AGREEMENT AND PLAN OF MERGER
dated as of
June 28, 2000
among
CENTRAL NEWSPAPERS, INC.,
GANNETT CO., INC.,
and
PACIFIC AND SOUTHERN INDIANA CORP.
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions 1
ARTICLE 2
THE OFFER
SECTION 2.01. The Offer 6
SECTION 2.02. Company Action 9
SECTION 2.03. Directors 10
ARTICLE 3
THE MERGER
SECTION 3.01. The Merger 12
SECTION 3.02. Conversion of Company Stock 12
SECTION 3.03. Surrender and Payment 13
SECTION 3.04. Dissenting Shares 14
SECTION 3.05. Stock Options 14
SECTION 3.06. Restricted Stock 15
SECTION 3.07. Adjustments 15
SECTION 3.08. Withholding Rights 15
SECTION 3.09. Lost Certificates 15
ARTICLE 4
THE SURVIVING CORPORATION
SECTION 4.01. Certificate of Incorporation 15
SECTION 4.02. Bylaws 16
SECTION 4.03. Directors and Officers 16
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 5.01. Corporate Existence and Power 16
SECTION 5.02. Corporate Authorization 16
SECTION 5.03. Governmental Authorization 17
SECTION 5.04. Non-contravention 17
SECTION 5.05. Capitalization 18
SECTION 5.06. Subsidiaries 19
SECTION 5.07. SEC Filings 19
SECTION 5.08. Financial Statements 20
SECTION 5.09. Disclosure Documents 20
SECTION 5.10. Absence of Certain Changes 20
SECTION 5.11. No Undisclosed Material Liabilities 21
SECTION 5.12. Compliance with Laws and Court Orders 21
SECTION 5.13. Litigation 21
SECTION 5.14. Finders' Fees 21
SECTION 5.15. Opinion of Financial Advisor 22
SECTION 5.16. Taxes 22
SECTION 5.17. Employee Benefit Plans 23
SECTION 5.18. Environmental Matters 25
SECTION 5.19. Intellectual Property 26
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PARENT
SECTION 6.01. Corporate Existence and Power 26
SECTION 6.02. Corporate Authorization 26
SECTION 6.03. Governmental Authorization 27
SECTION 6.04. Non-contravention 27
SECTION 6.05. Disclosure Documents 27
SECTION 6.06. Financing 27
ARTICLE 7
COVENANTS OF THE COMPANY
SECTION 7.01. Conduct of the Company 28
SECTION 7.02. Stockholder Meeting; Proxy Material;
Merger Without Stockholder Meeting 30
SECTION 7.03. Access to Information 30
SECTION 7.04. No Solicitation; Other Offers 31
ARTICLE 8
COVENANTS OF PARENT
SECTION 8.01. Confidentiality 33
SECTION 8.02. Obligations of Merger Subsidiary 34
SECTION 8.03. Company Stockholder Meeting 34
SECTION 8.04. Director and Officer Liability 34
SECTION 8.05. Employee Matters 35
ARTICLE 9
COVENANTS OF PARENT AND THE COMPANY
SECTION 9.01. Best Efforts 37
SECTION 9.02. Certain Filings 37
SECTION 9.03. Public Announcements 37
SECTION 9.04. Further Assurances 38
SECTION 9.05. Notices of Certain Events 38
ARTICLE 10
CONDITIONS TO THE MERGER
SECTION 10.01. Conditions to Obligations of Each Party 38
ARTICLE 11
TERMINATION
SECTION 11.01. Termination 39
SECTION 11.02. Effect of Termination 40
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. Notices 40
SECTION 12.02. Non-Survival of Representations and
Warranties 42
SECTION 12.03. Amendments; No Waivers 42
SECTION 12.04. Expenses 42
SECTION 12.05. Successors and Assigns 43
SECTION 12.06. Governing Law 43
SECTION 12.07. Jurisdiction 43
SECTION 12.08. WAIVER OF JURY TRIAL 44
SECTION 12.09. Counterparts; Effectiveness; Benefit 44
SECTION 12.10. Entire Agreement 44
SECTION 12.11. Captions 44
SECTION 12.12. Severability 44
SECTION 12.13. Specific Performance 45
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of June 28, 2000,
among Central Newspapers, Inc., an Indiana corporation (the "Company"),
Gannett Co., Inc., a Delaware corporation ("Parent"), and Pacific and Southern
Indiana Corp., an Indiana corporation and a wholly-owned subsidiary of Parent
("Merger Subsidiary").
WHEREAS, the respective Boards of Directors of Parent, Merger
Subsidiary and the Company have approved this Agreement, the Offer and the
Merger (as defined below) and deem it advisable and in the best interests of
their respective stockholders to consummate the Offer and the Merger on the
terms and conditions set forth herein;
WHEREAS, as a condition to Parent entering into this Agreement, Parent
has required that, immediately prior to the execution and delivery of this
Agreement, Parent, Merger Subsidiary and the Eugene C. Pulliam Trust (the
"Trust"), a significant stockholder of the Company, enter into a voting and
tender agreement (the "Voting Agreement") pursuant to which the Trust agrees
to vote its shares of Company Stock in favor of the Merger and tender Company
Class B Stock in connection with the Offer; and
WHEREAS, prior to the execution and delivery of the Voting Agreement
and this Agreement, the Board of Directors of the Company has duly amended its
bylaws to provide that the entry by the Trust, Parent and Merger Subsidiary
into the Voting Agreement and the acquisition of the Company Stock by Parent or
Merger Subsidiary will not be subject to the Indiana control share acquisition
statutes (i.e., Chapter 42 of the Indiana Business Corporation Law).
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as used herein, have
the following meanings:
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
"Benefit Arrangement" means any employment, severance or similar
contract or arrangement providing for compensation, bonus, profit-sharing, or
other forms of incentive or deferred compensation, health or medical benefits,
disability benefits, severance benefits and post-employment or retirement
benefits (including compensation, pension, health, medical or life insurance or
other benefits) that (i) is not an Employee Plan, (ii) is entered into,
maintained, administered or contributed to, as the case may be, by the Company
or any of its Affiliates and (iii) covers any employee or former employee of
the Company or any of its Subsidiaries.
"Business Day" means a day other than Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by
law to close.
"Code" means the Internal Revenue Code of 1986.
"Company Balance Sheet" means the consolidated balance sheet of the
Company as of December 26, 1999 and the footnotes thereto set forth in the
Company 10-K.
"Company Balance Sheet Date" means December 26, 1999.
"Company Class A Stock" means the shares of Class A Common Stock,
no par value, of the Company.
"Company Class B Stock" means the shares of Class B Common Stock,
no par value, of the Company.
"Company Intellectual Property Rights" means all material Intellectual
Property Rights owned or licensed and used or held for use by the Company or
any of its Subsidiaries.
"Company Stock" means the Company Class A Stock and the Company
Class B Stock.
"Company 10-K" means the Company's annual report on Form 10-K for
the fiscal year ended December 26, 1999.
"Employee Plan" means any "employee benefit plan", as defined in
Section 3(3) of ERISA, that (i) is subject to any provision of ERISA, (ii) is
maintained, administered or contributed to by the Company or any of its
Affiliates and (iii) covers any employee or former employee of the Company or
any of its Subsidiaries.
"Environmental Laws" means any federal, state, local or foreign law,
regulation, rule, order or decree, in each case as in effect on the date
hereof, that has as its principal purpose the protection of the environment.
"Environmental Permits" means all permits, licenses, certificates or
approvals necessary for the operation of the Company or any of its Subsidiaries
as currently conducted to comply with all applicable Environmental Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" means any entity that, together with the Company,
would be treated as a single employer under Section 414 of the Code.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976.
"Indiana Law" means the Indiana Business Corporation Law.
"Intellectual Property Right" means any trademark, service mark, trade
name, mask work, invention, patent, trade secret, copyright, know-how
(including any registrations or applications for registration of any of the
foregoing) or any other similar type of proprietary intellectual property
right.
"Lien" means, with respect to any property or asset, any mortgage, lien,
pledge, charge, security interest, encumbrance or other adverse claim of any
kind in respect of such property or asset. For purposes of this Agreement, a
Person shall be deemed to own subject to a Lien, any property or asset that it
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such property or asset.
"Material Adverse Effect" means, (a) with respect to any Person, a
material adverse effect on the condition (financial or otherwise), business,
assets or results of operations of such Person and its Subsidiaries, taken as
a whole, except any such effect resulting from or arising in connection with:
(i) changes in circumstances or conditions generally affecting the industry in
which such Person operates, (ii) changes in general economic or business
conditions or in financial markets in the United States or in the markets in
which such Person operates, or (iii) this Agreement or the transactions contem-
plated hereby or the announcement hereof, and (b), without limiting the
foregoing, with respect to the condition in paragraph (d) of Annex A hereto
insofar as it pertains to the Company's representations and warranties in
Section 5.02 and 5.05 of this Agreement, one or more failures of such represen-
tations and warranties to be true and correct that, individually or in the
aggregate, would reasonably be expected to make the Offer or the Merger more
costly to Merger Subsidiary or Parent by an amount that is material in the
context of the entirety of the transactions contemplated hereby (a "Specified
Failure") and any such Specified Failure or Specified Failures shall for the
purposes of this subparagraph (b) be deemed to have a Material Adverse Effect
on the Company.
"1933 Act" means the Securities Act of 1933.
"Option" means the option to purchase shares of Company Class B Stock
granted under Section 3.01(b) of the Voting Agreement.
"1934 Act" means the Securities Exchange Act of 1934.
"Person" means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"SEC" means the Securities and Exchange Commission.
"Subsidiary" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar
functions are at any time directly or indirectly owned by such Person.
"Third Party" means any Person, as defined in Section 13(d) of the 1934
Act, other than Parent or any of its Affiliates.
Any reference in this Agreement to a statute shall be to such statute, as
amended from time to time, and to the rules and regulations promulgated
thereunder.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
Acquisition Proposal 7.04
Certificates 3.03
Class A Offer Price 2.01
Class B Offer Price 2.01
Company Disclosure Schedule Article 5
Company Employees 8.05
Company Proxy Statement 5.09
Company SEC Documents 5.07
Company Securities 5.05
Company Stockholder Approval 5.02
Company Stockholder Meeting 7.02
Company Stock Option 3.05
Company Subsidiary Securities 5.06
Confidentiality Agreement 7.03
Constructive Satisfaction of the
Minimum Condition 2.01
Continuing Directors 2.03
Cutoff Date 7.04
DLJ 2.02
DLJ Fairness Opinion 2.02
Effective Time 3.01
Exchange Agent 3.03
GAAP 5.08
HSR Condition Annex A
Indemnified Person 8.04
Initial Expiration Date 2.01
IRS 5.16
Material Assets 9.01
Merger 3.01
Merger Consideration 3.02
Minimum Condition 2.01
Non-Union Company Employees 8.05
Union Employees 8.05
Offer 2.01
Offer Completion Date 7.02
Offer Documents 2.01
Offer Price 2.01
PCBs 5.18
RCRA 5.18
Schedule 14D-9 2.02
Schedule TO 2.01
Specified Failure 1.01
Superior Proposal 7.04
Surviving Corporation 3.01
Tax Return 5.16
Taxes 5.16
Taxing Authority 5.16
Termination Fee 12.04
Transactions 2.02
ARTICLE 2
THE OFFER
SECTION 2.01. The Offer. (a) Provided that this Agreement shall not have
been terminated in accordance with Article 11 and none of the events set forth
in Annex A hereto shall have occurred or be existing, Merger Subsidiary shall,
and Parent shall cause Merger Subsidiary to, as promptly as practicable after
the date hereof (but in no event later than the fifth Business Day after the
public announcement of the terms of this Agreement), commence (within the
meaning of Rule 14d-2(a) of the 1934 Act), an offer (the "Offer") to purchase
(x) any and all of the outstanding shares of Company Class A Stock for a
purchase price of $64.00 per share (the "Class A Offer Price") and (y) any and
all (subject to the Minimum Condition (as defined below)) of the outstanding
shares of Company Class B Stock for a purchase price of $6.40 per share (the
"Class B Offer Price" and, together with the Class A Offer Price, the "Offer
Price"), in each case, net to the seller in cash, subject to reduction for any
applicable withholding taxes and, but only if such payment is to be made other
than to the registered holder, any applicable stock transfer taxes payable by
such holder. The Offer will be made pursuant to an Offer to Purchase and
related Letter of Transmittal containing the terms and conditions set forth in
this Agreement. The initial expiration date of the Offer shall be the
twentieth Business Day from and after the date the Offer is commenced (the
"Initial Expiration Date"). The obligation of Merger Subsidiary to accept for
payment, purchase and pay for any shares of Company Stock tendered pursuant to
the Offer shall be subject, except as provided in Section 2.01(b), only to the
satisfaction of (i) the condition that at least 45,815,000 shares of Company
Class B Stock (subject to adjustment for stock splits, stock dividends, recapi-
talizations and similar events) (less any shares of Company Class B Stock owned
by Parent or Merger Subsidiary or any Affiliate of Parent or Merger Subsidiary
on the date such shares are purchased pursuant to the Offer) have been validly
tendered and not withdrawn prior to the expiration of the Offer (the "Minimum
Condition") and (ii) the other conditions set forth in Annex A hereto;
provided, however, that Merger Subsidiary expressly reserves the right to waive
any of the conditions to the Offer (other than the Minimum Condition) and to
make any change in the terms or conditions of the Offer (other than the Minimum
Condition) in its sole discretion, subject to Section 2.01(b). Notwithstanding
the previous sentence, Merger Subsidiary may waive the Minimum Condition so
long as (x) it has irrevocably waived all other conditions to the Offer (and
may, as a legal matter, irrevocably waive such conditions and otherwise
purchase shares of Company Stock pursuant to the Offer), (y) Parent has
irrevocably exercised or irrevocably committed to exercise the Option and
(z) the shares of Company Stock acquired pursuant to the Offer and through such
Option exercise would satisfy the Minimum Condition (such event being referred
to as a "Constructive Satisfaction of the Minimum Condition").
(b) Without the prior written consent of the Company, neither Parent nor
Merger Subsidiary will (i) decrease the price per share of Company Class A
Stock or Company Class B Stock payable in the Offer, (ii) decrease the number
of shares of Company Class A Stock or Company Class B Stock sought in the
Offer, (iii) change the form of consideration payable in the Offer,
(iv) impose conditions to the Offer in addition to those set forth in
Section 2.01(a) and Annex A, (v) except as provided below or required by any
rule, regulation, interpretation or position of the SEC applicable to the
Offer, change the expiration date of the Offer, or (vi) otherwise amend or
change any term or condition of the Offer in a manner adverse to the holders of
shares of Company Class A Stock or Company Class B Stock. Notwithstanding
anything in this Agreement to the contrary, without the consent of the Company,
Merger Subsidiary shall have the right to extend the Offer beyond the Initial
Expiration Date in the following events: (i) from time to time, but in no
event later than the date which is 60 days from the Initial Expiration Date,
if, at the Initial Expiration Date (or extended expiration date of the Offer,
if applicable), any of the conditions to the Offer (other than the Minimum
Condition to which this clause does not apply) shall not have been satisfied or
waived, until such conditions are satisfied or waived; (ii) for any period
required by any rule, regulation, interpretation or position of the SEC or the
staff thereof applicable to the Offer or any period required by applicable law;
(iii) if all conditions to the Offer other than the Minimum Condition are
satisfied or waived, for one or more periods not to exceed ten (10) business
days each (but no more than an aggregate of thirty (30) business days for all
such extensions); or (iv) if all of the conditions to the Offer are satisfied
or waived but the number of shares of each class of Company Stock validly
tendered and not withdrawn is less than ninety percent (90%) of the then out-
standing number of shares of each class of Company Stock, for an aggregate
period not to exceed twenty (20) business days (for all such extensions),
provided that Merger Subsidiary shall accept and promptly pay for all
securities tendered prior to the date of such extension and shall waive any
condition to the consummation of the Merger other than the condition in Section
10.01(c) that may fail to be satisfied during such extension. In addition,
Parent and Merger Subsidiary agree that notwithstanding clause (iii) of the
previous sentence, Merger Subsidiary may, and if requested by the Company
shall, from time to time extend the Offer, if at the Initial Expiration Date
(or any extended expiration date of the Offer, including pursuant to this
sentence, if applicable), no conditions to the Offer other than the Minimum
Condition, the HSR Condition (as defined in Annex A) and/or the conditions set
forth in clause (a) or clause (b) of Annex A shall excuse performance by Merger
Subsidiary under Annex A, until the earlier of ten (10) business days after
such previously scheduled expiration date or March 31, 2001; provided that the
Company will not make such a request where a Constructive Satisfaction of the
Minimum Condition exists. Upon the prior satisfaction or waiver of all the
conditions to the Offer and subject to the terms and conditions of this
Agreement, Merger Subsidiary will, and Parent will cause Merger Subsidiary to,
accept for payment, purchase and pay for, in accordance with the terms of the
Offer, all shares of Company Stock validly tendered and not withdrawn pursuant
to the Offer as soon as reasonably practicable after the expiration of the
Offer. Parent shall provide or cause to be provided to Merger Subsidiary on a
timely basis the funds necessary to accept for payment, and pay for, any shares
of Company Stock that Merger Subsidiary becomes obligated to accept for
payment, and pay for, pursuant to the Offer.
(c) As soon as reasonably practicable on the date of commencement of
the Offer, Parent and Merger Subsidiary shall file or cause to be filed with
the SEC a Tender Offer Statement on Schedule TO (together with any amendments
or supplements thereto, the "Schedule TO") with respect to the Offer. Parent
and Merger Subsidiary agree that the Schedule TO will comply as to form and
content in all material respects with the applicable provisions of the federal
securities laws, shall not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading, and will contain the offer to purchase
and form of the related letter of transmittal (such Schedule TO and such
documents included therein pursuant to which the Offer will be made, together
with any supplements or amendments thereto, the "Offer Documents"). Parent and
the Company each agree to correct promptly any information provided by it for
use in the Offer Documents if and to the extent that such information shall
have become false or misleading in any material respect and to supplement the
information provided by it specifically for use in the Schedule TO or the other
Offer Documents to include any information that shall become necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading. Parent and Merger Subsidiary agree to take all
steps necessary to cause the Offer Documents as so corrected or supplemented to
be filed with the SEC and be disseminated to holders of shares of Company
Stock, in each case, as and to the extent required by applicable federal
securities laws. The Company and its counsel shall be given a reasonable
opportunity to review and comment on the Offer Documents prior to their being
filed with the SEC. Parent and Merger Subsidiary agree to provide to the
Company and its counsel any comments or other communications which Parent,
Merger Subsidiary or their counsel may receive from the Staff of the SEC with
respect to the Offer Documents promptly after receipt thereof.
SECTION 2.02. Company Action. (a) The Company hereby consents to the
Offer and represents and warrants that its Board of Directors, at a meeting
duly called and held, has unanimously (i) determined that this Agreement and
its contemplated transactions, including the Offer, the Merger, and the
purchase of shares of Company Stock contemplated by the Offer (the
"Transactions"), are advisable and fair to and in the best interests of the
Company and the Company's shareholders, (ii) approved and adopted this
Agreement and the Transactions, including the Offer, the Merger, and the
purchase of shares of Company Stock contemplated by the Offer, in accordance
with the requirements of the Indiana Law, which approval satisfies in full the
requirements of prior approval contained in Sections 23-1-40-1, 23-1-43-18 and
23-1-43-19(1) of the Indiana Law, (iii) taken all requisite action to amend,
and has duly and validly amended, the Company's bylaws to provide that Chapter
42 of the Indiana Law does not apply to control share acquisitions of shares of
Company Stock (including, without limitation, by Parent or Merger Subsidiary
pursuant to the Offer or the Merger) and (iv) resolved, subject to Section 7.04
to recommend that the shareholders of the Company accept the Offer, tender
their shares of Company Stock pursuant to the Offer and approve and adopt this
Agreement and the Merger. The Company hereby consents to the inclusion in the
Offer Documents, the Schedule 14D-9 (as defined below) and the Proxy Statement
(as defined below) (if any) of such recommendation of the Board of Directors.
The Company represents and warrants that the Board of Directors has received
the written opinion (the "DLJ Fairness Opinion") of Donaldson, Lufkin &
Jenrette Securities Corporation ("DLJ"), stating that as of the date of such
opinion, the proposed consideration to be received by the holders of shares of
Company Stock pursuant to the Offer and the Merger is fair to such holders from
a financial point of view. The Company has been authorized by DLJ to permit,
subject to the prior review and consent by DLJ (such consent not to be
unreasonably withheld), the inclusion of the DLJ Fairness Opinion (or a
reference thereto) in the Offer Documents and the Schedule 14D-9.
(b) The Company will cause its transfer agent promptly to furnish Parent
and Merger Subsidiary with a list of the Company's shareholders, mailing labels
and any available listing or computer file containing the names and addresses
of all record holders of shares of Company Stock and lists of securities
positions of shares of Company Stock held in stock depositories and to provide
to Parent and Merger Subsidiary such additional information (including, without
limitation, updated lists of shareholders, mailing labels and lists of
securities positions) and such other assistance as Parent or Merger Subsidiary
or their agents may reasonably request in connection with the Offer. Subject
to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Transactions, Parent and Merger Subsidiary and each of their
affiliates, associates and agents will hold in confidence the information
contained in any such labels, listings and files, will use such information
only in connection with the Offer and the Merger and, if this Agreement is
terminated, will deliver, and will cause their agents to deliver, to the
Company all copies and any extracts or summaries from such information then in
their possession or control.
(c) As soon as reasonably practicable on the date of commencement of the
Offer, the Company shall file with the SEC and disseminate to holders of shares
of Company Stock, in each case as and to the extent required by applicable
federal securities laws, a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with any amendments or supplements thereto, the
"Schedule l4D-9") that shall reflect the recommendation of the Board of
Directors referred to in clause (iv) of Section 2.02(a) hereof. The Company
and Parent each agrees promptly to correct any information provided by it for
use in the Schedule 14D-9 if and to the extent that it shall have become false
or misleading in any material respect and to supplement the information
provided by it specifically for use in the Schedule 14D-9 to include any
information that shall become necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
Company agrees to take all steps necessary to cause the Schedule 14D-9 as so
corrected or supplemented to be filed with the SEC and to be disseminated to
holders of shares of Company Stock, in each case, as and to the extent required
by applicable federal securities laws. Parent and its counsel shall be given a
reasonable opportunity to review and comment on the Schedule 14D-9 prior to its
being filed with the SEC. The Company agrees to provide to Parent and Merger
Subsidiary and their counsel any comments or other communications which the
Company or its counsel may receive from the staff of the SEC with respect to
the Schedule 14D-9 promptly after receipt thereof. Parent, Merger Subsidiary
and the Company each hereby agree to provide promptly such information
necessary to preparation of the exhibits and schedules to the Schedule 14D-9
and the Offer Documents which the respective party responsible therefor will
reasonably request.
SECTION 2.03. Directors. (a) Promptly following the purchase of and payment
for a number of shares of Company Stock that satisfies the Minimum Condition,
and from time to time thereafter, Merger Subsidiary shall be entitled to
designate the number of directors, rounded up to the next whole number, on the
Board of Directors of the Company that equals the product of (i) the total
number of directors on the Board of Directors of the Company (giving effect to
the election of any additional directors pursuant to the Section) and (ii) the
percentage that the voting power of shares of Company Stock beneficially owned
by Parent and Merger Subsidiary (including shares of Company Stock paid for
pursuant to the Offer or the Option), upon such acceptance for payment, bears
to the total voting power of shares of Company Stock outstanding, and the
Company shall take all action within its power to cause Merger Subsidiary's
designees to be elected or appointed to the Board of Directors of the Company,
including, without limitation, increasing the number of directors, and seeking
and accepting resignations of incumbent directors. At such time, the Company
will also, upon request of Parent or Merger Subsidiary, use its best efforts to
cause individual directors designated by Merger Subsidiary to constitute the
number of members, rounded up to the next whole number, on (i) each committee
of the Board of Directors of the Company other than any such committee of such
Board of Directors established to take action under this Agreement and
(ii) each Board of Directors of each Subsidiary of the Company, and each com-
mittee thereof, that represents the same percentage as such individuals
represented on the Board of Directors. Notwithstanding the foregoing, in the
event that Merger Subsidiary's designees are to be appointed or elected to the
Board of Directors, until the Effective Time (as defined below), such Board of
Directors shall have at least two directors (x) who are directors on the date
of this Agreement or otherwise not Affiliates of Parent and (y) who are not
officers of the Company (the "Continuing Directors"); provided that in the
event that the number of Continuing Directors shall be reduced below two for
any reason whatsoever, any remaining Continuing Directors (or Continuing
Director, if there shall be only one remaining) shall be entitled to designate
persons to fill such vacancies who shall be deemed to be Continuing Directors
for purposes of this Agreement.
(b) The Company's obligations to appoint Merger Subsidiary's designees to the
Board of Directors shall be subject to Section 14(f) of the 1934 Act and Rule
14f-1 promulgated thereunder. The Company shall promptly take all actions and
shall include in the Schedule 14D-9 such information with respect to the
Company and its officers and directors (or an amendment thereof or an
information statement pursuant to Rule 14f-1 if Merger Subsidiary has not
theretofore designated directors), as Section 14(f) and Rule 14f-1 require in
order to fulfill its obligations under this Section. Parent and Merger
Subsidiary shall supply to the Company, and be solely responsible for, any
information with respect to themselves and their nominees, officers, directors
and affiliates required by Section 14(f) and Rule 14f-1.
(c) Following the election or appointment of Merger Subsidiary's designees
pursuant to Section 2.03(a) and until the Effective Time, the approval of the
Continuing Directors shall be required to authorize (and such authorization
shall constitute the authorization of the Company's Board of Directors and no
other action on the part of the Company, including any action by any other
directors of the Company, shall be required to authorize) any termination of
this Agreement by the Company, any amendment of this Agreement requiring action
by the Company's Board of Directors, any amendment of the certificate of
incorporation or bylaws of the Company, any extension of time for performance
of any obligation or action hereunder or under the Offer by Parent or Merger
Subsidiary, any waiver of compliance with, or enforcement of, any of the
agreements or conditions contained herein, or under the Offer for the benefit
of the Company and any material transaction with Parent, Merger Subsidiary or
any affiliate thereof.
ARTICLE 3
THE MERGER
SECTION 3.01. The Merger. (a) At the Effective Time, Merger
Subsidiary shall be merged (the "Merger") with and into the Company in
accordance with Indiana Law, whereupon the separate existence of Merger
Subsidiary shall cease, and the Company shall be the surviving
corporation (the "Surviving Corporation").
(b) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger, the Company
and Merger Subsidiary will file articles of merger with the Secretary of
State of the State of Indiana and make all other filings or recordings
required by Indiana Law in connection with the Merger. The Merger shall
become effective at such time (the "Effective Time") as the articles of
merger are duly filed with the Secretary of State of the State of Indiana
or at such later time as may be specified in the articles of merger.
(c) From and after the Effective Time, the Surviving Corporation
shall possess all the rights, powers, privileges and franchises and be
subject to all of the obligations, liabilities, restrictions and
disabilities of the Company and Merger Subsidiary, all as provided under
Indiana Law.
SECTION 3.02. Conversion of Company Stock. At the Effective Time:
(a) except as otherwise provided in Section 3.02(b) or Section
3.04, (i) each share of Company Class A Stock outstanding immediately
prior to the Effective Time shall be converted into the right to receive
$64 in cash and (ii) each share of Company Class B Stock outstanding
immediately prior to the Effective Time shall be converted into the right
to receive $6.40 in cash (in each case, the "Merger Consideration");
(b) each share of Company Stock held by the Company as treasury
stock or owned by Parent or any of its Subsidiaries immediately prior to
the Effective Time shall be canceled, and no payment shall be made with
respect thereto; and
(c) each share of common stock of Merger Subsidiary outstanding
immediately prior to the Effective Time shall be converted into and
become one share of common stock of the Surviving Corporation with the
same rights, powers and privileges as the shares so converted and shall
constitute the only outstanding shares of capital stock of the Surviving
Corporation.
SECTION 3.03. Surrender and Payment. (a) Prior to the Effective
Time, Parent shall appoint an agent (the "Exchange Agent") reasonably
acceptable to the Company for the purpose of exchanging certificates
representing shares of Company Stock (the "Certificates") for the Merger
Consideration. At the Effective Time, Parent will deposit with the
Exchange Agent the Merger Consideration to be paid in respect of the
shares of Company Stock. Promptly after the Effective Time, Parent will
send, or will cause the Exchange Agent to send, to each holder of shares
of Company Stock at the Effective Time a letter of transmittal and
instructions (which shall specify that the delivery shall be effected,
and risk of loss and title shall pass, only upon proper delivery of the
Certificates to the Exchange Agent) for use in such exchange.
(b) Each holder of shares of Company Stock that have been
converted into the right to receive the Merger Consideration will be
entitled to receive, upon surrender to the Exchange Agent of a
Certificate, together with a properly completed letter of transmittal,
the Merger Consideration in respect of each share of Company Stock
represented by such Certificate. Until so surrendered, each such
Certificate shall represent after the Effective Time for all purposes
only the right to receive such Merger Consideration.
(c) If any portion of the Merger Consideration is to be
paid to a Person other than the Person in whose name the surrendered
Certificate is registered, it shall be a condition to such payment that
the Certificate so surrendered shall be properly endorsed or otherwise be
in proper form for transfer and that the Person requesting such payment
shall pay to the Exchange Agent any transfer or other taxes required as a
result of such payment to a Person other than the registered holder of
such Certificate or establish to the satisfaction of the Exchange Agent
that such tax has been paid or is not payable.
(d) After the Effective Time, there shall be no further
registration of transfers of shares of Company Stock. If, after the
Effective Time, Certificates are presented to the Surviving Corporation,
they shall be canceled and exchanged for the Merger Consideration
provided for, and in accordance with the procedures set forth, in this
Article 3.
(e) Any portion of the Merger Consideration made
available to the Exchange Agent pursuant to Section 3.03(a) (and any
interest or other income earned thereon) that remains unclaimed by the
holders of shares of Company Stock one year after the Effective Time
shall be returned to Parent, upon demand, and any such holder who has not
exchanged shares of Company Stock for the Merger Consideration in
accordance with this Section 3.03 prior to that time shall thereafter
look only to Parent for payment of the Merger Consideration in respect of
such shares without any interest thereon. Notwithstanding the foregoing,
Parent shall not be liable to any holder of shares of Company Stock for
any amount paid to a public official pursuant to applicable abandoned
property, escheat or similar laws. Any amounts remaining unclaimed by
holders of shares of Company Stock three years after the Effective Time
(or such earlier date immediately prior to such time when the amounts
would otherwise escheat to or become property of any governmental
authority) shall become, to the extent permitted by applicable law, the
property of Parent free and clear of any claims or interest of any Person
previously entitled thereto.
SECTION 3.04. Dissenting Shares. Notwithstanding Section 3.02,
shares of Company Stock outstanding immediately prior to the Effective
Time and held by a holder who has not voted in favor of the Merger or
consented thereto in writing and who has demanded appraisal for such
shares in accordance with Indiana Law shall not be converted into a right
to receive the Merger Consideration, unless such holder fails to perfect,
withdraws or otherwise loses its right to appraisal. If, after the
Effective Time, such holder fails to perfect, withdraws or loses its
right to appraisal, such shares of Company Stock shall be treated as if
they had been converted as of the Effective Time into a right to receive
the Merger Consideration. The Company shall give Parent prompt notice of
any demands received by the Company for appraisal of shares of Company
Stock. Except as required by applicable law or with the prior written
consent of Parent, the Company shall not make any payment with respect
to, or settle or offer to settle, any such demands.
SECTION 3.05. Stock Options. At or immediately prior to the
Effective Time, each stock option to purchase shares of Company Class A
Stock outstanding under any stock option or compensation plan or
arrangement of the Company (a "Company Stock Option"), whether or not
vested or exercisable, shall be canceled, and the Company shall pay each
holder of any such option at or promptly after the Effective Time for
each such option an amount in cash determined by multiplying (i) the
excess, if any, of the Merger Consideration per share of Company Class A
Stock over the applicable exercise price of such option by (ii) the
number of shares of Company Class A Stock such holder could have
purchased (assuming full vesting of all options) had such holder
exercised such option in full immediately prior to the Effective Time.
SECTION 3.06. Restricted Stock. Any shares of Company Stock that
are outstanding immediately prior to the Effective Time and are unvested
or subject to a repurchase option, risk of forfeiture or other condition
shall become vested as of the Effective Time and will no longer be
subject to such repurchase option, risk of forfeiture or other condition.
SECTION 3.07. Adjustments. If, during the period between the date
of this Agreement and the Effective Time, any change in the outstanding
shares of capital stock of the Company shall occur, including by reason
of any reclassification, recapitalization, stock split or combination,
exchange or readjustment of shares, or stock dividend thereon with a
record date during such period, the Merger Consideration and any other
amounts payable pursuant to this Agreement shall be appropriately
adjusted.
SECTION 3.08. Withholding Rights. Each of the Surviving Corporation
and Parent shall be entitled to deduct and withhold from the
consideration otherwise payable to any Person pursuant to this Article 3
such amounts as it is required to deduct and withhold with respect to the
making of such payment under any provision of federal, state, local or
foreign tax law. If the Surviving Corporation or Parent, as the case may
be, so withholds amounts, such amounts shall be treated for all purposes
of this Agreement as having been paid to the holder of the shares of
Company Stock in respect of which the Surviving Corporation or Parent, as
the case may be, made such deduction and withholding.
SECTION 3.09. Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact
by the Person claiming such Certificate to be lost, stolen or destroyed
and, if required by the Surviving Corporation, the posting by such Person
of a bond, in such reasonable amount as the Surviving Corporation may
direct, as indemnity against any claim that may be made against it with
respect to such Certificate, the Exchange Agent will pay, in exchange for
such lost, stolen or destroyed Certificate, the Merger Consideration to
be paid in respect of the shares of Company Stock represented by such
Certificate, as contemplated by this Article.
ARTICLE 4
THE SURVIVING CORPORATION
SECTION 4.01. Certificate of Incorporation. The certificate of
incorporation of the Company in effect at the Effective Time shall be the
certificate of incorporation of the Surviving Corporation until amended
in accordance with applicable law.
SECTION 4.02. Bylaws. The bylaws of the Company in effect at the
Effective Time shall be the bylaws of the Surviving Corporation until
amended in accordance with applicable law.
SECTION 4.03. Directors and Officers. From and after the Effective
Time, until successors are duly elected or appointed and qualified in
accordance with applicable law, (i) the directors of Merger Subsidiary at
the Effective Time shall be the directors of the Surviving Corporation
and (ii) the officers of the Company at the Effective Time shall be the
officers of the Surviving Corporation.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the corresponding sections or subsections
of the disclosure Schedule delivered by the Company to Parent on or prior
to the date hereof (the "Company Disclosure Schedule") or in the Company
SEC Documents, the Company represents and warrants to Parent that:
SECTION 5.01. Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing
under the laws of the State of Indiana and has all corporate powers and
all governmental licenses, authorizations, permits, consents and
approvals required to carry on its business as now conducted, except for
those licenses, authorizations, permits, consents and approvals the
absence of which would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect on the Company. The
Company is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction where such qualification is
necessary, except for those jurisdictions where failure to be so
qualified would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company. The Company has
heretofore made available to Parent true and complete copies of the
certificate of incorporation and bylaws of the Company as currently in
effect. This Agreement constitutes a legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
SECTION 5.02. Corporate Authorization. (a) The execution, delivery
and performance by the Company of this Agreement and the consummation by
the Company of the transactions contemplated hereby are within the
Company's corporate powers and, except for any required approval of the
Company's stockholders, have been duly authorized by all necessary
corporate action on the part of the Company. The affirmative vote of the
holders of a majority of the voting power of the outstanding shares of
Company Stock, voting together as a single class (the "Company
Stockholder Approval"), is the only vote of the holders of any of the
Company's capital stock which may be necessary in connection with the
consummation of the Merger. This Agreement constitutes a valid and
binding agreement of the Company. Except for Sections 23-1-42-5, 23-1-
43-18 and 23-1-43-19 of the Indiana Law (the restrictions on voting
rights and business combinations of which have been rendered inapplicable
or otherwise satisfied) and 23-2-3.1-.5 of the Indiana Law, no state
takeover statute is applicable to the Offer, the Merger or other
transactions contemplated by this Agreement.
(b) At a meeting duly called and held, the Company's
Board of Directors has (i) determined that this Agreement and the
transactions contemplated hereby are fair to and in the best interests of
the Company's stockholders, (ii) approved and adopted this Agreement and
the transactions contemplated hereby and (iii) resolved (subject to
Section 7.04(c)) to recommend approval and adoption of this Agreement by
its stockholders.
SECTION 5.03. Governmental Authorization. The execution, delivery
and performance by the Company of this Agreement and the consummation by
the Company of the transactions contemplated hereby require no action by
or in respect of, or filing with, any governmental body, agency, official
or authority, domestic or foreign, other than (i) the filing of articles
of merger with respect to the Merger with the Secretary of State of the
State of Indiana and appropriate documents with the relevant authorities
of other states in which the Company is qualified to do business, (ii)
compliance with any applicable requirements of the HSR Act and of laws,
rules and regulations in foreign jurisdictions governing antitrust or
merger control matters, (iii) compliance with any applicable
requirements of the 1933 Act, the 1934 Act and any other applicable
securities or takeover laws, whether state or foreign, and (iv) any
actions or filings the absence of which would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on
the Company or materially to impair the ability of the Company to
consummate the transactions contemplated by this Agreement.
SECTION 5.04. Non-contravention. The execution, delivery and
performance by the Company of this Agreement and the consummation of the
transactions contemplated hereby do not and will not (i) contravene,
conflict with, or result in any violation or breach of any provision of
the articles of incorporation or bylaws of the Company, (ii) assuming
compliance with the matters referred to in Section 5.03, contravene,
conflict with, or result in a violation or breach of any provision of any
applicable law, regulation, judgment, injunction, order or decree, (iii
require any consent or other action by any Person under, constitute a
default under, or cause or permit the termination, cancellation,
acceleration or other change of any right or obligation or the loss of
any benefit to which the Company or any of its Subsidiaries is entitled
under any provision of any agreement or other instrument binding upon the
Company or any of its Subsidiaries or any license, franchise, permit,
certificate, approval or other similar authorization affecting, or
relating in any way to, the assets or business of the Company and its
Subsidiaries or (iv) result in the creation or imposition of any Lien on
any asset of the Company or any of its Subsidiaries, except, in the case
of clauses (ii), (iii) and (iv), for such matters as would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect on the Company.
SECTION 5.05. Capitalization. (a) The authorized capital stock of
the Company consists of 280,000,000 shares of common stock, no par value
per share, of which 150,000,000 shares have been designated as Company
Class A Stock and 130,000,000 shares have been designated as Company
Class B Stock. As of June 23, 2000, there were outstanding: (1)
32,724,324 shares of Company Class A Stock (which amount includes 184,000
shares of restricted stock of the Company); (2) 55,356,010 shares of
Company Class B Stock; and (3) employee and director stock options to
purchase an aggregate of 3,132,832 shares of Company Class A Stock. All
shares of capital stock of the Company outstanding as of the date hereof
have been duly authorized and validly issued and are fully paid and
nonassessable. All shares of Company Class A Stock issuable upon
exercise of outstanding employee or director stock options have been duly
authorized and, when issued in accordance with the terms thereof, will be
validly issued and will be fully paid and nonassessable.
(b) Except as set forth in this Section 5.05 and for changes
since June 23, 2000 resulting from the exercise of employee or director
stock options outstanding on such date, there are no outstanding (i)
shares of capital stock or voting securities of the Company, (ii)
securities of the Company convertible into or exchangeable for shares of
capital stock or voting securities of the Company or (iii) options or
other rights to acquire from the Company or other obligation of the
Company to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities
of the Company (the items in clauses (i), (ii) and (iii) being referred
to collectively as the "Company Securities"). There are no outstanding
obligations of the Company or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any of the Company Securities. Without
limiting the generality of the foregoing, neither the Company nor any of
its Subsidiaries has adopted a shareholder rights plan or similar plan or
arrangement.
SECTION 5.06. Subsidiaries. (a) Each Subsidiary of the Company is a
corporation duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation, has all powers and
all governmental licenses, authorizations, permits, consents and
approvals required to carry on its business as now conducted, except for
those licenses, authorizations, permits, consents and approvals the
absence of which would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect on the Company. Each such
Subsidiary is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction where such qualification is
necessary, except for those jurisdictions where failure to be so
qualified would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company. All material
Subsidiaries of the Company and their respective jurisdictions of
incorporation are identified in the Company 10-K.
(b) All of the outstanding capital stock of, or other
voting securities or ownership interests in, each Subsidiary of the
Company, is owned by the Company, directly or indirectly, free and clear
of any Lien and free of any other limitation or restriction (including
any restriction on the right to vote, sell or otherwise dispose of such
capital stock or other voting securities or ownership interests). There
are no outstanding (i) securities of the Company or any of its
Subsidiaries convertible into or exchangeable for shares of capital stock
or other voting securities or ownership interests in any Subsidiary of
the Company or (ii) options or other rights to acquire from the Company
or any of its Subsidiaries, or other obligation of the Company or any of
its Subsidiaries to issue, any capital stock or other voting securities
or ownership interests in, or any securities convertible into or
exchangeable for any capital stock or other voting securities or
ownership interests in, any Subsidiary of the Company (the items in
clauses (i) and (ii) being referred to collectively as the "Company
Subsidiary Securities"). There are no outstanding obligations of the
Company or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any of the Company Subsidiary Securities.
SECTION 5.07. SEC Filings. (a) The Company has made available to
Parent (i) the Company's annual report on Form 10-K for its fiscal year
ended December 26, 1999, (ii) its quarterly report on Form 10-Q for its
fiscal quarter ended March 26, 2000, (iii) its proxy statements relating
to meetings of, or actions taken without a meeting by, the stockholders
of the Company held since December 26, 1999, and (iv) all of its other
reports, statements, schedules and registration statements filed with the
SEC since December 26, 1999 (the documents referred to in this Section
5.07(a), collectively, the "Company SEC Documents".)
(b) As of its filing date, each Company SEC Document
complied as to form in all material respects with the applicable
requirements of the 1933 Act and the 1934 Act, as the case may be. The
Company has filed all material contracts, agreements and other documents
or instruments required to be filed as exhibits to the Company SEC
Documents.
(c) As of its filing date (or, if amended or superceded
by a filing prior to the date hereof, on the date of such filing), each
Company SEC Document filed pursuant to the 1934 Act did not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of
the circumstances under which they were made, not misleading.
SECTION 5.08. Financial Statements. The audited consolidated
financial statements and unaudited consolidated interim financial
statements of the Company included in the Company SEC Documents or
delivered to Parent pursuant to this Agreement fairly present or will
fairly present, in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis (except as may be
indicated in the notes thereto), the consolidated financial position of
the Company and its consolidated Subsidiaries as of the dates thereof and
their consolidated results of operations and cash flows for the periods
then ended (subject to normal year-end adjustments in the case of any
unaudited interim financial statements).
SECTION 5.09. Disclosure Documents. The proxy or information
statement of the Company which may be filed with the SEC in connection
with the Merger (the "Company Proxy Statement") and any amendments or
supplements thereto will, when filed, comply as to form in all material
respects with the applicable requirements of the 1934 Act. At the time
the Company Proxy Statement or any amendment or supplement thereto is
first mailed to stockholders of the Company, the Company Proxy Statement,
as supplemented or amended, if applicable, will not contain any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The
representations and warranties contained in this Section 5.09 will not
apply to statements or omissions included in the Company Proxy Statement
based upon information furnished to the Company by Parent specifically
for use therein.
SECTION 5.10. Absence of Certain Changes. Since the Company
Balance Sheet Date, the business of the Company and its Subsidiaries has
been conducted in the ordinary course consistent with past practices and
there has not been (a) any Material Adverse Effect on the Company or any
event, change, effect or development that would, individually or in the
aggregate, reasonably by expected to have a Material Adverse Effect on
the Company or (b) any action taken by the Company or any of its
Subsidiaries from the Company Balance Sheet Date through the date of this
Agreement that, if taken during the period from the date of this
Agreement through the Effective Time, would constitute a breach of
Section 7.01.
SECTION 5.11. No Undisclosed Material Liabilities. There are no
liabilities or obligations of the Company or any of its Subsidiaries of
any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, other than:
(a) liabilities or obligations disclosed or provided for
in the Company Balance Sheet or in the notes thereto or in the Company
SEC Documents filed prior to the date hereof,
(b) liabilities or obligations that would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect on the Company, and
(c) liabilities or obligations under this Agreement or
incurred in connection with the transactions contemplated hereby.
SECTION 5.12. Compliance with Laws and Court Orders. Neither the
Company nor any of its Subsidiaries is in violation of, or has since the
Company Balance Sheet Date violated, any applicable law, statute,
ordinance, rule, regulation, judgment, injunction, order or decree,
except for violations that have not had and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect on the Company.
SECTION 5.13. Litigation. There is no action, suit, investigation
or proceeding pending, or, to the knowledge of the Company, threatened,
against the Company or any of its Subsidiaries, or any of their
respective properties before any court or arbitrator or before or by any
governmental body, agency or official, domestic or foreign, that, if
determined or resolved adversely in accordance with the plaintiff's
demands, would reasonably be expected to have a Material Adverse Effect
on the Company.
SECTION 5.14. Finders' Fees. Except for DLJ, a copy of whose
engagement agreement has been provided to Parent, and Goldman Sachs &
Co., there is no investment banker, broker, finder or other intermediary
that has been retained by or is authorized to act on behalf of the
Company or any of its Subsidiaries who might be entitled to any fee or
commission from the Company or any of its Affiliates in connection with
the transactions contemplated by this Agreement. The Company has
provided to Parent a good faith estimate and description of the
professional expenses of the Company and its Subsidiaries that the
Company expects to incur or has incurred in connection with the Offer,
the Merger and the other transactions contemplated by this Agreement, or
are payable by the Company pursuant to Section 12.04(c).
SECTION 5.15. Opinion of Financial Advisor. The Company has
received an opinion of DLJ that, as of the date of such opinion, the
consideration to be received by the holders of shares of Company Stock
pursuant to the Offer and the Merger is fair to such holders from a
financial point of view.
SECTION 5.16. Taxes. (a) Company and each of its Subsidiaries has
timely filed (or has had timely filed on its behalf) or will file or
cause to be timely filed all material Tax Returns required by applicable
law to be filed by it prior to or as of the Effective Time, and all such
Tax Returns are, or will be at the time of filing, true and complete in
all material respects.
(b) The Company and each of its Subsidiaries has paid (or
has had paid on its behalf), or, where payment is not yet due, has
established (or has had established on its behalf and for its sole
benefit and recourse) or will establish or cause to be established in
accordance with GAAP on or before the Effective Time an adequate accrual
for the payment of, all taxes due with respect to any period ending prior
to or as of the Effective Time.
(c) The federal income Tax Returns of Company and its
Subsidiaries have been examined and settled with the Internal Revenue
Service (the "IRS") (or the applicable statutes of limitation for the
assessment of federal income Taxes for such periods have expired) for all
years through 1997.
(d) There are no material Liens or encumbrances for Taxes
on any of the assets of Company or any of its Subsidiaries.
(e) The Company and its Subsidiaries have complied in all
material respects with all applicable laws, rules and regulations
relating to the payment and withholding of Taxes.
(f) No federal, state, local or foreign audits or
administrative proceedings are pending with regard to any material Taxes
or Tax Return of Company or its Subsidiaries and none of them has
received a written notice of any proposed audit or proceeding regarding
any pending audit or proceeding.
(g) "Taxes" shall mean any and all taxes, charges, fees,
levies or other assessments, including income, gross receipts, excise,
real or personal property, sales, withholding, social security,
retirement, unemployment, occupation, use, goods and services, service
use, license, value added, capital, net worth, payroll, profits,
withholding, franchise, transfer and recording taxes, fees and charges,
and any other taxes, assessment or similar charges imposed by the IRS or
any taxing authority (whether domestic or foreign including any state,
county, local or foreign government or any subdivision or taxing agency
thereof (including a United States possession)) (a "Taxing Authority"),
whether computed on a separate, consolidated, unitary, combined or any
other basis; and such term shall include any interest whether paid or
received, fines, penalties or additional amounts attributable to, or
imposed upon, or with respect to, any such taxes, charges, fees, levies
or other assessments. "Tax Return" shall mean any report, return,
document, declaration or other information or filing required to be
supplied to any taxing authority or jurisdiction (foreign or domestic)
with respect to Taxes, including information returns, any documents with
respect to or accompanying payments of estimated Taxes, or with respect
to or accompanying requests for the extension of time in which to file
any such report, return, document, declaration or other information.
SECTION 5.17. Employee Benefit Plans. (a) The Company has made
available to Parent a list and copies of the material Employee Plans
(and, if applicable, related trust agreements) and all material
amendments thereto and material written interpretations thereof together
with the most recent annual report (Form 5500 including, if applicable,
Schedule B thereto).
(b) No transaction prohibited by Section 406 of ERISA or Section
4975 of the Code has occurred with respect to any employee benefit plan
or arrangement that is covered by Title I of ERISA, which transaction has
or will cause the Company to incur any material liability under ERISA or
the Code. No "accumulated funding deficiency," as defined in Section 412
of the Code, has been incurred with respect to any Employee Plan subject
to such Section 412, whether or not waived. No "reportable event",
within the meaning of Section 4043 of ERISA, other than a "reportable
event" that would not be reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company, and no event
described in Section 4062 or 4063 of ERISA, has occurred in connection
with any Employee Plan. The Company does not sponsor or contribute to
any "multiple employer welfare arrangement" as defined in Section 3(40)
of ERISA. Neither the Company nor any ERISA Affiliate has engaged in,
or is a successor or parent corporation to an entity that has engaged in,
a transaction described in Sections 4069 or 4212(c) of ERISA or incurred,
or reasonably expects to incur prior to the Effective Time, any
liability under Title IV of ERISA arising in connection with the
termination of, or a complete or partial withdrawal from, any plan
covered or previously covered by Title IV of ERISA or any liability
under Section 4971 of the Code that in either case could become a
liability of the Company, Parent or any ERISA Affiliate after the
Effective Time. The Company does not contribute to any "multiemployer
plan", as defined in Section 3(37) of ERISA. The assets of the Company
are not now, nor will they after the passage of time be, subject to any
lien imposed under Code Section 412(n) by reason of a failure of the
Company to make timely installments or other payments required under Code
Section 412 prior to the Effective Time.
(c) The Company has made available to Parent the most recent
determination letter, if any, of the IRS relating to each Employee Plan
intended to qualify under Section 401(a) of the Code. Each Employee Plan
has been maintained in substantial compliance with its terms and with the
requirements prescribed by any and all applicable statutes, orders, rules
and regulations, including but not limited to ERISA and the Code.
Without limiting the foregoing, with respect to each Employee Plan all
required employer contributions have been made.
(d) The Company has provided Parent with a list and copies or
descriptions of each material Benefit Arrangement (and, if applicable,
related trust agreements) and all material amendments thereto and
material written interpretations thereof. Each Benefit Arrangement and
any stock option or other stock related right or plan has been maintained
in substantial compliance with its terms and with the requirements
prescribed by any and all applicable statutes, orders, rules and
regulations and has been maintained in good standing with applicable
regulatory authorities.
(e) There has been no failure of any Employee Plan which is a
group health plan (as defined in Section 5000(b)(1) of the Code) to meet
the requirements of Code Section 4980B(f) with respect to a qualified
beneficiary (as defined in Section 4980B(g)), other than a failure that
would not be reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company.
(f) No employee or former employee of the Company or any
Subsidiary will become entitled to any bonus, retirement, severance, job
security or similar benefit or enhanced such benefit (including
acceleration of vesting or exercise of an incentive award) as a result of
the transactions contemplated hereby. No independent contractors of the
Company or any Subsidiary have asserted any claims for benefits under any
Employee Plans.
(g) There is no contract, plan or arrangement (written or
otherwise) covering any employee or former employee of the Company or any
Subsidiary that, individually or collectively, could give rise to the
payment of any amount that would not be deductible by Parent, the Company
or any Subsidiary by reason of Section 280G or 162(m) of the Code.
SECTION 5.18. Environmental Matters. (a) Except as would not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company:
(i) no written notice, demand, request for
information, citation, summons or order has been received, no
penalty has been assessed, and no investigation, action, claim,
suit or proceeding is pending or, to the knowledge of the Company,
threatened by any governmental entity or other Person which
alleges a violation by the Company or any Subsidiary of the
Company of any Environmental Law;
(ii) the Company and its Subsidiaries are in
compliance with all Environmental Laws and all Environmental
Permits;
(iii) there are no liabilities of the Company or any
of its Subsidiaries of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise
arising under any Environmental Law; and
(iv) in connection with the real property owned or
leased by the Company, no release, emission, or discharge into the
environment of hazardous substances, waste or air pollutants, as
defined under any Environmental Laws, has occurred within the past
twenty-four months, is presently occurring, or is anticipated to
occur in excess of permitted levels or reportable quantities,
under any Environmental Law. No hazardous waste or hazardous
substance including Polychlorinated Biphenyls ("PCBs") has been
disposed of by the Company, and to the Company's knowledge, no
hazardous waste or hazardous substance including PCBs has been
disposed of by any other Person, on the real property occupied by
the Company. As used herein, the term "hazardous waste" shall
have the same meaning as it has in the Resource Conservation and
Recovery Act ("RCRA"), as amended, and in the equivalent state
statutes, if any, of the states in which the Company operates any
newspaper or conducts any commercial printing.
(b) Except as set forth in this Section 5.18, or Sections
5.07 or 5.11, no representations or warranties are being made with
respect to environmental matters.
SECTION 5.19. Intellectual Property. No Company Intellectual
Property Right is subject to any outstanding judgment, injunction, order,
decree or agreement restricting the use thereof by the Company or any of
its Subsidiaries or restricting the licensing thereof by the Company or
any of its Subsidiaries to any Person, except for any judgment,
injunction, order, decree or agreement which would not reasonably be
expected to have a Material Adverse Effect on the Company. Since the
Company Balance Sheet Date, neither the Company nor any of its
Subsidiaries has been a defendant in any action, suit, investigation or
proceeding relating to, or otherwise has been notified of, any alleged
claim of infringement of any Intellectual Property Right. The Company
and its Subsidiaries have no outstanding claim or suit for any continuing
infringement by any other Person of any Company Intellectual Property
Rights.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company that:
SECTION 6.01. Corporate Existence and Power. Each of Parent and
Merger Subsidiary is a corporation duly incorporated, validly existing
and in good standing under the laws of its jurisdiction of incorporation
and has all corporate powers and all governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted, except for those licenses, authorizations,
permits, consents and approvals the absence of which would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect on Parent. Since the date of its incorporation, Merger Subsidiary
has not engaged in any activities other than in connection with or as
contemplated by this Agreement or in connection with arranging any
financing required to consummate the transactions contemplated hereby.
SECTION 6.02. Corporate Authorization. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement and the
consummation by Parent and Merger Subsidiary of the transactions
contemplated hereby are within the corporate powers of Parent and Merger
Subsidiary and have been duly authorized by all necessary corporate
action. This Agreement constitutes a valid and binding agreement of each
of Parent and Merger Subsidiary.
SECTION 6.03. Governmental Authorization. The execution, delivery
and performance by Parent and Merger Subsidiary of this Agreement and the
consummation by Parent and Merger Subsidiary of the transactions
contemplated hereby require no action by or in respect of, or filing
with, any governmental body, agency, official or authority, domestic or
foreign, other than (i) the filing of articles of merger with respect to
the Merger with the Secretary of State of the State of Indiana and
appropriate documents with the relevant authorities of other states in
which Parent is qualified to do business, (ii) compliance with any
applicable requirements of the HSR Act and of laws, rules and regulations
in foreign jurisdictions governing antitrust or merger control matters,
(iii) compliance with any applicable requirements of the 1933 Act, the
1934 Act and any other applicable securities or takeover laws, whether
state or foreign, and (iv) any actions or filings the absence of which
would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Parent or materially to impair
the ability of Parent and Merger Subsidiary to consummate the
transactions contemplated by this Agreement.
SECTION 6.04. Non-contravention. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement and the
consummation by Parent and Merger Subsidiary of the transactions
contemplated hereby do not and will not (i) contravene, conflict with, or
result in any violation or breach of any provision of the certificate of
incorporation or bylaws of Parent or Merger Subsidiary, (ii) assuming
compliance with the matters referred to in Section 6.03, contravene,
conflict with, or result in any violation or breach of any provision of
any law, regulation, judgment, injunction, order or decree or (iii)
require any consent or other action by any Person under, constitute a
default under, or cause or permit the termination, cancellation,
acceleration or other change of any right or obligation or the loss of
any benefit to which Parent or Merger Subsidiary is entitled under any
provision of any agreement or other instrument binding upon Parent or
Merger Subsidiary, except, in the case of clauses (ii) and (iii), for
such matters as would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect on Parent.
SECTION 6.05. Disclosure Documents. The information with respect to
Parent and any of its Subsidiaries that Parent furnishes to the Company
specifically for use in the Company Proxy Statement will not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of
the circumstances under which they are made, not misleading at the time
such Company Proxy Statement or any amendment or supplement thereto is
first mailed to stockholders of the Company.
SECTION 6.06. Financing. Parent has, or will have prior to the
expiration of the Offer, sufficient funds to consummate the transactions
contemplated by this Agreement, including payment in full for all shares
of Company Stock validly tendered in the Offer or outstanding at the
Effective Time.
ARTICLE 7
COVENANTS OF THE COMPANY
The Company agrees that:
SECTION 7.01. Conduct of the Company. From the date hereof until
the Effective Time, the Company and its Subsidiaries shall conduct their
business in the ordinary course consistent with past practice and shall
use their reasonable best efforts to preserve intact their business
organizations and relationships with third parties and to keep available
the services of their present officers and employees. Notwithstanding
the foregoing, except with the prior written consent of Parent or as
contemplated by this Agreement or as set forth in the Company Disclosure
Schedule, from the date hereof until the Effective Time the Company shall
not, and shall not permit any of its Subsidiaries to:
(a) declare, set aside or pay any dividend or other distribution
with respect to any share of its capital stock, other than (w) customary
quarterly cash dividends on the shares of Company Stock, (x) preferred
quarterly dividends payable to preferred shareholders of Indiana
Newspapers, Inc. and (y) dividends and other distributions paid by any
Subsidiary of the Company to the Company or any wholly-owned Subsidiary
of the Company;
(b) repurchase, redeem or otherwise acquire any shares of capital
stock or other securities of, or other ownership interests in, the
Company or any of its Subsidiaries;
(c) issue, deliver or sell any shares of Company Stock, or any
securities convertible into shares of Company Stock, or any rights,
warrants or options to acquire any shares of Company Stock, other than
(i) issuances pursuant to stock-based awards or options that are
outstanding on the date hereof or are granted in accordance with the
following clause (ii), and (ii) additional options or stock-based awards
to acquire shares of Company Stock granted under the terms of the
Company's stock plans as in effect on the date hereof in the ordinary
course consistent with past practice;
(d) amend its articles of incorporation or by-laws or other
comparable organizational documents or amend any material terms of the
outstanding securities of the Company or its Subsidiaries;
(e) merge or consolidate with any other Person or acquire a
material amount of stock or assets of any other Person;
(f) sell, lease, license or otherwise dispose of any material
subsidiary or material amount of assets, securities or property or make
any investments other than (i) pursuant to existing contracts or
commitments or (ii) transactions that are in the ordinary course
consistent with past practice and not material to the Company and its
Subsidiaries taken as a whole, including without limitation, investments
previously committed to (whether orally or in writing) by CNI Ventures,
Inc.;
(g) incur any indebtedness for borrowed money, guarantee any such
indebtedness, issue or sell any debt securities or warrants or other
rights to acquire any debt securities or guarantee any debt securities,
other than any indebtedness, guarantee or issuance incurred in the
ordinary course of business consistent with past practice or incurred
between the Company and any of its wholly-owned Subsidiaries or between
any of such wholly-owned Subsidiaries;
(h) except as required under any existing collective bargaining
agreement or under Section 3.05 or as may be mutually agreed upon between
Parent and the Company, enter into or adopt any new, or amend or renew
any existing, Employee Plan or Benefit Arrangement or any collective
bargaining agreement, other than as required by law;
(i) except (i) as permitted under Section 7.01(h) or (ii) to the
extent required by any existing collective bargaining agreement or by
written employment agreements existing on the date of this Agreement,
increase the compensation payable or to become payable to its officers or
employees, except for increases in the ordinary course of business
consistent with past practice in salaries or wages of employees of the
Company or any of its Subsidiaries;
(j) adopt any change, other than in the ordinary course of
business consistent with past practice or as required by the SEC, GAAP or
by law, in its accounting policies, procedures or practices;
(k) take any action that would, or that would reasonably be
expected to, result in any of the representations and warranties of the
Company set forth in this Agreement becoming untrue;
(l) enter into any contract or agreement involving annual
consideration in excess of $200,000 and/or renewing any such existing
contracts or agreements except, in each case, in the ordinary course of
business;
(m) enter into any contracts of employment (other than contracts
terminable by the Company without liability immediately following the
Closing) or any severance, retention or similar agreement; or
(n) agree or commit to do any of the foregoing.
SECTION 7.02. Stockholder Meeting; Proxy Material; Merger Without
Stockholder Meeting. (a) If required by applicable law to consummate the
Merger, the Company shall cause a meeting of its stockholders (the
"Company Stockholder Meeting"), to be duly called and held as soon as
practicable following the date on which the Merger Subsidiary completes
the purchase of shares of Company Stock pursuant to the Offer (the "Offer
Completion Date"), or the Option, for the purpose of voting on the
approval and adoption of this Agreement and the Merger. Subject to
Section 7.04(c), the Board of Directors of the Company shall recommend
approval and adoption of this Agreement and the Merger by the Company's
stockholders. In connection with such meeting, the Company will (i)
promptly prepare and file with the SEC, use its best efforts to have
cleared by the SEC and thereafter mail to its stockholders as promptly as
practicable the Company Proxy Statement and all other proxy materials for
such meeting, (ii) use its best efforts to obtain the necessary approvals
by its stockholders of this Agreement and the transactions contemplated
hereby and (iii) otherwise comply with all legal requirements applicable
to such meetings.
(b) If Merger Subsidiary shall acquire at least 90% of the
outstanding shares of each class of Company Stock pursuant to the Offer
or otherwise, the parties hereto agree, subject to satisfaction or (to
the extent permitted hereunder) waiver of all conditions to the Merger,
to take all necessary and appropriate action to cause the Merger to be
effective as soon as practicable after the acceptance for payment and
purchase of shares of Company Stock pursuant to the Offer without the
Company Stockholder Meeting.
SECTION 7.03. Access to Information. From the date hereof until the
Effective Time and subject to applicable law and the Confidentiality
Agreement dated as of May 26, 2000 between the Company and Parent (the
"Confidentiality Agreement"), the Company shall (i) give Parent, its
counsel, financial advisors, auditors and other authorized
representatives reasonable access to the offices, properties, books and
records of the Company and its Subsidiaries, (ii) furnish to Parent, its
counsel, financial advisors, auditors and other authorized
representatives such financial and operating data and other information
as such Persons may reasonably request and (iii) instruct the employees,
counsel, financial advisors, auditors and other authorized
representatives of the Company and its Subsidiaries to cooperate with
Parent in its investigation of the Company and its Subsidiaries. Any
investigation pursuant to this Section shall be conducted in such manner
as not to interfere unreasonably with the conduct of the business of the
Company and its Subsidiaries. No information or knowledge obtained by
Parent in any investigation pursuant to this Section shall affect or be
deemed to modify any representation or warranty made by the Company
hereunder.
SECTION 7.04. No Solicitation; Other Offers. (a) From the date
hereof until the earlier of the Effective Time and the termination of
this Agreement in accordance with Article 11, neither the Company nor any
of its Subsidiaries nor any of the officers, directors, employees,
investment bankers, consultants or other agents of the Company and its
Subsidiaries will, directly or indirectly, (i) solicit, initiate,
encourage, induce or knowingly facilitate (including, without limitation
by way of furnishing information) the submission of any Acquisition
Proposal or any inquiries with respect thereto, (ii) engage in
discussions or negotiations with any Person concerning an Acquisition
Proposal or knowingly facilitate any effort or attempt to make an
Acquisition Proposal or accept an Acquisition Proposal or (iii) disclose
any nonpublic information relating to the Company or any of its
Subsidiaries to any Person who, to the knowledge of the Company, is
making or considering making, or who has made, an Acquisition Proposal.
The Company will notify Parent as promptly as practicable (but in no
event later than 24 hours) after receipt by the Company of any
Acquisition Proposal or any request for nonpublic information relating to
the Company or any of its Subsidiaries by any Person who, to the
knowledge of the Company, is making or considering making or who has
made, an Acquisition Proposal. The Company shall provide such notice
orally and in writing and shall identify the Person making, and the terms
and conditions of, any such Acquisition Proposal or request. The Company
shall keep Parent informed of the status and details (including, without
limitation, amendments or proposed amendments) of any such Acquisition
Proposal or request. The Company shall, and shall cause its Subsidiaries
and the directors, employees and other agents of the Company and its
Subsidiaries to, cease immediately and cause to be terminated all
activities, discussions and negotiations, if any, with any Persons
conducted prior to the date hereof with respect to any Acquisition
Proposal and, to the extent within its power, to recover or cause to be
destroyed all information concerning the Company and its Subsidiaries in
the possession of such Persons and their Affiliates, representatives and
advisors. Nothing contained in this Agreement shall prevent the Board of
Directors of the Company from complying with Rule 14d-9 or Rule 14e-2
under the 1934 Act with respect to any Acquisition Proposal.
(b) Notwithstanding the first sentence of Section 7.04(a), the
Company may, until the earliest to occur of the Offer Completion Date, a
purchase of Company Stock pursuant to the Option, and the Company
Stockholders Meeting (such earliest date the "Cutoff Date"), negotiate or
otherwise engage in substantive discussions with, and furnish nonpublic
information to, any Person in response to an unsolicited Acquisition
Proposal by such Person if (i) the Company has complied with the terms of
this Section 7.04, (ii) the Board of Directors of the Company determines
in good faith that such Acquisition Proposal could reasonably be expected
to result in a Superior Proposal and, after consultation with and receipt
of advice from outside legal counsel, that the failure to take such
action could reasonably be deemed to constitute a breach of its fiduciary
duties under applicable law, (iii) such Person executes a confidentiality
agreement with terms no less favorable to the Company than those
contained in the Confidentiality Agreement (including the standstill
provisions unless the Company shall have amended the Confidentiality
Agreement to modify the standstill provisions therein to be no more
restrictive of Parent than such Person is restricted pursuant to such
confidentiality agreement) and (iv) the Company shall have delivered to
Parent prior written notice advising Parent that it intends to take such
action. The Company shall provide Parent any information regarding the
Company or its Subsidiaries provided to any Person making an Acquisition
Proposal which was not previously provided to Parent.
(c) Except as permitted in this Section 7.04(c), neither the
Board of Directors of the Company nor any committee thereof shall
(i) withdraw or modify, or publicly propose to withdraw or modify, in a
manner adverse to Parent, or take any action not explicitly permitted by
this Agreement that would be inconsistent with its approval of the Offer
and the Merger or with the recommendation to stockholders referred to in
Section 7.02 hereof, (ii) approve or recommend, or publicly propose to
approve or recommend, any Acquisition Proposal or (iii) cause the Company
to enter into any letter of intent, agreement in principle, acquisition
agreement or similar agreement related to any Acquisition Proposal.
Notwithstanding the foregoing, prior to the Cutoff Date, the Board of
Directors of the Company shall be permitted not to recommend to its
stockholders acceptance of the Offer and/or approval and adoption of this
Agreement and the Merger, or to withdraw, or modify in a manner adverse
to Parent, its recommendation to its stockholders referred to in
Section 2.02 and/or Section 7.02 hereof, but only if (i) the Company has
complied with the terms of this Section 7.04, (ii) the Company has
received an unsolicited Acquisition Proposal which the Board of Directors
determines in good faith constitutes a Superior Proposal, (iii) the Board
of Directors of the Company determines in good faith, after consultation
with and receipt of advice from outside legal counsel, that the failure
to take such action could reasonably be deemed to be inconsistent with
its fiduciary duties under applicable law and (iv) the Company shall have
delivered to Parent a prior written notice advising Parent that it
intends to take such action.
(d) For purposes of this Agreement:
"Acquisition Proposal" means any offer or proposal for a merger,
reorganization, consolidation, share exchange, business combination, or
other similar transaction involving the Company or any of its
Subsidiaries or any proposal or offer to acquire, directly or indirectly,
securities representing more than 50% of the voting power of the Company,
or a substantial portion of the assets of the Company and its
Subsidiaries taken as a whole, other than the Offer and the Merger
contemplated by this Agreement.
"Superior Proposal" means any bona fide written Acquisition
Proposal which (i) the Board of Directors of the Company determines in
good faith (after consultation with a financial advisor of nationally
recognized reputation and taking into account all the terms and
conditions of the Acquisition Proposal) is (a) more favorable to the
Company and its stockholders (in their capacities as stockholders) from a
financial point of view than the transaction contemplated hereunder, and
(b) reasonably capable of being completed, including a conclusion that
its financing, to the extent required, is then committed or is in the
good faith judgment of the Board of Directors of the Company, reasonably
capable of being financed by the Person making such Acquisition Proposal.
(e) During the period from the date of this Agreement until the
Effective Time or earlier termination of this Agreement, the Company
shall not terminate, amend, modify or waive any provision of any
confidentiality or standstill agreement to which it or any of its
Subsidiaries is a party (other than any involving Parent or its
Subsidiaries). During such period, the Company agrees to enforce, to the
fullest extent permitted under applicable law, the provisions of any such
agreement, including obtaining injunctions to prevent any breaches of
such agreements and to enforce specifically the terms and provisions
thereof in any court of the United States or any state thereof having
jurisdiction.
ARTICLE 8
COVENANTS OF PARENT
Parent agrees that:
SECTION 8.01. Confidentiality. Prior to the Effective Time and
after any termination of this Agreement, Parent will hold, and will use
its reasonable best efforts to cause its officers, directors, employees,
accountants, counsel, consultants, advisors and agents to hold, in
confidence all documents and information concerning the Company or any of
its Subsidiaries furnished to Parent or its Affiliates in connection with
the transactions contemplated by this Agreement in accordance with the
terms of the Confidentiality Agreement.
SECTION 8.02. Obligations of Merger Subsidiary. Parent will take
all action necessary to cause Merger Subsidiary to perform its
obligations under this Agreement and the Offer and to consummate the
Merger on the terms and conditions set forth in this Agreement.
SECTION 8.03. Company Stockholder Meeting. At the Company
Stockholder Meeting, if any, the Parent and Merger Subsidiary agree that
each shall vote, or cause to be voted, in favor of the Merger all shares
of Company Stock directly or indirectly beneficially owned by it or any
Subsidiary.
SECTION 8.04. Director and Officer Liability. Parent shall cause
the Surviving Corporation, and the Surviving Corporation hereby agrees,
to do the following:
(a) For six years after the Effective Time, the Surviving
Corporation shall indemnify and hold harmless each present and former
officer and director of the Company (each an "Indemnified Person") in
respect of acts or omissions in his or her capacity as an officer or
director of the Company or one or more of its Subsidiaries occurring at
or prior to the Effective Time to the fullest extent permitted by Indiana
Law or any other applicable laws or provided under the Company's articles
of incorporation and bylaws in effect on the date hereof, provided that
such indemnification shall be subject to any limitation imposed from time
to time under applicable law.
(b) The Surviving Corporation shall pay all expenses, including
reasonable fees and expenses of counsel, that an Indemnified Person may
incur in enforcing the indemnity and other obligations provided for in
this Section 8.04. The Indemnified Person shall be entitled to control
the defense of any action, suit, investigation or proceeding with counsel
of its own choosing reasonably acceptable to the Surviving Corporation
and the Surviving Corporation shall cooperate in the defense thereof;
provided that the Surviving Corporation shall not be liable for the fees
of more than one counsel for all Indemnified Persons, other than local
counsel, unless a conflict of interest shall be caused thereby, and
provided further that the Surviving Corporation shall not be liable for
any settlement effected without its written consent (which consent shall
not be unreasonably withheld).
(c) For six years after the Effective Time, the Surviving
Corporation shall provide officers' and directors' liability insurance in
respect of acts or omissions occurring prior to the Effective Time
covering each such Indemnified Person currently covered by the Company's
officers' and directors' liability insurance policy on terms with respect
to coverage and amount no less favorable than those of such policy in
effect on the date hereof (true and complete copies of which have been
made available to Parent); provided if the aggregate annual premiums for
such insurance at any time during such period shall exceed 200% of the
per annum rate of premium paid by the Company and its Subsidiaries as of
the date hereof for such insurance, then Parent shall, or shall cause its
Subsidiaries to, provide only such coverage as shall then be available at
an annual premium equal to 200% of such rate.
(d) If Parent, the Surviving Corporation or any of its successors
or assigns (i) consolidates with or merges into any other Person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger, or (ii) transfers or conveys all or
substantially all of its properties and assets to any Person, then, and
in each such case, to the extent necessary, proper provision shall be
made so that the successors and assigns of Parent or the Surviving
Corporation, as the case may be, shall assume the obligations set forth
in this Section 8.04.
(e) The rights of each Indemnified Person under this Section 8.04
shall be in addition to any rights such Person may have under the
certificate of incorporation or bylaws of the Company or any of its
Subsidiaries, under Indiana Law or any other applicable laws or under any
agreement of any Indemnified Person with the Company or any of its
Subsidiaries. These rights shall survive consummation of the Merger and
are intended to benefit, and shall be enforceable by, each Indemnified
Person.
(f) The obligations of the Surviving Corporation under this
Section 8.04 shall be joint and several obligations of Parent and the
Surviving Corporation.
SECTION 8.05. Employee Matters. (a) For a period of one year after
the Effective Time, Parent shall or shall cause the Surviving Corporation
to provide employee compensation (consisting of base pay, commission
rates and bonuses) and benefits (consisting of benefits similar to those
under the Employee Plans and Benefit Arrangements) to current and former
employees of the Company and its Subsidiaries who are not included in any
collective bargaining unit ("Non-Union Company Employees") that are in
the aggregate not less favorable to such employees than such compensation
provided to such employees as of the date hereof and the benefits
provided to such employees under the Employee Plans and Benefit
Arrangements as of the date hereof. The foregoing notwithstanding, in the
event the employment of any Company Employee is terminated other than for
cause during the one year period beginning at the Effective Time, such
employee shall receive severance or separation benefits in an aggregate
amount no more favorable than the severance or separation benefits such
employee would have been entitled to receive under plans or arrangements
provided by Parent or its Affiliates to similarly situated employees.
With respect to employees of the Company and its Subsidiaries who are
included in any collective bargaining unit ("Union Employees"), Parent
shall provide or cause the Surviving Corporation to provide the Union
Employees compensation and benefits required by their current collective
bargaining agreement as the same may be in effect from time to time.
(b) Service Credit. Each Company Employee shall be given full
credit for all service with the Company and its Affiliates and their
respective predecessors under any plans or arrangements providing
vacation, severance, retirement, pension or retiree welfare benefits
maintained by Parent or the Surviving Corporation or any of their
respective Affiliates in which such Company Employees participate for all
purposes that such service was recognized under any similar Employee Plan
or Benefit Arrangement as in effect immediately prior to the Effective
Time (including, without limitation, for purposes of eligibility,
vesting, benefit accrual and forms of benefit); provided, however, that
any benefit provided under such plans and arrangements maintained by
Parent or the Surviving Corporation or any of their respective Affiliates
in respect of any period of service prior to the Effective Time may be
reduced in amount by the benefit accrued by such Company Employee under
any similar Employee Plan or Benefit Arrangement in respect of the same
period of service.
(c) Pre-Existing Conditions and Credit for Deductibles. In the
event of any change in the welfare benefits provided to Company Employees
following the Effective Time, Parent shall or shall cause the Surviving
Corporation to (i) waive all limitations as to preexisting conditions,
exclusions and waiting periods with respect to participation and coverage
requirements applicable to the Company Employees under any such welfare
benefits to the extent that such conditions, exclusions or waiting
periods would not apply in the absence of such change and (ii) credit
each Company Employee with any co-payments and deductibles paid prior to
any such change in satisfying any applicable deductible or out-of-pocket
requirements after such change.
ARTICLE 9
COVENANTS OF PARENT AND THE COMPANY
The parties hereto agree that:
SECTION 9.01. Best Efforts. Subject to the terms and conditions of
this Agreement, the Company and Parent will use their best efforts to
take, or cause to be taken, all actions and to do, or cause to be done,
all things necessary, proper or advisable under applicable laws and
regulations to consummate the transactions contemplated by this
Agreement. In furtherance and not in limitation of the foregoing, each
of Parent and Company agrees to make an appropriate filing of a
Notification and Report Form pursuant to the HSR Act with respect to the
transactions contemplated hereby as promptly as practicable and in any
event within five Business Days of the date hereof and to supply as
promptly as practicable any additional information and documentary
material that may be requested pursuant to the HSR Act and to take all
other actions necessary to cause the expiration or termination of the
applicable waiting periods under the HSR Act. Notwithstanding the
foregoing, Parent shall not be required to agree, and the Company shall
not agree without Parent's consent, to waive any substantial rights or to
accept any substantial limitation on its operations, in each case, in
respect of any assets constituting a material portion of the assets of
the Parent and its Subsidiaries, taken as a whole ("Material Assets") or
to dispose of any Material Assets in connection with obtaining any such
expiration or termination of the applicable waiting periods under the HSR
Act.
SECTION 9.02. Certain Filings. The Company and Parent shall
cooperate with one another (i) in connection with the preparation of the
Company Proxy Statement, (ii) in determining whether any action by or in
respect of, or filing with, any governmental body, agency, official, or
authority is required, or any actions, consents, approvals or waivers are
required to be obtained from parties to any material contracts, in
connection with the consummation of the transactions contemplated by this
Agreement and (iii) in taking such actions or making any such filings,
furnishing information required in connection therewith or with the
Company Proxy Statement and seeking timely to obtain any such actions,
consents, approvals or waivers.
SECTION 9.03. Public Announcements. Parent and the Company will
consult with each other before issuing any press release or making any
public statement (including any broadly issued statement or announcement
to employees) with respect to this Agreement or the transactions
contemplated hereby and, except as may be required by applicable law or
any listing agreement with any national securities exchange, will not
issue any such press release or make any such public statement prior to
such consultation.
SECTION 9.04. Further Assurances. At and after the Effective Time,
the officers and directors of the Surviving Corporation will be
authorized to execute and deliver, in the name and on behalf of the
Company or Merger Subsidiary, any deeds, bills of sale, assignments or
assurances and to take and do, in the name and on behalf of the Company
or Merger Subsidiary, any other actions and things to vest, perfect or
confirm of record or otherwise in the Surviving Corporation any and all
right, title and interest in, to and under any of the rights, properties
or assets of the Company acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Merger.
SECTION 9.05. Notices of Certain Events. Each of the Company and
Parent shall promptly notify the other of:
(a) 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;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement;
(c) any actions, suits, claims, investigations, orders, decrees,
complaints or proceedings commenced or, to its knowledge, threatened
against, relating to or involving or otherwise affecting the Company,
Parent or any of their respective Subsidiaries that relate to the
consummation of the transactions contemplated by this Agreement;
(d) the occurrence of or becoming aware of the impending or
threatened occurrence of any event which would cause a breach of any of
such party's representations or warranties; and
(e) any substantial damage to any material assets of the Company
or any Subsidiary.
ARTICLE 10
CONDITIONS TO THE MERGER
SECTION 10.01. Conditions to Obligations of Each Party. The
obligations of the Company, Parent and Merger Subsidiary to consummate
the Merger are subject to the satisfaction of the following conditions:
(a) Merger Subsidiary shall have purchased shares of Company
Stock pursuant to the Offer or the Option; provided, that this condition
shall be deemed to have been satisfied with respect to the obligation of
Parent and Merger Subsidiary to effect the Merger if Merger Subsidiary
fails to accept for payment or pay for shares of Company Stock pursuant
to the Offer or the Option in violation of the terms of the Offer, the
Voting Agreement or of this Agreement;
(b) if required by applicable law, this Agreement shall have been
approved and adopted by the stockholders of the Company in accordance
with Indiana Law; and
(c) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prevent or prohibit the
consummation of the Merger.
ARTICLE 11
TERMINATION
SECTION 11.01. Termination. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time:
(a) by mutual written agreement of the Company and Parent;
(b) by either the Company or Parent, if:
(i) without material breach by the terminating party of its
obligations under this Agreement or (in the case of termination by
Parent) the Offer, the purchase of shares of Company Stock
pursuant to the Offer or the Option shall not have occurred on or
before November 30, 2000; provided that if the HSR Condition (as
defined in Annex A) and/or the conditions in paragraphs (a) and
(b) of Annex A shall not have been satisfied, such date shall be
March 31, 2001;
(ii) there shall be any law or regulation that makes
consummation of the Merger illegal or otherwise prohibited or any
judgment, injunction, order or decree of any court or governmental
body having competent jurisdiction enjoining Company or Parent
from consummating the Merger is entered and such judgment,
injunction, judgment or order shall have become final and
nonappealable; or
(iii) upon final adjournment of the Company Stockholder
Meeting, this Agreement shall not have been approved and adopted
in accordance with Indiana Law by the Company's stockholders at
the Company Stockholder Meeting (or any adjournment thereof), if
required; or
(c) by Parent, if the Board of Directors of the Company shall
have failed to recommend or withdrawn, or modified in a manner adverse to
Parent, its approval or recommendation of this Agreement, the Offer or
the Merger or shall have approved or recommended a Superior Proposal.
The party desiring to terminate this Agreement pursuant to this Section 11.01
(other than pursuant to Section 11.01(a)) shall give notice of such termination
to the other party.
SECTION 11.02. Effect of Termination. If this Agreement is
terminated pursuant to Section 11.01, this Agreement shall become void
and of no effect with no liability on the part of any party (or any
stockholder, director, officer, employee, agent, consultant or
representative of such party) to the other party hereto, provided that,
if such termination shall result from the willful (i) failure of either
party to fulfill a condition to the performance of the obligations of the
other party or (ii) failure of either party to perform a covenant hereof,
such party shall be fully liable for any and all liabilities and damages
incurred or suffered by the other party as a result of such failure. The
provisions of Sections 8.01, 12.04, 12.06, 12.07 and 12.08 shall survive
any termination hereof pursuant to Section 11.01.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including
facsimile transmission) and shall be given,
if to Parent or Merger Subsidiary, to:
Gannett Co., Inc.
1100 Wilson Boulevard
Arlington, Virginia
Attention: Larry F. Miller
Fax: (703) 558-3827
with a copy to:
Gannett Co., Inc.
1100 Wilson Boulevard
Arlington, Virginia
Attention: General Counsel
Fax: (703) 558-3897
and to:
Nixon Peabody LLP
401 Ninth Street, N.W.
Washington, D.C. 20004-2128
Attention: Richard F. Langan, Jr.
Fax: (212) 940-9940
if to the Company, to:
Central Newspapers, Inc.
200 E. Van Buren Street
Phoenix, Arizona 85004
Attention: Eric S. Tooker
Fax: (602) 444-8340
with copies to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: George R. Bason, Jr.
Fax: (212) 450-4800
and
Eugene C. Pulliam Trust
c/o Frank Russell
135 North Pennsylvania Street
Suite 1200
Indianapolis, IN 46204
Fax: (317) 231-9208
and
Munger, Tolles & Olson LLP
355 South Grand Avenue
Los Angeles, California 90071-1560
Attention: Robert E. Denham
Fax: (213) 687-3702
or such other address or facsimile number as such party may hereafter
specify for the purpose by notice to the other parties hereto. All such
notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5 p.m.
in the place of receipt and such day is a Business Day in the place of
receipt. Otherwise, any such notice, request or communication shall be
deemed not to have been received until the next succeeding Business Day
in the place of receipt.
SECTION 12.02. Non-Survival of Representations and Warranties. The
representations and warranties contained herein and in any certificate or
other writing delivered pursuant hereto shall not survive the Effective
Time or the termination of this Agreement.
SECTION 12.03. Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived prior to the Effective Time if, but
only if, such amendment or waiver is in writing and is signed, in the
case of an amendment, by each party to this Agreement or, in the case of
a waiver, by each party against whom the waiver is to be effective,
provided that, after the adoption of this Agreement by the stockholders
of the Company and without their further approval, no such amendment or
waiver shall reduce the amount or change the kind of consideration to be
received in exchange for the shares of Company Stock.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 12.04. Expenses. (a) Except as otherwise provided in this
Section, all costs and expenses incurred in connection with this
Agreement shall be paid by the party incurring such cost or expense.
(b) If:
(i) Parent shall terminate this Agreement pursuant to
Section 11.01(c); or
(ii) either the Company or Parent shall terminate this
Agreement pursuant to Sections 11.01(b)(i) or (iii) and (x) prior
to the termination or expiration of the Offer (in case of Section
11.01(b)(i)) and the final adjournment of the Company Stockholder
Meeting (in case of Section 11.01(b)(iii)) an Acquisition
Proposal is made by any Person and (y) the Company enters into a
definitive agreement in connection with an Acquisition Proposal or
an Acquisition Proposal is consummated, in either case, within
twelve months after termination of this Agreement,
then in any case as described in Section 12.04(b)(i), the Company shall
pay to Parent (by wire transfer of immediately available funds not later
than the date of termination of this Agreement or, in the case of Section
12.04(b)(ii), the earlier of the date of such definitive agreement and
the date of consummation of such Acquisition Proposal) an amount equal to
$97,000,000 (the "Termination Fee"); provided, however, that payment of
the Termination Fee shall not prevent Parent or Merger Subsidiary from
seeking specific performance against the Trust based on any breach of the
Voting Agreement by the Trust.
(c) The Company agrees to pay the reasonable investment banking
and legal counsel fees incurred by the Trust in connection with the
transactions contemplated hereby.
SECTION 12.05. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, provided that no
party may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of each other party
hereto, except that Parent or Merger Subsidiary may transfer or assign,
in whole or from time to time in part, to one or more of its Affiliates,
the right to enter into the transactions contemplated by this Agreement,
but no such transfer or assignment will relieve Parent or Merger
Subsidiary of its obligations hereunder.
SECTION 12.06. Governing Law. This Agreement shall be governed by
and construed in accordance with the law of the State of Indiana, without
regard to the conflicts of law rules of such state.
SECTION 12.07. Jurisdiction. Any suit, action or proceeding seeking
to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby
may be brought in any federal court located in the State of Indiana, and
each of the parties hereby consents to the jurisdiction of such courts
(and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding and irrevocably waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such
court or that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum. Process in any such
suit, action or proceeding may be served on any party anywhere in the
world, whether within or without the jurisdiction of any such court.
Without limiting the foregoing, each party agrees that service of process
on such party as provided in Section 12.01 shall be deemed effective
service of process on such party.
SECTION 12.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 12.09. Counterparts; Effectiveness; Benefit. This Agreement
may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Agreement shall become effective when
each party hereto shall have received counterparts hereof signed by all
of the other parties hereto. Except as provided in Section 8.04, no
provision of this Agreement is intended to confer any rights, benefits,
remedies, obligations, or liabilities hereunder upon any Person other
than the parties hereto and their respective successors and assigns.
Execution of this Agreement may be made by facsimile signature which, for
all purposes, shall be deemed to be an original signature.
SECTION 12.10. Entire Agreement. This Agreement and the
Confidentiality Agreement constitute the entire agreement between the
parties with respect to the subject matter of this Agreement and
supersede all prior agreements and understandings, both oral and written,
between the parties with respect to the subject matter of this Agreement.
SECTION 12.11. Captions. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
SECTION 12.12. 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 or unenforceable, 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 so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such a determination, the
parties 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 in order that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.
SECTION 12.13. Specific Performance. The parties hereto agree that
irreparable damage would occur if any provision of this Agreement were
not performed in accordance with the terms hereof and that the parties
shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement or to enforce specifically the performance of the terms
and provisions hereof in any federal court located in the State of
Indiana, in addition to any other remedy to which they are entitled at
law or in equity.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day
and year first above written.
CENTRAL NEWSPAPERS, INC.
By: /s/ Louis A. Weil, III
----------------------------
Name: Louis A. Weil, III
Title: President and
Chief Executive Officer
GANNETT CO., INC.
By: /s/ Larry F. Miller
----------------------------
Name: Larry F. Miller
Title: Executive Vice President
PACIFIC AND SOUTHERN INDIANA
CORP.
By: /s/ Larry F. Miller
----------------------------
Name: Larry F. Miller
Title: Vice President
<PAGE>
ANNEX A
CONDITIONS TO THE OFFER
Capitalized terms used but not defined herein shall have the
meanings set forth in the Agreement and Plan of Merger (the "Agreement")
of which this Annex A is a part. Notwithstanding any other provision of
the Offer, Merger Subsidiary shall not be required to accept for payment
or, subject to any applicable rules and regulations of the SEC, including
Rule 14e-1(c) promulgated under the 1934 Act (relating to the obligation
of Merger Subsidiary to pay for or return tendered shares of Company
Stock promptly after termination or withdrawal of the Offer), pay for,
any tendered shares of Company Stock and (subject to any such rules or
regulations) may delay the acceptance for payment of or the payment for
any tendered shares of Company Stock and (except as provided in the
Agreement) amend or terminate the Offer as to any Company Stock not then
paid for if (i) there are not validly tendered (and not withdrawn) prior
to the expiration date for the Offer that number of shares of Company
Class B Stock which, when added to any such shares owned by Parent or any
of its Affiliates, will at least satisfy the Minimum Condition, (ii) any
applicable waiting period under the HSR Act shall not have expired or
been terminated prior to expiration of the Offer (the "HSR Condition") or
(iii) at any time on or after the date of the Agreement and before the
expiration date of the Offer, any of the following events shall have
occurred and be continuing:
(a) there shall have been instituted or be pending any action,
suit or proceeding by or on behalf of any governmental entity (i)
challenging or seeking to make illegal, materially delay, or otherwise,
directly or indirectly, restrain or prohibit the making of the Offer, the
acceptance for payment of any Company Stock by Parent or Merger
Subsidiary, or the consummation of the Merger, or seeking to obtain
material damages in connection with the Offer or the Merger; (ii) subject
to Section 9.01 of the Merger Agreement, seeking to prohibit or limit
materially the ownership or operation by the Company, Parent or any of
their Subsidiaries of all or any of the business or assets of the
Company, Parent or any of their Subsidiaries that is material to either
Parent and its Subsidiaries or the Company and its Subsidiaries, in
either case, taken as a whole, or, to compel the Company, Parent or any
of their Subsidiaries as a result of the Offer or the Merger, to dispose
of or to hold separate all or any portion of the business or assets of
the Company, Parent or any of their Subsidiaries that is material to
either Parent and its Subsidiaries or the Company and its Subsidiaries,
in each case, taken as a whole; (iii) subject to Section 9.01 of the
Merger Agreement, seeking to impose or confirm any limitation on the
ability of Parent or Merger Subsidiary to exercise effectively full
rights of ownership of any Company Stock, including, without limitation,
the right to vote any Company Stock acquired by Merger Subsidiary pursuant
to the Offer or otherwise on all matters properly presented to the Company's
shareholders including, without limitation, the approval and adoption of this
Agreement and the Merger; (iv) seeking to require divestiture by Parent or
Merger Subsidiary of any Company Stock; or (v) which otherwise would have a
Material Adverse Effect on the Company; or
(b) there shall be in effect an injunction or other order,
decree, judgment or ruling by a governmental entity of competent
jurisdiction or a law, rule or regulation shall have been promulgated, or
enacted by a governmental entity of competent jurisdiction which in any
such case, subject to Section 9.01 of the Merger Agreement, (i)
restrains, prevents or prohibits the making or consummation of the Offer
or the consummation of the Merger or would make such consummation
illegal, or (ii) prevents, prohibits or restricts the ownership by Parent
(or any of its Affiliates or Subsidiaries) of any material portion of the
Company's business or assets or which would substantially deprive Parent
and/or its Affiliates or Subsidiaries of the benefit of ownership of the
Company's business or assets, or (iii) imposes material limitations on
the ability of Merger Subsidiary or Parent effectively to acquire the
shares of Company Stock; or
(c) the Agreement or the Voting Agreement shall have been
terminated in accordance with its terms or any event shall have occurred
which gives the Parent or Merger Subsidiary the right to terminate either
the Agreement or the Voting Agreement or not consummate the Merger; or
(d) any of the representations and warranties of the Company
contained in the Agreement or any of the representations and warranties
of the Trust in the Voting Agreement, in each case, disregarding all
qualifications and exceptions contained therein relating to materiality
or Material Adverse Effect or any similar standard or qualification,
shall not be true and correct in all respects as of the date of
determination, as if made at and as of such time, except (i) to the
extent that any such representation or warranty, by its terms, is
expressly limited to a specific date, in which case such representation
or warranty shall not be true and correct as of such date, or (ii) where
the failure of such representations and warranties to be true and correct
would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company; or
(e) the Company shall have failed to perform in all material
respects any of its agreements contained in the Agreement required to be
performed at or prior to the date of determination; or
(f) since the date of the Agreement there shall have occurred any
event, change, effect or development that, individually or in the
aggregate with any other event, change, effect or development, has had or
would reasonably be expected to have a Material Adverse Effect on the
Company; or
(g) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market in the United
States (other than a shortening of trading hours or any coordinated
trading halt triggered solely as a result of a specified increase or
decrease in a market index), (ii) a declaration of a banking moratorium
or any suspension of payments in respect of banks in the United States,
(iii) any limitation (whether or not mandatory) by any governmental
entity on, or other event that materially and adversely affects, the
extension of credit by banks or other lending institutions, (iv) a
commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the Untied States
or (v) in the case of any of the foregoing existing at the time of the
execution of the Agreement, a material acceleration or worsening thereof;
or
(h) the Board of Directors of the Company or any committee
thereof, (i) shall have withdrawn or modified in a manner adverse to
Merger Subsidiary (including by amendment of the Schedule 14D-9) its
approval or recommendation of the Offer, the Merger or the Agreement or
recommended or approved any Acquisition Proposal or (ii) shall have
resolved to do any of the foregoing;
which in the good faith judgment of Merger Subsidiary, in
any such case, and regardless of the circumstances giving rise to such
condition makes it inadvisable to proceed with the Offer or the
acceptance for payment of or payment for the Company Stock.
The foregoing conditions are for the sole benefit of Parent and
Merger Subsidiary and may be asserted by Parent and Merger Subsidiary,
and, except for the Minimum Condition and otherwise subject to the terms
of the Agreement, may be waived by Parent and Merger Subsidiary, in whole
or in part, at any time and from time to time, in the sole discretion of
Parent and Merger Subsidiary. The determination as to whether any
condition has been satisfied shall be deemed a continuing right which may
be asserted at any time and from time to time. Notwithstanding the fact
that the Parent and Merger Subsidiary reserve the right to assert the
failure of a condition following acceptance for payment but prior to
payment in order to delay payment or cancel their obligation to pay for
properly tendered shares of Company Stock, the Parent and Merger
Subsidiary will either promptly pay for such Company Stock or promptly
return such Company Stock. Should the Offer be terminated pursuant to
the foregoing provisions, all tendered shares of Company Stock not
theretofore accepted for payment pursuant thereto shall forthwith be
returned to the tendering shareholders.
<PAGE>
RIDER X
Pursuant to Item 601(b)(2) of Regulation S-K, Schedules to the
Agreement and Plan of Merger have been omitted and will be furnished
supplementally to the Commission upon request. The following is a list
of omitted schedules.
5.06 Subsidiaries
5.10 Absence of Certain Changes
5.13 Litigation
5.16 Taxes
5.17 Employee Benefit Plans
5.18 Environmental Matters
5.19 Intellectual Property
<PAGE>
