of
the transaction value upon the consummation of the merger. Hach has also agreed
to reimburse Lazard for its reasonable out-of-pocket expenses, including, but
not limited to, fees and expenses of its counsel. Hach has agreed to indemnify
Lazard and certain related parties against certain liabilities, including
liabilities arising under the federal securities laws.
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<PAGE>
Interests of Certain Persons in the Merger
You should be aware of the interests that executive officers, directors and
controlling stockholders of Hach have in the merger. These interests are
different from and in addition to your and their interests as stockholders.
These include:
. accelerated vesting of stock options and distributions under certain
benefit plans;
. employment arrangements and change of control agreements; and
. indemnification, and directors and officers' liability insurance
policies.
In discussing the fairness of the merger to the stockholders of Hach, the
Hach Board took into account these interests. These interests are summarized
below.
Ownership and Voting Stock. On April 21, 1999, directors and executive
officers of Hach and their affiliates beneficially owned approximately 58% of
the outstanding shares of Hach common stock, including 5,128,334 shares of Hach
Class A common stock and 5,111,157 shares of Hach common stock. Kathryn C.
Hach-Darrow and Bruce J. Hach entered into a stockholders support agreement on
April 21, 1999 with Danaher, and delivered a written consent on that date
voting all shares of Hach stock over which they exercise voting control,
representing an aggregate of 53% of the outstanding voting Hach stock on April
21, 1999, to approve the merger agreement. Kathryn Hach-Darrow also received
rights to have Danaher register the sale of Danaher common stock she receives
in the merger under the Securities Act of 1933. For a further description, see
"Other Agreements --Stockholders Support Agreement" and "Other Agreements--
Registration Rights Agreement."
As of June 2, 1999, 222,181 shares of Hach common stock and 573,585 shares
of Hach Class A common stock were issuable upon the exercise of outstanding
Hach stock options, which options, assuming an Exchange Ratio of 0.2987 (and
assuming a Danaher average stock price of $61.25, the closing price per share
of Danaher common stock on the NYSE on June 2, 1999) will be converted to
become approximately 120,400 shares of Danaher common stock in the aggregate.
All of the executive officers (other than Kathryn Hach-Darrow) and all of the
current non-employee directors of Hach currently hold Hach stock options which
will become shares of Danaher common stock.
As of June 2, 1999, the number of vested Hach stock options beneficially
owned by the five most highly compensated executive officers of Hach for the
year ended April 30, 1999 will increase as a result of the merger from 61,346
stock options to 192,682 stock options, and, for all other executives officers
as a group, from 53,330 stock options to 114,501 stock options. For a further
description, see "The Merger Agreement--Covenants--Hach Stock Options."
Hach Non-Employee Directors' Bonus Compensation Plan.
As a result of the merger, the Hach Directors' Bonus Compensation Plan will
terminate and the cash value of the stock units and related amounts which were
awarded to the four non-employee directors who are participants in the plan
will be determined and distributed to those persons. Based upon the closing
price per share of Danaher common stock on June 2, 1999 of $61.25 and the
Exchange Ratio of .2987, the approximate cash value of the stock units and
related amounts that will be distributed to the four non-employee directors is
as follows:
<TABLE>
<S> <C>
Linda A. Doty..................................................... $ 70,000
John N. McConnell................................................. $ 68,000
Joseph V. Schwann................................................. $165,000
Fred W. Wenninger................................................. $ 55,000
</TABLE>
Hach Employment Agreements.
Certain executive officers of Hach have employment agreements with Hach
which will come into effect upon the merger and thereafter will provide for
continued employment of such executive officer for a three year
23
<PAGE>
term, which is automatically renewed annually for one year unless either party
gives six months prior written notice of termination. The executive officers
are entitled to an annual compensation rate and employment benefits, in each
case no less favorable than that in effect at the time of the merger. The
following table identifies the executive officers who have such employment
agreements and their current annual employment compensation.
<TABLE>
<CAPTION>
Annual
Executive Officer Title Compensation Rate
----------------- ----- -----------------
<S> <C> <C>
Bruce J. Hach........... President and Chief Executive Officer $200,000
Gary R. Dreher.......... Vice President and Chief Financial Officer $151,000
Loel J. Sirovy.......... Senior Vice President, Operations $147,000
Jerry M. Churchill...... Vice President, U.S. Sales $130,000
Kenneth Ogan............ Vice President, Research and Development $145,000
Larry D. Thompson....... Vice President, Ames Chemical Operations $109,000
Brian K. Bowden......... Vice President, Information Systems Technology $110,000
Randall Petersen........ Director of Human Resources $107,000
</TABLE>
Upon the death of the executive officer, Hach is obligated to make payments
to the beneficiary or representative of the deceased at a rate equal to one-
half of the annual compensation in effect on the date of death, until the end
of the term of the agreement. Such payments are not reduced by any life
insurance benefits payable directly to the deceased's beneficiaries or estate.
If the executive officer's employment is terminated by Hach by reason of such
executive officer's disability, Hach is obligated to pay a salary to such
executive officer at the annual rate in effect upon termination, reduced by
disability, governmental and wage continuation benefits, for the remaining term
of the agreement. The agreements entitle an executive officer to resign during
the employment period if, without his consent in any circumstance other than
his disability, his position with Hach is changed, other than to a position
with duties and responsibilities normally expected of someone in his prior
position, or Hach changes his office location by more than 25 miles. Upon such
resignation, the executive officer is entitled to a lump sum cash payment equal
to the annual compensation rate, based on his annual compensation rate at the
time of termination, which would have been payable to the executive officer
over the remaining term of the agreement had it not been terminated. The
executive officer is also entitled to a lump sum cash payment approximately
equal to any other benefits, including equity, which would have been payable to
him during such period. The agreements do not provide for termination by Hach
other than for disability or for Cause. "Cause" means any of the following acts
by the executive officer: fraud, conviction of a crime involving moral
turpitude, a material breach of the terms of the employment agreement, or
defalcation or other similar dishonesty involving the operations, funds or
other assets of Hach or its subsidiaries. Each agreement includes a covenant by
the executive officer providing that if his employment terminates for any
reason he will not for the following twelve months engage directly or
indirectly in any business competitive with Hach.
It is presently estimated, based upon certain assumptions and data available
as of a recent date, that, if the employment of those executive officers of
Hach who have change of control employment agreements was terminated
immediately following the merger under circumstances entitling those persons to
severance benefits under those employment agreements, those persons would be
entitled to cash severance payments, excluding benefits, under these agreements
of approximately $3,297,000 in the aggregate. None of these agreements provides
for any gross-up payments.
On April 30, 1998, in connection with the acquisition of Environmental Test
Systems, Inc. ("ETS"), the Company entered into an employment agreement with
Mark Stephenson, the President of ETS, who also became a Vice President of Hach
at that time. The initial term of the employment agreement is for the period
ending April 30, 2001 and is automatically renewed annually for one year unless
either party gives five months' prior written notice of termination. Mr.
Stephenson is to receive a base salary of $155,000, which may be increased but
not decreased by the Board of Directors, and is entitled to participate in
Hach's employee benefit plans, practices and programs, to the extent eligible.
If the agreement terminates because of the death of Mr. Stephenson or if Hach
terminates Mr. Stephenson's employment due to a disability, Mr. Stephenson, or
his designated beneficiary, is entitled to his base salary through the end of
the month in which such termination of
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employment occurs and a pro rated bonus. If Hach terminates Mr. Stephenson's
employment for Cause, Mr. Stephenson is entitled to his base salary through the
date of such termination of employment. This agreement does not provide for
termination of employment by Hach other than for Cause or disability. Through
the first anniversary of any termination of employment, Mr. Stephenson has
agreed not to compete with Hach or its affiliates or to solicit any customers
or employees of Hach or its affiliates.
"Cause" generally means any of the following acts by Mr. Stephenson: a
breach of a material provision of the employment agreement which is not cured
within ten days after receipt of notice from Hach, the failure to comply with
any written policy of the Hach or its affiliates which is not cured within 10
days of receiving notice from Hach, the appropriation of a business opportunity
of Hach or its affiliates, the misappropriation of any funds of Hach or its
affiliates, a conviction of or plea of guilty or no contest to any criminal
offense which involves dishonesty or breach of trust or any willful conduct
that is demonstrably and materially injurious to the reputation of Hach or its
affiliates. A termination for Cause requires a good faith determination of the
Board of Directors of Hach that one of the above acts occurred.
Effective Time of the Merger
As soon as practicable on or after the closing of the merger, which closing
shall occur no later than the second business day after satisfaction or waiver
of all of the conditions to the merger, the merger will become effective upon
filing of the certificate of merger with the Secretary of State of the State of
Delaware or on such later date and time as may be specified in the certificate
of merger. The time at which the merger becomes effective is referred to in
this document as the "Effective Time." See "The Merger Agreement--Conditions."
Certificate of Incorporation and Bylaws
At the Effective Time, the certificate of incorporation and bylaws of Merger
Sub as in effect immediately prior to the Effective Time shall be the
certificate of incorporation of the surviving corporation (except that the
certificate of incorporation shall be amended at the Effective Time to provide
that the name of the surviving corporation will be "Hach Company") until
thereafter changed or amended as provided in the certificate of incorporation
or by applicable law.
At the Effective Time, the bylaws of Merger Sub as in effect immediately
prior to the Effective Time shall be the bylaws of the surviving corporation,
until thereafter changed or amended as provided in the bylaws or by applicable
law.
The merger agreement provides that the certificate of incorporation and
bylaws of the surviving corporation will contain provisions with respect to
indemnification and exculpation from liability set forth in Hach's restated
certificate of incorporation and bylaws on the date of the merger agreement.
These provisions may not be amended, repealed or otherwise modified for a
period of six years following the Effective Time in any manner that would
adversely affect the rights of individuals who on or prior to the Effective
Time were directors, officers, employees or agents of Hach, unless the
modification is required by law. See "The Merger Agreement--Covenants."
Certain Federal Income Tax Consequences
The following discussion is a summary description of the material U.S.
federal income tax consequences of the merger applicable to Hach stockholders
that are U.S. persons. This summary is not a complete description of all of the
potential tax effects of the merger and is based on the Internal Revenue Code,
as amended, Treasury Regulations, Internal Revenue Service rulings and judicial
opinions, all as in effect on the date of this information
statement/prospectus. All of the foregoing are subject to change and any such
change could affect the continuing validity of this discussion, which is not
binding on the Internal Revenue Service or the courts. Each Hach stockholder's
individual circumstances may affect the tax consequences of the merger to such
Hach stockholder, and the particular facts or circumstances of a Hach
stockholder that may so affect the
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consequences are not considered below. This summary is not intended to apply to
Hach stockholders in special situations, such as dealers in securities, traders
in securities who elect to apply a mark-to-market method of accounting,
financial institutions, tax-exempt organizations, insurance companies, persons
holding shares of Hach common stock or shares of Danaher common stock as part
of a hedging, straddle, conversion, constructive sale or other integrated
transaction, non-U.S. persons, persons whose functional currency is not the
U.S. dollar, persons subject to the U.S. alternative minimum tax, persons who
acquired shares of Hach common stock pursuant to an employee stock option or
otherwise as compensation, and persons who do not hold shares of Hach stock as
capital assets within the meaning of Section 1221 of the Code. In addition, no
information is provided below with respect to the tax consequences of the
merger under state, local, or foreign laws or any federal laws other than those
pertaining to the income tax. Consequently, each Hach stockholder is advised to
consult a tax advisor as to the specific tax consequences of the merger to such
Hach stockholder.
It is a condition to the obligation of Hach to consummate the merger that
Hach receive an opinion from McBride Baker & Coles, special tax counsel to
Hach, dated as of the closing date, to the effect that the merger will be
treated for federal income tax purposes as a reorganization qualifying under
the provisions of Section 368(a) of the Code, and that neither Hach nor any of
the stockholders of Hach will recognize any gain or loss for federal income tax
purposes as a result of the merger or receipt of the merger consideration,
except with respect to any cash received in lieu of a fractional share
interest. The treatment of cash received in the merger in lieu of a fractional
share interest is discussed below.
It is a condition to the obligation of Danaher to consummate the merger that
Danaher receive an opinion from Wachtell, Lipton, Rosen & Katz, special tax
counsel to Danaher, dated as of the closing date, to the effect that the merger
will be treated for federal income tax purposes as a reorganization qualifying
under the provisions of Section 368(a) of the Code.
In rendering the opinions described above, counsel may rely upon and
require, in form and substance reasonably acceptable to them, factual
representations, including those contained in certificates of officers of Hach,
Danaher, and Merger Sub.
Based upon the advice of their respective counsel, Hach and Danaher expect
that the merger will qualify as a reorganization under the Code with the
consequences set forth above. Assuming that the merger so qualifies, the
aggregate tax basis of the Danaher common stock received by Hach stockholders
in the merger will be the same, in each instance, as the aggregate tax basis of
the Hach stock surrendered in exchange therefor, excluding any basis allocable
to fractional share interests in Danaher common stock for which cash is
received. In addition, the holding period of the shares of Danaher common stock
received by Hach stockholders in the merger will include the period during
which the shares of Hach stock surrendered in exchange therefor were held,
provided that such shares of Hach stock were held as capital assets at the
Effective Time.
A Hach stockholder who receives cash in the merger in lieu of a fractional
share interest in Danaher common stock will be treated as having received the
fractional share interest and then having sold such interest for the cash
received. This sale will result in the recognition of gain or loss for federal
income tax purposes, measured by the difference between the amount of cash
received and the tax basis of the Hach stock allocable to such fractional share
interest. This gain or loss will be capital gain or loss, provided that the
Hach stock was held as a capital asset at the Effective Time. In addition, in
the case of an individual Hach stockholder, any such capital gain will be
subject to a maximum federal income tax rate of 20% if the stockholder's
holding period in the Hach stock was more than 12 months.
Accounting Treatment
It is expected that the merger will be accounted for as a "pooling of
interests" transaction for accounting and financial reporting purposes. Under
such method of accounting, Hach stockholders and Danaher stockholders will be
deemed to have combined their existing voting common stock interests by virtue
of the exchange of shares of Hach stock for Danaher common stock. Accordingly,
the book value of the assets, liabilities and stockholders' equity of each of
Hach and Danaher, as reported on its respective consolidated balance sheet,
will be carried over to the consolidated balance sheet of Danaher, and no
goodwill will be created.
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In the merger agreement, Hach, Danaher and Merger Sub have agreed to use all
reasonable efforts to cause the merger to qualify, and not to take any actions
which the party knows or has reason to know could prevent the merger from
qualifying, for pooling-of-interests treatment. Hach further agreed that it
will use all reasonable best efforts to secure the waiver of any limited stock
appreciation rights or other rights to redeem for cash options or warrants of
Hach by each holder thereof and, subject to the prior consent of Danaher, which
shall not be unreasonably withheld, take such other actions as are necessary to
cure any facts or circumstances that could prevent the merger from qualifying
for pooling-of-interests accounting treatment, including by reissuing tainted
treasury shares as Danaher may approve. It is a condition to completion of the
merger that Danaher receive a letter from Arthur Andersen LLP, as independent
auditor of Danaher, to the effect that the merger is required to be accounted
for as a pooling of interests. In order to facilitate the treatment of the
merger as a "pooling of interests" and, therefore, to facilitate the
satisfaction of this condition and the covenants described above, Hach will
sell approximately 1.9 million shares of Hach common stock and approximately
2.3 million shares of Hach Class A common stock prior to the completion of the
merger.
The unaudited pro forma financial information contained in this information
statement/prospectus has been prepared using the "pooling of interests"
accounting method to account for the merger. See "Summary Historical and
Unaudited Pro Forma Financial Information" and "Unaudited Pro Forma Combined
Financial Information."
Regulatory Approvals
Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations promulgated thereunder (the "HSR Act"), we may
not complete the merger unless certain filings have been submitted to the
Antitrust Division of the U.S. Department of Justice and the U.S. Federal Trade
Commission, and certain waiting period requirements have expired or are
otherwise earlier terminated by the Antitrust Division and the Federal Trade
Commission. On May 7, 1999, Hach and Danaher submitted the required filings to
the Antitrust Division and the Federal Trade Commission. The waiting period
under the HSR Act is expected to expire on June 6, 1999, unless extended by a
request for additional information or documentary materials.
The Antitrust Division and the Federal Trade Commission frequently
scrutinize the legality under the antitrust laws of transactions such as the
merger. At any time before or after the completion of the merger, the Antitrust
Division or the Federal Trade Commission could take any action under the
antitrust laws as it deems necessary or desirable in the public interest,
including seeking to enjoin the completion of the merger or seeking the
divestiture of substantial assets of Hach or Danaher. Hach and Danaher believe
that the completion of the merger will not violate the antitrust laws. There
can be no assurance, however, that a challenge to the merger on antitrust
grounds will not be made, or, if a challenge is made, what the result will be.
In addition, under the laws of certain foreign nations, we may not complete
the merger unless certain filings are made with these nations' antitrust
regulatory authorities and these authorities approve or clear the merger. In
particular, on May 21, 1999, Danaher notified the German Federal Cartel Office.
Hach and Danaher expect that the merger will not violate any foreign antitrust
laws and that all the foreign antitrust regulatory authorities whose approval
or clearance is required will approve or clear the merger.
Listing of Shares of Danaher Common Stock on the NYSE
In the merger agreement, Danaher has agreed to use all reasonable efforts to
cause the shares of Danaher common stock which are to be issued pursuant to the
merger agreement and upon exercise of options granted to employees of Hach and
its subsidiaries to be listed for trading on the New York Stock Exchange, Inc.
(the "NYSE"). Such authorization for listing is a condition to the obligations
of Danaher, Merger Sub and Hach to consummate the merger.
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Resale of Shares of Danaher Common Stock Issued in the Merger; Affiliates
The shares of Danaher common stock to be issued to Hach stockholders in
connection with the merger and pursuant to the agreement and plan of
reorganization will be freely transferable under the Securities Act, except for
shares of Danaher common stock issued to any person deemed to be an affiliate
of Hach for purposes of Rule 145 under the Securities Act at the time of the
execution and delivery of the written consent by the controlling stockholders
on April 21, 1999. Those affiliates may not sell their shares of Danaher common
stock acquired in connection with the merger except pursuant to an effective
registration statement under the Securities Act covering such shares, or in
compliance with Rule 145 promulgated under the Securities Act or another
applicable exemption from the registration requirements of the Securities Act.
Pursuant to the merger agreement, Hach has delivered to Danaher a letter
identifying all persons who at the time of the execution and delivery of the
written consent may be deemed to be affiliates under Rule 145 or under
applicable Commission accounting releases with respect to pooling-of-interests
accounting treatment. Hach has further agreed to use all reasonable efforts to
cause each person who is so identified as an affiliate in such letter to
deliver to Danaher on or prior to the date which is 30 days prior to the
Effective Time a written agreement that such affiliate will not sell, pledge,
transfer or otherwise dispose of any Danaher common stock received in the
merger in violation of the Securities Act, and that such affiliate will not
sell any shares of Danaher common stock or any shares of Hach stock or
otherwise reduce such affiliate's risk relative to any shares of Danaher common
stock until after such time as consolidated financial statements which reflect
at least 30 days of post-merger operations have been published by Danaher in
the form of a quarterly earnings report, an effective registration statement
filed with the Commission, a report to the Commission on Form 10-K, 10-Q or 8-
K, or any other public filing or announcement which includes the combined
results of operations. Receipt by Danaher of such a written agreement from each
person who may be deemed to be an affiliate of Hach for Rule 145 or pooling-of-
interests purposes is a condition to Danaher's obligation to close the merger.
Kathryn C. Hach Darrow and Bruce J. Hach delivered their own affiliate letters
on April 21, 1999. See "The Merger Agreement--Covenants;" "The Merger
Agreement--Conditions."
No Appraisal Rights
Under Delaware law, stockholders in a public company are not generally
entitled to appraisal rights in a merger if the consideration they receive in
the merger consists only of shares listed on a national securities exchange and
cash in lieu of fractional shares. Accordingly, holders of Hach stock are not
entitled to appraisal rights in connection with the merger because the shares
of both Hach common stock and Hach Class A common stock are designated as
Nasdaq National Market securities and the shares of Danaher common stock are
listed on the NYSE and the Pacific Exchange.
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THE MERGER AGREEMENT
In this section of the information statement/prospectus, we describe the
material provisions of the merger agreement. We have attached a copy of the
merger agreement as Appendix A to this information statement/prospectus and
incorporate the merger agreement into this information statement/prospectus by
reference. The summary of the merger agreement we provide below is qualified in
its entirety by reference to the merger agreement. We encourage you to read the
merger agreement because it is the legal document that governs the merger.
The Merger
Under the terms and subject to the conditions set forth in the merger
agreement, Merger Sub will merge with and into Hach, with Hach continuing as
the surviving corporation. The surviving corporation will be a wholly owned
subsidiary of Danaher after the merger.
Consideration To Be Received In The Merger; Exchange Ratio
At the time of the merger, each outstanding share of Hach common stock and
Hach Class A common stock, other than shares held by Hach, any of its
subsidiaries, Danaher and Merger Sub, will be converted into the right to
receive a fraction of a validly issued, fully paid and nonassessable share of
Danaher common stock equal to the Exchange Ratio of .2987. The Exchange Ratio
may be subject to adjustment, as follows:
. If the Average Danaher Stock Price (as defined below) is less than
$57.09, Hach may call off the merger, provided that if Hach does so call
off the merger and on or before the second trading day following the
Determination Date (as defined below), Danaher agrees to increase the
Exchange Ratio to equal a fraction, the numerator of which is the
product of $57.09 and the then current Exchange Ratio and the
denominator of which is the Average Danaher Stock Price, then the merger
agreement will not be terminated.
. If the Average Danaher Stock Price (as defined below) is more than
$73.41, Danaher may call off the merger, provided that if Danaher does
so call off the merger and on or before the second trading day following
the Determination Date (as defined below), Hach agrees to decrease the
Exchange Ratio to equal that fraction, the numerator of which is the
product of $73.41 and the then current Exchange Ratio and the
denominator of which is the Average Danaher Stock Price, then the merger
agreement will not be terminated.
For purposes of the merger agreement, the "Average Danaher Stock Price" is
the average of the daily last sale prices for a share of Danaher common stock
as reported on the NYSE Composite Transactions reporting system (as reported in
The Wall Street Journal or, if not reported therein, in another mutually agreed
upon authoritative source) for the fifteen consecutive trading days ending at
the close of trading on the date the last of the mutual closing conditions of
the parties set forth in the merger agreement are satisfied (or, if such date
is not a trading date for Danaher common stock, the immediately preceding
trading date) (the "Determination Date").
Treatment of Hach Stock Held by Hach, Danaher and Merger Sub. Each share of
Hach stock owned by Hach as treasury stock, by its subsidiaries or by Merger
Sub will be automatically canceled and retired in the merger and will cease to
exist, and no securities of Danaher or other consideration will be delivered in
exchange for those shares. Each share of Hach stock owned by Danaher
immediately prior to the Effective Time will be converted into and exchanged
for one hundred thousandth of a fully paid and non assessable share of common
stock of the surviving corporation.
Procedures For Surrender Of Hach Certificates; Fractional Shares
Surrender of Hach Certificates. As soon as reasonably practicable after the
Effective Time, SunTrust Bank, Atlanta, Georgia, Danaher's exchange agent for
the merger, will send a letter of transmittal and instructions with respect to
the surrender by Hach stockholders of their Hach stock certificates to each
former Hach stockholder.
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Upon surrender by the Hach stockholders of their stock certificates
representing shares of Hach stock together with a duly executed letter of
transmittal and other documents, the Hach stockholders will be entitled to
receive stock certificates representing whole shares of Danaher common stock
which such holder has the right to receive pursuant to the merger agreement in
respect of shares of Hach stock formerly evidenced by such Hach certificate,
together with a cash payment in lieu of fractional shares, if any.
After the merger, until so surrendered to the exchange agent, each
certificate that previously represented shares of Hach stock will represent
only the right to receive upon surrender a certificate evidencing whole shares
of Danaher common stock into which such shares of Hach stock were converted in
the merger and cash in lieu of fractional shares of Danaher common stock, if
any, as described below.
Holders of certificates previously representing shares of Hach stock will
not be paid dividends or other distributions payable to holders of record of
shares of Danaher common stock as of any record date after the Effective Time,
until their certificates are surrendered to the exchange agent. When their
certificates are surrendered, any unpaid dividends with a record date after the
Effective Time but prior to such surrender with respect to whole shares of
Danaher common stock and any cash in lieu of fractional shares of Danaher
common stock payable as described below will be paid without interest.
We will close Hach's stock transfer books at the Effective Time, and no
further transfers of shares of Hach stock will be recorded on its stock
transfer books. If a transfer of ownership of Hach stock that is not registered
in the transfer records of Hach has occurred, a certificate representing the
proper number of shares of Danaher common stock will be issued to a person
other than the person in whose name the certificate so surrendered is
registered, together with a cash payment in lieu of fractional shares, if any,
and payment of dividends or distributions, if any, so long as the Hach stock
certificates are accompanied by all documents required to evidence and effect
the transfer, the person requesting such payment pays any transfer or other
taxes required by reason of the issuance of shares of Danaher common stock or
establishes to Danaher's satisfaction that such taxes have been paid.
Fractional Shares. No fractional share of Danaher common stock will be
issued to any Hach stockholder upon surrender of certificates previously
representing Hach stock. Instead, the exchange agent will pay to each of those
stockholders an amount in cash determined by multiplying the fractional share
interest to which the holder would otherwise be entitled by the closing sale
price of a share of Danaher common stock on the NYSE composite tape on the last
trading day prior to the Effective Time.
Representations And Warranties
Danaher, Merger Sub and Hach have made representations and warranties in the
merger agreement relating to, among other things:
. their corporate organization, qualification, standing and power;
. their capital structures;
. the authorization, execution, delivery, and enforceability of the merger
agreement and related matters;
. required consents, approvals, orders and authorizations of governmental
authorities relating to, and non-contravention of certain agreements as
a result of, the merger agreement;
. documents filed by each of Danaher and Hach with the SEC and the
accuracy of the information contained in such documents;
. absence of certain material changes or events with respect to Hach since
April 30, 1998 and with respect to Danaher since January 1, 1999;
. litigation;
. compliance with applicable laws, permits and licensing requirements;
. treatment of the merger as a pooling-of-interests for accounting
purposes;
. qualification of the merger as a reorganization for tax purposes;
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. engagement of and payment of fees to brokers, investment bankers,
finders and financial advisors in connection with the merger agreement;
and
. accuracy of information to the provided in this information
statement/prospectus.
The merger agreement also contains certain representations and warranties of
Hach, relating to, among other things:
. its subsidiaries and its investments in other companies;
. the absence of undisclosed liabilities;
. board approval of the merger agreement and the merger;
. required stockholder vote in connection with the merger agreement and
the merger;
. employee benefit plans and ERISA compliance;
. environmental matters;
. taxes and tax returns;
. absence of excess parachute payments;
. contracts and debt instruments;
. intellectual property;
. labor agreements;
. the opinion of its investment banker;
. inapplicability of Section 203 of the Delaware General Corporation Law
and other state takeover laws; and
. "Year 2000" compliance.
The merger agreement also contains the representation and warranty of
Danaher and Merger Sub regarding the purpose and operations of Merger Sub.
The representations and warranties made by the parties to the merger
agreement will not survive the Effective Time, but they form the basis of a
condition to closing regarding the obligations of Danaher and Merger Sub, on
the one hand, and Hach, on the other hand.
Covenants
Conduct of Business.
. Hach. Hach has agreed in the merger agreement that during the period
from the date of the merger agreement and continuing until the Effective
Time or the termination of the merger agreement, Hach will, and will
cause its subsidiaries to, carry on their respective businesses in the
ordinary course consistent with past practice and use all reasonable
efforts to preserve intact their current business organizations, keep
available the services of their current officers and employees and
preserve their relationships with customers, suppliers and others having
business dealings them. In addition, Hach has agreed to certain
customary restrictions on the conduct of its business with regard to
matters relating to: (1) dividends and changes in capital stock, (2)
stock options and stock issuances, (3) amendments to organizational
documents, (4) mergers, consolidations and acquisitions of assets,
(5) sales and like transfers of assets, (6) incurrence of indebtedness,
(7) capital expenditures, (8) tax matters, (9) settlement of actions,
(10) compensation and employee benefits, (11) material contracts, and
(12) other material actions.
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. Danaher. Danaher has agreed in the merger agreement that during the
period from the date of the merger agreement and continuing until the
Effective Time or the termination of the merger agreement, Danaher will,
and will cause its subsidiaries to, carry on their respective businesses
in the ordinary course consistent with past practice and use all
reasonable efforts to preserve their relationships with customers,
suppliers and others having business dealings them, provided that the
foregoing will not prevent them from disposing of or acquiring any
assets or businesses or entering into any financing transactions if such
action is, in the judgment of Danaher, desirable in the conduct of the
business of Danaher and its subsidiaries. In addition, Danaher has
agreed to certain customary restrictions on the conduct of its business
with regard to matters relating to: (1) dividends and changes in capital
stock, (2) amendments to organizational documents, and (3) other related
material actions.
. Further agreements. Each of Danaher and Hach has agreed not to take any
action that would result in any of the representations of such party in
the merger agreement becoming untrue.
No Solicitation. Hach has agreed that it will not and will not permit any of
its subsidiaries to, nor will it authorize or permit any officer, director,
advisor, representative of Hach or any of its subsidiaries to:
. solicit, encourage, or facilitate the submission of any proposal for a
merger or other business combination involving Hach or any of its
subsidiaries or any acquisition of any capital stock or any significant
amount of the assets of Hach or any of its subsidiaries; or
. engage in discussions regarding, or provide any information to any
person with respect to, or take any other action to facilitate any
inquiries that constitute, or may reasonably be expected to lead to, any
business combination or like transaction.
Hach agreed to terminate any such existing discussions or negotiations with
respect to any such proposals (of which there were none) and to request the
return or destruction of any confidential information provided to any other
party in connection with any such discussion during the last 12 months. In
addition, Hach has agreed to notify Danaher promptly if it receives such a
proposal and provide Danaher with the material terms of the proposal and the
identity of the person making the proposal, and to keep Danaher informed on a
current basis of the status and details of any such request or proposal.
Benefit Plans and Employee Matters in General. In the merger agreement,
Danaher agreed with Hach that following the merger it will cause the surviving
corporation to honor, the employment, severance and bonus agreements and
arrangements to which Hach is a party as of the merger. As a general rule, Hach
employees who continue employment after the effective time of the merger will
receive credit for pre-merger service for purposes of eligibility and vesting
(but not benefit accrual).
In the merger agreement, Danaher also agreed with Hach that:
. for the period ending December 31, 1999, the surviving corporation shall
continue the compensation and employee benefit and welfare plans and
programs of Hach to the extent practicable as in effect on the date of
the merger; and
. from and after January 1, 2000, the surviving corporation will provide
the employees of Hach and its subsidiaries at the time of the merger as
a whole (1) compensation (including bonus and incentive awards) programs
and plans and (2) employee benefit and welfare plans, programs,
contracts, agreements and policies (including insurance and pension
plans), fringe benefits and vacation policies which are substantially
the same as or not materially less favorable in the aggregate to such
employees than those generally in effect with respect to similarly
situated employees of Danaher.
Certain Hach plans will be affected by the merger as described in the following
paragraphs.
Hach Stock Options. In the merger agreement, Hach and Danaher agreed to take
all necessary action to provide that at the time of the merger, all stock
options under any Hach stock option or stock appreciation
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<PAGE>
rights plan will be canceled and each holder of a stock option, whether or not
then exercisable, shall receive with respect to such stock option or right,
that number of whole shares of Danaher common stock equal to (1) the fair value
of such stock option divided by (2) the Average Danaher Stock Price. Hach
agreed to use its reasonable best efforts to receive any consents that may be
necessary to cancel the options in exchange for shares of Danaher common stock.
For purposes of the merger agreement, the "fair value of such stock option"
is equal to the product of (x) the number of shares of Hach stock subject to
such stock option and (y) the excess, if any, of (A) the product of the
Exchange Ratio at the time of completion of the merger and the Average Danaher
Stock Price over (B) the exercise price of such stock option. The calculation
of the Average Danaher Stock Price is described at "--Consideration to Be
Received in the Merger; Exchange Ratio."
Hach Deferred Compensation Plan. Each of those participants in the Hach
Deferred Compensation Plan who are eligible to participate in Danaher's
Executive Deferred Incentive Program ("EDIP") will have ten days following the
merger to elect to transfer his or her Hach Deferred Compensation Plan account
balance to an EDIP account as of December 31, 2000. The Hach Deferred
Compensation Plan will terminate on December 31, 2000, and account balances for
those persons who do not participate in the EDIP (or who have not elected to
transfer such account balances to EDIP accounts) will be paid to such
individuals in cash promptly.
Hach Employee Stock Purchase Plan. Hach will amend its Employee Stock
Purchase Plan so that the current offering period will end prior to the merger.
No other offers will be made under this plan.
Insurance and Indemnification. For three years after the merger, Danaher
will maintain in effect Hach's current directors' and officers' liability
insurance (or policies containing substantially similar coverage) covering acts
or omissions occurring prior to and as of the effective time of the merger.
Danaher and its subsidiaries will not, however, be required to pay, in total,
an annual premium for the insurance described in this paragraph in excess of
200% of the current annual premium paid by Hach for its existing coverage prior
to merger. However, if the annual premiums of that insurance coverage exceed
that amount, Danaher will be obligated to obtain a policy with the best
coverage available for a cost up to but not exceeding that amount.
If the merger is completed, the certificate of incorporation and by-laws of
the surviving corporation shall contain the provisions of Hach's certificate of
incorporation and by-laws in effect as of the date of the merger agreement
affecting the indemnified parties' rights to indemnification, limitation of
liability and advancement of expenses will survive the completion of the merger
and will continue in full force and effect for a period of six years. Such
provisions may not be amended, repealed or modified in any manner that would
adversely affect the rights of those individuals who at the time of the merger
were directors, officers, employees or agents of Hach, unless such modification
is required by law. Danaher has agreed to cause the surviving corporation to
honor its indemnification obligations to such persons.
Fees and Expenses. Pursuant to the merger agreement, whether or not the
merger is completed, Danaher and Hach will pay their own costs and expenses
incurred in connection with the merger and the merger agreement, and not the
other's.
Tax Treatment. The merger agreement provides that Danaher, Merger Sub and
Hach must use all reasonable efforts to ensure that the merger qualifies, and
will not take any actions which that party knows or has reason to know could
prevent the merger from qualifying, as a tax free reorganization under Section
368(a) of the Internal Revenue Code.
Accounting Treatment. In the merger agreement, Danaher, Merger Sub and Hach
have agreed to use all reasonable efforts to cause the merger to, and will not
take any actions which that party knows or has reason to know could prevent the
merger from qualifying, for pooling-of-interests treatment.
Public Announcements. Danaher, Merger Sub and Hach have agreed to consult
with one another before issuing, and provide each other the opportunity to
review and comment upon the text of, any press release or public statement
relating to the transactions contemplated by the merger agreement and shall not
make any such statement prior to consultation, except as may be required by
applicable law, court process or by obligations pursuant to any listing
agreement with any national securities exchange.
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<PAGE>
All Reasonable Efforts. Subject to the terms of the merger agreement, each
party has agreed to use all reasonable efforts to take or cause to be taken all
actions necessary, proper or advisable under applicable law to complete in the
most expeditious manner possible the merger and other transactions contemplated
in the merger agreement including:
. making all necessary registrations and filings with all third parties
and governmental entities;
. obtaining all necessary consents, approvals or waivers from third
parties; and
. executing and delivering all additional instruments necessary to
complete the transactions contemplated by, and to carry out the purpose
of, the merger agreement.
We have also agreed to supply additional information that may be requested
pursuant to the HSR Act promptly and to take all other actions necessary to
cause the expiration or termination of the applicable waiting periods under the
HSR Act and in connection with other required consents as soon as practicable.
Additional Covenants. The merger agreement provides for additional covenants
relating to, among other things, the preparation and filing of this information
statement/prospectus and the related registration statement on Form S-4, the
convening of a meeting of the Hach stockholders if requested by Danaher, access
to information and confidentiality, notifying the other parties of certain
breaches of representations and certain failures to comply with the covenants
of the merger agreement, and the delivery of information about and letters from
certain affiliates of Hach.
Conditions
The obligations of each party to the merger agreement to complete the merger
are subject to the satisfaction or waiver of various conditions on or before
the Effective Time completed, which include, in addition to other customary
closing conditions, the following:
. no litigation brought by any governmental entity seeking to enjoin
completion of the merger, and no order, executive order, stay, decree,
judgment or injunction or statute, rule or regulation shall be in effect
that prohibits the completion of the merger;
. any waiting period applicable to the merger under the HSR Act shall have
terminated or expired;
. the registration statement on Form S-4 of which this information
statement/prospectus is a part shall have been declared effective and
shall not be the subject of any stop order, and any proceedings shall
not have been brought or threatened by the SEC for that purpose;
. the Danaher common stock issuable to Hach stockholders pursuant to the
merger agreement shall be approved for listing on the NYSE, subject to
official notice of issuance; and
. all authorizations, consents, approvals, waivers or orders required to
be obtained, and all filings, notices and declarations required to be
made, by Danaher, Merger Sub and Hach prior to the completion of the
merger and the related transactions shall have been obtained from, and
made with, all required governmental entities except for such
authorizations, consents, filings, approvals, waivers, orders, notices
or declarations the failure to obtain or make would not have a material
adverse effect, at or after the Effective Time, on Hach or Danaher.
Except as may be waived in writing by Hach, the obligation of Hach to effect
the merger is also subject to the satisfaction of the following conditions:
. the representations and warranties of Danaher in the merger agreement
(when read to exclude any qualification or exception as to materiality
or material adverse effect) shall be true and correct as of the closing
date of the merger except for such failures to be true and correct which
could not, individually or in the aggregate, reasonably be expected to
result in a material adverse effect on Danaher or Hach, provided that
those representations and warranties that address matters only as of a
particular date shall remain true and correct in all material respects
as of such particular date; Hach shall have received a certificate
executed on behalf of Danaher by the Chief Executive Officer of Danaher
to such effect;
34
<PAGE>
. Danaher shall have performed in all material respects all covenants
required to be performed by it under the merger agreement at or prior to
the closing date of the merger;
. Hach shall have received an opinion of McBride Baker & Coles, dated as
of the closing date, to the effect that the merger will be treated for
federal income tax purposes as a reorganization qualifying under the
provisions of Section 368(a) of the Internal Revenue Code, and that
neither Hach nor any of the shareholders of Hach will recognize any gain
or loss for federal income tax purposes as a result of the merger or
receipt of the merger consideration, except with respect to any cash
received in lieu of a fractional share interest; and
. Danaher shall have signed and delivered the registration rights
agreement.
Except as may be waived in writing by Danaher and Merger Sub, the
obligation of Danaher and Merger Sub to effect the merger is also subject to
the satisfaction of the following conditions:
. the representations and warranties of Hach in the merger agreement (when
read to exclude any qualification or exception as to materiality or
material adverse effect) shall be true and correct as of the closing
date of the merger except for such failures to be true and correct could
not, individually or in the aggregate, reasonably be expected to result
in a material adverse effect on Hach or Danaher provided that those
representations and warranties which address matters only as of a
particular date shall remain true and correct in all material respects
as of such particular date; Danaher shall have received a certificate
executed on behalf of Hach by the Chief Executive Officer and Chief
Financial Officer of Hach to such effect;
. Hach shall have performed in all material respects all obligations
required to be performed by it under the merger agreement at or prior to
the closing date of the merger;
. Danaher shall have received an opinion of Wachtell, Lipton, Rosen & Katz
to the effect that the merger will qualify as a reorganization within
the meaning of Section 368(a) of the Internal Revenue Code;
. Danaher shall have received a letter from Arthur Andersen LLP to the
effect that the merger is required to be accounted for as a pooling-of-
interests by Danaher under generally accepted accounting principles;
. Hach has obtained the consent or approval of each person whose consent
or approval is required in connection with the merger under all loan or
credit agreements, notes, lease or other agreements or instruments to
which Hach or any subsidiary is a party, except as would not have a
material adverse effect on Hach prior to the Effective Time and on
Danaher after the Effective Time; and
. Danaher has received from each person who is identified as an
"affiliate" of Hach an agreement to comply with restrictions on such
affiliates pursuant to Rule 145 under the Securities Act and under the
pooling of interests accounting treatment rules.
Termination
The merger agreement provides that prior to the Effective Time, the merger
agreement may be terminated:
. by mutual written consent of Danaher and Hach;
. by either Danaher or Hach if:
(1) we do not complete the merger on or before October 31, 1999, except
that a party may not terminate the merger agreement for this reason
if its failure to fulfill its obligations is the cause of the merger
not being completed by October 31, 1999;
(2) any governmental entity issues a final non-appealable order, decree
or ruling or has taken any other action that makes the merger
illegal or permanently prohibits the completion of the merger; or
35
<PAGE>
(3) there has been a material breach by the other party of any of the
other's representations, warranties, covenants or agreements
contained in the merger agreement, which breach would result in the
failure to satisfy the conditions regarding covenants and
representations, and such breach is incapable of being cured by
October 31, 1999.
. by Hach, if
(1) at the close of business on the Determination Date if the Average
Danaher Stock Price is less than $57.09;
(2) Hach elects to terminate the merger agreement for such reason; and
(3) on or before the end of the second trading day after the
Determination Date, Danaher has not elected to increase the
Exchange Ratio to equal that fraction of a share of Danaher common
stock (rounded to four decimal points), the numerator of which is
the product of $57.09 and the Exchange Ratio (as then in effect)
and the denominator of which is the Average Danaher Stock Price.
. by Danaher, if
(1) at the close of business or on the Determination Date, the Average
Danaher Stock Price is more than $73.41;
(2) Danaher elects to terminate the merger agreement for such reason;
and
(3) on or before the end of the second trading day after the
Determination Date, Hach has not elected to decrease the Exchange
Ratio to equal that fraction of a share of Danaher common stock
(rounded to four decimal points), the numerator of which is the
product of $73.41 and the Exchange Ratio (as then in effect) and
the denominator of which is the Average Danaher Stock Price.
Hach may elect not to terminate the merger agreement even if the Danaher
Average Stock Price falls below $57.09 per share or not to decrease the
Exchange Ratio if Danaher terminates the merger agreement if the Danaher
Average Stock Price rises above $73.41. In determining whether to elect to
terminate the merger agreement or to lower the Exchange Ratio in these
circumstances, the Hach Board will take into account, consistent with its
fiduciary duties, all relevant facts and circumstances existing at the time,
including, without limitation, whether it believes Danaher is prepared to
increase the Exchange Ratio, the market for comparable stocks in Hach's
industry, the relative value of shares of Danaher common stock in the market,
and the advice of its legal advisors and investment banker. By their approval
of the merger agreement in the written consent, Hach stockholders have
authorized the Hach Board to determine, in the exercise of its fiduciary
duties, to (1) proceed with the merger even though the value received per share
of Hach stock is less than $17.05 because the Danaher Average Stock Price is
below $57.09 and (2) allow Danaher to terminate the merger (and not to lower
the Exchange Ratio) because the Danaher Average Stock Price is more than $73.41
even though the value to be received per share of Hach stock would be at least
$21.93 based upon the Average Danaher Stock Price.
Amendments
The parties to the merger agreement may amend the merger agreement, provided
that any amendment that by law or in accordance with the rules of any relevant
stock exchange requires further approval by the Hach stockholders will not be
made without the further approval of those stockholders. Any amendment will be
in writing.
Extension; Waiver
The merger agreement permits Hach and Danaher to extend the time for
performance of any of the obligations of the other party, to waive any
inaccuracies in the representations of the other party and, subject to the
provision described in "--Amendment," waive compliance with any of the
agreements or conditions contained in the merger agreement.
36
<PAGE>
OTHER AGREEMENTS
The descriptions of the stockholders support agreement, the registration
rights agreement and the agreement and plan of reorganization set forth below
do not purport to be complete and are qualified in their entirety by reference
to those agreements. A copy of the stockholders support agreement is attached
as Appendix B to this information statement/prospectus and is incorporated by
reference herein. A copy of the form of registration rights agreement is
attached as Appendix D to this information statement/prospectus and is
incorporated by reference herein. A copy of the agreement and plan of
reorganization is attached as Appendix E to this information
statement/prospectus and is incorporated by reference herein.
Stockholders Support Agreement
Agreement to Support Transaction. Concurrently with the execution of the
merger agreement, Danaher and the controlling stockholders, Mrs. Hach-Darrow
and Mr. Hach, entered into a stockholders support agreement. Mrs. Hach-Darrow
has served as the Chairman of Hach since 1988 and served as the Chief Executive
Officer of Hach from 1988 to 1998. As of June 2, 1999, Mrs. Hach-Darrow held
4,546,990 shares of Hach common stock and 4,541,647 shares of Hach Class A
common stock. After the merger, Mrs. Hach-Darrow will hold approximately 2% of
the outstanding shares of Danaher common stock. Mr. Hach has served as Chief
Executive Officer of Hach since 1998 and has served as President of Hach since
1988. Prior to serving as Chief Executive Officer, Mr. Hach was the Chief
Operating Officer of Hach since 1988. As of June 2, 1999, Mr. Hach held 247,318
shares of Hach common stock and 236,962 shares of Hach Class A common stock.
Pursuant to the stockholders support agreement, each controlling stockholder
agreed to execute and deliver, in accordance with Section 228 of the DGCL, a
written consent of Hach stockholders without a meeting, with respect to all
shares of Hach stock that such stockholder had the right to vote, to approve
and adopt the merger agreement and the merger. On April 21, 1999, promptly
after the execution and delivery of the merger agreement, each controlling
stockholder executed the written consent and delivered it to Hach. As a result,
no further vote or action by Hach's public stockholders is necessary to effect
the merger, except as may arise if certain amendments are proposed to be made
to the merger agreement that under the DGCL require stockholder approval. As of
April 21, 1999, the date the written consent was signed, the controlling
stockholders owned approximately 53% of the voting power of Hach stock. A copy
of the written consent is attached as Appendix C to this information
statement/prospectus and is incorporated by reference herein.
In addition to delivering such written consent, each of the controlling
stockholders agreed in the stockholders support agreement to deliver any
additional written consents with respect to, or to vote, in person or by proxy,
all shares of Hach stock or other voting securities owned by such controlling
stockholder or her or his affiliates in favor of approval and adoption of the
merger agreement, the merger, and any action required in furtherance thereof,
and against any action or agreement that would result in a material breach of
any representation, warranty, covenant or obligation of Hach contained in the
merger agreement. Each controlling stockholder further agreed that she or he
would not, and would not permit any of her or his affiliates to, contract to
sell, sell or otherwise pledge, encumber, transfer or dispose of any shares of
Hach stock without giving prior written notice to Danaher and in any event if
such transaction could reasonably be expected to jeopardize Danaher's ability
to account for the merger as a pooling of interests.
Pursuant to the stockholders support agreement, each controlling stockholder
also agreed that she or he and her or his affiliates will cooperate fully with
Danaher in connection with the merger agreement and the transactions
contemplated thereby, and that he or she and his or her affiliates will not,
directly or indirectly, encourage, solicit or engage in discussions or
negotiations with any third party (other than Danaher) concerning any business
combination, sale of a significant amount of assets, or other alternative
transaction, that he or she will terminate any current discussions and
negotiations, and that he or she will notify Danaher of any alternative
transaction and the identity of any third party making such proposal for an
alternative transaction.
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<PAGE>
The stockholder support agreement terminates upon the first to occur of the
merger or termination of the merger agreement in accordance with its terms.
Covenant Not to Compete. The stockholders support agreement further provides
that each controlling stockholder will not carry on or participate in business
similar to or in competition with any business conducted by Hach or assist or
advise any other person in such business, in each instance for a period of
three years after the Effective Time. The controlling stockholders also agreed
that for a five year period commencing at the Effective Time that each of them
would not lend or allow her or his name or reputation to by used in or to
promote any business related to Hach's businesses other than for the benefit of
Danaher and its affiliates or solicit or divert from Danaher and its affiliates
any business constituting, or any customer of, or any supplier of, any part of
the businesses then conducted by Hach, Danaher or any of their affiliates.
Covenant Not to Solicit. Pursuant to the stockholders support agreement,
each controlling stockholder also agreed for a period of five years commencing
at the Effective Time not to induce or attempt to induce any person (1) engaged
or employed or within the prior 12 months by Hach or its affiliates to leave
the employ of Hach or its affiliates or in any other manner seek to contract
for the services of any such person in any capacity or (2) who is or has been
within the prior 12 months a customer or supplier with respect to any business
of Hach to interfere, in any way, directly or indirectly, with the business
relationship between Hach and any of is affiliates and any such customer.
Registration Rights Agreement
Concurrently with the execution of the merger agreement, Danaher and Mrs.
Hach-Darrow agreed to a form of registration rights agreement, pursuant to
which, during the period commencing on the Effective Time and ending on the
first anniversary of the Effective Time (the "Registration Period"), Mrs. Hach-
Darrow shall have the right to request that Danaher register for sale under the
Securities Act all or a part of the Danaher common stock she acquires in the
merger and any securities issued or issuable to Mrs. Hach-Darrow in connection
with a stock dividend, stock split, reorganization, merger or similar
transaction in respect of any shares of Danaher common stock she acquires in
the merger. Mrs. Hach-Darrow is entitled to make one request to register these
shares of Danaher common stock during the Registration Period.
The proposed registration rights agreement provides that Danaher may include
in the registration requested by Mrs. Hach-Darrow other securities for sale for
its own account or for the account of any other person, subject to certain
restrictions if marketing factors limit the number of shares to be included in
such registration. Under the registration rights agreement, Danaher is not
obligated to register any securities on a "shelf" registration statement
pursuant to Rule 415 under the Securities Act (or any successor provisions of
the Securities Act) or otherwise to register securities on a continuous or
delayed basis.
The registration rights agreement also provides that Danaher is entitled to
postpone the request for registration or delivery of a prospectus or supplement
or amendment if it determines that in view of the advisability of deferring
public disclosure of material corporate developments or other information, the
disclosures required to be made pursuant thereto would not be in the best
interests of Danaher at that time. No single postponement of the request for
registration or delivery of a prospectus or supplement may exceed 90 days and
all such postponements may not exceed 180 days in the aggregate.
Agreement and Plan of Reorganization
On the date of the merger agreement, Danaher entered into an agreement and
plan of reorganization with C&K Enterprises, Ltd., a Delaware corporation, and
the controlling stockholders of C&K, Mrs. Hach-Darrow and Mr. Hach. As of the
date of the agreement and plan of reorganization, C&K owned 1,511,415 shares of
Hach common stock and 1,511,415 shares of Hach Class A common stock, and the
controlling stockholders of C&K had the right to vote 92.78% of the outstanding
voting rights of C&K. The agreement and plan of reorganization contemplates the
reorganization of C&K, which is intended to occur immediately prior to
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<PAGE>
completion of the merger. Pursuant to the agreement and plan of reorganization,
all shares of Hach stock held by C&K will be exchanged with Danaher for shares
of Danaher common stock and cash in lieu of a fractional share of Danaher
common stock, if any, at the Exchange Ratio provided for in the merger
agreement. Pursuant to the agreement and plan of reorganization, promptly after
the exchange of shares of Hach stock for shares of Danaher common stock, C&K
will liquidate. The obligation of the parties to complete the reorganization is
conditioned upon satisfaction of the following conditions:
. satisfaction or waiver of the conditions to the merger set forth in the
merger agreement;
. declaration of effectiveness of a registration statement covering the
shares of Danaher common stock to be issued in this exchange;
. absence of any stop order suspending the effectiveness of the
registration statement or any proceedings initiated or, to the knowledge
of C&K or Danaher, threatened by the SEC and in each instance still
ongoing; and
. approval for listing on the NYSE of the shares of Danaher common stock
issuable pursuant to this agreement and plan of reorganization.
It is a condition to C&K's, Mrs. Hach-Darrow's and Mr. Hach's obligation to
complete the C&K reorganization that they receive a legal opinion to the effect
that the C&K reorganization will be treated for federal income tax purposes as
a reorganization qualifying under the provisions of Section 368(a) of the
Internal Revenue Code and that neither C&K nor any of the controlling
stockholders of C&K will recognize any gain or loss for federal income tax
purposes as a result of the reorganization or receipt of the consideration in
such reorganization (except with respect to cash paid instead of fractional
shares). The agreement and plan of reorganization expressly provides that the
merger is not conditioned upon the completion of the reorganization of C&K
described above.
In the merger, the shares of Hach common stock and Hach Class A common stock
acquired by Danaher pursuant to the C&K reorganization will not be canceled but
will be converted into and exchanged for one hundred-thousandth of a share of
common stock of the surviving corporation.
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<PAGE>
COMPARISON OF STOCKHOLDER RIGHTS
Both Hach and Danaher are Delaware corporations and are governed by Delaware
law. In addition, the rights of Hach stockholders are currently governed by the
Hach restated certificate of incorporation, as amended, and the Hach bylaws,
and the rights of Danaher stockholders are governed by the Danaher certificate
of incorporation and the Danaher bylaws. After the Effective Time, the rights
of holders of Hach common stock and Hach Class A common stock who become
holders of Danaher common stock will be governed by the Danaher certificate of
incorporation, the Danaher bylaws and Delaware law. In most respects, the
rights of holders of Hach common stock and Hach Class A common stock (which is
distinguished from Hach common stock by the absence of voting rights) are
similar to the rights of holders of Danaher common stock. The following is a
summary of the material differences between such rights. This summary does not
purport to be a complete discussion of, and is qualified in its entirety by
reference to, Delaware law as well as to the Hach restated certificate of
incorporation, the Hach bylaws, the Danaher certificate of incorporation and
the Danaher bylaws, copies of which are on file with the SEC.
Summary of Material Differences Between Current Rights of Hach
Stockholders and Rights Those Stockholders Will Have as Danaher
Stockholders Following the Merger
<TABLE>
<CAPTION>
Hach Stockholder Rights Danaher Stockholder Rights
<S> <C> <C>
Authorized The authorized capital stock of Hach The authorized capital stock of
Capital Stock: consists of 25 million shares of Danaher consists of 300 million
common stock and 20 million shares shares of common stock and 15
of Class A common stock. million shares of preferred stock.
- --------------------------------------------------------------------------------------------------
Number of Directors: The Hach restated certificate of The Danaher certificate of
incorporation and bylaws both incorporation requires no less than
require Hach to have no less than 3 directors, and the Danaher bylaws
three directors, and provide for the provide that the number
Hach Board to have the power to of directors may be between 1 and
determine the total number. The Hach 15, as determined by the Danaher
Board currently consists of 9 Board. The Danaher Board currently
directors. consists of 7 directors.
- --------------------------------------------------------------------------------------------------
Classification of Board Hach does not have a classified The Danaher Board is divided into 3
of Directors: board. The Hach bylaws require that classes, with each class serving a
all directors be elected for a term staggered 3 year term. There are
of one year or until his or her currently
successor is elected and qualified. 2 classes with 3 directors, and 1
class with 1 director.
- --------------------------------------------------------------------------------------------------
Removal of Directors: Pursuant to the Hach bylaws, any Delaware law provides that the
director or the entire Hach Board stockholders of a company with a
may be removed, either for or classified board may remove a
without cause, at any time by the director
affirmative vote of the holders of a only for cause, unless its
majority of all outstanding shares certificate of incorporation
of Hach stock entitled to vote. provides otherwise. Neither the
Danaher certificate of incorporation
nor the Danaher bylaws address the
removal of directors.
</TABLE>
40
<PAGE>
<TABLE>
<CAPTION>
Hach Stockholder Rights Danaher Stockholder Rights
<S> <C> <C>
Amendment of Corporate The Hach restated certificate of The Danaher certificate of
Charter: incorporation may be amended by incorporation may be amended by the
board resolution and an affirmative affirmative vote of holders of a
vote by holders of a majority of the majority of Danaher common stock
Hach common stock, except with outstanding.
respect to:
(1) amending the provision described
in "Business Combination
Prohibitions" below, which
requires the affirmative vote of
80% of the outstanding Hach
stock entitled to vote on all
stockholder matters;
(2) proposals to change the par
value of the Hach Class A common
stock, other amendments to the
certificate of incorporation
that alter or change the powers,
preferences or special rights of
the Class A common stock so as
to adversely affect them or
other matters that may require
class voting under Delaware law,
in each such case the vote of
holders of Hach Class A common
stock as a class is required;
and
(3) proposals to change the number
of authorized shares of either
Hach common stock or Hach Class
A common stock, in which case
the affirmative vote of the
holders of a majority of the
outstanding Hach stock voting
together as a single class is
required.
- --------------------------------------------------------------------------------------------------
Amendment of Bylaws: The Hach bylaws may be altered or The Danaher bylaws may be amended,
repealed by the holders of Hach and new bylaws may be adopted, by
voting stock or by the Hach Board, Danaher stockholders or the Danaher
if notice of the proposed change was Board, provided that notice of all
given in the notice of meeting and, such amendment or adoption is
in the case of a meeting of the Hach included in the notice of such
Board, such notice was given no less Danaher stockholders meeting or
than two days before the meeting. Danaher Board meeting. The Danaher
The Hach bylaws state that any bylaws state that all such
alteration of the Hach bylaws by the amendments must be approved by
holders of Hach voting stock either holders of a majority of all
requires the affirmative vote of at outstanding Danaher common stock or
least a majority of the voting power a majority of the entire Danaher
of all outstanding stock entitled to Board then in office, including
vote. vacancies.
The Danaher certificate of
incorporation specifically provides
that no bylaws adopted by the
Danaher stockholders may invalidate
any prior act of the directors which
would have been valid if such bylaw
had not been adopted.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Hach Stockholder Rights Danaher Stockholder Rights
<S> <C> <C>
Voting Stock: The outstanding Hach voting stock is The outstanding Danaher voting stock
Hach common stock and, in limited consists solely of Danaher common
instances, Hach Class A common stock.
stock. Holders of Hach Class A
common stock may vote on the
following matters:
(1) proposals to change the par
value of Hach Class A common
stock, other amendments to the
certificate of incorporation
that alter or change the powers,
preferences or special rights of
the Class A common stock so as
to adversely affect them or
other matters that may require
class voting under Delaware law,
in each such case the vote of
holders of Class A common as a
class is required;
(2) proposals to change the number
of authorized shares of either
Hach common stock or Hach Class
A common stock, in which case
the affirmative vote of holders
of a majority of all outstanding
Hach stock voting together as a
single class is required; and
(3) all matters presented to Hach
stockholders (a) automatically
at the time the number of
outstanding shares of Hach
common stock is less than 10% of
the aggregate number of
outstanding shares of Hach Class
A common stock and Hach common
stock; or (b) upon the
resolution of the Hach Board if,
as a result of the existence of
the Hach Class A common stock,
the Hach common stock and/or the
Hach Class A common stock are,
or will be, excluded from
quotation on the NASDAQ National
Market System and on principal
national exchanges.
</TABLE>
42
<PAGE>
<TABLE>
<CAPTION>
Hach Stockholder Rights Danaher Stockholder Rights
<S> <C> <C>
Exculpation of Pursuant to its bylaws, Hach will Pursuant to its bylaws, Danaher will
Directors and indemnify any director or officer of indemnify any director, officer,
Officers: Hach (or any director, officer, employee, agent or fiduciary of
employee or agent of another entity Danaher (or of another entity if
if serving at the request of Hach) serving at the request of Danaher)
to the fullest extent permitted by to the fullest extent permitted by
the DGCL as it may be amended (but Delaware law. The Danaher
only if such amendment permits Hach certificate of incorporation
to provide broader coverage than provides that Danaher will indemnify
prior to the amendment), provided to the fullest extent permitted by
that, if the person seeks law any person made, or threatened
indemnification in connection with a to be made, party to an action or
proceeding that he or she initiated, proceeding by reason of the fact
the Hach Board approved the that he is or was a director or
proceeding. The Hach bylaws further officer of Danaher or that such
provide that Hach may indemnify its director or officer was serving any
employees and agents if the Hach other entity in any capacity at the
Board so authorizes. request of Danaher. The Danaher
certificate of incorporation further
provides that no director shall be
personally liable to Danaher or its
stockholders for monetary damages
for any breach of fiduciary duty,
except for any breach of the duty of
loyalty, for any act not in good
faith or which involves intentional
misconduct or a knowing violation of
the law, for unlawful dividends,
repurchases or redemptions under
Delaware law, or for any transaction
in which that director received an
improper personal benefit.
The Hach restated certificate of
incorporation provides that Hach
shall to the full extent permitted
by the DGCL, as amended from time to
time, indemnify all persons whom it
may indemnify pursuant to the DGCL.
It also states that no director
shall be personally liable to Hach
or its stockholders for monetary
damages for breach of fiduciary duty
as a director, except for any breach
of the duty of loyalty, for any act
not in good faith or which involves
intentional misconduct or a knowing
violation of the law, for unlawful
dividends, repurchases or
redemptions under Delaware law, or
for any transaction in which that
director received an improper
personal benefit.
- -------------------------------------------------------------------------------------------------
Business Combination The Hach restated certificate of None.
Prohibitions: incorporation contains two articles
that could inhibit certain business
combinations. The first provision
requires the affirmative vote of the
holders of 80% of Hach common stock
to approve (1) the adoption of a
merger agreement; (2) the sale of
substantially all the assets of
Hach; or (3) the issuance by Hach or
a subsidiary of voting stock in
excess of 10% of Hach common stock
outstanding, if, in either case, the
other entity is the beneficial owner
of more than 5% of the outstanding
shares of Hach voting stock,
including shares it has the right to
acquire pursuant to conversion
rights, warrants or options or that
it can vote, buy or dispose of
pursuant to agreement.
</TABLE>
43
<PAGE>
<TABLE>
<CAPTION>
Hach Stockholder Rights Danaher Stockholder Rights
<S> <C> <C>
This requirement does not apply if
the Hach Board by resolution
approves a memorandum of
understanding with the other entity
prior to the time such entity has
become a holder of more than 5% of
the outstanding shares of Hach
voting stock. This requirement also
does not apply if Hach or one of its
subsidiaries holds a majority of the
voting power of the other person.
This provision may only be amended
or appealed by the affirmative vote
of the holders of 80% of Hach voting
stock.
The second provision requires a
person who acquires 15% or more of
outstanding share of Hach common
stock and does not at the same time
own 15% or more of the outstanding
shares of Hach Class A common stock
to make a public tender offer to
acquire the number of additional
shares of Hach Class A common stock
such that that person would hold
equivalent percentages of
outstanding Hach common stock and
Hach Class A common stock.
The provision contains a formula for
determining the price at which the
tender offer must be made and is
triggered not only at the 15%
threshold but at every increment of
5% above that threshold. Certain
acquisitions that cross the
threshold (by gift, devise, etc.) do
not trigger this provision.
Failure to comply with this
provision suspends the right to vote
those shares of Hach common stock
held by that person.
- ----------------------------------------------------------------------------------------------------
Stockholder Rights Plan: Hach does not have a stockholder Danaher does not have a stockholder
rights plan. rights plan. While Danaher has no
present intention to adopt a
stockholder rights plan, the Danaher
Board, pursuant to its authority to
issue Danaher preferred stock, could
do so without Danaher stockholder
approval at any future time.
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
Hach Stockholder Rights Danaher Stockholder Rights
<S> <C> <C>
Special Meetings of Special meetings of Hach The Danaher bylaws provide that
Stockholders: stockholders may only be called by the chairman, the president, any
the chairman of the Hach Board or by vice president, the secretary or
the Hach Board pursuant to a any assistant secretary of
resolution adopted by a majority of Danaher may call a special
all directors, subject to the rights meeting, and such officers shall
of holders of Hach preferred stock. call a special meeting if
requested in writing by a
majority of the Danaher Board or
by Danaher stockholders owning a
majority of the capital stock of
Danaher issued and outstanding
and entitled to vote.
</TABLE>
45
<PAGE>
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The following unaudited pro forma combined financial information should be
read in conjunction with the financial statements, including the notes thereto,
of Danaher and Hach, which are incorporated by reference in this information
statement/prospectus. The pro forma information is presented for illustration
purposes only and is not necessarily indicative of the operating results or
financial position that would have occurred if the merger had been consummated
in accordance with the assumptions set forth below, nor is it necessarily
indicative of future operating results or financial position.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
The following unaudited pro forma combined balance sheet presents, under the
pooling-of-interests accounting method, the consolidated balance sheet of
Danaher as of December 31, 1998 combined with the balance sheet of Hach as of
January 30, 1999.
<TABLE>
<CAPTION>
Pro
Forma Pro Forma
Danaher Hach Adj. Balance
---------- -------- ------- ----------
(in thousands)
<S> <C> <C> <C> <C>
Assets
Current Assets:
Cash and Equivalents............ $ 41,923 $ 5,875 $ 47,798
Accounts Receivable............. 467,108 18,435 485,543
Inventories..................... 323,486 13,995 337,481
Prepaids and Other.............. 54,387 6,487 60,874
---------- -------- ----------
Total Current Assets.......... 886,904 44,792 931,696
Plant, Property and Equipment,
net............................ 471,025 39,173 510,198
Other Assets.................... 96,213 14,931 111,144
Excess Cost over net assets,
net............................ 1,284,573 3,248 1,287,821
---------- -------- ----------
Total Assets.................. $2,738,715 $102,144 $2,840,859
========== ======== ==========
Liabilities
Current Liabilities:
Notes Payables, current
portion........................ $ 59,639 $ 82 $ 59,721
Accounts Payable................ 158,596 3,185 161,781
Accrued Expenses................ 470,470 9,273 $10,000(2) 489,743
---------- -------- ------- ----------
Total Current Liabilities..... 688,705 12,540 10,000 711,245
Other Long-Term Liabilities..... 285,261 9,646 294,907
Long-Term Debt.................. 412,918 31,000 443,918
Shareholders' Equity:
Common Stock.................... 1,467 23,246 (23,246) 1,467
Additional Paid-In Capital...... 374,412 9,035 23,246 406,693
Cumulative Adjustment and
Other.......................... (2,703) 330 (2,373)
Retained Earnings............... 978,655 16,347 (10,000)(2) 985,002
Total Shareholders' Equity...... 1,351,831 48,958 (10,000) 1,390,789
---------- -------- ------- ----------
Total......................... $2,738,715 $102,144 $ 0 $2,840,859
========== ======== ======= ==========
</TABLE>
See accompanying notes to the unaudited pro forma combined financial
information.
46
<PAGE>
UNAUDITED PRO FORMA COMBINED STATEMENTS OF EARNINGS
The following unaudited pro forma combined statements of earnings present,
under the pooling-of-interests accounting method, the consolidated statements
of earnings of Danaher for the years ended December 31, 1998, December 31, 1997
and December 31, 1996, combined with the statements of earnings of Hach for the
twelve months ended January 30, 1999, January 31, 1998 and January 25, 1997.
<TABLE>
<CAPTION>
Year Ended 12/31/98
--------------------------- Pro Forma
Danaher Hach(1)(3) Results
------------- ------------- -------------
(in thousands, except per share data)
<S> <C> <C> <C>
Net Sales............................ $ 2,910,038 $ 137,023 $ 3,047,061
Cost of Sales........................ 1,821,084 68,145 1,889,229
SG & A............................... 722,116 51,604 773,720
Total Expenses....................... 2,543,200 119,749 2,662,949
------------- ----------- -------------
Operating Profit..................... 366,838 17,274 384,112
Other Expense........................ 40,796 0 40,796
Interest Expense, Net................ 24,931 1,376 26,307
------------- ----------- -------------
Earnings before Taxes................ 301,111 15,898 317,009
Taxes................................ 118,165 6,658 124,823
------------- ----------- -------------
Net Earnings......................... $ 182,946 $ 9,240 $ 192,186
============= =========== =============
EPS-Basic............................ $1.36 $0.54 $1.37
EPS-Diluted.......................... $1.32 $0.54 $1.33
Average Shares-Basic................. 134,745 16,976 139,816
Average Shares-Diluted............... 138,885 17,079 143,987
<CAPTION>
Year Ended 12/31/97
--------------------------- Pro Forma
Danaher Hach(1)(3) Results
------------- ------------- -------------
(in thousands, except per share data)
<S> <C> <C> <C>
Net Sales............................ $ 2,492,002 $ 127,098 $ 2,619,100
Cost of Sales........................ 1,598,431 65,060 1,663,491
SG & A............................... 592,515 43,748 636,263
Total Expenses....................... 2,190,946 108,808 2,299,754
------------- ----------- -------------
Operating Profit..................... 301,056 18,290 319,346
Interest Expense, Net................ 13,211 (218) 12,993
------------- ----------- -------------
Earnings before Taxes................ 287,845 18,508 306,353
Taxes................................ 111,239 6,538 117,777
------------- ----------- -------------
Net Earnings......................... $ 176,606 $ 11,970 $ 188,576
============= =========== =============
EPS-Basic............................ $1.32 $0.62 $1.35
EPS-Diluted.......................... $1.28 $0.62 $1.31
Average Shares-Basic................. 133,999 19,170 139,725
Average Shares-Diluted............... 137,730 19,248 143,479
</TABLE>
See accompanying notes to the unaudited pro forma combined financial
information.
47
<PAGE>
<TABLE>
<CAPTION>
Year Ended 12/31/96
--------------------- Pro Forma
Danaher Hach(1)(3) Results
---------- ---------- ----------
(in thousands, except per share
data)
<S> <C> <C> <C>
Net Sales..................................... $2,233,193 $119,056 $2,352,249
Cost of Sales................................. 1,409,693 61,187 1,470,880
SG & A........................................ 556,094 40,864 596,958
Total Expenses................................ 1,965,787 102,051 2,067,838
---------- -------- ----------
Operating Profit.............................. 267,406 17,005 284,411
Interest Expense, Net......................... 16,813 (1,585) 15,228
---------- -------- ----------
Earnings before Taxes......................... 250,593 18,590 269,183
Taxes......................................... 96,236 6,436 102,672
---------- -------- ----------
Net Earnings from Continuing Operations....... 154,357 12,154 166,511
Discontinued Operations....................... 79,811 0 79,811
Net Earnings.................................. $234,168 $12,154 $246,322
========== ======== ==========
EPS from Continuing Operations-Basic.......... $1.16 $0.53 $1.19
EPS from Continuing Operations-Diluted........ $1.13 $0.53 $1.17
EPS from Discontinued Operations-Basic........ $0.60 $0.00 $0.57
EPS from Discontinued Operations-Diluted...... $0.59 $0.00 $0.56
EPS-Net Earnings-Basic........................ $1.76 $0.53 $1.76
EPS-Net Earnings-Diluted...................... $1.72 $0.53 $1.72
Average Shares-Basic.......................... 132,950 22,728 139,739
Average Shares-Diluted........................ 136,123 22,735 142,914
</TABLE>
See accompanying notes to the unaudited pro forma combined financial
information.
48
<PAGE>
Notes to Pro Forma Combined Financial Information (Unaudited)
(1) Hach's fiscal year has historically ended in April. The pro forma
information is presented in accordance with Danaher's fiscal year which
ends December 31. Hach's balances for twelve month periods ending
approximately one month later than the Danaher periods have been included
in these combined statements. In the opinion of Danaher's management, this
difference is not material.
(2) Merger expenses of approximately $10 million are based on a preliminary
estimate and are made up of approximately equal amounts related to: (i)
transaction costs associated with the merger; and (ii) integrating and
implementing efficiencies associated with information, operational and
administrative systems.
(3) Earnings per share includes all shares of Hach common stock and Hach Class
A common stock (or Hach stock and equivalents, as appropriate) based on the
Exchange Ratio of 0.2987 shares of Danaher for each share of Hach common
stock or Hach Class A common stock (or equivalent).
49
<PAGE>
EXPERTS
The consolidated balance sheets of Danaher as of December 31, 1998 and 1997
and the consolidated statements of income, changes in stockholders' equity, and
cash flows for each of the three years in the period ended December 31, 1998,
incorporated by reference in this information statement/prospectus, have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their reports with respect thereto, and are included herein, in reliance upon
their authority as experts in accounting and auditing in giving said reports.
The consolidated balance sheets of Hach as of April 30, 1998 and 1997 and
the consolidated statements of income, changes in stockholders' equity and cash
flows for each of the three years in the period ended April 1998 in the Annual
Report on Form 10-K of Hach for the year ended April 30, 1998, incorporated by
reference in this information statement/prospectus, have been so incorporated
in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of that firm as experts in auditing and
accounting.
With respect to the unaudited consolidated financial information on Hach for
the periods ended August 1, 1998, October 31, 1998 and January 30, 1999,
incorporated by reference in this information statement/prospectus,
PricewaterhouseCoopers LLP reported that they have applied limited procedures
in accordance with professional standards for a review of such information.
However, their separate reports dated August 19, 1998, November 18, 1998 and
February 16, 1999 incorporated by reference herein, state that they did not
audit and they do not express an opinion on the unaudited consolidated
financial information. Accordingly, the degree of reliance on their reports on
such information should be restricted in light of the limited nature of the
review procedures applied. PricewaterhouseCoopers LLP is not subject to the
liability provisions of Section 11 of the Securities Act of 1933 for their
reports on the unaudited consolidated financial information because those
reports are not "reports" or "parts" of the registration statement prepared or
certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11
of the Act.
LEGAL MATTERS
The validity of the shares of Danaher common stock to be issued in the
merger will be passed upon for Danaher by Wilmer, Cutler & Pickering,
Washington, D.C., counsel to Danaher. Certain legal matters with respect to the
federal income tax consequences of the merger will be passed upon for Danaher
by Wachtell, Lipton, Rosen & Katz, New York, New York. Certain legal matters
with respect to the federal income tax consequences of the merger will be
passed upon for Hach by McBride Baker & Coles, Chicago, Illinois. Certain legal
matters with respect to the federal income tax consequences of the C&K
reorganization will be passed upon for C&K by Sidley & Austin, Chicago,
Illinois.
WHERE YOU CAN FIND MORE INFORMATION
Hach and Danaher file annual, quarterly and special reports, proxy
statements and other information with the Commission. You may read and copy any
reports, statements or other information that we have filed at the Commission's
public reference rooms. Please call the Commission at 1-800-SEC-0330 for
information on the public reference rooms or visit the following locations of
the Commission:
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, DC 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661-
2511
You may also obtain copies of this information by mail from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, at prescribed rates. Our Commission filings are also
available to the public from commercial document retrieval services and at the
web site maintained by the Commission at http://www.sec.gov.
50
<PAGE>
Danaher filed a registration statement on Form S-4 to register with the
Commission Danaher common stock that may be issued to Hach stockholders in the
merger. This information statement/prospectus is a part of that registration
statement and constitutes a prospectus of Danaher in addition to being an
information statement of Hach. As allowed by Commission rules, this information
statement/prospectus does not contain all the information you can find in the
registration statement or the exhibits to the registration statement.
The Commission allows Hach and Danaher to "incorporate by reference"
information into this information statement/prospectus, which means important
information may be disclosed to you by referring you to another document filed
separately with the Commission. The information incorporated by reference is
deemed to be part of this information statement/prospectus, except for any
information superseded by information in (or incorporated by reference in) this
statement/prospectus. This information statement/prospectus incorporates by
reference the documents set forth below that have been previously filed with
the Commission. These documents contain important information about our
companies and their financial condition.
<TABLE>
<CAPTION>
Danaher SEC Filings Description or
(File No. 001-08089 ) Period/As of Date
=========================================== -------------------------------------------
<S> <C>
Annual Report on Form 10-K Year ended December 31, 1998
Quarterly Report on Form 10-Q Quarter ended March 31, 1999
Registration Statement on Form S-4 dated Description of Danaher common stock
June 8, 1998 contained therein and any amendment or
report filed for the purpose of updating
such description.
Proxy Statement Dated March 30, 1999
<CAPTION>
Hach SEC Filings Description or
(File No. 000-03947) Period/As of Date
=========================================== -------------------------------------------
<S> <C>
Annual Report on Form 10-K Year ended April 30, 1998
Quarterly Report on Form 10-Q Quarters ended August 1, 1998, October 31,
1998 and January 30, 1999
Current Report on Form 8-K Filed on May 14, 1998 and on May 4, 1999
Proxy Statement Dated August 7, 1998
</TABLE>
Hach and Danaher are also incorporating by reference additional documents
that either company may file with the Commission pursuant to the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder, between the date of this information statement/prospectus and the
Effective Time. These include periodic reports, such as annual reports on Form
10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, as well
as proxy statements.
Danaher has supplied all information contained or incorporated by reference
in this information statement/prospectus relating to Danaher, and Hach has
supplied all such information relating to Hach.
If you are a stockholder, Danaher and Hach may have sent you some of the
documents incorporated by reference, but you can obtain any of them through us,
the Commission, or the Commission Internet world wide web site as described
above. Documents incorporated by reference are available from us without
charge, excluding all exhibits unless we have specifically incorporated by
reference an exhibit in this information statement/prospectus. Stockholders may
obtain documents incorporated by reference in this information
statement/prospectus by requesting them in writing or by telephone from the
appropriate party at the following address:
Hach Company Danaher Corporation
5600 Lindbergh Drive 1250 24th Street, N.W., Suite 800
Loveland, Colorado 80538 Washington, D.C. 20037
Tel.: (970) 669-3050 Tel.: 202-828-0850
Attention: Chief Financial Officer Attention: Corporate Secretary
website: http://www.hach.com website: http://www.danaher.com
51
<PAGE>
If you would like to request documents from us, please do so by June 25,
1999 to receive them before the Effective Time. If you request any incorporated
documents from us, we will mail them to you by first class mail, or another
equally prompt means, within one business day after we receive your request.
We have authorized no one to give you any information or to make any
representation about the proposed merger involving our companies that differs
from or adds to the information contained in this information
statement/prospectus or in the documents our companies have publicly filed with
the Commission. Therefore, if anyone should give you any different or
additional information, you should not rely on it.
If you live in a jurisdiction where it is unlawful to offer to exchange or
sell, or to ask for offers to exchange or buy, the securities offered by this
information statement/prospectus, or to ask for proxies, or, if you are a
person to whom it is unlawful to direct such activities, then the offer
presented by this information statement/prospectus does not extend to you.
The information contained in this document speaks only as of the date
indicated on the cover of this document unless the information specifically
indicates that another date applies.
52
<PAGE>
APPENDIX A
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
Dated as of April 21, 1999
Among
DANAHER CORPORATION,
H2O ACQUISITION CORP.
And
HACH COMPANY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
ARTICLE I
The Merger
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
SECTION 1.1. The Merger............................................... A-1
SECTION 1.2. Closing.................................................. A-1
SECTION 1.3. Effective Time........................................... A-2
SECTION 1.4. Effects of the Merger.................................... A-2
SECTION 1.5. Certificate of Incorporation and By-laws................. A-2
SECTION 1.6. Directors................................................ A-2
SECTION 1.7. Officers................................................. A-2
ARTICLE II
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 2.1. Effect on Capital Stock.................................. A-2
SECTION 2.2. Exchange of Certificates................................. A-3
ARTICLE III
Representations and Warranties
SECTION 3.1. Representations and Warranties of the Company............ A-5
SECTION 3.2. Representations and Warranties of Parent and Sub......... A-15
ARTICLE IV
Covenants Relating to Conduct of Business
SECTION 4.1. Conduct of Business...................................... A-18
SECTION 4.2. No Solicitation.......................................... A-21
ARTICLE V
Additional Agreements
SECTION 5.1. Preparation of Form S-4 and the Information Statement.... A-21
SECTION 5.2. Access to Information; Confidentiality................... A-21
SECTION 5.3. Reasonable Efforts; Notification......................... A-22
SECTION 5.4. Employee Stock Purchase Plan............................. A-22
SECTION 5.5. Stock Option Plans....................................... A-22
SECTION 5.6. Benefit Plans and Employee Matters....................... A-23
SECTION 5.7. Indemnification, Exculpation and Insurance............... A-24
SECTION 5.8. Fees and Expenses........................................ A-24
SECTION 5.9. Public Announcements..................................... A-24
SECTION 5.10. Affiliates; Accounting and Tax Treatment................. A-24
SECTION 5.11. State Takeover Laws...................................... A-25
ARTICLE VI
Conditions Precedent
SECTION 6.1. Conditions to Each Party's Obligations to Effect the
Merger................................................... A-25
SECTION 6.2. Additional Conditions to Obligations of Parent and Sub... A-26
SECTION 6.3. Additional Conditions to Obligations of the Company...... A-26
</TABLE>
- i -
<PAGE>
ARTICLE VII
Termination, Amendment and Waiver
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
SECTION 7.1. Termination............................................... A-27
SECTION 7.2. Effect of Termination..................................... A-28
SECTION 7.3. Amendment................................................. A-28
SECTION 7.4. Extension; Waiver......................................... A-28
ARTICLE VIII
General Provisions
SECTION 8.1. Nonsurvival of Representations and Warranties............. A-29
SECTION 8.2. Notices................................................... A-29
SECTION 8.3. Definitions............................................... A-30
SECTION 8.4. Interpretation............................................ A-30
SECTION 8.5. Counterparts.............................................. A-30
SECTION 8.6. Entire Agreement; No Third-Party Beneficiaries............ A-30
SECTION 8.7. Governing Law............................................. A-30
SECTION 8.8. Assignment................................................ A-30
SECTION 8.9. Enforcement............................................... A-31
SECTION 8.10. Severability.............................................. A-31
EXHIBIT 5.10 FORM OF AFFILIATE LETTER
EXHIBIT 6.3(d) FORM OF REGISTRATION RIGHTS AGREEMENT
</TABLE>
- ii -
<PAGE>
AGREEMENT AND PLAN OF MERGER, dated as of April 21, 1999, among DANAHER
CORPORATION, a Delaware corporation ("Parent"), H2O ACQUISITION CORP., a
Delaware corporation ("Sub") and a direct wholly owned subsidiary of Parent,
and HACH COMPANY, a Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and the Company
have approved the merger of Sub with and into the Company (the "Merger"), upon
the terms and subject to the conditions set forth in this Agreement and in
accordance with the Delaware General Corporation Law (the "DGCL"), whereby the
issued and outstanding shares of Company Common Stock (as defined in Section
3.1(c)) other than shares to be canceled in accordance with Section 2.1(b),
will be converted into the right to receive shares of common stock, par value
$.01 per share, of Parent ("Parent Common Stock");
WHEREAS, as an inducement to Parent to enter into this Agreement, certain
significant stockholders of the Company have entered into an agreement with
Parent (the "Stockholders Support Agreement") pursuant to which each
significant stockholder has, among other things, agreed to vote his or her
shares of Company Common Stock in favor of the Merger;
WHEREAS, contemporaneously with the execution of this Agreement, the
stockholders of the Company representing a majority of the voting power of the
Company have adopted this Agreement by written consent without a meeting
pursuant to Section 228 of the DGCL, the Restated Certificate of Incorporation
of the Company, as amended (the "Restated Certificate of Incorporation"), and
the By-laws of the Company;
WHEREAS, contemporaneously with the execution of this Agreement, Parent and
certain stockholders of the Company are executing an Agreement and Plan of
Reorganization that provides for the acquisition by Parent of all of the
Company Common Stock held by C&K Enterprises, Ltd., a Delaware corporation, in
exchange for shares of Parent Common Stock, which exchange is intended to be
effected immediately prior to the consummation of the Merger;
WHEREAS, Parent, Sub and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also to
prescribe various conditions to the Merger;
WHEREAS, for Federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, for accounting purposes, it is intended that the Merger shall be
accounted for as a "pooling-of-interests";
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
ARTICLE I
THE MERGER
SECTION 1.1. The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the DGCL, Sub shall be merged
with and into the Company at the Effective Time (as hereinafter defined).
Following the Merger, the separate corporate existence of Sub shall cease and
the Company shall continue as the surviving corporation (the "Surviving
Corporation") and shall succeed to and assume all the rights and obligations of
the Company and of Sub in accordance with the DGCL.
SECTION 1.2. Closing. The closing of the Merger will take place at 10:00
a.m. on a date to be specified by the parties, which shall be no later than the
second business day after satisfaction or waiver of the
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conditions set forth in Article VI (the "Closing Date"), at the offices of
Wachtell, Lipton, Rosen & Katz, New York, New York, unless another time, date
or place is agreed to in writing by the parties hereto.
SECTION 1.3. Effective Time. Subject to the provisions of this Agreement, as
soon as practicable on or after the Closing Date, the parties shall file a
certificate of merger or other appropriate documents (in any such case, the
"Certificate of Merger") executed in accordance with the relevant provisions of
the DGCL and shall make all other filings or recordings required under the
DGCL. The Merger shall become effective at such time as the Certificate of
Merger is duly filed with the Delaware Secretary of State, or at such other
time as Sub and the Company shall agree should be specified in the Certificate
of Merger (the date and time of such filing, or such later date or time as may
be set forth therein, being the "Effective Time").
SECTION 1.4. Effects of the Merger. The Merger shall have the effects set
forth in Section 259 of the DGCL.
SECTION 1.5. Certificate of Incorporation and By-laws. (a) The certificate
of incorporation of Sub as in effect immediately prior to the Effective Time
shall be the certificate of incorporation of the Surviving Corporation (except
that such certificate of incorporation shall be amended at the Effective Time
to provide that the name of the Surviving Corporation shall be "HACH COMPANY"),
until thereafter changed or amended as provided therein or by applicable law.
(b) The by-laws of Sub as in effect at the Effective Time shall be the by-
laws of the Surviving Corporation, until thereafter changed or amended as
provided therein or by applicable law.
SECTION 1.6. Directors. The directors of Sub immediately prior to the
Effective Time shall be the initial directors of the Surviving Corporation,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
SECTION 1.7. Officers. The officers of the Company immediately prior to the
Effective Time shall continue as the officers of the Surviving Corporation,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION 2.1. Effect on Capital Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of Parent, Sub, the Company, or
the holders of any shares of Company Common Stock or any shares of capital
stock of Sub:
(a) Capital Stock of Sub. Each share of the capital stock of Sub
issued and outstanding immediately prior to the Effective Time shall be
converted into and exchanged for 1.4588948 fully paid and nonassessable
shares of common stock of the Surviving Corporation; provided, that such
number shall be appropriately adjusted to take account of any issuances of
Company Common Stock prior to the Effective Time.
(b) Cancellation of Treasury Stock; Parent Owned Stock Remains
Outstanding. Each share of Company Common Stock that is owned by the
Company or any subsidiary of the Company, and each share of Company Common
Stock that is owned by Sub, immediately prior to the Effective Time shall
automatically be canceled and retired without any conversion thereof and no
consideration shall be delivered with respect thereto. Each share of
Company Common Stock that is owned by Parent immediately prior to the
Effective Time shall be converted into and exchanged for one hundred
thousandth of a fully paid and non assessable share of common stock of the
Surviving Corporation.
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(c) Conversion of Company Common Stock. Each share of Company Common
Stock issued and outstanding as of the Effective Time, other than shares of
Company Common Stock to be canceled or to remain outstanding in accordance
with Section 2.1(b), shall be converted, subject to Section 2.2(e), Section
7.1(f) and Section 7.1(g), into the right to receive .2987 (the "Exchange
Ratio") of a share of Parent Common Stock. If, prior to the Effective Time,
Parent should split or combine the Parent Common Stock, or pay a stock
dividend or other stock distribution in Parent Common Stock, then the
Exchange Ratio will be appropriately adjusted to reflect such split,
combination, dividend or other distribution.
As of the Effective Time, all of the shares of Company Common Stock
converted into the right to receive Parent Common Stock pursuant to this
Section 2.1(c) shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and each certificate previously
representing any such shares shall thereafter represent the right to receive a
certificate representing the shares of Parent Common Stock into which such
Company Common Stock was converted in the Merger and, if applicable, cash
payments in lieu of fractional shares of Parent Common Stock pursuant to
Section 2.2(e). The holders of such certificates previously evidencing such
shares of Company Common Stock outstanding immediately prior to the Effective
Time shall cease to have any rights with respect to such shares of Company
Common Stock as of the Effective Time except as otherwise provided herein or by
law. Such certificates previously representing such shares of Company Common
Stock shall be exchanged for certificates representing whole shares of Parent
Common Stock issued in consideration therefor upon the surrender of such
certificates in accordance with the provisions of Section 2.2, without
interest. No fractional share of Parent Common Stock shall be issued, and, in
lieu thereof, a cash payment shall be made pursuant to Section 2.2(e).
SECTION 2.2. Exchange of Certificates. (a) Exchange Agent. Prior to the
Effective Time, Parent shall enter into an agreement with such bank or trust
company as may be designated by Parent and as shall be reasonably satisfactory
to the Company (the "Exchange Agent"), and, as contemplated by such agreement,
Parent shall deposit, or shall cause to be deposited, with the Exchange Agent
as of the Effective Time (or otherwise when requested by the Exchange Agent
from time to time in order to effect any exchange pursuant to this Section
2.2), for the benefit of the holders of shares of Company Common Stock
converted into the right to receive Parent Common Stock, for exchange in
accordance with this Article II through the Exchange Agent, cash sufficient to
make payments in lieu of fractional shares pursuant to Section 2.2(e), and
certificates representing the shares of Parent Common Stock issuable pursuant
to Section 2.1 in exchange for such outstanding shares of Company Common Stock
(such cash and certificates representing shares of Parent Common Stock,
together with any dividends or distributions with respect to shares represented
by such certificates, being collectively referred to as the "Exchange Fund").
The Exchange Agent shall deliver the Parent Common Stock contemplated to be
issued pursuant to Section 2.1 out of the Exchange Fund. Except as contemplated
by Section 2.2(e), the Exchange Fund shall not be used for any other purpose.
(b) Exchange Procedure. As soon as reasonably practicable after the
Effective Time, and in no event later than five business days thereafter, the
Exchange Agent shall mail to each holder of record of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding shares of Company Common Stock converted into the right to receive
Parent Common Stock (the "Certificates"), (i) a letter of transmittal in
customary form (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 (ii) instructions for use in
effecting the surrender of the Certificates in exchange for certificates
representing shares of Parent Common Stock. Upon surrender of a Certificate for
cancellation to the Exchange Agent, together with such letter of transmittal,
duly executed, and such other documents as may reasonably be required by the
Exchange Agent, the holder of such Certificate shall be entitled to receive in
exchange therefor a certificate evidencing that number of whole shares of
Parent Common Stock which such holder has the right to receive pursuant to this
Agreement in respect of the shares of Company Common Stock formerly evidenced
by such Certificate (after taking into account all shares of Company Common
Stock then held of record by such holder), and a check representing the amount
of any cash in lieu of fractional shares of Parent Common Stock to which such
holder is entitled pursuant to Section 2.2(e) and any dividends or other
distributions to which such holder is entitled pursuant to Section 2.2(c), and
the Certificate so surrendered shall forthwith be canceled.
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In the event of a transfer of ownership of Company Common Stock which is not
registered in the transfer records of the Company, a certificate representing
the proper number of shares of Parent Common Stock may be issued to a person
other than the person in whose name the Certificate so surrendered is
registered, if such Certificate, accompanied by all documents required to
evidence and effect such transfer, shall be properly endorsed or otherwise be
in proper form for transfer, and the person requesting such payment shall pay
any transfer or other taxes required by reason of the issuance of shares of
Parent Common Stock to a person other than the registered holder of such
Certificate or establish to the reasonable satisfaction of Parent that such tax
has been paid or is not applicable. Until surrendered as contemplated by this
Section 2.2, each Certificate shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender a certificate
evidencing whole shares of Parent Common Stock, cash in lieu of any fractional
shares of Parent Common Stock to which such holder is entitled pursuant to
Section 2.2(e) and any dividends or other distributions to which such holder is
entitled pursuant to Section 2.2(c). No interest will be paid or will accrue on
any cash payable pursuant to Section 2.2(c) or 2.2(e).
(c) Distributions with Respect to Unexchanged Shares. No dividends or other
distributions declared or made after the Effective Time with respect to Parent
Common Stock with a record date after the Effective Time shall be paid to the
holder of any unsurrendered Certificate with respect to the shares of Parent
Common Stock represented thereby, and no cash payment in lieu of fractional
shares shall be paid to any such holder pursuant to Section 2.2(e), in each
case until the surrender of such Certificate in accordance with this Article
II. Subject to the effect of applicable escheat laws, following surrender of
such Certificate, there shall be paid to the holder of a certificate
representing whole shares of Parent Common Stock issued in exchange therefor,
without interest, (i) at the time of such surrender, the amount of any cash
payable in lieu of a fractional share of Parent Common Stock to which such
holder is entitled pursuant to Section 2.2(e) and the amount of dividends or
other distributions with a record date after the Effective Time theretofore
paid with respect to such whole shares of Parent Common Stock, and (ii) at the
appropriate payment date, the amount of dividends or other distributions with a
record date after the Effective Time but prior to such surrender and with a
payment date subsequent to such surrender payable with respect to such whole
shares of Parent Common Stock.
(d) No Further Ownership Rights in Company Stock. All shares of Parent
Common Stock issued upon the surrender for exchange of Certificates in
accordance with the terms of this Article II (including any cash paid pursuant
to Section 2.2(c) or 2.2(e)) shall be deemed to have been issued (and paid) in
full satisfaction of all rights pertaining to the shares of Company Common
Stock theretofore represented by such Certificates, subject, however, to the
Surviving Corporation's obligation to pay any dividends or make any other
distributions with a record date prior to the Effective Time which may have
been declared or made by the Company on such shares of Company Common Stock in
accordance with the terms of this Agreement or prior to the date of this
Agreement and which remain unpaid at the Effective Time and have not been paid
prior to surrender. At the Effective Time, the stock transfer books of the
Company shall be closed, and there shall be no further registrations of
transfers of shares of Company Common Stock thereafter on the records of the
Company. If, after the Effective Time, Certificates are presented to the
Surviving Corporation, Parent or the Exchange Agent for any reason, they shall
be cancelled and exchanged as provided in this Article II.
(e) No Fractional Shares. No certificates or scrip representing fractional
shares of Parent Common Stock shall be issued upon the surrender for exchange
of Certificates, and such fractional share interests will not entitle the owner
thereof to vote or to any rights of a stockholder of Parent. Each holder who
otherwise would have been entitled to a fraction of a share of Parent Common
Stock shall receive in lieu thereof cash (without interest) in an amount
determined by multiplying the fractional share interest to which such holder
would otherwise be entitled by the closing sale price of a share of Parent
Common Stock on the New York Stock Exchange, Inc. ("NYSE") composite tape on
the last full trading day prior to the Effective Time. No such holder shall be
entitled to dividends, voting rights or any other rights in respect of any
fractional share.
(f) Termination of Exchange Fund. Any portion of the Exchange Fund that
remains undistributed to the holders of Certificates for twelve months after
the Effective Time shall be delivered to Parent, upon demand, and any holders
of Certificates who have not theretofore complied with this Article II shall
thereafter look only
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to Parent for the shares of Parent Common Stock, any cash in lieu of fractional
shares of Parent Common Stock and any dividends or distributions with respect
to Parent Common Stock to which they are entitled.
(g) No Liability. None of Parent, Sub, the Company or the Exchange Agent
shall be liable to any holder of shares of Company Common Stock for any shares
of Parent Common Stock (or dividends or distributions with respect thereto) or
cash from the Exchange Fund 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 seven years after the Effective Time
(or immediately prior to such earlier date on which any cash, any cash in lieu
of fractional shares or any dividends or distributions with respect to whole
shares of Parent Common Stock in respect of such Certificate would otherwise
escheat to or become the property of any Governmental Entity (as defined
herein)), any such cash, dividends or distributions in respect of such
Certificate shall, to the extent permitted by applicable laws, become the
property of Parent, free and clear of all claims or interest of any person
previously entitled thereto.
(h) Withholding Rights. Parent or the Exchange Agent shall be entitled to
deduct and withhold from the consideration otherwise payable pursuant to this
Agreement to any holder of Certificates such amounts as Parent or the Exchange
Agent, as the case may be, is required to deduct and withhold with respect to
the making of such payment under the Code, or any provision of state, local or
foreign tax law. To the extent that amounts are so withheld by Parent or the
Exchange Agent, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the Certificates in respect of
which such deduction and withholding shall have been made by Parent or the
Exchange Agent.
(i) Investment of Exchange Fund. The Exchange Agent shall invest any cash
included in the Exchange Fund, as directed by Parent, on a daily basis. Any
interest and other income resulting from such investments shall be paid to
Parent.
(j) Missing Certificates. In the event any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact and the
posting by such person of a bond in such reasonable amount as Parent may direct
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 shares of Parent Common Stock, dividends and
distributions and cash in lieu of fractional shares deliverable in respect
thereof pursuant to this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the Company. Except as
disclosed by specific reference to the applicable section of the Disclosure
Schedule delivered by the Company to Parent concurrently herewith (the "Company
Disclosure Schedule"), the Company represents and warrants to Parent and Sub as
follows:
(a) Organization, Standing and Corporate Power. The Company and each of
its subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is organized
and has the requisite corporate power and authority to carry on its
business as now being conducted. The Company and each of its subsidiaries
is duly qualified or licensed to do business and is in good standing in
each jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such qualification or licensing necessary,
other than in such jurisdictions where the failure to be so qualified or
licensed (individually or in the aggregate) could not reasonably be
expected to have a material adverse effect on the Company. The Company has
made available to Parent complete and correct copies of its certificate of
incorporation and by-laws and the certificates of incorporation and by-laws
or other organizational documents of its Material Subsidiaries, in each
case as amended to the date of
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this Agreement. For purposes of this Agreement, "Material Subsidiary" means
each subsidiary of the Company designated as a Material Subsidiary in
Schedule 3.1(b)(i) of the Company Disclosure Schedule.
(b) Subsidiaries. Schedule 3.1(b)(i) of the Company Disclosure Schedule
lists each subsidiary of the Company and its jurisdiction of incorporation
or organization. All the outstanding shares of capital stock of each such
subsidiary have been validly issued and are fully paid and nonassessable
and are owned by the Company, by another subsidiary of the Company or by
the Company and another such subsidiary, free and clear of all pledges,
liens, charges, encumbrances and security interests of any kind or nature
whatsoever (collectively, "Liens"). Except for the capital stock of its
subsidiaries, the Company does not own, directly or indirectly, any capital
stock or other ownership interest in any corporation, partnership, joint
venture or other entity.
(c) Capital Structure. The authorized capital stock of the Company
consists of 25,000,000 shares of Common Stock, $1.00 par value (the "Common
Stock") and 20,000,000 shares of Class A Common Stock, $1.00 par value (the
"Class A Common Stock" and, with the Common Stock, the "Company Common
Stock"). At the close of business on April 19, 1999, (i) 9,005,414 shares
of Common Stock and 8,606,364 shares of Class A Common Stock were issued
and outstanding, (ii) there were 2,617,539 shares of Common Stock and
3,016,589 shares of Class A Common Stock held by the Company in its
treasury, (iii) 315,453 shares of Common Stock and 682,953 shares of Class
A Common Stock were reserved for issuance upon exercise of outstanding
Stock Options (as defined in Section 5.5) and (iv) 500,000 shares of Class
A Common Stock reserved for issuance under the Company's Employee Stock
Purchase Plan. Except as set forth above, at the close of business on April
19, 1999, no shares of capital stock or other voting securities of the
Company were issued, reserved for issuance or outstanding. No subsidiary of
the Company owns any shares of Company Common Stock. Since April 19, 1999,
(x) no shares of Company Common Stock have been issued except pursuant to
Stock Options outstanding on April 19, 1999, and (y) no new Stock Options
have been issued. There are no outstanding stock appreciation rights of the
Company which were not granted in tandem with a related Stock Option and no
outstanding limited stock appreciation rights or other rights to redeem for
cash options or warrants of, or other equity interests in, the Company. All
outstanding shares of capital stock of the Company are, and all shares
which may be issued upon the exercise of Stock Options will be, when
issued, duly authorized, validly issued, fully paid and nonassessable and
not subject to preemptive rights. There are no bonds, debentures, notes or
other indebtedness of the Company having the right to vote (or convertible
into, or exchangeable for, securities having the right to vote) on any
matters on which stockholders of the Company may vote. Except for the Stock
Options described above, of which as of April 21, 1999, 998,406 Stock
Options were outstanding and 671,739 of such Stock Options were
exercisable, as of the date of this Agreement, there are no outstanding
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the Company or any of its
subsidiaries is a party or by which any of them is bound obligating the
Company or any of its subsidiaries to issue, deliver or sell, or cause to
be issued, delivered or sold, additional shares of capital stock or other
voting securities of the Company or of any of its subsidiaries or
obligating the Company or any of its subsidiaries to issue, grant, extend
or enter into any such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking. There are no outstanding contractual
obligations of the Company or any of its subsidiaries to repurchase, redeem
or otherwise acquire any shares of capital stock (or options to acquire any
such shares) of the Company or any of its subsidiaries. There are no
agreements, arrangements or commitments of any character (contingent or
otherwise) pursuant to which any person is or may be entitled to receive
any earn-out or similar payment based on the revenues, earnings or
financial performance of the Company or any of its subsidiaries or assets
or calculated in accordance therewith. There are no agreements to cause the
Company or any of its subsidiaries to file a registration statement under
the Securities Act of 1933 (the "Securities Act") or which otherwise relate
to the registration of any securities of the Company.
(d) Authority; Noncontravention. The Company has the requisite corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the
transactions
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contemplated hereby have been duly authorized by all necessary corporate
action on the part of the Company and, upon approval by written consent of
stockholders owning a majority of the outstanding shares of Common Stock,
no additional approval or vote of the holders of any class or series of the
Company's securities is necessary to approve this Agreement and the
transactions contemplated hereby. The Board of Directors of the Company (at
a meeting duly called and held) has by a unanimous vote of directors (i)
determined that the Merger is advisable and fair and in the best interests
of the Company and the Company Stockholders, (ii) approved this Agreement
and the Merger in accordance with the provisions of the DGCL, and (iii)
submitted this Agreement to, and recommended the approval and adoption of
this Agreement and the Merger by, the stockholders of the Company.
Concurrently with the execution of this Agreement, the holders of a
majority of the outstanding Common Stock have contemporaneously with the
execution hereof approved and adopted this Agreement and the Merger by
written consent without a meeting pursuant to Section 228 of the DGCL and
the Restated Certificate of Incorporation of the Company, as amended, and
the Bylaws of the Company. Prior to execution and delivery of the
Stockholders Support Agreement, the Board of Directors of the Company has
approved the Stockholders Support Agreement and has taken all necessary
action to ensure that the provisions of Article 9 of the Restated
Certificate of Incorporation of the Company shall not apply to this
Agreement or the Stockholders Support Agreement or the transactions
contemplated hereby and thereby. This Agreement has been duly executed and
delivered by the Company and constitutes the valid and binding obligation
of the Company, enforceable against the Company in accordance with its
terms. The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby and compliance with
the provisions hereof will not, conflict with, or result in any violation
of or default (with or without notice or lapse of time, or both) under, or
require the consent of (or the giving of notice to) a third party with
respect to, or give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a material benefit under, or
result in the creation of any Lien upon any of the properties or assets of
the Company or any of its subsidiaries under, (i) the certificate of
incorporation or by-laws of the Company or the comparable charter or
organizational documents of any of its subsidiaries, (ii) any loan or
credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or license applicable
to the Company or any of its subsidiaries or their respective properties or
assets, or (iii) subject to the governmental filings and other matters
referred to in the following sentence, any judgment, order, decree,
statute, laws, ordinance, rule or regulation applicable to the Company or
any of its subsidiaries or their respective properties or assets, other
than, in the case of clauses (ii) or (iii), any such conflicts, violations,
defaults, rights or Liens that individually or in the aggregate could not
reasonably be expected to (x) have a material adverse effect on the
Company, (y) impair in any material respect the ability of the Company to
perform its obligations under this Agreement, or (z) prevent or materially
delay the consummation of any of the transactions contemplated hereby. No
consent, approval, order or authorization of, or registration, declaration
or filing with, any Federal, state or local government or any court,
administrative or regulatory agency or commission or other governmental
authority or agency, domestic or foreign (a "Governmental Entity"), is
required by the Company or any of its subsidiaries in connection with the
execution and delivery of this Agreement by the Company or the consummation
by the Company of the transactions contemplated hereby, except for (i) the
filing with the Federal Trade Commission and the Antitrust Division of the
Department of Justice (the "Specified Agencies") of a premerger
notification and report form by the Company under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the "HSR Act"), (ii) the filing with
the Securities and Exchange Commission (the "SEC") of (x) the Information
Statement (as defined in Section 5.1) and (y) such reports under Section
13(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as may be required in connection with this Agreement and the
transactions contemplated hereby, (iii) the filing of the Certificate of
Merger with the Delaware Secretary of State and appropriate documents with
the relevant authorities of other states in which the Company is qualified
to do business, and (iv) such other consents, approvals, orders,
authorizations, registrations, declarations and filings, including under
the laws of any foreign country in which the Company or any of its
subsidiaries conducts any business or owns any property or assets, the
failure of which to be obtained or made could not, individually or in the
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aggregate, reasonably be expected to have a material adverse effect on the
Company or prevent or materially delay the consummation of any of the
transactions contemplated by this Agreement.
(e) SEC Documents; Financial Statements. Since January 1, 1996, the
Company has filed with the SEC all required reports, forms and other
documents (the "SEC Documents"). As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such SEC
Documents, and none of the SEC Documents contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Except to the
extent that information contained in any SEC Document has been revised or
superseded by a later-filed SEC Document filed and publicly available prior
to the date of this Agreement, none of the SEC Documents contains any
untrue statement of a material fact or omits 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. The financial statements of the Company included in the SEC
Documents comply as to form in all material respects with all applicable
accounting requirements and the published rules and regulations of the SEC
with respect thereto, have been prepared in accordance with generally
accepted accounting principles (except, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC) applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto) and fairly present 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). Except as set forth in the SEC Documents filed
prior to the date of this Agreement (or, with respect to any future
repetition of this representation, prior to the time of such repetition),
and except for liabilities and obligations incurred in the ordinary course
of business consistent with past practice since the date of the most recent
consolidated balance sheet included in the SEC Documents, neither the
Company nor any of its subsidiaries has any liabilities or obligations of
any nature (whether accrued, absolute, contingent or otherwise) required by
generally accepted accounting principles to be set forth on a consolidated
balance sheet of the Company and its consolidated subsidiaries or in the
notes thereto.
(f) Information Supplied. None of the information supplied or to be
supplied by the Company specifically for inclusion or incorporation by
reference in (i) the Form S-4 (as defined in Section 5.1(a)) will, at the
time the Form S-4 is filed with the SEC, 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 in order to make
the statements therein, in light of the circumstances under which they are
made, not misleading or (ii) the Information Statement will, at the date it
is mailed to the Company's stockholders, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The
Information Statement will comply as to form in all material respects with
the requirements of the Exchange Act and the rules and regulations
thereunder, except that no representation or warranty is made by the
Company with respect to statements made or incorporated by reference
therein based on information supplied by Parent or Sub specifically for
inclusion or incorporation by reference in the Information Statement.
(g) Absence of Certain Changes or Events. Except as disclosed in the SEC
Documents filed prior to the date of this Agreement, since April 30, 1998
the Company has conducted its business only in the ordinary course
consistent with prior practice, and there has not been (i) any material
adverse change in the Company, (ii) except for regular quarterly cash
dividends, any declaration, setting aside or payment of any dividend or
other distribution (whether in cash, stock or property) with respect to any
of the Company's capital stock, (iii) any split, combination or
reclassification of any of its capital stock or any issuance or the
authorization of any issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital stock, (iv) (x) any
granting by the Company or any of its subsidiaries to any officer of the
Company or any of its subsidiaries of any increase in compensation, except
in the
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ordinary course of business consistent with prior practice or as was
required under employment agreements in effect as of the date of the most
recent audited financial statements included in the SEC Documents filed
prior to the date of this Agreement (a list of all such employment
agreements being set forth in Section 3.1(g) of the Company Disclosure
Schedule), (y) any granting by the Company or any of its subsidiaries to
any such officer of any increase in severance or termination pay, except as
was required under employment, severance or termination agreements in
effect as of the date of the most recent audited financial statements
included in the SEC Documents filed prior to the date of this Agreement, or
(z) any entry into, or renewal or modification of, any employment,
consulting, severance or termination agreement with any such officer by the
Company or any of its subsidiaries, (v) any damage, destruction or loss,
whether or not covered by insurance, that, individually or in the
aggregate, has or could reasonably be expected to have a material adverse
effect on the Company, (vi) any change in accounting methods, principles or
practices by the Company, except insofar as may have been required by a
change in generally accepted accounting principles or (vii) any agreement
to do any of the things described in the preceding clauses (i) through
(vi).
(h) Litigation. Except as disclosed in the SEC Documents filed prior to
the date of this Agreement, there is no suit, action, investigation, audit
or proceeding pending or, to the knowledge of the Company, threatened
against the Company or any of its subsidiaries that, individually or in the
aggregate, could reasonably be expected to (i) have a material adverse
effect on the Company, (ii) impair in any material respect the ability of
the Company to perform its obligations under this Agreement, or (iii)
prevent the consummation of any of the transactions contemplated by this
Agreement, nor is there any judgment, decree, injunction, rule or order of
any Governmental Entity or arbitrator outstanding against the Company or
any of its subsidiaries having, or which could reasonably be expected to
have, any effect referred to in the foregoing clauses (i) through (iii).
(i) Benefit Plans; ERISA Compliance. (i) For purposes of this Section
3.1(i), the following terms have the meanings set forth below:
"Controlled Group Liability" means any and all material liabilities
(i) under Title IV of ERISA, (ii) under section 302 of ERISA, (iii)
under sections 412 and 4971 of the Code, (iv) as a result of a failure
to comply with the continuation coverage requirements of section 601 et
seq. of ERISA and section 4980B of the Code, and (v) under
corresponding or similar provisions of foreign laws or regulations,
other than such liabilities that arise solely out of, or relate solely
to, the Employee Benefit Plans.
An "Employee Benefit Plan" means any employee benefit plan, program,
policy, practices, or other arrangement providing benefits to any
current or former employee, officer or director of the Company or any
of its subsidiaries or any beneficiary or dependent thereof that is
sponsored or maintained by the Company or any of its subsidiaries or to
which the Company or any of its subsidiaries contributes or is
obligated to contribute, whether or not written, including without
limitation any employee welfare benefit plan within the meaning of
Section 3(1) of ERISA, any employee pension benefit plan within the
meaning of Section 3(2) of ERISA (whether or not such plan is subject
to ERISA) and any bonus, incentive, deferred compensation, vacation,
stock purchase, stock option, severance, employment, change of control
or fringe benefit plan, program or agreement.
"ERISA Affiliate" means, with respect to any entity, trade or
business, any other entity, trade or business that is a member of a
group described in Section 414(b), (c), (m) or (o) of the Code or
Section 4001(b)(1) of ERISA that includes the first entity, trade or
business, or that is a member of the same "controlled group" as the
first entity, trade or business pursuant to Section 4001(a)(14) of
ERISA.
A "Multiemployer Plan" means any "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA.
A "Plan" means any Employee Benefit Plan other than a Multiemployer
Plan.
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"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer
Plan, as those terms are defined in Part I of Subtitle E of Title IV of
ERISA.
(ii) Schedule 3.1(i)(ii) of the Company Disclosure Schedule sets
forth a true, complete and correct complete list of all material
Employee Benefit Plans (the "Plan List").
(iii) With respect to each Plan, the Company has delivered to
Parent a true, correct and complete copy of to the extent
applicable: (A) each Plan document and any related trust agreements,
and insurance contracts and other funding vehicles; (B) the most
recent Annual Report (Form 5500 Series) and accompanying schedule,
if any; (C) the current summary plan description and any material
modifications thereto, if any; (D) the most recent annual financial
report, if any; (E) the most recent actuarial report, if any; and
(F) the most recent determination letter from the IRS, if any.
Except as specifically provided in the foregoing documents delivered
to Parent, there are no amendments to any Plan that have been
adopted or approved nor has the Company or any of its subsidiaries
undertaken to make any such amendments or to adopt or approve any
new Plan.
(iv) The Plan List identifies each Plan that is intended to be a
"qualified plan" within the meaning of Section 401(a) of the Code
("Qualified Plans"). The Internal Revenue Service has issued a
favorable determination letter with respect to each Qualified Plan
and the related trust that has not been revoked, and to the
Company's knowledge there are no existing circumstances nor any
events that have occurred that could adversely affect the qualified
status of any Qualified Plan or the related trust unless such
circumstances or events could be cured without any material
liability to the Company and its subsidiaries. The Plan List
identifies each Plan which is intended to meet the requirements of
Code Section 501(c)(9), and each such plan meets such requirements
in all material respects and provides no disqualified benefits (as
such term is defined in Code Section 4976(b).
(v) All contributions required to be made to any Plan by
applicable law or regulation or by any plan document or other
contractual undertaking, and all premiums due or payable with
respect to insurance policies funding any Plan, for any period
through the date hereof have been timely made or paid in full or, to
the extent not required to be made or paid on or before the date
hereof, have been fully reflected on the Company's most recent
balance sheet included in the SEC Documents filed prior to the date
hereof. Each Employee Benefit Plan that is an employee welfare
benefit plan under Section 3(1) of ERISA is either (A) funded
through an insurance company contract and is not a "welfare benefit
fund" with the meaning of Section 419 of the Code or (B) unfunded.
(vi) With respect to each Employee Benefit Plan, the Company and
its subsidiaries have complied, and are now in compliance, in all
material respects with all provisions of ERISA, the Code and all
laws and regulations applicable to such Employee Benefit Plans and
each Employee Benefit Plan has been administered in all material
respects in accordance with its terms. There is not now, nor do any
circumstances exist that could give rise to, any requirement for the
posting of security with respect to a Plan or the imposition of any
material lien on the assets of the Company or any of its
subsidiaries under ERISA or the Code.
(vii) With respect to each Plan that is subject to Title IV or
Section 302 of ERISA or Section 412 or 4971 of the Code: (A) there
does not exist any accumulated funding deficiency within the meaning
of Section 412 of the Code or Section 302 of ERISA, whether or not
waived; (B) no reportable event within the meaning of Section
4043(c) of ERISA for which the 30-day notice requirement has not
been waived has occurred, and the consummation of the transactions
contemplated by this agreement will not result in the occurrence of
any such reportable event; (C) all premiums to the Pension Benefit
Guaranty Corporation have been timely paid in full; (D) no material
liability (other than for premiums to the PBGC) under Title
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IV of ERISA has been or is expected to be incurred by the Company;
and (E) the PBGC has not instituted proceedings to terminate any
such Plan and, to the Company's knowledge, no condition exists that
presents a material risk that such proceedings will be instituted or
which would constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any
such Plan.
(viii) No Employee Benefit Plan is a Multiemployer Plan or a plan
that has two or more contributing sponsors at least two of whom are
not under common control, within the meaning of Section 4063 of
ERISA (a "Multiple Employer Plan"). None of the Company and its
subsidiaries nor any of their respective ERISA Affiliates has, at
any time during the last six years, contributed to or been obligated
to contribute to any Multiemployer Plan or Multiple Employer Plan.
None of the Company and its subsidiaries nor any ERISA Affiliates
has incurred any Withdrawal Liability that has not been satisfied in
full.
(ix) There does not now exist, nor do any circumstances exist
that could result in, any Controlled Group Liability that would be a
material liability of the Company following the Closing. Without
limiting the generality of the foregoing, neither the Company nor
any ERISA Affiliate of the Company has engaged in any transaction
described in Section 4069 or Section 4204 or 4212 of ERISA.
(x) Except as disclosed in the SEC Reports, the Company has no
material liability for life, health, medical or other welfare
benefits to former employees or beneficiaries or dependents thereof,
except for health continuation coverage as required by Section 4980B
of the Code or Part 6 of Title I of ERISA and except for coverage
provided at no expense to the Company.
(xi) Except as set forth on Schedule 3.1(i)(xi) of the Company
Disclosure Schedule, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated
hereby will (either alone or in conjunction with any other event)
result in, cause the accelerated vesting or delivery of, or increase
the amount or value of, any payment or benefit to any employee,
officer or director of the Company or any of its subsidiaries.
(xii) None of the Company and its subsidiaries nor any other
person, including any fiduciary, has engaged in any "prohibited
transaction" (as defined in Section 4975 of the Code or Section 406
of ERISA), which could subject any of the Employee Benefit Plans or
their related trusts, the Company, any of its subsidiaries or any
person that the Company or any of its subsidiaries has an obligation
to indemnify, to any material tax or penalty imposed under Section
4975 of the Code or Section 502 of ERISA.
(xiii) There are no pending or threatened claims (other than
claims for benefits in the ordinary course), lawsuits or
arbitrations which have been asserted or instituted, or to Company's
knowledge, no set of circumstances exists which may reasonably give
rise to a claim or lawsuit, against the Plans, any fiduciaries
thereof with respect to their duties to the Plans or the assets of
any of the trusts under any of the Plans which could reasonably be
expected to result in any material liability of the Company or any
of its subsidiaries to the Pension Benefit Guaranty Corporation, the
Department of Treasury, the Department of Labor, any Multiemployer
Plan, any Plan or any participant in a Plan.
(xiv) All Employee Benefit Plans subject to the laws of any
jurisdiction outside of the United States (i) have been maintained
in accordance with all applicable requirements, (ii) if they are
intended to qualify for special tax treatment meet all requirements
for such treatment, and (iii) if they are intended to be funded
and/or book-reserved are fully funded and/or book-reserved, as
appropriate, based upon reasonable actuarial assumptions.
(j) Taxes. (i) Each of the Company and its subsidiaries has timely filed
all material Federal, state, local and foreign tax returns and reports
required to be filed by it through the date hereof and shall timely file
all such returns and reports required to be filed on or before the
Effective Time. All such returns and
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reports are and will be true, complete and correct in all material
respects. The Company and each of its subsidiaries has paid and discharged
(or the Company has paid and discharged on its behalf) all material taxes
due from them, other than such taxes as are being contested in good faith
by appropriate proceedings and are adequately reserved for on the most
recent financial statements contained in the SEC Documents filed prior to
the date of the Agreement. All taxes payable by the Company and its
subsidiaries (A) for all taxable periods and portions thereof through the
date of the most recent financial statements contained in the SEC Documents
filed prior to the date of this Agreement are properly reflected in
accordance with generally accepted accounting principles in such financial
statements, and (B) the unpaid taxes of the Company and its subsidiaries do
not exceed the amount shown therefor on such financial statements adjusted
for the passage of time through the Effective Time in accordance with past
custom and practice of the Company and its subsidiaries in filing their tax
returns. The Company and each of its subsidiaries has withheld all material
amounts required to be withheld under applicable tax laws from any
employee, creditor or other person. There are no material liens for taxes
upon the assets of the Company or any of its subsidiaries, other than liens
for current taxes not yet due.
(ii) Except for taxes being contested in good faith and adequately
reserved for in the Company's financial statements, no claim or
deficiency for any taxes has been proposed, threatened, asserted or
assessed by the IRS or any other taxing authority or agency against the
Company, or any of its subsidiaries which, if resolved against the
Company or any of its subsidiaries, could, individually or in the
aggregate, reasonably be expected to have a material adverse effect
upon the Company, and no requests for waivers of the time to assess any
material taxes or file any material tax return or report are pending.
The Federal income tax returns of the Company and each of its
subsidiaries consolidated in such returns have been examined by and
settled with the Internal Revenue Service for all years through fiscal
year 1995. The Company has made available to Parent true and correct
copies of all federal, state, local and foreign income tax returns, and
state and local property and sales tax returns and any other tax
returns filed by the Company or any of its subsidiaries for any of the
taxable periods that remains open, as of the date hereof, for
examination or assessment of tax.
(iii) Neither the Company nor any of its subsidiaries has made an
election under Section 341(f) of the Code. The Company is not and has
never been a United States real property holding corporation within the
meaning of Section 897 of the Code. Neither the Company nor any of its
subsidiaries has constituted either a "distributing corporation" or a
"controlled corporation" in a distribution of stock qualifying for tax-
free treatment under Section 355 of the Code (x) in the prior 24 month
period or (y) in a distribution which could otherwise constitute part
of a "plan" or "series of related transactions" (within the meaning of
Section 355(e) of the Code) in conjunction with the Merger.
(iv) Neither the Company nor any of its subsidiaries has any
liability for material taxes of any person (other than the Company and
its subsidiaries) under Treasury Regulation Section 1.1502-6 (or any
comparable provision of state, local or foreign law), by contract or
otherwise. Neither the Company nor any subsidiary is a party to any
agreement, understanding or arrangement relating to the allocation or
sharing of taxes.
(v) Neither the Company nor any of its subsidiaries has taken or
agreed to take any action or has any knowledge of any fact or
circumstance that might prevent or impede the Merger from qualifying as
a reorganization within the meaning of Section 368(a) of the Code.
(vi) As used in this Agreement, "taxes" shall include all Federal,
state, local and foreign income, property, sales, withholding, excise
and other taxes, of any nature whatsoever (whether payable directly or
by withholding), together with any interest and penalties, additions to
tax or additional amounts imposed with respect thereto. Notwithstanding
the definition of "subsidiary" set forth in Section 8.3 of this
Agreement, for the purposes of this Section 3.1(j), references to the
Company and each of its subsidiaries shall also include former
subsidiaries of the Company for the
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periods during which any such corporations were included in any
consolidated, combined or unitary tax return of the Company.
(k) No Excess Parachute Payments. Any amount that could be received
(whether in cash or property or the vesting of property) as a result of any
of the transactions contemplated by this Agreement by any employee, officer
or director of the Company or any of its affiliates who is a "disqualified
individual" (as such term is defined in proposed Treasury Regulation
Section 1.280G-1) under any employment, severance or termination agreement,
other compensation arrangement or Benefit Plan currently in effect would
not be characterized as an "excess parachute payment" (as such term is
defined in Section 280G(b)(1) of the Code).
(l) Labor Agreements. Neither the Company nor any of its subsidiaries is
a party to any collective bargaining agreement or other labor agreement
with any union or labor organization and, to the knowledge of the Company,
there is no activity or proceeding of any labor organization (or
representative thereof) to organize any such employees. The Company and its
subsidiaries are not subject to any pending or, to the knowledge of the
Company, threatened (i) material unfair labor practice, employment
discrimination or other complaint, (ii) strike or lockout or material
dispute, slowdown or work stoppage or (iii) material claim, suit, action or
governmental investigation, in respect of which any director, officer,
employee or agent of the Company or any of its subsidiaries is or may be
entitled to claim indemnification from the Company or any subsidiary.
(m) Compliance with Applicable Laws. (i) Each of the Company and its
subsidiaries has in effect all Federal, state, local and foreign
governmental approvals, authorizations, certificates, filings, franchises,
licenses, notices, permits and rights ("Permits") necessary for it to own,
lease or operate its properties and assets and to carry on its business as
now conducted, and there has occurred no default under any such Permit,
except for the lack of Permits and for defaults under Permits which lack or
default individually or in the aggregate could not reasonably be expected
to have a material adverse effect on the Company. Except as disclosed in
the SEC Documents filed prior to the date of this Agreement, the Company
and its subsidiaries are in compliance with all applicable statutes, laws,
ordinances, rules, orders and regulations of any Governmental Entity,
except for noncompliance which individually or in the aggregate could not
have a material adverse effect on the Company.
(ii) To the knowledge of the Company, the Company and each of its
subsidiaries is, and has been, and each of the Company's former
subsidiaries, while subsidiaries of the Company, was, in compliance in
all material respects with all applicable Environmental Laws, except
for noncompliance which individually or in the aggregate could not
reasonably be expected to have a material adverse effect on the
Company. The term "Environmental Laws" means any Federal, state, local
or foreign statute, code, ordinance, rule, regulation, policy,
guideline, permit, consent, approval, license, judgment, order, writ,
decree, injunction or other authorization, including the requirement to
register underground storage tanks, relating to: (A) emissions,
discharges, releases or threatened releases of Hazardous Material (as
hereinafter defined) into the environment, including, without
limitation, into ambient air, soil, sediments, land surface or
subsurface, buildings or facilities, surface water, groundwater,
publicly owned treatment works, septic systems or land; or (B) the
generation, treatment, storage, disposal, use, handling, manufacturing,
transportation or shipment of Hazardous Material.
(iii) During the period of ownership or operation by the Company and
its subsidiaries of any of their respective current or previously owned
or leased properties, to the knowledge of the Company there have been
no releases of Hazardous Material in, on, under or affecting such
properties or any surrounding site, except in each case for those which
individually or in the aggregate could not reasonably be expected to
have a material adverse effect on the Company. Prior to the period of
ownership or operation by the Company and its subsidiaries of any of
their respective current or previously owned or leased properties, to
the knowledge of the Company, no Hazardous Material was generated,
treated, stored, disposed of, used, handled or manufactured at, or
transported, shipped or
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disposed of from, such currently or previously owned or leased
properties, and there were no releases of Hazardous Material in, on,
under or affecting any such property or any surrounding site, except in
each case for those which individually or in the aggregate could not
reasonably be expected to have a material adverse effect on the
Company. The term "Hazardous Material" means (A) hazardous materials,
contaminants, constituents, medical wastes, hazardous or infectious
wastes and hazardous substances as those terms are defined in the
following statutes and their implementing regulations: the Hazardous
Materials Transportation Act, 49 U.S.C. (S) 1801 et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. (S) 6901 et seq., the
Comprehensive Environmental Response, Compensation and Liability Act,
as amended by the Superfund Amendments and Reauthorization Act, 42
U.S.C. (S) 9601 et seq., the Clean Water Act, 33 U.S.C. (S) 1251 et
seq. and the Clean Air Act, 42 U.S.C. (S) 7401 et seq., (B) petroleum,
including crude oil and any fractions thereof, (C) natural gas,
synthetic gas and any mixtures thereof, (D) asbestos and/or asbestos-
containing material, and (E) PCBs, or materials or fluids containing
PCBs in excess of 50 ppm.
(n) Contracts; Debt Instruments. Except as disclosed in Schedule 3.1(n)
of the Company Disclosure Schedule or for contracts filed as an exhibit to
the Company's latest Annual Report on Form 10-K, there is no contract or
agreement that is material to the business, financial condition or results
of operations of the Company and its subsidiaries taken as a whole
("Material Contract"). Each Material Contract of the Company is valid and
binding and in full force and effect, and neither the Company nor any of
its subsidiaries is in violation of or in default under (nor does there
exist any condition which upon the passage of time or the giving of notice,
or both, would cause such a violation of or default under) any loan or
credit agreement, note, bond, mortgage, indenture or lease, or any other
Material Contract to which it is a party or by which it or any of its
properties or assets is bound, except for such failures to be valid and
binding and for violations or defaults that could not, individually or in
the aggregate, reasonably be expected to result in a material adverse
effect on the Company. Set forth in Section 3.1(n) of the Company
Disclosure Schedule is a description of any material changes to the amount
and terms of the indebtedness of the Company and its subsidiaries as
described in the Company's Form 10-Q for the quarter ended January 31,
1999. The Company and its subsidiaries are not, and after the Effective
Time neither the Surviving Corporation nor Parent will be (by reason of any
agreement to which the Company is a party), subject to any noncompetition
or similar restriction on their respective businesses.
(o) Intellectual Property. Except as could not, individually and in the
aggregate, reasonably be expected to have a material adverse effect on the
Company, (i) the Company and each of its subsidiaries owns, has the right
to acquire or is licensed or otherwise has the right to use (in each case,
free and clear of any Liens), all Intellectual Property (as defined below)
used in the conduct of its business as currently conducted, (ii) no claims
are pending or, to the knowledge of the Company, threatened, that the
Company or any of its subsidiaries is infringing on or otherwise violating
the rights of any person with regard to any Intellectual Property, and
(iii) to the knowledge of the Company, no person is infringing on or
otherwise violating any right of the Company or any of its subsidiaries
with respect to any Intellectual Property owned by the Company or its
subsidiaries. For purposes of this Agreement, "Intellectual Property" shall
mean patents, copyrights, trademarks (registered or unregistered), service
marks, brand names, trade dress, trade names, the goodwill associated with
the foregoing and registrations in any jurisdiction of, and applications in
any jurisdiction to register, the foregoing; and trade secrets and rights
in any jurisdiction to limit the use or disclosure thereof by any person.
(p) Accounting Matters. Neither the Company nor, to its knowledge, any
of its affiliates has taken or agreed to take any action or has knowledge
of any fact or circumstance relating to the Company that would prevent
Parent from accounting for the business combination to be effected by the
Merger as a pooling-of-interests.
(q) Opinion of Financial Advisor. The Company has received the opinion
of Lazard Freres & Co. LLC, dated the date of this Agreement, to the effect
that, as of such date, the Exchange Ratio to be used in the Merger is fair
to the Company's stockholders, taken as a whole, from a financial point of
view, and a copy of such signed opinion will be delivered to Parent as soon
as practicable.
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(r) Brokers. No broker, investment banker, financial advisor or other
person, other than Lazard Freres & Co. LLC, the fees and expenses of which
have been disclosed to Parent and will be paid by the Company, is entitled
to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Company. The
Company has separately disclosed to Parent the amount of payment due to
Lazard Freres & Co. LLC in respect of the Merger. The Company will promptly
deliver to Parent a complete and correct set of all agreements (and
amendments thereof) between the Company and Lazard Freres & Co. LLC
pursuant to which such firm would be entitled to any payment relating to
the Merger.
(s) State Takeover Statutes. The Company has taken all requisite action
to render inapplicable to this Agreement, the Stockholders Support
Agreement and the transactions contemplated hereby and thereby the
provisions of Section 203 of the DGCL and such action is effective at the
date of this Agreement. To the knowledge of the Company, no other state
takeover statute or similar statute or regulation is applicable to the
Company or applies to the Merger, this Agreement, the Stockholders Support
Agreement, or any of the transactions contemplated by this Agreement or the
Stockholders Support Agreement.
(t) Year 2000 Compliance. The Company has initiated a review and
assessment of the Year 2000 Problem (as hereinafter defined), has developed
a plan for addressing the Year 2000 Problem on a timely basis and has to
date implemented such plan, except where the Company's failure to do so is
not reasonably likely to have a material adverse effect on the Company.
Except as could not reasonably be expected to have a material adverse
effect on the Company, to the knowledge of the Company none of the assets
or properties owned or utilized by the Company will fail to perform because
of the Year 2000 Problem. The term "Year 2000 Problem" means the material
inability of any hardware, software or process to recognize and correctly
calculate dates on and after January 1, 2000, or the failure of computer
systems, products or services to perform any of their intended functions in
a proper manner in connection with data containing any date on or after
January 1, 2000.
SECTION 3.2. Representations and Warranties of Parent and Sub. Except as
disclosed by specific reference to the applicable section of the Disclosure
Schedule delivered by Parent to the Company concurrently herewith (the "Parent
Disclosure Schedule"), Parent and Sub represent and warrant to the Company as
follows:
(a) Organization, Standing and Corporate Power. Each of Parent and Sub
is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is incorporated and has the
requisite corporate power and authority to carry on its business as now
being conducted. Each of Parent and Sub is duly qualified or licensed to do
business and is in good standing in each jurisdiction in which the nature
of its business or the ownership or leasing of its properties makes such
qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed (individually or in the
aggregate) could not reasonably be expected to have a material adverse
effect on Parent. Parent has made available to the Company complete and
correct copies of its certificate of incorporation and by-laws and the
certificate of incorporation and by-laws of Sub, in each case as amended to
the date of this Agreement.
(b) Capital Structure. The authorized capital stock of Parent as of the
date of this Agreement consists of 300,000,000 shares of Parent Common
Stock and 15,000,000 shares of preferred stock, without par value. At the
close of business on April 16, 1999, (i) 135,408,036 shares of Parent
Common Stock and no shares of preferred stock were issued and outstanding,
(ii) 11,595,000 shares of Parent Common Stock were held by Parent in its
treasury, and (iii) 15,000,000 shares of Parent Common Stock were reserved
for issuance upon exercise of outstanding employee stock options to
purchase shares of Parent Common Stock. The number of shares of Parent
Common Stock issuable under this Agreement has been or will be reserved for
issuance. Except as set forth above, at the close of business on April 16,
1999, no shares of capital stock or other voting securities of the Parent
were issued, reserved for issuance or outstanding. All outstanding shares
of capital stock of Parent are, and all shares which may be issued pursuant
to this
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Agreement will be, when issued, duly authorized, validly issued, fully paid
and nonassessable and not subject to preemptive rights. As of the date of
this Agreement, there are no bonds, debentures, notes or other indebtedness
of Parent having the right to vote (or convertible into, or exchangeable
for, securities having the right to vote) on any matters on which
stockholders of Parent may vote. Except as set forth above, as of the date
of this Agreement, there are no outstanding securities, options, warrants,
calls, rights, commitments, agreements, arrangements or undertakings of any
kind to which Parent is a party or by which it is bound obligating Parent
to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or other voting securities or obligating
Parent to issue, grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or undertaking. As
of the date of this Agreement, there are no outstanding contractual
obligations of Parent to repurchase, redeem or otherwise acquire any shares
of its capital stock. As of the date of this Agreement, the authorized
capital stock of Sub consists of 1,000 shares of common stock, par value
$.01 per share, of which 100 shares have been validly issued, are fully
paid and nonassessable and are owned by Parent free and clear of any Liens.
(c) Authority; Noncontravention. Parent and Sub have the requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery
of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the
part of Parent and Sub. This Agreement has been duly executed and delivered
by Parent and Sub and constitutes a valid and binding obligation of each
such party, enforceable against each such party in accordance with its
terms. The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby and compliance with
the provisions hereof will not, conflict with, or result in any violation
of, or default (with or without notice or lapse of time, or both) under, or
require the consent of (or the giving notice to) a third party with respect
to, or give rise to a right of termination, cancellation or acceleration of
any obligation or to loss of a material benefit under, or result in the
creation of any Lien upon any of the properties or assets of Parent or any
of its subsidiaries under, (i) the certificate of incorporation or by-laws
of Parent or Sub, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession,
franchise or license applicable to Parent or any of its subsidiaries or
their respective properties or assets as of the date hereof, or (iii)
subject to the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to Parent or any of its subsidiaries or their
respective properties or assets, other than, in the case of clauses (ii) or
(iii), any such conflicts, violations, defaults, rights or Liens that
individually or in the aggregate could not reasonably be expected to (x)
have a material adverse effect on Parent, (y) impair in any material
respect the ability of Parent and Sub to perform their respective
obligations under this Agreement, or (z) prevent or materially delay the
consummation of any of the transactions contemplated hereby. No consent,
approval, order or authorization of, or registration, declaration or filing
with any Governmental Entity is required by Parent or any of its
subsidiaries in connection with the execution and delivery of this
Agreement or the consummation by Parent or Sub, as the case may be, of any
of the transactions contemplated hereby, except for (i) the filing with the
Specified Agencies of a premerger notification and report form under the
HSR Act, (ii) the filing with the SEC of (x) the Form S-4 and (y) such
reports under Sections 13(a), 13(d) and 16(a) of the Exchange Act as may be
required in connection with this Agreement and the transactions
contemplated hereby, (iii) the filing of the Certificate of Merger with the
Delaware Secretary of State and appropriate documents with the relevant
authorities of other states in which the Company is qualified to do
business, and (iv) such other consents, approvals, orders, authorizations,
registrations, declarations and filings, including under (x) the laws of
any foreign country in which the Company or any of its subsidiaries
conducts any business or owns any property or assets or (y) the "takeover"
or "blue sky" laws of various states, the failure of which to be obtained
or made could not, individually or in the aggregate, reasonably be expected
to have a material adverse effect on Parent or prevent or materially delay
the consummation of any of the transactions contemplated by this Agreement.
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(d) SEC Documents; Financial Statements. Since January 1, 1997, Parent
has filed with the SEC all required reports and forms and other documents
(the "Parent SEC Documents"). As of their respective dates, the Parent SEC
Documents complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such Parent SEC
Documents, and none of the Parent SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.
Except to the extent that information contained in any Parent SEC Document
has been revised or superseded by a later-filed Parent SEC Document filed
and publicly available prior to the date of this Agreement, none of the
Parent SEC Documents contains any untrue statement of a material fact or
omits 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. The financial statements of
Parent included in the Parent SEC Documents comply as to form in all
material respects with all applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles
(except, in the case of unaudited statements, as permitted by Form 10-Q of
the SEC) applied on a consistent basis during the periods involved (except
as may be indicated in the notes thereto) and fairly present the
consolidated financial position of Parent 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 adjustments). Except as set forth
in the SEC Documents filed prior to the date of this Agreement (or, with
respect to any future repetition of this representation, prior to the time
of such repetition), and except for liabilities and obligations incurred in
the ordinary course of business consistent with past practice since the
date of the most recent consolidated balance sheet included in the SEC
Documents, neither Parent nor any of its subsidiaries has any liabilities
or obligations of any nature (whether accrued, absolute, contingent or
otherwise) required by generally accepted accounting principles to be set
forth on a consolidated balance sheet of Parent and its consolidated
subsidiaries or in the notes thereto.
(e) Information Supplied. None of the information supplied or to be
supplied by Parent or Sub for inclusion or incorporation by reference in
(i) the Form S-4 will, at the time the Form S-4 is filed with the SEC, 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 in order to make the statements therein, in light of the
circumstances under which they are made, not misleading or (ii) the
Information Statement will, at the date the Information Statement is mailed
to the Company's stockholders, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Form S-4 will
comply as to form in all material respects with the requirements of the
Securities Act and the rules and regulations promulgated thereunder, except
that no representation or warranty is made by Parent or Sub with respect to
statements made or incorporated by reference in either the Form S-4 or the
Information Statement based on information supplied by the Company
specifically for inclusion or incorporation by reference therein.
(f) Absence of Certain Changes or Events. Except as disclosed in the
Parent SEC Documents filed prior to the date of this Agreement, since
January 1, 1999, Parent has conducted its business only in the ordinary
course consistent with prior practice and there has not been (i) any
material adverse change in Parent, (ii) except for regular quarterly cash
dividends, any declaration, setting aside or payment of any dividend or
distribution (whether in cash, stock or property) with respect to any of
Parent's capital stock, (iii) any split, combination or reclassification of
any of its capital stock or any issuance or the authorization of any
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, (iv) any damage, destruction
or loss, whether or not covered by insurance, that has or could reasonably
be expected to have a material adverse effect on Parent, (v) any change in
accounting methods, principles or practices by Parent materially affecting
its assets, liabilities or business except
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insofar as may have been required by a change in generally accepted
accounting principles, or (vi) any agreement to do any of the things
described in the preceding clauses (i) through (v).
(g) Litigation. Except as disclosed in the Parent SEC Documents filed
prior to the date of this Agreement, as of the date of this Agreement there
is no suit, action or proceeding pending or, to the knowledge of Parent,
threatened against Parent or any of its subsidiaries that, individually or
in the aggregate, could reasonably be expected to (i) have a material
adverse effect on Parent, (ii) impair in any material respect the ability
of Parent to perform its obligations under this Agreement, or (iii) prevent
the consummation of any of the transactions contemplated by this Agreement,
nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against Parent or any of its
subsidiaries having, or which is reasonably likely to have, any effect
referred to in the foregoing clauses (i) through (iii).
(h) Compliance with Applicable Laws. (i) Each of Parent and its
subsidiaries has in effect all Permits necessary for it to own, lease or
operate its properties and assets and to carry on its business as now
conducted, and there has occurred no default under any such Permit, except
for the lack of Permits and for defaults under Permits which lack or
default individually or in the aggregate could not reasonably be expected
to have a material adverse effect on Parent. Except as disclosed in the
Parent SEC Documents filed prior to the date of this Agreement, Parent and
its subsidiaries are in compliance with all applicable statutes, laws,
ordinances, rules, orders and regulations of any Governmental Entity,
except for possible noncompliance which individually or in the aggregate
could not reasonably be expected to have a material adverse effect on
Parent.
(ii) To the knowledge of Parent, Parent and each of its subsidiaries
is, and has been, and each of Parent's former subsidiaries, while
subsidiaries of Parent, was, in compliance in all material respects
with all applicable Environmental Laws, except for possible
noncompliance which individually or in the aggregate could not
reasonably be expected to have a material adverse effect on Parent.
(i) Accounting Matters; Tax Treatment. Neither Parent nor, to its best
knowledge, any of its affiliates has taken or agreed to take any action or
has knowledge of any fact or circumstance relating to Parent that would
prevent Parent from accounting for the business combination to be effected
by the Merger as a pooling-of-interests. Neither Parent nor any of its
subsidiaries has taken or agreed to take any action or has any knowledge of
any fact or circumstance that might prevent or impede the Merger from
qualifying as a reorganization within the meaning of Section 368(a) of the
Code.
(j) Brokers. No broker, investment banker, financial advisor or other
person, other than Salomon Smith Barney Inc., the fees and expenses of
which will be paid by Parent, is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with
the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Parent or Sub.
(k) Interim Operations of Sub. Sub was formed solely for the purpose of
engaging in the transactions contemplated hereby, has engaged in no other
business activities and has conducted its operations only as contemplated
hereby.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.1. Conduct of Business. (a) Conduct of Business by the
Company. Between the date of this Agreement and the Effective Time, the Company
shall, and shall cause its subsidiaries to, carry on their respective
businesses in the ordinary course consistent with past practice and use all
reasonable efforts to preserve intact their current business organizations,
keep available the services of their current officers and employees and
preserve their relationships with customers, suppliers and others having
business dealings with them. Without limiting the generality of the foregoing,
between the date of this Agreement and the Effective Time, except (a) as
expressly contemplated by this Agreement or (b) as set forth in Section 4.1(a)
of the
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Company Disclosure Schedule, the Company shall not, and shall not permit any of
its subsidiaries, without the prior written approval of Parent, to:
(i) (A) declare, set aside or pay (whether in cash, stock, property, or
otherwise) any dividends on, or make any other distributions in respect of,
any of its capital stock, other than (x) the Company's regular quarterly
cash dividends in amounts and with record and payment dates in the ordinary
course of business consistent with past practice and (y) dividends and
distributions by any direct or indirect wholly owned subsidiary of the
Company to its parent, (B) split, combine or reclassify any of its capital
stock, or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock,
or (C) purchase, redeem or otherwise acquire any shares of capital stock of
the Company or any of its subsidiaries or any other securities thereof or
any rights, warrants or options to acquire any such shares or other
securities;
(ii) other than the issuance of Company Common Stock upon the exercise
of Stock Options outstanding on the date of this Agreement in accordance
with their present terms or in accordance with the present terms of any
employment agreements existing on the date of this Agreement and described
in Section 4.1(a) of the Company Disclosure Schedule, (A) issue, deliver,
sell, award, pledge, dispose of or otherwise encumber or authorize or
propose the issuance, delivery, grant, sale, award, pledge or other
encumbrance (including limitations in voting rights) or authorization of,
any shares of its capital stock, any other voting securities or any
securities convertible into, or any rights, warrants or options to acquire,
any such shares, voting securities or convertible securities, (B) amend or
otherwise modify the terms of any such rights, warrants or options, or (C)
accelerate the vesting of any of the Stock Options;
(iii) amend its certificate of incorporation, by-laws or other
comparable charter or organizational documents;
(iv) acquire or agree to acquire (for cash or shares of stock or
otherwise) (A) by merging or consolidating with, or by purchasing a
substantial portion of the assets of, or by any other manner, any business
or any corporation, partnership, joint venture, association or other
business organization or division thereof or (B) except for capital assets
consistent with (vii) below, any assets except in the ordinary course of
business consistent with past practice;
(v) mortgage or otherwise encumber or subject to any Lien, or sell,
lease, exchange or otherwise dispose of any of, its properties or assets,
except for sales of its products in the ordinary course of business
consistent with past practice;
(vi) (A) incur any indebtedness for borrowed money (including under
existing credit facilities) or guarantee any such indebtedness of another
person, issue or sell any debt securities or warrants or other rights to
acquire any debt securities of the Company or any of its subsidiaries,
guarantee any debt securities of another person, enter into any "keep well"
or other agreement to maintain any financial statement condition of another
person or enter into any arrangement having the economic effect of any of
the foregoing, except for the incurrence of indebtedness to finance the
Company's working capital needs which, in the aggregate, do not exceed
$1,000,000, provided that the terms of any such indebtedness (including any
prepayment penalty) shall be subject to the approval of Parent, or (B) make
any loans, advances or capital contributions to, or investments in, any
other person, other than to the Company or any direct or indirect wholly
owned subsidiary of the Company;
(vii) make or agree to make any capital expenditures except as
consistent with the Company's Fiscal 1999 and Fiscal 2000 Capital Budget
previously provided to Parent on a pro rata basis in each of those fiscal
years;
(viii) make or rescind any express or deemed election relating to taxes,
settle or compromise any claim, action, suit, litigation, proceeding,
arbitration, investigation, audit or controversy relating to taxes, change
any of its methods of reporting income or deductions for Federal income tax
purposes except as may be required by applicable law or file any tax return
or report other than in a manner consistent with past practice;
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(ix) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction, in the ordinary course of
business consistent with past practice or in accordance with their terms,
of liabilities reflected or reserved against in the most recent
consolidated financial statements of the Company included in the SEC
Documents or incurred in the ordinary course of business consistent with
past practice;
(x) (A) increase the rate or terms of compensation payable or to become
payable generally to any of the Company's directors, officers or employees
other than in connection with promotions and regular raise cycle increases
in the ordinary course and in accordance with past practices and after
consultation with Parent, (B) pay or agree to pay any pension, retirement
allowance or other employee benefit not provided for by any existing
Employee Benefit Plan or employment agreement described in the SEC
Documents filed prior to the date of this Agreement, (C) commit itself to
any additional pension, profit sharing, bonus, incentive, deferred
compensation, stock purchase, stock option, stock appreciation right, group
insurance, severance pay, continuation pay, termination pay, retirement or
other employee benefit plan, agreement or arrangement, or increase the rate
or terms of any employee plan or benefit arrangement, (D) enter into any
employment agreement with or for the benefit of any person, or (E) increase
the rate of compensation under or otherwise change the terms of any
existing employment agreement;
(xi) except in the ordinary course of business consistent with past
practice, modify, amend or terminate or fail to use reasonable business
efforts to renew any material contract or agreement to which the Company or
any subsidiary is a party, or waive, release or assign any material rights
or claims (including any rights under any confidentiality agreements); or
(xii) authorize any of, or commit or agree to take any of, the foregoing
actions.
(b) Conduct of Business by Parent. During the period from the date of this
Agreement to the Effective Time, Parent shall, and shall cause its subsidiaries
to, carry on their respective businesses in the ordinary course consistent with
past practice and use all reasonable efforts to preserve their relationships
with customers, suppliers and others having business dealings with them;
provided that the foregoing shall not prevent Parent or any of its subsidiaries
from discontinuing or disposing of any part of its assets or business or from
acquiring any assets or businesses or from entering into any financing
transactions if such action is, in the judgment of Parent, desirable in the
conduct of the business of Parent and its subsidiaries. Without limiting the
generality of the foregoing, during the period from the date of this Agreement
to the Effective Time, except as (i) expressly contemplated by this Agreement
or (ii) as set forth in a writing delivered to the Company prior to the
execution hereof, Parent shall not, and shall not permit any of its
subsidiaries to:
(i) (A) declare, set aside or pay (whether in cash or property) any
dividends on, or make any other distributions in respect of, any capital
stock other than dividends and distributions by any direct or indirect
wholly owned subsidiary of Parent to its parent and except for regular
quarterly cash dividends (in an amount determined in a manner consistent
with Parent's past practice) declared by the Board of Directors of Parent
with customary record and payment dates, or (B) split, combine or
reclassify any of its capital stock or issue or authorize the issuance of
any other securities in respect of, in lieu of or in substitution for
shares of Parent's capital stock;
(ii) amend its certificate of incorporation (except to increase the
number of shares authorized), by-laws or other comparable charter or
organizational documents in a manner which could reasonably be expected to
be materially adverse to the stockholders of the Company; or
(iii) authorize, or commit or agree to take any of, the foregoing
actions.
(c) Other Actions. The Company and Parent shall not, and shall not permit
any of their respective subsidiaries to, take any action that would result in
(i) any of the representations and warranties of such party set forth in this
Agreement that are qualified as to materiality, becoming untrue or (ii) any of
such representations and warranties that are not so qualified becoming untrue
in any material respect.
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SECTION 4.2. No Solicitation. (a) The Company shall not, nor shall it permit
any of its subsidiaries to, nor shall it authorize or permit any officer,
director or employee of, or any investment banker, attorney or other advisor or
representative of, the Company or any of its subsidiaries to, (i) solicit or
initiate, or encourage or facilitate the submission of, any proposal or offer
for a merger or other business combination involving the Company or any of its
subsidiaries or any acquisition of any capital stock of, or any significant
amount of the assets of, the Company or any of its subsidiaries, or (ii)
participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to facilitate
any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any such transaction (other than with respect to, and
in connection with, the Merger and any other transaction contemplated by this
Agreement). The Company shall immediately terminate any currently on-going
discussions with respect to any such transaction and shall request the return
or destruction of any confidential information provided to any other party in
connection with any such discussions during the past 12 months. The Company
shall promptly advise Parent orally and in writing of any request for
information or of any proposal received from any third party relating to the
Company or its securities, including the material terms and conditions of such
request, proposal or inquiry, and the identity of the person making the same.
The Company shall keep Parent informed on a current basis of the status and
details of any such request, proposal or inquiry.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1. Preparation of Form S-4 and the Information Statement. As
promptly as practicable after the execution of this Agreement, (i) the Company
shall prepare and file with the SEC on Schedule 14C an information statement
relating to this Agreement, the transactions contemplated hereby and the
approval thereof by written consent of the stockholders of the Company
(together with any amendments and supplements thereof or supplements thereto,
the "Information Statement"), and (ii) Parent shall prepare and file with the
SEC a registration statement on Form S-4 (together with all amendments thereto,
the "Form S-4") in which the Information Statement shall be included as a
prospectus, in connection with the registration under the Securities Act of the
shares of Parent Common Stock to be issued to the stockholders of the Company
pursuant to the Merger. Each of Parent and the Company shall use all reasonable
efforts to cause the Form S-4 to become effective as promptly as practicable,
and shall take all or any action required under any applicable Federal or state
securities laws in connection with the issuance of shares of Parent Common
Stock pursuant to the Merger. Each of Parent and the Company shall furnish all
information concerning itself to the other as the other may reasonably request
in connection with such actions and the preparation of the Form S-4 and
Information Statement. Parent will advise the Company, and (where applicable)
the Company will advise Parent, promptly after receiving from the SEC or any
other Governmental Entity any of the following: (i) notice that the Form S-4
has become effective, (ii) notice of the issuance of any stop order or the
suspension of the qualification of the shares of Parent Common Stock issuable
in connection with the Merger for offering or sale in any jurisdiction, (iii) a
request for amendment of the Form S-4 or the Information Statement, or (iv) SEC
comments to the Form S-4 or the Information Statement or requests for
additional information with respect thereto. As promptly as practicable after
the Form S-4 shall have become effective, the Company shall mail the
Information Statement to its stockholders. Without limiting the foregoing, if
Parent so requests, the Company will take all action necessary in accordance
with applicable law and its Restated Certificate of Incorporation and By-Laws
to convene a meeting of its stockholders to consider and vote upon the approval
and adoption of this Agreement and the transactions contemplated hereby, and to
submit this Agreement to the stockholders of the Company for their approval, or
to solicit a further written consent, in lieu of a stockholders' meeting, of
its stockholders approving and adopting this Agreement and the transactions
contemplated hereby, and the Company and its Board of Directors shall take all
lawful reasonable action to solicit, and use all reasonable efforts to obtain,
such approval, including making any required filings with Governmental
Entities.
SECTION 5.2. Access to Information; Confidentiality. Subject to any
applicable law and that certain confidentiality agreement executed in 1993, the
general nature of which has been disclosed, the Company shall,
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and shall cause each of its subsidiaries to, afford to Parent, and to its
officers, employees, accountants, counsel, financial advisers and other
representatives, full access during normal business hours upon receipt of
reasonable prior notice during the period prior to the Effective Time to all of
the Company's properties, books, contracts, commitments, personnel and records
and, during such period, the Company shall, and shall cause each of its
subsidiaries to, furnish promptly to Parent, (a) a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of Federal or state securities laws and (b)
all other information concerning its business, properties and personnel as
Parent may reasonably request. Except as required by law, Parent will hold, and
will cause its officers, employees, accountants, counsel, financial advisers
and other representatives and affiliates to hold, any confidential information
in accordance with the Confidentiality Agreement between Parent and the Company
executed in connection with the Merger (the "Confidentiality Agreement").
SECTION 5.3. Reasonable Efforts; Notification. (a) Upon the terms and
subject to the conditions set forth in this Agreement, each of the parties
agrees to use all reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with the
other parties in doing, all things necessary, proper or advisable to consummate
and make effective, in the most expeditious manner practicable, the Merger and
the other transactions contemplated by this Agreement, including (i) the making
of all necessary registrations and filings (including filings with Governmental
Entities, if any), (ii) the obtaining of all necessary consents, approvals or
waivers from third parties, and (iii) the execution and delivery of any
additional instruments necessary to consummate the transactions contemplated
by, and to fully carry out the purposes of, this Agreement. Each party shall
promptly notify the other parties of any communication to that party from any
Governmental Entity and permit the other parties to review in advance any
proposed communications to any Governmental Entity. Parent and the Company
shall not (and shall cause their respective affiliates and representatives not
to) participate in any meeting with any Governmental Entity in respect of any
filings, investigation or other inquiry unless it consults with the other party
in advance and, to the extent permitted by such Governmental Entity, gives the
other party the opportunity to attend and participate thereat. Each of the
parties hereto will coordinate and cooperate fully with the other parties
hereto in exchanging such information and providing such assistance as such
other parties may reasonably request in connection with the foregoing and in
seeking early termination of any applicable waiting periods under the HSR Act
or in connection with other required consents. Each of the Company and Parent
agrees to respond promptly to and comply fully with any request for additional
information or documents under the HSR Act. Each party will provide the others
with copies of all correspondence, filings or communications (or memoranda
setting forth the substance thereof) between such party or any of its
representatives, on the one hand, and any Governmental Entity or members of its
staff, on the other hand, with respect to this Agreement and the transactions
contemplated hereby.
(b) The Company shall give prompt notice to Parent, and Parent shall give
prompt notice to the Company, of (i) any representation or warranty made by it
contained in this Agreement that is qualified as to materiality becoming untrue
or inaccurate in any respect or any such representation or warranty that is not
so qualified becoming untrue or inaccurate in any material respect or (ii) the
failure by it to comply with or satisfy in any material respect any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement; provided, however, that no such notification shall affect the
representations, warranties, covenants, or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
SECTION 5.4. Employee Stock Purchase Plan. The Company shall take all
necessary action so that any offering under the Company's Employee Stock
Purchase Plan that begins before the Effective Time and would otherwise end
after the Effective Time ends before the Effective Time and no such offering
begins after the Effective Time.
SECTION 5.5. Stock Option Plans. The Company and Parent shall take all
necessary action to provide that, at the Effective Time, and except as provided
in Section 5.4, all outstanding stock options to purchase shares of Company
Common Stock ("Stock Options") heretofore granted under any stock option or
stock appreciation rights plan, program or arrangement of the Company
(collectively, the "Stock Option Plans") will
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be canceled and retired and shall cease to exist, and that each holder of a
Stock Option, whether or not then exercisable, shall receive with respect to
such Stock Option, without any action on the part of such holder, the number of
whole shares of Parent Common Stock equal to (i) the Fair Value of such Stock
Option (as defined below) divided by (ii) the Average Parent Stock Price (as
defined below), where: the "Fair Value of such Stock Option" is equal to the
product of (x) the number of shares of Company Common Stock subject to such
Stock Option and (y) the excess, if any, of (A) the product of the Exchange
Ratio and the Average Parent Stock Price over (B) the exercise price of such
Stock Option. The Company shall use its reasonable best efforts to receive any
consents necessary to effectuate the foregoing. The Company represents and
warrants that, under the terms of the Stock Option Plans and the Stock Options,
following the Effective Time, no holder of a Stock Option or participant in any
Stock Option Plan shall have any right thereunder to acquire any capital stock
of the Company, Parent or the Surviving Corporation.
SECTION 5.6. Benefit Plans and Employee Matters. (a) Parent agrees that the
Company will honor, and, from and after the Effective Time, Parent will cause
the Surviving Corporation to honor, in accordance with their respective terms
as in effect on the date hereof, the employment, severance and bonus agreements
and similar arrangements to which the Company is a party and which are set
forth on Sections 3.1(i) and 5.5 of the Company Disclosure Schedule.
(b) Parent agrees that (i) for the period ending December 31, 1999, the
Surviving Corporation shall continue the compensation and employee benefit and
welfare plans and programs of the Company to the extent practicable as in
effect on the date hereof, and (ii) thereafter the Surviving Corporation shall
provide employees of the Company and its subsidiaries immediately prior to the
Effective Time ("Company Employees") as a whole (A) compensation (including
bonus and incentive awards) programs and plans and (B) employee benefit and
welfare plans, programs, contracts, agreements and policies (including
insurance and pension plans), fringe benefits and vacation policies which are
substantially the same as or not materially less favorable in the aggregate to
such Company Employees than those generally in effect with respect to similarly
situated employees of Parent.
(c) For all purposes under the employee benefit plans of Parent and its
Affiliates providing benefits after the Effective Time, each Company Employee
shall be credited with his or her years of service with the Company and its
affiliates before the Effective Time, to the same extent as such Company
Employee was entitled, before the Effective Time, to credit for such service
under any similar Employee Benefit Plans (as defined in Section 3.1(i)), except
to the extent such credit would result in a duplication of benefits. In
addition, and without limiting the generality of the foregoing: (i) each
Company Employee shall be immediately eligible to participate, without any
waiting time, in any and all employee benefit plans sponsored by Parent and its
affiliates for the benefit of Company Employees (such plans, collectively, the
"New Plans") to the extent coverage under such New Plan replaces coverage under
a comparable Employee Benefit Plan in which such Company Employee participated
immediately before the Effective Time (such plans, collectively, the "Old
Plans"); and (ii) for purposes of each New Plan providing medical, dental,
pharmaceutical and/or vision benefits to any Company Employee, Parent shall
cause all pre-existing condition exclusions and actively-at-work requirements
of such New Plan to be waived for such employee and his or her covered
dependents to the extent currently applicable to such persons.
(d) Parent and the Company shall take all steps necessary or appropriate to
terminate the Company's Deferred Compensation Plan on the terms and conditions
set forth in this Section 5.6(d). Parent shall determine which of the Company
Employees who participate in such Deferred Compensation Plan will be eligible
to participate in Parent's Executive Deferred Incentive Program (the "EDIP")
immediately following the Effective Time, and shall offer each such Company
Employee (an "EDIP Participant") the opportunity to elect, not later than the
tenth day after the Effective Time, whether or not such EDIP Participant's
account balance under such Deferred Compensation Plan will be transferred to an
EDIP account for such EDIP Participant as of December 31, 2000. Such Deferred
Compensation Plan shall terminate effective as of December 31, 2000, and the
account balance thereunder as of December 31, 2000 of each participant who is
not an EDIP Participant, as well as the account balance thereunder as of
December 31, 2000 of each EDIP
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Participant who does not elect to have his or her account balance transferred
as provided in the preceding sentence, shall be paid to such individual in cash
as promptly as possible thereafter.
SECTION 5.7. Indemnification, Exculpation and Insurance. (a) The certificate
of incorporation and the by-laws of the Surviving Corporation shall contain the
provisions with respect to indemnification and exculpation from liability set
forth in the Company's Restated Certificate of Incorporation and By-laws on the
date of this Agreement, which provisions shall not be amended, repealed or
otherwise modified for a period of six years following the Effective Time in
any manner that would adversely affect the rights thereunder of individuals who
on or prior to the Effective Time were directors, officers, employees or agents
of the Company, unless such modification is required by law. Parent shall cause
the Surviving Corporation to comply with its obligations with respect to the
indemnification provisions contained in the Surviving Corporation's certificate
of incorporation and by-laws.
(b) For three years following the Effective Time, Parent shall maintain in
effect directors' and officers' liability insurance covering those persons who
are currently covered by the Company's directors' and officers' liability
insurance policy (a copy of which has been heretofore delivered to Parent) (the
"Indemnified Parties") with coverage limits no less favorable than the terms of
such current insurance coverage; provided, however, that in no event shall
Parent be required to expend in any one year an amount in excess of 200% of the
annual premiums currently paid by the Company for such insurance; and provided
further that if the annual premiums of such insurance coverage exceed such
amount, Parent shall be obligated to obtain a policy with the greatest coverage
available for a cost not exceeding such amount.
(c) In the event Parent, the Surviving Corporation or any of their
successors or assigns (i) consolidates with or merges into any other person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person, then and in each such case, proper
provisions shall be made so that the successors and assigns of Parent or the
Surviving Corporation, as the case may be, shall assume the obligations set
forth in this Section 5.7.
(d) This Section 5.7 shall survive the consummation of the Merger at the
Effective Time, is intended to benefit the Company, Parent, the Surviving
Corporation and the Indemnified Parties, and shall be binding on all successors
and assigns of Parent and the Surviving Corporation.
SECTION 5.8. Fees and Expenses. All fees and expenses incurred in connection
with the Merger, this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such fees or expenses, whether or not the Merger
is consummated.
SECTION 5.9. Public Announcements. Parent and Sub, on the one hand, and the
Company, on the other hand, will consult with each other before issuing, and
provide each other the opportunity to review and comment upon, any press
release or other public statements with respect to the transactions
contemplated by this Agreement, including the Merger, and shall not issue any
such press release or make any such public statement prior to such
consultation, except as may be required by applicable law, court process or by
obligations pursuant to any listing agreement with any national securities
exchange. The parties agree that the initial press release to be issued with
respect to the transactions contemplated by this Agreement shall be in the form
heretofore agreed to by the parties.
SECTION 5.10. Affiliates; Accounting and Tax Treatment. (a) The Company
shall (x) within 30 days after the date of this Agreement, deliver to Parent a
letter identifying all persons who may be deemed affiliates of the Company
under Rule 145 of the Securities Act or otherwise under applicable SEC
accounting releases with respect to pooling-of-interests accounting treatment
and (y) use all reasonable efforts to obtain from each such affiliate, by the
thirtieth day prior to the Effective Time, a written agreement substantially in
the form of Exhibit 5.10 hereto. The Company shall use all reasonable efforts
to obtain such a written agreement as soon as practicable from any person who
may be deemed to have become an affiliate of the Company, after the Company's
delivery of the letter referred to above and prior to the Effective Time.
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(b) Each party hereto shall (i) use all reasonable efforts to cause the
Merger to qualify, and shall not take any actions which such party knows or has
reason to know could prevent the Merger from qualifying, for pooling-of-
interests accounting treatment and as a reorganization under the provisions of
Section 368(a) of the Code and (ii) use its reasonable efforts to obtain the
letters from the accountants referred to in Sections 6.2(e) and the opinions of
counsel referred to in Section 6.2(d) and Section 6.3(c).
(c) The Company shall (i) use all reasonable best efforts to secure the
waiver of any limited stock appreciation rights or other rights to redeem for
cash options or warrants of the Company by each holder thereof and (ii) subject
to the prior consent of Parent, which shall not be unreasonably withheld, take
such other actions as are necessary to cure any facts or circumstances that
could prevent the Merger from qualifying for pooling-of-interests accounting
treatment, including by reissuing "tainted treasury shares" of Company Common
Stock in a manner (including pursuant to any registration statements filed with
the SEC), limited to a number and at a time reasonably acceptable to Parent.
SECTION 5.11. State Takeover Laws. The Company shall, upon the request of
Parent, take all reasonable steps to assist in any challenge by Parent to the
validity or applicability to the transactions contemplated by this Agreement
and the Stockholder Support Agreement, including the Merger, of any state
takeover law.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1. Conditions to Each Party's Obligations to Effect the
Merger. The respective obligation of each party to effect the Merger is subject
to the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) NYSE Listing. The shares of Parent Common Stock issuable to the
Company's stockholders pursuant to this Agreement shall have been approved
for listing on the NYSE, subject to official notice of issuance.
(b) No Injunctions; Litigation. No litigation brought by a Governmental
Entity shall be pending which seeks to enjoin or prohibit the consummation
of the Merger, and no temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or
other legal restraint or prohibition preventing the consummation of the
Merger shall be in effect.
(c) Form S-4. The Form S-4 shall have been declared effective by the SEC
under the Securities Act. No stop order suspending the effectiveness of the
Form S-4 shall have been issued by the SEC, and no proceedings for that
purpose shall have been initiated or, to the knowledge of Parent or the
Company, threatened by the SEC which, in the case of any of the foregoing,
shall be ongoing.
(d) HSR Act. The applicable waiting period (and any extension thereof)
under the HSR Act shall have expired or been terminated.
(e) Approvals. Other than the filing of merger documents in accordance
with the DGCL, all authorizations, consents, waivers, orders or approvals
required to be obtained, and all filings, notices or declarations required
to be made, by Parent, Sub and the Company prior to the consummation of the
Merger and the transactions contemplated hereunder shall have been obtained
from, and made with, all required Governmental Entities except for such
authorizations, consents, waivers, orders, approvals, filings, notices or
declarations the failure to obtain or make which would not have a material
adverse effect, at or after the Effective Time, on the Company or Parent.
(f) Information Statement. At least twenty calendar days shall have
elapsed from the mailing of the Information Statement to the stockholders
of the Company.
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SECTION 6.2. Additional Conditions to Obligations of Parent and Sub. The
obligations of Parent and Sub to effect the Merger are also subject to the
following conditions:
(a) Representations and Warranties. Each of the representations and
warranties of the Company contained in this Agreement (when read to exclude
any qualification or exception as to materiality or material adverse
effect) shall, as of the Closing Date as though made on and as of the
Closing Date, be true and correct except for such failures to be true and
correct as could not, individually or in the aggregate, reasonably be
expected to result in a material adverse effect on the Company or Parent;
provided that those representations and warranties which address matters
only as of a particular date shall remain true and correct in all material
respects (except that where any statement in a representation or warranty
expressly includes a standard of materiality, such statement shall be true
and correct in all respects giving effect to such standard) as of such
date. Parent shall have received a certificate of the Chief Executive
Officer and Chief Financial Officer of the Company to such effect.
(b) Agreements and Covenants. The Company shall have performed or
complied in all material respects with the agreements and covenants
required by this Agreement to be performed or complied with by it on or
prior to the Closing Date. Parent shall have received a certificate of the
Chief Executive Officer and Chief Financial Officer of the Company to such
effect.
(c) Consents Under Agreements. The Company shall have obtained the
consent or approval of each person whose consent or approval shall be
required in connection with the Merger under all loan or credit agreements,
notes, mortgages, indentures, leases or other agreements or instruments to
which it or any of its Material Subsidiaries is a party, except those for
which failure to obtain such consents and approvals would not have a
material adverse effect on the Company prior to or after the Effective Time
or a material adverse effect on Parent after the Effective Time.
(d) Tax Opinion. Parent shall have received the opinion of Wachtell,
Lipton, Rosen & Katz, counsel to Parent, dated as of the Closing Date, to
the effect that, on the basis of facts, representations and assumptions set
forth in such opinion, the Merger will be treated for Federal income tax
purposes as a reorganization qualifying under the provisions of Section
368(a) of the Code. The issuance of such opinion shall be conditioned on
the receipt of customary representation letters in form and substance
reasonably acceptable to Wachtell, Lipton, Rosen & Katz.
(e) Pooling Letter. Parent shall have received from Arthur Andersen LLP,
as independent auditors of Parent, on the date of the Information Statement
and on the Closing Date, letters, in each case dated as of such respective
dates, addressed to Parent, in form and substance reasonably acceptable to
Parent and to the effect that the business combination to be effected by
the Merger is required to be accounted for as a pooling-of-interests by
Parent for purposes of its consolidated financial statements under
generally accepted accounting principles and applicable SEC rules and
regulations.
(f) Affiliate Agreements. Parent shall have received from each person
who may be deemed to be an affiliate of the Company (under Rule 145 of the
Securities Act or otherwise under applicable SEC accounting releases with
respect to pooling-of-interests accounting treatment) on or prior to the
Closing Date a signed agreement substantially in the form of Exhibit 5.10
hereto.
SECTION 6.3. Additional Conditions to Obligations of the Company. The
obligations of the Company to effect the Merger are also subject to the
following conditions:
(a) Representations and Warranties. Each of the representations and
warranties of Parent contained in this Agreement (when read to exclude any
qualification or exception as to materiality or material adverse effect)
shall, as of the Closing Date as though made on and as of the Closing Date,
be true and correct, except for such failures to be true and correct as
could not, individually or in the aggregate, reasonably be expected to
result in a material adverse effect on Parent; provided that those
representations
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and warranties which address matters only as of a particular date shall
remain true and correct in all material respects (except that where any
statement in a representation or warranty expressly includes a standard of
materiality, such statement shall be true and correct in all respects
giving effect to such standard) as of such date. The Company shall have
received a certificate of the Chief Executive Officer and Chief Financial
Officer of Parent to such effect.
(b) Agreements and Covenants. Parent shall have performed or complied in
all material respects with the agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the Closing
Date. The Company shall have received a certificate of the Chief Executive
Officer and Chief Financial Officer of Parent to such effect.
(c) Tax Opinion. The Company shall have received the opinion of McBride
Baker & Coles, counsel to the Company, dated as of the Closing Date, to the
effect that, on the basis of facts, representations and assumptions set
forth in such opinion, the Merger will be treated for Federal income tax
purposes as a reorganization qualifying under the provisions of Section
368(a) of the Code and that neither the Company nor any of its stockholders
will recognize any gain or loss for federal income tax purposes as a result
of the Merger or receipt of the merger consideration (except with respect
to cash paid in lieu of fractional shares). The issuance of such opinion
shall be conditioned on the receipt of customary representation letters in
form and substance reasonably acceptable to McBride Baker & Coles.
(d) Registration Rights Agreement. Parent shall have executed and
delivered to the other parties thereto a registration rights agreement in
the form of Exhibit 6.3(d) hereto.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1. Termination. This Agreement may be terminated at any time prior
to the Effective Time, whether before or after approval of matters presented in
connection with the Merger by the stockholders of the Company:
(a) by mutual written consent of Parent and the Company;
(b) by Parent, upon a breach of any representation, warranty, covenant
or agreement on the part of the Company set forth in this Agreement, or if
any representation or warranty of the Company shall have become untrue, in
either case such that the conditions set forth in Section 6.2(a) or Section
6.2(b), as the case may be, would be incapable of being satisfied by
October 31, 1999;
(c) by the Company, upon a breach of any representation, warranty,
covenant or agreement on the part of Parent set forth in this Agreement, or
if any representation or warranty of Parent shall have become untrue, in
either case such that the conditions set forth in Section 6.3(a) or Section
6.3(b), as the case may be, would be incapable of being satisfied by
October 31, 1999;
(d) by either Parent or the Company, if any Governmental Entity shall
have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the
consummation of the Merger and such order, decree or ruling or other action
shall have become final and nonappealable;
(e) by either Parent or the Company, if the Merger shall not have
occurred by October 31, 1999 unless the failure to consummate the Merger is
the result of a material breach of any representation, or warranty,
covenant or agreement set forth in this Agreement by the party seeking to
terminate this Agreement;
(f) by the Company, by a vote of a majority of the members of its entire
Board of Directors, at any time during the two-day period commencing at the
close of business on the Determination Date (as
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defined below), in the event the Average Parent Stock Price (as defined
below) is less than $57.09; provided, however, that if the Company elects
to exercise its termination right pursuant to this Section 7.1(f), it shall
give prompt written notice thereof to Parent, and during the two-day period
commencing with its receipt of such notice, Parent may elect to increase
the Exchange Ratio to equal that fraction of a share of Parent Common Stock
(rounded to four decimal points), the numerator of which is the product of
$57.09 and the Exchange Ratio (as then in effect) and the denominator of
which is the Average Parent Stock Price; if Parent makes an election
contemplated by the above proviso to this Section 7.1(f) within such two-
day period, it shall give prompt written notice to the Company of such
election and the revised Exchange Ratio, whereupon no termination shall
have occurred pursuant to this Section 7.1(f) and this Agreement shall
remain in effect in accordance with its terms, except that the Exchange
Ratio shall be fixed at the number determined in accordance with this
Section 7.1(f) and any references in this Agreement to the "Exchange Ratio"
shall thereafter be deemed to refer to the Exchange Ratio as so adjusted;
or
(g) by Parent, at any time during the two-day period commencing at the
close of business on the Determination Date, in the event the Average
Parent Stock Price is greater than $73.41; provided, however, that if
Parent elects to exercise its termination right pursuant to this Section
7.1(g), it shall give prompt written notice thereof to the Company, and
during the two-day period commencing with its receipt of such notice, the
Company may elect to decrease the Exchange Ratio to equal that fraction of
a share of Parent Common Stock (rounded to four decimal points), the
numerator of which is the product of $73.41 and the Exchange Ratio (as then
in effect) and the denominator of which is the Average Parent Stock Price;
if the Company makes an election contemplated by the above proviso to this
Section 7.1(g) within such two-day period, it shall give prompt written
notice to Parent of such election and the revised Exchange Ratio, whereupon
no termination shall have occurred pursuant to this Section 7.1(g) and this
Agreement shall remain in effect in accordance with its terms, except that
the Exchange Ratio shall be fixed at the number determined in accordance
with this Section 7.1(g) and any references in this Agreement to the
"Exchange Ratio" shall thereafter be deemed to refer to the Exchange Ratio
as so adjusted.
The "Average Parent Stock Price" means the average of the Daily Per Share
Prices (as defined below) for the 15 consecutive trading days ending on the
date the last of the conditions set forth in Section 6.1 shall be satisfied
(or, if such day is not a trading day, ending on the immediately preceding
trading day) (the "Determination Date"). The "Daily Per Share Price" for any
trading day means the daily last sale price for the Parent Common Stock, as
reported on the NYSE Composite Transactions reporting system (as reported in
The Wall Street Journal or, if not reported therein, in another mutually agreed
upon authoritative source) for that day.
SECTION 7.2. Effect of Termination. In the event of termination of this
Agreement by either the Company or Parent as provided in Section 7.1, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Parent, Sub or the Company, other than the
provisions of Section 3.1(r), Section 3.2(j), the last sentence of Section 5.2,
Section 5.8, this Section 7.2 and Article VIII and except to the extent that
such termination results from the willful and material breach by a party of any
of its representations, warranties, covenants or agreements set forth in this
Agreement.
SECTION 7.3. Amendment. This Agreement may be amended by the parties by
action of their respective boards of directors at any time, provided that there
shall not be made any amendment that by law requires further approval by the
stockholders of the Company without the further approval of such stockholders.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties.
SECTION 7.4. Extension; Waiver. At any time prior to the Effective Time, the
parties may (a) extend the time for the performance of any of the obligations
or other acts of the other parties, (b) waive any inaccuracies in the
representations and warranties contained in this Agreement or in any document
delivered pursuant to this Agreement or (c) subject to the proviso of Section
7.3, waive compliance with any of the
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agreements or conditions contained in this Agreement. Any agreement on the part
of a party to any such extension or waiver shall be valid only if set forth in
an instrument in writing, signed on behalf of such party. The failure of any
party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of those rights.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.1. Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time. This Section 8.1
shall not limit any covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time of the Merger.
SECTION 8.2. Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier (providing proof of
delivery) or telecopy (with receipt acknowledged) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to Parent or Sub, to
Danaher Corporation
1250 24th Street, NW
Washington, D.C. 20037
Facsimile: (202) 828-0860
Attention: Patrick W. Allender
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Facsimile: (212) 403-2000
Attention: Trevor S. Norwitz, Esq.
and a copy to:
Wilmer, Cutler & Pickering
2445 "M" Street, NW
Washington, D.C. 20037-1420
Facsimile: (202) 663-6363
Attention: Mark Dewire, Esq.
if to the Company, to
Hach Company
5600 Lindbergh Drive
P.O. Box 389
Loveland, CO 80539
Facsimile: (970) 669-2932
Attention: Gary R. Dreher
with a copy to:
McBride Baker & Coles
500 West Madison Street, 40th Floor
Chicago, IL 60661-2511
Facsimile: (312) 993-9350
Attention: Robert O. Case, Esq.
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and a copy to:
Sidley & Austin
One First National Plaza
Chicago, IL 60603
Facsimile: (312) 853-7036
Attention: Thomas A. Cole, Esq.
SECTION 8.3. Definitions. For purposes of this Agreement:
(a) an "affiliate" or "Affiliate" of any person means another person
that directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, such first person;
(b) "knowledge" means, when used in connection with the Company or
Parent, knowledge of the individuals listed in Section 8.3 of the Company
Disclosure Schedule, and, when used in connection with Parent, knowledge of
the individuals listed in Section 8.3 of the Parent Disclosure Schedule, in
each case, after due inquiry for such purpose;
(c) "material adverse change" or "material adverse effect" means, when
used in connection with the Company or Parent, any change or effect that is
or could, individually or in the aggregate, reasonably be expected to be
materially adverse to the business, assets, liabilities, financial
condition, results of operations or prospects of such party and its
subsidiaries taken as a whole;
(d) "person" means an individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or other entity;
and
(e) a "subsidiary" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership interests
of which is sufficient to elect at least a majority of its board of
directors or other governing body (or, if there are no such voting
interests, more than 50% of the equity interests of which) is owned
directly or indirectly by such first person.
SECTION 8.4. Interpretation. When a reference is made in this Agreement to a
Section, Exhibit or Schedule, such reference shall be to a Section of, or an
Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" and "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
SECTION 8.5. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other parties.
SECTION 8.6. Entire Agreement; No Third-Party Beneficiaries. This Agreement
and the Confidentiality Agreement constitute the entire agreement, and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof and thereof and except
for the provisions of Section 5.7, are not intended to confer upon any person
other than the parties hereto any rights or remedies hereunder.
SECTION 8.7. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflict of
laws thereof.
SECTION 8.8. Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.
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SECTION 8.9. Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Delaware or in Delaware state court, this being in
addition to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of any Federal court located in the State of Delaware or
any Delaware state court in the event any dispute arises out of this Agreement
or any of the transactions contemplated by this Agreement, (b) agrees that it
will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court, and (c) agrees that it will not
bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a Federal or state court
sitting in the State of Delaware.
SECTION 8.10. 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 hereby is not affected in any manner
materially adverse to any party. 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 any acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement
to be signed by their respective officers thereunto duly authorized, all as of
the date first written above.
Attest: DANAHER CORPORATION
/s/ Patrick W. Allender
By: _________________________________
Name:Patrick W. Allender
Title:Senior Vice President and
Chief Financial Officer
H2O ACQUISITION CORP.
/s/ Patrick W. Allender
By: _________________________________
Name:Patrick W. Allender
Title:President
HACH COMPANY
/s/ Kathryn C. Hach-Darrow
By: _________________________________
Name:Kathryn C. Hach-Darrow
Title:Chairman
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EXHIBIT 5.10
FORM OF AFFILIATE LETTER
Danaher Corporation
1250 24th Street, NW
Washington, D.C. 20037
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be deemed to be
an "affiliate" of HACH COMPANY, a Delaware corporation (the "Company"), as the
term "affiliate" is (i) defined within the meaning of Rule 145 of the rules and
regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act"), and/or (ii) used in and for purposes of Accounting Series Releases 130
and 135, as amended, of the Commission. Pursuant to the terms of the Agreement
and Plan of Merger dated as of April 20, 1999 (the "Agreement"), among Danaher
Corporation, a Delaware corporation ("Parent"), H2O Acquisition Corp., a
Delaware corporation ("Sub"), and the Company, Sub will be merged with and into
the Company (the "Merger").
In connection with the Merger, I am entitled to receive shares of common
stock, par value $.01 per share, of Parent (the "Parent Shares") in exchange
for shares (or options for shares) owned by me of common stock of the Company
(the "Company Shares").
I represent, warrant and covenant to Parent that in the event I receive any
Parent Shares as a result of the Merger:
(a) I shall not make any sale, transfer or other disposition of the
Parent Shares in violation of the Act or the Rules and Regulations.
(b) I have carefully read this letter and the Agreement and discussed
the requirements of such documents and other applicable limitations upon my
ability to sell, transfer or otherwise dispose of Parent Shares, to the
extent I felt necessary, with my counsel or counsel for the Company.
(c) I have been advised that the issuance of Parent Shares to me
pursuant to the Merger has been or will be registered with the Commission
under the Act on a Registration Statement on Form S-4. However, because I
have been advised that, at the time the Merger was submitted for a vote of
the stockholders of the Company, (a) I may be deemed to have been an
affiliate of the Company, and (b) other than as set forth in the Agreement,
the distribution by me of the Parent Shares has not been registered under
the Act, I will not sell, transfer, hedge, encumber or otherwise dispose of
Parent Shares issued to me in the Merger unless (i) such sale, transfer or
other disposition is made in conformity with the volume and other
limitations of Rule 145 promulgated by the Commission under the Act, (ii)
such sale, transfer or other disposition has been made pursuant to an
effective registration statement under the Act, or (iii) in the opinion of
counsel reasonably acceptable to Parent or as described in a "no-action" or
interpretive letter from the Staff of the Commission, such sale, transfer
or other disposition is otherwise exempt from registration under the Act.
(d) I understand that Parent is under no obligation, other than as set
forth in the Agreement, to register the sale, transfer or other disposition
of the Parent Shares by me or on my behalf under the Act or to take any
other action necessary in order to make compliance with an exemption from
such registration available solely as a result of the Merger.
(e) I also understand that there will be placed on the Certificates for
the Parent Shares issued to me, or any substitutions therefor, a legend
stating in substance:
THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION
TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES.
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE TRANSFERRED IN
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ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE REGISTERED HOLDER
HEREOF AND DANAHER CORPORATION, A COPY OF WHICH AGREEMENT IS ON FILE AT
THE PRINCIPAL OFFICES OF DANAHER CORPORATION.
(f) I also understand that unless a sale or transfer is made in
conformity with the provisions of Rule 145, or pursuant to a registration
statement, Parent reserves the right to put the following legend on the
certificates issued to my transferee:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND WERE ACQUIRED FROM A PERSON WHO
RECEIVED SUCH SHARES IN A TRANSACTION TO WHICH RULE 145 PROMULGATED
UNDER THE SECURITIES ACT OF 1933 APPLIES. THE SHARES HAVE BEEN ACQUIRED
BY THE HOLDER NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY
DISTRIBUTION THEREOF WITHIN THE MEANING OF THE SECURITIES ACT OF 1933
AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN
ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OF 1933.
It is understood and agreed that the legends set forth in paragraphs (e) and
(f) above shall be removed by delivery of substitute certificates without such
legend if the undersigned shall have delivered to Parent a copy of a letter
from the staff of the Commission, or an opinion of counsel reasonably
satisfactory to Parent in form and substance reasonably satisfactory to Parent,
to the effect that such legend is not required for purposes of the Act.
I further represent to, and covenant with, Parent that I will not, during
the 30 days prior to the Effective Time (as defined in the Agreement), sell,
transfer, hedge, encumber or otherwise dispose or reduce my rights with respect
to the Company Shares or shares of the capital stock of Parent that I may hold
and, furthermore, that I will not sell, transfer, hedge, encumber or otherwise
dispose of or reduce my rights with respect to Parent Shares received by me in
the Merger or any other shares of the capital stock of Parent until after such
time as results covering at least 30 days of combined operations of the Company
and Parent have been published by Parent, in the form of a quarterly earnings
report, an effective registration statement filed with the Commission, a report
to the Commission on Form 10-K, 10-Q, or 8-K, or any other public filing or
announcement which includes such combined results of operations.
Execution of this letter should not be considered an admission on my part
that I am an "affiliate" of the Company as described in the first paragraph of
this letter, or as a waiver of any rights I may have to object to any claim
that I am such an affiliate on or after the date of this letter.
Very truly yours,
-------------------------------------
Name:
Accepted this day of
1999, by
DANAHER CORPORATION
By
_________________________________
Name:
Title:
A-33
<PAGE>
APPENDIX B
STOCKHOLDERS SUPPORT AGREEMENT
STOCKHOLDERS SUPPORT AGREEMENT dated as of April 21, 1999, by and among
DANAHER CORPORATION, a Delaware corporation ("Parent"), on the one hand, and
each of KATHRYN C. HACH-DARROW and BRUCE J. HACH (each a "Stockholder" and,
collectively, the "Stockholders"), on the other hand. Each Stockholder is
executing this Agreement in her or his capacity as a stockholder of HACH
COMPANY, a Delaware corporation (the "Company").
WHEREAS, Parent, H20 ACQUISITION CORP., a Delaware corporation and a wholly
owned subsidiary of Parent ("Sub"), and the Company, are entering into an
Agreement and Plan of Merger (the "Merger Agreement"; capitalized terms used
without definition herein having the meanings ascribed thereto in the Merger
Agreement) under which the Stockholders will receive substantial value for
their interest in the Company;
WHEREAS, a significant portion of the goodwill and value of the Company
resides in the "Hach" tradename;
WHEREAS, each Stockholder is a director of the Company, who possesses
significant knowledge and information about and expertise in the Company
Business (as defined below) which is extremely valuable to competitors of the
Company, and accordingly Parent has required as a condition to its willingness
to enter into the Merger Agreement that each Stockholder make, and each
Stockholder has agreed to make, the commitments set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein, the parties hereto agree as follows:
Section 1. Agreement to Support Transaction. Until the earlier of the
Effective Time and the termination of this Agreement in accordance with its
terms:
(a) Each Stockholder hereby agrees that, immediately following the
execution and delivery of this Agreement and the Merger Agreement, she or
he shall execute and deliver, or cause to be executed and delivered by the
record owner of shares beneficially owned by such Stockholder, in
accordance with Section 228 of the DGCL, the Restated Certificate of
Incorporation and By-laws of the Company, the Written Consent of
Stockholders Without a Meeting, in the form attached hereto as Annex A,
with respect to all shares of Company Common Stock that are owned
beneficially or of record by such Stockholder or as to which such
Stockholder has, directly or indirectly, the right to vote or direct the
voting.
(b) Each Stockholder hereby further agrees she or he shall, from time to
time, at the request of Parent, (i) timely execute and deliver (or cause to
be timely executed and delivered) an additional written consent with
respect to, or (ii) vote, or cause to be voted, at any meeting of
stockholders of the Company held prior to the earlier of the Effective Time
and the termination of this Agreement or at any adjournment or postponement
thereof, in person or by proxy, all shares of Company Common Stock, and any
other voting securities of the Company (whether acquired heretofore or
hereafter), that are beneficially owned by such Stockholder or her or his
Affiliates or as to which such Stockholder or any of her or his Affiliates
has, directly or indirectly, the right to vote or direct the voting, in
favor of approval and adoption of the Merger Agreement and the Merger
(including as they may be amended by the Board of Directors of the
Company), and any action required in furtherance thereof and against any
action or agreement that would result in a material breach of any
representation, warranty, covenant or obligation of the Company contained
in the Merger Agreement.
(c) Other than pursuant to the Merger or with Parent's prior written
consent, each Stockholder agrees that she or he will not, and will not
permit any company, trust or other entity controlled by such
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Stockholder to, and will not permit any of such Stockholder's Affiliates
to, contract to sell, sell, pledge, encumber or otherwise transfer or
dispose of any Company Common Stock beneficially owned by her or him or any
interest therein or securities convertible thereinto or any voting rights
with respect thereto without giving Parent prior written notice thereof and
in any event if such transaction could reasonably be expected to jeopardize
Parent's ability to account for the Merger as a "pooling of interests."
(d) Each Stockholder hereby revokes any and all previous proxies with
respect to such Stockholder's shares of Company Common Stock or any other
voting securities of the Company.
(e) Each Stockholder hereby agrees to, will cause any company, trust or
other entity controlled by such Stockholder to, and will cause such
Stockholder's Affiliates to, cooperate fully with Parent in connection with
the Merger Agreement and the transactions contemplated thereby. Each
Stockholder agrees that neither such Stockholder nor any of her or his
representatives, agents or Affiliates will, directly or indirectly,
encourage, solicit or engage in discussions or negotiations with any third
party (other than Parent) concerning any merger, consolidation, business
combination, sale of a significant amount of securities or assets or
similar transaction ("Alternative Transactions") other than the
transactions contemplated hereby and by the Merger Agreement. Each
Stockholder shall immediately request that any Person that has received
directly or indirectly from such Stockholder any confidential information
involving the Company or any of its Subsidiaries return all copies thereof
to the Company and shall, and shall cause her or his representatives,
agents and Affiliates to, terminate all discussions or negotiations with
any Person with respect to any Alternative Transaction. Each Stockholder
will notify Parent immediately of any inquiries or proposals with respect
to any such transaction that are received by, or any such negotiations or
discussions of which such Stockholder is aware that are sought to be
initiated with, such Stockholder or any of such Stockholder's Affiliates or
the Company or any of its Subsidiaries, will advise Parent of the identity
of any Person proposing any such Alternative Transaction and of the terms
thereof and shall keep Parent apprised with respect to all matters relating
thereto.
(f) Each Stockholder is signing this Agreement solely in her or his
capacity as a record holder and beneficial owner of shares of Company
Common Stock and nothing herein shall limit or affect any actions taken by
a Stockholder in her or his capacity as an officer or director of the
Company, subject to the provisions of the Merger Agreement.
Section 2. Rule 145; Pooling Letter. Each Stockholder is on the date hereof
executing, and shall cause each of such Stockholder's Affiliates identified as
Affiliates of the Company on the Company's letter referred to in Section 5.10
of the Merger Agreement to execute by the thirtieth day prior to the Effective
Time, a written agreement in the form attached as Exhibit 5.10 to the Merger
Agreement (relating to compliance with Rule 145 and pooling rules).
Section 3. Tax Representations. Each Stockholder shall deliver to Parent's
counsel and the Company's counsel, if so requested by such counsel,
respectively, a certificate setting forth such representations as are customary
to be given by shareholders in transactions such as the Merger in connection
with the opinions contemplated by Sections 6.2(d) and 6.3(c) of the Merger
Agreement.
Section 4. Covenant Not to Compete. (a) Each Stockholder agrees that,
commencing at the Effective Time and continuing until the third anniversary of
the Effective Time, such Stockholder shall not carry on or participate in the
design, manufacture or marketing of laboratory instruments, process analyzers
and test kits for analyzing the properties of water and other aqueous solutions
(any such activities being referred to herein as "Company Business") or in any
business in competition with any Company Business, as conducted by the Company
on the date hereof, in any country in which the Company operates. Each
Stockholder shall not, whether or not for compensation, engage in any Company
Business, or assist or advise any other Person in such Person's conduct of any
Company Business, whether as a director, officer, employee, consultant,
adviser, independent contractor or otherwise; provided, however, that the
Stockholders shall not be prohibited from owning up to five percent (5%) of the
outstanding securities in any Person that is engaged in any Company Business as
a passive investor.
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<PAGE>
(b) Each Stockholder agrees that, commencing at the Effective Time and
continuing until the fifth anniversary of the Effective Time, such Stockholder
shall not (i) lend or allow such Stockholder's name or reputation to be used in
or to promote any Company Business, other than for the benefit of Parent and
its Affiliates (including the Company); or (ii) solicit, divert or attempt to
divert from Parent and its Affiliates any business constituting, or any
customer of, or any supplier of, any part of the Company Business then
conducted by the Company, Parent or any of their Affiliates.
Section 5. Covenant Not to Solicit. In addition to the foregoing, each
Stockholder further agrees that such Stockholder shall not, commencing at the
Effective Time and continuing until the fifth anniversary of the Effective
Time, induce or attempt to induce any Person (i) engaged or employed currently
or within the prior 12 months (whether part-time or full-time) by the Company
or any of its Affiliates to leave the employ of or engagement with the Company,
or its Affiliates, as the case may be, or to cease providing the services to or
on behalf of the Company or its Affiliates, as the case may be, then provided
by such Person, or in any other manner seek to engage, employ or contract for
the services of, any such Person (whether or not for compensation) in any
capacity, or (ii) that is then or has been within the prior 12 months a
customer or supplier with respect to any Company Business to interfere, in any
way, directly or indirectly, with the business relationship between the Company
or any of its Affiliates and any such customer.
Section 6. Representations as to Stock Ownership. Each Stockholder
represents and warrants to Parent that (a) Schedule I hereto sets forth,
opposite such Stockholder's name, the number and type of shares of Company
Common Stock or other securities of the Company of which such Stockholder is
the record or beneficial owner, and (b) such Stockholder is the lawful owner of
such shares, free and clear of all liens, charges, encumbrances, voting
agreements and commitments of every kind, except as may be disclosed on
Schedule I.
Section 7. Effectiveness and Termination. In the event the Merger Agreement
is terminated in accordance with its terms, this Agreement shall automatically
terminate and be of no further force or effect. Upon such termination, except
for any rights any party may have in respect of any breach by any other party
of its obligations hereunder, none of the parties hereto shall have any further
obligation or liability hereunder.
Section 8. Miscellaneous.
(a) Notices, Etc. All notices, requests, demands or other communications
required by or otherwise with respect to this Agreement shall be in writing and
shall be deemed to have been duly given when delivered personally (by courier
service or otherwise) or when delivered by telecopy (with receipt
acknowledged), to Parent at Danaher Corporation, 1250 24th Street, N.W.,
Washington, D.C. 20037, or to any Stockholder at her or his address set forth
in the records of the Company, or to such other address as any such party shall
have designated by notice so given to each other party.
(b) Amendments, Waivers, Etc. This Agreement may not be amended, changed,
supplemented, waived or otherwise modified or terminated except by an
instrument in writing signed by each party hereto. The failure of any party
hereto to exercise any right, power or remedy provided under this Agreement or
otherwise available in respect hereof at law or in equity, or to insist upon
compliance by any other party hereto with its obligations hereunder, and any
custom or practice of the parties at variance with the terms hereof, shall not
constitute a waiver by such party of its right to exercise any such or other
right, power or remedy or to demand such compliance.
(c) Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of and be enforceable by the parties and their respective
successors and assigns. Any transfer of shares of Company Common Stock
notwithstanding, the transferor shall remain liable for the performance of all
obligations under this Agreement of transferor. Any transferee of shares of
Company Common Stock permitted pursuant to this Agreement shall take such
shares subject to the provisions of this Agreement and deliver to Parent in
advance of such transfer its signed acknowledgment to such effect.
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(d) Entire Agreement This Agreement (together with the Merger Agreement and
the other agreements and documents expressly contemplated hereby and thereby)
embodies the entire agreement and understanding among the parties relating to
the subject matter hereof and supersedes all prior agreements and
understandings relating to such subject matter. There are no representations,
warranties or covenants by the parties hereto relating to such subject matter
other than those expressly set forth in this Agreement and the Merger
Agreement.
(e) Severability. If any term of this Agreement or the application thereof
to any party or circumstance shall be held invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such term to the
other parties or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by applicable law, provided that, in
such event, the parties shall negotiate in good faith in an attempt to agree to
another provision (in lieu of the term or application held to be invalid or
unenforceable) that will be valid and enforceable and will carry out to the
maximum extent possible the parties' intentions hereunder.
(f) Remedies. The parties acknowledge that money damages are not an adequate
remedy for violations of this Agreement and that any party may, in its sole
discretion, apply to a court of competent jurisdiction for specific performance
or injunctive or such other relief as such court may deem just and proper in
order to enforce this Agreement or prevent any violation hereof and, to the
extent permitted by applicable law, each party waives any objection to the
imposition of such relief or any requirement for a bond. All rights, powers and
remedies provided under this Agreement or otherwise available in respect hereof
at law or in equity shall be cumulative and not alternative, and the exercise
or beginning of the exercise of any thereof by any party shall not preclude the
simultaneous or later exercise of any other such right, power or remedy by such
party.
(g) Governing Law; Jurisdiction. This Agreement and all disputes hereunder
shall be governed by and construed and enforced in accordance with the internal
laws of the State of Delaware, without regard to principles of conflicts of
law. Each party hereby irrevocably submits to the exclusive jurisdiction of the
Court of Chancery in the State of Delaware or the United States District Court
of Delaware in any action, suit or proceeding arising in connection with this
Agreement, and agrees that any such action, suit or proceeding shall be brought
only in such court (and waives any objection based on forum non conveniens or
any other objection to venue therein). Each party hereto hereby waives any
right to a trial by jury in connection with any such action, suit or
proceeding.
(h) Name, Captions, Gender. The name assigned this Agreement and the section
captions used herein are for convenience of reference only and shall not affect
the interpretation or construction hereof. Whenever the context may require,
any pronoun used herein shall include the corresponding masculine, feminine or
neuter forms.
(i) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies each signed by less than all, but together signed by all, the
parties hereto.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
DANAHER CORPORATION
/s/ Patrick W. Allender
By: _________________________________
Name: Patrick W. Allender
Title:Senior Vice President and
Chief Financial Officer
STOCKHOLDERS
/s/ Kathryn Hach-Darrow
By: _________________________________
Name: Kathryn Hach-Darrow
/s/ Bruce J. Hach
By: _________________________________
Name: Bruce J. Hach
B-5
<PAGE>
Schedule I
SHARE OWNERSHIP
<TABLE>
<CAPTION>
Shares Owned
---------------------------------
Shares Options
------------------- -------------
Class
Class A A
Common Common Common Common
Name of Shareholder Stock Stock Stock Stock
------------------- --------- --------- ------ ------
<S> <C> <C> <C> <C>
Kathryn C. Hach-Darrow........................ 4,546,990 4,541,647 0 0
Bruce J. Hach................................. 238,350 227,514 20,000 54,000
========= ========= ====== ======
Total....................................... 4,785,340 4,769,161 20,000 54,000
</TABLE>
B-6
<PAGE>
APPENDIX C
WRITTEN CONSENT OF STOCKHOLDERS OF HACH COMPANY
Dated as of April 21, 1999
Pursuant to the provisions of Section 228 and Section 251 of the General
Corporation Law of the State of Delaware, the undersigned each holding and
having voting power over that number of shares of Common Stock, par value $1.00
per share, of Hach Company, a Delaware corporation (the "Company") and that
number of shares of Class A Common Stock, par value $1.00 per share, of the
Company (together, "Company Common Stock") set forth adjacent to his or her
name below, collectively constituting a majority of the voting power of the
issued and outstanding Company Common Stock, do hereby consent to, approve and
adopt the following resolution:
WHEREAS, contemporaneously with this resolution, the Board of Directors
of the Company has determined that the merger (the "Merger") of H2O
Acquisition Corp., a Delaware corporation ("Merger Sub"), with and into the
Company is fair and advisable and in the best interest of the Company and
its stockholders, has approved and adopted the Agreement and Plan of
Merger, dated as of April 20, 1999, among Danaher Corporation, a Delaware
corporation ("Parent"), Merger Sub and the Company in the form attached to
this consent (the "Merger Agreement") and the Merger, and has submitted the
Merger Agreement to, and recommended the approval and adoption of the
Merger Agreement and the Merger by, the stockholders of the Company.
NOW, THEREFORE, BE IT RESOLVED, that the Merger Agreement and the Merger
be, and they hereby are, consented to, approved and adopted in all
respects.
This Consent may be executed in one or more counterparts, all of which shall be
considered one and the same instrument.
/s/ Kathryn C. Hach-Darrow 4,546,990 shares Common Stock
------------------------------------ 4,541,647 shares Class A Common
Name: Kathryn C. Hach-Darrow Stock
/s/ Bruce J. Hach 238,350 shares Common Stock
------------------------------------ 227,514 shares Class A Common
Name: Bruce J. Hach Stock
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APPENDIX D
FORM OF
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of , 1999, between DANAHER
CORPORATION, a Delaware corporation ("Parent"), on the one hand, and Kathryn C.
Hach-Darrow (the "Stockholder"), on the other hand.
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as of April 21,
1999 (the "Merger Agreement"), by and among Parent, H2O Acquisition Corp., a
Delaware corporation ("Merger Sub") and a wholly owned subsidiary of Parent,
and Wilbur Corporation, a Delaware corporation (the "Company"), Merger Sub will
merge (the "Merger") with and into the Company, and pursuant thereto shares of
Common Stock, par value $1.00 per share, of the Company and shares of Class A
Common Stock, par value $1.00 per share, of the Company will be converted into
shares of Common Stock, par value $.01 per share, of Parent ("Common Stock").
Capitalized terms used herein but not otherwise defined herein shall have the
same meaning as in the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth herein, the parties agree as follows:
1. Registrable Securities. As used herein, "Registrable Securities" shall
mean: (A) the shares of Common Stock to be acquired by the Stockholder at the
effective time of the Merger (the "Effective Time") pursuant to the Merger
Agreement, and (B) any securities of Parent issued or issuable with respect to
any Common Stock referred to in subdivision (A) by way of stock dividend or
stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization or otherwise. As to any
particular Registrable Securities, once issued such securities shall cease to
be Registrable Securities when (x) a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder (the
"Securities Act") and such securities shall have been disposed of in accordance
with such registration statement, (y) they shall have been transferred pursuant
to Rule 144 or Rule 145 (or any successor provision) under the Securities Act
or (z) they shall have ceased to be outstanding.
2. Registration on Request. (a) Request. During the period commencing on the
Effective Time and ending on the first anniversary of the Effective Time (the
"Registration Period"), the Stockholder shall have the right on one occasion
upon written request (the "Request") to request that Parent effect the
registration under the Securities Act of all or a part of the Registrable
Securities then owned by the Stockholder (but in any event not less than an
aggregate of 500,000 shares of Common Stock, as adjusted to reflect any stock
splits, combinations of shares, reclassifications or comparable transactions,
or such lesser number of shares as shall then constitute all of the Registrable
Securities then owned by the Stockholder taking into account all Registrable
Securities to be included in such registration). Upon receipt of any such
Request, Parent will use all reasonable efforts (subject to Section 4(b)) to
effect such registration of the Registrable Securities which Parent has been so
requested to register in the Request within 60 days after delivery of the
Registration Notice.
Parent may include in any such registration other securities for sale for
its own account or for the account of any other Person; provided that, if the
managing underwriter (if any) for the offering shall determine that the number
of shares proposed to be offered in such offering would be reasonably likely to
adversely affect such offering, then the securities to be sold by the
Stockholder shall be included in such registration before any securities
proposed to be sold for the account of Parent or any other Person.
(b) Registration Statement Form. Parent shall effect any registration
requested under this Section 2 by the filing of a registration statement on
such form as Parent may determine; provided that Parent shall not be obligated
to register any securities on a "shelf" registration statement pursuant to Rule
415 under the
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Securities Act (or any successor provisions of such Act) or otherwise to
register securities on a continuous or delayed basis.
(c) Expenses. The Stockholder shall bear all reasonably documented out-of-
pocket expenses incurred in connection with any registration which may be
requested under this Section 2, including all registration, filing and New York
Stock Exchange, Inc. fees, all fees and expenses of complying with securities
or blue sky laws, all printing fees and expenses, messenger and delivery
expenses, the fees and disbursements of counsel for the stockholder and the
expenses of any special audits or "comfort" letters required by or incident to
such performance and any fees, commissions, discounts and disbursements of
underwriters. Parent shall bear the fees and expenses of Parent's counsel.
(d) Selection of Underwriters. The lead managing underwriter for any
registration requested under this Section 2 effected by means of a firm
commitment underwriting shall be selected by Parent, and shall be reasonably
acceptable to the Stockholder.
3. Registration Procedures. If Parent is required to seek to effect the
registration of Registrable Securities under the Securities Act as provided in
Section 2, Parent will:
(i) prepare and (within 30 days after the receipt of the Request) file
with the SEC the requisite registration statement to effect such
registration and use all reasonable efforts to cause such registration
statement to become effective, provided that, before filing such
registration statement or any amendments thereto, Parent will furnish to
the counsel selected by the Stockholder copies of all such documents
proposed to be filed, which documents will be subject to the review of such
counsel before any such filing is made, and Parent will comply with any
reasonable request made by such counsel to make changes in any information
contained in such documents relating to the Stockholder;
(ii) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith
as may be reasonably necessary to maintain the effectiveness of such
registration and to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement until the earliest of (A) the termination of this Agreement
pursuant to Section 15, (B) such time as all of such securities have been
disposed of and (C) the date which is 60 days after the date of initial
effectiveness of such registration statement;
(iii) furnish to the Stockholder such number of conformed copies of such
registration statement and of each amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
contained in such registration statements and any supplements thereto and
any other prospectus filed under Rule 424 under the Securities Act, and
such other documents, including documents incorporated by reference, as the
Stockholder may reasonably request;
(iv) use all reasonable efforts to register or qualify all Registrable
Securities registered pursuant to such registration statement under such
other securities or blue sky laws of such jurisdictions as the Stockholder
shall reasonably request, to keep such registration or qualification in
effect for so long as such registration statement remains in effect, and
take any other action which may be reasonably necessary or advisable to
enable the Stockholder to consummate the disposition in such jurisdictions
of the securities owned by the Stockholder, except that Parent shall not
for any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction wherein it would not but for the
requirements of this subdivision (iv) be obligated to be so qualified, to
be subject to taxation or to consent to general service of process in any
such jurisdiction;
(v) use all reasonable efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to
enable the Stockholder to consummate the disposition of such Registrable
Securities;
D-2
<PAGE>
(vi) if such registration includes an underwritten public offering,
furnish to the Stockholder a signed counterpart of (x) an opinion of
counsel for Parent, dated the date of the closing under the underwriting
agreement, and (y) a "comfort letter," dated the effective date of such
registration statement (and a supplement to such "comfort letter" dated the
date of the closing under the underwriting agreement), signed by the
independent public accountants who have certified Parent's financial
statements included in such registration statement, covering substantially
the same matters with respect to such registration statement (and the
prospectus included therein) and, in the case of the accountants' letter,
with respect to events subsequent to the date of such financial statements,
as are customarily covered in opinions of issuer's counsel and in
accountants' letters delivered to the underwriters in underwritten public
offerings of securities and, in the case of the accountants' letter, such
other financial matters, as the Stockholder (or the underwriters, if any)
may reasonably request;
(vii) notify the Stockholder at any time when Parent is aware that a
prospectus relating to Registrable Securities is required to be delivered
under the Securities Act, promptly upon becoming aware of the happening of
any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made, and at the request of the
Stockholder (and subject to Section 4(b)(ii)) as promptly as reasonably
practicable prepare and furnish to the Stockholder a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light
of the circumstances under which they were made;
(viii) otherwise use all reasonable efforts to comply with the
Securities Act and the Exchange Act and with all applicable rules and
regulations of the SEC, and not file any amendment or supplement to such
registration statement or prospectus to which the Stockholder shall have
reasonably objected on the grounds that such amendment or supplement does
not comply in all material respects with the requirements of the Securities
Act;
(ix) provide a transfer agent and registrar for all Registrable
Securities covered by such registration statement not later than the
effective date of such registration statement; and
(x) use all reasonable efforts to list all Common Stock covered by such
registration statement on any securities exchange on which any of the
Common Stock is then listed.
Parent may require the Stockholder to furnish Parent such information
regarding the Stockholder and the distribution of such securities as Parent may
from time to time reasonably request in writing for the purpose of registering
the Registrable Securities pursuant to a Request hereunder.
The Stockholder agrees by acquisition of the Registrable Securities that
upon receipt of any notice from Parent of the happening of any event of the
kind described in subdivision (vii) of this Section 3, the Stockholder will
forthwith discontinue its disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until the
Stockholder's receipt of the copies of the supplemented or amended prospectus
contemplated by subdivision (vii) of this Section 3 and, if so directed by
Parent, will deliver to Parent (at Parent's expense) all copies then in the
Stockholder's possession, other than permanent file copies, of the prospectus
relating to such Registrable Securities current at the time of receipt of such
notice. Any delay pursuant to this paragraph shall toll on a day for day basis
the running of the 60 day period referred to in Section 3(ii) hereof.
4. (a) Requested Underwritten Offerings. If requested by the underwriters
for any underwritten offering of Registrable Securities by the Stockholder
under a registration requested pursuant to Section 2, Parent and the
Stockholder will enter into a customary underwriting agreement with such
underwriters for such offering, to
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contain such representations and warranties and such other terms as are
customarily contained in agreements of this type, including, without
limitation, indemnities to the effect and to the extent provided in Section 6.
(b) Postponement. (i) [RESERVED]
(ii) Parent may postpone any registration which is requested pursuant to
Section 2 or delivery of a prospectus or supplement or amendment pursuant to
Section 3(vii) if it determines that in view of the advisability of deferring
public disclosure of material corporate developments or other information, the
disclosures required to be made pursuant thereto would not be in the best
interests of Parent at that time. In the event Parent makes any such election,
the Stockholder agrees to keep confidential the fact of such election and any
information provided by Parent in connection therewith. No single postponement
pursuant to this Section 4(b)(ii) of any registration which is requested
pursuant to Section 2 or delivery of a prospectus or supplement or amendment
pursuant to Section 3(vii) shall exceed 90 days and all such postponements
shall not exceed 180 days in the aggregate.
5. Covenants Relating to Rule 144/145. Parent will prepare and file in a
timely manner, information, documents and reports in compliance with the
Exchange Act so as to comply with the requirements of such Act and the rules
and regulations thereunder. If at any time Parent is not required to file
reports in compliance with either Section 13 or Section 15(d) of the Exchange
Act, Parent at its expense will forthwith, upon the written request of the
Stockholder, make available adequate current public information with respect to
Parent within the meaning of paragraph (c)(2) of Rule 144 under the Securities
Act.
6. Indemnification. (a) Indemnification by Parent. In the event of any
registration of any Registrable Securities of Parent under the Securities Act,
Parent will indemnify and hold harmless the Stockholder, each other Person who
participates as an underwriter in the offering or sale of such securities and
each other Person who controls any such underwriter within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which the Stockholder or any such underwriter or controlling person
may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the registration statement under which such Registrable Securities were
registered under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and Parent will reimburse the Stockholder and each such
underwriter and controlling person for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, liability, action or proceedings; provided that Parent shall
not be liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon (i) an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information
furnished to Parent by the Stockholder for use in the preparation thereof, (ii)
the use of any prospectus after such time as the obligation of Parent to keep
the same effective and current has expired, or (iii) the use of any prospectus
after such time as Parent has advised the Stockholder that the filing of a
post-effective amendment or supplement thereto is required, except such
prospectus as so amended or supplemented, and provided further that Parent
shall not be liable to any Person who participates as an underwriter in the
offering or sale of Registrable Securities or any other Person, if any, who
controls such underwriter within the meaning of the Securities Act in any such
case to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of the matters described
in (i), (ii) or (iii) above or such Person's failure to send or give a copy of
the final prospectus or supplement to the Persons asserting an untrue statement
or alleged untrue statement or omission or alleged omission at or prior to the
written confirmation of the sale of Registrable Securities to such Person if
such statement or omission was corrected in such final prospectus or
supplement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Stockholder or any such
underwriter or controlling person and shall survive the transfer of such
securities by the Stockholder.
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(b) Indemnification by the Stockholder. Parent may require, as a condition
to including any Registrable Securities of the Stockholder in any registration
statement filed pursuant to Section 2, that Parent shall have received an
undertaking reasonably satisfactory to it from the Stockholder to indemnify and
hold harmless (in the same manner and to the same extent as set forth in
subdivision (a) of this Section 6) Parent, each director and officer of Parent,
and each other Person, if any, who controls Parent, within the meaning of the
Securities Act, with respect to any untrue statement or alleged untrue
statement of a material fact in or omission or alleged omission to state a
material fact from such registration statement, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, if such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to Parent by the Stockholder for use in the
preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement provided, however, that
the Stockholder shall not be liable to the extent that the losses, liabilities
or expenses arise out of or are based upon (i) the use by Parent of any
prospectus after such time as the obligation of Parent to keep the same
effective and current has expired or (ii) the use by Parent of any prospectus
after such time as the Stockholder has advised Parent that the filing of a
post-effective amendment or supplement thereto is required with respect to any
information contained in such prospectus concerning the Stockholder, except
such prospectus as so amended or supplemented. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
Parent, or any such director, officer, or controlling person and shall survive
the transfer of such securities by the Stockholder.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified party
of notice of the commencement of any action or proceeding involving a claim
referred to in the preceding subdivisions of this Section 6, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of such action,
provided that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under the
preceding subdivisions of this Section 6, except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, unless a conflict
of interest between such indemnified and indemnifying parties exists in respect
of such claim, the indemnifying party shall be entitled to participate in and
to assume the defense thereof, jointly with any other indemnifying party
similarly notified to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to the indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation.
(d) Contribution. If for any reason the foregoing indemnity is unavailable,
or is insufficient to hold harmless an indemnified party, then the indemnifying
party shall contribute to the amount paid or payable by the indemnified party
as a result of the expense, loss, damage or liability, (i) in such proportion
as is appropriate to reflect the relative fault of the indemnifying party on
the one hand and the indemnified party on the other (determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or omission relates to information supplied by the indemnifying
party or the indemnified party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission), or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law or provides a lesser sum to the indemnified
party than the amount hereinafter calculated, in the proportion as is
appropriate to reflect not only the relative fault of the indemnifying party
and the indemnified party, but also the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other, as
well as any other relevant equitable considerations. No indemnified party
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any indemnifying
party who was not guilty of such fraudulent misrepresentation.
7. Notices, etc. All notices, requests, demands or other communications
required by or otherwise with respect to this Agreement shall be in writing and
shall be deemed to have been duly given to any party when
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delivered personally (by courier service or otherwise), when delivered by
telecopy if receipt is confirmed by return telecopy, or five days after being
mailed by registered or certified mail, return receipt requested, in each case
to the applicable addresses set forth below:
If to Parent:
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 W. 52nd Street
New York, New York 10019
Attention: Trevor S. Norwitz, Esq.
Telecopy: (212) 403-2000
If to the Stockholder:
with a copy to:
or to such other address as such party shall have designated by
notice so given to each other party.
8. Amendments, Waivers, etc. This Agreement may not be amended,
supplemented, waived or otherwise modified except by an instrument in writing
signed by the party against whom enforcement is sought. The failure of any
party to exercise any right, power or remedy provided under this Agreement or
otherwise available in respect hereof at law or in equity, or to insist upon
compliance by any other party with its obligations hereunder, and any custom or
practice of the parties at variance with the terms hereof, shall not constitute
a waiver by such party of its right to exercise any such or other right, power
or remedy or to demand such compliance.
9. Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties relating to the subject matter hereof and
supersedes all prior agreements and understandings relating to such subject
matter.
10. Severability. If any term of this Agreement or the application thereof
to any party or circumstance shall be held invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such term to the
other parties or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by applicable law.
11. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of and be enforceable by the parties and their respective
successors and assigns; provided that neither the rights nor the obligations of
any party may be assigned or delegated without the prior written consent of the
other parties.
12. Governing Law. This Agreement and all disputes hereunder shall be
governed by and construed and enforced in accordance with the laws of the State
of Delaware.
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13. Name, Captions. The name assigned this Agreement and the section
captions used herein are for convenience of reference only and shall not affect
the interpretation or construction hereof.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies each signed by less than all, but together signed by all, the
parties hereto.
15. Termination. This Agreement shall terminate and be of no further force
and effect upon the later of the expiration of the Registration Period and the
tenth day after effectiveness of the registration statement filed pursuant to
the Request made during the Registration Period; provided that, notwithstanding
this Section 15, the provisions of Section 6 shall survive the termination of
this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
DANAHER CORPORATION
By:
---------------------------------
Name:
Title:
-------------------------------------
Name: Kathryn C. Hach-Darrow
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APPENDIX E
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement"), dated as of April
21, 1999, by and among DANAHER CORPORATION, a Delaware corporation ("Parent"),
C&K ENTERPRISES, LTD., a Delaware corporation ("C&K"), and Kathryn Hach-Darrow
and Bruce J. Hach (the "Shareholders").
WHEREAS, C&K owns 1,511,415 shares of Common Stock ("Common Stock"), par
value $1.00 per share, of Hach Company, a Delaware corporation (the "Company"),
and 1,511,415 shares of Class A Common Stock ("Class A Common Stock"), par
value $1.00 per share, of the Company (such shares of Class A Common Stock,
together with such shares of Common Stock, the "Shares");
WHEREAS, Parent, H2O Acquisition Corp., a Delaware corporation and wholly
owned subsidiary of Parent, and the Company are entering into an Agreement and
Plan of Merger dated as of the date hereof (the "Merger Agreement");
WHEREAS, Parent wishes to acquire from C&K, and C&K wishes to transfer to
Parent, the Shares in exchange for Parent Common Stock following which C&K
intends promptly to liquidate and to distribute all of its assets to its
stockholders, who shall assume all of its liabilities;
WHEREAS, for Federal income tax purposes, it is intended that the
transactions described in Article II below (the "Reorganization") shall qualify
as a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended;
WHEREAS, Parent, C&K and the Shareholders desire to set forth herein the
terms and conditions of the Reorganization;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
Certain Definitions
Definitions. All capitalized terms used in this Agreement that are not
otherwise defined herein shall have the meanings assigned to them in the Merger
Agreement.
ARTICLE II
Exchange; Liquidation of C&K
Section 2.1. Exchange. At such time as shall be determined by agreement
between Parent and C&K, but in no event earlier than the satisfaction or waiver
of the conditions set forth in Article III, and in any event prior to the
Effective Time (the "Reorganization Closing Time"), subject to the terms and
conditions of this Agreement, C&K shall transfer to Parent all of the Shares,
constituting all of its assets, and in consideration thereof Parent shall
transfer to C&K Parent Common Stock as follows: each Share owned by C&K shall
be exchanged for a fraction of a share of Parent Common Stock equal to the
Exchange Ratio. To the extent that C&K otherwise would have been entitled to a
fraction of a share of Parent Common Stock, C&K shall receive in lieu thereof
cash (without interest) in an amount determined by multiplying the fractional
share interest to which C&K would otherwise be entitled by the closing sale
price of a share of Parent Common Stock on the NYSE composite tape on the last
full trading day prior to the Effective Time. C&K shall not be entitled to
dividends, voting rights or any other rights in respect of any fractional
share.
Section 2.2. Liquidation. Promptly after the Reorganization Closing Time,
C&K shall liquidate by distributing to its stockholders all of its assets and
causing such stockholders to assume all of its liabilities.
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ARTICLE III
Conditions to Closing
(a) The obligations of the parties to consummate the Reorganization is
subject to the satisfaction at or prior to the Reorganization Closing Time of
all of the following conditions:
(i) The satisfaction at or prior to the Reorganization Closing Time of
all of the conditions set forth in Article VI of the Merger Agreement (any
of which may be waived to the extent set forth in the Merger Agreement).
(ii) A Registration Statement on Form S-4 (together with all amendments
thereto) or other applicable registration statement covering the Parent
Common Stock to be issued hereunder shall have been filed and declared
effective by the SEC pursuant to the Securities Act of 1933, as amended,
and no stop order suspending the effectiveness of such Form S-4 or other
registration statement shall have been issued by the SEC, and no
proceedings for that purpose shall have been initiated or, to the knowledge
of Parent or C&K, threatened by the SEC and, in the case of any of the
foregoing, shall be ongoing.
(iii) The shares of Parent Common Stock issuable pursuant to this
Agreement shall have been approved for listing on the NYSE, subject to
official notice of issuance.
(b) The obligations of C&K and the Shareholders to consummate the
Reorganization are subject to the receipt by the Shareholders at or prior to
the Reorganization Closing Time of the opinion of Sidley & Austin, dated as of
the Reorganization Closing Time, to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion, the Reorganization
will be treated for Federal income tax purposes as a reorganization qualifying
under the provisions of Section 368(a) of the Code and that neither C&K nor any
of the Shareholders will recognize any gain or loss for Federal income tax
purposes as a result of the Reorganization or receipt of the consideration
described in Section 2.1 above (except with respect to cash paid in lieu of
fractional shares). The issuance of such opinion shall be conditioned on the
receipt of customary representation letters in form and substance reasonably
acceptable to Sidley & Austin.
ARTICLE IV
Termination
This Agreement and Plan of Reorganization shall terminate upon the
termination of the Merger Agreement in accordance with its terms.
ARTICLE V
No Assumptions of Liabilities; Indemnification
Parent shall not assume any liabilities of or pertaining to C&K or arising
from C&K's ownership of the Shares. The Shareholders shall jointly and
severally indemnify Parent against any loss, damage, liability, deficiency,
tax, interest, penalty, cost or expense (including reasonable attorneys' fees)
incurred or suffered by Parent and resulting or arising from any losses,
liabilities, obligations and Taxes, whether fixed, contingent, accrued,
unaccrued, past, future or otherwise, of or pertaining to C&K or arising from
C&K's ownership of the Shares.
ARTICLE VI
General Provisions
Section 6.1. Further Assurances. At any time, and from time to time, after
the Closing Date, each party will execute such additional instruments and take
such actions as may be reasonably requested by the other party to confirm or
perfect title to any property transferred hereunder or otherwise to carry out
the intent and purposes of this Agreement.
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Section 6.2. Survival. The provisions of Article V shall survive the
Reorganization Closing Time and the Closing.
Section 6.3. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed therein without regard to the
conflicts of law principles of such State.
Section 6.4. Assignments. This Agreement shall inure to the benefit of, and
be binding upon the parties hereto and their successors and assigns; provided,
however, that any assignment by either party of its rights under this Agreement
without the written consent of the other party shall be void.
Section 6.5. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Section 6.6. Reasonable Efforts. The parties hereto shall each use their
reasonable efforts and cooperate to cause the closing conditions hereunder to
be satisfied, including, without limitation, to cause the Form S-4 or other
registration statement referred to in Article III to become effective as
promptly as possible.
Section 6.7. No Condition. It is expressly agreed and acknowledged that the
Reorganization shall not be a condition to the Closing under the Merger
Agreement.
IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of each
of the parties as of the day first above written.
DANAHER CORPORATION
/s/ Patrick Allender
By: _________________________________
Name:Patrick W. Allender
Title:Senior Vice President and
Chief Financial Officer
C&K ENTERPRISES, LTD.
/s/ Kathryn Hach-Darrow
By:__________________________________
Name:Kathryn Hach-Darrow
Title:President and Treasurer
THE SHAREHOLDERS
/s/ Kathryn Hach-Darrow
_____________________________________
Kathryn Hach-Darrow
/s/ Bruce J. Hach
_____________________________________
Bruce J. Hach
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APPENDIX F
[LETTERHEAD OF LAZARD FRERES & CO. LLC]
April 21, 1999
The Board of Directors
Hach Company
5600 Lindbergh Drive
Loveland, Colorado 80533
Dear Members of the Board:
We understand that Danaher Corporation ("Danaher") and Hach Company ("Hach")
have entered into an Agreement and Plan of Merger dated as of April 21, 1999
(the "Agreement"), pursuant to which a wholly-owned subsidiary of Danaher will
be merged with and into Hach (the "Merger") as a result of which Hach will
become a wholly-owned subsidiary of Danaher. Pursuant to the Agreement, each
share of Common Stock, par value $1.00 per share, and Class A Common Stock, par
value $1.00 per share, of Hach (collectively the "Hach Shares") outstanding
immediately prior to the effective time of the Merger will be converted into
0.2987 shares (the "Exchange Ratio") of common stock, par value $0.01 per share
of Danaher (the "Danaher Shares"), subject to adjustment as provided in the
Agreement.
You have requested our opinion as to the fairness, from a financial point of
view, to the holders of Hach Shares, taken as a whole, of the Exchange Ratio.
In connection with this opinion, we have:
(i) Reviewed the financial terms and conditions of the Agreement;
(ii)Analyzed certain historical business and financial information relating
to Danaher and Hach;
(iii) Reviewed various financial forecasts and other data provided to us by
Danaher and Hach relating to their respective businesses;
(iv) Participated in discussions with members of the senior management of
Danaher and Hach with respect to the businesses and prospects of
Danaher and Hach, respectively and the strategic objectives of each;
(v) Reviewed public information with respect to certain other companies in
lines of businesses we believe to be generally comparable to those of
Danaher and Hach;
(vi) Reviewed the financial terms of certain business combinations
involving companies in lines of businesses we believe to be generally
comparable to those of Danaher and Hach, and in other industries
generally;
(vii) Reviewed the historical stock prices and trading volumes of Danaher
Shares and Hach Shares; and
(viii) Conducted such other financial studies, analyses and investigations
as we deemed appropriate.
We have relied upon the accuracy and completeness of the foregoing
information, and have not assumed any responsibility for any independent
verification of such information or any independent valuation or appraisal of
any of the assets or liabilities of Danaher or Hach, or concerning the solvency
or fair value of either of the foregoing entities. With respect to financial
forecasts we have assumed that they have been reasonably prepared on bases
reflecting the best currently available estimates and judgments of management
of Danaher and Hach as to the future financial performance of Danaher and Hach,
respectively. We assume no responsibility for and express no view as to such
forecasts or the assumptions on which they are based. We understand and have
assumed that the Merger will be accounted for as a pooling of interests and be
a reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended.
Further, our opinion is necessarily based on accounting standards, economic,
monetary, market and other conditions as in effect on, and the information made
available to us as of, the date hereof. You have not authorized us to solicit,
and we have not solicited any indications of interest or proposals from third
parties
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with respect to a purchase of all or part of Hach's business. In that regard,
we understand that certain shareholders representing a majority of Hach's
voting power have executed an agreement pursuant to which they have agreed to
consent in writing to the Merger concurrently with the execution of the Merger
Agreement, and that, accordingly, it is not contemplated that a shareholder
meeting for the purposes of approving the Merger Agreement will be held.
In rendering our opinion, we have assumed that the Merger will be
consummated on the terms described in the Agreement, without any waiver of any
material rights, terms or conditions by Hach and that obtaining the necessary
regulatory approvals for the Merger will not have an adverse effect on Danaher
or Hach. In addition, we are not expressing any opinion as to the prices at
which Danaher Shares or Hach Shares may trade following the date of this
opinion.
Lazard Freres & Co. LLC is acting as investment banker to Hach in connection
with the Merger and will receive a fee for our services, a substantial portion
of which is contingent upon the closing of the Merger. Lazard Freres & Co. LLC
has in the past acted as investment banker to Hach and received fees for its
services. In addition, Hach has agreed to indemnify us for certain liabilities
that may arise out of our engagement as investment banker.
Our engagement and the opinion expressed herein are for the benefit of
Hach's Board of Directors in connection with its consideration of the Merger.
This opinion is not intended to and does not constitute a recommendation to any
shareholder of Hach as to whether such holder should vote to approve, or take
any other action with respect to, the Merger and the transactions contemplated
by the Agreement. It is understood that this letter may not be disclosed or
otherwise referred to without our prior consent, except as may otherwise be
required by law or by a court of competent jurisdiction, except that this
opinion may be included in its entirety in a proxy or information statement
required to be filed with the Securities and Exchange Commission in connection
with the Merger.
Based on and subject to the foregoing, we are of the opinion that the
Exchange Ratio is fair to the holders of Hach Shares, taken as a whole, from a
financial point of view.
Very truly yours,
LAZARD FRERES & CO. LLC
By: /s/ Jeffrey A. Golman
-------------------------------
Jeffrey A. Golman
Managing Director
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 20. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law ("DGCL") provides that a
corporation has the power to indemnify its officers, directors, employees and
agents (or persons serving in such positions in another entity at the request
of the corporation) against expenses, including attorney's fees, judgments,
fines or settlement amounts actually and reasonably incurred by them in
connection with the defense of any action by reason of being or having been
directors or officers, if such person shall have acted in good faith and in a
manner reasonably believed to be in or not opposed to the best interests of the
corporation (and, with respect to any criminal action, had no reasonable cause
to believe the person's conduct was unlawful), except that if such action shall
be by or in the right of the corporation, no such indemnification shall be
provided as to any claim, issue or matter as to which such person shall have
been judged to have been liable to the corporation unless and to the extent
that the Court of Chancery of the State of Delaware, or another court in which
the suit was brought, shall determine upon application that, in view of all of
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity.
The Registrant's Certificate of Incorporation provides that the Registrant
will indemnify its officers and directors to the fullest extent permitted by
Delaware law. The By-Laws provide that the Registrant will indemnify its
directors, officers, employees and agents upon the determination that such
person has met the applicable standard of conduct under Delaware law as
restated in the By-Laws. The persons who may determine that the applicable
standard of conduct has been met are (1) the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding, (2) if such a quorum is not obtainable, or even if
obtainable a quorum of disinterested directors so directs, independent legal
counsel in a written opinion, or (iii) the stockholders. To the extent that a
director, officer, employee or agent of the Registrant has been successful on
the merits or otherwise in defense of such claim, the Registrant will indemnify
him against expenses without the necessity of making a determination of whether
or not that person has met the applicable standard of conduct.
As permitted by Section 102 of the DGCL, the Registrant's Certificate of
Incorporation provides that no director shall be liable to the Registrant or
its stockholders for monetary damages for any breach of fiduciary duty as a
director other than (i) for breaches of the director's duty of loyalty to the
Registrant or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
the unlawful payment of dividends or unlawful stock purchases or redemptions
under Section 174 of the DGCL, or (iv) for any transaction from which the
director derived an improper personal benefit.
Item 21. Exhibits and Financial Statement Schedules
(a) Exhibits:
<TABLE>
<C> <S>
2.1 Agreement and Plan of Merger, dated as of April 21, 1999, among the
Registrant, H\2\O Acquisition Corp. and Hach Company (included as
Appendix A to the Information Statement/Prospectus incorporated as part
of this Registration Statement). The Registrant agrees to furnish
supplementally a copy of the disclosure schedules to the Commission upon
request.
2.2 Agreement and Plan of Reorganization, dated as of April 21, 1999, by and
among the Registrant, C&K Enterprises, Ltd., and Kathryn C. Hach-Darrow
and Bruce J. Hach (included as Appendix E to the Information
Statement/Prospectus incorporated as part of this Registration
Statement).
5.1 Opinion of Wilmer, Cutler & Pickering as to the legality of the shares
being issued (including consent).
8.1 Opinion of Wachtell, Lipton, Rosen & Katz regarding the federal income
tax consequences of the Merger (including consent).
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S>
8.2 Opinion of McBride Baker & Coles regarding the federal income tax
consequences of the Merger (including consent).
23.1 Consent of Arthur Andersen LLP relating to the audited financial
statements of the Registrant.
23.2 Consent of PricewaterhouseCoopers LLP relating to the audited financial
statements of Hach.
23.3 Consent of Wilmer, Cutler & Pickering (included in Exhibit No. 5.1).
23.4 Consent of Wachtell, Lipton, Rosen & Katz (included in Exhibit No. 8.1).
23.5 Consent of McBride Baker & Coles (included in Exhibit No. 8.2).
23.6 Consent of Lazard Freres & Co. LLC.
24.1 Power of Attorney.
99.1 Stockholders Support Agreement, dated as of April 21, 1999, by and among
the Registrant, on the one hand, and Kathryn C. Hach-Darrow and Bruce J.
Hach, on the other hand (included as Appendix B to the Information
Statement/Prospectus incorporated as part of this Registration
Statement).
</TABLE>
Item 22. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price represent
no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change in such information in the
Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled
II-2
<PAGE>
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
(c) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(d) The undersigned Registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this Registration Statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(e) The Registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (d) immediately preceding, or (ii) that purports to meet
the requirements of Section l0(a)(3) of the Securities Act and is used in
connection with an offering of securities subject to Rule 415, will be filed as
a part of an amendment to the Registration Statement and will not be used until
such amendment is effective, and that, for purposes of determining any
liability under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the securities
offering therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(f) The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in the
documents filed subsequent to the effective date of the Registration Statement
through the date of responding to the request.
(g) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the District of Columbia, on June 3,
1999.
DANAHER CORPORATION
/s/ Patrick W. Allender
By: _________________________________
Patrick W. Allender
Senior Vice President, Chief
Financial Officer and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President, Chief Executive June 3, 1999
______________________________________ Officer and Director
George M. Sherman
/s/ Patrick W. Allender Senior Vice President, June 3, 1999
______________________________________ Chief Financial Officer
Patrick W. Allender and Secretary
/s/ C. Scott Brannan Vice President -- June 3, 1999
______________________________________ Administration and
C. Scott Brannan Controller (Chief
Accounting Officer)
* Chairman of the Board June 3, 1999
______________________________________
Steven M. Rales
* Chairman of the Executive June 3, 1999
______________________________________ Committee
Mitchell P. Rales
* Director June 3, 1999
______________________________________
Mortimer M. Caplan
* Director June 3, 1999
______________________________________
Donald J. Ehrlich
* Director June 3, 1999
______________________________________
Walter G. Lohr
* Director June 3, 1999
______________________________________
A. Emmet Stephenson, Jr.
</TABLE>
* Pursuant to the Powers of Attorney included as Exhibit 24.1 to this
Registration Statement
/s/ C. Scott Brannan
* By: __________________
C. Scott Brannan
Attorney-in-Fact
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
2.1 Agreement and Plan of Merger, dated as of April 21, 1999, among the
Registrant, H\2\O Acquisition Corp. and Hach Company (included as
Appendix A to the Information Statement/Prospectus incorporated as
part of this Registration Statement). The Registrant agrees to furnish
supplementally a copy of the disclosure schedules to the Commission
upon request.
2.2 Agreement and Plan of Reorganization, dated as of April 21, 1999, by
and among the Registrant, C&K Enterprises, Ltd., and Kathryn C. Hach-
Darrow and Bruce J. Hach (included as Appendix E to the Information
Statement/Prospectus incorporated as part of this Registration
Statement).
5.1 Opinion of Wilmer, Cutler & Pickering as to the legality of the shares
being issued (including consent).
8.1 Opinion of Wachtell, Lipton, Rosen & Katz regarding the federal income
tax consequences of the Merger (including consent).
8.2 Opinion of McBride Baker & Coles regarding the federal income tax
consequences of the Merger (including consent).
23.1 Consent of Arthur Andersen LLP relating to the audited financial
statements of the Registrant.
23.2 Consent of PricewaterhouseCoopers LLP relating to the audited
financial statements of Hach.
23.3 Consent of Wilmer, Cutler & Pickering (included in Exhibit No. 5.1).
23.4 Consent of Wachtell, Lipton, Rosen & Katz (included in Exhibit No.
8.1).
23.5 Consent of McBride Baker & Coles (included in Exhibit No. 8.2).
23.6 Consent of Lazard Freres & Co. LLC.
24.1 Power of Attorney.
99.1 Stockholders Support Agreement, dated as of April 21, 1999, by and
among the Registrant, on the one hand, and Kathryn C. Hach-Darrow and
Bruce J. Hach, on the other hand (included as Appendix B to the
Information Statement/Prospectus incorporated as part of this
Registration Statement).
</TABLE>
<PAGE>
Exhibit 5.1
[LETTERHEAD OF WILMER, CUTLER & PICKERING]
June 3, 1999
Danaher Corporation
1250 24th Street, N.W.
Washington, D.C. 20037
Re: Danaher Corporation (the "Company")
Registration Statement on Form S-4
Ladies and Gentlemen:
In connection with the registration of the issuance of shares (the "Common
Shares") of Common Stock of the Company, par value $0.01 per share, under the
Securities Act of 1933, as amended (the "Act"), by the Company, on Form S-4
filed with the Securities and Exchange Commission (the "Commission") on June 3,
1999 (the "Registration Statement"), you have requested our opinion with
respect to the matters set forth below.
In our capacity as your special counsel, we are familiar with the
proceedings taken and proposed to be taken by the Company in connection with
the authorization and issuance of the Common Shares by the Company pursuant to
(i) the Agreement and Plan of Merger, dated April 21, 1999, among the Company,
H\2\O Acquisition Corp. and Hach Company (the "Merger Agreement"), and (ii)
the Agreement and Plan of Reorganization, dated as of April 21, 1999, among the
Company, C&K Enterprises, Ltd. and Kathryn C. Hach-Darrow and Bruce J. Hach
(the "Reorganization Agreement"). We assume for purposes of this opinion that
(i) the merger of H\2\O Acquisition Corp. with and into Hach Company (the
"Merger") will take place at the Effective Time (as defined in the Merger
Agreement) in the manner contemplated by the Merger Agreement and (ii) the
reorganization (the "Reorganization") of C&K Enterprises, Ltd. will take place
at the Reorganization Closing Time (as defined in the Reorganization Agreement)
in the manner contemplated by the Reorganization Agreement. In addition, we
have made such legal and factual examinations and inquiries, including
examinations of documents, corporate records and instruments, as we have deemed
necessary or appropriate for purposes of this opinion.
In our examination of documents and records, we have assumed, without
investigation, the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to us as originals, the
conformity with originals of all documents submitted to us as telecopied,
certified, photostatic or reproduced copies and the authenticity of all such
documents. We have also assumed, but not independently verified, that all
documents executed by a party other than the Company or any respective
subsidiaries thereof were duly and validly authorized, executed and delivered
by such party, that such party has the requisite power and authority to
execute, deliver and perform such agreements and other documents, and that such
agreements and other documents are legal, valid and binding obligations of such
party and enforceable against such party in accordance with their respective
terms.
Based upon and subject to the foregoing, it is our opinion that the Common
Shares being registered under the Registration Statement, when issued pursuant
to the Merger and the Reorganization in the manner contemplated by the
Registration Statement, the Merger Agreement and the Reorganization Agreement,
will be validly issued, fully paid and nonassessable.
<PAGE>
This opinion is limited to the general corporate law of the State of
Delaware, and we express no opinion with respect to the applicability thereto,
or the effect thereon, of any other laws or as to any matters of municipal law
or the laws of any other local agencies within the state. We express no opinion
whatsoever as to any other laws or regulations or as to laws relating to choice
of law or conflicts of law principles.
The information set forth herein is as of the date hereof. We assume no
obligation to advise you of changes which may thereafter be brought to our
attention. Our opinions are based on statutory and judicial decisions in effect
at the date hereof, and we do not opine with respect to any law, regulation,
rule or governmental policy or decision which may be enacted, determined or
adopted after the date hereof, nor assume any responsibility to advise you of
future changes in our opinions.
We hereby consent to the use of this opinion as Exhibit 5.1 to the
Registration Statement. We also consent to any and all references to our firm
under the caption "Legal Matters" in the Registration Statement. In giving such
consent, we do not thereby admit that we are in the category of persons whose
consent is required under Section 7 of the Act and the Rules and Regulations of
the Commission promulgated thereunder.
Very truly yours,
/s/ Mark A. Dewire
--------------------
Mark A. Dewire, a partner
<PAGE>
Exhibit 8.1
[LETTERHEAD OF WACHTELL, LIPTON, ROSEN & KATZ]
June 3, 1999
Danaher Corporation
1250 24th Street, N.W.
Washington, DC 20037
Ladies and Gentlemen:
Reference is made to the Registration Statement of Danaher Corporation, a
Delaware corporation ("Danaher"), on Form S-4 (the "Registration Statement")
and the information statement/prospectus included therein, each as amended or
supplemented through the date hereof, relating to the merger (the "Merger") of
H\2\O Acquisition Corp., a Delaware corporation and a wholly owned subsidiary
of Danaher, with and into Hach Company, a Delaware corporation.
We have participated in the preparation of the discussion set forth in the
section entitled "THE MERGER--Certain Federal Income Tax Consequences." In our
opinion, such discussion, insofar as it relates to the federal income tax
consequences of the Merger, is accurate in all material respects.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement and to the
references therein to us. In giving such consent, we do not thereby admit that
we are in the category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended.
Very truly yours,
/s/ Wachtell, Lipton, Rosen & Katz
<PAGE>
Exhibit 8.2
[MCBRIDE BAKER & COLES LETTERHEAD]
June 3, 1999
Hach Company
5600 Lindbergh Drive
Loveland, Colorado 80539
Ladies and Gentlemen:
We have acted as counsel to Hach Company, a Delaware corporation (the
"Company"), in connection with the proposed merger (the "Merger") of H20
Acquisition Corp. ("Sub"), a Delaware corporation and wholly-owned subsidiary
of Danaher Corporation, a Delaware corporation ("Parent"), with and into the
Company, pursuant to the terms of the Agreement and Plan of Merger dated as of
April 21, 1999 (the "Merger Agreement"), among Parent, Sub, and the Company, as
described in the Registration Statement on Form S-4 to be filed by Parent with
the Securities and Exchange Commission today (the "Registration Statement").
We have participated in the preparation of the discussion contained in the
information statement/prospectus included as part of the Registration Statement
(the "Prospectus") under the caption "THE MERGER--Certain Federal Income Tax
Consequences." In our opinion, that discussion, insofar as it relates to the
federal income tax consequences of the Merger, is accurate in all material
respects.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. We also
consent to the references to McBride Baker & Coles in the Registration
Statement and the Prospectus. In giving such consent, we do not thereby admit
that we are in the category of persons whose consent is required under Section
7 of the Securities Act of 1933, as amended.
Very truly yours,
MCBRIDE BAKER & COLES
/s/ Thomas J. Kinasz
By: _________________________________
A Partner
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated January 27, 1999
included (or incorporated by reference) in Danaher Corporation's Form 10-K for
the year ended December 31, 1998 and to all references to our Firm included in
this registration statement.
/s/ Arthur Andersen LLP
Washington, D.C.
June 3, 1999
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-4 of Danaher Corporation of our report dated June 4, 1998
relating to the financial statements of Hach Company, which appears in the 1998
Annual Report to Shareholders of Hach Company, which is incorporated by
reference in Hach Company's Annual Report on Form 10-K for the year ended April
30, 1998. We also consent to the incorporation by reference of our report dated
June 4, 1998 relating to the financial statement schedule which appears in such
Annual Report on Form 10-K. We also consent to the reference to us under the
heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Denver, Colorado
June 3, 1999
<PAGE>
Exhibit 23.6
CONSENT OF LAZARD FRERES & CO. LLC
We hereby consent to the use of our name and the description of our opinion
letter, dated April 21, 1999, under the captions "SUMMARY--Fairness Opinion,"
"THE MERGER--Background of the Merger," "THE MERGER--Hach's Reasons for the
Merger; Recommendation of the Hach Board," "THE MERGER--Opinion of the
Investment Banker for the Hach Board" and "THE MERGER AGREEMENT--
Representations and Warranties" in, and to the inclusion of such opinion letter
as Annex F to, the Information Statement/Prospectus of Hach Company and Danaher
Corporation, which Information Statement/Prospectus is part of the Registration
Statement on Form S-4 of Danaher Corporation filed with the Securities and
Exchange Commission on June 3, 1999. By giving such consent, we do not thereby
admit that we are experts with respect to any part of such Registration
Statement within the meaning of the term "expert" as used in, or that we come
within the category of such persons whose consent is required under, the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission promulgated thereunder.
Lazard Freres & Co. LLC
/s/ Jeffrey A. Golman
By: _________________________________
Jeffrey A. Golman
Managing Director
New York, New York
June 3, 1999
<PAGE>
Exhibit 24.1
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Patrick
W. Allender and C. Scott Brannan, and each of them, with full power of
substitution and resubstitution and each with full power to act without the
other, his true and lawful attorney-in-fact and agent, for him and in his name,
place and stead, in any and all capacities, to sign this Registration Statement
on Form S-4 relating to the issuance of shares of Danaher Corporation common
stock pursuant to the Agreement and Plan of Merger, dated as of April 21, 1999,
among Danaher Corporation (the "Company"), a wholly-owned subsidiary of the
Company and Hach Company, and the Agreement and Plan of Reorganization, dated
as of April 21, 1999, by and among the Company, C&K Enterprises, Ltd., and
Kathryn C. Hach-Darrow and Bruce J. Hach, and any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the
same, with all exhibits thereto, and all other documents in connection
therewith, with the Securities Exchange Commission or any state, granting unto
said attorneys-in-fact and agents, and each of the them, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their, or his
substitutes or substitute, may lawfully do or cause to be done by virtue
hereof.
Date: May 27, 1999
<TABLE>
<S> <C>
/s/ Steven M. Rales /s/ Donald J. Ehrlich
__________________________________________ __________________________________________
Steven M. Rales Donald J. Ehrlich
/s/ Mitchell P. Rales /s/ Walter G. Lohr
__________________________________________ __________________________________________
Mitchell P. Rales Walter G. Lohr
/s/ George M. Sherman /s/ A. Emmet Stephenson, Jr.
__________________________________________ __________________________________________
George M. Sherman A. Emmet Stephenson, Jr
/s/ Mortimer M. Caplan
__________________________________________
Mortimer M. Caplan
</TABLE>
