<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-9
(AMENDMENT NO. 10)
(WITH RESPECT TO THE TENDER OFFER BY MARTIN MARIETTA CORPORATION)
SOLICITATION/RECOMMENDATION STATEMENT PURSUANT TO
SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
GRUMMAN CORPORATION
(NAME OF SUBJECT COMPANY)
GRUMMAN CORPORATION
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, $1 PAR VALUE
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHT)
(TITLE OF CLASS OF SECURITIES)
40018110
(CUSIP NUMBER OF CLASS OF SECURITIES)
THOMAS L. GENOVESE
VICE PRESIDENT AND GENERAL COUNSEL
GRUMMAN CORPORATION
1111 STEWART AVENUE
BETHPAGE, NEW YORK 11714-3580
(516) 575-3871
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS ON BEHALF OF THE PERSONS(S) FILING STATEMENT)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
This Amendment No. 10 amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9, dated March 8, 1994
(the "Schedule 14D-9"), of Grumman Corporation, a New York corporation (the
"Company"), filed in connection with the Offer as set forth in the Schedule
14D-9. Capitalized terms used herein shall have the definitions set forth in the
Schedule 14D-9 unless otherwise provided herein.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
On March 25, 1994, the Company received a letter from Martin Marietta, a
copy of which is attached hereto as Exhibit (c)(25) and incorporated by
reference herein in its entirety. The letter stated that "whatever steps Grumman
takes regarding the Martin Marietta and Northrop offers are, of course, Grumman
decisions alone" and requested that "[i]f Grumman decides to establish bidding
procedures, we would appreciate being advised promptly." On March 27, 1994 the
Board held a special meeting to consider, among other things, the March 25
letter from Martin Marietta as well as the letter of March 23, 1994 from
Northrop to the Company (previously filed as Exhibit (c)(22)) in which Northrop
requested that there be "a free and open competitive bidding" and that the
Company "take such actions as may be necessary and appropriate . . ." to achieve
this.
In light of the foregoing and all the relevant circumstances, the Board
then discussed whether it was in the best interest of the shareholders of the
Company to have, and whether the Board's fiduciary duties required it to seek,
free and open competitive bidding for the Company in accordance with appropriate
procedures. The Board concluded in the affirmative and authorized and directed
that the following letter (the "Letter"), setting forth the position of the
Board, be transmitted to both Martin Marietta and Northrop.
"GRUMMAN CORPORATION
DR. RENSO L. CAPORALI
BETHPAGE, NEW YORK 11714-3580 CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
March 28, 1994
Martin Marietta Corporation
6801 Rockledge Drive
Bethesda, Maryland 26817
Northrop Corporation
1840 Century Park East
Los Angeles, California 90067
Re: Rules and Procedures for Submission of Proposals
Gentlemen:
The Board of Directors of Grumman Corporation (the "Company") has
determined that it is in the best interests of the shareholders of the Company
to have free and open competitive bidding for the Company.
Northrop Corporation ("Northrop") has requested, in a letter dated March
23, 1994, that there be 'a free and open competitive bidding' and that the
Company 'take such actions as may be necessary and appropriate . . .' to achieve
this. Martin Marietta Corporation ("Martin Marietta") has recognized, in a
letter dated March 25, 1994, that 'whatever steps Grumman takes regarding the
Martin Marietta and Northrop offers are, of course, Grumman decisions alone' and
has requested that it be advised promptly 'if Grumman decides to establish
bidding procedures.'
It is the strongly held view of the Board of Directors that this process
must be conducted in an open, fair and orderly manner. The interests of our
shareholders, employees, customers, suppliers, communities and the public
generally can and will be best served by such an approach. The Board of
Directors is mindful that the process in which the Company is currently engaged
does present certain risks, particularly if the process is
1
<PAGE> 3
prolonged, including disruption to the Company's business and overall
uncertainty among the Company's constituencies as to the Company's future. In
order to mitigate these risks, the Board of Directors believes that the most
prudent course of action is to bring this process to a prompt and orderly close.
Accordingly, the Board of Directors has established the rules and
procedures specified below for receiving proposals to acquire the Company
("Proposals"). The procedures are designed to constitute a single and final
round of bidding, and each of you should submit your best and highest offer.
The purpose of this letter is to invite each of you to submit Proposals,
pursuant to such rules and procedures. The Board of Directors believes that
agreement to such rules and procedures is critical to mitigating the risk of the
process in which the Company is now engaged and, accordingly, submission of a
Proposal will constitute for all purposes an agreement to be bound by such rules
and procedures.
The following rules and procedures will govern the submission of Proposals:
1. Proposals should be in the respective forms attached [included in
Exhibit (c)(26) hereto] and should be addressed and delivered in a sealed
envelope to the Board of Directors of the Company: c/o Gene T. Sykes,
Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004. Proposals
must be received on Thursday, March 31, 1994 at 5:00 p.m. New York time
(the "Submission Date"), unless extended by notice. You may not make any
Proposal, or modify or amend any pending Proposal, to purchase the Company,
except as prescribed herein.
2. Until we have accepted one of your Proposals, we will not, except
as may be required by law, publicly disclose the terms of either of your
Proposals or communicate them to the other of you. Submission of your
Proposal constitutes a representation that you have kept and will keep your
Proposal confidential unit 9:00 a.m. New York time Monday, April 4, 1994
and that you have no knowledge of the other's Proposal.
3. The Agreement and Plan of Merger currently in effect between the
Company and Martin Marietta without any change (except as to the price per
Share as defined therein and as to language amending upon acceptance the
existing Merger Agreement to reflect such price per Share) is to be used by
Martin Marietta as specified in submitting the attached form of Proposal
for execution by Martin Marietta. The form of the Agreement and Plan of
Merger submitted by Northrop to Grumman, pursuant to the letter dated March
23, 1994 from Northrop's counsel to the Company's counsel, without any
changes (except as to price per Share as defined therein) is to be used by
Northrop as specified in submitting the attached form of Proposal for
execution by Northrop.
4. It is the intention of the Board of Directors that the winning
Proposal will be accepted as promptly as possible after 5:00 p.m. New York
time Thursday, March 31, 1994. It is requested that each of you be
available the week-end commencing 5:00 p.m. New York time Thursday, March
31, 1994 in the case of Martin Marietta to execute an amendment to the
Agreement and Plan of Merger and in the case of Northrop to execute the
Agreement and Plan of Merger as specified in Paragraph 3. Each Proposal
will be irrevocable until 9:00 a.m. New York time on Monday, April 4, 1994.
5. The Board of Directors will accept the Proposal which it determines
in its reasonable good faith judgment is the best value reasonably
obtainable for shareholders of the Company. A Proposal will be accepted
only by a written acceptance signed by the Chairman of the Board, or other
official of the Company specifically authorized by the Board of Directors.
2
<PAGE> 4
The Board of Directors reserves the right, insofar as necessary in the
proper exercise of its fiduciary duties, to change the rules and procedures
as set forth in this letter. If the Board of Directors modifies these rules
and procedures, it intends promptly to notify both of you orally, with
confirmation in writing.
Very truly yours,
BOARD OF DIRECTORS
GRUMMAN CORPORATION
By: /S/ RENSO L. CAPORALI
Renso L. Caporali,
Chairman"
The Letter (a copy of which is attached hereto as Exhibit (c)(26) and
incorporated by reference herein in its entirety) was sent to each of Martin
Marietta and Northrop on the morning of March 28, 1994 and a public announcement
of the sending of the Letter was made at approximately 8:30 a.m. on March 28,
1994. A copy of the press release announcing the sending of the Letter is set
forth as Exhibit (c)(28) hereto and is incorporated by reference herein in its
entirety.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
(c)(25) Letter dated March 25, 1994 from Martin Marietta Corporation to the
Company.
(c)(26) Letter dated March 28, 1994 from the Company to Martin Marietta
Corporation and Northrop Corporation.
(c)(27) Form of Agreement and Plan of Merger submitted by Northrop Corporation
to the Company.
(c)(28) Press Release of the Company dated March 28, 1994.
3
<PAGE> 5
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
GRUMMAN CORPORATION
By: /S/ RENSO L. CAPORALI
Chairman of the Board and
Chief Executive Officer
Date: March 28, 1994
4
<PAGE> 6
EXHIBIT INDEX
EXHIBIT
(c)(25) Letter dated March 25, 1994 from Martin Marietta Corporation to the
Company.
(c)(26) Letter dated March 28, 1994 from the Company to Martin Marietta
Corporation and Northrop Corporation.
(c)(27) Form of Agreement and Plan of Merger submitted by Northrop Corporation
to the Company.
(c)(28) Press Release of the Company dated March 28, 1994.
<PAGE> 1
EXHIBIT(C)(25)
<TABLE>
<S> <C>
MARTIN MARIETTA CORPORATION 6801 Rockledge Drive
Bethesda, Maryland 10617
Telephone (301) 867-8186
NORMAN R. AUGUSTINE
Chairman and Chief Executive Officer
</TABLE>
March 25, 1994
Dr. Renso L. Caporali
Chairman & CEO
Grumman Corporation
1111 Stewart Avenue
Bethpage, NY 11714-3580
Dear Dr. Caporali:
This will confirm my comments in our telephone conversation last evening to
the effect that whatever steps Grumman takes regarding the Martin Marietta and
Northrop offers are, of course, Grumman decisions alone.
If Grumman decides to establish bidding procedures, we would appreciate
being advised promptly.
Sincerely,
[facsimile signature]
Norman R. Augustine
<PAGE> 1
EXHIBIT(C)(26)
GRUMMAN CORPORATION
BETHPAGE, NEW YORK 11714-3580
DR. RENSO L. CAPORALI
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
March 28, 1994
Martin Marietta Corporation
6801 Rockledge Drive
Bethesda, Maryland 26817
Northrop Corporation
1840 Century Park East
Los Angeles, California 90067
Re: Rules and Procedures for Submission of Proposals
Gentlemen:
The Board of Directors of Grumman Corporation (the "Company") has
determined that it is in the best interests of the shareholders of the Company
to have free and open competitive bidding for the Company.
Northrop Corporation ("Northrop") has requested, in a letter dated March
23, 1994, that there be "a free and open competitive bidding" and that the
Company "take such actions as may be necessary and appropriate . . ." to achieve
this. Martin Marietta Corporation ("Martin Marietta") has recognized, in a
letter dated March 25, 1994, that "whatever steps Grumman takes regarding the
Martin Marietta and Northrop offers are, of course, Grumman decisions alone" and
has requested that it be advised promptly "if Grumman decides to establish
bidding procedures."
It is the strongly held view of the Board of Directors that this process
must be conducted in an open, fair and orderly manner. The interests of our
shareholders, employees, customers, suppliers, communities and the public
generally can and will be best served by such an approach. The Board of
Directors is mindful that the process in which the Company is currently engaged
does present certain risks, particularly if the process is prolonged, including
disruption to the Company's business and overall uncertainty among the Company's
constituencies as to the Company's future. In order to mitigate these risks, the
Board of Directors believes that the most prudent course of action is to bring
this process to a prompt and orderly close.
Accordingly, the Board of Directors has established the rules and
procedures specified below for receiving proposals to acquire the Company
("Proposals"). The procedures are designed to constitute a single and final
round of bidding, and each of you should submit your best and highest offer.
The purpose of this letter is to invite each of you to submit Proposals,
pursuant to such rules and procedures. The Board of Directors believes that
agreement to such rules and procedures is critical to mitigating the risk of the
process in which the Company is now engaged and, accordingly, submission of a
Proposal will constitute for all purposes an agreement to be bound by such rules
and procedures.
The following rules and procedures will govern the submission of Proposals:
1. Proposals should be in the respective forms attached and should be
addressed and delivered in a sealed envelope to the Board of Directors of
the Company: c/o Gene T. Sykes, Goldman, Sachs & Co., 85 Broad Street, New
York, New York 10004. Proposals must be received on Thursday, March 31,
1994 at 5:00 p.m. New York time (the "Submission Date"), unless extended by
notice. You may not make
<PAGE> 2
any Proposal, or modify or amend any pending Proposal, to purchase the
Company, except as prescribed herein.
2. Until we have accepted one of your Proposals, we will not, except
as may be required by law, publicly disclose the terms of either of your
Proposals or communicate them to the other of you. Submission of your
Proposal constitutes a representation that you have kept and will keep your
Proposal confidential unit 9:00 a.m. New York time Monday, April 4, 1994
and that you have no knowledge of the other's Proposal.
3. The Agreement and Plan of Merger currently in effect between the
Company and Martin Marietta without any change (except as to the price per
Share as defined therein and as to language amending upon acceptance the
existing Merger Agreement to reflect such price per Share) is to be used by
Martin Marietta as specified in submitting the attached form of Proposal
for execution by Martin Marietta. The form of the Agreement and Plan of
Merger submitted by Northrop to Grumman, pursuant to the letter dated March
23, 1994 from Northrop's counsel to the Company's counsel, without any
changes (except as to price per Share as defined therein) is to be used by
Northrop as specified in submitting the attached form of Proposal for
execution by Northrop.
4. It is the intention of the Board of Directors that the winning
Proposal will be accepted as promptly as possible after 5:00 p.m. New York
time Thursday, March 31, 1994. It is requested that each of you be
available the week-end commencing 5:00 p.m. New York time Thursday, March
31, 1994 in the case of Martin Marietta to execute an amendment to the
Agreement and Plan of Merger and in the case of Northrop to execute the
Agreement and Plan of Merger as specified in Paragraph 3. Each Proposal
will be irrevocable until 9:00 a.m. New York time on Monday, April 4, 1994.
5. The Board of Directors will accept the Proposal which it determines
in its reasonable good faith judgment is the best value reasonably
obtainable for shareholders of the Company. A Proposal will be accepted
only by a written acceptance signed by the Chairman of the Board, or other
official of the Company specifically authorized by the Board of Directors.
The Board of Directors reserves the right, insofar as necessary in the
proper exercise of its fiduciary duties, to change the rules and procedures as
set forth in this letter. If the Board of Directors modifies these rules and
procedures, it intends promptly to notify both of you orally, with confirmation
in writing.
Very truly yours,
BOARD OF DIRECTORS
GRUMMAN CORPORATION
By: /s/ RENSO L. CAPORALI
----------------------------------
Renso L. Caporali,
Chairman
<PAGE> 3
FORM OF PROPOSAL
FOR MARTIN MARIETTA
Board of Directors
Grumman Corporation
c/o Gene T. Sykes
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Lady and Gentlemen:
Martin Marietta Corporation hereby offers, pursuant to and in accordance
with the rules and procedures in your letter to us dated March 28, 1994 (the
"Procedures"), to amend the Agreement and Plan of Merger, dated as of March 6,
1994, among Martin Marietta Corporation, MMC Acquisition Corp. and Grumman
Corporation (the "Merger Agreement"), to increase the price Acquisition would
pay to $ per Share pursuant to and otherwise in accordance with the
Merger Agreement.
This offer shall be irrevocable until 9:00 a.m. New York time on Monday
April 4, 1994. The execution and delivery of this Proposal, pursuant to and in
accordance with the Procedures, and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by the
boards of directors of Parent and Acquisition and by Parent as sole shareholder
of Acquisition, and no other corporate proceedings on the part of Parent or
Acquisition are necessary to authorize this offer or the amendment to the Merger
Agreement contemplated hereby. (Defined terms used herein shall have the
meanings specified in the Merger Agreement.)
Acceptance of this offer by Grumman Corporation in accordance with the
Procedures shall constitute an amendment to the Merger Agreement to change in
the second WHEREAS clause $55.00 to $ . The Merger Agreement, except as
so amended, shall remain in full force and effect.
Sincerely yours,
--------------------------------------
Norman R. Augustine
Chairman of the Board and
Chief Executive Officer
<PAGE> 4
FORM OF PROPOSAL
FOR NORTHROP
Board of Directors
Grumman Corporation
c/o Gene T. Sykes
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Lady and Gentlemen:
Northrop Corporation hereby offers, pursuant to and in accordance with the
rules and procedures in your letter to us dated March 28, 1994 (the
"Procedures"), to amend the form Agreement and Plan of Merger, dated as of March
24, 1994, among Northrop Corporation, Northrop Acquisition, Inc. and Grumman
Corporation submitted to you, pursuant to the letter dated March 23, 1994 from
our counsel to your counsel (the "Merger Agreement"), to increase the price
Acquisition would pay to $ per Share pursuant to and otherwise in
accordance with the Merger Agreement.
This offer shall be irrevocable until 9:00 a.m. New York time on Monday,
April 4, 1994. The execution and delivery of this Proposal, pursuant to and in
accordance with the Procedures, and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by the
boards of directors of Parent and Acquisition and by Parent as sole shareholder
of Acquisition, and no other corporate proceedings on the part of Parent or
Acquisition are necessary to authorize this offer or the amendment to the Merger
Agreement contemplated hereby. (Defined terms used herein shall have the
meanings specified in the Merger Agreement.)
Acceptance of this offer by Grumman Corporation in accordance with the
Procedures shall constitute an amendment to the Merger Agreement to change in
the second WHEREAS clause $60.00 to $ and the Merger Agreement, so
amended, shall be in full force and effect.
Sincerely yours,
--------------------------------------
Kent Kresa
Chairman of the Board and
Chief Executive Officer
<PAGE> 1
EXHIBIT (c)(27)
AGREEMENT AND PLAN OF MERGER
DATED AS OF MARCH 24,1994
AMONG
NORTHROP CORPORATION,
NORTHROP ACQUISITION, INC.
AND
GRUMMAN CORPORATION
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE 1 THE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1 The Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Company Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.3 Boards of Directors and Committees; Section 14(f) . . . . . . . . . . . 3
ARTICLE 2 THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.2 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.3 Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.4 Certificate of Incorporation and By-Laws . . . . . . . . . . . . . . . 4
SECTION 2.5 Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.6 Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.7 Conversion of Shares . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.8 Stock Option Plans; MIP . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.9 Shareholders' Meeting . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 3 DISSENTING SHARES; EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.1 Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.2 Payment for Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . . . . 7
SECTION 4.1 Organization and Qualification; Subsidiaries . . . . . . . . . . . . . 7
SECTION 4.2 Capitalization of the Company and its Subsidiaries . . . . . . . . . . 8
SECTION 4.3 Authority Relative to this Agreement; Consents and Approvals . . . . . 9
SECTION 4.4 SEC Reports, Financial Statements . . . . . . . . . . . . . . . . . . . 9
SECTION 4.4 Proxy Statement; Offer Documents . . . . . . . . . . . . . . . . . . . 9
SECTION 4.6 Consents and Approvals; No Violations . . . . . . . . . . . . . . . . . 10
SECTION 4.7 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.9 No Undisclosed Liabilities; Absence of Changes . . . . . . . . . . . . 10
SECTION 4.9 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.10 Compliance with Applicable Law . . . . . . . . . . . . . . . . . . . . 11
SECTION 4.11 Employee Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4.12 Environmental Laws and Regulations . . . . . . . . . . . . . . . . . . 11
SECTION 4.13 Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.14 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION . . . . . . . . . . . 12
SECTION 5.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.2 Authority Relative to this Agreement . . . . . . . . . . . . . . . . . 12
SECTION 5.3 Consents and Approvals; No Violations . . . . . . . . . . . . . . . . . 12
SECTION 5.4 Proxy Statement; Schedule 14D-9 . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.5 Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.6 No Prior Activities . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.7 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 6 COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 6.1 Conduct of Business of the Company . . . . . . . . . . . . . . . . . . 13
SECTION 6.2 Other Potential Bidders . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 6.3 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 6.4 Additional Agreements; Reasonable Efforts . . . . . . . . . . . . . . . 16
SECTION 6.5 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 6.6 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
SECTION 6.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6.8 Notification of Certain Matters . . . . . . . . . . . . . . . . . . 17
SECTION 6.9 Guarantee of Performance . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6.10 Redemption of Rights . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 7 CONDITIONS TO CONSUMMATION OF THE MERGER . . . . . . . . . . . . . . . . . 17
SECTION 7.1 Conditions to Each Party's Obligations to Effect the Merger . . . . 17
ARTICLE 8 TERMINATION; AMENDMENT; WAIVER . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 8.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 8.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 8.3 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 8.4 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 8.5 Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 9 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 9.1 Nonsurvival of Representations and Warranties .. . . . . . . . . . . 20
SECTION 9.2 Entire Agreement; Assignment . . . . . . . . . . . . . . . . . . . . 21
SECTION 9.3 Validity . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . 21
SECTION 9.4 Notices . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . 21
SECTION 9.5 Governing Law . . . . . . . . . . . . . . . . .. . . . . . . . . . . 21
SECTION 9-6 Descriptive Headings . . . . . . . . . . . . .. . . . . . . . . . . 21
SECTION 9.7 Parties in Interest . . . . . . . . . . . . . .. . . . . . . . . . . 21
SECTION 9.8 Counterparts . . . . . . . . . . . . . . . . .. . . . . . . . . . . 21
</TABLE>
ii
<PAGE> 4
TABLE OF DEFINED TERMS
<TABLE>
<CAPTION>
CROSS REFERENCE
TERM IN AGREEMENT
<S> <C>
Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.4(a)
Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.2(b)
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.11
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.2(a)
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Company Permits . . . . . . . . . . . . . . . . . . . . . . . . Section 4.10
Company Securities . . . . . . . . . . . . . . . . . . . . . . Section 4.2(a)
DGCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.1
Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . Section 3.1
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . Section 2.2
Environmental Claim . . . . . . . . . . . . . . . . . . . . . . Section 4.12
Environmental Laws . . . . . . . . . . . . . . . . . . . . . . Section 4.12
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.11
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.3(b)
Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . Section 3.2(a)
Exchange Fund . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.2(a)
Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . Section 1.2(a)
Governmental Entity . . . . . . . . . . . . . . . . . . . . . . Section 4.6
HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.6
Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.2(b)
Material Adverse Effect . . . . . . . . . . . . . . . . . . . . Sections 4.1(a) and 5.1
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.1
Merger Consideration . . . . . . . . . . . . . . . . . . . . . Section 2.7(a)
Minimum Condition . . . . . . . . . . . . . . . . . . . . . . . Section 1.1(a)
1993 Financial Statement . . . . . . . . . . . . . . . . . . . Section 4.4
NYBCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.2(a)
Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Offer Documents . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1(b)
Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.8(a)
Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Per Share Amount . . . . . . . . . . . . . . . . . . . . . . . Recitals
Premium Amount . . . . . . . . . . . . . . . . . . . . . . . . Section 6.7(b)
Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . Section 4.5
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.2(a)
Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . Section 4.2(a)
Schedule 14D-9 . . . . . . . . . . . . . . . . . . . . . . . . Section 1.2(b)
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . Section 4.4
SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1(b)
SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.4(a)
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recitals
Shareholders' Meeting . . . . . . . . . . . . . . . . . . . . . Section 2.9(a)
Stock Plans . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.8(a)
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.1(a)
Surviving Corporation . . . . . . . . . . . . . . . . . . . . . Section 2.1
Third Party . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.3(a)
Third Party Acquisition . . . . . . . . . . . . . . . . . . . . Section 8.3(a)
1993 Financial Statements . . . . . . . . . . . . . . . . . . . Section 4.4
</TABLE>
iii
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of March 24, 1994,
is among NORTHROP CORPORATION, a Delaware corporation ("Parent"), NORTHROP
ACQUISITION, INC., a Delaware corporation and a wholly owned subsidiary of
Parent ("Acquisition"), and GRUMMAN CORPORATION, a New York corporation (the
"Company").
WHEREAS, the Board of Directors of the Company (the "Board")
has, in light of and subject to the terms and conditions set forth herein, (i)
determined that each of the Offer and the Merger (each as defined below) is
fair to the shareholders of the Company and in the best interest of such
shareholders and (ii) approved and adopted this Agreement and the transactions
contemplated hereby and resolved to recommend acceptance of the Offer and
approval and adoption by the shareholders of the Company of this Agreement; and
WHEREAS, in furtherance thereof, it is proposed that
Acquisition shall amend its outstanding tender offer (the "Offer") to acquire
all of the outstanding shares of common stock, par value $1.00 per share, of
the Company (the "Shares"), together with the associated Rights (as hereafter
defined), at a price of $60.00 per Share (such amount, or any greater amount
per share paid pursuant to the Offer, being hereinafter referred to as the "Per
Share Amount"), net to the seller in cash, in accordance with the terms and
subject to the conditions provided herein.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, Parent, Acquisition and the Company
hereby agree as follows:
ARTICLE I
THE OFFER
SECTION 1.1. The Offer. (a) Provided that this Agreement
shall not have been terminated in accordance with Section 8.1 and none of the
events or conditions set forth in Annex A shall have occurred and be existing,
Acquisition shall use all reasonable efforts to consummate the Offer.
Acquisition shall accept for payment Shares which have been validly tendered
and not withdrawn pursuant to the Offer at the earliest time following
expiration of the Offer that all conditions to the Offer shall have been
satisfied or waived by Acquisition. The obligation of Acquisition to accept for
payment, purchase and pay for Shares tendered pursuant to the Offer shall be
subject only to the conditions set forth in Annex A hereto and to the further
condition that a number of Shares representing not less than two-thirds of the
Shares then outstanding on a fully diluted basis shall have been validly
tendered and not withdrawn prior to the expiration date of the Offer (the
"Minimum Condition"). Acquisition expressly reserves the right to increase the
price per Share payable in the Offer or to make any other changes in the terms
and conditions of the Offer (provided that, unless previously approved by the
Company in writing, no change may be made which decreases the price per Share
payable in the Offer, which changes the form of consideration to be paid in the
Offer, which reduces the maximum number of Shares to be purchased in the Offer,
which imposes conditions to the Offer in addition to those set forth in Annex A
hereto or which broadens the scope of such conditions). It is agreed that the
conditions set forth in Annex A are for the sole benefit of Acquisition and may
be asserted by Acquisition regardless of the circumstances giving rise to any
such condition (including any action or inaction by Acquisition) or may be
waived by Acquisition, in whole or in part at any time and from time to time,
in its sole discretion. The failure by Acquisition at any time to exercise any
of the foregoing rights shall not be deemed a waiver of any such right and
each such right shall be deemed an ongoing right which may be asserted at any
time and from time to time. Any determination (which shall be made in good
faith) by Acquisition with respect to any of the foregoing
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<PAGE> 6
conditions (including, without limitation, the satisfaction of such conditions)
shall be final and binding on the parties. The Per Share Amount shall be paid
net to the seller in cash, less any required withholding of taxes, upon the
terms and subject to such conditions of the Offer. The Company agrees that no
Shares held by the Company or any of its subsidiaries will be tendered in the
Offer.
(b) As soon as practicable after the date hereof, Acquisition
shall file with the Securities and Exchange Commission (the "SEC") an amendment
to its Tender Offer Statement on Schedule 14D-1 dated March 14, 1994 with
respect to the Offer which will reflect the existence of this Agreement, amend
the conditions to the Offer in accordance herewith and contain a supplement to
Acquisition's Offer to Purchase dated March 14, 1994 and related letter of
transmittal (together with any supplements or amendments thereto, collectively
the "Offer Documents"). The Offer Documents will comply in all material
respects with the provisions of applicable federal securities laws and the
securities laws of the State of New York. The information provided and to be
provided by the Company, Parent and Acquisition for use in the Offer Documents
shall not, on the date filed with the SEC and on the date first published or
sent or given to the Company's shareholders, as the case may be, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. Parent,
Acquisition and the Company each agrees promptly to correct any information
provided by it for use in the Offer Documents if and to the extent that it
shall have become false or misleading in any material respect and Acquisition
further agrees to take all steps necessary to cause the Offer Documents as so
corrected to be filed with the SEC and to be disseminated to holders of Shares,
in each case as and to the extent required by applicable federal securities
laws and the securities laws of the State of New York.
SECTION 1.2. Company Action. (a) The Company hereby approves
of and consents to the Offer and represents and warrants that the Board, at a
meeting duly called and held, has, subject to the terms and conditions set
forth herein, (i) determined that this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, are fair to, and in the
best interests of, the shareholders of the Company, (ii) approved this
Agreement and the transactions contemplated hereby, Including the Offer and the
Merger, in all respects and that such approval constitutes approval of the
Offer, this Agreement and the Merger for purposes of (A) Sections 902 and 912
of the New York Business Corporation Law (the "NYBCL") and similar provisions
of any other similar state statutes that might be deemed applicable to the
transactions contemplated hereby, (B) paragraph 1(a) of Article SEVENTH of the
Company's certificate of incorporation and (C) Section 11(a)(ii)(B) of the
Rights Agreement, and (iii) resolved to recommend that the shareholders of the
Company accept the Offer, tender their Shares thereunder to Acquisition and
approve and adopt this Agreement and the Merger, provided, however, that such
recommendation may be withdrawn, modified or amended to the extent that the
Board by a majority vote determines in its good faith judgment, based as to
legal matters on the written opinion of legal counsel, that the Board is
required to do so in the exercise of its fiduciary duties. The Company consents
to the inclusion of such recommendation and approval in the Offer Documents.
The Company further represents that Goldman, Sachs & Co. (the "Financial
Adviser") has delivered to the Board its written opinion that the cash
consideration to be received by the shareholders of the Company pursuant to the
Offer and the Merger is fair to such shareholders. The Company has been
authorized by the Financial Adviser to permit, subject to the prior review and
consent by the Financial Adviser (such consent not to be unreasonably
withheld), the inclusion of the fairness opinion (or a reference thereto) in
the Offer Documents, the Schedule 14D-9 and the Proxy Statement. The Company
hereby represents that it has terminated the Agreement and Plan of Merger dated
as of March 6, 1994 among Martin Marietta Corporation, MMC Acquisition Corp.
and the Company pursuant to Section 8.1 (d)(ii) thereof.
(b) The Company hereby agrees to file with the SEC as soon as
practicable after the date hereof an amendment to its Solicitation/
Recommendation Statement on Schedule 14D-9 pertaining to the Offer (together
with any amendments or supplements thereto, the "Schedule 14D-9") containing
the recommendation described in Section 1.2(a) and to promptly mail the
Schedule 14D-9 to the shareholders of the Company. The Schedule 14D-9 will
comply in all material respects with the provisions of
2
<PAGE> 7
applicable federal securities laws and, on the date filed with the SEC and on
the date first published, sent or given to the Company's shareholders, 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 therein, in light of the circumstances under which they were made,
not misleading, except that no representation is made by the Company with
respect to information supplied by Parent or Acquisition in writing for
inclusion in the Schedule 14D-9. The Company, Parent and Acquisition 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 the Company further agrees to take all
steps necessary to cause the Schedule 14D-9 as so corrected to be filed with
the SEC and disseminated to the holders of Shares, in each case as and to the
extent required by applicable federal securities laws. Notwithstanding
anything to the contrary in this Agreement, if the Board by majority vote
determines in its good faith judgment, based as to legal matters on the written
opinion of legal counsel, that the Board is required in the exercise of its
fiduciary duties to withdraw, modify or amend the recommendation of the Board,
such withdrawal, modification or amendment shall not constitute a breach of
this Agreement.
(c) In connection with the Offer, the Company will promptly
furnish Parent and Acquisition with mailing labels, security position listings
and any available listing or computer files containing the names and addresses
of the record holders of the Shares as of a recent date and shall furnish
Acquisition with such additional information and assistance (including, without
limitation, updated lists of shareholders, mailing labels and lists of
securities positions) as Acquisition or its agents may reasonably request in
communicating the Offer to the record and beneficial holders of Shares. 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 Merger, Parent, Acquisition and their affiliates, associates,
agents and advisors shall use the information contained in any such labels,
listings and files only in connection with the Offer and the Merger, and, if
this Agreement shall be terminated, will deliver to the Company all copies of
such information then in their possession.
SECTION 1.3. Boards of Directors and Committees; Section
14(f). (a) Promptly upon the purchase by Acquisition of Shares pursuant to the
Offer and from time to time thereafter, and subject to the last sentence of
this Section 1.3(a), Acquisition shall be entitled to designate up to such
number of directors, rounded up to the next whole number, on the Board as will
give Acquisition representation on the Board equal to the product of the number
of directors on the Board (giving effect to any increase in the number of
directors pursuant to this Section 1.3) and the percentage that such number of
Shares so purchased bears to the total number of outstanding Shares on a
fully-diluted basis, and the Company shall use its best efforts to, upon request
by Acquisition, promptly, at the Company's election, either increase the size
of the Board (subject to the provisions of Article EIGHTH of the Company's
certificate of incorporation) or secure the resignation of such number of
directors as is necessary to enable Acquisition's designees to be elected to
the Board and to cause Acquisition's designees to be so elected. At such times,
and subject to the last sentence of this Section 1.3(a), the Company will use
its best efforts to cause persons designated by Acquisition to constitute the
same percentage as is on the Board of (i) each committee of the Board (other
than any committee of the Board established to take action under this
Agreement), (ii) each board of directors of each subsidiary of the Company and
(iii) each committee of each such board. Notwithstanding the foregoing, the
Company shall use its best efforts to ensure that three of the members of the
Board as of the date hereof shall remain members of the Board until the
Effective Time (as defined in Section 2.2 hereof).
(b) The Company's obligation to appoint designees to the
Board shall be subject to Section 14(f) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and Rule 14f-1 promulgated thereunder.
The Company shall promptly take all action required pursuant to such Section
and Rule in order to fulfill its obligations under this Section 1.3 and shall
include in the Schedule 14D-9 such information with respect to the Company and
its officers and directors as is required under such Section and Rule in order
to fulfill its obligations under this Section 1.3. Acquisition will supply to
the Company in writing and be solely responsible for any information with
respect to itself and its nominees, officers, directors and affiliates required
by such Section and Rule.
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<PAGE> 8
(c) Following the election or appointment of Acquisition's
designees pursuant to this Section 1.3 and prior to the Effective Time, if
there shall be any directors of the Company who were directors as of the date
hereof, any amendment of this Agreement, any termination of this Agreement by
the Company, any extension by the Company of the time for the performance of
any of the obligations or other acts of Acquisition or Parent or waiver of any
of the Company's rights hereunder, will require the concurrence of a majority
of such directors.
ARTICLE 2
THE MERGER
SECTION 2.1. The Merger. At the Effective Time and upon the
terms and subject to the conditions of this Agreement and in accordance with
the NYBCL and the Delaware General Corporation Law (the "DGCL"), Acquisition
shall be merged with and into the Company (the "Merger"). Following the Merger,
the Company shall continue as the surviving corporation (the "Surviving
Corporation") and the separate corporate existence of Acquisition shall cease.
Parent may, upon notice to the Company, modify the structure of the Merger if
Parent determines it advisable to do so because of tax or other considerations,
and the Company shall promptly enter into any amendment to this Agreement
necessary or desirable to accomplish such structure modification, provided that
no such amendment shall reduce the Merger Consideration.
SECTION 2.2. Effective Time. As soon as practicable after the
satisfaction or waiver of the conditions set forth in Article 7, the parties
hereto will deliver a certificate of merger to the Department of State of the
State of New York and to the Secretary of State of the State of Delaware for
filing and make all other filings or recordings required by the NYBCL and the
DGCL in connection with the Merger. Prior to the filing referred to in this
Section 2.2, a closing will be held at the offices of Gibson, Dunn & Crutcher,
200 Park Avenue, New York, New York 10166 (or such other place as the parties
may agree) for the purpose of confirming all of the foregoing. The Merger shall
become effective at such time as such certificate of merger is duly filed by
the Department of State of the State of New York, or at such later time as is
specified in such certificate of merger (the time the Merger becomes effective
being referred to herein as the "Effective Time").
SECTION 2.3. Effects of the Merger. The Merger shall have the
effects set forth in the NYBCL (including, without limitations, Section 906
thereof) and the DGCL. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all the properties, rights, privileges,
powers and franchises of the Company and Acquisition shall vest in the
Surviving Corporation, and all debts, liabilities and duties of the Company and
Acquisition shall become the debts, liabilities and duties of the Surviving
Corporation.
SECTION 2.4. Certificate of Incorporation and By-Laws. (a) 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. (b) The by-laws of the Company in
effect at the Effective Time shall be the by-laws of the Surviving Corporation
until amended in accordance with applicable law.
SECTION 2.5. Directors. The directors of Acquisition at the
Effective Time shall be the initial directors of the Surviving Corporation,
each to hold office in accordance with the Certificate of Incorporation and
By-Laws of the Surviving Corporation until such director's successor is duly
elected or appointed and qualified.
SECTION 2.6. Officers. The officers of the Company at the
Effective Time shall be the initial officers of the Surviving Corporation, each
to hold office in accordance with the Certificate of Incorporation and By-Laws
of the Surviving Corporation until such officer's successor is duly elected or
appointed and qualified.
4
<PAGE> 9
SECTION 2.7. Conversion of Shares. (a) Each Share issued and
outstanding immediately prior to the Effective Time (other than (i) Shares held
in the Company's treasury or by any of the Company's subsidiaries, (ii) Shares
held by Parent, Acquisition or any other subsidiary of Parent and (iii)
Dissenting Shares (as defined in Section 3.1 hereof)) together with the
associated Rights, shall, by virtue of the Merger and without any action on
the part of Acquisition, the Company or the holder thereof, be canceled and
extinguished and be converted into the right to receive, pursuant to Section
3.2, the Per Share Amount in cash (the "Merger Consideration"), payable to the
holder thereof, without interest thereon, upon the surrender of the certificate
formerly representing such Share, less any required withholding of taxes.
Parent and Acquisition shall take such action as may be necessary to cause
Acquisition to have outstanding, immediately prior to the Effective Time, the
same number of shares of common stock as the number of Shares then outstanding.
At the Effective Time, each outstanding share of the common stock, par value
$.01 per share, of Acquisition shall be converted into one share of common
stock, par value $1.00 per share, of the Surviving Corporation.
(b) Each Share held in the treasury of the Company and each
Share held by Parent, Acquisition or any subsidiary of Parent, Acquisition or
the Company immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of Acquisition, the Company or the
holder thereof, be canceled, retired and cease to exist and no payment shall be
made with respect thereto.
SECTION 2.8. Stock Option Plans; MIP. (a) The Company shall
use all reasonable efforts to cause all holders of options ("Options") to
purchase Shares granted under the 1981 Stock Option Plan of the Company, the
1990 Stock Option Plan of the Company, the 1992 Long Term Incentive Plan of the
Company or any predecessor stock option or stock plan of the Company
(collectively, the "Stock Plans") which are outstanding immediately prior to
the Effective Time to exercise such Options prior to the Effective Time. The
Company shall take such action as is necessary under the Stock Plans to cause
any Options that remain outstanding after the Merger to thereafter be
exercisable for a short-term debt instrument of the Surviving Corporation in a
face amount (and with an interest rate and other terms designed to provide a
fair value) equal to an amount determined by multiplying the Merger
Consideration by the number of Shares for which such Option was theretofore
exercisable.
(b) Prior to the Effective Time, the Company shall use all
reasonable efforts to (i) obtain any consents from individuals who are entitled
to awards under the Company's Management Incentive Plan ("MIP") and (ii) make
any amendments to the terms of such plan that are necessary to provide for
future distributions thereunder to be paid in the form of cash (and not in the
form of Shares).
SECTION 2.9. Shareholders' Meeting. The Company, acting
through the Board, shall in accordance with applicable law:
(i) duly call, give notice of, convene and hold
an annual or special meeting of its shareholders (the
"Shareholders' Meeting"), to be held as soon as practicable
after May 18, 1994 (provided that Acquisition shall have
purchased Shares pursuant to the Offer) for the purpose of
considering and taking action upon this Agreement;
(ii) subject to its fiduciary duties as determined
in good faith by a majority of the Board, based as to legal
matters on the written opinion of legal counsel, include in
the Proxy Statement the recommendation of the Board that
shareholders of the Company vote in favor of the approval and
adoption of this Agreement and the written opinion of the
Financial Advisor that the cash consideration to be received
by the shareholders of the Company pursuant to the Merger is
fair to such shareholders; and
(iii) use all reasonable efforts (A) to obtain and
furnish the information required to be included by it in the
Proxy Statement and, after
5
<PAGE> 10
consultation with Parent and Acquisition, respond promptly to
any comments made by the SEC with respect to the Proxy
Statement and any preliminary version thereof and cause the
Proxy Statement to be mailed to its Shareholders at the
earliest practicable time following the expiration or
termination of the Offer and (B) subject to its fiduciary
duties as determined in good faith by a majority of the Board,
based as to legal matters on the written opinion of legal
counsel, to obtain the necessary approvals by its shareholders
of this Agreement and the transactions contemplated hereby.
At such meeting, Parent, Acquisition and their affiliates
will vote all Shares owned by them in favor of approval and
adoption of this Agreement and the transactions contemplated
hereby.
ARTICLE 3
DISSENTING SHARES; EXCHANGE OF SHARES
SECTION 3.1. Dissenting Shares. Notwithstanding anything in
this Agreement to the contrary, Shares 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 Section 623 of the NYBCL ("Dissenting Shares") shall not be
converted into a right to receive the Merger Consideration, unless such holder
fails to perfect or withdraws or otherwise loses his right to appraisal. If,
after the Effective Time, such holder fails to perfect or withdraws or loses his
right to appraisal, such Shares shall be treated as if they had been converted
as of the Effective Time into a right to receive the Merger Consideration,
without interest thereon. The Company shall give Parent and Acquisition prompt
notice of any demands received by the Company for appraisal of Shares, and,
prior to the Effective Time, Parent and Acquisition shall have the right to
direct all negotiations and proceedings with respect to such demands. Prior to
the Effective Time, the Company shall not, except with the prior written
consent of Parent or Acquisition, make any payment with respect to, or settle
or offer to settle, any such demands.
SECTION 3.2. Payment for Shares. (a) Prior to the Effective
Time, Parent and Acquisition shall designate a bank or trust company reasonably
acceptable to the Company to act as Exchange Agent in connection with the
Merger (the "Exchange Agent") pursuant to an exchange agency agreement
providing for the matters set forth in this Section 3.2 and otherwise
reasonably satisfactory to the Company. At or prior to the Effective Time,
Parent or Acquisition will provide the Exchange Agent with the funds necessary
to make the payments contemplated by Section 2.7(a) hereof (the "Exchange
Fund").
(b) Promptly after the Effective Time, the Exchange Agent
shall mail to each record holder, as of the Effective Time, of an outstanding
certificate or certificates which immediately prior to the Effective Time
represented Shares (the "Certificates") a form letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the Certificates to the
Exchange Agent) and instructions for use in effecting the surrender of the
Certificates for payment therefor. Upon surrender to the Exchange Agent of a
Certificate, together with a duly executed letter of transmittal and any other
required documents, the holder of such Certificate shall receive in exchange
therefor (as promptly as practicable) the consideration set forth in Section
2.7(a) hereof, without any interest thereon, less any required withholding of
taxes, and such Certificate shall forthwith be canceled. If payment is to be
made to a person other than the person in whose name a Certificate so
surrendered is registered, it shall be a condition of payment that the
Certificate so surrendered shall be properly endorsed or otherwise in proper
form for transfer, that the signatures on the Certificate or any related stock
power shall be properly guaranteed and that the person requesting such payment
shall either pay any transfer or other taxes required by reason of the payment
to a person other than the registered holder of the Certificate so surrendered
or establish to the satisfaction of the Surviving Corporation that such tax has
been paid or is not applicable. Until surrendered in accordance with the
6
<PAGE> 11
provisions of this Section 3.2(b), each Certificate (other than Certificates
representing Shares held in the Company's treasury or by Acquisition, or by any
subsidiary of the Company or Acquisition, and other than Certificates
representing Dissenting Shares) shall represent for all purposes only the right
to receive for each Share represented thereby the consideration provided for
under this Agreement.
(c) After the Effective Time, there shall be no transfers on
the stock transfer books of the Surviving Corporation of the Shares which were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation, they shall be
canceled and exchanged for the consideration provided for, and in accordance
with the procedures set forth, in this Article 3.
(d) From and after the Effective Time, the holders of
Certificates evidencing ownership of Shares outstanding immediately prior to
the Effective Time shall cease to have any rights with respect to such Shares
except as otherwise provided herein or by applicable law. Such holders shall
have no rights, after the Effective Time, with respect to such Shares except to
surrender such Certificates in exchange for cash pursuant to this Agreement or
to perfect any rights of appraisal as a holder of Dissenting Shares that such
holders may have pursuant to Section 623 of the NYBCL.
(e) Any portion of the Exchange Fund (including the proceeds
of any investment thereof) that remains unclaimed by the shareholders of the
Company for six months after the Effective Time shall be repaid to the
Surviving Corporation. Any shareholders of the Company who have not theretofore
complied with this Article 3 shall thereafter look only to the Surviving
Corporation for payment of their claims for the consideration set forth in
Section 2.7(a) hereof for each Share such shareholder holds, without any
interest thereon.
(f) Notwithstanding anything to the contrary in this Section
3.2, none of the Exchange Agent, Parent or the Surviving Corporation shall be
liable to a holder of a Certificate formerly representing Shares for any amount
properly delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law. If Certificates are not surrendered prior to
two years after the Effective Time, unclaimed funds payable with respect to such
Certificates shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or interest
of any person previously entitled thereto.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each of Parent
and Acquisition that, except as disclosed in the letter, dated the date hereof,
from the Company to Parent (the "Letter"):
SECTION 4.1. Organization and Qualification; Subsidiaries. (a)
Each of the Company and its subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its businesses as now being
conducted, except where the failure to be so organized, existing and in good
standing or to have such power and authority would not, individually or in the
aggregate, have a Material Adverse Effect (as defined below) on the Company.
The Company has heretofore delivered to Acquisition or Parent accurate and
complete copies of the certificate of incorporation and by-laws, as currently
in effect, of the Company and promptly will deliver to Acquisition and Parent
accurate and complete copies of the certificate or articles of incorporation
and by-laws, as currently in effect, of each of its significant subsidiaries
(as that term is defined in Regulation S-X of the General Rules and
Regulations under the Securities Act of 1933, as amended). When used in
connection with the Company or any of its subsidiaries, the term
"Material Adverse Effect" means any change or effect (other than changes or
effects described in the Letter) that is or is reasonably likely to be
materially adverse to the business, results of operations or condition
(financial or otherwise) of the
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Company and its subsidiaries, taken as whole, other than any change or effect
arising out of general economic conditions unrelated to any businesses in which
the Company is engaged.
(b) Each of the Company and its subsidiaries is duly qualified
or licensed and in good standing to do business in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except in such
jurisdictions where the failure to be so duly qualified or licensed and in good
standing would not, individually or in aggregate, have a Material Adverse
Effect on the Company.
SECTION 4.2. Capitalization of the Company and its
Subsidiaries. (a) The authorized capital stock of the Company consists of:
80,000,000 shares of common stock, par value $1.00 per share (the "Common
Stock"), of which, as of February 28, 1994, 33,935,448 Shares were issued and
outstanding and 10,000,000 shares of preferred stock, par value $1.00 per share,
no shares of which are outstanding. All of the Shares have been validly issued,
and are fully paid, nonassessable and free of preemptive rights. As of February
28, 1994, approximately 1,129,226 shares of Common Stock were reserved for
issuance and issuable upon or otherwise deliverable in connection with the
exercise of outstanding Options. As of February 28, 1994, performance share
awards were outstanding with respect to a maximum of 428,650 shares of Common
Stock under the Company's Long Term Incentive Plan with no more than an
additional 30,000 shares of Common Stock payable as dividend equivalents with
respect to such share awards, and the number of all such shares (including
shares under the performance share awards and the dividend equivalent shares
thereon) will be doubled under such plan as a result of any change of control
as defined therein. As of February 28, 1994, 107,975,451 shares of Common Stock
were deliverable in settlement of deferred compensation under the MIP. Since
February 28, 1994, no shares of the Company's capital stock have been issued
other than pursuant to stock options already in existence on such date, and
since February 28, 1994, no stock options have been granted. Except as set
forth above and except for the rights (the "Rights") to, among other things,
purchase Series A Junior Participating Preferred Stock issued pursuant to the
Rights Agreement, dated as of February 18, 1988 (the "Rights Agreement"),
between the Company and The Bank of New York, as Rights Agent, there are
outstanding (i) no shares of capital stock or other voting securities of the
Company, (ii) no securities of the Company or any of its subsidiaries
convertible into or exchangeable for shares of capital stock or voting
securities of the Company, (iii) no options or other rights to acquire from the
Company or any of its subsidiaries, and no obligations of the Company or any of
its subsidiaries to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of the
Company, and (iv) no equity equivalents, interests in the ownership or earnings
of the Company or any of its subsidiaries or other similar rights
(collectively, "Company Securities"). There are no outstanding obligations of
the Company or any of its subsidiaries to repurchase, redeem or otherwise
acquire any Company Securities.
(b) Except for directors qualifying shares, if any, all of the
outstanding capital stock of, or other ownership interests in, each subsidiary
of the Company, is owned by the Company, directly or indirectly, free and clear
of any Lien (as hereinafter defined) or any other limitation or restriction
(including any restriction on the right to vote or sell the same, except as may
be provided as a matter of law). There are no securities of the Company or any
of its subsidiaries convertible into or exchangeable for, no options or other
rights to acquire from the Company or any of its subsidiaries, and no other
contract understanding, arrangement or obligation (whether or not contingent)
providing for the issuance or sale, directly or indirectly, of any capital stock
or other ownership interests in, or any other securities of, any subsidiary of
the Company. There are no outstanding contractual obligations of the Company or
any of its subsidiaries to repurchase, redeem or otherwise acquire any
outstanding shares of capital stock or other ownership interests in any
subsidiary of the Company. For purposes of this Agreement, "Lien" means, with
respect to any asset (including, without limitation, any security) any
mortgage, lien, pledge, charge, security interest or encumbrance of any kind in
respect of such asset.
(c) The Shares and the Rights constitute the only class of
equity securities of the Company or any of its subsidiaries registered or
required to be registered under the Exchange Act.
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SECTION 4.3. Authority Relative to this Agreement; Consents
and Approvals. (a) The Company has all necessary corporate power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by the Board and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby (other than, with respect to the Merger, the
approval and adoption of this Agreement by the holders, including Acquisition,
of two-thirds of the then outstanding Shares). This Agreement has been duly and
validly executed and delivered by the Company and constitutes a valid, legal
and binding agreement of the Company, enforceable against the Company in
accordance with its terms.
(b) The Board has duly and validly approved, and taken all
corporate actions required to be taken by the Board for the consummation of, the
transactions, including the Offer and the acquisition of the Shares pursuant
thereto and the Merger, contemplated hereby, including but not limited to all
actions required to render the provisions of Section 912 of the NYBCL
restricting business combinations with "interested shareholders" inapplicable
to such transactions.
SECTION 4.4. SEC Reports; Financial Statements. (a) The
Company has filed all required forms, reports and documents with the SEC since
January 1, 1990 (collectively, the "SEC Reports"), each of which has complied
in all material respects with all applicable requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and the Exchange Act each as in
effect on the dates so filed. The Company has heretofore delivered or promptly
will deliver to Acquisition or Parent, in the form filed with the SEC
(including any amendments thereto), (i) its Annual Reports on Form 10-K for
each of the three fiscal years ended December 31, 1991, 1992 and 1993, (ii) all
definitive proxy statements relating to the Company's meetings of shareholders
(whether annual or special) held since January 1, 1990 and (iii) all other
reports (other than Quarterly Reports on Form 10-Q) or registration statements
filed by the Company with the SEC since January 1, 1990. None of such forms,
reports or documents, including, without limitation, any financial statements
or schedules included or incorporated by reference therein, contained, when
filed, any untrue statement of a material fact or omitted to state a material
fact required to be stated or incorporated by reference therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The Company has also delivered to Parent or
Acquisition a true and complete copy of the audited consolidated financial
statements of the Company, including the notes thereto, for the fiscal year
ended December 31, 1993 (the "1993 Financial Statements"). The 1993 Financial
Statements and the audited consolidated financial statements of the Company
included in its Annual Reports on Form 10-K referred to in the first sentence
of this Section 4.4(a) fairly present, in conformity with generally accepted
accounting principles 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 changes in financial position for the periods then
ended.
(b) The Company has heretofore made available or promptly will
make available to Acquisition or Parent a complete and correct copy of any
amendments or modifications, which have not yet been filed with the SEC, to
agreements, documents or other instruments which previously had been filed by
the Company with the SEC pursuant to the Exchange Act.
SECTION 4.5. Proxy Statement; Offer Documents. Any proxy or
similar materials distributed to the Company's shareholders in connection with
the Merger, including any amendments or supplements thereto (the "Proxy
Statement"), will comply in all material respects with applicable federal
securities laws, except that no representation is made by the Company with
respect to information supplied by Acquisition or Parent for inclusion in the
Proxy Statement. None of the information supplied by the Company in writing for
inclusion in the Offer Documents or provided by the Company in the Schedule
14D-9 will, at the respective times that the Offer Documents and the Schedule
14D-9 or any amendments or supplements thereto are filed with the SEC and are
first published or sent or given to holders of Shares, contain any untrue
statement of a material fact or omit to state any material fact
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required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
SECTION 4.6. Consents and Approvals, No Violations. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Securities Act, the Exchange
Act, state securities or blue sky laws, the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), and the filing and
recordation of a certificate of merger as required by the NYBCL and the DGCL,
no filing with or notice to, and no permit, authorization, consent or approval
of, any court or tribunal or administrative, governmental or regulatory body,
agency or authority (a "Governmental Entity") is necessary for the execution
and delivery by the Company of this Agreement or the consummation by the
Company of the transactions contemplated hereby, except where the failure to
obtain such permits, authorizations, consents or approvals or to make such
filings or give such notice would not have a Material Adverse Effect on the
Company. Neither the execution, delivery and performance of this Agreement by
the Company nor the consummation by the Company of the transactions
contemplated hereby will (i) conflict with or result in any breach of any
provision of the respective certificate of incorporation or by-laws (or
similar governing documents) of the Company or of any its subsidiaries, (ii)
result in a violation or breach of, or constitute (with or without due notice
or lapse of time or both) a default (or give rise to any right of termination,
amendment, cancellation or acceleration) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which the Company or any of its
subsidiaries is a party or by which any of them or any of their respective
properties or assets may be bound, other than breaches or defaults under loan
agreements resulting from the existence of indebtedness on the part of
Acquisition, or (iii) violate any order, writ, injunction, decree, law,
statute, rule or regulation applicable to the Company or any of its
subsidiaries or any of their respective properties or assets, except in the
case of (ii) or (iii) for violations, breaches or defaults which would not,
individually or in the aggregate, have a Material Adverse Effect on the Company.
SECTION 4.7. No Default. None of the Company or any of its
subsidiaries is in default or violation (and no event has occurred which with
notice or the lapse of time or both would constitute a default or violation) of
any term, condition or provision of (i) its certificate of incorporation or
by-laws (or similar governing documents), (ii) any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or
obligation to which the Company or any of its subsidiaries is now a party or by
which any of them or any of their respective properties or assets may be bound
or (iii) any order, writ, injunction, decree, law, statute, rule or regulation
applicable to the Company, any of its subsidiaries or any of their respective
properties or assets, except in the case of (ii) or (iii) for violations,
breaches or defaults that would not, individually or in the aggregate, have a
Material Adverse Effect on the Company.
SECTION 4.8. No Undisclosed Liabilities; Absence of Changes.
Except as and to the extent publicly disclosed by the Company, as of December
31, 1993, neither the Company nor any of its subsidiaries had any liabilities
or obligations of any nature, whether or not accrued, contingent or otherwise,
that would be required by generally accepted accounting principles to be
reflected on a consolidated balance sheet of the Company and its subsidiaries
(including the notes thereto) or, which would have, individually or in the
aggregate, a Material Adverse Effect on the Company. Except as publicly
disclosed by the Company, since December 31, 1993, neither the Company nor any
of its subsidiaries has incurred any liabilities of any nature, whether or not
accrued, contingent or otherwise, which would have, and there have been no
events, changes or effects with respect to the Company and its subsidiaries
having, individually or in the aggregate, a Material Adverse Effect on the
Company.
SECTION 4.9. Litigation. Except as publicly disclosed by the
Company, there is no suit, claim, action, proceeding or investigation pending
or, to the knowledge of the Company, threatened against the Company or any of
its subsidiaries or any of their respective properties or assets before any
Governmental Entity which, individually or in the aggregate, would have a
Material Adverse Effect on the Company or would prevent or delay the
consummation of the transactions contemplated by
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Agreement. Except as publicly disclosed by the Company, neither the Company nor
any of its subsidiaries is subject to any outstanding order, writ, injunction
or decree which, insofar as can be reasonably foreseen, individually or in the
aggregate, in the future would have a Material Adverse Effect on the Company or
would prevent or delay the consummation of the transactions contemplated
hereby.
SECTION 4.10. Compliance with Applicable Law. Except as
publicly disclosed by the Company, the Company and its subsidiaries hold all
permits, licenses, variances, exemptions, orders and approvals of all
Governmental Entities necessary for the lawful conduct of their respective
businesses (the "Company Permits"), except for failures to hold such permits,
licenses, variances, exemptions, orders and approvals which would not,
individually or in the aggregate, have a Material Adverse Effect on the
Company. Except as publicly disclosed by the Company, the Company and its
subsidiaries are in compliance with the terms of the Company Permits, except
where the failure so to comply would not have a Material Adverse Effect on the
Company. Except as publicly disclosed by the Company, the businesses of the
Company and its subsidiaries are not being conducted in violation of any law,
ordinance or regulation of any Governmental Entity except that no
representation or warranty is made in this Section 4.10 with respect to
Environmental Laws (as defined in Section 4.12 below) and except for violations
or possible violations which individually or in the aggregate do not, and,
insofar as reasonably can be foreseen, in the future will not, have a Material
Adverse Effect on the Company. Except as publicly disclosed by the Company, no
investigation or review by any Governmental Entity with respect to the Company
or any of its subsidiaries is pending or, to the best knowledge of the Company,
threatened, nor, to the best knowledge of the Company, has any Governmental
Entity indicated an intention to conduct the same, other than, in each case,
those which the Company reasonably believes will not have a Material Adverse
Effect on the Company.
SECTION 4.11. Employee Plans. All "employee benefit plans" as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), maintained or contributed to by the Company and its
subsidiaries are in compliance with the applicable provisions of ERISA and the
Internal Revenue Code of 1986, as amended (the "Code"), except for instances of
noncompliance that individually or in the aggregate would not have a Material
Adverse Effect on the Company.
SECTION 4.12. Environmental Laws and Regulations. (a) Except
as publicly disclosed by the Company, (i) the Company and each of its
subsidiaries is in material compliance with all applicable federal, state and
local laws and regulations relating to pollution or protection of human health
or the environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata) (collectively, "Environmental
Laws"), except for non-compliance that individually or in the aggregate would
not have a Material Adverse Effect on the Company, which compliance includes,
but is not limited to, the possession by the Company and its subsidiaries of
all material permits and other governmental authorizations required under
applicable Environmental Laws, and compliance with the terms and conditions
thereof; (ii) neither the Company nor any of its subsidiaries has received
written notice of, or, to the best knowledge of the Company, is the subject of,
any action, cause of action, claim, investigation, demand or notice by any
person or entity alleging liability under or non-compliance with any
Environmental Law (an "Environmental Claim") that individually or in the
aggregate would have a Material Adverse Effect on the Company; and (iii) to
the best knowledge of the Company, there are no circumstances that are
reasonably likely to prevent or interfere with such material compliance in the
future.
(b) Except as publicly disclosed by the Company, there are no
Environmental Claims which individually or in the aggregate would have a
Material Adverse Effect on the Company that are pending or, to the best
knowledge of the Company, threatened against the Company or any of its
subsidiaries or, to the best knowledge of the Company, against any person or
entity whose liability for any Environmental Claim the Company or any of its
subsidiaries has or may have retained or assumed either contractually or by
operation of law.
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SECTION 4.13. Rights Agreement. The Company has taken all necessary
action so that none of the execution of this Agreement, the making of the
Offer, the acquisition of Shares pursuant to the Offer or the consummation of
the Merger will (i) cause the Rights issued pursuant to the Rights Agreement
to become exercisable, (ii) cause any person to become an Acquiring Person (as
such term is defined in the Rights Agreement) or (iii) give rise to a
Distribution Date or a Triggering Event (as each such term is defined in the
Rights Agreement).
SECTION 4.14. Brokers. No broker, finder or investment banker (other
than the Financial Adviser, a true and correct copy of whose engagement
agreement has been provided to Acquisition or Parent) is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by
and on behalf of the Company.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION
Parent and Acquisition hereby represent and warrant to the Company as
follows:
SECTION 5.1. Organization. Each of Parent and Acquisition is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted, except where the failure to be so organized, existing
and in good standing or to have such power and authority would not in the
aggregate have a Material Adverse Effect (as defined below) on Parent or
Acquisition. When used in connection with Parent or Acquisition, the term
"Material Adverse Effect" means any change or effect that is materially adverse
to the business, results of operations or condition (financial or otherwise) of
Parent and its subsidiaries, taken as a whole, other than any change or effect
arising out of general economic conditions unrelated to any businesses in which
Parent and its subsidiaries are engaged.
SECTION 5.2. Authority Relative to this Agreement. Each of Parent and
Acquisition has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
boards of directors of Parent and Acquisition and by Parent as the sole
shareholder of Acquisition, and no other corporate proceedings on the part of
Parent or Acquisition are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by each of Parent and Acquisition and
constitutes a valid, legal and binding agreement of each of Parent and
Acquisition, enforceable against each of Parent and Acquisition in accordance
with its terms.
SECTION 5.3. Consents and Approvals; No Violations. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Securities Act, the Exchange
Act, state securities or blue sky laws, the HSR Act, and the filing and
recordation of a certificate of merger as required by the NYBCL and the DGCL,
no filing with or notice to, and no permit, authorization, consent or approval
of, any Governmental Entity is necessary for the execution and delivery by
Parent or Acquisition of this Agreement or the consummation by Parent or
Acquisition of the transactions contemplated hereby, except where the failure
to obtain such permits, authorizations, consents or approvals or to make such
filings or give such notice would not have a material adverse effect on the
ability of Parent or Acquisition to consummate the Offer or the Merger.
Neither the execution, delivery and performance of this Agreement by Parent or
Acquisition nor the consummation by Parent or Acquisition of the transactions
contemplated hereby will (i) conflict with or result in any breach of any
provision of the respective certificate of incorporation or by-laws (or
similar governing documents) of Parent or Acquisition or any of Parent's
subsidiaries, (ii) result in a violation or
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breach of, or constitute (with or without due notice or lapse of time or both)
a default (or give rise to any right of termination, amendment, cancellation or
acceleration) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which Parent or Acquisition or any of Parent's
subsidiaries is a party or by which any of them or any of their respective
properties or assets may be bound or (iii) violate any order, writ, injunction
decree, law, statute, rule or regulation applicable to Parent or Acquisition or
any of Parent's subsidiaries or any of their respective properties or assets,
except in the case of (ii) or (iii) for violations, breaches or defaults which
would not, individually or in the aggregate, have a material adverse effect on
the ability of Parent or Acquisition to consummate the Offer or the Merger.
SECTION 5.4. Proxy Statement; Schedule 14D-9. None of the information
supplied by Parent or Acquisition in writing for inclusion in the Proxy
Statement or the Schedule 14D-9 will, at the respective times that the Proxy
Statement and the Schedule 14D-9 or any amendments or supplements thereto are
filed with the SEC and are first published or sent or given to holders of
Shares, and in the case of the Proxy Statement, at the time that it or any
amendment or supplement thereto is mailed to the Company's shareholders, at the
time of the Shareholders' Meeting or at the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
SECTION 5.5. Financing. Either Parent or Acquisition has or will have
sufficient funds available to purchase all of the Shares outstanding on a fully
diluted basis and to pay all related fees and expenses.
SECTION 5.6. No Prior Activities. Except for obligations incurred in
connection with its incorporation or organization, the making of the Offer or
the negotiation and consummation of this Agreement and the transactions
contemplated hereby, Acquisition has neither incurred any obligation or
liability nor engaged in any business or activity of any type or kind
whatsoever or entered into any agreement or arrangement with any person or
entity.
SECTION 5.7. Brokers. Except for Salomon Brothers Inc (a true and
correct copy of whose engagement agreement has been provided to the Company),
no broker, finder or investment banker is entitled to any brokerage, finder's
or other fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by and on behalf of Parent or
Acquisition.
ARTICLE 6
COVENANTS
SECTION 6. 1. Conduct of Business of the Company. Except as
contemplated by this Agreement, during the period from the date hereof to the
time persons designated or elected by Acquisition or any of its affiliates
shall constitute a majority of the Board, the Board will not permit the Company
or any of its subsidiaries to conduct its operations otherwise than in the
ordinary course of business consistent with past practice. Without limiting the
generality of the foregoing, and except as otherwise expressly provided in this
Agreement, prior to the time persons designated or elected by Acquisition or any
of its affiliates shall constitute a majority of the Board, the Board will not,
without the prior written consent of Parent or Acquisition, permit the Company
or any of its subsidiaries to:
(a) amend or propose to amend its certificate or articles of
incorporation or by-laws;
(b) authorize for issuance, issue, sell, deliver or agree or commit to
issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any
stock of any class or any other securities or equity equivalents (including,
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without limitation, any stock options or stock appreciation rights), except as
required by agreements with the Company's employees under the Stock Plans as in
effect as of the date hereof or pursuant to the Rights Agreement, and except
deliveries of certificates for Shares issued prior to the date hereof pursuant
to the Company's Restricted Stock Award Plan, or amend any of the terms of any
such securities or agreements outstanding as of the date hereof, except as
specifically contemplated by this Agreement;
(c) split, combine or reclassify any share of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock,
or redeem or otherwise acquire any of its securities or any securities of its
subsidiaries;
(d) (i) incur or assume any long-term or short-term debt or issue any
debt securities except for borrowings under existing lines of credit in the
ordinary course of business and in amounts not material to the Company and its
subsidiaries taken as a whole; (ii) assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise) for
the obligations of any other person except in the ordinary course of business
consistent with past practice and in amounts not material to the Company and its
subsidiaries, taken as a whole, and except for obligations of wholly owned
subsidiaries of the Company; (iii) make any loans, advances or capital
contributions to, or investments in, any other person (other than to wholly
owned subsidiaries of the Company or customary loans or advances to employees
in the ordinary course of business consistent with past practice and in amounts
not material to the maker of such loan or advance); (iv) pledge or otherwise
encumber shares of capital stock of the Company or any of its subsidiaries; or
(v) mortgage or pledge any of its material assets, tangible or intangible, or
create or suffer to exist any material Lien thereupon, except as disclosed in
the Letter;
(e) except as may be required by law or as contemplated by this
Agreement, enter into, adopt or amend or terminate any bonus, profit sharing,
compensation, severance, termination, stock option, stock appreciation right,
restricted stock, performance unit, stock equivalent, stock purchase agreement,
pension, retirement, deferred compensation, employment, severance or other
employee benefit agreement, trust, plan, fund or other arrangement for the
benefit or welfare of any director, officer or employee in any manner, or
(except for normal increases in the ordinary course of business consistent with
past practice that, in the aggregate, do not result in a material increase in
benefits or compensation expense to the Company, and as required under existing
agreements or in the ordinary course of business generally consistent with past
practice) increase in any manner the compensation or fringe benefits of any
director, officer or employee or pay any benefit not required by any plan and
arrangement as in effect as of the date hereof (including, without limitation,
the granting of stock appreciation rights or performance units);
(f) except as disclosed in the Letter, acquire, sell, lease or dispose
of any assets outside the ordinary course of business or any assets which in
the aggregate are material to the Company and its subsidiaries taken as a
whole, or enter into any commitment or transaction outside the ordinary course
of business consistent with past practice which would be material to the
Company and its subsidiaries taken as a whole;
(g) except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
principles or practices used by it;
(h) revalue in any material respect any of its assets including,
without limitation, writing down the value of inventory or writing-off notes or
accounts receivable other than in the ordinary course of business;
(i) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or division
thereof or any equity interest therein; (ii) enter into any contract or
agreement other than in the ordinary course of business consistent with past
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practice which would be material to the Company and its subsidiaries taken as a
whole; (iii) authorize any new capital expenditure or expenditures which,
individually, is in excess of $2,500,000 or, in the aggregate, are in excess of
$25,000,000; provided, that none of the foregoing shall limit any capital
expenditure already included in the Company's 1994 capital expenditure budget
previously provided to Parent or Acquisition; or (iv) enter into or amend any
contract, agreement, commitment or arrangement providing for the taking of any
action that would be prohibited hereunder;
(j) make any tax election or settle or compromise any income tax
liability material to the Company and its subsidiaries taken as a whole;
(k) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction in the ordinary course of business
of liabilities reflected or reserved against in, or contemplated by, the
consolidated financial statements (or the notes thereto) of the Company and
its subsidiaries or incurred in the ordinary course of business consistent
with past practice;
(l) settle or compromise any pending or threatened suit, action or
claim relating to the transactions contemplated hereby; or
(m) take, or agree in writing or otherwise to take, any of the actions
described in Sections 6.1(a) through 6.1(l) or any action which would make
any of the representations or warranties of the Company contained in this
Agreement untrue or incorrect as of the date when made or would result in any
of the conditions set forth in Annex A not being satisfied.
SECTION 6.2. Other Potential Bidders. The Company, its affiliates and
their respective officers, directors, employees, representatives and agents
shall immediately cease any existing discussions or negotiations, if any, with
any parties conducted heretofore with respect to any acquisition of all or any
material portion of the assets of, or any equity interest in, the Company or
any of its subsidiaries or any business combination with the Company or any of
its subsidiaries, other than as described in the Letter. The Company may,
directly or indirectly, furnish information and access, in each case only in
response to unsolicited requests therefor, to any corporation, partnership,
person or other entity or group pursuant to confidentiality agreements, and may
participate in discussions and negotiate with such entity or group concerning
any merger, sale of assets, sale of shares of capital stock or similar
transaction involving the Company or any subsidiary or division of the Company,
if such entity or group has submitted a written proposal to the Board relating
to any such transaction and the Board by a majority vote determines in its good
faith judgment, based as to legal matters on the written opinion of legal
counsel, that failing to take such action would constitute a breach of the
Board's fiduciary duty. The Board shall provide a copy of any such written
proposal to Parent or Acquisition immediately after receipt thereof and
thereafter keep Parent and Acquisition promptly advised of any development
with respect thereto. Except as set forth above, neither the Company or any
of its affiliates, nor any of its or their respective officers, directors,
employees, representatives or agents, shall, directly or indirectly, encourage,
solicit, participate in or initiate discussions or negotiations with, or
provide any information to, any corporation, partnership, person or other
entity or group (other than Parent and Acquisition, any affiliate or associate
of Parent and Acquisition or any designees of Parent and Acquisition)
concerning any merger, sale of assets, sale of shares of capital stock or
similar transaction involving the Company or any subsidiary or division of the
Company; provided, however, that nothing herein shall prevent the Board from
taking, and disclosing to the Company's shareholders, a position contemplated
by Rules 14d-9 and 14e-2 promulgated under the Exchange Act with regard to
any tender offer, provided, further, that the Board shall not recommend that
the shareholders of the Company tender their Shares in connection with any
such tender offer unless the Board by a majority vote determines in its good
faith judgment, based as to legal matters on the written opinion of legal
counsel, that failing to take such action would constitute a breach of the
Board's fiduciary duty.
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SECTION 6.3. Access to Information. (a) Between the date hereof and the
Effective Time, the Company will give Parent and Acquisition and their
authorized representatives reasonable access to all employees, plants, offices,
warehouses and other facilities and to all books and records of the Company and
its subsidiaries, will permit Parent and Acquisition to make such inspections
as Parent and Acquisition may reasonably require and will cause the Company's
officers and those of its subsidiaries to furnish Parent and Acquisition with
such financial and operating data and other information with respect to the
business and properties of the Company and any of its subsidiaries as Parent or
Acquisition may from time to time reasonably request.
(b) Each of Parent and Acquisition will hold and will cause its
consultants and advisors to hold in confidence, unless compelled to disclose by
judicial or administrative process or, in the written opinion of its legal
counsel, by other requirements of law, all documents and information concerning
the Company and its subsidiaries furnished to Parent or Acquisition in
connection with the transactions contemplated by this Agreement (except to the
extent that such information can be shown to have been (i) previously known by
Parent or Acquisition from sources other than the Company, or its directors,
officers, representatives or affiliates, (ii) in the public domain through no
fault of Parent or Acquisition or (iii) later lawfully acquired by Parent or
Acquisition on a non-confidential basis from other sources who are not known by
Parent or Acquisition to be bound by a confidentiality agreement or otherwise
prohibited from transmitting the information to Parent or Acquisition by a
contractual, legal or fiduciary obligation) and will not release or disclose
such information to any other person, except its auditors, attorneys, financial
advisors and other consultants and advisors in connection with this Agreement
who need to know such information. If the transactions contemplated by this
Agreement are not consummated, such confidence shall be maintained and, if
requested by or on behalf of the Company, Parent and Acquisition will, and will
use all reasonable efforts to cause their auditors, attorneys, financial
advisors and other consultants, agents and representatives to, return to the
Company or destroy all copies of written information furnished by the Company
to Parent and Acquisition or their agents, representatives or advisors. It is
understood that Parent and Acquisition shall be deemed to have satisfied their
obligation to hold such information confidential if they exercise the same care
as they take to preserve confidentiality for their own similar information.
SECTION 6.4. Additional Agreements; Reasonable Efforts. Subject to the
terms and conditions herein provided, each of the parties hereto agrees to use
all reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things reasonably necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including, without limitation, (i)
cooperation in the preparation and filing of the Offer Documents, the Schedule
14D-9, the Proxy Statement, any filings that may be required under the HSR Act,
and any amendments to any thereof; (ii) the taking of all action reasonably
necessary, proper or advisable to secure any necessary consents under existing
debt obligations of the Company and its subsidiaries or amend the notes,
indentures or agreements relating thereto to the extent required by such notes,
indentures or agreements or redeem or repurchase such debt obligations; (iii)
contesting any pending legal proceeding relating to the Offer or the Merger and
(iv) the execution of any additional instruments necessary to consummate the
transactions contemplated hereby. Subject to the terms and conditions of this
Agreement, Parent and Acquisition agree to use all reasonable efforts to cause
the Effective Time to occur as soon as practicable after the shareholder vote
with respect to the Merger. In case at any time after the Effective Time any
further action is necessary to carry out the purposes of this Agreement, the
proper officers and directors of each party hereto shall take all such
necessary action.
SECTION 6.5. Consents. Parent, Acquisition and the Company each will
use all reasonable efforts to obtain consents of all third parties and
governmental authorities necessary, proper or advisable for the consummation of
the transactions contemplated by this Agreement.
SECTION 6.6. Public Announcements. Parent, Acquisition and the
Company, as the case may be, will consult with one another before issuing any
press release or otherwise making any public statements with respect to the
transactions contemplated by this Agreement, including, without
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<PAGE> 21
limitation, the Offer and the Merger, and shall not issue any such press
release or make any such public statement prior to such consultation, except
as may be required by applicable law or by obligations pursuant to any listing
agreement with any national securities exchange or the Nasdaq Stock Market, as
determined by Parent, Acquisition or the Company, as the case may be.
SECTION 6.7. Indemnification; Directors' and Officers' Insurance.
(a) Parent and Acquisition agree that all rights to indemnification or
exculpation now existing in favor of the directors, officers, employees and
agents of the Company and its subsidiaries as provided in their respective
charters or by-laws or otherwise in effect as of the date hereof with respect
to matters occurring prior to the Effective Time shall survive the Merger and
shall continue in full force and effect. To the maximum extent permitted by the
NYBCL, such indemnification shall be mandatory rather than permissive and the
Surviving Corporation shall advance expenses in connection with such
indemnification.
(b) Parent shall cause the Surviving Corporation to maintain in effect
for not less than three years from the Effective Time the policies of the
directors' and officers' liability and fiduciary insurance most recently
maintained by the Company (provided that the Surviving Corporation may
substitute therefor policies of at least the same coverage containing terms and
conditions which are no less advantageous to the beneficiaries thereof so long
as such substitution does not result in gaps or lapses in coverage) with respect
to matters occurring prior to the Effective Time to the extent available
provided that in no event shall the Surviving Corporation be required to expend
more than an amount per year equal to 200% of the current annual premiums paid
by the Company (the "Premium Amount") to maintain or procure insurance coverage
pursuant hereto and further provided that if the Surviving Corporation is
unable to obtain the insurance called for by this Section 6.7(b), the Surviving
Corporation will obtain as much comparable insurance as is available for the
Premium Amount per year.
SECTION 6.8. Notification of Certain Matters. The Company shall give
prompt notice to Parent and Acquisition, and Parent and Acquisition shall give
prompt notice to the Company, of (i) the occurrence or nonoccurrence of any
event the occurrence or nonoccurrence of which would be likely to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at or prior to the Effective Time and (ii)
any material failure of the Company, Parent or Acquisition, as the case may be,
to comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it hereunder; provided, however, that the delivery of any
notice pursuant to this Section 6.8 shall not cure such breach or non-
compliance or limit or otherwise affect the remedies available hereunder to the
party receiving such notice. Notwithstanding anything to the contrary herein,
no provision of this Agreement shall limit or restrict the right of the Board
to amend, rescind or take or omit to take any action pursuant to or under any
provision of the Rights Agreement; provided, however, that no such amendment,
action or omission will cause the acquisition of Shares pursuant to the Offer
or the consummation of the Merger to give rise to a Triggering Event.
SECTION 6.9. Guarantee of Performance. Parent hereby guarantees the
performance by Acquisition of its obligations under this Agreement and the
indemnification obligations of the Surviving Corporation pursuant to Section
6.7(a) hereof.
SECTION 6.10. Redemption of Rights. At Parent's request, the Company
will take such action as Parent may request to effectuate the redemption, at
any time after the purchase by Acquisition pursuant to the Offer of at least a
majority of the outstanding Shares, of the Rights.
ARTICLE 7
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.1. Conditions to Each Party's Obligations to Effect the
Merger. The respective obligations of each party hereto to effect the Merger is
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
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<PAGE> 22
(a) this Agreement shall have been adopted by the affirmative vote of
the shareholders of the Company by the requisite vote;
(b) no statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or enforced by any
U.S. court or U.S. governmental authority which prohibits, restrains, enjoins
or restricts the consummation of the Merger;
(c) any waiting period applicable to the Merger under the HSR Act
shall have terminated or expired; and
(d) Acquisition shall have purchased Shares pursuant to the Offer.
ARTICLE 8
TERMINATION; AMENDMENT; WAIVER
SECTION 8.1. Termination. This Agreement may be terminated and the
Offer and the Merger may be abandoned at any time, but prior to the Effective
Time:
(a) by mutual written consent of Parent, Acquisition and the Company;
(b) by Parent and Acquisition or the Company if any court of competent
jurisdiction in the United States or other United States governmental body
shall have issued a final order, decree or ruling or taken any other final
action restraining, enjoining or otherwise prohibiting the Merger and such
order, decree, ruling or other action is or shall have become nonappealable;
(c) by Parent and Acquisition if due to an occurrence or circumstance
which would result in a failure to satisfy any of the conditions set forth in
Annex A hereto, Acquisition shall have (A) terminated the Offer or (B) failed
to pay for Shares pursuant to the Offer within 60 days following the date
hereof;
(d) by the Company if (i) there shall not have been a material breach
of any representation, warranty, covenant or agreement on the part of the
Company and Acquisition shall have (A) terminated the Offer or (B) failed to
pay for Shares pursuant to the Offer within 60 days following the date hereof
or (ii) prior to the purchase of Shares pursuant to the Offer, a corporation,
partnership, person or other entity or group shall have made a bona fide offer
that the Board by a majority vote determines in its good faith judgment and in
the exercise of its fiduciary duties, based as to legal matters on the written
opinion of legal counsel, is more favorable to the Company's shareholders than
the Offer and the Merger, provided that such termination under this clause (ii)
shall not be effective until payment of the fee required by Section 8.3(b)
hereof;
(e) by Parent and Acquisition prior to the purchase of Shares pursuant
to the Offer, if (i) there shall have been a breach of any representation or
warranty on the part of the Company having a Material Adverse Effect on the
Company or materially adversely affecting (or materially delaying) the
consummation of the Offer, (ii) there shall have been a breach of any covenant
or agreement on the part of the Company resulting in a Material Adverse Effect
on the Company or materially adversely affecting (or materially delaying) the
consummation of the Offer, which shall not have been cured prior to the earlier
of (A) 10 days following notice of such breach and (B) two business days prior
to the date in which the Offer expires, (iii) the Company shall engage in
negotiations with any entity or group (other than Parent or Acquisition) that
has proposed a Third Party Acquisition (as defined below), (iv) the Board shall
have withdrawn or modified (including by amendment of the Schedule 14D-9) in a
manner adverse to Acquisition its approval or recommendation of the Offer, this
Agreement or the Merger or shall have recommended another offer, or shall have
adopted any resolution to effect any of the foregoing or (v) the Minimum
Condition shall not have been satisfied by the expiration date of the Offer and
on or prior to
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<PAGE> 23
such date an entity or group (other than Parent or Acquisition) shall have made
and not withdrawn a proposal with respect to a Third Party Acquisition; or (f)
by the Company if (i) there shall have been a breach of any representation or
warranty on the part of Parent or Acquisition which materially adversely
affects (or materially delays) the consummation of the Offer or (ii) there
shall have been a material breach of any covenant or agreement on the part of
Parent or Acquisition and which materially adversely affects (or materially
delays) the consummation of the Offer which shall not have been cured prior to
the earliest of (A) 10 days following notice of such breach and (B) two
business days prior to the date on which the Offer expires.
SECTION 8.2. Effect of Termination. In the event of the
termination and abandonment of this Agreement pursuant to Section 8.1, this
Agreement shall forthwith become void and have no effect, without any liability
on the part of any party hereto or its affiliates, directors, officers or
shareholders, other than the provision of this Section 8.2 and Sections 6.3(b)
and 8.3 hereof. Nothing contained in this Section 8.2 shall relieve any party
from liability for any breach of this Agreement.
SECTION 8.3. Fees and Expenses. (a) In the event Parent and
Acquisition terminate this Agreement pursuant to Section 8.1(e)(i) or
8.1(e)(ii) hereof, Parent and Acquisition would suffer direct and substantial
damages, which damages cannot be determined with reasonable certainty. To
compensate Parent and Acquisition for such damages, the Company shall pay to
Parent the amount of $20 million as liquidated damages immediately upon such a
termination. It is specifically agreed that the amount to be paid pursuant to
this Section 8.3(a) represents liquidated damages and not a penalty.
(b) If
(i) Parent and Acquisition terminate this Agreement
pursuant to Section 8.1(e)(ii), (iii), (iv) or (v) hereof and,
within 12 months thereafter the Company enters into an
agreement with respect to a Third Party Acquisition, or a
Third Party Acquisition occurs, involving any party (or any
affiliate thereof) (x) with whom the Company (or its agents)
had negotiations with a view to a Third Party Acquisition, (y)
to whom the Company (or its agents) furnished information with
a view to a Third Party Acquisition or (z) who had submitted a
proposal or expressed an interest in a Third Party
Acquisition, in the case of each of clauses (x), (y) and (z)
after the date hereof and prior to such termination; or
(ii) Parent and Acquisition terminate this Agreement
pursuant to Section 8.1(e)(iii), (iv) or (v), and within 12
months thereafter a Third Party Acquisition shall occur
involving a consideration for Shares (including the value of
any stub equity) in excess of the Per Share Amount; or
(iii) the Company terminates this Agreement pursuant
to 8.1(d)(ii) hereof,
the Company shall pay to Parent and Acquisition, within one business day
following the execution and delivery of such agreement or such occurrence, as
the case may be, or simultaneously with such termination pursuant to Section
8.1(d)(ii), a fee, in cash, of $50,000,000, provided however that the Company
in no event shall be obligated to pay more than one such $50,000,000 fee with
respect to all such agreements and occurrences and such termination. In case
liquidated damages shall have been paid pursuant to Section 8.3(a) in
connection with such a termination, the amount so paid, minus an amount equal
to the fees and expenses that would have been collectible by Parent and
Acquisition pursuant to Section 8.3(c) but for the operation of clause (ii) of
the parenthetical of the first sentence thereof, shall be credited against the
amount payable pursuant to this Section 8.3(b).
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<PAGE> 24
"Third Party Acquisition" means the occurrence of any of the
following events (i) the acquisition of the Company by merger or otherwise by
any person (which includes a "person" as such term is defined in Section
13(d)(3) of the Exchange Act) or entity other than Parent, Acquisition or any
affiliate thereof (a "Third Party"); (ii) the acquisition by a Third Party of
more than 30% of the total assets of the Company and its subsidiaries, taken as
a whole; (iii) the acquisition by a Third Party of 30% or more of the
outstanding Shares; (iv) the adoption by the Company of a plan of liquidation
or the declaration or payment of an extraordinary dividend; or (v) the
repurchase by the Company or any of its subsidiaries of more than 20% of the
outstanding Shares, other than a repurchase which was not approved by the
Company or publicly announced prior to the termination of this Agreement and
which is not part of a series of transactions resulting in a change of control.
(c) Upon the termination of this Agreement for any reason
prior to the purchase of Shares by Acquisition pursuant to the Offer (other
than (i) termination by the Company pursuant to Section 8.1(f) hereof and (ii)
termination in circumstances requiring the Company to pay liquidated damages as
contemplated by Section 8.3(a) hereof) the Company shall reimburse Parent,
Acquisition and their affiliates (not later than one business day after
submission of statements therefore) for all actual documented out-of-pocket
fees and expenses, not to exceed $8,800,000, actually and reasonably incurred
by any of them or on their behalf in connection with the Offer and the Merger
and the consummation of all transactions contemplated by this Agreement
(including, without limitation, fees payable to financing sources, investment
bankers, counsel to any of the foregoing, and accountants). Parent and
Acquisition have provided the Company with an estimate of the amount of such
fees and expenses and, if Parent or Acquisition shall have submitted a request
for reimbursement hereunder, will provide the Company in due course with
invoices or other reasonable evidence of such expenses upon request. The
Company shall in any event pay the amount requested (not to exceed $8,800,000)
within one business day of such request, subject to the Company's right to
demand a return of any portion as to which invoices are not received in due
course.
(d) Except as specifically provided in this Section 8.3 each
party shall bear its own expenses in connection with this Agreement and the
transactions contemplated hereby.
SECTION 8.4. Amendment. Subject to Section 1.3(c), this
Agreement may be amended by action taken by the Company, Parent and Acquisition
at any time before or after approval of the Merger by the shareholders of the
Company (if required by applicable law) but, after any such approval, no
amendment shall be made which requires the approval of such shareholders under
applicable law without such approval. This Agreement may not be amended except
by an instrument in writing signed on behalf of the parties hereto.
SECTION 8.5. Extension; Waiver. Subject to Section 1.3(c),
at any time prior to the Effective Time, each party hereto may (i) extend the
time for the performance of any of the obligations or other acts of the other
party, (ii) waive any inaccuracies in the representations and warranties of the
other party contained herein or in any document, certificate or writing
delivered pursuant hereto or (iii) waive compliance by the other party with any
of the agreements or conditions contained herein. Any agreement on the part of
either party hereto to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party. The failure
of either party hereto to assert any of its rights hereunder shall not
constitute a waiver of such rights.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1. Nonsurvival of Representations and Warranties.
The representations and warranties made herein shall not survive beyond the
Effective Time or a termination of this Agreement.
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<PAGE> 25
SECTION 9.2. Entire Agreement; Assignment. This Agreement
(a) constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and (b) shall not be assigned by operation of law or
otherwise; provided, however, that Acquisition may assign any or all of its
rights and obligations under this Agreement to any subsidiary of Parent, but no
such assignment shall relieve Acquisition of its obligations hereunder if such
assignee does not perform such obligations.
SECTION 9.3. Validity. If any provision of this Agreement,
or the application thereof to any person or circumstance, is held invalid or
unenforceable, the remainder of this Agreement, and the application of such
provision to other persons or circumstances, shall not be affected thereby, and
to such end, the provisions of this Agreement are agreed to be severable.
SECTION 9.4. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
cable, telegram, facsimile or telex, or by registered or certified mail
(postage prepaid, return receipt requested), to the other party as follows:
if to Parent or Acquisition: Northrop Corporation
1840 Century Park East
Los Angeles, CA 90067
Attention: General Counsel
if to the Company to: Grumman Corporation
1111 Stewart Avenue
Bethpage, New York 11714-3580
Attention: General Counsel
Fax No. 516-575-2921
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above.
SECTION 9.5. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York, without
regard to the principles of conflicts of law thereof.
SECTION 9.6. Descriptive Headings. The descriptive headings
herein are inserted for convenience of reference only and are not intended to
be part of or to affect the meaning or interpretation of this Agreement.
SECTION 9.7. Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto and its
successors and permitted assigns, and except as provided in Sections 6.7 and
9.2, nothing in this Agreement, express or implied, is intended to or shall
confer upon any other person any rights, benefits or remedies of any nature
whatsoever under or by reason of this Agreement.
SECTION 9.8. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an original, but
all of which shall constitute one and the same agreement.
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<PAGE> 26
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be duly executed on its behalf as of the day and year first above
written.
NORTHROP CORPORATION
By: /s/ KENT KRESA
Name: Kent Kresa
Title: Chairman of the Board,
President and Chief Executive
Officer
NORTHROP ACQUISITION, INC.
By: /s/ RICHARD R. MOLLEUR
Name: Richard R. Molleur
Title: Vice President
GRUMMAN CORPORATION
By:
Name:
Title:
22
<PAGE> 27
ANNEX A
THE CAPITALIZED TERMS USED HEREIN HAVE THE MEANINGS SET FORTH IN THE
AGREEMENT AND PLAN OF MERGER TO WHICH THIS ANNEX A IS ATTACHED
Notwithstanding any other provisions of the Offer, Acquisition
shall not be required to accept for payment or pay for, and may delay the
acceptance for payment of, or the payment for, any Shares, and may terminate
the Offer and not accept for payment or pay for any Shares, if (i) immediately
prior to the expiration of the Offer (as it may be extended in accordance with
the Offer), the Minimum Condition shall not have been satisfied, (ii) any
applicable waiting period under the HSR Act shall not have expired or been
terminated prior to the expiration of the Offer or (iii) at any time on or
after March 25, 1994 and prior to the acceptance for payment of Shares,
Acquisition makes a determination (which shall be made in good faith) that any
of the following conditions exist:
(a) there shall have been any action taken, or any statute,
rule, regulation, judgment, order or injunction proposed, sought, promulgated,
enacted, entered, enforced or deemed applicable to the Offer, or any other
action shall have been taken, proposed or threatened, by any state or federal
government or governmental authority or by any U.S. court, other than the
routine application to the Offer, the Merger or other subsequent business
combination of waiting periods under the HSR Act, that presents a substantial
likelihood of (1) making the acceptance for payment of, or the payment for,
some or all of the Shares illegal or otherwise prohibiting, restricting or
significantly delaying consummation of the Offer, (2) imposing material
limitations on the ability of Acquisition to acquire or hold or to exercise
effectively all rights of ownership of the Shares, including, without
limitation, the right to vote any Shares purchased by Acquisition on all
matters properly presented to the shareholders of the Company, or effectively
to control in any material respect the business, assets or operations of the
Company, its subsidiaries, Acquisition or any of their respective affiliates,
or (3) otherwise having a Material Adverse Effect on the Company, Parent or
Acquisition; or
(b) any material adverse change shall have occurred or be
threatened, or Parent or Acquisition shall have become aware of any fact or
circumstance, that has had or is reasonably likely to have a Material Adverse
Effect on the Company; or
(c) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on the New York Stock
Exchange, (ii) the declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States (whether or not mandatory),
(iii) the commencement of a war, armed hostilities or other international or
national calamity directly or indirectly involving the United States and having
a Material Adverse Effect on the Company or materially adversely affecting (or
materially delaying) the consummation of the Offer, (iv) any limitation
(whether or not mandatory), by any U.S. governmental authority or agency on, or
any other event that, in the judgment of Acquisition, is reasonably likely to
materially adversely affect, the extension of credit by banks or other
financial institutions, (v) from the date of the Merger Agreement through the
date of termination or expiration of the Offer, a decline of at least 25% in
the Standard & Poor's 500 Index or (vi) in the case of any of the situations
described in clauses (i) through (v) inclusive, existing at the date of the
commencement of the Offer, a material acceleration or worsening thereof; or
(d) any person (which includes a "person" as such term is
defined in Section 13(d)(3) of the Exchange Act) other than Acquisition, any of
its affiliates, or any group of which any of them is a member shall have
acquired beneficial ownership of more than 30% of the outstanding Shares or
shall have entered into a definitive agreement or an agreement in principle
with the Company with respect to a tender offer or exchange offer for any
Shares or a merger, consolidation or other business combination with or
involving the Company or any of its subsidiaries; or
(e) the Merger Agreement shall have been terminated in
accordance with its terms; or
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<PAGE> 28
ANNEX A
(f) prior to the purchase of Shares pursuant to the Offer,
the Board shall have withdrawn or modified (including by amendment of the
Schedule 14D-9) in a manner adverse to Acquisition its approval or
recommendation of the Offer, this Agreement or the Merger or shall have
recommended another offer, or shall have adopted any resolution to effect any
of the foregoing which, in the sole judgment of Acquisition in any such case,
and regardless of the circumstances (including any action or omission by
Acquisition) giving rise to any such condition, makes it inadvisable to proceed
with such acceptance for payment.
24
<PAGE> 1
EXHIBIT(C)(28)
PRESS RELEASE
For Immediate Release
March 28, 1994
Bethpage, New York. Grumman Corporation announced that today it had sent
the attached letter to both Martin Marietta Corporation and Northrop
Corporation.
