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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 12, 1995
--------------------
(September 29, 1995)
The Allen Group Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-6016 38-0290950
- --------------- ---------------- --------------------
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
25101 Chagrin Boulevard, Suite 350, Beachwood, Ohio 44122-5619
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (216) 765-5800
--------------
Not Applicable
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
------------------------------------
On September 29, 1995, The Allen Group Inc. (the "Company") effected the
previously announced distribution (the "Distribution"), on a pro rata basis, of
100% of the outstanding shares of the common stock, par value $.01 per share,
of the Company's wholly-owned subsidiary TransPro, Inc. ("TransPro") to the
holders of record of the Company's common stock as of the close of business on
September 29, 1995 (the "Record Date"). The Distribution was made on the basis
of one share of TransPro common stock for every four shares of the Company's
common stock outstanding on the Record Date, which resulted in the distribution
of an aggregate of 6,621,349 shares of TransPro common stock.
Immediately prior to the Distribution, the Company contributed (the
"Contribution") to TransPro substantially all of the assets and liabilities of
the Company's original equipment radiator and fabricated metal products
business (the "Automotive and Truck Products Business"), as well as the
Company's 50% ownership interest in GO/DAN Industries ("GDI"), a 50/50 joint
venture partnership between the Company and Handy & Harman. Immediately
thereafter and prior to the Distribution, the Company caused GDI to redeem the
outstanding ownership interest in GDI not already owned by the Company, thereby
making GDI an indirect wholly owned partnership of TransPro.
As a result of the Contribution and the Distribution, TransPro now owns the
Automotive and Truck Products Business and 100% of GDI, and is an independent
company.
Item 7. Financial Statements and Exhibits.
---------------------------------
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Financial information that reflects the Contribution and the Distribution is
included in the Company's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1995 (the "Form 10-Q"), and is incorporated herein by
reference. In connection therewith, the net assets distributed (estimated
at $50.6 million as of June 30, 1995 and classified as a current asset on
the Consolidated Condensed Balance Sheets included in the Form 10-Q) will be
accounted for as a dividend, with such net assets, as finally determined,
charged to retained earnings at September 30, 1995.
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(c) Exhibits
2.1 -- Contribution Agreement, dated September 29, 1995, between The
Allen Group Inc. and TransPro, Inc. (The schedules and exhibits
to the Contribution Agreement have been omitted, but will be
provided upon request.)
99.1 -- Press Release issued September 29, 1995.
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
THE ALLEN GROUP INC.
By: /s/ McDara P. Folan, III
-------------------------------
Name: McDara P. Folan, III
Title: Vice President
Date: October 12, 1995
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Exhibit Index
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibits
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<S> <C>
2.1 -- Contribution Agreement, dated September 29, 1995, between The Allen
Group Inc., and TransPro, Inc. (The schedules and exhibits to the
Contribution Agreement have been omitted, but will be provided upon
request.)
99.1 -- Press Release issued September 29, 1995
</TABLE>
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Exhibit 2.1
-----------
CONTRIBUTION AGREEMENT
BETWEEN
THE ALLEN GROUP INC.
AND
TRANSPRO, INC.
SEPTEMBER 29, 1995
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<TABLE>
TABLE OF CONTENTS
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<CAPTION>
PAGE
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<S> <C>
ARTICLE I -- DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II -- CONTRIBUTION OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.1 Contribution of Assets by Allen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.1.1 Owned Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.1.2 Leased Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.1.3 Owned Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.1.4 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.1.5 Customer Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.1.6 Contractual Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.1.7 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.1.8 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.1.9 Leased Tangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.1.10 Licenses, Permits and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.1.11 Records and Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.1.12 Prepaid Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.1.13 Cash Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.1.14 Intercompany Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.1.15 Personnel and Payroll Records . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.1.16 Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.2 Preparation and Delivery of Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.3 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE III -- CONTRIBUTION OF STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.1 Contribution of Stock by Allen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE IV -- ASSUMPTION OF LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.1 Assumed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.2 Excluded Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE V -- EMPLOYEE MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.1 Employment of Transferred Employees by TransPro. . . . . . . . . . . . . . . . . . . . . . 23
5.2 Employee Benefits of TransPro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.3 Treatment of Stock Options and Restricted Stock for Transferred Employees . . . . . . . . . 33
5.4 Treatment of Stock Options and Restricted Stock for Continuing Allen Employees . . . . . . . 35
5.5 Liability to Transferred Employees and Former Employees . . . . . . . . . . . . . . . . . . 37
5.6 Benefit; Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.7 At Will Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.8 Assumption of Collective Bargaining Agreements . . . . . . . . . . . . . . . . . . . . . . . 38
5.9 Assumption of Key Employee Severance Agreements . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE VI -- CLOSING OF THE CONTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.2 Conditions to Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
</TABLE>
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<TABLE>
<S> <C>
ARTICLE VII -- THE DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.1 The Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.2 Cooperation Prior to the Distribution . . . . . . . . . . . . . . . . . . . . 41
7.3 Conditions to Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.4 Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE VIII -- REPRESENTATIONS AND WARRANTIES OF ALLEN . . . . . . . . . . . . . . . . . . . . 43
8.1 Organization and Good Standing . . . . . . . . . . . . . . . . . . . . . . . . 43
8.2 Title to Acquired Assets and Acquired Stock . . . . . . . . . . . . . . . . . 43
ARTICLE IX -- COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.1 Additional Assurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.2 Contractual Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.3 Certain Arrangements Relating to Wooster IRBs . . . . . . . . . . . . . . . . 45
9.4 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
9.5 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.6 Litigation Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.7 Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.8 Retention of Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.9 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE X -- INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
10.1 Indemnification by TransPro . . . . . . . . . . . . . . . . . . . . . . . . . 50
10.2 Indemnification by Allen . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
10.3 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE XI -- MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
11.1 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
11.2 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
11.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
11.4 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
11.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
11.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
11.7 Registration of Acquired Stock . . . . . . . . . . . . . . . . . . . . . . . . 57
11.8 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
</TABLE>
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<TABLE>
SCHEDULES AND EXHIBITS
<S> <C> <C>
Schedule 1.1(a) Additional Permitted Liens
Schedule 1.1(b) Additional Transferred Employees
Schedule 2.1 Transferred Corporate Assets
Schedule 2.1.1 Owned Real Property
Schedule 2.1.2 Leased Real Property
Schedule 2.1.3(b) Owned Motor Vehicles
Schedule 2.1.8 Excluded Intellectual Property
Schedule 2.1.12 Corporate Prepaid Items
Schedule 2.1.13 Cash Reserves
Schedule 2.1.14 Allowable Intercompany Accounts
Schedule 2.2 Preparation of Balance Sheets
Schedule 2.3 Excluded Assets
Schedule 4.1 Assumed Corporate Liabilities
Schedule 4.2 Excluded Liabilities
Exhibit A Preliminary Balance Sheet
Exhibit B-1 Form of Employment Agreement with John C. Martin
Exhibit B-2 Form of Employment Agreement with Raymond M.
Scanlon
Exhibit C Instrument of Contribution and Assignment
Exhibit D Instrument of Assumption
Exhibit E Interim Services Agreement
Exhibit F Consulting Agreement
Exhibit G Patent and Trademark Assignment Documents
</TABLE>
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CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT, dated as of September 29, 1995
(this "Agreement"), is made and entered into by and between The Allen Group
Inc., a Delaware corporation ("Allen"), and TransPro, Inc., a Delaware
corporation and a wholly owned subsidiary of Allen ("TransPro").
WITNESSETH:
----------
WHEREAS, the Board of Directors of Allen has determined that
it is advisable to pursue a tax-free spin-off (the "Spin-Off") of a new company
consisting of Allen's Crown and G&O Manufacturing Company divisions, which
comprise Allen's Truck Products segment, together with Allen's ownership
interest (and rights related thereto) in GO/DAN Industries, a New York general
partnership ("GDI"), in order to enable both Allen and TransPro to
independently pursue their own respective business strategies and objectives,
to permit both Allen and TransPro to focus on their respective primary
businesses, to enable Allen to use its common stock as acquisition currency, to
effectively reduce the cost of such acquisitions to Allen, and to enable
TransPro to establish its own criteria for making capital investments and
strategic acquisitions of other businesses and to gain direct access to the
capital markets to finance such capital expenditures or acquisitions; and
<PAGE> 6
WHEREAS, pursuant to the Spin-Off, Allen intends to contribute
to TransPro (i) all of the properties and assets relating to the current Crown
and G&O Manufacturing Company divisions of Allen, except for the assets listed
on SCHEDULE 2.3 hereto (the "Transferred Business"), (ii) all of the
outstanding capital stock of (A) Allen Heat Transfer Products Inc., a Delaware
corporation and a wholly owned subsidiary of Allen ("AHTP"), (B) AHTP II, Inc.,
a Delaware corporation and a wholly owned subsidiary of Allen ("AHTP II") and
(C) TransPro Indus Ltd., a Mauritius corporation and a wholly owned subsidiary
of Allen (formerly known as Allen Indus Ltd.) ("AIL"), and (iii) certain
corporate assets of Allen identified on SCHEDULE 2.1 hereto, and TransPro
intends to assume the corporate liabilities of Allen identified on SCHEDULE 4.1
hereto as well as the liabilities and obligations of Allen relating to the
Transferred Business (including any liabilities relating to any assets or
business previously sold or otherwise disposed of by Allen which historically
had related to the Crown or G & O Manufacturing Company divisions of Allen
prior to such disposition), PROVIDED that for purposes of this Agreement,
corporate assets or corporate liabilities shall be deemed to be assets or
liabilities maintained on the corporate books of Allen and not on the
divisional books of Crown or G & O; and
WHEREAS, Allen intends to retain all of its properties and
assets not related to the Transferred Business, AHTP, AHTP II or AIL including,
without limitation, all properties and assets relating to Allen's current
telecommunications equipment business
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and vehicle emissions testing business (the "Retained Business"), except for
certain corporate assets of Allen identified on SCHEDULE 2.1 hereto, and to
retain all of the liabilities and obligations of Allen not related to the
Transferred Business, except for certain corporate liabilities that TransPro
will assume;
WHEREAS, pursuant to the Spin-Off, after consummation of the
transfers described above, Allen intends to make a pro rata distribution (the
"Distribution") to holders of Allen Common Stock as of the Record Date of all
of the shares of TransPro Common Stock owned by Allen on the Distribution Date;
WHEREAS, the parties hereto desire to record their respective
rights, duties, obligations and agreements in connection with such
transactions;
NOW, THEREFORE, in consideration of the mutual promises
hereinafter set forth and other good and valuable consideration, the parties
hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
-----------
1.1 GENERAL. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
ACTION: any action, suit, arbitration, inquiry, proceeding or
investigation by or before any court, any governmental or other regulatory or
administrative agency or commission or any arbitration tribunal.
3
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AFFILIATE: as defined in Rule 12b-2 under the Exchange Act,
including with respect to TransPro any TransPro Subsidiary and with respect to
Allen any Allen Subsidiary.
ALLEN BOARD: the Board of Directors of Allen.
ALLEN COMMITTEE: The Management Compensation Committee of the
Allen Board.
ALLEN COMMON STOCK: the Common Stock, par value $1 per share,
of Allen.
ALLEN GUARANTY: the Guaranty Agreement dated June 15, 1995,
by Allen to H & H and certain of its Affiliates.
ALLEN OPTIONS: any option to purchase shares of Allen Common
Stock issued to employees of Allen pursuant to either of the Allen Stock Plans.
ALLEN POST-DISTRIBUTION PRICE: The arithmetic mean of the
highest and lowest sales prices per share of the Allen Common Stock on the New
York Stock Exchange on the first trading day after the Mailing Date.
ALLEN PRE-DISTRIBUTION PRICE: The arithmetic mean of the
highest and lowest sales prices per share of the Allen Common Stock on the New
York Stock Exchange on the Mailing Date.
ALLEN RESTRICTED STOCK: shares of Allen Common Stock awarded
by Allen to employees of Allen that are subject to restrictions pursuant to the
1982 Stock Plan or the 1992 Stock Plan.
ALLEN STOCK OPTION AGREEMENT: any written agreement, executed
by the grantee of Allen Options and Allen, which contains terms and conditions
regarding such Allen Options.
4
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ALLEN STOCK PLANS: the 1982 Stock Plan and the 1992 Stock
Plan.
ALLEN SUBSIDIARY: any Subsidiary of Allen other than TransPro
or any TransPro Subsidiary, including any Subsidiary of Allen following the
Distribution Date and any other Subsidiary of Allen which thereafter may be
organized or acquired.
BASIS ADJUSTMENT: any increase or decrease in the tax basis
of assets transferred to TransPro pursuant to this Agreement which occurs as a
result of an IRS (or other taxing authority) audit, any reallocation of a
deduction from the period prior to the Distribution to the period after the
Distribution or any reallocation of a deduction from the period after the
Distribution to the period prior to the Distribution. For example, if after
audit it is determined that an amount previously expensed by Allen prior to the
Distribution with respect to the Transferred Business, the Acquired Stock or
the assets of any of the Transferred Subsidiaries or of GDI should have been
capitalized, and if the effect of that audit adjustment is to increase the
basis in the Transferred Business, the Acquired Stock or the assets of any of
the Transferred Subsidiaries or of GDI upon or after the Distribution, then a
Basis Adjustment as defined in this Agreement shall have occurred.
CODE: the Internal Revenue Code of 1986, as amended.
COMMISSION: the Securities and Exchange Commission.
5
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CONNECTICUT IRBS: industrial revenue bonds or similar debt
instruments issued by the Connecticut Development Authority relating to the
Transferred Business.
CONTINUING ALLEN EMPLOYEE: any employee of Allen who is not a
Transferred Employee.
DISTRIBUTION: as defined in the Recitals.
DISTRIBUTION AGENT: The First National Bank of Boston, as
distribution agent.
DISTRIBUTION DATE: the date determined by the Allen Board on
which the Distribution shall be effected.
DISTRIBUTION RATE: the number of shares of TransPro Common
Stock to be distributed for each share of Allen Common Stock pursuant to the
Distribution, as determined by the Allen Board prior to the Distribution Date.
ERISA: the Employee Retirement Income Security Act of 1974,
as amended, or any successor legislation.
EXCHANGE ACT: the Securities Exchange Act of 1934, as
amended.
FORM S-1: the registration statement on Form S-1 filed by
TransPro with the Commission to effect the registration of the Distribution of
TransPro Common Stock pursuant to the Securities Act.
GDI OPTION AGREEMENT: the Agreement dated June 15, 1995, by
and among AHTP, AHTP II, H & H and GDI.
H & H: Handy & Harman Radiator Corporation, a Delaware
corporation.
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INCOME TAX: any Tax that is computed with reference to the
taxpayer's net income and any business license or franchise tax.
INSURANCE PROCEEDS: those monies (i) received by an insured
from an insurance carrier or (ii) paid by an insurance carrier on behalf of the
insured, in either case net of the applicable premium adjustments (including
reserves) or retrospectively rated premium adjustments.
INTERIM SERVICES AGREEMENT: the Interim Services Agreement
between Allen and TransPro, the form of which is attached hereto as Exhibit E.
IRBS: the Connecticut IRBs, the Jackson IRBs and the Wooster
IRBs.
IRS: the Internal Revenue Service.
JACKSON IRBS: industrial revenue bonds or similar debt
instruments issued by City of Jackson, Mississippi relating to the Transferred
Business.
KMDB PLAN: the Allen Key Management Deferred Bonus Plan, as
amended from time to time.
LIABILITIES: any and all debts, liabilities and obligations,
absolute or contingent, asserted or unasserted, matured or unmatured,
liquidated or unliquidated, accrued or unaccrued, known or unknown, direct or
indirect, whenever arising (unless otherwise specified in this Agreement),
including all costs and expenses relating thereto, and including, without
limitation, those debts, liabilities and obligations arising under any law,
rule, regulation, Action, threatened Action, order
7
<PAGE> 12
or consent decree of any governmental entity or any award of any arbitrator of
any kind, and those arising under any contract, commitment or undertaking
including those arising under this Agreement.
LOSSES: any and all losses, liabilities, claims, damages,
obligations, payments, costs and expenses, matured or unmatured, absolute or
contingent, accrued or unaccrued, liquidated or unliquidated, known or unknown
(including, without limitation, the costs and expenses of any and all Actions,
threatened Actions, demands, assessments, judgments, settlements and
compromises relating thereto and attorneys' fees and any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any such actions or threatened actions).
MAILING DATE: the date on which certificates representing
shares of TransPro Common Stock are mailed to holders of shares of Allen Common
Stock in connection with the Distribution.
1982 STOCK PLAN: The Allen Group Inc. 1982 Stock Plan, as
amended.
1992 STOCK PLAN: The Allen Group Inc. 1992 Stock Plan, as
amended.
NON-INCOME TAX: any Tax other than an Income Tax.
PERMITTED LIENS: with respect to Allen or TransPro, shall
include any of the following: (a) liens in favor of any entity on all or part
of the assets of Subsidiaries of such entity securing indebtedness owing by
Subsidiaries of such entity
8
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to such entity; (b) liens to secure Taxes, assessments and other government
charges in respect of obligations not overdue or liens on properties to secure
claims for labor, material or supplies in respect of obligations not overdue;
(c) deposits or pledges made in connection with, or to secure payment of,
workmen's compensation, unemployment insurance, old age pensions or other
social security obligations; (d) liens on properties in respect of judgments or
awards, the indebtedness with respect to which does not cause a default or
event of default pursuant to any agreement for money borrowed; (e) liens of
carriers, warehousemen, mechanics and materialmen, and other like liens on
properties, in existence less than 120 days from the date of creation thereof
in respect of obligations not overdue; (f) encumbrances on Real Property
consisting of easements, rights of way, zoning restrictions, restrictions on
the use of real property and defects and irregularities in the title thereto,
landlord's or lessor's liens under leases, and other minor liens or
encumbrances none of which interferes materially with the use of the property
affected in the ordinary conduct of the business of such party and its
Subsidiaries, which defects do not individually or in the aggregate have a
materially adverse effect on the business of such party individually or of such
party and its Subsidiaries on a consolidated basis; (g) liens securing other
indebtedness not in excess of $4,000,000 (including capitalized leases); and
(h) liens existing on the date hereof and listed on SCHEDULE 1.1(A) hereto.
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PROSPECTUS: the final prospectus to be sent to the holders of
Allen Common Stock as of the Record Date in connection with the Distribution.
RECORD DATE: the close of business on the date to be
determined by the Allen Board as the record date for the Distribution.
REPLACEMENT TRANSPRO OPTIONS: options to purchase shares of
TransPro Common Stock issued to Transferred Employees in substitution for any
forfeited Allen Options.
REPLACEMENT TRANSPRO RESTRICTED STOCK: shares of TransPro
Common Stock awarded by TransPro to Transferred Employees in substitution for
any shares of Allen Restricted Stock forfeited by any such Transferred
Employee.
SECURITIES ACT: the Securities Act of 1933, as amended.
SUBSIDIARIES: the term "Subsidiaries" as used herein with
respect to any entity shall, unless otherwise indicated, be deemed to refer to
both direct and indirect subsidiaries of such entity.
TAX: any federal, state, local or foreign tax, including,
without limitation, any income, sales, use, personal property, payroll,
withholding, franchise or gross receipt tax, and any claims, demands,
assessments, judgments, costs, expenses or penalties connected with any such
tax and associated reports and returns.
TAX BENEFIT: the present value of the reduction in federal,
state, and local Tax liability made potentially
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available to the indemnifying party by any Basis Adjustment. (If the Basis
Adjustment is an increase, the indemnifying party shall be TransPro; if it is a
decrease, the indemnifying party shall be Allen.) In calculating the Tax
Benefit attributable to any Basis Adjustment, the following principles shall
apply: (a) the indemnifying party shall be deemed to be able to absorb all
deductions made available to it as a result of the Basis Adjustment in the
earliest year in which those deductions become available to it under the Tax
laws; (b) the aggregate marginal tax rate applicable to the indemnifying party
shall be 40 percent or in the case of a Basis Adjustment only at the state or
local level, five (5%) percent; (c) the discount rate to be used in calculating
the present value of the reduction in Tax liability shall be equal to the
interest rate (on the date that the Basis Adjustment becomes final and
unappealable) applicable to United States Treasury securities having a maturity
approximately equal to one-half of the period over which the deductions made
available by the Basis Adjustment will arise; (d) all available elections to
accelerate depreciation or amortization deductions attributable to the Basis
Adjustment shall have been made by the indemnifying party; and (e) no Tax
Benefit shall be deemed to arise if and to the extent that any portion of the
Basis Adjustment is properly allocable to assets that are neither depreciable
nor amortizable under the Tax laws in effect at the time of the Basis
Adjustment.
TRANSFERRED EMPLOYEES: all employees of Allen as of the
Distribution (a) whose duties relate primarily to the
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Transferred Business, except for Frank J. Hyson, or (b) who are identified on
SCHEDULE 1.1(B) hereto.
TRANSPRO COMMITTEE: The Management Compensation and
Nominating Committee of the Board of Directors of TransPro.
TRANSPRO COMMON STOCK: the Common Stock, par value $.01 per
share, of TransPro (and associated stock purchase rights).
TRANSPRO POST-DISTRIBUTION PRICE: The arithmetic mean of the
highest and lowest sales prices per share of the TransPro Common Stock on the
New York Stock Exchange on the first trading day after the Mailing Date.
TRANSFERRED SUBSIDIARIES: AHTP, AHTP II and AIL.
TRANSPRO SUBSIDIARY: any Subsidiary of Allen or TransPro that
will be a Subsidiary of TransPro immediately following the Distribution Date,
and any other Subsidiary of TransPro which thereafter may be organized or
acquired.
WOOSTER IRBS: industrial revenue bonds or similar debt
instruments issued by the City of Wooster, Ohio relating to the Transferred
Business.
ARTICLE II
CONTRIBUTION OF ASSETS
----------------------
2.1 CONTRIBUTION OF ASSETS BY ALLEN. Upon the terms and
subject to the conditions of this Agreement at the Closing (as defined herein),
Allen shall make a contribution (the "Contribution") to the capital of TransPro
by assigning, transferring, delivering and conveying to TransPro, and TransPro
shall acquire from Allen, (a) all of the rights, properties and
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assets relating to the Transferred Business and (b) certain corporate assets of
Allen identified on SCHEDULE 2.1 hereto (the "Acquired Assets"), all as
reflected on the Closing Date Balance Sheet (as defined herein), prepared in
accordance with Section 2.2 hereof; PROVIDED, HOWEVER, that the Acquired Assets
shall expressly exclude (i) the capital stock of any direct or indirect
subsidiary of Allen, including, without limitation, the Acquired Stock (as
defined in Section 3.1(a) hereof), (ii) any and all of the rights, properties
and assets relating to the Retained Business and (iii) the Excluded Assets (as
defined in Section 2.3 hereof). As used in this Agreement, the terms "used in
the Transferred Business" or "relating to the Transferred Business" or words of
similar import shall mean any and all assets, properties and rights owned at
the Closing by Allen for use in, or arising out of, or existing in connection
with or pertaining to, the Transferred Business. The Acquired Assets shall
include, without limitation, the following:
2.1.1 OWNED REAL PROPERTY. All of Allen's rights and
interests in and to the real property identified on SCHEDULE 2.1.1 hereto,
including all buildings, structures, fixtures and improvements located thereon
and all easements, privileges and appurtenant rights thereto (the "Owned Real
Property").
2.1.2 LEASED REAL PROPERTY. All of Allen's rights and
interests in and to the leases pertaining to the leased real property
identified on SCHEDULE 2.1.2 hereto, and in and to the real property leased by
Allen pursuant to such leases, including all buildings, structures, fixtures
and improvements located
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thereon and all easements, privileges and appurtenant rights thereto (the
"Leased Real Property" and, together with the Owned Real Property, the "Real
Property").
2.1.3 OWNED TANGIBLE PERSONAL PROPERTY. (a) All
machinery, operating equipment and supplies, office equipment and supplies,
furniture, office and telephone equipment, computer hardware and software and
other tangible personal property (and not otherwise within the categories
described in Section 2.1.3(b) hereof) owned by Allen and relating to the
Transferred Business (the "Personal Property") wherever located, together with
all spare, maintenance and replacement parts and accessories to any of the
foregoing.
(b) The cars, trucks or other motor vehicles owned by
Allen relating to the Transferred Business identified on SCHEDULE 2.1.3(B)
hereto, wherever such motor vehicles may be located (the "Motor Vehicles").
2.1.4 INVENTORY. (a) All of the finished goods,
work-in-progress and raw material inventory owned by Allen and relating to the
Transferred Business and either (i) located at any of Allen's facilities or on
order or in transit to any of such facilities or (ii) on consignment by Allen
to any third parties or Affiliates of Allen and (b) all right and interest in
and to finished goods, work-in-progress and raw material inventory on
consignment to Allen from any third party and relating to the Transferred
Business (the "Inventory").
2.1.5 CUSTOMER CONTRACTS. Subject to Section 9.2, all
contracts, agreements or arrangements relating to the
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governmental, commercial and industrial customer accounts of Allen relating to
the Transferred Business and such other contracts with customers relating to
the Transferred Business (the "Customer Contracts").
2.1.6 CONTRACTUAL RIGHTS. Subject to Section 9.2, all
rights and interests of Allen in and to mortgages, leases, licenses, purchase
or sales orders, security agreements, supply agreements, vendor agreements or
other agreements, undertakings, arrangements or contracts, whether written or
oral, express or implied, of Allen relating to the Transferred Business,
including, without limitation, all rights of Allen relating to any agreement
with Rolamex, S.A. de C.V. (such contracts, together with the Customer
Contracts, are referred to as the "Assumed Contracts").
2.1.7 ACCOUNTS RECEIVABLE. All accounts receivable of
Allen relating to the Transferred Business, other than the Intercompany
Accounts (as defined below), whether or not actually invoiced as of the Closing
Date (the "Accounts Receivable").
2.1.8 INTELLECTUAL PROPERTY. Except as provided on
SCHEDULE 2.1.8, all of Allen's rights and interests in patents, patent
applications, know-how, processes, formulations, trademarks, non-exclusive
license and sublicense rights in trademarks, copyrights, trade secrets,
technology, confidential or proprietary information, innovations, ideas,
improvements, inventions, distributor and customer lists and other intellectual
property rights (the "Intellectual Property") relating to the Transferred
Business.
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2.1.9 LEASED TANGIBLE PERSONAL PROPERTY. All rights and
interests of Allen in and to (a) the leases relating to tangible personal
property leased by Allen from third parties relating to the Transferred
Business wherever located and (b) the tangible personal property leased
pursuant thereto, including, without limitation, any motor vehicles leased by
Allen in connection with the Transferred Business (the "Leased Personal
Property").
2.1.10 LICENSES, PERMITS AND APPROVALS. All licenses,
permits, emission reduction approvals, classifications, variances, waivers,
consents and qualifications ("Permits") to the extent transferable, issued or
granted to Allen by any federal, state or local government or any subdivision,
authority, department, commission, board, bureau, agency, court or
instrumentality thereof that relate to any of the Real Property or any other
Acquired Assets or are used in the Transferred Business.
2.1.11 RECORDS AND LISTS. All books, files, documents,
sales literature, customer records, operating records, purchasing records and
specifications, engineering data, product, material and tooling specifications,
equipment lists, service and parts records, warranty records and inventory
records, computer programs, instructions, advertising and promotional
materials, dealer and distribution lists and other records (the "Records") of
Allen relating to the Transferred Business.
2.1.12 PREPAID ITEMS. All prepaid expenses and deposits,
other than, except as provided in Section 2.1.13
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hereof, deposits with financial institutions, of every kind and description,
wherever located ("Prepaid Items"), of Allen (a) relating exclusively to the
Transferred Business or (b) identified on SCHEDULE 2.1.12 hereto.
2.1.13 CASH RESERVES. Cash balances in the amount set forth
on, and with the provisions for post-Closing adjustment described on, SCHEDULE
2.1.13 hereto (the "Cash Reserves").
2.1.14 INTERCOMPANY ACCOUNTS. Any and all accounts or notes
receivable held by, due to or to become due to, Allen as of the Closing which
are listed on SCHEDULE 2.1.14 hereto ("Intercompany Accounts"), PROVIDED,
HOWEVER, that any Intercompany Account listed on SCHEDULE 2.1.14 hereto which
is a negative amount shall be deemed to be an Assumed Liability pursuant to
Section 4.1.
2.1.15 PERSONNEL AND PAYROLL RECORDS. All personnel and
payroll records for all Transferred Employees (as defined herein).
2.1.16 CLAIMS. All claims of every kind and description
relating to the Transferred Business that Allen may have against any other
person, except for any claim for refunds relating to Income Taxes accrued
prior to the Distribution Date.
2.1.17 OTHER. All other properties, assets, rights and
interests of every kind and description, wherever located, of Allen relating to
the Transferred Business, including, without limitation, any construction in
progress with respect to assets described in Section 2.1 hereof which are
intended for use in the Transferred Business, and the goodwill relating to the
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Transferred Business, including the going concern value relating thereto.
2.2 PREPARATION AND DELIVERY OF BALANCE SHEETS. (a)
Attached hereto as EXHIBIT A is a balance sheet (the "Preliminary Balance
Sheet") as of June 30, 1995 reflecting the book value of the Acquired Assets
and the Assumed Liabilities as of such date. The parties hereto agree that the
Preliminary Balance Sheet fully and accurately reflects the book value of the
Acquired Assets and the Assumed Liabilities as of June 30, 1995. Except as
provided on SCHEDULE 2.2, the Preliminary Balance Sheet shall be prepared from
the consolidated financial statements of Allen, prepared in accordance with
generally accepted accounting principles ("GAAP"), applied consistently in all
material respects with Allen's accounting policies and practices in effect as
of the date thereof.
(b) Promptly after the Closing but not later than December
31, 1995 (except with respect to the amount of deferred tax liabilities and the
allocation of Canadian pension liabilities and/or assets (collectively, the
"Delayed Allocations"), which shall be calculated no later than one year from
the date hereof), Allen shall prepare and deliver a balance sheet (the "Closing
Date Balance Sheet") as of the Closing Date reflecting the book value of the
Acquired Assets and the Assumed Liabilities as of such date. The Closing Date
Balance Sheet shall be prepared on a basis consistent with the Preliminary
Balance Sheet, including the exceptions set forth on SCHEDULE 2.2, reflecting
any changes from June 30, 1995 to the Closing
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Date. The book value of the Acquired Assets set forth on the Closing Date
Balance Sheet, less the book value of the Assumed Liabilities set forth on the
Closing Date Balance Sheet, shall represent the amount agreed upon by the
parties to be the book value of Allen's contribution to the capital of TransPro
pursuant to this Article II.
(c) If there are any items related to the Closing Date
Balance Sheet which are in dispute, then such items shall be submitted for
resolution to Ernst & Young ("E&Y"). For purposes of dispute resolution, the
accounting policies followed by Allen up to and including the Closing Date with
respect to the Transferred Business and the Transferred Subsidiaries shall
prevail. All fees and expenses, if any, for dispute resolution work by E&Y
shall be borne equally by Allen and TransPro. E&Y shall act as an arbitrator
to determine, based solely on presentations by Allen and TransPro, and not by
independent review, only those issues still in dispute.
2.3 EXCLUDED ASSETS. (a) Notwithstanding anything to
the contrary contained in this Agreement, the rights, properties and assets
listed or described on SCHEDULE 2.3 hereto (the "Excluded Assets"), shall be
retained by Allen and shall not be included in the Acquired Assets contributed,
transferred, assigned, conveyed and delivered to TransPro.
(b) Notwithstanding anything to the contrary contained in
this Agreement, Allen shall retain all right, title and interest in and to the
names and service marks "Allen", "Allen Group", "The Allen Group" and "The
Allen Group Inc." and to all
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versions of the "Allen" logo heretofore used by the Transferred Business, the
Transferred Subsidiaries or TransPro (the "Name"), PROVIDED, HOWEVER, that
TransPro shall be permitted to continue to use the Name pursuant to a
non-exclusive, non-transferrable license but only as a trade name, assumed name
or dba and only for a transition period of one year following the Closing,
after which TransPro shall cease all use of the Name. By accepting the license
under this Section 2.3(b), TransPro acknowledges the rights of Allen to its
names and marks, including, without limitation, the Name, and agrees that such
rights and registrations pertaining thereto are valid and enforceable.
ARTICLE III
CONTRIBUTION OF STOCK
---------------------
3.1 CONTRIBUTION OF STOCK BY ALLEN. (a) Upon the terms
and subject to the conditions of this Agreement, at the Closing, Allen shall
make a contribution to the capital of TransPro by assigning, transferring,
delivering and conveying to TransPro, and TransPro shall acquire from Allen,
(i) all issued and outstanding shares of capital stock of AHTP, (ii) all issued
and outstanding shares of capital stock of AHTP II, and (iii) all issued and
outstanding shares of capital stock of AIL, (collectively, the "Acquired
Stock").
(b) Allen shall transfer and deliver all of the Acquired
Stock or cause to be transferred and delivered all of the Acquired Stock.
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ARTICLE IV
ASSUMPTION OF LIABILITIES
-------------------------
4.1 ASSUMED LIABILITIES. On the terms and subject to the
conditions of this Agreement, except for those liabilities and obligations
listed or described on SCHEDULE 4.2 hereto, TransPro shall assume from Allen as
of the Closing, and thereafter shall pay, perform and discharge, whether
accrued or not as of the Closing, (a) all of the corporate Liabilities
identified on SCHEDULE 4.1 hereto and (b) any and all Liabilities of Allen of
any nature arising out of or relating to the Acquired Assets, the Transferred
Business or the Transferred Employees (including, without limitation, any
Liabilities (i) relating to warranty or payroll obligations or trade payables,
(ii) relating to any of the IRBs, (iii) resulting from any Environmental
Liability (as defined below) relating to the Transferred Business (including
any Environmental Liability of any predecessor of Allen relating to the
Transferred Business and any Environmental Liability relating to any site
formerly occupied by any facility which related to the Transferred Business),
(iv) relating to any Intercompany Account listed on SCHEDULE 2.1.14 hereto
which is a negative amount, (v) arising in connection with the GDI Option
Agreement or the Allen Guaranty, (vi) arising in connection with the Form S-1
or the Prospectus, (vii) relating to any assets or business previously sold or
otherwise disposed of by Allen which historically had related to the
Transferred Business prior to such disposition, or (viii) resulting from any
pending or threatened litigation, proceeding or investigation involving any
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asserted or unasserted, known or unknown, absolute or contingent, or direct or
indirect liability, indebtedness or obligation relating to the Acquired Assets
or the Transferred Business), or to acts or events occurring or conditions
existing with respect to the Acquired Assets or the Transferred Business
whether before, on, or after the date hereof, including, without limitation,
any and all liabilities and obligations, known or unknown, absolute or
contingent, direct or indirect, or asserted or unasserted relating to the Real
Property, the Personal Property, the Motor Vehicles, the Inventory, the Assumed
Contracts, the Accounts Receivable, the Intellectual Property, the Leased
Personal Property, the Permits, the Records, the Prepaid Items, the Cash
Reserves and the Intercompany Accounts described in Section 2.1 hereof and the
Transferred Employees described in Article V hereof (the "Assumed
Liabilities"). The Assumed Liabilities shall include, but not be limited to,
any and all Liabilities related to the Transferred Business reflected on the
Closing Date Balance Sheet, and any and all Liabilities assumed by TransPro
pursuant to Article V hereof. For purposes of this Agreement, "Environmental
Liability" shall mean any and all Liabilities and obligations relating to the
requirements of any applicable environmental laws or regulations or, caused by,
or arising out of, the generation, storage, transportation, treatment,
recycling, reuse, reclamation, disposition or use or handling in any way of (a)
any petroleum or petroleum product, (b) any "Hazardous Substances,"
"Pollutants" or "Contaminants" (as such terms are defined in the Comprehensive
Environmental
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Responses, Compensation and Liability Act of 1980, as amended) and any
substances classified as hazardous under any other applicable environmental
laws, or (c) any other waste materials.
4.2 EXCLUDED LIABILITIES. Notwithstanding anything
contained herein to the contrary, (a) any and all liabilities and obligations
of Allen not related to the Transferred Business, including, without
limitation, the Liabilities and obligations related to the Retained Business or
related to any assets or business not historically related to the Transferred
Business previously transferred by Allen or any of its Affiliates, and (b) the
Liabilities and obligations listed on SCHEDULE 4.2, shall not be assumed by
TransPro and shall be retained by Allen (the "Excluded Liabilities").
ARTICLE V
EMPLOYEE MATTERS
----------------
5.1 EMPLOYMENT OF TRANSFERRED EMPLOYEES BY TRANSPRO.
TransPro shall employ, effective as of the Distribution, all Transferred
Employees.
5.2 EMPLOYEE BENEFITS OF TRANSPRO.
(a) GENERAL Subject to the terms and conditions of, and
except as otherwise provided in, this Article V, effective as of the
Distribution, TransPro shall provide the Transferred Employees with terms and
conditions of employment, including, without limitation, employee benefits and
other perquisites, that are substantially the same as those provided to the
Transferred Employees by Allen prior to the Distribution. However, nothing
contained in this Agreement shall impair TransPro's ability to
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make such reasonable changes in such terms and conditions of employment
following the Distribution as TransPro may deem to be necessary or appropriate
for the operation of the Transferred Business or the Transferred Subsidiaries.
(b) TRANSPRO WELFARE BENEFIT PLANS.
(i) TRANSPRO MEDICAL PLAN. Effective as of the
Distribution, Transferred Employees (and their eligible dependents) shall be
covered by a medical plan or plans maintained by TransPro (the "TransPro
Medical Plan"), coverage under which shall be a continuation of the medical
plan coverage provided to Transferred Employees by Allen immediately prior to
the Distribution. The TransPro Medical Plan also shall provide coverage (or
eligibility for coverage) for those former employees of the Transferred
Business (and their eligible dependents) who were covered by, or were eligible
to obtain coverage under, the medical plan coverage offered by Allen
immediately prior to the Distribution ("Covered Former Employees"). The
TransPro Medical Plan made available to Transferred Employees, Covered Former
Employees and their dependents as of the Distribution shall waive any
applicable waiting periods for coverage of Transferred Employees, Covered
Former Employees and their dependents which did not exist with respect to such
Transferred Employee, Covered Former Employees or dependent immediately prior
to the Distribution. The TransPro Medical Plan shall not contain, as of the
Distribution, any exclusion or limitation with respect to any pre-existing
condition of any Transferred Employee, Covered Former Employee or dependent.
Any deductible or out-of-pocket
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maximum amount applicable to each Transferred Employee, Covered Former Employee
or dependent immediately prior to the Distribution shall continue to apply to
such Transferred Employee, Covered Former Employee or dependent on and after
the Distribution Date for the plan year of the medical plan of TransPro
covering such Transferred Employee, Covered Former Employee or dependent.
Effective as of the Distribution, TransPro and the TransPro Subsidiaries shall
have sole financial responsibility for the cost of (and shall assume from
Allen, to the extent applicable, all obligations with respect to) (i) medical
claims incurred by Transferred Employees, Covered Former Employees or their
dependents from and after the Distribution and (ii) medical claims that were
incurred by Transferred Employees, Covered Former Employees or their dependents
prior to the Distribution but that remain unpaid as of the Distribution Date.
(ii) POST-RETIREMENT LIFE INSURANCE COVERAGE.
Effective as of the Distribution, TransPro shall assume all liability for
post-retirement life insurance coverage for each former employee of the
Transferred Business receiving such coverage or entitled to such coverage from
Allen as of the Distribution Date.
(iii) REIMBURSEMENT PLANS. TransPro shall
implement, effective as of the Distribution, a flexible spending account plan,
a dependent care reimbursement plan and a health care reimbursement plan
(collectively referred to as the "TransPro Reimbursement Plans"). Such plans
shall, for the 1995 calendar year only, be successors to, and continuations of,
The
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Allen Group Inc. Flexible Spending Account Plan, The Allen Group Inc. Dependent
Care Reimbursement Plan and The Allen Group Inc. Health Care Reimbursement Plan
(the "Allen Reimbursement Plans"). Effective as of the Distribution, TransPro
shall assume all liability under the Allen Reimbursement Plans with respect to
all Transferred Employees for the 1995 calendar year.
(c) TRANSPRO PENSION, 401(K) AND EXECUTIVE DEFERRED
COMPENSATION AND SUPPLEMENTAL RETIREMENT PLANS
(i) PENSION PLAN. TransPro shall implement, effective as of
the Distribution, a qualified defined benefit pension plan ("TransPro
Retirement Plan") substantially similar to The AllenGroup Inc. Corporate
Retirement Plan (the "Allen Retirement Plan") for the benefit of (A)
Transferred Employees who participate in the Allen Retirement Plan as of the
Distribution and (B) former employees of the Transferred Business whose
employment with Allen terminated at a time when they were employees of the
Transferred Business and who have benefits under the Allen Retirement Plan as
of the Distribution (collectively, "Transferred Retirement Plan Participants").
All Transferred Retirement Plan Participants who are Transferred Employees
shall be eligible for immediate participation in the TransPro Retirement Plan
as of the Distribution Date, and all Transferred Retirement Plan Participants
shall be credited under the TransPro Retirement Plan, for all purposes
(including, without limitation, vesting and benefit accrual), with the service
credited to them under the Allen Retirement Plan. Effective as of the
Distribution and until the completion of the transfer of assets
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and liabilities described in this Section 5.2(c)(i), the Allen Retirement Plan
shall provide that a Transferred Retirement Plan Participant will not be
eligible to retire or commence receiving benefits accrued thereunder up to the
Distribution Date, until he or she terminates his or her employment with
TransPro following the Distribution. Until the completion of the transfer of
assets and liabilities from the Allen Retirement Plan to the TransPro
Retirement Plan described in this Section 5.2(c)(i), benefits under the
TransPro Retirement Plan payable to a Transferred Retirement Plan Participant
thereunder shall be computed on the basis of his or her total service with
Allen and TransPro, but shall be reduced by any benefits payable to such
Transferred Retirement Plan Participant under the Allen Retirement Plan. As
soon as practicable after the Distribution, Allen shall cause the trustee of
the master trust under which the assets of the Allen Retirement Plan are held
(the "Master Trust") to segregate within the Master Trust the Segregated
Pension Assets (as defined in the following sentence) determined to be
allocable as of the Distribution to Transferred Retirement Plan Participants.
For purposes of the preceding sentence, the Segregated Pension Assets allocable
as of the Distribution to Transferred Retirement Plan Participants shall mean
assets with a value equal to the sum of the present values as of the
Distribution of the accrued benefits on a termination basis (within the meaning
of Section 414(l) of the Code and the regulations thereunder) of the
Transferred Retirement Plan Participants under the Allen Retirement Plan, such
present values being determined on the basis of the
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following actuarial assumptions: (i) 7.5% interest per annum, (ii) the GAM 83
mortality table, (iii) an average assumed retirement age of 62.7 and (iv) the
other actuarial assumptions utilized by Allen for purposes of the annual
actuarial valuation of the Allen Retirement Plan. As soon as practicable after
the Distribution, Allen and TransPro shall make or cause to be made all
required filings and submissions to appropriate governmental and regulatory
authorities and all necessary or appropriate amendments to the Allen Retirement
Plan and the TransPro Retirement Plan, and shall take all other steps necessary
and appropriate, to permit the transfer of the Segregated Pension Assets from
the Allen Retirement Plan to the TransPro Retirement Plan. As soon as
practicable after the filings, submissions, amendments and other steps
described in this Section 5.2(c)(i) are completed, and after the expiration of
any waiting periods imposed under applicable law, Allen shall cause the trustee
of the Master Trust to transfer to the trustee of the TransPro Retirement Plan,
and TransPro shall cause the trustee of the TransPro Retirement Plan to accept
such transfer of, assets of the Allen Retirement Plan equal to (A) the
Segregated Pension Assets, minus (B) benefit payments to Transferred Retirement
Plan Participants made during the period from the Distribution Date through the
date of such transfer plus (C) interest on the difference between (A) and (B)
at the rate of nine percent (9%) per annum compounded annually from the
Distribution Date through the date of such transfer. After such transfer, the
Transferred Retirement Plan Participants shall be credited with benefits
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under the TransPro Retirement Plan attributable to service prior to the
Distribution Date at least equal to their accrued benefits under the Allen
Retirement Plan, and the Allen Retirement Plan shall have no further
obligations with respect to such accrued benefits. The Allen Retirement Plan
shall have no obligation to make any transfer to the TransPro Retirement Plan
unless and until Allen receives evidence reasonably satisfactory to it that the
TransPro Retirement Plan is a qualified plan under Section 401(a) of the Code
that is permitted to receive the transfer of assets and liabilities described
in this Section 5.2(c)(i), and that the transfer from the Allen Retirement Plan
to the TransPro Retirement Plan described in this Section 5.2(c)(i) will not
adversely affect the tax-qualified status of the Allen Retirement Plan. The
TransPro Retirement Plan shall have no obligation to accept any transfer from
the Allen Retirement Plan unless and until TransPro receives evidence
reasonably satisfactory to it that the Allen Retirement Plan is a qualified
plan under Code Section 401(a).
(ii) 401(K) PLAN. (A) TransPro agrees that the
Transferred Employees who participate in The Allen Group Inc. Employee
Before-Tax Savings Plan (the "Allen Savings Plan") as of the Distribution
("Transferred Savings Plan Participants") shall be eligible to participate in
the TransPro-sponsored plan that provides for salary deferrals under Code
Section 401(k) (the "TransPro Savings Plan"), which plan currently exists as
the GO/DAN Industries 401(k) Savings Plan, provided that matching employer
contributions under the TransPro Savings Plan for
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Transferred Savings Plan Participants shall be limited to one percent (1%) of
each such Participant's compensation for purposes of such Plan. The TransPro
Savings Plan shall recognize the service of the Transferred Savings Plan
Participants for eligibility and vesting purposes to the same extent that such
service is recognized for such purposes under the Allen Savings Plan.
(B) From the Distribution Date through
December 31, 1995, TransPro Common Stock credited to the accounts of
participants under the Allen Savings Plan other than Transferred Savings Plan
Participants as a result of the Distribution shall be subject to the investment
directions of such participants in accordance with the provisions of the Allen
Savings Plan and applicable rules thereunder that apply to investment funds
under the Allen Savings Plan other than the portion of the Allen Common Stock
fund thereunder that is attributable to matching employer contributions. As
soon as practicable after December 31, 1995, any TransPro Common Stock that
remains in the accounts of participants described in the preceding sentence
shall be sold by the trustee of the Allen Savings Plan, and the proceeds of
such sale shall be converted to Allen Common Stock. Such participants shall be
permitted to direct the investment of such Allen Common Stock in the manner
described in the second preceding sentence.
(C) From and after the Distribution
Date, Transferred Savings Plan Participants shall be permitted to direct the
investment of their accounts under the Allen Savings
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Plan (including Allen Common Stock credited to such accounts and TransPro
Common Stock credited to such accounts as a result of the Distribution) in the
manner described in Section 5.2(c)(ii)(B). As soon as practicable after
January 1, 1996, all assets credited to the accounts of Transferred Savings
Plan Participants other than Allen Common Stock shall be transferred from the
Allen Savings Plan to the accounts held for the Transferred Savings Plan
Participants under the TransPro 401(k) Plan.
(D) The Allen Savings Plan shall have no
obligation to make any transfer to the TransPro Savings Plan unless and until
Allen receives evidence reasonably satisfactory to it that the TransPro Savings
Plan is a qualified plan under Section 401(a) of the Code that is permitted to
receive the transfers described in this Section 5.2(c)(ii), and that the
transfers from the Allen Savings Plan to the TransPro Savings Plan described in
this Section 5.2(c)(ii) will not adversely affect the tax-qualified status of
the Allen Savings Plan. The TransPro Savings Plan shall have no obligation to
accept any transfer from the Allen Savings Plan unless and until TransPro
receives evidence reasonably satisfactory to it that the Allen Savings Plan is
a qualified plan under Code Section 401(a).
(iii) ASSUMPTION OF HOURLY PLANS. Effective as of
the Distribution, Allen shall assign to TransPro, and TransPro shall accept
from Allen, the legal status of sponsor of, and all of Allen's right, title and
interest in, under and to the following retirement plans, and any trust
agreements, insurance
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contracts or other funding vehicles related thereto: (a) The Crown Divisions,
Wooster and Louisville Plants, The Allen Group Inc. Bargaining Unit Employees'
Pension Plan; (b) The Crown Divisions, The Allen Group Inc. Pension Plan for
Hourly Rated Employees; (c) The G&O Manufacturing Company, Division of The
Allen Group Inc. (Jackson) Retirement Income Plan; and (d) The G&O
Manufacturing Company Union Retirement Income Plan (hereinafter collectively
referred to as the "Hourly Retirement Plans"). TransPro shall assume from
Allen all of the obligations, responsibilities and liabilities of Allen under
the Hourly Retirement Plans, whether arising before or after the Distribution.
In order to effectuate such assignment and assumption, TransPro and Allen shall
each take all actions and execute all instruments required on their respective
parts to provide for such assignment and assumption and the substitution in
connection therewith of TransPro for Allen under the Hourly Retirement Plans
and their related trust agreements, insurance contracts or other funding
vehicles.
(iv) DEFERRED COMPENSATION AND SUPPLEMENTAL
PENSION OBLIGATIONS. TransPro shall assume from Allen effective as of the
Distribution the following obligations to executive officers of Allen who are
Transferred Employees: (i) the obligation to make cash payments of bonus
amounts earned by such executive officers under the KMDB Plan, including the
obligation to credit and pay interest on any such amounts the payment of which
is deferred at the election of an executive officer; and (ii) the obligation to
provide supplemental pensions to John
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Martin and Ray Scanlon, to the extent of supplemental pension benefits accrued
as of the Distribution Date.
5.3 TREATMENT OF STOCK OPTIONS AND RESTRICTED STOCK FOR
TRANSFERRED EMPLOYEES. Subject in all respects to the discretion of the
TransPro Committee, the following arrangements shall apply to Transferred
Employees who hold Allen Options or Allen Restricted Stock at the time of the
Distribution:
(a) Any Transferred Employee who holds outstanding Allen
Options that are exercisable in whole or in part at the time of the
Distribution may exercise any such Allen Options in accordance with their terms
within 90 days of the Distribution Date to the extent such options are then
exercisable. Such Allen Options shall be adjusted in the same manner as the
Allen Options held by Continuing Allen Employees as described below in Section
5.4. To the extent any such Allen Options remain unexercised at the end of
such 90-day period, they shall then terminate in accordance with their terms.
Any Transferred Employee who holds Allen Options that are not exercisable in
whole or in part at the time of the Distribution shall receive Replacement
TransPro Options in accordance with procedures to be established by the
TransPro Committee. Each Replacement TransPro Option shall have the following
terms:
(i) The number of shares of TransPro Common Stock
covered by such Option shall be equal to the number of shares of Allen Common
Stock covered by the Allen Option it replaces (to the extent such Option was
not exercisable at the time of the Distribution) multiplied by the quotient
obtained by dividing the
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Allen Pre-Distribution Price by the TransPro Post-Distribution Price.
(ii) The exercise price per share of TransPro
Common Stock covered by such Option shall be equal to the exercise price per
share of the Allen Option it replaces multiplied by the quotient obtained by
dividing the TransPro Post-Distribution Price by the Allen Pre-Distribution
Price.
(iii) Each such Replacement Option shall become
exercisable and terminate on the same schedule as the Allen Option it replaces.
Fractions shall be rounded off to the nearest whole share.
(b) The following provisions shall apply to any Allen
Restricted Stock held by a Transferred Employee:
(i) Allen Restricted Stock granted pursuant to the
1982 Stock Plan shall cease to be restricted, and the holder thereof shall,
subject to the discretion of the Allen Committee, receive unrestricted shares
of Allen Common Stock upon consummation of the Distribution;
(ii) Allen Restricted Stock granted pursuant to the
1992 Stock Plan pursuant to the KMDB Plan shall be forfeited by the Transferred
Employee upon the Distribution, and, upon the surrender of certificates
representing such Allen Restricted Stock to Allen, such Transferred Employee
shall receive Replacement TransPro Restricted Stock with restrictions that
terminate on the same schedule as the restrictions applicable to the Allen
Restricted Stock it replaces; and
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(iii) Allen Restricted Stock granted pursuant to the
1992 Stock Plan shall likewise be forfeited, and upon such surrender such
Transferred Employee shall receive Replacement TransPro Restricted Stock with
corresponding restrictions, but with new performance targets as determined by
the TransPro Committee.
The number of shares of Replacement TransPro Restricted Stock
to be delivered to a Transferred Employee pursuant to clauses (ii) and (iii) of
this Section 5.3(b) shall be equal to the number of shares of Allen Restricted
Stock forfeited by such Transferred Employee on the Distribution Date
multiplied by the quotient obtained by dividing the Allen Pre-Distribution
Price by the TransPro Post-Distribution Price. No fractional shares of
Replacement Restricted Stock shall be issued, and all such fractions shall be
rounded off to the nearest whole share.
5.4 TREATMENT OF STOCK OPTIONS AND RESTRICTED STOCK FOR
CONTINUING ALLEN EMPLOYEES. Subject in all respects to the discretion of the
Allen Committee, the following arrangements shall apply to Continuing Allen
Employees who hold Allen Options or Allen Restricted Stock at the time of the
Distribution:
(a) In order to prevent dilution of the rights of
Continuing Allen Employees under Allen Options as a result of the Distribution,
all outstanding Allen Options shall be adjusted as follows:
(i) The number of shares of Allen Common Stock
covered by each Allen Option outstanding after the Distribution shall be equal
to the number of shares covered by such Option
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immediately before the Distribution multiplied by the quotient obtained by
dividing the Allen Pre-Distribution Price by the Allen Post-Distribution
Price. Fractions shall be rounded off to the nearest whole share.
(ii) The exercise price per share of Allen Common
Stock covered by each such Option after the Distribution shall be equal to the
exercise price per share under such option immediately before the Distribution
multiplied by the quotient obtained by dividing the Allen Post-Distribution
Price by the Allen Pre-Distribution Price.
(b) All shares of TransPro Common Stock received pursuant
to the Distribution with respect to shares of Allen Restricted Stock shall be
forfeited by each Continuing Allen Employee to TransPro. In substitution for
the shares of TransPro Common Stock so forfeited, each Continuing Allen
Employee who holds Allen Restricted Stock at the time of the Distribution shall
receive that number of additional shares of Allen Restricted Stock which is
equal in value to the TransPro Common Stock so forfeited. Such number of
shares of Allen Restricted Stock shall be determined by multiplying the number
of shares of TransPro Common Stock so forfeited by the quotient obtained by
dividing the TransPro Post-Distribution Price by the Allen Post-Distribution
Price. The restrictions applicable to such additional shares of Allen
Restricted Stock shall be determined as follows:
(i) Additional shares received with respect to Allen
Restricted Stock granted pursuant to the 1992 Stock Plan
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and the KMDB Plan shall have the same restrictions that apply to such Allen
Restricted Shares; and
(ii) Additional shares received with respect to Allen
Restricted Stock granted pursuant to the 1992 Stock Plan shall likewise have
the same restrictions, except that the performance targets shall be adjusted by
the Allen Committee, along with the performance targets of the underlying Allen
Restricted Stock, to reflect the Distribution.
No fractional shares of such Allen Restricted Stock shall be
issued, and all such fractions shall be rounded off to the nearest whole share.
5.5 LIABILITY TO TRANSFERRED EMPLOYEES AND FORMER
EMPLOYEES. As provided in Section 4.1, and except as provided in Section 4.2,
TransPro shall assume sole responsibility for (A) payment of any and all wages,
vacation pay, bereavement pay, jury duty pay, disability income, supplemental
unemployment benefits, fringe benefits or other perquisites of employment, or
similar benefits, payroll taxes and other payroll related expenses, (B)
payments to or under employee benefit plans of Allen, (C) workers' compensation
claims or related litigation claims, (D) claims filed with the Equal Employment
Opportunity Commission or related litigation claims and (E) other similar
employment-related claims, in any such case arising out of or relating to (i)
the employment of the Transferred Employees by Allen prior to the Distribution
or (ii) the employment by Allen of former employees of the Transferred Business
whose employment
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with the Transferred Business terminated on or before the Distribution Date.
5.6 BENEFIT; ENFORCEABILITY. Nothing in this Agreement,
including, without limitation, this Article V, shall be deemed to be for the
benefit of, or enforceable by or on behalf of, any Transferred Employee, or any
dependent or beneficiary of any Transferred Employee.
5.7 AT WILL EMPLOYMENT. Nothing in this Article V shall
limit the at will nature of the employment of any of the Transferred Employees
who do not have any other contractual rights with respect to employment by
TransPro or the right of Allen or TransPro to alter or terminate any employee
benefit plan.
5.8 ASSUMPTION OF COLLECTIVE BARGAINING AGREEMENTS.
TransPro shall assume, as of the Distribution, all obligations of Allen under
and with respect to the collective bargaining agreements covering Transferred
Employees and shall take all required actions with respect to such assumptions
as may be required by law or by any of such agreements.
5.9 ASSUMPTION OF KEY EMPLOYEE SEVERANCE AGREEMENTS.
TransPro hereby assumes and agrees to perform the obligations of Allen under
the severance agreements previously entered into by Allen with John C. Martin,
III and with Raymond M. Scanlon. TransPro shall discharge its obligations
under this Section by entering into Employment Agreements with Messrs. Martin
and Scanlon in substantially the forms attached hereto as Exhibits B-1 and B-2,
respectively.
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ARTICLE VI
CLOSING OF THE CONTRIBUTION
---------------------------
6.1 CLOSING. The closing of the Contribution (the
"Closing") shall be held at the offices of Jones, Day, Reavis & Pogue, North
Point, 901 Lakeside Avenue, Cleveland, Ohio 44114, on September 29, 1995 at
10:00 A.M. or such other place and time as the parties hereto agree. The date
on which the Closing actually takes place shall be referred to as the "Closing
Date."
6.2 CONDITIONS TO CONTRIBUTION. The consummation of each
of the transactions provided for herein shall be subject to the following
conditions, any one or more of which may be waived in writing by the parties
hereto: (a) the execution and delivery of each of the documents specified in
Section 6.3 hereof, and (b) the completion of financing arrangements (the
"TransPro Financing") providing credit to TransPro in an aggregate amount of at
least $70,000,000, on terms and conditions satisfactory in all respects to
TransPro.
6.3 CLOSING DELIVERIES. At the Closing:
(a) Allen shall provide TransPro with an executed
Instrument of Contribution and Assignment in substantially the form of EXHIBIT
C hereto.
(b) TransPro shall provide Allen with an executed
Instrument of Assumption, in substantially the form of EXHIBIT D hereto.
(c) Allen shall deliver or cause to be delivered
certificates for all of the Acquired Stock.
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(d) TransPro and Allen shall execute and deliver the
Interim Services Agreement, in substantially the form of EXHIBIT E hereto.
(e) TransPro and Allen shall execute and deliver the
Consulting Agreement, in substantially the form of EXHIBIT F hereto.
(f) TransPro and Allen shall execute and deliver the
patent and trademark assignment documents attached as EXHIBIT G hereto.
ARTICLE VII
THE DISTRIBUTION
----------------
7.1 THE DISTRIBUTION. (a) Immediately after the
Distribution Date, in consideration for the Contribution, TransPro shall issue
to Allen a number of shares of TransPro Common Stock equal to (i) the number of
shares of Allen Common Stock issued and outstanding at the close of business on
the Record Date DIVIDED BY four, MINUS (ii) 1000.
(b) Subject to Section 7.3 hereof, on or prior to the
Distribution Date, Allen will deliver to the Distribution Agent for the benefit
of the holders of record of Allen Common Stock on the Record Date, a single
stock certificate, endorsed by Allen in blank, representing all of the then
outstanding shares of TransPro Common Stock owned by Allen, and shall instruct
the Distribution Agent to distribute on the Distribution Date (or as soon
thereafter as reasonably practicable) the appropriate number of shares of
TransPro Common Stock to each holder of record of shares of Allen Common Stock
on the Record Date or to any
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appropriately designated transferee or transferees of such holder. The
Distribution shall be effective as of 11:59 p.m., Eastern Standard Time, on the
Distribution Date. Allen will provide to the Distribution Agent all share
certificates and any information required in order to complete the Distribution
on the basis of the Distribution Rate, subject to Section 7.4 hereof.
7.2 COOPERATION PRIOR TO THE DISTRIBUTION. (a) Allen
and TransPro shall have prepared, and Allen shall mail, prior to the
Distribution Date, to the holders of Allen Common Stock, the Prospectus. Allen
and TransPro shall have prepared, and TransPro shall have filed with the
Commission, the Form S-1, which includes the Prospectus. Allen and TransPro
shall use reasonable efforts to cause the Form S-1 to become effective under
the Securities Act as soon as practicable.
(b) Allen and TransPro shall cooperate in preparing,
filing with the Commission and causing to become effective any registration
statements or amendments thereto which are required to reflect the
establishment of, or amendments to, any employee benefit or other plans
contemplated by the Distribution and this Agreement.
(c) Allen and TransPro shall take all such action as may
be necessary or appropriate under the securities or blue sky laws of states or
other political subdivisions of the United States, in connection with the
transactions contemplated by this Agreement.
(d) Allen and TransPro shall have prepared, and TransPro
shall have filed in preliminary form and shall seek to
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make effective, an application to permit the listing of the TransPro Common
Stock on the New York Stock Exchange (the "Exchange").
7.3 CONDITIONS TO DISTRIBUTION. In no event shall the
Distribution Date occur prior to such time as each of the following have
occurred or been waived by Allen in its discretion: (a) the Closing of the
Contribution shall have occurred pursuant to Article VI; (b) the regulatory
approvals and all other material consents which are required to effect the
Distribution shall have been received; (c) the option closing contemplated by
GDI Option Agreement shall have occurred; (d) the Form S-1 shall have been
declared effective by the Commission; (e) the Allen Board shall have received
an opinion of counsel satisfactory to it that the Distribution will be a
tax-free "spin-off" under Section 355 of the Code; (f) the Certificate of
Incorporation and By-Laws of TransPro shall have been adopted and be in effect;
and (g) the TransPro Common Stock shall have been accepted for listing on the
Exchange.
7.4 FRACTIONAL SHARES. The Distribution Agent shall be
directed as soon as practicable after the Distribution Date to determine the
number of whole shares and fractional shares of TransPro Common Stock allocable
to each holder of record of shares of Allen Common Stock as of the Record Date
based upon the Distribution Rate, to aggregate all such fractional shares and
sell the whole shares obtained thereby at then prevailing prices and to cause
to be distributed to each such holder to which a fractional share shall be
allocable such holder's ratable share
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of the proceeds of such sale, after making appropriate deductions of the amount
required to be withheld for federal income tax purposes and after deducting an
amount equal to all brokerage charges, commissions and transfer taxes
attributed to such sale.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF ALLEN
---------------------------------------
Allen represents and warrants to TransPro as follows:
8.1 ORGANIZATION AND GOOD STANDING. Allen is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware.
8.2 TITLE TO ACQUIRED ASSETS AND ACQUIRED STOCK.
To the best knowledge of Allen, Allen has good and marketable title to the
Acquired Assets and the Acquired Stock, subject to no rights of others,
including any mortgages, leases, conditional sales agreements, title retention
agreements, liens or any other encumbrances except Permitted Liens.
ARTICLE IX
COVENANTS
---------
9.1 ADDITIONAL ASSURANCE. After the Closing, Allen shall
from time to time at the request of TransPro prepare, execute and deliver to
TransPro such other instruments of conveyance and transfer and shall take such
other actions as TransPro may reasonably request so as to more effectively
sell, transfer, assign, deliver and convey title to and possession of the
Acquired Assets or Acquired Stock to TransPro, or otherwise to consummate the
transactions contemplated hereby.
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9.2 CONTRACTUAL RIGHTS. (a) In connection with the
sale, assignment, transfer and conveyance of the Assumed Contracts in
accordance with Section 2.1 hereto, Allen shall take all reasonable action in
its power to cause any required consents, authorizations, approvals and/or
novations (individually, a "Consent") to be obtained as promptly as
practicable. Notwithstanding any such sale, assignment, transfer and
conveyance of the Assumed Contracts hereunder, Allen shall not transfer any
Assumed Contract hereunder which cannot be sold, assigned, transferred or
conveyed to TransPro by law, rule, regulation or otherwise unless Allen obtains
any required Consent with respect to such Assumed Contract. Allen shall use
reasonable efforts to obtain any such required Consent, provided, however, that
to the extent additional costs, expenses or payments to the other party to an
Assumed Contract are reasonably required to be incurred in connection with
obtaining any such Consent, including, without limitation, increased payment
obligations pursuant to the terms of any such Assumed Contract, such additional
costs and expenses shall be borne by TransPro as an Assumed Liability, unless
such Consent also releases Allen from any and all ongoing liabilities under
such Assumed Contract, in which case such additional costs and expenses
relating to such Assumed Contract shall be borne by Allen as an Excluded
Liability.
(b) Until Allen obtains such required Consent with
respect to such Assumed Contract, Allen shall, to the extent it is able to do
so, (i) consider TransPro a subcontractor of Allen
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under any such Assumed Contract, (ii) transfer to TransPro whatever assets,
payments or rights to payments Allen receives or will receive pursuant to any
such Assumed Contract, (iii) make available to TransPro any other benefits
Allen receives, will receive, or which are available to Allen, under any such
Assumed Contract, and (iv) do all other things in its power to permit TransPro
to have all rights and benefits to which Allen is entitled under any such
Assumed Contract.
9.3 CERTAIN ARRANGEMENTS RELATING TO WOOSTER IRBS. After
the Closing, until the earlier of (i) the termination of the current
arrangements for Dresdner Bank ("Dresdner") to provide a letter of credit (the
"Dresdner L/C") relating to the Wooster IRBs and (ii) December 31, 1995, Allen
shall remain obligated pursuant to the terms of the Restated and Amended
Reimbursement Agreement dated as of March 31, 1993 by and between Allen and
Dresdner (the "Reimbursement Agreement"). TransPro shall reimburse Allen for
any and all costs and expenses relating to the issuance of any letter of credit
of TransPro in favor of Allen described in this Section 9.3. TransPro shall
promptly notify Allen in writing of any termination of the Dresdner L/C. On
the Closing Date, TransPro agrees to arrange for an irrevocable letter of
credit in the amount of $8,236,712 to be issued by the First National Bank of
Boston, on terms and conditions reasonably satisfactory to Allen, to be
available to Allen for payment of any and all liabilities relating to the
Reimbursement Agreement (the "Bank of Boston L/C"). TransPro shall maintain
the Bank of Boston L/C in effect for as long as
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Allen remains obligated pursuant to the Reimbursement Agreement. If the
Dresdner L/C has not been terminated prior to December 31, 1995, Allen may, in
its sole discretion, at any time upon 15 days written notice to TransPro,
require that TransPro repay all obligations pursuant to the loan agreement
relating to the Wooster IRBs (the "Wooster Loan Agreement").
9.4 INSURANCE. (a) Allen has historically provided
insurance coverage with respect to the Transferred Business through various
policies maintained by Allen for workers' compensation, general liability, fire
and other types of losses (the "Allen Insurance Policies"). Allen will
continue to provide such coverage under the Allen Insurance Policies until
12:01 a.m. on the Distribution Date or such later date as may be agreed to in
writing by Allen and TransPro and accepted by the relevant insurers, PROVIDED,
HOWEVER, that Allen will continue to provide coverage under Allen Insurance
Policies with respect to prescription drug purchases by Transferred Employees
until 12:01 a.m. on September 30, 1995. After such time insurance coverage in
substitution for that provided by the Allen Insurance Policies shall be solely
through policies maintained by TransPro (the "TransPro Insurance Policies"),
except as provided in Section 9.4(b). Following the Distribution Date, Allen
and TransPro shall cooperate and assist each other in the prevention of
conflicts or gaps in insurance coverage and/or collection of proceeds relating
to the Transferred Business or the Transferred Subsidiaries.
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(b) Allen and TransPro agree that certain Allen Insurance
Policies are written on an "occurrence" basis or a "claims made" basis and may
provide coverage to Allen with respect to the Transferred Business or the
Transferred Subsidiaries for incidents occurring prior to the Distribution Date
even though the claim was first made after the Distribution Date. Allen and
TransPro agree to use reasonable efforts to obtain insurance coverage for
incidents occurring prior to the Distribution Date with respect to the
Transferred Business or the Transferred Subsidiaries through the TransPro
Insurance Policies. To the extent that the TransPro Insurance Policies do not
provide insurance coverage for such incidents, Allen and TransPro agree that
(i) TransPro shall have the right to present claims relating to incidents
occurring prior to the Distribution Date to Allen or Allen's insurers under all
Allen Insurance Policies that provided insurance coverage to the Transferred
Business or the Transferred Subsidiaries prior to the Distribution Date and
(ii) Allen shall submit such claims to Allen's insurers on a timely basis or
shall assist TransPro in the submission of such claims to such insurers. To
the extent that any losses by TransPro are not covered by such third-party
insurers, Allen will not be required to reimburse TransPro for such losses.
With respect to any insured losses relating to the Transferred Business or the
Transferred Subsidiaries, Allen shall pay over to TransPro any Insurance
Proceeds it receives on account of such losses.
9.5 ACCESS TO INFORMATION. From and after the
Distribution Date each party hereto shall afford the other party
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and its accountants, counsel and other designated representatives reasonable
access (including using reasonable efforts to give duplicating rights during
normal business hours to all records, books, contacts, instruments, computer
data and other data and information in such party's possession relating to the
business and affairs of such other party (other than data and information
subject to an attorney/client or other privilege)), insofar as such access is
reasonably required by such other party including, without limitation, for
audit, accounting and litigation purposes, as well as for purposes of
fulfilling disclosure and reporting obligations.
9.6 LITIGATION COOPERATION. Each party hereto shall use
reasonable efforts to make available to the other party, upon written request,
its officers, directors, employees and agents as witnesses to the extent that
such persons may reasonably be required in connection with any legal,
administrative or other proceedings arising out of the business of the other
party prior to the Distribution Date in which the requesting party may from
time to time be involved.
9.7 REIMBURSEMENT. Each party providing information or
witnesses under Sections 9.5 or 9.6 to the other party shall be entitled to
receive from the recipient, upon the presentation of invoices therefor, payment
for all out-of-pocket costs and expenses as may be reasonably incurred in
providing such information or witnesses.
9.8 RETENTION OF RECORDS. Except as otherwise required
by law or agreed to in writing, each party shall, and
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shall cause its Affiliates to, retain all information relating to the other
party's business in accordance with the past practice of such party.
Notwithstanding the foregoing, any party may destroy or otherwise dispose of
any information at any time, provided that, prior to such destruction or
disposal, (a) such party shall provide no less than 60 days' prior written
notice to the other party, specifying the information proposed to be destroyed
or disposed of and (b) if the recipient of such notice shall request in writing
prior to the scheduled date for such destruction or disposal that any of the
information proposed to be destroyed or disposed of be delivered to such
requesting party, the party proposing the destruction or disposal shall
promptly arrange for the delivery of such of the information as was requested
at the expense of the requesting party.
9.9 CONFIDENTIALITY. Each party shall hold and shall
cause its directors, officers, employees, agents, consultants and advisors to
hold in strict confidence, unless compelled to disclose by judicial or
administrative process or, in the opinion of its counsel, by other requirements
of law, all information (other than any such information relating solely to the
business or affairs of such party) concerning the other party (except to the
extent that such information can be shown to have been (a) in the public domain
through no fault of such party or (b) later lawfully acquired on a
non-confidential basis from other sources by the party to which it was
furnished), and neither party shall release or disclose such information to any
other person, except its auditors, attorneys, financial advisors, bankers and
other
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consultants and advisors who shall be advised of and agree to comply with the
provisions of this Section 9.9. Each party shall be deemed to have satisfied
its obligation to hold confidential information concerning or supplied by the
other party if it exercises the same care as it takes to preserve
confidentiality for its own similar information.
ARTICLE X
INDEMNIFICATION
---------------
10.1 INDEMNIFICATION BY TRANSPRO. TransPro shall
indemnify, defend and hold harmless Allen and each Affiliate of Allen, and each
of their respective officers, directors, shareholders, agents, Affiliates,
employees, representatives, successors and assigns (the "Allen Indemnitees")
from and against any and all Losses which arise out of or are related to (a)
the assets acquired under Section 2.1 of this Agreement, (b) the stock acquired
under Section 3.1 of this Agreement, (c) the Liabilities assumed under Section
4.1 of this Agreement, (d) any Liabilities arising in connection with the Form
S-1 or the Prospectus, (e) any Liabilities for any Income Tax relating to the
Transferred Business or the Transferred Subsidiaries for any period after the
Distribution Date, (f) any Liabilities for any Non-Income Tax relating to the
Transferred Business or the Transferred Subsidiaries for any period before or
after the Distribution Date (including any payments of any Non- Income Tax made
by Allen after the Distribution Date with respect to the Transferred Business
or the Transferred Subsidiaries), or (g) any Tax Benefit relating to TransPro
with respect to the Transferred
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Business, the Transferred Subsidiaries or GDI, and will reimburse the Allen
Indemnitees for any legal or other costs and expenses reasonably incurred by
any of the Allen Indemnitees in connection with any investigation of, or
defending against, any such Loss. TransPro's indemnification obligation under
Section 10.1(e) shall be deemed to include the amount, if any, by which Allen's
aggregate payments (estimated or otherwise) of Income Tax (to states or
localities that do not treat the Distribution as causing AHTP to end its tax
year or to leave a unitary or combined group of which Allen is the parent),
with respect to income of AHTP for the taxable period that includes the
Distribution Date, exceed the aggregate amount of Income Tax that would have
been owed to those states and localities with respect to AHTP for the period
ending on the Distribution Date had AHTP closed its books on the Distribution
Date and determined its Income Tax for the taxable period ending on that date.
TransPro's indemnification obligation under this Section 10.1 shall be deemed
to include all costs, expenses and Liabilities relating to the IRBs, including,
without limitation, (i) with respect to the Connecticut IRBs, all Liabilities
under the lease agreement for the facility located in New Haven, Connecticut,
(ii) with respect to the Wooster IRBs, all Liabilities to Dresdner pursuant to
the Reimbursement Agreement or otherwise and all Liabilities under the Wooster
Loan Agreement and (iii) with respect to the Jackson IRBs, all costs and
expenses, including attorney's fees, incurred after the Closing to exercise the
option to purchase the facility located in Jackson, Mississippi;
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PROVIDED, HOWEVER, that Allen shall be obligated to pay an amount up to $50,000
to exercise the option to purchase the facility located in Jackson,
Mississippi.
10.2 INDEMNIFICATION BY ALLEN. Allen shall indemnify,
defend and hold harmless TransPro and each Affiliate of TransPro, and each of
their respective officers, directors, shareholders, agents, Affiliates,
employees, representatives, successors and assigns (the "TransPro Indemnitees"
and, together with the Allen Indemnitees, the "Indemnitees") from and against
any and all Losses which arise out of or are related to (a) the Excluded
Assets, (b) the Excluded Liabilities, (c) the Retained Business, (d) any
Liabilities for any Income Tax relating to the Transferred Business or the
Transferred Subsidiaries for any period up to and including the Distribution
Date, (e) any Liabilities for any Tax related to the Retained Business for any
period before or after the Distribution Date, (f) any refunds of Non-Income
Taxes with respect to the Transferred Business or the Transferred Subsidiaries,
or (g) any Tax Benefit accruing to Allen with respect to the Transferred
Business, the Transferred Subsidiaries or GDI, and will reimburse the TransPro
Indemnitees for any legal or other costs and expenses reasonably incurred by
the TransPro Indemnitees in connection with any investigation of, or defending
against, any such Loss. Allen's indemnification obligation under Section
10.2(d) shall be deemed to include the amount, if any, by which Allen's
aggregate payments (estimated or otherwise) of Income Tax (to states or
localities that do not treat the Distribution as causing AHTP to end its tax
year or to
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leave a unitary or combined group of which Allen is the parent), with respect
to income of AHTP for the taxable period that includes the Distribution Date,
are less than the aggregate amount of Income Tax that would have been owed to
those states and localities with respect to AHTP for the period ending on the
Distribution Date had AHTP closed its books on the Distribution Date and
determined its Income Tax for the taxable period ending on that date. Allen's
indemnification obligation under this Section 10.2 shall not include any
adjustments in the amount of the Delayed Allocations.
10.3 PROCEDURE FOR INDEMNIFICATION. (a) In case any
Indemnitee shall receive notice or otherwise learn of the assertion of any
claim or the commencement of any proceeding (including any governmental
investigation) by any person who is not a party to this Agreement (or any
Affiliate of either party) with respect to which any party (an "Indemnifying
Party") may be obligated to provide indemnification hereunder (a "Third Party
Claim"), such Indemnitee shall promptly notify the Indemnifying Party in
writing, provided that the failure of any Indemnitee to give notice as provided
in this Section 10.3 shall not relieve the related Indemnifying Party of its
obligations hereunder, except to the extent that such Indemnifying Party is
prejudiced by such failure to give notice.
(b) In case any such proceeding shall be brought against
any Indemnitee, the Indemnifying Party shall be entitled to participate therein
and, to the extent that it shall wish, to assume the defense thereof, with
counsel satisfactory to such
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Indemnitee and shall pay as incurred the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any Indemnitee shall have
the right to retain its own counsel at its own expense. Notwithstanding the
foregoing, the Indemnifying Party shall pay as incurred the fees and expenses
of the counsel retained by the Indemnitee in the event (i) the Indemnifying
Party and the Indemnitee shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the Indemnifying Party and the Indemnitee and
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them, in which case the
Indemnifying Party shall not be entitled to assume the defense of such suit
notwithstanding its obligation to bear the fees and expenses of such counsel.
The Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Party agrees to
indemnify the Indemnitee from and against any loss or liability by reason of
such settlement or judgment. Notwithstanding the foregoing sentence, if at any
time an Indemnitee shall have requested the Indemnifying Party to reimburse the
Indemnitee for fees and expenses of counsel as contemplated by this paragraph,
the Indemnifying Party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent to which the indemnification
obligations of the Indemnifying Party hereunder are applicable if
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(i) such settlement is entered into more than 60 days after receipt by the
Indemnifying Party of the aforesaid request for reimbursement of fees and
expenses of the Indemnitee's counsel and (ii) the Indemnifying Party shall not
have reimbursed the Indemnitee in accordance with such request prior to the
date of such settlement. If the Indemnifying Party elects not to assume
responsibility for defending a Third Party Claim, or fails to notify an
Indemnitee of its election as provided in this Section 10.3(b), such Indemnitee
may defend or seek to compromise or settle such Third Party Claim.
(c) Any claim on account of a Loss which does not result
from a Third Party Claim shall be asserted by written notice given by the
Indemnitee to the related Indemnifying Party. Such Indemnifying Party shall
have a period of 30 days after the receipt of such notice to respond thereto.
If such Indemnifying Party does not respond within such 30 day period, such
Indemnifying Party shall be deemed to have refused to accept responsibility to
make payment. If such Indemnifying Party does not respond within such 30 day
period or rejects such claim in whole or in part, such Indemnitee shall be free
to pursue such remedies as may be available to such party under this Agreement
or under applicable law.
ARTICLE XI
MISCELLANEOUS
-------------
11.1 BINDING EFFECT. This Agreement and the rights and
duties hereunder shall be binding upon and inure to the benefit of the
successors and assigns of each of the parties hereto and
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also shall be binding upon and inure to the benefit of any corporation,
partnership, joint venture, trust, unincorporated organization or any other
entity that acquires all or substantially all of the assets of the business of
Allen or TransPro.
11.2 ENTIRE AGREEMENT. This Agreement and the other
documents referred to herein set forth the entire understanding of the parties
and supersede all prior agreements, covenants, arrangements, communications,
representations or warranties, whether oral or written, made by the parties or
any officer, employee or representative of the parties.
11.3 AMENDMENT. This Agreement may be amended only by a
written instrument signed by the parties or their respective successors or
assigns.
11.4 GOVERNING LAW. This Agreement and (unless otherwise
provided) all amendments hereof and waivers and consents hereunder shall be
governed by the internal laws of the State of Ohio, without regard to the
conflicts of law principles thereof.
11.5 NOTICES. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be delivered by
hand, mailed by registered or certified mail (return receipt requested), or
sent by telecopy or by a recognized overnight courier service, to the parties
at the following addresses (or such other addresses for a party as shall be
specified by like notice) and shall be deemed given on the date on which such
notice is received:
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if to Allen:
The Allen Group Inc.
25101 Chagrin Boulevard
Beachwood, Ohio 44122-5619
Attention: President
Telecopy: (216) 765-0410
with a copy to:
The Allen Group Inc.
25101 Chagrin Boulevard
Beachwood, Ohio 44122-5619
Attention: General Counsel
Telecopy: (216) 765-0410
if to TransPro:
TransPro, Inc.
100 Gando Drive
New Haven, Connecticut 06513
Attention: President
Telecopy: (203) 865-3723
with a copy to:
TransPro, Inc.
100 Gando Drive
New Haven, Connecticut 06513
Attention: Chief Financial Officer
Telecopy: (203) 865-3723
11.6 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original
instrument and all of which together shall constitute a single agreement.
11.7 REGISTRATION OF ACQUIRED STOCK. Allen and TransPro
shall take all necessary action to register the transfer and delivery by Allen
to TransPro of the Acquired Stock in accordance with applicable law.
11.8 EXPENSES. Allen shall bear all expenses,
including fees and expenses of any attorneys, accountants, investment bankers,
brokers, finders and other intermediaries, incurred in
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connection with this Agreement and the transactions contemplated hereby, except
(a) for fees and expenses related to any arrangement or transaction
specifically intended to benefit only TransPro after the Closing, including,
without limitation, fees and expenses (i) related to the design and
implementation of employee benefit plans or arrangements of TransPro for any of
the Transferred Employees and (ii) of TransPro's independent auditors
responsible for review of the Preliminary Balance Sheet, the Closing Date
Balance Sheet or any other financial statements with respect to TransPro, which
TransPro shall bear and (b) as otherwise provided herein, including, without
limitation, as provided in Section 9.2(a) with respect to certain Assumed
Contracts.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their duly authorized agents or officers, as of the day and year
and at the place first above written.
THE ALLEN GROUP, INC.
By /s/ McDara P. Folan, III
------------------------------
Name: McDara P. Folan, III
Title: Vice President
TRANSPRO, INC.
By /s/ Henry P. McHale
------------------------------
Name: Henry P. McHale
Title: President and CEO
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Exhibit 99.1
------------
ALLEN GROUP SPIN-OFF COMPLETED
------------------------------
CLEVELAND, OHIO, September 29, 1995 -- The Allen Group Inc. ("Allen")
announced today that the spin-off distribution of its wholly owned subsidiary,
TransPro, Inc. ("TransPro"), has been completed. The effective time of the
distribution and the record date is as of the close of business on Friday,
September 29, 1995. One share of common stock of TransPro will be distributed
for every four shares of Allen common stock owned as of the record date.
Certificates for shares of TransPro common stock will be mailed to Allen
stockholders on or about October 10, 1995.
TransPro has been approved for trading on the New York Stock Exchange
under the symbol "TPR" and "when issued" trading commenced on Friday, September
29, 1995.
TransPro is comprised of three independent operating units that supply
heat transfer and fabricated metal products to OEM's of trucks, vans and other
industrial products and to the automotive and truck aftermarkets. These
include Allen's former Crown and G&O Manufacturing Company divisions, together
with GO/DAN Industries ("GO/DAN"). Allen previously owned 50% of GO/DAN and,
in connection with the spin-off, GO/DAN has redeemed the remaining ownership
interest from the prior joint venture partner. TransPro is headquartered in
New Haven, Connecticut.
The Allen Group (NYSE symbol - ALN) is a leading supplier to the
worldwide two-way wireless communications marketplace of systems expansion,
site management products and antennas; provides frequency planning, systems
engineering services and design
<PAGE> 2
programs to current and emerging wireless markets; and operates centralized
automotive emissions inspection programs.
For further information contact: Robert A. Youdelman
(Allen Group)
216-765-5820
- or -
John C. Martin III
(TransPro)
203-562-5121
