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EXHIBIT 2.1
AGREEMENT AND PLAN OF SHARE EXCHANGE
BY AND BETWEEN
ETABLISSEMENTS DELHAIZE FRERES ET CIE "LE LION" S.A.
AND
DELHAIZE AMERICA, INC.
Dated as of November 16, 2000
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TABLE OF CONTENTS
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AGREEMENT AND PLAN OF SHARE EXCHANGE...........................................................1
ARTICLE I STOCK DIVIDEND; SHARE EXCHANGE; CLOSING..............................................2
1.1 Stock Dividend...............................................................2
1.2 Share Exchange...............................................................2
1.3 Effective Time...............................................................2
1.4 Time and Place of Closing....................................................3
1.5 Effect of the Share Exchange.................................................3
1.6 Articles of Incorporation....................................................3
1.7 Bylaws.......................................................................3
1.8 Directors and Officers.......................................................3
ARTICLE II EXCHANGE OF SECURITIES..............................................................3
2.1 Exchange of Securities.......................................................3
2.2 Stock Options and Restricted Stock...........................................5
2.3 Dissenting Shares............................................................6
2.4 Procedure for Election.......................................................6
2.5 Exchange of Certificates.....................................................7
2.6 No Liability................................................................10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF COMPANY.........................................10
3.1 Organization................................................................10
3.2 Capitalization..............................................................10
3.3 Authorization of Agreement; Recommendation of Share Exchange................11
3.4 Governmental Filings; No Conflicts..........................................12
3.5 Disclosure and Financial Statements.........................................13
3.6 Absence of Certain Changes..................................................13
3.7 Vote Required...............................................................13
3.8 Opinion of Financial Advisor................................................14
3.9 Finders and Investment Bankers..............................................14
3.10 North Carolina Shareholder Protection Act...................................14
3.11 Takeover Laws...............................................................14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT...........................................14
4.1 Organization................................................................14
4.2 Capitalization..............................................................15
4.3 Authorization of Agreement..................................................15
4.4 Governmental Filings; No Violations.........................................16
4.5 Disclosure and Financial Statements.........................................16
4.6 Absence of Certain Changes..................................................17
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4.7 Vote Required...............................................................17
4.8 Compliance with Laws........................................................17
4.9 Litigation..................................................................17
4.10 Finders and Investment Bankers..............................................17
4.11 No Foreign Withholding......................................................17
ARTICLE V COVENANTS...........................................................................18
5.1 Conduct of the Business of the Company......................................18
5.2 Conduct of the Business of Parent...........................................20
5.3 Non-Solicitation............................................................21
5.4 Shareholders' Meetings......................................................21
5.5 SEC Filings; Registration Statement.........................................22
5.6 Access to Information; Confidentiality......................................23
5.7 Filings, Other Action.......................................................23
5.8 Public Announcements........................................................24
5.9 NYSE/Euronext Brussels Listing..............................................24
5.10 Notice of Certain Events....................................................25
5.11 Directors' and Officers' Indemnification and Insurance......................25
5.12 Affiliates..................................................................25
5.13 Rule 144 Reporting..........................................................26
5.14 Transfer Taxes..............................................................26
5.15 Shareholder Litigation......................................................26
5.16 Accounting Matters..........................................................26
5.17 Shareholders Agreement......................................................26
5.18 Tax Treatment...............................................................26
5.19 Additional Members of the Parent Board of Directors.........................27
5.20 Employee Benefits...........................................................27
5.21 Delhaize America Dividends..................................................27
ARTICLE VI CLOSING CONDITIONS.................................................................27
6.1 Conditions to the Obligations of Each Party.................................27
6.2 Conditions to Obligations of Parent.........................................29
6.3 Conditions to Obligations of Company........................................30
ARTICLE VII TERMINATION AND ABANDONMENT.......................................................30
7.1 Termination.................................................................30
7.2 Procedure and Effect of Termination.........................................31
ARTICLE VIII MISCELLANEOUS....................................................................31
8.1 Amendment and Modification..................................................31
8.2 Waiver of Compliance; Consents..............................................32
8.3 Non-Survival of Representations, Warranties and Agreements..................32
8.4 Notices.....................................................................32
8.5 Assignment; Parties in Interest.............................................33
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8.6 Expenses....................................................................33
8.7 Specific Performance........................................................34
8.8 Governing Law...............................................................34
8.9 Counterparts................................................................34
8.10 Interpretation..............................................................34
8.11 Entire Agreement............................................................34
8.12 Severability................................................................34
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AGREEMENT AND PLAN OF SHARE EXCHANGE
This AGREEMENT AND PLAN OF SHARE EXCHANGE (this "AGREEMENT"), dated as
of November 16, 2000, by and between Etablissements Delhaize Freres et Cie "Le
Lion" S.A., a societe anonyme organized under the laws of the Kingdom of
Belgium ("PARENT"), and Delhaize America, Inc., a North Carolina corporation
(the "COMPANY"),
WITNESSETH:
WHEREAS, Parent (together with its wholly-owned subsidiary) owns an
aggregate of approximately 37% of the issued and outstanding shares of Class A
common stock, par value $0.50 per share, of the Company (the "CLASS A COMMON
STOCK"), and approximately 56% of the issued and outstanding shares of Class B
common stock, par value $0.50 per share, of the Company (the "CLASS B COMMON
STOCK," and together with the Class A Common Stock, the "COMPANY COMMON
STOCK");
WHEREAS, Parent has proposed to the Board of Directors of the Company
that Parent acquire the shares of the Company Common Stock not owned by Parent
or its wholly-owned subsidiary (the "PUBLIC SHARES" and the holders thereof
being referred to herein as the "PUBLIC SHAREHOLDERS");
WHEREAS, the Board of Directors of Parent believes it is in the best
interest of Parent and its shareholders, and the Board of Directors of the
Company believes it is in the best interest of the Company and the Public
Shareholders, to consummate a share exchange whereby Parent would acquire all
of the Public Shares held by the Public Shareholders (the "SHARE EXCHANGE"),
upon the terms and subject to the conditions set forth in this Agreement;
WHEREAS, a Special Committee of the Board of Directors of the Company
(the "SPECIAL COMMITTEE") has (i) determined that the Share Exchange is fair to
and in the best interests of the Public Shareholders and (ii) recommended the
approval of this Agreement and the Share Exchange to the Board of Directors of
the Company;
WHEREAS, the Board of Directors of the Company has (i) determined that
the Share Exchange is fair to and in the best interests of the Public
Shareholders and (ii) recommended the approval of this Agreement and the Share
Exchange to the Public Shareholders;
WHEREAS, the Special Committee has (i) determined that it is in the
best interests of the Public Shareholders that the Company adopt a bylaw opting
out of the provisions of the North Carolina Shareholder Protection Act, such
bylaw to be effective upon the earlier of (a) the day immediately preceding the
meeting of Company shareholders to consider this Agreement and the Share
Exchange and (b) December 31, 2000, (ii) approved such a bylaw and (iii)
recommended approval thereof to the Board of Directors of the Company;
WHEREAS, the Board of Directors of the Company has approved an
amendment to the Bylaws of the Company opting out of the provisions of the
North Carolina Shareholder Protection Act, such bylaw to be effective upon the
earlier of (a) the day immediately preceding
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the meeting of Company shareholders to consider this Agreement and the Share
Exchange and (b) December 31, 2000;
WHEREAS, in connection with the Share Exchange, the Special Committee
and the Board of Directors of the Company have determined that it is in the
best interests of the Public Shareholders that prior to the Share Exchange the
Company effect a stock dividend whereby each holder of record of an outstanding
share of Class A Common Stock and each holder of record of an outstanding share
of Class B Common Stock shall be entitled to receive a stock dividend of 499
shares of Class A Common Stock with respect to each such share (the "STOCK
DIVIDEND");
WHEREAS, for U.S. federal income tax purposes, it is intended that the
Share Exchange should qualify as a reorganization under the provisions of
Section 368(a)(1)(B) of the United States Internal Revenue Code of 1986, as
amended (the "CODE"); and
WHEREAS, the Boards of Directors of Parent and the Company have
approved this Agreement and the Share Exchange upon the terms and subject to
the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties and agreements herein contained, and intending to
be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
STOCK DIVIDEND; SHARE EXCHANGE; CLOSING
1.1 Stock Dividend. Upon the terms and subject to the conditions set
forth in this Agreement and in accordance with the North Carolina Business
Corporation Act (the "NORTH CAROLINA CORPORATION LAW"), immediately prior to
the Effective Time (as defined below), the Company shall effect the Stock
Dividend. The Company will not distribute to the Public Shareholders stock
certificates representing the shares of Class A Common Stock to be issued in
the Stock Dividend and such shares shall be deemed to be represented by the
certificates representing the issued and outstanding Public Shares prior to the
Stock Dividend, provided that the Company shall issue stock certificates
representing the shares of Class A Common Stock to be issued in the Stock
Dividend to Parent and its wholly-owned subsidiary which owns shares of Company
Common Stock immediately prior to the Stock Dividend.
1.2 Share Exchange. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with Article 11 of the North
Carolina Corporation Law, at the Effective Time each Public Share shall be
acquired by Parent as set forth in Article II below. After the Effective Time,
the Company shall continue as a corporation organized under North Carolina law
and Parent, together with its wholly-owned subsidiary, shall own all of the
outstanding Company Common Stock.
1.3 Effective Time. As promptly as practicable after the satisfaction
or, if permissible, waiver of the conditions set forth in Article VI hereof,
but in no event later than the Closing (as defined below), the parties hereto
shall deliver Articles of Share Exchange (the "ARTICLES OF SHARE EXCHANGE") for
filing by the Secretary of State of the State of North Carolina, in such form
as is required by, and executed in accordance with the relevant provisions of,
the
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North Carolina Corporation Law and shall do any and all other lawful things
necessary to cause the Share Exchange to become effective upon the filing of
the Articles of Share Exchange or such later time as the parties hereto may
agree and set forth in the Articles of Share Exchange (such date and time being
the "EFFECTIVE TIME").
1.4 Time and Place of Closing. The closing of the Share Exchange (the
"CLOSING") shall take place at the offices of Akin, Gump, Strauss, Hauer &
Feld, L.L.P., 590 Madison Avenue, New York, New York 10022, or such other place
as the parties hereto shall agree, as soon as practicable following
satisfaction or waiver of the conditions set forth in Article VI hereof. The
date on which the Closing actually occurs is herein referred to as the "CLOSING
DATE."
1.5 Effect of the Share Exchange. At the Effective Time, the effect of
the Share Exchange shall be as provided in the applicable provisions of the
North Carolina Corporation Law.
1.6 Articles of Incorporation. The Articles of Incorporation of the
Company in effect at the Effective Time shall continue to be the Articles of
Incorporation of the Company until thereafter amended in accordance with the
North Carolina Corporation Law and such Articles of Incorporation, provided
that, subject to shareholder approval as contemplated by Section 5.4 hereof,
prior to the Stock Dividend the Company shall amend its Articles of
Incorporation to increase the number of authorized shares of Class A Common
Stock to 100,000,000,000 and to clarify the permissibility of the Stock
Dividend (the "CHARTER AMENDMENT").
1.7 Bylaws. The Bylaws of the Company in effect at the Effective Time
shall continue to be the Bylaws of the Company until thereafter amended or
repealed in accordance with the North Carolina Corporation Law, the Articles of
Incorporation of the Company and such Bylaws.
1.8 Directors and Officers. The directors and officers of the Company
immediately prior to the Effective Time shall continue in their respective
positions with the Company after the Effective Time, each to hold office, in
accordance with and subject to the Articles of Incorporation and Bylaws of the
Company, until their respective successors have been duly elected or appointed
or their earlier death or resignation.
ARTICLE II
EXCHANGE OF SECURITIES
2.1 Exchange of Securities.
(a) Each Public Share issued and outstanding immediately
prior to the Effective Time (other than any Dissenting Shares (as defined
below)), by virtue of the Share Exchange and without any action on the part of
the holder thereof, shall be automatically exchanged as of the Effective Time
for the right to receive (i) 0.40 fully paid and non-assessable American
depositary shares, with each such American depositary share representing the
right to receive one bearer ordinary voting share, without nominal value, of
Parent ("PARENT SHARES"), subject to Parent's ability to change the number of
Parent Shares for which each American depositary share is exchangeable, which
change shall have the effect referenced in Section 2.5(g) below, provided,
however, that the number of American depositary shares representing each
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Parent Share shall not exceed three, with each such American depositary share
being evidenced by one or more receipts (each an "ADR") issued in accordance
with the terms of a deposit agreement to be entered into among Parent, The Bank
of New York (or such other depositary selected by Parent) and the owners and
holders from time to time of ADRs, which agreement shall be reasonably
acceptable to the Company (the "ADR CONSIDERATION"), or (ii) if a properly
completed Election Form (as defined below) shall have been submitted to the
Exchange Agent (as defined below) on a timely basis with respect to such Public
Share, 0.40 Parent Shares (the "ORDINARY SHARE CONSIDERATION" and together with
the ADR Consideration, the "SHARE EXCHANGE CONSIDERATION") in each case subject
to Section 2.5(h) below (it being understood that the ratios above do not give
effect to the Stock Dividend; such ratios as they may be adjusted pursuant to
the terms hereof, the "EXCHANGE RATIO"). The Share Exchange Consideration shall
be payable to the holder of a Public Share upon surrender of the certificate
representing such Public Share.
(b) Each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time which is then owned beneficially or of
record by Parent or any wholly-owned subsidiary of Parent shall not be
exchanged in the Share Exchange and shall remain issued and outstanding shares
of Company Common Stock.
(c) Subject to Section 2.3 hereof, at the Effective Time the
holders of Public Shares as of the Effective Time shall cease to be
shareholders of the Company, and shall be entitled only to receive the
applicable Share Exchange Consideration upon the surrender of the certificates
(the "CERTIFICATES") representing Public Shares in accordance with Section 2.5
hereof or to their rights under Article 13 of the North Carolina Corporation
Law, subject, however, to the Company's obligation to pay any dividends with a
record date prior to the Effective Time which have been declared by the Company
prior to the Effective Time and which remain unpaid at the Effective Time.
(d) Each Public Share which is automatically exchanged for
the right to receive Share Exchange Consideration hereunder (which excludes any
Dissenting Shares) shall remain issued and outstanding after the Effective Time
and as of the Effective Time, by virtue of the Share Exchange, shall be
acquired by Parent as provided in this Article II.
(e) At or immediately after the Closing, the Exchange Agent
(as defined below), as agent of, and for the account of, each of the Public
Shareholders (other than any Dissenting Shareholders), shall contribute to the
capital of Parent the Public Shares (other than any Dissenting Shares (as
defined below)) to be acquired by Parent pursuant to the Share Exchange in
exchange for that number of Parent Shares to be issued in connection with the
Share Exchange pursuant to the terms of this Agreement, rounded down to the
nearest whole share. In order to effectuate the foregoing, at or immediately
after the Closing, the Exchange Agent, or such other party as shall be
reasonably acceptable to the Company and Parent, shall represent the Public
Shareholders before a public notary in Belgium in order to (i) contribute the
Public Shares in kind to the capital of Parent, (ii) become the holder, as
agent, of the Parent Shares to be issued by Parent in return for such
contribution and (iii) execute all documents and minutes and take any other
actions which the Exchange Agent or such other party deems necessary or
appropriate to effect the issuance of Parent Shares pursuant to the terms of
this Agreement. In the event that a Dissenting Shareholder does not comply with
the provisions of Article 13 of the North
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Carolina Corporation Law and thereupon is entitled to receive the applicable
Share Exchange Consideration hereunder pursuant to the provisions of Section
2.3 hereof, the Exchange Agent or such other party shall take the foregoing
actions in order to effectuate the issuance of the Share Exchange Consideration
to such shareholder.
2.2 Stock Options and Restricted Stock.
(a) At the Effective Time, each option to purchase shares of
Class A Common Stock pursuant to each stock option and incentive plan of or
sponsored by the Company (the "COMPANY OPTION PLANS"), that is then
outstanding, whether vested or unvested (each a "COMPANY OPTION"), shall be
converted into an option (each an "ADJUSTED OPTION") to purchase the number of
ADRs (rounded up to the nearest whole share) equal to (i) the number of shares
of Class A Common Stock subject to such option multiplied by (ii) the Exchange
Ratio, at an exercise price per ADR (rounded down to the nearest whole cent)
equal to the exercise price for a share of Class A Common Stock subject to such
Company Option divided by the Exchange Ratio; provided, however, that in the
case of a Company Option to which Section 421 of the Code applies by reason of
its qualification under Section 422 of the Code, the conversion formula shall
be adjusted, if necessary, to comply with Section 424(a) of the Code. Except as
set forth above, the Adjusted Options shall be subject to substantially the
same terms and conditions as were applicable to the Company Options immediately
prior to the Effective Time, provided that in no event shall the terms and
conditions regarding the vesting or exercisability of such options be modified.
(b) Parent and the Company shall take such actions as are
necessary for the conversion and exercise of Company Options pursuant to this
Section 2.2. Parent shall prepare and file with the SEC (as defined below) a
registration statement on Form S-8 or other appropriate form with respect to
ADRs subject to Adjusted Options, and shall use commercially reasonable efforts
to have such registration statement declared effective immediately after the
Effective Time and to maintain the effectiveness of such registration statement
covering such Adjusted Options for so long as the Adjusted Options remaining
outstanding.
(c) Notwithstanding any other provision of this Agreement to
the contrary, any shares of restricted Company Common Stock ("RESTRICTED
STOCK") issued pursuant to the Company Option Plans or other agreements and
outstanding as of the Effective Time shall pursuant to this Article II be
automatically exchanged for restricted ADRs in the Share Exchange and such
restricted ADRs shall be subject to substantially the same terms and provisions
of the applicable Company Option Plans and the related agreements pursuant to
which such shares of Restricted Stock were issued, provided that in no event
shall the terms and conditions regarding the vesting of such Restricted Stock
be modified. The Company shall take all necessary action to cause the
Restricted Stock acquired by Parent pursuant to the Share Exchange to be free
of restrictions as of and after the Effective Time.
(d) The Company shall not permit any Company Option or share
of Restricted Stock to become vested or exercisable (or to otherwise
accelerate) as a result of this Agreement or the consummation of the Share
Exchange.
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(e) Parent hereby agrees that upon the proper exercise of an
Adjusted Option after the Closing that no Belgian income, stamp or withholding
tax will be payable by the optionee with respect to such exercise, provided
that such optionee is not a Belgian resident at such time.
2.3 Dissenting Shares. Notwithstanding anything in this Agreement
to the contrary, any shares of Company Common Stock that are outstanding
immediately prior to the Effective Time and that are held by shareholders of the
Company who shall be entitled to dissent and appraisal rights under Article 13
of the North Carolina Corporation Law ("DISSENTING SHAREHOLDERS"), who shall
give notice of their intent to demand payment for their shares in accordance
with Article 13 of the North Carolina Corporation Law if the Share Exchange is
effectuated, and who shall have preserved such shareholder's right to receive
payment for such shares by taking those actions required by such Article 13
within the time periods stipulated therein (collectively, the "DISSENTING
SHARES"), shall not be exchanged for or represent the right to receive the Share
Exchange Consideration, but instead shall be cancelled as of the Effective Time
and the Dissenting Shareholders shall be entitled to receive the amounts
determined in accordance with the provisions of such Article 13. The Company
shall pay any cash amounts required to be paid under Article 13 with respect to
Dissenting Shares solely with cash out of funds of the Company. No funds shall
be supplied for that purpose, directly or indirectly, by Parent, and Parent
shall not directly or indirectly reimburse the Company for any payments to
dissenters. In the event that at the Effective Time Dissenting Shareholders
shall have complied with the provisions of Section 55-13-21 of the North
Carolina Corporation Law but shall not have demanded payment for and deposited
their Dissenting Shares in accordance with Section 55-13-23 of the North
Carolina Corporation Law (but the time period for doing so shall not have
lapsed), then at the Effective Time such shares shall remain issued and
outstanding shares of the Company and will be held in escrow by the Company for
the benefit of the Company or Parent, as the case may be. In the event that a
Dissenting Shareholder complies with all applicable provisions of Article 13
after the Effective Time, the Dissenting Shares formerly held by such
shareholder shall automatically be cancelled and payment therefor shall be made
by the Company as provided in Article 13. In the event that a Dissenting
Shareholder does not comply with the provisions of Article 13, the Dissenting
Shares formerly held by such shareholder will be released from escrow and
thereupon transferred to Parent in accordance with Section 2.1(e) above, and the
former holder thereof shall have the right to receive the Share Exchange
Consideration in accordance with the terms hereof. The Company shall give Parent
prompt notice of any notice, demand for payment or other document or instrument
received by the Company relating to the exercise of dissenters' rights under the
North Carolina Corporation Law with respect to the Share Exchange, and the
Parent shall have the right, for itself and the Company, to direct all
negotiations, actions and proceedings with respect to the exercise of such
dissenters' rights. The Company shall not, except with the prior written consent
of Parent, make any payment in respect of any demand for payment for Dissenting
Shares or settle or offer to settle any such demand for payment.
2.4 Procedure for Election.
(a) At such time as shall be sufficient to permit the holders
of Public Shares to exercise their right to make an election pursuant to this
Section 2.4, Parent will make available to all record holders of Public Shares
a letter of transmittal and election form and other appropriate
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material (collectively, the "ELECTION FORM") providing for such holder to elect
to receive the ADR Consideration or the Ordinary Share Consideration with
respect to all of such holder's Public Shares (an "ELECTION"). As of the
Election Date (as defined below), any Public Share with respect to which there
shall not have been effected such election by submission to the Exchange Agent
of a properly completed Election Form shall be automatically exchanged in the
Share Exchange for the right to receive the ADR Consideration.
(b) Any election to receive the ADR Consideration or the
Ordinary Share Consideration shall have been validly made only if the Exchange
Agent shall have received by 5:00 p.m., New York City time, on or prior to the
Election Date, an Election Form properly completed and executed by such holder
of Public Shares. As used herein, "ELECTION DATE" means a date announced by
Parent, in a news release, as the last day on which an Election Form will be
accepted; provided, however, that such date shall be:
(1) for any record holder other than the Depository Trust
Company ("DTC"), a business day no earlier than a date that
is 20 business days after the date on which the Effective
Time occurs and shall be at least five, and not more than 20,
business days following the date of such news release;
provided further, that subsequent to such announcement,
Parent shall have the right to change such Election Date to a
later date so long as such later is at least five business
days following the date of the news release announcing such
change.
(2) for holders of record holding shares through DTC, a
business day at least ten business days prior to the date on
which the Effective Time occurs; provided further, that
subsequent to such announcement, Parent shall have the right
to change such Election Date to a date so long such later
date is at least five business days prior to the date of the
news release announcing such change.
Parent shall have the right to make reasonable determinations
and to establish reasonable procedures (not inconsistent with the terms of this
Agreement) in guiding the Exchange Agent in its determination as to the
validity of Election Forms and of any revision, revocation or withdrawal
thereof.
(c) Record holders of Public Shares who are nominees only may
submit a separate Election Form for each beneficial owner for whom such record
holder is a nominee; provided, however, that at the request of Parent or the
Exchange Agent, such record holder shall certify to the reasonable satisfaction
of Parent or the Exchange Agent that such record holder holds such shares as
nominee for the beneficial owner thereof.
(d) Any holder of the Public Shares may at any time prior to
5:00 p.m. New York City time on the Election Date revoke such holder's election
by written notice to the Exchange Agent received at any time prior to 5:00 p.m.
New York City time on the Election Date.
2.5 Exchange of Certificates.
(a) Parent shall designate The Bank of New York (or such
other person or persons as is reasonably acceptable to the Company) to act as
exchange agent (the "EXCHANGE
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AGENT") in effecting the exchange of Certificates that, immediately prior to
the Effective Time, represented Public Shares (other than Dissenting Shares)
for the Share Exchange Consideration pursuant to Section 2.1(a) hereof.
Promptly after the Effective Time, Parent shall cause to be mailed to each
person who was, at the Effective Time, a holder of record of Public Shares
entitled to receive the Share Exchange Consideration pursuant to Section
2.1(a), a form of letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon proper delivery of such Certificates to the Exchange Agent and shall
be in such form and have such other provisions as Parent shall reasonably
specify) and instructions for use in effecting the surrender of the
Certificates pursuant to such letter of transmittal. Upon the surrender of each
such Certificate, together with such letter of transmittal duly completed and
validly executed in accordance with the instructions thereto, the Exchange
Agent shall deliver to the holder of such Certificate the applicable Share
Exchange Consideration determined in accordance with Section 2.1(a) above, and
such Certificate shall forthwith be canceled. Until so surrendered and
exchanged, each such Certificate (other than Certificates representing
Dissenting Shares) shall represent solely the right to receive the applicable
Share Exchange Consideration. In the event any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by Parent or the Exchange Agent, the posting by such person of a bond
in customary form and amount as indemnity against any claim that may be made
against it with respect to such Certificate, the Exchange Agent shall issue in
exchange for such lost, stolen or destroyed Certificate the applicable Share
Exchange Consideration otherwise deliverable upon due surrender of any such
Certificate pursuant to this Agreement.
(b) As of or promptly after the Effective Time, the Company
shall issue to Parent stock certificates representing the shares of Class A
Common Stock and Class B Common Stock acquired by Parent under this Agreement.
(c) As of or promptly after the Effective Time, or at such
other appropriate time with respect to Dissenting Shareholders who do not
comply with Article 13 of the North Carolina Corporation Law after the
Effective Time, Parent shall deposit the Share Exchange Consideration in trust
with the Exchange Agent, for the benefit of the holders of Public Shares, for
exchange in accordance with this Article II.
(d) Promptly following the date which is six months after the
Effective Time, the Exchange Agent shall deliver to Parent all Share Exchange
Consideration, Certificates and other documents in its possession relating to
the transactions described in this Agreement, and the Exchange Agent's duties
shall terminate. Thereafter, each holder of a Certificate may surrender such
Certificate to Parent and (subject to applicable abandoned property, escheat
and similar laws and, in the case of Dissenting Shares, subject to applicable
law) receive in exchange therefor the applicable Share Exchange Consideration.
(e) No dividends or other distributions declared or made
after the date of this Agreement with respect to Parent Shares with a record
date after the Effective Time will be paid to the holder of any unsurrendered
Certificate until the holder of record of such Certificate shall surrender such
Certificate. Subject to Section 2.5(d) above, following surrender of any such
Certificate, there shall be delivered to the record holder thereof (i) the
applicable Share Exchange Consideration in exchange for such Certificate
pursuant to Section 2.1(a), including cash in lieu
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of any fractional shares in accordance with Section 2.5(h) below and (ii)
payments of the amount of dividends or other distributions with a record date
after the Effective Time then payable with respect to the Parent Shares or
ADRs, as the case may be, constituting the Share Exchange Consideration.
(f) After the Effective Time, there shall be no transfers on
the stock transfer books of the Company of Public Shares except for the
transfer of such shares to Parent under this Agreement and the cancellation of
Dissenting Shares pursuant to Section 2.3 hereof. If, after the Effective Time,
Certificates formerly representing Public Shares are presented to the Company
or the Exchange Agent, such Certificates shall be cancelled and (subject to
applicable abandoned property, escheat and similar laws and, in the case of
Dissenting Shares, subject to applicable law) exchanged for the applicable
Share Exchange Consideration, as provided in this Article II.
(g) The Exchange Ratio shall be adjusted to reflect fully the
effect of any stock split, reverse split, stock dividend, reorganization,
recapitalization or other like change with respect to Parent Shares (including
any dividend or distribution of securities convertible into Parent Shares or
ADRs) or Company Common Stock (including any dividend or distribution of
securities convertible into Company Common Stock), or the ratio at which
American depositary shares are exchangeable for Parent Shares, occurring after
the date hereof and having a record or effective date prior to the Effective
Time, including the Stock Dividend. For illustration purposes only, if no such
adjustment other than as a result of the Stock Dividend occurred prior to the
Effective Time, after the completion of the Stock Dividend the Exchange Ratio
hereunder would be .0008.
(h) Notwithstanding anything to the contrary in this
Agreement, no fraction of an ADR or Parent Share will be issued by virtue of
the Share Exchange. In lieu thereof, each record holder of Public Shares at the
Effective Time who but for the provisions of this Section 2.5(h) would be
entitled to receive a fractional ADR or Parent Share by virtue of the Share
Exchange, shall be paid cash, without any interest thereon, as provided below.
Parent shall direct the Exchange Agent to determine the whole number of ADRs or
Parent Shares and fractional ADRs or Parent Shares allocable to each holder of
Public Shares at the Effective Time, to aggregate all such fractional ADRs and
Parent Shares into whole ADRs and Parent Shares, to sell the whole ADRs and
Parent Shares obtained thereby in the open market at then prevailing prices on
behalf of holders who otherwise would be entitled to receive fractional ADRs or
Parent Shares, and to distribute to each such holder such holder's ratable
share of the total proceeds of such sale, after making appropriate deductions
of the amount, if any, required for federal income tax withholding purposes and
after deducting any applicable transfer taxes. All brokers' fees and
commissions incurred in connection with such sales shall be paid by Parent. In
the event that after the Effective Time a Dissenting Shareholder becomes
entitled to receive Share Exchange Consideration pursuant to the terms of
Section 2.3 above and in connection therewith would otherwise be entitled to
receive a fractional ADR or Parent Share, such shareholder shall receive in
lieu thereof an amount of cash, without any interest thereon, equal to the
product of (i) such fraction and (ii) the closing sale price of an ADR or
Parent Share, as applicable, for the trading day immediately preceding the date
upon which such Dissenting Shareholder becomes entitled to receive Share
Exchange Consideration.
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2.6 No Liability. Neither Parent nor the Company shall be liable to
any Public Shareholder for any Share Exchange Consideration in respect of
Public Shares (or dividends or distributions with respect thereto) delivered to
a public official pursuant to any applicable abandoned property, escheat or
similar law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF COMPANY
The Company hereby represents and warrants to Parent as follows:
3.1 Organization. Each of the Company and its subsidiaries (each such
subsidiary being hereinafter referred to as a "COMPANY SUBSIDIARY") that is a
Significant Subsidiary (as defined in Section 3.2(a) below) is a corporation,
partnership or other entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization and has all requisite corporate or other power and authority to
own, lease and operate its properties and to conduct its business as currently
conducted. Each of the Company and its Significant Subsidiaries is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification or licensing
necessary, except where the failure to be so duly qualified or licensed would
not, individually or in the aggregate, have, or reasonably be expected to have,
a Company Material Adverse Effect. The term "COMPANY MATERIAL ADVERSE EFFECT"
shall mean any change or effect that individually or in the aggregate is
materially adverse to the financial condition, business or results of
operations of the Company and the Company Subsidiaries taken as a whole;
provided, however, that such term shall not include (a) changes or effects
which are attributable to the United States economy or the financial markets or
to conditions generally affecting the industry in which the Company or the
Company Subsidiaries participates or (b) changes or effects resulting from any
matter, which matter was approved by the Company's Board of Directors on or
following the date hereof, including without limitation the transactions
contemplated by this Agreement, unless, with respect to such matter, all
directors of the Company who are also executive officers of Parent voted
against such matter (such matter and related contemplated transactions, an
"APPROVED MATTER").
3.2 Capitalization.
(a) Prior to the effectiveness of the Charter Amendment, the
authorized capital stock of the Company consists of (i) 3,000,000,000 shares of
Company Common Stock divided into two classes of 1,500,000,000 shares of Class
A Common Stock and 1,500,000,000 shares of Class B Common Stock, of which, on
November 4, 2000 there were 105,840,566 shares of Class A Common Stock issued
and outstanding and 75,290,542 shares of Class B Common Stock issued and
outstanding and (ii) 500,000,000 shares of preferred stock, par value $.50 per
share, of which on the date hereof there were no shares outstanding. Except as
set forth above, there are no shares of capital stock of the Company authorized
or, as of November 4, 2000, issued or outstanding. Since November 4, 2000 no
shares of Company Common Stock have been issued except in connection with the
exercise of Company Options. After the effectiveness of the Charter Amendment
the authorized capital stock of the Company will consist of 101,500,000,000
shares of Company Common Stock divided into 100,000,000,000 shares of
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<PAGE> 15
Class A Common Stock and 1,500,000,000 shares of Class B Common Stock and
500,000,000 shares of preferred stock. All issued and outstanding shares of
Company Common Stock are duly authorized, validly issued, fully paid and
nonassessable. Except as set forth on Section 3.2(a) of the disclosure letter
delivered by the Company to Parent prior to the execution of this Agreement
(the "COMPANY DISCLOSURE LETTER"), each Company Subsidiary that is a
"SIGNIFICANT SUBSIDIARY" within the meaning of Rule 12b-2 under the Exchange
Act (as defined in Section 3.4 below) is listed in the Company's Annual Report
on Form 10-K for the fiscal year ending January 1, 2000 (the "2000 FORM 10-K"),
and except as and to the extent set forth in the 2000 Form 10-K, the Company
owns directly or indirectly all of the issued and outstanding capital stock of
each of its Significant Subsidiaries, free and clear of all liens, pledges,
security interests, claims or other encumbrances. Except for options to
purchase 6,727,603 shares of Class A Common Stock and 639,256 shares of
restricted Class A Common Stock issued pursuant to the Company Option Plans as
of the date hereof, there are no existing options, warrants, calls,
subscriptions, preemptive rights or other agreements or commitments whatsoever
obligating the Company or any Company Subsidiary to issue, transfer, deliver or
sell or cause to be issued, transferred, delivered or sold any additional
shares of capital stock of the Company or any Company Subsidiary, or obligating
the Company or any Company Subsidiary to grant, extend or enter into any such
agreement or commitment.
(b) Except for (i) the 2000 Shareholders' Agreement (the
"SHAREHOLDERS AGREEMENT") among the Company, Parent and Delhaize The Lion
America, Inc., a Delaware corporation that is a wholly-owned subsidiary of
Parent ("DETLA"), (ii) the Shareholders' Agreement, dated as of June 14, 1999,
among Delhaize "The Lion" Nederland, B.V., Pierre-Olivier Beckers, Jean-Claude
Coppieters `t Wallant, Bill McCanless, Lester C. Nail, Laura C. Kendall and
Keith M. Gehl, and (iii) the Shareholders Agreement among Hannaford Bros. Co.,
HomeRuns.com, Inc., Cypress Merchant Banking Patinas II, L.P., Cypress Merchant
Banking II, C.V. and 55th Street Partners II, L.P., there are no voting trusts
or other agreements or understandings to which the Company or any Company
Subsidiary is a party with respect to the voting of the capital stock of the
Company or any Company Subsidiary.
3.3 Authorization of Agreement; Recommendation of Share Exchange.
(a) The Company has all requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized and approved by the Company's Board of Directors (including
pursuant to Article 4, Section 6 of the Company's Bylaws) and, except for the
approval of this Agreement, the Share Exchange, the Stock Dividend and the
Charter Amendment by the shareholders of the Company as described in Section
3.7 below, no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by the Company
and constitutes a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms except as such enforceability
may be subject to the effects of bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting the rights of creditors and
of general principles of equity (the "ENFORCEABILITY EXCEPTION").
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(b) The Board of Directors of the Company (based on the
recommendation of the Special Committee) has, by the unanimous vote of all
directors, determined that this Agreement and the transactions contemplated
hereby are fair to and in the best interests of the Public Shareholders and has
resolved to recommend the Share Exchange, this Agreement, the Stock Dividend
and the Charter Amendment to the Public Shareholders.
(c) At a meeting duly noticed, called and held, the Special
Committee unanimously determined that this Agreement and the transactions
contemplated hereby are fair to and in the best interests of the Public
Shareholders, and has recommended the approval of this Agreement and the
transactions contemplated hereby to the Board of Directors of the Company.
3.4 Governmental Filings; No Conflicts.
(a) Except for (i) filings required by the applicable
requirements of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), and the Securities Act of 1933, as amended (the "SECURITIES ACT"), (ii)
the filing and recordation of appropriate Share Exchange documents, including
Articles of Share Exchange, as required by the North Carolina Corporation Law
and, if applicable, the laws of other states in which the Company is qualified
to do business, (iii) filing of Articles of Amendment with the Secretary of
State of the State of North Carolina with respect to the Charter Amendment,
(iv) filings under securities or blue sky laws or takeover statutes of the
various states, (v) filings required to be made with the New York Stock
Exchange ("NYSE") and (vi) filings in connection with any applicable transfer
or other taxes in any applicable jurisdiction, no filing with, and no permit,
authorization, consent or approval of, any public body or authority is
necessary for the consummation by the Company of the transactions contemplated
by this Agreement, the failure to make or obtain which would, individually or
in the aggregate, have a Company Material Adverse Effect or materially
adversely affect the ability of the Company to perform its obligations
hereunder or to consummate the transactions contemplated hereby.
(b) Except as set forth on Section 3.4(b) of the Company
Disclosure Letter and assuming compliance with the matters referred to in
Section 3.4(a) above and receipt of shareholder approval referred to in Section
3.7 below, none of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby, or compliance by the
Company with any of the provisions hereof, will (i) conflict with or result in
any violation of any provision of the Articles of Incorporation or Bylaws of
the Company, (ii) result in a violation or breach of, or constitute a default
(or give rise to any right of termination, cancellation or acceleration) under,
any note, bond, mortgage, indenture, license, agreement or other instrument or
obligation to which the Company or any Company Subsidiary is a party or by
which any of them or any or their properties or assets is bound or (iii)
violate any statute, rule, regulation, order, injunction, writ or decree of any
public body or authority by which the Company or any Company Subsidiary or any
of their respective assets or properties is bound, excluding from the foregoing
clauses (ii) and (iii) violations, breaches, rights or defaults which would
not, individually or in the aggregate, have a Company Material Adverse Effect
or materially adversely affect the Company's ability to perform its obligations
hereunder or to consummate the transactions contemplated hereby.
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3.5 Disclosure and Financial Statements.
(a) The Company has timely filed all forms, reports and
documents with the Securities and Exchange Commission (the "SEC") since
September 30, 1999, required to be filed by it pursuant to the Securities Act
and the Exchange Act and the rules and regulations promulgated thereunder
(collectively, the "COMPANY DISCLOSURE STATEMENTS"), all of which have
complied, as of their respective filing dates, in all material respects with
all applicable requirements of the Securities Act and the Exchange Act and the
rules and regulations promulgated thereunder. None of such Company Disclosure
Statements, at the time filed, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) The consolidated balance sheets and the related
consolidated statements of income, shareholders' equity and cash flows
(including the notes and schedules thereto) of the Company and its consolidated
subsidiaries contained or incorporated by reference in the Company Disclosure
Statements have been prepared from, and are in accordance with, the books and
records of the Company and its consolidated subsidiaries, comply in all
material respects with applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto, and present
fairly, in all material respects, the consolidated financial position of the
Company and its consolidated subsidiaries as of their respective dates, and the
consolidated results of their operations and their cash flows for the periods
presented therein, in conformity with United States generally accepted
accounting principles ("GAAP") applied on a consistent basis, except as
otherwise noted therein, and subject in the case of quarterly financial
statements to normal year-end audit adjustments, and except that the quarterly
financial statements do not contain all of the footnote disclosures required by
GAAP.
3.6 Absence of Certain Changes. Except as listed on Schedule 3.6 in
the Company's Disclosure Letter, contemplated by this Agreement or disclosed in
the Company Disclosure Statements filed prior to the date hereof, since
September 30, 2000, the Company and each of its Significant Subsidiaries has
conducted their businesses in the ordinary course of business consistent with
past practice, has not incurred any liability or obligation of any nature,
whether accrued, absolute, contingent or otherwise, outside of the ordinary
course of business and there has not been any event or occurrence which,
individually or in the aggregate, has had a Company Material Adverse Effect.
3.7 Vote Required. (i) The affirmative vote of the holders of a
majority of the outstanding Class A Common Stock and the Class B Common Stock,
each voting as a separate class, is the only vote of the holders of any class
or series of capital stock of the Company necessary to approve this Agreement
and the Share Exchange, (ii) the affirmative vote of the holders of the
majority of the outstanding Class A Common Stock, voting as a separate class,
is the only vote of the holders of any class or series of capital stock of the
Company necessary to approve the Stock Dividend and (iii) the affirmative vote
of a majority of each of the Class A Common Stock and the Class B Common Stock
voting on the Charter Amendment, each voting as a separate class, is the only
vote of the holders of any class or series of capital stock of the Company
necessary to approve the Charter Amendment, in each case under the North
Carolina Corporation Law and the Bylaws of the Company.
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3.8 Opinion of Financial Advisor. The Special Committee has received
the opinion of Credit Suisse First Boston Corporation ("CSFB") dated November
16, 2000 that, as of the date of such opinion, the Exchange Ratio is fair to
the Public Shareholders from a financial point of view.
3.9 Finders and Investment Bankers. No broker, investment banker or
other person is entitled to any broker's or finder's fee or similar
compensation in connection with this Agreement or the Share Exchange based upon
arrangements made by the Company, except for CSFB whose fees shall be paid by
the Company.
3.10 North Carolina Shareholder Protection Act. The Board of Directors
of the Company has taken all necessary action, including the approval of an
amendment to the Company's Bylaws, such that Article 9 of the North Carolina
Corporation Law is not applicable to the Company or to the transactions
contemplated by this Agreement, including the Share Exchange. The bylaw
described in the preceding sentence will become effective upon the earlier of
(i) the day immediately preceding the meeting of Company shareholders to
consider this Agreement and the Share Exchange and (ii) December 31, 2000. The
Special Committee has recommended approval of such amendment to the Company's
Bylaws to the Board of Directors of the Company.
3.11 Takeover Laws. This Agreement and the transactions contemplated
hereby are exempt from the requirements of any "moratorium," "control share,"
"fair price," "affiliate transaction," "business combination" or other
antitakeover laws and regulations of the State of North Carolina, including,
without limitation, Article 9A of the North Carolina Corporation Law.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby represents and warrants to the Company as follows:
4.1 Organization. Each of Parent and its subsidiaries that is a
Significant Subsidiary (other than the Company) is a societe anonyme or other
entity duly organized, validly existing and in good standing under the laws of
its jurisdiction of organization and has all requisite corporate power and
authority to own, lease and operate its properties and to conduct its business
as currently conducted, except where the failure to be so organized, existing
and in good standing or to have such power and authority would not,
individually or in the aggregate, have a Parent Material Adverse Effect. Each
of Parent and its Significant Subsidiaries (other than the Company) is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification or licensing
necessary, except where the failure to be so duly qualified or licensed would
not, individually or in the aggregate, have, or reasonably be expected to have,
a Parent Material Adverse Effect. The term "PARENT MATERIAL ADVERSE EFFECT"
shall mean any change or effect that individually or in the aggregate is
materially adverse to the financial condition, business or results of
operations of Parent and its subsidiaries taken as a whole; provided, however,
that such term shall not include (i) changes or effects which are attributable
to the national economy in which Parent or its subsidiaries operate or
financial markets or to conditions generally affecting the industry in which
Parent or its subsidiaries
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<PAGE> 19
participate and (ii) any Company Material Adverse Effect. Parent has heretofore
delivered to the Company a true and complete (free) translated copy of Parent's
Articles of Association as currently in effect.
4.2 Capitalization.
(a) The subscribed capital of Parent is 1,015,470,000 Belgian
Francs. As of November 15, 2000, there were 52,031,725 ordinary voting shares,
without nominal value, issued and outstanding and no other capital stock was
issued or outstanding. All such issued and outstanding Parent Shares are duly
authorized, validly issued, fully paid, nonassessable and were issued in
compliance with any preemptive rights applicable to such shares. Parent has no
outstanding bonds, debentures, notes or other obligations the holders of which
have the right to vote (or which are convertible into or exercisable for
securities having the right to vote) with the shareholders of Parent on any
matter. Except as disclosed in the Parent Disclosure Statements (as defined
below) filed or disclosed prior to the date hereof, Parent owns directly or
indirectly all of the issued and outstanding capital stock of each of its
Significant Subsidiaries, free and clear of all liens, pledges, security
interests, claims or other encumbrances. Except for this Agreement and warrants
to purchase 297,450 Parent Shares issued to directors, officers and employees
of Parent and its subsidiaries, there are not at the date of this Agreement any
existing options, warrants, calls, subscriptions, convertible securities, or
other rights, agreements or commitments which obligate Parent or any subsidiary
of Parent (other than the Company) to issue, transfer, deliver or sell any
shares of capital stock of Parent or any subsidiary of Parent (other than the
Company), or obligating Parent or any subsidiary of Parent (other than the
Company) to grant, extend or enter into any such agreement or commitment.
(b) There are no voting trusts or other agreements or
understandings to which Parent is a party with respect to the voting of the
capital stock of Parent.
4.3 Authorization of Agreement.
(a) Parent has all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized and approved by the Board of Directors of Parent, and except for the
shareholder approvals as described in Section 4.7 below, no other corporate
proceedings on the part of Parent are necessary to authorize this Agreement or
the transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Parent and constitutes a valid and binding agreement
of Parent, enforceable against Parent in accordance with its terms, except for
the Enforceability Exception.
(b) At meetings duly noticed, called and held, the Board of
Directors of Parent has unanimously determined that this Agreement and the
transactions contemplated hereby are fair to and in the best interests of the
shareholders of Parent and has resolved to submit to the shareholders of Parent
a proposal to authorize the Board of Directors of Parent to increase the
capital of Parent in an amount sufficient to consummate the Share Exchange.
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<PAGE> 20
4.4 Governmental Filings; No Violations.
(a) Except for (i) filings required by the applicable
requirements of the Exchange Act and the Securities Act, (ii) the filing and
recordation of appropriate Share Exchange documents, including Articles of
Share Exchange, as required by the North Carolina Corporation Law, (iii)
filings under securities or blue sky laws or takeover statutes of the various
states, (iv) filings required by the Belgian Banking and Finance Commission
(the "CBF") or the Brussels Stock Exchange (or Euronext Brussels), (v) listing
applications with the NYSE or the National Association of Securities Dealers,
as the case may be, and (vi) filings in connection with any applicable transfer
or other taxes in any applicable jurisdiction, no filing with, and no permit,
authorization, consent or approval of, any public body or authority is
necessary for the consummation by Parent of the transactions contemplated by
this Agreement, the failure to make or obtain which would, individually or in
the aggregate, have a Parent Material Adverse Effect or materially adversely
affect the ability of Parent to perform its obligations hereunder or to
consummate the transactions contemplated hereby.
(b) Assuming compliance with the matters referred to in
Section 4.4(a) above and the receipt of shareholder approval referred to in
Section 4.7 below, none of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby, or compliance by Parent
with any of the provisions hereof will (i) conflict with or result in any
violation of any provision of the Articles of Association of Parent or other
governing document of Parent, (ii) result in a violation or breach of, or
constitute a default (or give rise to any right of termination, cancellation or
acceleration) under any note, bond, mortgage, indenture, license, agreement or
other instrument or obligation to which Parent or any of its subsidiaries
(other than the Company) is a party, or by which any of them or any of their
respective properties or assets is bound, or (iii) violate any statute, rule,
regulation, order, injunction, writ or decree of any public body or authority
by which Parent or any of its subsidiaries (other than the Company), or any of
their respective properties or assets is bound, excluding from the foregoing
clauses (ii) and (iii) violations, breaches, rights or defaults which would
not, individually or in the aggregate, have a Parent Material Adverse Effect or
materially adversely affect Parent's ability to perform its obligations
hereunder or to consummate the transactions contemplated hereby.
4.5 Disclosure and Financial Statements.
(a) Since September 30, 1999, Parent has timely (i) filed all
reports, statements and accounts with the CBF, the Brussels Stock Exchange (or
Euronext Brussels), and the National Bank of Belgium required to be filed by it
and (ii) publicly disclosed all statements and information required to be
publicly disclosed (the documents and information referred to in clauses (i)
and (ii) above are collectively hereinafter referred to as the "PARENT
DISCLOSURE STATEMENTS"), all of which have complied, as of their respective
filing date, in all material respects with all applicable requirements. None of
such Parent Disclosure Statements, at the time filed or disclosed, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(b) The consolidated balance sheets, the related statements
of consolidated profit and loss account and the statements of consolidated cash
flows (including the notes and
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<PAGE> 21
schedules thereto) of Parent and its consolidated subsidiaries contained in the
Parent Disclosure Statements have been prepared from, and are in accordance
with, the books and records of Parent and its consolidated subsidiaries, comply
in all material respects with applicable accounting requirements, and present
fairly, in all material respects, the consolidated financial position of Parent
and its consolidated subsidiaries as of their respective dates, and the
consolidated results of their operations and their cash flows for the periods
presented therein, in conformity with Belgian generally accepted accounting
principles applied on a consistent basis, except as otherwise noted therein.
4.6 Absence of Certain Changes. Except as set forth on Section 4.6 of
the disclosure letter delivered by Parent to the Company prior to the execution
of this Agreement (the "PARENT DISCLOSURE LETTER"), contemplated by this
Agreement or disclosed in the Parent Disclosure Statements filed or disclosed
prior to the date hereof, since September 30, 2000, Parent and each of its
Significant Subsidiaries (other than the Company) have conducted their
businesses in the ordinary course of business consistent with past practice,
have not incurred any liability of obligation of any nature, whether accrued,
absolute, contingent or otherwise, outside of the ordinary course of business
and there has not been any event or occurrence which, individually or in the
aggregate, has had a Parent Material Adverse Effect.
4.7 Vote Required. (i) The affirmative vote of the holders of
seventy-five percent of the Parent Shares represented at a properly convened
shareholders meeting of Parent to increase the capital of Parent or to
authorize the Board of Directors of Parent to issue Parent Shares and (ii) the
affirmative vote of the holders of eighty percent of the Parent Shares
represented at a properly convened shareholders meeting of Parent to approve
the item referred to in clause (ii) of Section 5.4(b) hereof, are the only
votes of the holders of Parent Shares necessary for Parent to consummate the
Share Exchange and the transactions contemplated hereby.
4.8 Compliance with Laws. Neither Parent nor any of its Significant
Subsidiaries (other than the Company) is in violation of any statute, law,
ordinance, regulation, rule, judgment, decree, order, injunction or other
authorization or approval of any governmental authority applicable to its
business or operations, except for violations that would not, individually or
in the aggregate, result in a Parent Material Adverse Effect.
4.9 Litigation. Except as set forth on Section 4.9 of the Parent
Disclosure Letter or disclosed in the Parent Disclosure Statements filed or
disclosed prior to the date hereof, there is no action, suit, investigation or
proceeding pending against or, to the knowledge of Parent, threatened against
or affecting Parent or any of its Significant Subsidiaries (other than the
Company) or any of their respective properties that, individually or in the
aggregate, would have a Parent Material Adverse Effect.
4.10 Finders and Investment Bankers. No broker, investment banker or
other person is entitled to any broker's or finder's fee or similar
compensation in connection with this Agreement or the Share Exchange based upon
arrangements made by Parent, except for Salomon Smith Barney Inc. whose fees
shall be paid by Parent.
4.11 No Foreign Withholding. There is no law, rule or regulation of
any taxing authority or other governmental entity within Belgium that would
require Parent, the Company
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or the Exchange Agent to deduct from or withhold any portion of the Share
Exchange Consideration.
ARTICLE V
COVENANTS
5.1 Conduct of the Business of the Company. Prior to the Effective
Time, except as set forth on Section 5.1 of the Company Disclosure Letter,
unless Parent shall otherwise consent in writing, the Company shall, and shall
cause each Company Subsidiary to, carry on their respective businesses only in
the ordinary course and consistent with past practice and, to the extent
consistent therewith and with the specific terms of this Agreement, use all
commercially reasonable efforts to preserve intact their current business
organizations, keep available the services of their current employees and
preserve their relationships with customers, suppliers and others having
business dealings with them. From the date hereof until the Effective Time, the
Company shall operate in accordance with the terms of the Shareholders
Agreement and the Bylaws of the Company and not take any action in violation of
the Shareholders Agreement or the Bylaws without obtaining the requisite
approval set forth therein. Except as otherwise provided in this Agreement, and
without limiting the generality of the foregoing, from the date hereof until
the Effective Time, without the written consent of Parent (which consent shall
be deemed to have been given with respect to any Approved Matter), the Company
shall not:
(a) issue or sell any stock or other securities of the
Company or any Company Subsidiary, or options or warrants for or obligations
convertible into such stock or securities except for (i) the issuance of Class
A Common Stock pursuant to (x) the exercise of Company Options outstanding as
of the date hereof and (y) the Stock Dividend and (ii) the issuance in the
ordinary course of business of options to acquire up to two million five
hundred thousand shares of Class A Common Stock under the terms of the Company
Option Plans, provided that such option grants have been approved by the Stock
Option Committee of the Company Board of Directors;
(b) sell or otherwise dispose of a substantial part of the
Company's assets other than in the ordinary course of business;
(c) and shall not permit a Company Subsidiary to, merge or
consolidate with or into any other corporation or reorganize, recapitalize or
liquidate;
(d) and shall not permit any Company Subsidiary to, adopt or
propose any change to its articles of incorporation or bylaws (or similar
organizational documents) other than the Charter Amendment;
(e) and shall not permit any Company Subsidiary to (i)
declare, set aside or pay any dividend or other distribution with respect to
any shares of capital stock of the Company or the applicable Company Subsidiary
other than (x) cash dividends on the Company Common Stock pursuant to Section
5.21 below, and (y) the Stock Dividend or (ii) repurchase, redeem or otherwise
acquire any outstanding shares of capital stock or other securities of, or
other ownership interests in, the Company;
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(f) settle any material audit, make or change any material
tax election or file any material amended tax return;
(g) incur any indebtedness except for (i) trade debt in the
ordinary course of business or pursuant to existing credit facilities or
arrangements, (ii) indebtedness necessary to consummate the transactions
contemplated by this Agreement, including pursuant to Section 2.3 above and
(iii) the refinancing of any outstanding indebtedness of the Company, fail to
make any required contribution to any benefit plan maintained by the Company,
increase compensation, bonus or other benefits payable to any executive officer
or former employee except for increases approved by the Compensation Committee
of the Company Board of Directors or enter into any settlement or consent with
respect to any pending litigation outside of the ordinary course of business;
(h) change any method of accounting or accounting practice by
the Company or any of the Company Subsidiaries, except for any such change
required by U.S. GAAP;
(i) take any action that would give rise to a claim under the
Worker Adjustment and Retraining Notification Act of 1988 ("WARN ACT") or any
similar state law or regulation because of a "plant closing" or "mass layoff"
(each as defined in the WARN Act);
(j) and no Company Subsidiary shall (A) adopt, amend (other
than amendments that reduce the amounts payable by the Company or any Company
Subsidiary, or amendments required by law to preserve the qualified status of
any benefit plan maintained by the Company) or assume an obligation to
contribute to any employee benefit plan or arrangement of any type or
collective bargaining agreement or enter into any employment, severance or
similar contract with any person (including, without limitation, contracts with
management of the Company or any Company Subsidiaries that might require that
payments be made upon consummation of the transactions contemplated hereby) or
amend any such existing contracts to increase any amounts payable thereunder or
benefits provided thereunder, (B) engage in any transaction in connection with
which the Company or any Company Subsidiary could be subjected (directly or
indirectly) to either a civil penalty assessed pursuant to subsections (c), (i)
or (l) of Section 502 of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") or a tax imposed pursuant to Chapter 43 of Subtitle D of
the Code, (C) terminate any benefit plan maintained by the Company in a manner,
or take any other action with respect to any benefit plan maintained by the
Company, that could result in the liability of the Company or any Company
Subsidiary to any person, (D) take any action that could adversely affect the
qualification of any Company benefit plan or its compliance with the applicable
requirements of ERISA, (E) fail to make full payment when due of all amounts
which, under the provisions of any Company benefit plan, any agreement relating
thereto or applicable law, the Company or any Company Subsidiary are required
to pay as contributions thereto or (F) fail to file, on a timely basis, all
reports and forms required by federal regulations with respect to any Company
benefit plan;
(k) and will not permit any Company Subsidiary to, (i) take,
or agree or commit to take, any action that would make any representation or
warranty of the Company hereunder inaccurate in any respect at, or as of any
time prior to, the Effective Time or (ii) omit,
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or agree or commit to omit, to take any action necessary to prevent any such
representation or warranty from being inaccurate in any respect at any such
time; and
(l) and shall not permit any Company Subsidiary to agree or
commit to do any of the foregoing.
5.2 Conduct of the Business of Parent. Prior to the Effective Time,
except as set forth on Section 5.2 of the Parent Disclosure Letter, unless the
Company shall otherwise consent in writing (such consent to be effective only
if recommended by the Special Committee), Parent shall, and shall cause each
subsidiary (other than the Company and its subsidiaries) to, carry on their
respective businesses only in the ordinary course and consistent with past
practice and, to the extent consistent therewith and with the specific terms of
this Agreement, use all commercially reasonable efforts to preserve intact
their current business organizations, keep available the services of their
current employees and preserve their relationships with customers, suppliers
and others having business dealings with them. Except as otherwise provided in
this Agreement, and without limiting the generality of the foregoing, from the
date hereof until the Effective Time, without the written consent of the
Company, Parent shall not:
(a) issue or sell any stock or other securities of Parent or
any Significant Subsidiary of Parent, or options or warrants for or obligations
convertible into such stock or securities except for (i) the issuance of Parent
Shares pursuant to the exercise of options and warrants outstanding as of the
date hereof, (ii) capital increases of wholly-owned Significant Subsidiaries of
Parent which are subscribed for by Parent and (iii) the issuance of options or
warrants to acquire Parent Shares granted to directors, officers and employees
of Parent and its subsidiaries in the ordinary course of business in an amount
not to exceed 300,000 Parent Shares;
(b) sell or otherwise dispose of a substantial part of
Parent's assets other than in the ordinary course of business;
(c) and shall not permit any of its Significant Subsidiaries
to, merge or consolidate with or into any other corporation or reorganize,
recapitalize or liquidate;
(d) and shall not permit any Significant Subsidiary to, adopt
or propose any change to its Articles of Association (or similar organizational
documents) other than in connection with transactions permitted by Section
5.2(a)(ii) above;
(e) declare, set aside or pay any dividend or other
distribution with respect to any Parent Shares other than cash dividends on
Parent Shares in an amount not greater than EUR 2.00 per share per calendar
year;
(f) settle any material audit, make or change any material
tax election or file any material amended tax return;
(g) change any method of accounting or accounting practice by
Parent, except for any such change required by Belgian GAAP;
(h) incur any indebtedness outside of the ordinary course of
business except for (i) any indebtedness necessary to consummate the Share
Exchange and the other transactions
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contemplated by this Agreement, including the Parent Repurchase Program (as
defined in Section 5.4(b) below) and (ii) the refinancing of any outstanding
indebtedness of Parent;
(i) and will not permit any subsidiary to, (i) take, or agree
or commit to take, any action that would make any representation or warranty of
Parent hereunder inaccurate in any respect at, or as of any time prior to, the
Effective Time or (ii) omit, or agree or commit to omit, to take any action
necessary to prevent any such representation or warranty from being inaccurate
in any respect at any such time; and
(j) and shall not permit any of its Significant Subsidiaries
to agree or commit to do any of the foregoing.
5.3 Non-Solicitation. From the date of this Agreement until the
termination hereof, the Company and each Company Subsidiary shall not, and
shall cause their respective officers, directors, employees or other agents not
to, directly or indirectly, (i) take any action to solicit, initiate or
encourage any Company Acquisition Proposal (as defined below) or (ii) engage in
negotiations with, or disclose any nonpublic information relating to the
Company or any Company Subsidiary, respectively, or afford access to their
respective properties, books or records to any person that may be considering
making, or has made, a Company Acquisition Proposal. Nothing contained in this
Section 5.3 shall prohibit the Company and its Board of Directors from taking
and disclosing a position with respect to a tender offer by a third party
pursuant to Rules 14d-9 and 14e-2(a) promulgated by the SEC under the Exchange
Act. The term "COMPANY ACQUISITION PROPOSAL" as used herein means any offer or
proposal for, or any indication of interest in, a merger, share exchange,
consolidation or other business combination directly or indirectly involving
the Company or any Company Subsidiary or the acquisition of a substantial
equity interest in, or a substantial portion of the assets of, any such party,
other than the transactions contemplated by this Agreement.
5.4 Shareholders' Meetings.
(a) The Company shall take all action necessary in accordance
with applicable law and its Articles of Incorporation and Bylaws to convene a
meeting of its shareholders as promptly as practicable to consider and vote
upon the approval of this Agreement, the Share Exchange, the Stock Dividend and
the Charter Amendment. The Company shall take all reasonable action to solicit
such approval, including, without limitation, timely mailing the Proxy
Statement/Prospectus (as defined below). In the Proxy Statement/Prospectus,
subject to their duties under applicable law, the Board of Directors of the
Company shall recommend approval of this Agreement, the Share Exchange, the
Stock Dividend and the Charter Amendment to the Public Shareholders. At such
meeting, Parent shall cause all shares of Company Common Stock then owned by it
and its subsidiary owning Company Common Stock to be voted in favor of the
approval of this Agreement, the Share Exchange, the Stock Dividend and the
Charter Amendment.
(b) To the extent not already taken, Parent shall take all
action necessary in accordance with applicable law and its Articles of
Association to convene a meeting of its shareholders as promptly as practicable
to consider and vote upon proposals to (i) increase the capital of Parent in an
amount sufficient to consummate the Share Exchange or to authorize the
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Board of Directors of Parent to issue a sufficient number of Parent Shares to
consummate the Share Exchange and (ii) grant to the Board of Directors of
Parent the authorization to repurchase outstanding Parent Shares up to the
maximum amount permitted by Belgian law (the "PARENT REPURCHASE PROGRAM").
Parent shall take all lawful action to solicit such approval from its
shareholders.
5.5 SEC Filings; Registration Statement.
(a) To the extent required, Parent and the Company shall
timely file with the SEC a Transaction Statement on Schedule 13E-3 (the
"SCHEDULE 13E-3") with respect to the Share Exchange and disseminate to the
Public Shareholders such information as is required by Rule 13e-3 under the
Exchange Act.
(b) Parent and the Company shall cooperate and promptly
prepare and Parent shall file with the SEC as soon as practicable a
Registration Statement on Form F-4 (the "REGISTRATION STATEMENT") under the
Securities Act, with respect to Parent Shares represented by the ADRs, a
portion of which Registration Statement shall also serve as the proxy statement
with respect to the meeting of the shareholders of the Company in connection
with the consideration of the Share Exchange, the Charter Amendment and the
Stock Dividend and the prospectus with respect to such Registration Statement
(the "PROXY STATEMENT/PROSPECTUS").
(c) Parent shall promptly prepare and cause the depositary to
file with the SEC a registration statement on Form F-6 with respect to the
registration of ADRs under the Securities Act and use commercially reasonable
efforts to have such Form F-6 declared effective as promptly as practicable.
(d) The respective parties hereto shall cause the Schedule
13E-3 (to the extent required), the Proxy Statement/Prospectus and the
Registration Statement to comply as to form in all material respects with the
applicable provisions of the Securities Act, the Exchange Act and the rules and
regulations thereunder. Parent shall use commercially reasonable efforts, and
the Company shall cooperate with Parent, to have the Registration Statement
declared effective by the SEC as promptly as practicable and to keep the
Registration Statement effective as long as is necessary to consummate the
Share Exchange. Parent and the Company shall, as promptly as practicable,
provide copies to each other of any written comments received from the SEC with
respect to the Schedule 13E-3 (to the extent required) and the Registration
Statement and advise each other of any verbal comments with respect to the
Schedule 13E-3 (to the extent required) and the Registration Statement received
from the SEC. Parent shall use commercially reasonable efforts to obtain, prior
to the effective date of the Registration Statement, all necessary state
securities law or "blue sky" permits or approvals required to carry out the
transactions contemplated by this Agreement and shall pay all expenses incident
thereto. Parent agrees that the Proxy Statement/Prospectus and each amendment
or supplement thereto at the time of mailing thereof and at the time of the
meeting of shareholders of the Company, and the Schedule 13E-3 (to the extent
required) and each amendment or supplement thereto, at the time it is filed and
the Registration Statement, at the time it becomes effective, will not include
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided, however, that the foregoing shall not apply to the extent that any
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such untrue statements of a material fact or omission to state a material fact
was made by Parent in reliance upon and in conformity with written information
concerning the Company furnished to Parent by the Company specifically for
inclusion in the Proxy Statement/Prospectus, Schedule 13E-3 (to the extent
required) or Registration Statement. The Company agrees that the written
information concerning the Company provided by it specifically for inclusion in
the Proxy Statement/Prospectus and each amendment or supplement thereto, at the
time of mailing thereof and at the time of the meeting of shareholders of the
Company, and the written information concerning the Company provided by the
Company specifically for inclusion in the Schedule 13E-3 (to the extent
required) and each amendment or supplement thereto, at the time it is filed,
and the written information concerning the Company provided by it specifically
for inclusion in the Registration Statement, at the time it becomes effective,
will not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. No amendment or supplement to the Registration Statement shall be
made by Parent or the Company without the approval of the other party, which
approval shall not be unreasonably withheld. Parent shall advise the Company,
promptly after Parent receives notice thereof, of the time when the
Registration Statement has become effective.
(e) Parent shall promptly prepare and file with the
applicable Belgian regulatory authorities any proxy statement or other
materials required, if any, in connection with the Parent shareholders meeting
contemplated by Section 5.4(b) above and shall comply with all legal
requirements applicable to such meeting.
5.6 Access to Information; Confidentiality. To the extent
permitted by applicable law, from the date hereof until the Effective Time, the
Company and Parent each agrees as to itself and its Significant Subsidiaries
that it shall afford (a) to the counsel, financial advisors, auditors, and other
authorized representatives of the other reasonable access during normal business
hours to its and its Significant Subsidiaries' offices, properties, books and
records and shall furnish to the other and the other's counsel, financial
advisors, auditors and other authorized representatives (i) a copy of each
report, schedule, registration statement and other document filed by it during
such period pursuant to the requirements of federal and state securities laws or
comparable foreign laws and (ii) copies of such financial and operating data and
other information as such persons may reasonably request and shall instruct its
employees, auditors, counsel and financial advisors to cooperate with the other
in its investigation of the business of the other, and (b) access to the
independent auditors of the other. Notwithstanding the foregoing, no
investigation pursuant to this Section 5.6 shall affect any representation or
warranty made hereunder. Each party shall hold in confidence all nonpublic
information until such time as such information is otherwise publicly available
and, if this Agreement is terminated, each party shall deliver to the other all
documents, work papers and other materials (including copies) obtained as a
result of this Agreement or in connection herewith, whether so obtained before
or after the execution hereof.
5.7 Filings, Other Action.
(a) Upon the terms and subject to the conditions of this
Agreement, each of Parent and the Company agrees to use commercially reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable under
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any applicable laws to consummate and make effective the transactions
contemplated hereby as promptly as practicable including, but not limited to,
(i) the preparation and filing of all forms, registrations and notices required
to be filed to consummate the transactions contemplated hereby and the taking
of such actions as are necessary to obtain any requisite approvals, consents,
orders, exemptions or waivers by any third party or governmental authority,
(ii) the satisfaction of the conditions to the consummation of the Share
Exchange, the Charter Amendment and the Stock Dividend, (iii) contesting any
legal proceeding challenging the Share Exchange, the Charter Amendment or the
Stock Dividend and (iv) the execution of any additional instruments, including
the Articles of Share Exchange and Articles of Amendment to the Articles of
Incorporation of the Company, necessary to consummate the transactions
contemplated hereby. Subject to the terms and conditions of this Agreement and
the applicable provisions of the North Carolina Corporation Law, each party
hereto agrees to use commercially reasonable efforts to cause the Effective
Time to occur as soon as practicable after the shareholder meetings of the
Company and Parent with respect to the matters described in Section 5.4 above.
In case at any time after the Effective Time any further action is necessary to
carry out the purposes of this Agreement, the proper officers and directors of
each party hereto shall use commercially reasonable efforts to take all such
necessary action.
(b) Each party hereto shall promptly consult with the other
with respect to, provide any necessary information with respect to and provide
the other (or its counsel) copies of all filings made by such party with any
governmental authority or any other information supplied by such party with any
governmental authority in connection with this Agreement and the transactions
contemplated hereby. Each party hereto shall promptly inform the other of any
communication from any governmental authority regarding any of the transactions
contemplated hereby. If either party hereto or any affiliate thereof receives a
request for additional information or documentary material from any
governmental authority with respect to the transactions contemplated hereby,
then such party shall endeavor in good faith to make, or cause to be made, as
soon as reasonably practicable and after consultation with the other party, an
appropriate response in compliance with such request.
5.8 Public Announcements. Parent and the Company shall (i) consult
with each other before issuing any press release, making any filing with the
SEC or CBF or otherwise making any public statements with respect to the Share
Exchange, this Agreement and the transactions contemplated hereby and (ii) not
issue any such press release, make any SEC or CBF filing or make any such
public statement prior to such consultation, except as may be required by law
or by obligations pursuant to any listing agreement with any securities
exchange.
5.9 NYSE/Euronext Brussels Listing.
(a) Parent shall use commercially reasonable efforts to cause
the ADRs to be issued in the Share Exchange to be approved for listing, subject
to official notice of issuance, on the New York Stock Exchange ("NYSE") on or
prior to the day immediately preceding the Closing Date. To the extent the ADRs
cannot be listed on the NYSE, Parent shall use commercially reasonable efforts
to cause them to be quoted on the Nasdaq National Market ("NASDAQ") on or prior
to the day immediately preceding the Closing Date.
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(b) Parent shall use commercially reasonable efforts to cause
the Parent Shares to be issued in the Share Exchange to be approved for
listing, subject to official notice of issuance, on Euronext Brussels on or
prior to the day immediately preceding the Closing Date.
5.10 Notice of Certain Events. The Company and Parent
shall promptly notify each other of (i) the occurrence or non-occurrence of any
fact or event which would be reasonably likely (A) to cause any representation
or warranty contained in this Agreement to be untrue or inaccurate in any
material respect at any time from the date hereof to the Effective Time or (B)
to cause any covenant, condition or agreement under this Agreement not to be
complied with or satisfied in any material respect and (ii) any failure of the
Company or Parent to comply or satisfy any covenant, condition or agreement to
be complied with or satisfied by it hereunder in any material respect; provided,
however, that no such notification shall affect the representations or
warranties of any party hereto or the conditions to the obligations of any party
hereunder. Each of the Company and Parent shall promptly notify each other of
any notice or other communication from any person alleging that the consent of
such person is or may be required in connection with the transactions
contemplated by this Agreement or any notice or other communication from any
governmental authority in connection with the transactions contemplated by this
Agreement.
5.11 Directors' and Officers' Indemnification and Insurance.
(a) Parent and the Company agree that all rights to
exculpation and indemnification currently provided in favor of the directors
and officers of the Company and the Company Subsidiaries under the Articles of
Incorporation and Bylaws of the Company with respect to acts or omissions of
such persons on or prior to the Effective Time shall survive the Effective Time
and continue in full force and effect and no action shall be taken by Parent or
the Company after the Effective Time that would adversely affect such
exculpation and indemnification rights. Following the Effective Time, the
Company shall indemnify and hold harmless individuals who on or prior to the
Effective Time were officers or directors of the Company or Company
Subsidiaries to the extent set forth in the preceding sentence.
(b) Parent shall cause the Company to maintain in effect for
six years from the Effective Time the current directors' and officers'
liability insurance policies maintained by the Company, or policies of at least
the same coverage containing terms and conditions which are not materially less
favorable, with respect to matters occurring prior to the Effective Time;
provided, however, that in no event shall the Company be required to expend
pursuant to this Section 5.11 more than an amount per year equal to 150% of
current annual premiums paid by the Company for such insurance. In the event
that, but for the proviso to the immediately preceding sentence, the Company
would be required to expend more than 150% of current annual premiums, the
Company shall obtain the maximum amount of such insurance obtainable by payment
of annual premiums equal to 150% of current annual premiums.
5.12 Affiliates. Prior to the Closing Date, the Company
shall cause to be delivered to Parent a letter identifying, to the best of the
Company's knowledge, all persons who are, at the time of the Company shareholder
meeting relating to the approval of the Share Exchange, deemed to be
"affiliates" of the Company for purposes of Rule 145 under the Securities Act
(the "COMPANY AFFILIATES"). The Company shall use its reasonable best efforts to
cause each person
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who is so identified as a Company Affiliate to deliver to Parent on or prior to
the Closing Date a letter agreement substantially in the form of Exhibit 5.11.
5.13 Rule 144 Reporting. From and after the Effective Time, unless and
until each Company Affiliate has disposed of all ADRs or Parent Shares received
by it as Share Exchange Consideration, such ADRs or Parent Shares are permitted
to be resold pursuant to Rule 145(d)(3) under the Securities Act or such ADRs
or Parent Shares are covered by an effective registration statement under
Section 5 of the Securities Act, Parent shall make and keep "available adequate
current public information" (as those terms are used in Rule 144 under the
Securities Act) with respect to Parent and, upon any reasonable request by such
Company Affiliate, provide a statement as to such availability.
5.14 Transfer Taxes. The Company shall pay any transfer taxes payable
in connection with the Share Exchange and shall be responsible for the
preparation and filing of any required tax returns, declarations, reports,
schedules and information returns with respect to such taxes. At and following
the Effective Time, the Company and Parent shall be jointly and severally
liable for all stamp duties, stamp duty reserve tax and other similar taxes
imposed on the Company and/or Parent in connection with the issuance of ADRs
and the Parent Shares to be issued in the Share Exchange. Notwithstanding the
foregoing, Parent shall not be liable for the payment of any amounts which
would cause the Share Exchange to not qualify as a reorganization under Section
368(a)(1)(B) of the Code.
5.15 Shareholder Litigation. The Company shall give Parent reasonable
opportunity to participate in the defense of any shareholder litigation against
the Company and/or its officers and directors relating to the transactions
contemplated hereby.
5.16 Accounting Matters.
(a) The Company shall use commercially reasonable efforts to
cause to be delivered to Parent a letter of PricewaterhouseCoopers LLP, dated a
date within two business days before the effective date of the Registration
Statement, and addressed to Parent, in form and substance reasonably
satisfactory to Parent and customary in scope and substance for "comfort"
letters delivered by independent public accountants in connection with
registration statements and proxy statements similar to the Registration
Statement.
(b) Parent shall use commercially reasonable efforts to cause
to be delivered to the Company a letter of Deloitte & Touche Reviseurs
d'Entreprises SCRL, dated a date within two business days before the effective
date of the Registration Statement, and addressed to the Company, in form and
substance satisfactory to the Company and customary in scope and substance for
"comfort" letters delivered by independent public accountants in connection
with registration statements and proxy statements similar to the Registration
Statement.
5.17 Shareholders Agreement. At the Effective Time, the Company and
Parent shall, and Parent shall cause Detla to, terminate the Shareholders
Agreement.
5.18 Tax Treatment. The Company and Parent shall use commercially
reasonable efforts to cause the Share Exchange to qualify, and shall not take,
and shall use commercially reasonable efforts to prevent any subsidiary of such
party from taking (except for the Company
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in the case of Parent), any actions which could prevent the Share Exchange from
qualifying, as a reorganization under the provisions of Section 368(a)(1)(B) of
the Code, provided that Parent shall have no obligation to sell any of its
shares of Company Common Stock under this Section 5.18. Parent hereby agrees
that it shall not purchase any Parent Shares under the Parent Repurchase
Program until after the Effective Time.
5.19 Additional Members of the Parent Board of Directors. Parent will
cause the Board of Directors of Parent to use commercially reasonable efforts,
including without limitation convening a shareholders meeting, to cause R.
William McCanless, Hugh G. Farrington and three Independent Directors (as
defined below) who are reasonably acceptable to the Special Committee, to be
members of the Parent Board of Directors prior to, as of or immediately after
the Closing, for a term of two years. For purposes of this Section 5.19,
"INDEPENDENT DIRECTOR" shall mean an individual who is not a director,
executive officer or employee of Parent or an executive officer or employee of
the Company or a relative of any such person. In the event such Independent
Directors are not identified by Parent and are reasonably acceptable to the
Special Committee or are not otherwise approved to serve as Parent directors in
advance of the time that such persons may be elected or appointed to Parent's
Board of Directors on or prior to Closing, it is agreed that one or more of the
members of the Special Committee selected by Parent who has agreed to serve
shall be nominated to serve on the Parent Board of Directors on a temporary
basis. In the event any member of the Special Committee becomes a member of the
Parent Board of Directors pursuant to this Section 5.19, if requested such
person shall resign as a director of Parent effective upon the election or
appointment of a replacement Independent Director reasonably acceptable to the
Special Committee. The parties hereto agree that from and after the Effective
Time, the Special Committee shall have no authority under this Agreement except
with respect to consideration of the three directors proposed by Parent as
provided above in this Section 5.19 and that in connection with the Special
Committee's consideration thereof it shall respond to Parent within a
reasonable period of time.
5.20 Employee Benefits. Parent and the Company hereby acknowledge that
it is their intent that following the Effective Time the Company will provide
its employees with benefits, including with respect to stock options or similar
equity incentives, which, in the aggregate, are competitive with those
generally offered in the United States retail industry at such time.
5.21 Delhaize America Dividends. Subject to applicable law, the
Company shall pay regular quarterly cash dividends on the Company Common Stock
in accordance with past practice, including any internal corporate policies
with respect to the timing and amount of any such dividends, from the date
hereof until the Effective Time. Notwithstanding the foregoing, the parties
hereby agree that the fourth quarter 2000 dividend of the Company on the Class
A Common Stock and Class B Common Stock shall be $.1443 and $.1426
respectively, subject to applicable law.
ARTICLE VI
CLOSING CONDITIONS
6.1 Conditions to the Obligations of Each Party. The respective
obligations of each party hereto to effect the Share Exchange shall be subject
to the satisfaction or waiver, at or prior to the Effective Time, of the
following conditions:
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(a) each of this Agreement, the Share Exchange, the Stock
Dividend and the Charter Amendment shall have been approved by the shareholder
votes set forth in Section 3.7 above, in each case in accordance with the
Articles of Incorporation and Bylaws of the Company and the North Carolina
Corporation Law;
(b) the increase in the capital of Parent or the
authorization of the Board of Directors of Parent to issue Parent Shares, in
each case in an amount sufficient to consummate the Share Exchange shall have
been approved by the requisite vote of the Parent shareholders in accordance
with the Articles of Association of Parent and Belgian law;
(c) no statute, rule, regulation, temporary, preliminary or
permanent order or injunction shall have been promulgated, enacted, entered,
enforced or deemed applicable to the Share Exchange, the Charter Amendment or
the Stock Dividend or performance under this Agreement, by any state, federal
or foreign government or governmental authority or court or governmental agency
of competent jurisdiction and remain in effect that prohibits the consummation
of the Share Exchange, the Charter Amendment or the Stock Dividend;
(d) the Registration Statement shall have become effective
and shall be effective at the Effective Time, and no stop order suspending
effectiveness of the Registration Statement shall have been issued, and no
action, suit, proceeding or investigation by the SEC to suspend the
effectiveness thereof shall have been initiated and be continuing;
(e) each of the Company and Parent shall have obtained such
governmental permits, authorizations, consents or approvals required to
consummate the transactions contemplated hereby other than those which would
not result in a Company Material Adverse Effect or a Parent Material Adverse
Effect, respectively;
(f) the ADRs issuable to the Public Shareholders pursuant to
this Agreement shall have been approved for listing or quotation on either the
NYSE or NASDAQ, subject to official notice of issuance;
(g) the Parent Shares issued pursuant to this Agreement shall
have been approved for listing on Euronext Brussels, subject to official notice
of issuance and the CBF shall have approved the prospectus for the admission of
the same on Euronext Brussels;
(h) Parent and the Board of Directors of the Company shall
have received from Akin, Gump, Strauss, Hauer & Feld, L.L.P., counsel to
Parent, on the Closing Date, a written opinion reasonably satisfactory to
Parent and the Special Committee to the effect that for federal income tax
purposes (i) the Share Exchange should constitute a reorganization within the
meaning of Section 368(a)(1)(B) of the Code and (ii) no gain or loss should be
recognized by a shareholder of the Company that exchanges its Company Common
Stock for ADRs and/or Parent Shares, except with respect to cash received in
lieu of fractional ADRs or Parent Shares. In rendering such opinion, counsel to
Parent shall be entitled to rely upon information, representations and
assumptions provided by Parent and the Company which shall be reasonably
acceptable to counsel for the Special Committee;
(i) Parent and the Company shall have received from the
Internal Revenue Service a private letter ruling addressing certain issues
under Section 367(a)(i) of the Code,
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reasonably satisfactory to Parent and the Special Committee and sufficient to
enable Akin, Gump, Strauss, Hauer & Feld, L.L.P. to render the opinion
described in Section 6.1(h) above; and
(j) a Registration Statement on Form F-6 under the Securities
Act with respect to the ADRs shall be effective, and no stop order suspending
effectiveness of such Registration Statement shall have been issued.
6.2 Conditions to Obligations of Parent. The obligations of Parent
under this Agreement to consummate the Share Exchange are also subject to the
satisfaction or waiver, at or prior to the Effective Time, of the following
additional conditions:
(a) the representations and warranties of the Company
contained herein shall be true and correct in all respects (in the case of any
representation or warranty containing any materiality qualification) or in all
material respects (in the case of any representation or warranty without any
materiality qualification) as of the date of this Agreement and as of the
Closing with the same effect as though all such representations and warranties
had been made as of Closing, except (i) for any such representations and
warranties made as of a specified date, which shall be true and correct in all
respects (in the case of any representation or warranty containing any
materiality qualification) or in all material respects (in the case of any
representation or warranty without any materiality qualification) as of such
date, or (ii) as expressly contemplated by this Agreement, and Parent shall
have received from the Company's Chief Executive Officer and Chief Financial
Officer an officer's certificate to this effect;
(b) each and all of the covenants and agreements of the
Company to be performed and complied with pursuant to this Agreement prior to
the Closing shall have been duly performed and complied with in all material
respects, and Parent shall have received from the Company's Chief Executive
Officer and Chief Financial Officer an officer's certificate to this effect;
(c) effective demands for payment under Article 13 of the
North Carolina Corporation Law shall not have been received by the Company with
respect to more than fourteen percent (14%) of the outstanding Public Shares;
(d) the Charter Amendment shall have been filed with the
Secretary of State of the State of North Carolina and shall have become
effective and the Stock Dividend shall have been effected, all in accordance
with the North Carolina Corporation Law;
(e) the Parent Repurchase Program shall have been approved by
the requisite vote of the Parent shareholders in accordance with the Articles
of Association of Parent and Belgian law;
(f) Parent shall have received from Akin, Gump, Strauss,
Hauer & Feld, L.L.P. and Deloitte & Touche, LLP written opinions reasonably
satisfactory to Parent regarding the tax treatment of the Share Exchange and
the Stock Dividend under Section 897 of the Code; and
(g) Parent shall have received the letter referred to in
Section 5.16(a) above.
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6.3 Conditions to Obligations of Company. The obligation of the
Company under this Agreement to consummate the Share Exchange is also subject
to the satisfaction or waiver, at or prior to the Effective Time, of the
following additional conditions:
(a) the representations and warranties of Parent contained
herein shall be true and correct in all respects (in the case of any
representation or warranty containing any materiality qualification) or in all
material respects (in the case of any representation or warranty without any
materiality qualification) as of the date of this Agreement and as of the
Closing with the same effect as though all such representations and warranties
had been made as of Closing, except (i) for any such representations and
warranties made as of a specified date, which shall be true and correct as of
such date, or (ii) as expressly contemplated by this Agreement, and the Company
shall have received from Parent an officer's certificate to this effect;
(b) each and all of the covenants and agreements of Parent to
be performed and complied with pursuant to this Agreement prior to the Closing
shall have been duly performed and complied with in all material respects, and
the Company shall have received from Parent an officer's certificate to this
effect;
(c) the Company shall have received the letter referred to in
Section 5.16(b) above; and
(d) three Independent Directors consisting of persons who are
reasonably acceptable to the Special Committee and/or members of the Special
Committee shall have been elected or appointed to the Parent Board of Directors
pursuant to Section 5.19 above.
ARTICLE VII
TERMINATION AND ABANDONMENT
7.1 Termination. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after approval by the shareholders of the
Company and Parent contemplated herein:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Special Committee on behalf of
the Company if the Effective Time shall not have occurred on or before
September 30, 2001 (the "TERMINATION DATE"); provided, however, that the right
to terminate this Agreement under this Section 7.1(b) shall not be available to
any party hereto whose failure to fulfill any obligation under this Agreement
has been the cause of, or resulted in, the failure of the Effective Time to
occur on or before such date;
(c) by either Parent or the Company if any court of competent
jurisdiction in the United States or Belgium or other governmental agency or
authority of competent jurisdiction shall have issued an order, decree or
ruling or taken any other action permanently restraining, enjoining or
otherwise prohibiting the Share Exchange, and such order, decree, ruling or
other action shall have become final and non-appealable;
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(d) by the Company, at any time, if any of the conditions set
forth in Section 6.3(a) or (b) is not satisfied at such time and (i) such
condition is incapable of being satisfied prior to the Termination Date or (ii)
Parent is not using commercially reasonable efforts to cure the breach
resulting in such condition not being satisfied in as timely a manner as
practicable;
(e) by Parent, at any time, if any of the conditions set
forth in Section 6.2(a) or (b) is not satisfied at such time and (i) such
condition is incapable of being satisfied prior to the Termination Date or (ii)
the Special Committee or the Company is not using commercially reasonable
efforts to cure the breach resulting in such condition not being satisfied in
as timely a manner as practicable;
(f) by either the Company or Parent, if the shareholder
approvals referred to in Section 5.4 have not been obtained by reason of the
failure to obtain the requisite vote upon a vote at a duly held meeting of
shareholders or at any adjournment or postponement thereof; or
(g) by Parent if the Board of Directors of the Company,
acting on the recommendation of the Special Committee, (i) shall have withdrawn
or modified in a manner adverse to Parent its approval or recommendation of
this Agreement, the Share Exchange, the Stock Dividend or the Charter
Agreement, (ii) shall have approved or recommended another offer or an
agreement to effect a proposal made by a third party (other than an affiliate
of Parent) to effect a Company Acquisition Proposal or (iii) shall have
resolved to effect any of the foregoing.
7.2 Procedure and Effect of Termination. Any termination of this
Agreement by the Company shall be authorized only if the Company's Board of
Directors acts on the recommendation of the Special Committee. In the event of
termination of this Agreement by either Parent or the Company pursuant to
Section 7.1, written notice thereof shall forthwith be given to the other party
hereto, and this Agreement shall terminate and the Share Exchange shall be
abandoned, without further action by any of the parties hereto. If this
Agreement is terminated pursuant to Section 7.1, this Agreement shall forthwith
become void, and there shall be no liability on the part of any party hereto,
except as set forth in Section 8.6. Nothing herein shall relieve any party
hereto from liability for any breach hereof.
ARTICLE VIII
MISCELLANEOUS
8.1 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified or supplemented only by written agreement of
Parent and the Company at any time prior to the Effective Time with respect to
any of the terms contained herein; provided, however, that (i) after the
receipt of the approval of the Company and/or Parent shareholders, as the case
may be, pursuant to Section 5.4, no such amendment or modification shall be
made that alters the amount or changes the form of the Share Exchange
Consideration or otherwise materially and adversely affects the rights of the
Public Shareholders hereunder, without the further approval of the holders of
at least a majority of the outstanding Class A Common Stock and Class B Common
Stock, each voting as a separate class and (ii) the approval of the Special
Committee shall be required for any amendment, modification or supplementing of
this
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Agreement, any extension by the Company of the time for the performance of
any obligations or other acts of Parent and any waiver of any of the Company's
rights under this Agreement.
8.2 Waiver of Compliance; Consents. Any failure of Parent on the one
hand, or the Company, on the other hand, to comply with any obligation,
covenant, agreement or condition herein may be waived by the Company (subject
to the approval of the Special Committee as set forth in Section 8.1(ii) above)
or Parent, respectively, only by a written instrument, but such waiver shall
not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure. Any determination by the Company as to the existence of any such
failure on the part of Parent shall be made by the Special Committee on behalf
of the Company. Whenever this Agreement requires or permits consent by or on
behalf of any party hereto, such consent shall be given in writing in a manner
consistent with the requirements for a waiver of compliance as set forth in
Section 8.1(ii) above and this Section 8.2.
8.3 Non-Survival of Representations, Warranties and Agreements. The
representations, warranties and agreements in this Agreement shall terminate at
the Effective Time or upon the termination of this Agreement pursuant to
Section 7.1 hereof, as the case may be, except that (i) the agreements set
forth in Articles II and VIII and the agreements contained in Article V that
contemplate action to be taken following the Effective Time shall survive the
Effective Time indefinitely and (ii) the agreements set forth in Section 5.6,
Article VIII and Section 7.2 hereof shall survive the termination of this
Agreement indefinitely.
8.4 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if (i) delivered personally or by
overnight courier, (ii) mailed by registered or certified mail, return receipt
requested, postage prepaid, or (iii) transmitted by telecopy and the
appropriate telecopy confirmation is received, and in each case, addressed to
the respective parties at the following addresses (or at such other address for
a party as shall be specified by like notice; provided, however, that notices
of a change of address shall be effective only upon receipt thereof):
(a) if to Parent:
Etablissements Delhaize Freres et Cie
"Le Lion" S.A.
rue Osseghem 53
1080 Brussels, Belgium
Telecopy: 011-32-2-412-2118
Attention: Chief Executive Officer
with a required copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201
Telecopy: 214-969-4343
Attention: Michael E. Dillard, P.C.
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(b) if to the Company:
Delhaize America, Inc.
2110 Executive Drive
Salisbury, North Carolina 28145
Telecopy: 704-637-8803
Attention: Chief Executive Officer
with required copies to:
Special Committee of the Board of Directors
of Delhaize America, Inc.
c/o Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Telecopy: (212) 403-2000
Attention: Edward D. Herlihy
and
Robinson, Bradshaw & Hinson, P.A.
101 North Tryon Street
Suite 1900
Charlotte, North Carolina 28248
Telecopy: (704) 378-4000
Attention: Russell M. Robinson, II
Any notice so addressed shall be deemed to be given (x) three business days
after being mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid and (y) upon delivery, if transmitted by hand
delivery, overnight courier or telecopy.
8.5 Assignment; Parties in Interest. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto without the prior written consent of the
other parties. Except for Sections 2.2 and 5.11 hereof, which are intended to
be for the benefit of the holders of Company Options and Restricted Stock, and
the indemnified parties identified in such section, respectively, this
Agreement is not intended to confer upon any person other than the parties
hereto any rights or remedies under or by reason of this Agreement.
8.6 Expenses. Except as provided in Section 5.14 above, whether or not
the Share Exchange is consummated, all costs and expenses incurred in
connection with the Share Exchange, this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses;
provided, however, that the allocable share of each of Parent and the Company
for all expenses related to printing, filing and mailing the Proxy
Statement/Prospectus and all SEC and other regulatory filing fees incurred in
connection with the Schedule 13E-3 (to the extent required) and the
Registration Statement shall be one-half.
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8.7 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties hereto shall be entitled to
an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or equity.
8.8 Governing Law. This Agreement shall be governed by the laws of the
State of North Carolina (regardless of the laws that might otherwise govern
under applicable principles of conflicts of law) as to all matters, including
but not limited to matters of validity, construction, effect, performance and
remedies.
8.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.10 Interpretation. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement. As used in this Agreement, (i) the term
"PERSON" shall mean and include an individual, a partnership, a joint venture,
a corporation, a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof; (ii) the
terms "AFFILIATE" and "ASSOCIATE" shall have the meanings set forth in Rule
12b-2 of the General Rules and Regulations promulgated under the Exchange Act;
and (iii) the term "SUBSIDIARY" of any specified corporation or other entity
shall mean any corporation or other entity of which the outstanding securities
having ordinary voting power to elect a majority of the board of directors or
other governing body are directly or indirectly owned by such specified
corporation or other entity.
8.11 Entire Agreement. This Agreement, including the Company
Disclosure Letter, the Parent Disclosure Letter and the other schedules and
exhibits hereto, embody the entire agreement and understanding of the parties
hereto in respect of the subject matter contained herein and supersedes all
prior agreements and the understandings between the parties with respect to
such subject matter.
8.12 Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void, unenforceable or against its regulatory policy, the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. Upon such determination that any term,
provision, covenant or restriction of this Agreement is invalid, void,
unenforceable or against regulatory policy, the parties hereto shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
[Signature page follows]
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IN WITNESS WHEREOF, Parent and the Company have caused this Agreement
to be signed, by their respective duly authorized officers, as of the date
first above written.
ETABLISSEMENTS DELHAIZE FRERES
ET CIE "LE LION" S.A.
By:
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Name:
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Title:
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By:
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Name:
-------------------------------------
Title:
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DELHAIZE AMERICA, INC.
By:
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Name:
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Title:
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S-1
