SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) November 24, 1998
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INTERNATIONAL PAPER COMPANY
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(Exact name of Registrant as Specified in Charter)
New York 1-3157 13-0872805
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(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
Two Manhattanville Road, Purchase, NY 10577
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code 914-397-1500
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(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events.
On November 24, 1998, International Paper Company signed a definitive
merger agreement with Union Camp Corporation.
A copy of the Agreement and Plan of Merger, dated as of November 24,
1998 is attached hereto as Exhibit 2.1.
A copy of the press release dated November 24, 1998 is attached
hereto as Exhibit 99.1.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits
2.1 Agreement and Plan of Merger, dated as of November 24, 1998
99.1 Press Release dated November 24, 1998
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
International Paper Company
By: /s/ James Guedry
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Name: James Guedry
Title: Secretary
November 25, 1998
EXHIBIT INDEX
2.1 Agreement and Plan of Merger, dated as of November 24, 1998
99.1 Press Release dated November 24, 1998
EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
dated as of
November 24, 1998
among
UNION CAMP CORPORATION,
INTERNATIONAL PAPER COMPANY
and
MAPLE ACQUISITION, INC.
TABLE OF CONTENTS
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Page
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ARTICLE 1
Definitions
Section 1.1. Definitions.......................................1
ARTICLE 2
The Merger
Section 2.1. The Merger........................................6
Section 2.2. Organizational Documents..........................7
Section 2.3. Directors and Officers............................7
ARTICLE 3
Conversion of Securities and Related Matters
Section 3.1. Conversion of Capital Stock.......................8
Section 3.2. Exchange Ratio; Fractional Shares; Adjustments....8
Section 3.3. Exchange of Certificates..........................9
Section 3.4. UCC Stock Options................................12
ARTICLE 4
Representations and Warranties of UCC
Section 4.1. Corporate Existence and Power....................13
Section 4.2. Corporate Authorization..........................13
Section 4.3. Governmental Authorization.......................14
Section 4.4. Non-Contravention................................14
Section 4.5. Capitalization...................................15
Section 4.6. Subsidiaries.....................................15
Section 4.7. UCC SEC Documents................................16
Section 4.8. Financial Statements; No Material Undisclosed
Liabilities......................................17
Section 4.9. Information to Be Supplied.......................17
Section 4.10. Absence of Certain Changes.......................18
Section 4.11. Litigation.......................................18
Section 4.12. Taxes............................................18
Section 4.13. Employee Benefits................................19
Section 4.14. Compliance with Laws; Licenses, Permits and
Registrations....................................20
Section 4.15. Title to Properties..............................20
Section 4.16. Intellectual Property............................21
Section 4.17. Environmental Matters............................21
Section 4.18. Finders' Fees; Opinions of Financial Advisor.....22
Section 4.19. Required Vote; Board Approval....................22
Section 4.20. State Takeover Statutes; Rights Agreement........22
Section 4.21. Pooling Matters; Tax Treatment...................23
ARTICLE 5
Representations and Warranties of IP
Section 5.1. Corporate Existence and Power....................23
Section 5.2. Corporate Authorization..........................24
Section 5.3. Governmental Authorization.......................24
Section 5.4. Non-Contravention................................24
Section 5.5. Capitalization of IP and MergerSub...............25
Section 5.6. IP SEC Documents.................................26
Section 5.7. Financial Statements; No Material Undisclosed
Liabilities......................................26
Section 5.8. Information to Be Supplied.......................27
Section 5.9. Absence of Certain Changes.......................27
Section 5.10. Litigation.......................................27
Section 5.11. Taxes............................................27
Section 5.12. Compliance with Laws; Licenses, Permits and
Registrations....................................28
Section 5.13. Title to Properties..............................28
Section 5.14. Intellectual Property............................29
Section 5.15. Environmental Matters............................29
Section 5.16. Finders' Fees....................................29
Section 5.17. Required Vote; Board Recommendation..............29
Section 5.18. Pooling Matters..................................30
ARTICLE 6
Covenants of UCC
Section 6.1. UCC Interim Operations...........................30
Section 6.2. Shareholder Meeting..............................33
Section 6.3. Acquisition Proposals; Board Recommendation......34
Section 6.4. Transfer Taxes...................................35
ARTICLE 7
Covenants of IP
Section 7.1. IP Interim Operations............................36
Section 7.2. Shareholder Meeting; Board Recommendation........37
Section 7.3. Director and Officer Liability...................37
Section 7.4. Employee Benefits................................39
Section 7.5. Stock Exchange Listing...........................40
Section 7.6. Conduct of MergerSub.............................40
ARTICLE 8
Covenants of IP and UCC
Section 8.1. Reasonable Best Efforts..........................41
Section 8.2. Certain Filings; Cooperation in Receipt of
Consents.........................................41
Section 8.3. Public Announcements.............................42
Section 8.4. Access to Information; Notification of Certain
Matters..........................................43
Section 8.5. Further Assurances...............................43
Section 8.6. Tax and Accounting Treatment.....................44
Section 8.7. Affiliate Letters................................44
Section 8.8. Confidentiality..................................44
Section 8.9. IP Standstill....................................45
Section 8.10. ASR 135..........................................47
Section 8.11. Integration Committee............................47
ARTICLE 9
Conditions to the Merger
Section 9.1. Conditions to the Obligations of Each Party......47
Section 9.2. Conditions to the Obligations of UCC.............48
Section 9.3. Conditions to the Obligations of IP and
MergerSub........................................49
ARTICLE 10
Termination
Section 10.1. Termination.....................................50
Section 10.2. Effect of Termination...........................51
Section 10.3. Fees and Expenses...............................51
ARTICLE 11
Miscellaneous
Section 11.1. Notices.........................................53
Section 11.2. Survival of Representations, Warranties and
Covenants after the Effective Time.............54
Section 11.3. Amendments; No Waivers..........................54
Section 11.4. Successors and Assigns..........................55
Section 11.5. Governing Law...................................55
Section 11.6. Counterparts; Effectiveness; Third Party
Beneficiaries..................................55
Section 11.7. Jurisdiction....................................55
Section 11.8. Waiver of Jury Trial............................56
Section 11.9. Enforcement.....................................56
Section 11.10. Entire Agreement................................56
EXHIBITS
Exhibit A-1 -- Affiliate's Letter Relating to Pooling (UCC)
Exhibit A-2 -- Affiliate's Letter Relating to Pooling (IP)
Exhibit A-3 -- Affiliate's Letter Relating to the Securities Act (UCC)
Exhibit B -- Tax Representations of UCC
Exhibit C -- Tax Representations of IP and MergerSub
SCHEDULES
UCC Disclosure Schedule
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of November 24, 1998
among Union Camp Corporation, a Virginia corporation ("UCC"), International
Paper Company, a New York corporation ("IP"), and Maple Acquisition, Inc., a
Delaware corporation and a wholly owned IP Subsidiary ("MergerSub").
RECITALS
WHEREAS, the Boards of Directors of UCC and IP each have
determined that a business combination between UCC and IP is advisable and in
the best interests of their respective companies and shareholders and presents
an opportunity for their respective companies to achieve long-term strategic
and financial benefits, and accordingly have agreed to effect the merger
provided for herein upon the terms and subject to the conditions set forth
herein;
WHEREAS, the parties hereto intend that the merger provided for
herein shall qualify for U.S. federal income tax purposes as a reorganization
(a "368 Reorganization") within the meaning of Section 368(a) of the U.S.
Internal Revenue Code of 1986, as amended (together with the rules and
regulations promulgated thereunder, the "Code");
WHEREAS, the parties hereto intend that the merger provided for
herein be accounted for as a "pooling-of-interests" for financial reporting
purposes; and
WHEREAS, by resolutions duly adopted, the respective Boards of
Directors of UCC, IP and MergerSub have approved and adopted this Agreement
and the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, and
intending to be legally bound, the parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.1. Definitions. (a) As used herein, the following
terms have the following meanings:
"Acquisition Proposal" means any offer or proposal for, or
indication of interest in, a merger, consolidation, share exchange, business
combination, reorganization, recapitalization, liquidation, dissolution or
other similar transaction involving, or any purchase of 15% or more of the
assets or any class of equity securities of, UCC or any Significant Subsidiary
of UCC, other than the transactions contemplated by this Agreement.
"Affiliate" means, with respect to any Person, any other Person,
directly or indirectly, controlling, controlled by, or under common control
with, such Person. For purposes of this definition, the term "control"
(including the correlative terms "controlling", "controlled by" and "under
common control with") means the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract, or otherwise.
"Business Day" means any day other than a Saturday, Sunday or
one on which banks are authorized by law to close in New York, New York.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Governmental Entity" means any federal, state or local
governmental authority, any transgovernmental authority or any court,
administrative or regulatory agency or commission or other governmental
authority or agency, domestic or foreign.
"IP Balance Sheet" means IP's consolidated balance sheet
included in the IP 10-K relating to its fiscal year ended on December 31, 1997.
"IP Common Share" means one share of common stock of IP, par
value $1.00 per share.
"IP SEC Documents" means (i) IP's annual reports on Form 10-K
for its fiscal years ended December 31, 1996 and December 31, 1997 (the "IP
10-Ks"), (ii) IP's quarterly reports on Form 10-Q (the "IP 10-Qs") for its
fiscal quarters ended September 30, June 30 and March 31, of fiscal years 1997
and 1998, (iii) IP's proxy or information statements relating to meetings of,
or actions taken without a meeting by, IP's shareholders held since December
31, 1996, and (iv) all other reports filings, registration statements and other
documents filed by it with the SEC since December 31, 1996.
"knowledge" means, with respect to the matter in question, if
any of the executive officers of UCC or IP, as the case may be, has actual
knowledge of such matter.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset, provided, however, that the term "Lien" shall not include (i)
liens for water and sewer charges and current taxes not yet due and payable or
being contested in good faith and (ii) mechanics', carriers', workers',
repairers', materialmen's, warehousemen's and other similar liens arising or
incurred in the ordinary course of business.
"Material Adverse Effect" means a material adverse effect on the
financial condition, business or results of operations of a Person and its
Subsidiaries, taken as a whole, but shall exclude any material adverse effect
arising out of any change or development relating to (i) U.S. or global
economic or industry conditions, (ii) changes in U.S. or global financial
markets or conditions, (iii) any generally applicable change in law, rule or
regulation or GAAP or interpretation of any thereof and/or (iv) the
announcement of this Agreement or the transactions contemplated hereby. "IP
Material Adverse Effect" means a Material Adverse Effect in respect of IP and
"UCC Material Adverse Effect" means a Material Adverse Effect in respect of
UCC.
"NYSE" means The New York Stock Exchange.
"Person" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization, including any Governmental Entity.
"Proxy Statement/Prospectus" means the joint proxy statement/
prospectus included in the Registration Statement relating to the UCC
Shareholder Meeting and the IP Shareholder Meeting, together with any
amendments or supplements thereto.
"Registration Statement" means the Registration Statement on
Form S-4 registering under the Securities Act the IP Common Shares issuable in
connection with the Merger.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Significant Subsidiary" means any Subsidiary that constitutes a
"significant subsidiary" of such Person within the meaning of Rule 1-02 of
Regulation S-X of the Exchange Act.
"Subsidiary" means, with respect to any Person, any corporation
or other entity of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
Persons performing similar functions are directly or indirectly owned by such
Person. "IP Subsidiary" means a Subsidiary of IP and "UCC Subsidiary" means a
Subsidiary of UCC.
"Superior Proposal" means a bona fide, written Acquisition
Proposal for at least a majority of the outstanding UCC Common Shares that is
on terms that a majority of UCC's Board of Directors determines in good faith
(after consultation with an investment bank of nationally recognized reputation
and UCC's outside counsel) (i) would result in a transaction, if consummated,
that is more favorable to UCC's shareholders (in their capacities as
shareholders), from a financial point of view (taking into account, among other
things, all legal, financial, regulatory and other aspects of the proposal and
the identity of the offeror) than the transactions contemplated hereby (after
giving effect to any revised proposal made by or on behalf of IP prior to the
end of the five-Business-Day-period referred to in Section 6.3(d)) and (ii) is
reasonably capable of being consummated.
"UCC Balance Sheet" means UCC's consolidated balance sheet
included in the UCC 10-K relating to its fiscal year ended on December 31,
1997.
"UCC Common Share" means one share of common stock of UCC,
$1.00 par value per share.
"UCC SEC Documents" means (i) the annual reports on Form 10-K of
UCC (the "UCC 10-Ks") and Bush Boake Allen Inc., a Virginia corporation
("BBA"), for their respective fiscal years ended December 31, 1996 and
December 31, 1997, (ii) the quarterly reports on Form 10-Q of UCC (the "UCC
10-Qs") and BBA for their respective fiscal quarters ended September 30, June
30 and March 31 of fiscal years 1997 and 1998, (iii) UCC's and BBA's proxy or
information statements relating to meetings of, or actions taken without a
meeting by, the UCC shareholders and the BBA shareholders, respectively, held
since December 31, 1996, and (iv) all other reports filings, registration
statements and other documents filed by UCC and BBA with the SEC since
December 31, 1996; provided that, for the purposes of the representations and
warranties made by UCC in Section 4.7 only, the term "UCC SEC Documents" shall
not be deemed to include any reports, statements, filings or documents filed
with the SEC by BBA.
"Virginia Code" means the Virginia Stock Corporation Act, as
amended.
(b) Each of the following terms is defined in the Section set
forth opposite such term:
Terms Section
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Advance Notice 7.4(b)
Articles of Merger 2.1(b)
Average IP Share Price 3.1(a)
BBA 1.1(a)
Certificates 3.3(a)
Closing 2.1(d)
Code Recitals
Commission 2.1(b)
Effective Time 2.1(b)
End Date 10.1(b)(i)
Environmental Laws 4.17(b)
ERISA 4.13(a)
ERISA Affiliate 4.13(a)
Escrow Account 3.3(h)
Escrow Agent 3.3(h)
Escrow Agreement 3.3(h)
Exchange Agent 3.3(a)
Exchange Fund 3.3(a)
Exchange Ratio 3.2(a)
GAAP 4.8(a)
HSR Act 4.3(b)
Indemnified Parties 7.3(b)
IP Preamble
IP Cumulative Preferred 5.5(a)
IP Intellectual Property 5.14
IP Material Adverse Effect 1.1(a)
IP Recommendation 7.2
IP Returns 5.11
IP Securities 5.5(b)
IP Serial Preferred 5.5(a)
IP Shareholder Approval 5.17(a)
IP Shareholder Meeting 7.2
IP Subsidiary 1.1(a)
IP 10-Ks 1.1(a)
IP 10-Qs 1.1(a)
Merger 2.1(a)
MergerSub Common Share 3.1(a)
Merger Consideration 3.1(b)
MergerSub Preamble
Multiemployer Plan 4.13(b)
Random Trading Days 3.1(a)
Retirement Plan 4.13(b)
Rights 3.1(b)
Rights Agreement 3.1(b)
RSPP 7.4(c)
Stock Unit Plan 7.4(c)
Surviving Corporation 2.1(a)
Termination Fee 10.3(b)
Third Party Acquisition Event 10.3(c)
368 Reorganization Recitals
Transfer Taxes 6.4
UCC Preamble
UCC Employee Plans 4.13(a)
UCC Intellectual Property 4.16
UCC Material Adverse Effect 1.1(a)
UCC Option 3.4(a)
UCC Recommendation 6.2
UCC Returns 4.12
UCC Securities 4.5(b)
UCC Shareholder Approval 4.19(a)
UCC Shareholder Meeting 6.2
UCC Subsidiary 1.1(a)
UCC 10-Ks 1.1(a)
UCC 10-Qs 1.1(a)
ARTICLE 2
The Merger
Section 2.1. The Merger. (a) At the Effective Time,
MergerSub shall be merged (the "Merger") with and into UCC in accordance
with the terms and conditions of this Agreement and of the Virginia Code,
at which time the separate existence of MergerSub shall cease and UCC shall
continue its existence. In its capacity as the corporation surviving the
Merger, this Agreement sometimes refers to UCC as the "Surviving
Corporation".
(b) As soon as practicable after satisfaction or, to the extent
permitted hereby, waiver of all conditions to the Merger set forth herein, UCC
and MergerSub will file articles of merger (the "Articles of Merger") with the
State Corporation Commission of the Commonwealth of Virginia (the
"Commission") and make all other filings or recordings required by the
Virginia Code in connection with the Merger. The "Effective Time" shall be the
date and time that the Certificate of Merger is issued by the Commission in
respect of the Merger (unless otherwise agreed upon by the parties and
specified in the Articles of Merger, in which case, subject to Section 13.1-606
of the Virginia Code, the Effective Time shall be the date and time so
specified).
(c) From and after the Effective Time, the Merger shall have the
effects set forth in Section 13.1-721 of the Virginia Code.
(d) The closing of the Merger (the "Closing") shall be held at the
offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York, NY (or such
other place as agreed by the parties) on a date to be specified by the
parties, which shall be no later than the second Business Day after
satisfaction or, to the extent permitted hereby, waiver of the conditions set
forth in Article 9, unless the parties hereto agree to another date.
Section 2.2. Organizational Documents. The Articles of Merger
shall provide that at the Effective Time (i) MergerSub's articles of
incorporation in effect immediately prior to the Effective Time shall be the
Surviving Corporation's articles of incorporation, provided that the Surviving
Corporation shall retain its current name and (ii) MergerSub's bylaws in effect
immediately prior to the Effective Time shall be the Surviving Corporation's
bylaws, in each case until amended in accordance with applicable law.
Section 2.3. Directors and Officers. (a) IP agrees to take all
necessary actions so that, on the second Business Day after the Effective Time,
IP's Board of Directors shall include W. Craig McClelland and two individuals
who are serving on UCC's Board of Directors as of the date hereof. The
parties hereto understand and agree that such two individuals must be
reasonably acceptable to the nominating committee of IP's Board of Directors,
in its sole discretion. The three individuals elected to IP's Board of
Directors as contemplated by this Section 2.3 shall be apportioned equally
among the three classes of IP's Board of Directors.
(b) From and after the Effective Time (until successors are duly
elected or appointed and qualified), (i) MergerSub's directors at the Effective
Time shall be the Surviving Corporation's directors and (ii) UCC's officers
immediately prior to the Effective Time shall be the Surviving Corporation's
officers.
ARTICLE 3
Conversion of Securities and Related Matters
Section 3.1. Conversion of Capital Stock. At the Effective
Time, by virtue of the Merger:
(a) Each share of common stock of MergerSub (each, a "MergerSub
Common Share") outstanding immediately prior to the Effective Time shall be
converted into and become one share of common stock of the Surviving
Corporation.
(b) Except as otherwise provided in Section 3.2(b), each UCC
Common Share outstanding immediately prior to the Effective Time, together
with the rights ("Rights") attached thereto and issued pursuant to the Amended
and Restated Rights Agreement dated as of June 25, 1996, between UCC and The
Bank of New York, as Rights Agent (the "Rights Agreement"), shall be converted
into the right to receive a number of IP Common Shares equal to the Exchange
Ratio. This Agreement shall refer to the IP Common Shares required to be
issued pursuant to this Section 3.1(b), together with any cash payments
required to be made in lieu of fractional IP Common Shares, collectively as
the "Merger Consideration."
(c) Each UCC Common Share held by UCC as treasury stock or owned
by IP or any IP Subsidiary immediately prior to the Effective Time shall be
canceled, and no payment shall be made in respect thereof.
Section 3.2. Exchange Ratio; Fractional Shares; Adjustments.
(a) The "Exchange Ratio" (as the same may be adjusted pursuant to Section
3.2(c)) shall be determined by dividing 71.00 by the Average IP Share Price,
provided that, (i) if the Average IP Share Price is less than $43.70, the
Exchange Ratio shall be 1.6247 and (ii) if the Average IP Share Price is
greater than $48.30, the Exchange Ratio shall be 1.4700.
For purposes of this Agreement, (i) "Average IP Share Price"
means the average last sales price per IP Common Share on the NYSE Composite
Tape for the Random Trading Days and (ii) "Random Trading Days" means the ten
trading days selected by lot out of the twenty trading days ending on and
including the fifth trading day preceding the Effective Time. The Random
Trading Days shall be selected by lot by IP and UCC at 5:00 p.m. New York time
on the second trading day preceding the Effective Time.
(b) No fractional IP Common Shares shall be issued in the Merger.
All fractional IP Common Shares that a holder of any UCC Common Shares would
otherwise be entitled to receive as a result of the Merger shall be
aggregated. If a fractional IP Common Share results from such aggregation,
the holder shall be entitled to receive, in lieu thereof, a cash amount,
without interest, determined by multiplying the Average IP Share Price by the
fraction of an IP Common Share to which such holder would otherwise have been
entitled. As promptly as practicable after the determination of the amount of
cash, if any, to be paid to holders of fractional share interests, the Exchange
Agent (as hereinafter defined) shall so notify IP, and IP shall deposit such
amount with the Exchange Agent and shall cause the Exchange Agent to forward
payments to such holders of fractional share interests, subject to and in
accordance with the terms of Section 3.3.
(c) If at any time during the period between the date of this
Agreement and the Effective Time, any change in the outstanding shares of
capital stock of IP or securities convertible or exchangeable into capital
stock of IP shall occur, including by reason of any reclassification,
recapitalization, stock split or combination, exchange or readjustment of
shares, or any dividend or distribution thereon (other than regular quarterly
cash dividends) or a record date with respect to any of the foregoing shall
occur during such period, the number of IP Common Shares constituting part of
the Merger Consideration shall be appropriately adjusted to provide to the
holders of the IP Common Shares and the UCC Common Shares the same economic
effect as contemplated by this Agreement prior to the consummation of such
event.
Section 3.3. Exchange of Certificates.
(a) Exchange Agent. Promptly after the date hereof, IP shall
appoint a bank or trust company reasonably acceptable to UCC as an agent (the
"Exchange Agent") for the benefit of holders of UCC Common Shares for the
purpose of exchanging, pursuant to this Article 3, certificates
("Certificates") that immediately prior to the Effective Time represented
outstanding UCC Common Shares which were converted into the right to receive
the Merger Consideration. IP will make available to the Exchange Agent, as
needed, the Merger Consideration, together with any dividends or distributions
with respect thereto, if any, to be paid in respect of UCC Common Shares
pursuant to this Article 3 (the "Exchange Fund"), and except as contemplated by
Section 3.3(f) or Section 3.3(g) hereof, the Exchange Fund shall not be used
for any other purpose.
(b) Exchange Procedures. As promptly as practicable after the
Effective Time, IP shall send, or will cause the Exchange Agent to send, to
each holder of record of a Certificate or Certificates a letter of transmittal
and instructions (which shall be in customary form and specify that delivery
shall be effected, and risk of loss and title shall pass, only upon delivery
of the Certificates to the Exchange Agent), for use in the exchange
contemplated by this Section 3.3. Upon surrender of a Certificate to the
Exchange Agent, together with a duly executed letter of transmittal, the
holder of such Certificate shall be entitled to receive in exchange therefor
the Merger Consideration and unpaid dividends and distributions thereon, if
any, as provided in this Article 3 in respect of the UCC Common Shares
represented by such Certificate (after giving effect to any required
withholding tax). Until surrendered as contemplated by this Section 3.3, each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive the Merger Consideration and unpaid dividends and
distributions thereon, if any, as provided in this Article 3. If any portion
of the Merger Consideration is to be paid to a Person other than the Person in
whose name the Certificate is registered, it shall be a condition to such
payment that the Certificate so surrendered shall be properly endorsed or
otherwise be in proper form for transfer and that the Person requesting such
payment shall pay to the Exchange Agent any transfer or other taxes required
as a result of such payment to a Person other than the registered holder of
such Certificate or establish to the satisfaction of the Exchange Agent that
such tax has been paid or is not payable. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed and, if
required by IP, the posting by such Person of a bond, in such reasonable
amount as IP may direct, as indemnity against any claim that may be made
against it with respect to such Certificate, the Exchange Agent will deliver
in exchange for such lost, stolen or destroyed Certificate, the proper amount
of the Merger Consideration, together with any unpaid dividends and
distributions on any such IP Common Shares, as contemplated by this Article 3.
(c) Distributions with Respect to Unexchanged Shares. Whenever a
dividend or other distribution is declared by IP in respect of the IP Common
Shares, the record date for which is at or after the Effective Time, that
declaration shall include dividends or other distributions in respect of all IP
Common Shares issuable pursuant to this Agreement. No dividends or other
distributions declared or made after the Effective Time with respect to IP
Common Shares constituting part of the Merger Consideration shall be paid to
the holder of any unsurrendered Certificate, and no cash payment in lieu of
fractional shares shall be paid to any such holder, until such Certificate is
surrendered as provided in this Section 3.3. Following such surrender, there
shall be paid, without interest, to the Person in whose name the IP Common
Shares have been registered (i) at the time of such surrender, the amount of
dividends or other distributions with a record date after the Effective Time
previously paid or payable on the date of such surrender with respect to such
whole IP Common Shares, less the amount of any withholding taxes that may be
required thereon, and (ii) at the appropriate payment date subsequent to
surrender, the amount of dividends or other distributions with a record date
after the Effective Time but prior to surrender and a payment date subsequent
to surrender payable with respect to such whole IP Common Shares, less the
amount of any withholding taxes which may be required thereon.
(d) No Further Ownership Rights in UCC Common Shares. All IP
Common Shares issued upon surrender of Certificates in accordance with the
terms hereof (including any cash paid pursuant to this Article 3) shall be
deemed to have been issued in full satisfaction of all rights pertaining to
such UCC Common Shares represented thereby, and, as of the Effective Time, the
stock transfer books of UCC shall be closed and there shall be no further
registration of transfers on UCC's stock transfer books of UCC Common Shares
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation for any reason,
they shall be canceled and exchanged as provided in this Section 3.3.
(e) Return of Merger Consideration. Upon demand by IP, the
Exchange Agent shall deliver to IP any portion of the Merger Consideration
made available to the Exchange Agent pursuant to this Section 3.3 that remains
undistributed to holders of UCC Common Shares one year after the Effective
Time. Holders of Certificates who have not complied with this Section 3.3
prior to such demand shall thereafter look only to IP for payment of any claim
to the Merger Consideration and dividends or distributions, if any, in respect
thereof.
(f) No Liability. None of IP, the Surviving Corporation or the
Exchange Agent shall be liable to any Person in respect of any UCC Common
Shares (or dividends or distributions with respect thereto) for any amounts
paid to a public official pursuant to any applicable abandoned property,
escheat or similar law. Any amounts remaining unclaimed by any holder of UCC
Common Shares immediately prior to such time when such amounts would otherwise
escheat to or become the property of any Governmental Entity, shall, to the
extent permitted by applicable laws, become the property of IP, free and clear
of all claims or interest of any Person previously entitled thereto.
(g) Withholding Rights. Each of the Surviving Corporation and IP
shall be entitled to deduct and withhold from the Merger Consideration (and
any dividends or distributions thereon) otherwise payable hereunder to any
Person such amounts as it is required to deduct and withhold with respect to
the making of such payment under any provision of federal, state, local or
foreign income tax law. To the extent that the Surviving Corporation or IP so
withholds those amounts, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of UCC Common
Shares in respect of which such deduction and withholding was made by the
Surviving Corporation or IP, as the case may be.
(h) Tax Escrow. Pursuant to an escrow agreement (the "Escrow
Agreement") to be entered into by UCC with an escrow agent (the "Escrow
Agent") selected mutually by UCC and IP, UCC shall, immediately prior to the
Effective Time, deposit in an account (the "Escrow Account") with the Escrow
Agent funds sufficient in the aggregate to pay any Transfer Taxes (as defined
herein) attributable to the Merger. Upon certification by UCC, these funds
will be released from the Escrow Account, (i) to pay any Transfer Taxes that
become payable under any applicable state, local, foreign or provincial law,
or (ii) to UCC, upon UCC's reasonable determination and certification that
UCC's obligations in respect of the amounts specified above in this Section
3.03(h) have at such time been fully satisfied. The Escrow Agreement shall
permit the Escrow Agent to invest the funds in the Escrow Account as directed
by UCC. The Escrow Agreement shall be, in form and substance, reasonably
acceptable to IP.
Section 3.4. UCC Stock Options. (a) At the Effective Time, each
option to purchase UCC Common Shares (each, a "UCC Option") outstanding under
any stock option or compensation plan or arrangement of UCC, whether or not
vested or exercisable, shall be deemed to constitute an option to acquire, on
the same terms and conditions as were applicable under such UCC Option, the
same number of IP Common Shares as the holder of such UCC Option would have
been entitled to receive pursuant to this Agreement had such holder exercised
such UCC Option in full immediately prior to the Effective Time (rounded up to
the nearest whole number), at a price per share (rounded down to the nearest
whole cent) equal to (x) the aggregate exercise price for the UCC Common
Shares otherwise purchasable pursuant to such UCC Option divided by (y) the
number of full IP Common Shares deemed purchasable pursuant to such UCC Option
in accordance with the foregoing. The parties hereto agree that this Section
3.4 shall be interpreted in a manner that is consistent with the Merger being
treated as a "pooling of interests" as described in the first sentence of
Section 4.21(a).
(b) Prior to the Effective Time, UCC shall take all actions
(including, if appropriate, amending the terms of UCC's stock option or
compensation plans or arrangements) that are necessary to give effect to the
transactions contemplated by Sections 3.4(a).
(c) Effective at the Effective Time, IP shall assume each UCC
Option in accordance with the terms of the relevant stock option plan or
compensation arrangement under which it was issued and the stock option
agreement by which it is evidenced. At or prior to the Effective Time, IP
shall take all corporate action necessary to reserve for issuance a sufficient
number of IP Common Shares for delivery upon exercise of the UCC Options
assumed by it in accordance with this Section 3.4(c). As soon as practicable
after the Effective Time, IP shall file a registration statement on Form S-3
or Form S-8, as the case may be (or any successor or other appropriate forms),
or another appropriate form (or shall cause such UCC Option to be deemed to be
an option issued pursuant to an IP stock option or compensation plan for which
a sufficient number of IP Common Shares have previously been registered
pursuant to an appropriate registration form) with respect to the IP Common
Shares subject to such UCC Options, and shall use its reasonable best efforts
to maintain the effectiveness of such registration statement(s) (and maintain
the current status of the prospectus(es) contained therein) for so long as
such UCC Options remain outstanding.
ARTICLE 4
Representations and Warranties of UCC
Except as disclosed in (i) the UCC Disclosure Schedule attached
hereto (which disclosure schedule shall make a specific reference to the
particular Section or subsection of this Agreement to which exception is being
taken but once made shall be deemed made for all purposes of the UCC Disclosure
Schedule) or (ii) the UCC SEC Documents filed or made prior to the date
hereof, UCC represents and warrants to IP that:
Section 4.1. Corporate Existence and Power. UCC is a
corporation duly incorporated, validly existing and in good standing under the
laws of the Commonwealth of Virginia, and has all corporate powers required to
carry on its business as now conducted. UCC is duly qualified to do business
as a foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except where the failure to be so
qualified, individually or in the aggregate, would not be reasonably likely to
have a UCC Material Adverse Effect. UCC has heretofore made available to IP
true and complete copies of UCC's articles of incorporation and bylaws as
currently in effect.
Section 4.2. Corporate Authorization. The execution, delivery
and performance by UCC of this Agreement and the consummation by UCC of the
transactions contemplated hereby are within UCC's corporate powers and, except
for the UCC Shareholder Approval (as defined herein), have been duly
authorized by all necessary corporate action. Assuming that this Agreement
constitutes the valid and binding obligation of IP and MergerSub, this
Agreement constitutes a valid and binding agreement of UCC, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium and similar laws, now or hereafter in effect, relating to or
affecting creditors' rights and remedies and to general principles of equity.
Section 4.3. Governmental Authorization. The execution,
delivery and performance by UCC of this Agreement and the consummation by UCC
of the transactions contemplated hereby require no action by or in respect of,
or filing with, any Governmental Entity other than (a) the filing of (i) an
articles of merger in accordance with the Virginia Code, (ii) a certificate of
merger in accordance with the Delaware General Corporation Law, and (iii)
appropriate documents with the relevant authorities of other states or
jurisdictions in which UCC or any UCC Subsidiary is qualified to do business;
(b) compliance with any applicable requirements of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the "HSR Act"); (c) compliance with, and
the filing (if necessary) of a notification with the European Commission
under, Council Regulation (EEC) No. 4064/89 and any other foreign filings or
approvals; (d) compliance with any applicable requirements of the Securities
Act and the Exchange Act; (e) such as may be required under any applicable
state securities or blue sky laws; (f) such as may be required under the New
Jersey Industrial Site Recovery Act and the regulations promulgated
thereunder; (g) such as may be required under the Connecticut Hazardous Waste
Establishment Transfer Act and the rules and regulations promulgated
thereunder; and (h) such other consents, approvals, actions, orders,
authorizations, registrations, declarations and filings which, if not obtained
or made, would not, individually or in the aggregate, (x) be reasonably
likely to have a UCC Material Adverse Effect or (assuming for this purpose
that the Effective Time had occurred) an IP Material Adverse Effect, or (y)
prevent or materially impair the ability of UCC to consummate the transactions
contemplated by this Agreement.
Section 4.4. Non-Contravention. The execution, delivery and
performance by UCC of this Agreement and the consummation by UCC of the
transactions contemplated hereby do not and will not (a) contravene or conflict
with UCC's articles of incorporation or bylaws, (b) assuming compliance with
the matters referred to in Section 4.3, contravene or conflict with or
constitute a violation of any provision of any law, regulation, judgment,
injunction, order or decree binding upon or applicable to UCC or any UCC
Subsidiary, (c) constitute a default under or give rise to a right of
termination, cancellation or acceleration of any right or obligation of UCC or
any UCC Subsidiary or to a loss of any benefit or status to which UCC or any
UCC Subsidiary is entitled under any provision of any agreement, contract or
other instrument binding upon UCC or any UCC Subsidiary or any license,
franchise, permit or other similar authorization held by UCC or any UCC
Subsidiary, or (d) result in the creation or imposition of any Lien on any
asset of UCC or any UCC Subsidiary other than, in the case of each of (b), (c)
and (d), any such items that would not, individually or in the aggregate (x)
be reasonably likely to have a UCC Material Adverse Effect or (y) prevent or
materially impair the ability of UCC to consummate the transactions
contemplated by this Agreement.
Section 4.5. Capitalization. (a) The authorized capital stock
of UCC consists of 125,000,000 UCC Common Shares and 1,000,000 shares of
preferred stock, par value $1.00 per share (of which 125,000 have been
designated Series A Junior Participating Preferred Stock and reserved for
issuance upon exercise of the Rights). As of November 20, 1998, there were
outstanding (x) 69,196,486 UCC Common Shares, (y) no shares of UCC preferred
stock and (z) (as of November 23, 1998) stock options to purchase an aggregate
of 5,151,216 UCC Common Shares (of which options to purchase an aggregate of
3,272,911 UCC Common Shares were exercisable) and approximately 15,000 stock
units outstanding under the Stock Unit Plan (as defined in Section 7.4(c)).
All outstanding shares of capital stock of UCC have been duly authorized and
validly issued and are fully paid and nonassessable.
(b) As of the date hereof, except (i) as set forth in this
Section 4.5, (ii) the Rights and (iii) for changes since November 20, 1998
resulting from the exercise of stock options or the conversion of stock units
and dividend equivalents thereon outstanding on such date, there are no
outstanding (x) shares of capital stock or other voting securities of UCC, (y)
securities of UCC convertible into or exchangeable for shares of capital stock
or voting securities of UCC, and (z) options or other rights to acquire from
UCC, and no obligation of UCC to issue, any capital stock, voting securities
or securities convertible into or exchangeable for capital stock or voting
securities of UCC (the items in clauses (x), (y) and (z) being referred to
collectively as the "UCC Securities"). There are no outstanding obligations
of UCC or any UCC Subsidiary to repurchase, redeem or otherwise acquire any UCC
Securities.
Section 4.6. Subsidiaries. (a) Each Significant Subsidiary of
UCC is a corporation duly incorporated or an entity duly organized, and is
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization, has all powers and authority and all material
governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted and is duly qualified to do business as
a foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, in each case with such
exceptions as, individually or in the aggregate, would not be reasonably
likely to have, a UCC Material Adverse Effect. The UCC Disclosure Schedule
sets forth a list of all Significant Subsidiaries of UCC and their respective
jurisdictions of incorporation or organization and identifies UCC's (direct or
indirect) percentage equity ownership interest therein.
(b) All of the outstanding shares of capital stock of, or other
ownership interest in, each Significant Subsidiary of UCC has been validly
issued and is fully paid and nonassessable. All of the outstanding capital
stock of, or other ownership interest, which is owned, directly or indirectly,
by UCC in, each of its Significant Subsidiaries is owned free and clear of any
Lien and free of any other limitation or restriction (including any limitation
or restriction on the right to vote, sell or otherwise dispose of such capital
stock or other ownership interests) with such exceptions as, individually or
in the aggregate, would not be reasonably likely to have, a UCC Material
Adverse Effect. There are no outstanding (i) securities of UCC or any of its
Significant Subsidiaries convertible into or exchangeable or exercisable for
shares of capital stock or other voting securities or ownership interests in
any of its Significant Subsidiaries, (ii) options, warrants or other rights to
acquire from UCC or any of its Significant Subsidiaries, and no other
obligation of UCC or any of its Significant Subsidiaries to issue, any capital
stock, voting securities or other ownership interests in, or any securities
convertible into or exchangeable or exercisable for any capital stock, voting
securities or ownership interests in, any of its Significant Subsidiaries or
(iii) obligations of UCC or any of its Significant Subsidiaries to repurchase,
redeem or otherwise acquire any outstanding securities of any of its
Significant Subsidiaries or any capital stock of, or other ownership interests
in, any of its Significant Subsidiaries.
Section 4.7. UCC SEC Documents. (a) UCC has made available to
IP the UCC SEC Documents. UCC has filed all reports, filings, registration
statements and other documents required to be filed by it with the SEC since
December 31, 1996. No UCC Subsidiary is required to file any form, report,
registration statement or prospectus or other document with the SEC.
(b) As of its filing date, each UCC SEC Document complied as to
form in all material respects with the applicable requirements of the
Securities Act and/or the Exchange Act, as the case may be.
(c) No UCC SEC Document filed pursuant to the Exchange Act
contained, as of its filing date, any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made,
not misleading. No UCC SEC Document, as amended or supplemented, if
applicable, filed pursuant to the Securities Act contained, as of the date such
document or amendment became effective, any untrue statement of a material
fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
Section 4.8. Financial Statements; No Material Undisclosed
Liabilities. (a) The audited consolidated financial statements and unaudited
consolidated interim financial statements of UCC included in the UCC 10-Ks and
the UCC 10-Qs fairly present in all material respects, in conformity with
generally accepted accounting principles applied on a consistent basis
("GAAP") (except as may be indicated in the notes thereto), the consolidated
financial position of UCC 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 (subject to normal year-end adjustments in
the case of any unaudited interim financial statements).
(b) There are no liabilities of UCC or any UCC Subsidiary of any
kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, in each case, that are required by GAAP to be set
forth on a consolidated balance sheet of UCC, other than:
(i) liabilities or obligations disclosed or provided for in
the UCC Balance Sheet or disclosed in the notes thereto;
(ii) liabilities or obligations under this Agreement or
incurred in connection with the transactions contemplated hereby; and
(iii) other liabilities or obligations, which, individually or
in the aggregate, would not be reasonably likely to have a UCC Material
Adverse Effect.
Section 4.9. Information to Be Supplied. (a) The information
to be supplied by UCC expressly for inclusion or incorporation by reference in
the Proxy Statement/Prospectus will (i) in the case of the Registration
Statement, at the time it becomes effective, 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 not misleading
and (ii) in the case of the remainder of the Proxy Statement/Prospectus, at
the time of the mailing thereof, at the time of the UCC Shareholder Meeting
and at the time of the IP Shareholder Meeting, 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 are made, not misleading. The Proxy
Statement/Prospectus will comply (with respect to information relating to UCC)
as to form in all material respects with the provisions of the Securities Act
and the Exchange Act.
(b) Notwithstanding the foregoing, UCC makes no representation or
warranty with respect to any statements made or incorporated by reference in
the Proxy Statement/Prospectus based on information supplied by IP or
MergerSub.
Section 4.10. Absence of Certain Changes. Since December 31,
1997, except as otherwise expressly contemplated by this Agreement, UCC and
the UCC Subsidiaries have conducted their business in the ordinary course
consistent with past practice and there has not been (a) any damage,
destruction or other casualty loss (whether or not covered by insurance)
affecting the business or assets of UCC or any UCC Subsidiary that,
individually or in the aggregate, has had or would be reasonably likely to have
a UCC Material Adverse Effect or (b) any action, event, occurrence,
development or state of circumstances or facts that, individually or in the
aggregate, has had or would be reasonably likely to have a UCC Material
Adverse Effect.
Section 4.11. Litigation. There is no action, suit,
investigation, arbitration or proceeding pending against, or to the knowledge
of UCC threatened against, UCC or any UCC Subsidiary or any of their respective
assets or properties before any arbitrator or Governmental Entity that,
individually or in the aggregate, would be reasonably likely to have, a UCC
Material Adverse Effect.
Section 4.12. Taxes. Except as set forth in the UCC Balance
Sheet (including the notes thereto), (i) all tax returns, statements, reports
and forms (collectively, the "UCC Returns") required to be filed with any
taxing authority by, or with respect to, UCC and the UCC Subsidiaries have been
filed in accordance with all applicable laws; (ii) UCC and the UCC
Subsidiaries have timely paid all taxes shown as due and payable on the UCC
Returns that have been so filed, and, as of the time of filing, the UCC Returns
correctly reflected the facts regarding the income, business, assets,
operations, activities and the status of UCC and the UCC Subsidiaries (other
than taxes which are being contested in good faith and for which adequate
reserves are reflected on the UCC Balance Sheet); (iii) UCC and the UCC
Subsidiaries have made provision for all taxes payable by them for which no
UCC Return has yet been filed; (iv) the charges, accruals and reserves for
taxes with respect to UCC and its Subsidiaries reflected on the UCC Balance
Sheet are adequate under GAAP to cover the tax liabilities accruing through
the date thereof; (v) there is no action, suit, proceeding, audit or claim now
proposed or pending against or with respect to UCC or any of the UCC
Subsidiaries in respect of any tax where there is a reasonable possibility of
a materially adverse determination; and (vi) neither UCC nor any of the UCC
Subsidiaries has been a member of an affiliated, consolidated, combined or
unitary group other than one of which UCC was the common parent.
Section 4.13. Employee Benefits. (a) Schedule 4.13(a) of the
UCC Disclosure Schedule contains a correct and complete list identifying each
material "employee benefit plan", as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974 ("ERISA"), each employment, severance
or similar contract, plan, arrangement or policy and each other plan or
arrangement (written or oral) providing for compensation, bonuses,
profit-sharing, stock option or other stock related rights or other forms of
incentive or deferred compensation, vacation benefits, insurance coverage
(including any self-insured arrangements), health or medical benefits,
disability benefits, workers' compensation, supplemental unemployment
benefits, severance benefits and post-employment or retirement benefits
(including compensation, pension, health, medical or life insurance benefits)
which is maintained, administered or contributed to by UCC or any ERISA
Affiliate (as defined below) and covers any employee or former employee of UCC
or any UCC Subsidiary. Copies of such plans (and, if applicable, related
trust agreements) and all amendments thereto and written interpretations
thereof have been furnished, or will be made available upon request, to IP
together with the most recent annual report (Form 5500 including, if
applicable, Schedule B thereto) prepared in connection with any such plan.
Such plans are referred to collectively herein as the "UCC Employee Plans".
For purposes of this Section 4.13, "ERISA Affiliate" of any Person means any
other Person which, together with such Person, would be treated as a single
employer under Section 414 of the Code.
(b) Schedule 4.13(b) of the UCC Disclosure Schedule separately
identifies each UCC Employee Plan that constitutes a "multiemployer plan", as
defined in Section 3(37) of ERISA (a "Multiemployer Plan"), or any other plan
subject to Title IV of ERISA (a "Retirement Plan"). No "accumulated funding
deficiency", as defined in Section 412 of the Code, has been incurred with
respect to any UCC Employee Plan which is a Retirement Plan, whether or not
waived. To the knowledge of UCC, no condition exists and no event has
occurred that would be reasonably likely to constitute grounds for termination
of any UCC Employee Plan which is a Retirement Plan or, with respect to any
UCC Employee Plan which is a Multiemployer Plan, presents a material risk of a
complete or partial withdrawal under Title IV of ERISA and neither UCC nor any
of its ERISA Affiliates has incurred any liability under Title IV of ERISA
arising in connection with the termination of, or complete or partial
withdrawal from, any plan covered or previously covered by Title IV of ERISA
that would be reasonably likely to have a UCC Material Adverse Effect. To the
knowledge of UCC, nothing has been done or omitted to be done and no
transaction or holding of any asset under or in connection with any UCC
Employee Plan has occurred that will make UCC or any UCC Subsidiary, or any
officer or director of UCC or any UCC Subsidiary, subject to any liability
under Title I of ERISA or liable for any tax pursuant to Section 4975 of the
Code (assuming the taxable period of any such transaction expired as of the
date hereof) that would be reasonably likely to have a UCC Material Adverse
Effect.
(c) Each UCC Employee Plan which is intended to be qualified under
Section 401(a) of the Code is so qualified and has been so qualified during the
period from its adoption to date, and each trust forming a part thereof is
exempt from tax pursuant to Section 501(a) of the Code. UCC has furnished, or
will make available upon request, to IP copies of the most recent Internal
Revenue Service determination letters with respect to each such UCC Employee
Plan. Each UCC Employee Plan has been maintained in substantial compliance
with its terms and with the requirements prescribed by any and all statutes,
orders, rules and regulations, including but not limited to ERISA and the
Code, which are applicable to such UCC Employee Plan.
(d) There is no contract, agreement, plan or arrangement covering
any employee or former employee of UCC that, individually or collectively,
would be reasonably likely to give rise to the payment of any amount that
would not be deductible pursuant to the terms of Sections 162(m) or 280G of
the Code.
(e) Except as disclosed in writing to IP prior to the date hereof,
there has been no amendment to, written interpretation or announcement
(whether or not written) relating to, or change in employee participation or
coverage under, any UCC Employee Plan which would increase materially the
expense of maintaining such UCC Employee Plan above the level of the expense
incurred in respect thereof for the fiscal year ended December 31, 1997.
Section 4.14. Compliance with Laws; Licenses, Permits and
Registrations. (a) To the knowledge of UCC, neither UCC nor any UCC
Subsidiary is in violation of, or has violated, any applicable provisions of
any laws, statutes, ordinances, regulations, judgments, injunctions, orders or
consent decrees, except for any such violations which, individually or in the
aggregate, would not be reasonably likely to have a UCC Material Adverse
Effect.
(b) Each of UCC and the UCC Subsidiaries has all permits,
licenses, approvals, authorizations of and registrations with and under all
federal, state, local and foreign laws, and from all Governmental Entities
required by UCC and the UCC Subsidiaries to carry on their respective
businesses as currently conducted, except where the failure to have any such
permits, licenses, approvals, authorizations or registrations, individually or
in the aggregate, would not be reasonably likely to have a UCC Material
Adverse Effect.
Section 4.15. Title to Properties. (a) UCC and each UCC
Subsidiary have good and marketable title to, or valid leasehold interests in,
all their properties and assets except for such as are no longer used or
useful in the conduct of their businesses or as have been disposed of in the
ordinary course of business and except for defects in title, easements,
restrictive covenants and similar Liens, encumbrances or impediments that, in
the aggregate, do not materially interfere with the ability of UCC and its
Subsidiaries to conduct their business, taken as a whole, as currently
conducted. All such assets and properties, other than assets and properties
in which UCC or any UCC Subsidiary has leasehold interests, are free and clear
of all Liens, except for Liens that, in the aggregate, do not and will not
materially interfere with the ability of UCC and the UCC Subsidiaries to
conduct their business, taken as a whole, as currently conducted.
(b) Except as would not be reasonably likely, individually or in
the aggregate, to have a UCC Material Adverse Effect, (i) UCC and each UCC
Subsidiary are in compliance with the terms of all leases to which they are a
party and under which they are in occupancy, and all such leases are in full
force and effect and (ii) UCC and each UCC Subsidiary enjoy peaceful and
undisturbed possession under all such leases.
Section 4.16. Intellectual Property. Except as would not be
reasonably likely to have a UCC Material Adverse Effect, individually or in
the aggregate, UCC and the UCC Subsidiaries own or have a valid license to use
each trademark, service mark, trade name, mask work, invention, patent, trade
secret, copyright, know-how (including any registrations or applications for
registration of any of the foregoing) or any other similar type of proprietary
intellectual property right (collectively, the "UCC Intellectual Property")
necessary to carry on the business of UCC and the UCC Subsidiaries, taken as a
whole, as currently conducted. To the knowledge of UCC, neither UCC nor any
UCC Subsidiary has received any written notice of infringement of or challenge
to, and, to UCC's knowledge, there are no claims pending with respect to the
rights of others to the use of, any UCC Intellectual Property that, in any
such case, individually or in the aggregate, would be reasonably likely to
have a UCC Material Adverse Effect.
Section 4.17. Environmental Matters. (a) With such exceptions
as, individually or in the aggregate, would not be reasonably likely to have a
UCC Material Adverse Effect, to the knowledge of UCC, (i) no written notice,
notification, demand, request for information, citations, summons, complaint
or order has been received by, and no investigation, action, claim, suit,
proceeding or review is pending or threatened by any Person against, UCC or
any UCC Subsidiary, with respect to any applicable Environmental Law and (ii)
UCC and the UCC Subsidiaries are and have been in compliance with all
applicable Environmental Laws.
(b) For purposes of this Section 4.17 and Section 5.15, the term
"Environmental Laws" means any federal, state, local and foreign statutes,
laws (including, without limitation, common law), judicial decisions,
regulations, ordinances, rules, judgments, orders, codes, injunctions, permits
or governmental agreements relating to human health and safety, the
environment or to pollutants, contaminants, wastes, or chemicals.
Section 4.18. Finders' Fees; Opinions of Financial Advisor.
(a) Except for Goldman, Sachs & Co., there is no investment banker, broker,
finder or other intermediary which has been retained by, or is authorized to
act on behalf of, UCC or any UCC Subsidiary who might be entitled to any fee or
commission from IP or any of its Affiliates upon consummation of the
transactions contemplated by this Agreement.
(b) UCC has received the opinion of Goldman, Sachs & Co., dated as
of the date hereof, to the effect that, as of such date, the Exchange Ratio is
fair to the holders of UCC Common Shares (other than IP and any IP Subsidiary)
from a financial point of view.
Section 4.19. Required Vote; Board Approval. (a) The only
vote of the holders of any class or series of capital stock of UCC required by
law, rule or regulation to approve this Agreement, the Merger and/or any of the
other transactions contemplated hereby is the affirmative vote (the "UCC
Shareholder Approval") of the holders of more than two-thirds of the
outstanding UCC Common Shares in favor of the adoption of this Agreement and
the Merger.
(b) UCC's Board of Directors has unanimously (a) determined that
this Agreement and the transactions contemplated hereby, including the Merger,
are in the best interests of UCC and its shareholders, (b) approved this
Agreement and the transactions contemplated hereby and (c) resolved to
recommend to such shareholders that they vote in favor of adopting and
approving this Agreement and the Merger in accordance with the terms hereof.
Section 4.20. State Takeover Statutes; Rights Agreement. (a)
UCC has taken all actions required to be taken by it in order to exempt this
Agreement and the transactions contemplated hereby from the provisions of
Sections 13.1-725 through 13.1-728 and 13.1-728.1 through 13.1-728.9 of the
Virginia Code, and accordingly, such Sections do not apply to the Merger or
any of such transactions. No other "control share acquisition", "fair price"
or other anti-takeover laws or regulations enacted under state or federal laws
in the United States apply to this Agreement or any of the transactions
contemplated hereby.
(b) UCC has taken all action necessary to (i) render the Rights
inapplicable to the Merger and the other transactions contemplated by this
Agreement and (ii) ensure that (A) neither IP, MergerSub nor any of their
Affiliates will become an Acquiring Person (as defined in the Rights
Agreement) as a result of the transactions contemplated hereby and (B) neither
a Distribution Date nor an Acquisition Date (each as defined in the Rights
Agreement) shall occur by reason of the approval or execution of this
Agreement, the announcement or consummation of the Merger or the announcement
or consummation of any of the other transactions contemplated by this
Agreement.
Section 4.21. Pooling Matters; Tax Treatment. (a) UCC intends
that the Merger be accounted for under the "pooling of interests" method under
the requirements of Opinion No. 16 (Business Combinations) of the Accounting
Principles Board of the American Institute of Certified Public Accountants, the
Financial Accounting Standards Board, and the rules and regulations of the
SEC. UCC will request a letter addressed to it from PricewaterhouseCoopers
LLP dated as of a date prior to the Effective Time, and (if and when obtained)
a copy of it will be delivered to IP. Such letter shall state that
PricewaterhouseCoopers LLP believes that UCC is a pooling candidate for
purposes of the transactions contemplated hereby.
(b) Neither UCC nor any of its Affiliates has taken or agreed to
take any action or is aware of any fact or circumstance that would prevent the
Merger from qualifying (i) for "pooling of interests" accounting treatment as
described in Section 4.21(a) above or (ii) as a 368 Reorganization.
ARTICLE 5
Representations and Warranties of IP
Except as disclosed in the IP SEC Documents filed or made prior
to the date hereof, IP represents and warrants to UCC that:
Section 5.1. Corporate Existence and Power. Each of IP and
MergerSub is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
corporate powers required to carry on its business as now conducted. IP is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where the character of the property owned or leased by it
or the nature of its activities makes such qualification necessary, except
where the failure to be so qualified would not, individually or in the
aggregate, be reasonably likely to have an IP Material Adverse Effect. IP has
heretofore made available to UCC true and complete copies of IP's restated
certificate of incorporation and bylaws as currently in effect. Since the
date of its incorporation, MergerSub has not engaged in any activities other
than in connection with or as contemplated by this Agreement.
Section 5.2. Corporate Authorization. The execution, delivery
and performance by IP and MergerSub of this Agreement and the consummation by
IP and MergerSub of the transactions contemplated hereby are within the
corporate powers of IP and MergerSub and, except for the IP Shareholder
Approval, have been duly authorized by all necessary corporate action.
Assuming that this Agreement constitutes the valid and binding obligation of
UCC, this Agreement constitutes a valid and binding agreement of each of IP
and MergerSub, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and similar laws, now or
hereafter in effect, relating to or affecting creditors' rights and remedies
and to general principles of equity.
Section 5.3. Governmental Authorization. The execution,
delivery and performance by IP and MergerSub of this Agreement and the
consummation by IP and MergerSub of the transactions contemplated hereby
require no action by or in respect of, or filing with, any Governmental Entity
other than (a) those set forth in clauses (a) through (g) of Section 4.3 and
(b) such other consents, approvals, actions, orders, authorizations,
registrations, declarations and filings which, if not obtained or made, would
not, individually or in the aggregate, (i) be reasonably likely to have an IP
Material Adverse Effect or (assuming for this purpose that the Effective Time
had occurred) a UCC Material Adverse Effect, or (ii) prevent or materially
impair the ability of IP and MergerSub to consummate the transactions
contemplated by this Agreement.
Section 5.4. Non-Contravention. The execution, delivery and
performance by IP and MergerSub of this Agreement and the consummation by IP
and MergerSub of the transactions contemplated hereby do not and will not (a)
contravene or conflict with the restated certificate of incorporation or
bylaws of IP or the articles of incorporation or bylaws of MergerSub, (b)
assuming compliance with the matters referred to in Section 5.3, contravene or
conflict with any provision of law, regulation, judgment, injunction, order or
decree binding upon or applicable to IP or any IP Subsidiary, (c) constitute a
default under or give rise to a right of termination, cancellation or
acceleration of any right or obligation of IP or any IP Subsidiary or to a
loss of any benefit or status to which IP or any IP Subsidiary is entitled
under any provision of any agreement, contract or other instrument binding
upon IP or any IP Subsidiary or any license, franchise, permit or other
similar authorization held by IP or any IP Subsidiary, or (d) result in the
creation or imposition of any Lien on any asset of IP or any IP Subsidiary
other than, in the case of each of (b), (c) and (d), any such items that would
not, individually or in the aggregate, (x) be reasonably likely to have an IP
Material Adverse Effect or (y) prevent or materially impair the ability of IP
or MergerSub to consummate the transactions contemplated by this Agreement.
Section 5.5. Capitalization of IP and MergerSub. (a) The
authorized capital stock of IP consists of 400,000,000 IP Common Shares,
400,000 shares of Cumulative $1.00 Preferred Stock, no par value per share
("IP Cumulative Preferred") and 8,750,000 shares of Serial Preferred Stock,
$1.00 par value per share (the "IP Serial Preferred"). As of September 30,
1998, there were outstanding (i) 307,306,313 IP Common Shares and 15,696
shares of the IP Cumulative Preferred and (ii) stock options to purchase an
aggregate of 12,097,455 IP Common Shares (of which options to purchase an
aggregate of 5,777,178 IP Common Shares were vested and exercisable). In
addition, approximately 8,332,000 IP Common Shares were reserved for issuance
upon the conversion of the IP-Obligated-Mandatory-Redeemable-Preferred
securities of a Subsidiary trust of IP. All outstanding shares of capital
stock of IP have been duly authorized and validly issued and are fully paid
and nonassessable.
(b) As of the date hereof, except as set forth in this Section 5.5
and except for changes since September 30, 1998 resulting from the exercise of
stock options outstanding on such date, there are no outstanding (i) shares of
capital stock or other voting securities of IP, (ii) securities of IP
convertible into or exchangeable for shares of capital stock or voting
securities of IP, and (iii) options or other rights to acquire from IP, and no
obligation of IP to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of IP
(the items in clauses (i), (ii) and (iii) being referred to collectively as
the "IP Securities"). There are no outstanding obligations of IP or any IP
Subsidiary to repurchase, redeem or otherwise acquire any IP Securities.
(c) The IP Common Shares to be issued as part of the Merger
Consideration have been duly authorized and, when issued and delivered in
accordance with the terms of this Agreement, will have been validly issued,
fully paid and nonassessable and free of any preemptive or other similar
right.
(d) The authorized capital stock of MergerSub consists solely of
100 MergerSub Common Shares, of which, as of the date hereof, 100 were issued
and outstanding. All outstanding MergerSub Common Shares have been duly
authorized and validly issued and are fully paid and nonassessable, free of any
preemptive or other similar right.
Section 5.6. IP SEC Documents. (a) IP has made available to
UCC the IP SEC Documents. IP has filed all reports, filings, registration
statements and other documents required to be filed by it with the SEC since
December 31, 1996. No IP Subsidiary is at present required to file any form,
report, registration statement or prospectus or other document with the SEC.
(b) As of its filing date, each IP SEC Document complied as to form
in all material respects with the applicable requirements of the Securities Act
and/or the Exchange Act, as the case may be.
(c) No IP SEC Document filed pursuant to the Exchange Act
contained, as of its filing date, any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made,
not misleading. No IP SEC Document, as amended or supplemented, if
applicable, filed pursuant to the Securities Act as of the date such document
or amendment became effective contained any untrue statement of a material
fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
Section 5.7. Financial Statements; No Material Undisclosed
Liabilities. (a) The audited consolidated financial statements and unaudited
consolidated interim financial statements of IP included in the IP 10-Ks and
the IP 10-Qs fairly present in all material respects, in conformity with GAAP
(except as may be indicated in the notes thereto), the consolidated financial
position of IP 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 (subject to normal year-end adjustments in the case of
any unaudited interim financial statements).
(b) There are no liabilities of IP or any IP Subsidiary of any
kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise that are required by GAAP to be set forth on a
consolidated balance sheet of IP, other than:
(i) liabilities or obligations disclosed or provided for in
the IP Balance Sheet (including the notes thereto);
(ii) liabilities or obligations under this Agreement or
incurred in connection with the transactions contemplated hereby; and
(iii) other liabilities or obligations, which, individually or
in the aggregate, would not be reasonably likely to have an IP Material
Adverse Effect.
Section 5.8. Information to Be Supplied. (a) The information
to be supplied by IP expressly for inclusion or incorporation by reference in
the Proxy Statement/Prospectus will (i) in the case of the Registration
Statement, at the time it becomes effective, 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 not misleading
and (ii) in the case of the remainder of the Proxy Statement/Prospectus, at
the time of the mailing thereof, at the time of the UCC Shareholder Meeting
and at the time of the IP Shareholder Meeting, 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 are made, not misleading. The Proxy
Statement/Prospectus will comply (with respect to information relating to IP)
as to form in all material respects with the provisions of the Securities Act
and the Exchange Act.
(b) Notwithstanding the foregoing, IP makes no representation or
warranty with respect to any statements made or incorporated by reference in
the Proxy Statement/Prospectus with respect to information supplied by UCC.
Section 5.9. Absence of Certain Changes. Since December 31,
1997, except as otherwise expressly contemplated by this Agreement, IP and the
IP Subsidiaries have conducted their business in the ordinary course consistent
with past practice and there has not been (a) any damage, destruction or other
casualty loss (whether or not covered by insurance) affecting the business or
assets of IP or any IP Subsidiary that, individually or in the aggregate, has
had or would be reasonably likely to have an IP Material Adverse Effect or (b)
any action, event, occurrence, development or state of circumstances or facts
that, individually or in the aggregate, has had or would be reasonably likely
to have an IP Material Adverse Effect.
Section 5.10. Litigation. There is no action, suit,
investigation, arbitration or proceeding pending against, or to the knowledge
of IP threatened against, IP or any IP Subsidiary or any of their respective
assets or properties before any arbitrator or Governmental Entity that,
individually or in the aggregate, would be reasonably likely to have an IP
Material Adverse Effect.
Section 5.11. Taxes. Except as set forth in the IP Balance
Sheet (including the notes thereto), (i) all tax returns, statements, reports
and forms (collectively, the "IP Returns") required to be filed with any
taxing authority by, or with respect to, IP and the IP Subsidiaries have been
filed in accordance with all applicable laws; (ii) IP and the IP Subsidiaries
have timely paid all taxes shown as due and payable on the IP Returns that
have been so filed, and, as of the time of filing, the IP Returns correctly
reflected the facts regarding the income, business, assets, operations,
activities and the status of IP and the IP Subsidiaries (other than taxes
which are being contested in good faith and for which adequate reserves are
reflected on the IP Balance Sheet); (iii) IP and the IP Subsidiaries have made
provision for all taxes payable by them for which no IP Return has yet been
filed; (iv) the charges, accruals and reserves for taxes with respect to IP
and its Subsidiaries reflected on the IP Balance Sheet are adequate under GAAP
to cover the tax liabilities accruing through the date thereof; (v) there is
no action, suit, proceeding, audit or claim now proposed or pending against or
with respect to IP or any of the IP Subsidiaries in respect of any tax where
there is a reasonable possibility of a materially adverse determination; and
(vi) neither IP nor any of the IP Subsidiaries has been a member of an
affiliated, consolidated, combined or unitary group other than one of which IP
was the common parent.
Section 5.12. Compliance with Laws; Licenses, Permits and
Registrations. (a) To the knowledge of IP, neither IP nor any IP Subsidiary is
in violation of, or has violated, any applicable provisions of any laws,
statutes, ordinances, regulations, judgments, injunctions, orders or consent
decrees, except for any such violations which, individually or in the
aggregate, would not be reasonably likely to have, an IP Material Adverse
Effect.
(b) Each of IP and the IP Subsidiaries has all permits,
licenses, approvals, authorizations of and registrations with and under all
federal, state, local and foreign laws, and from all Governmental Entities
required by IP and the IP Subsidiaries to carry on their respective businesses
as currently conducted, except where the failure to have any such permits,
licenses, approvals, authorizations or registrations, individually or in the
aggregate, would not be reasonably likely to have an IP Material Adverse
Effect.
Section 5.13. Title to Properties. (a) IP and each IP
Subsidiary have good and marketable title to, or valid leasehold interests in,
all their properties and assets except for such as are no longer used or
useful in the conduct of their businesses or as have been disposed of in the
ordinary course of business and except for defects in title, easements,
restrictive covenants and similar Liens, encumbrances or impediments that, in
the aggregate, do not materially interfere with the ability of IP and the IP
Subsidiaries to conduct their business, taken as a whole, as currently
conducted. All such assets and properties, other than assets and properties
in which IP or any IP Subsidiary has leasehold interests, are free and clear
of all Liens, except for Liens that, in the aggregate, do not and will not
materially interfere with the ability of IP and the IP Subsidiaries to conduct
their business, taken as a whole, as currently conducted.
(b) Except as would not be reasonably likely, individually or in
the aggregate, to have an IP Material Adverse Effect, (i) IP and each IP
Subsidiary are in compliance with the terms of all leases to which they are a
party and under which they are in occupancy, and all such leases are in full
force and effect and (ii) IP and each IP Subsidiary enjoy peaceful and
undisturbed possession under all such leases.
Section 5.14. Intellectual Property. Except as would not be
reasonably likely to have an IP Material Adverse Effect, individually or in the
aggregate, IP and the IP Subsidiaries own or have a valid license to use each
trademark, service mark, trade name, mask work, invention, patent, trade
secret, copyright, know-how (including any registrations or applications for
registration of any of the foregoing) or any other similar type of proprietary
intellectual property right (collectively, the "IP Intellectual Property")
necessary to carry on the business of IP and the IP Subsidiaries, taken as a
whole, as currently conducted. To the knowledge of IP, neither IP nor any IP
Subsidiary has received any written notice of infringement of or challenge to,
and, to IP's knowledge, there are no claims pending with respect to the rights
of others to the use of, any IP Intellectual Property that, in either case,
individually or in the aggregate, would be reasonably likely to have an IP
Material Adverse Effect.
Section 5.15. Environmental Matters. With such exceptions as,
individually or in the aggregate, would not be reasonably likely to have an IP
Material Adverse Effect, to the knowledge of IP, (i) no written notice,
notification, demand, request for information, citations, summons, complaint
or order has been received by, and no investigation, action, claim, suit,
proceeding or review is pending or threatened by any Person against, IP or any
IP Subsidiary, with respect to any applicable Environmental Law and (ii) IP
and the IP Subsidiaries are and have been in compliance with all applicable
Environmental Laws.
Section 5.16. Finders' Fees. Except for Credit Suisse First
Boston, whose fees will be paid by IP, there is no investment banker, broker,
finder or other intermediary who might be entitled to any fee or commission
from IP or any of its Affiliates upon consummation of the transactions
contemplated by this Agreement.
Section 5.17. Required Vote; Board Recommendation. (a) The
only votes of the holders of any class or series of capital stock of IP
required by law, rule or regulation to approve this Agreement, the Merger
and/or any of the other transactions contemplated hereby are the affirmative
vote of the holders of a majority of (i) the IP Common Shares present and
voting at the IP Shareholder Meeting (as defined in Section 7.2) in favor of
the issuance of the IP Common Shares pursuant to the Merger and (ii) all
outstanding shares entitled to vote thereon at the IP Shareholder Meeting in
favor of an amendment to IP's restated certificate of incorporation to
increase the number of authorized IP Common Shares (the approvals described in
clauses (i) and (ii) are collectively referred to herein as the "IP
Shareholder Approval").
(b) IP's Board of Directors has unanimously (i) determined that
this Agreement and the transactions contemplated hereby, including the Merger
and the issuance of the IP Common Shares pursuant to the Merger, are in the
best interests of IP and its shareholders, (ii) approved this Agreement, and
the transactions contemplated hereby and (iii) resolved to recommend to such
shareholders that they vote in favor of (x) the issuance of the IP Common
Shares pursuant to the Merger and (y) an amendment to IP's restated
certificate of incorporation to increase the number of authorized IP Common
Shares, in accordance with the terms hereof.
Section 5.18. Pooling Matters. Neither IP nor any of its
Affiliates has taken or agreed to take any action or is aware of any fact or
circumstance that would prevent the Merger from qualifying (i) for "pooling of
interests" accounting treatment as described in the first sentence of Section
4.21(a) or (ii) as a 368 Reorganization. IP will request a letter addressed
to it from Arthur Andersen LLP dated as of a date prior to the Effective Time,
and (if and when such letter is obtained) a copy will be delivered to UCC.
Such letter shall state that Arthur Andersen LLP believes that the Merger
should be accounted for as a "pooling of interests" as described in the first
sentence of Section 4.21(a).
ARTICLE 6
Covenants of UCC
UCC agrees that:
Section 6.1. UCC Interim Operations. Except as set forth in
the UCC Disclosure Schedule or as otherwise expressly contemplated hereby,
without the prior consent of IP (which consent shall not be unreasonably
withheld or delayed), from the date hereof until the Effective Time, UCC
shall, and shall cause each of the UCC Subsidiaries to, conduct their business
in all material respects in the ordinary course consistent with past practice
and shall use commercially reasonable efforts to (i) preserve intact its
present business organization, (ii) maintain in effect all material foreign,
federal, state and local licenses, approvals and authorizations, including,
without limitation, all material licenses and permits that are required for
UCC or any UCC Subsidiary to carry on its business and (iii) preserve existing
relationships with its material customers, lenders, suppliers and others
having material business relationships with it. Without limiting the
generality of the foregoing, except as set forth in the UCC Disclosure
Schedule or as otherwise expressly contemplated by this Agreement, from the
date hereof until the Effective Time, without the prior consent of IP (which
consent shall not be unreasonably withheld or delayed), UCC shall not, nor
shall it permit any UCC Subsidiary to:
(a) amend UCC's articles of incorporation or by-laws;
(b) split, combine or reclassify any shares of capital stock of
UCC or any less-than-wholly-owned UCC Subsidiary or 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, repurchase or
otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of
its securities or any securities of any UCC Subsidiary, except (i) for regular
quarterly cash dividends (having customary record and payment dates, not in
excess of $0.45 per UCC Common Share, and (ii) for regular dividends by
less-than-wholly-owned UCC Subsidiaries on a pro rata basis to the equity
owners thereof or (iii) pursuant to the existing terms of any UCC Employee
Plan;
(c) (i) issue, deliver or sell, or authorize the issuance,
delivery or sale of, any shares of its capital stock of any class or any
securities convertible into or exercisable for, or any rights, warrants or
options to acquire, any such capital stock or any such convertible securities,
other than in connection with the UCC Employee Plans or benefit plans or
arrangements existing on the date hereof and covering the members of UCC's
Board of Directors, (A) the issuance of UCC Common Shares upon the exercise of
stock options in accordance with their present terms and (B) the granting of
options to acquire UCC Common Shares in the ordinary course of business
consistent with past practice or (ii) amend in any material respect any
material term of any outstanding security of UCC or any UCC Subsidiary;
(d) other than in connection with transactions permitted by
Section 6.1(e), incur any capital expenditures or any obligations or
liabilities in respect thereof, except for those (i) contemplated by the
capital expenditure budgets for UCC and the UCC Subsidiaries made available
to IP, (ii) incurred in the ordinary course of business of UCC and the UCC
Subsidiaries or (iii) not otherwise described in clauses (i) and/or (ii)
which, in the aggregate, do not exceed $10 million;
(e) acquire (whether pursuant to merger, stock or asset purchase
or otherwise) in one transaction or series of related transactions (i) any
assets (including any equity interests) having a fair market value in
excess of $10 million, or (ii) all or substantially all of the equity
interests of any Person or any business or division of any Person having a
fair market value in excess of $5 million;
(f) sell, lease, encumber or otherwise dispose of any assets,
other than (i) sales in the ordinary course of business consistent with
past practice, (ii) equipment and property no longer used in the operation
of UCC's business and (iii) assets related to discontinued operations of
UCC or any UCC Subsidiary;
(g) incur (which shall not be deemed to include entering into
credit agreements, lines of credit or similar arrangements until UCC or any
UCC Subsidiary becomes liable with respect to any indebtedness for borrowed
money or guarantees thereof under such arrangements) any indebtedness for
borrowed money or guarantee any such indebtedness or issue or sell any debt
securities or warrants or rights to acquire any debt securities of UCC or
any UCC Subsidiary or guarantee any debt securities of others, except in
the ordinary course of business consistent with past practice (which shall
include, without limitation, borrowings under UCC's existing credit
agreements and overnight borrowings);
(h) (i) enter into any agreement or arrangement that limits or
otherwise restricts UCC, any UCC Subsidiary or any of their respective
Affiliates or any successor thereto or that would, after the Effective
Time, limit or restrict UCC, any UCC Subsidiary, the Surviving Corporation,
IP, any IP Subsidiary or any of their respective Affiliates, from engaging
or competing in any line of business or in any location, which agreement or
arrangement would be material to the business of UCC and the UCC
Subsidiaries or the business of IP and the IP Subsidiaries (assuming the
Merger had taken place), in either case taken as a whole or (ii) except in
the ordinary course of business, amend, modify or terminate any material
contract, agreement or arrangement of UCC or any UCC Subsidiary or
otherwise waive, release or assign any material rights, claims or benefits
of UCC or any UCC Subsidiary thereunder;
(i) (i) except in the ordinary course of business consistent
with past practice or as required by law or an existing agreement, increase
the amount of compensation of any director or executive officer or make any
increase in or commitment to increase any employee benefits, (ii) except as
required by law, an agreement existing on the date hereof or UCC severance
policy as of the date hereof, grant any severance or termination pay to any
director, officer or employee of UCC or any UCC Subsidiary, (iii) adopt any
additional employee benefit plan or, except in the ordinary course of
business, make any contribution to any existing such plan or (iv) except as
may be required by law, amend in any material respect any UCC Employee
Plan;
(j) change UCC's (x) methods of accounting in effect at
September 30, 1998, except as required by changes in GAAP or by Regulation
S-X of the Exchange Act, as concurred in by its independent public
accountants or (y) fiscal year;
(k) (i) settle, or propose to settle, any litigation,
investigation, arbitration, proceeding or other claim that is material to
the business of UCC and the UCC Subsidiaries, taken as a whole, other than
the payment, discharge or satisfaction, in the ordinary course of business
consistent with past practice of liabilities (x) recognized or disclosed in
the most recent consolidated financial statements (or the notes thereto) of
UCC included in the UCC SEC Documents or (y) incurred since the date of
such financial statements in the ordinary course of business consistent
with past practice, or (ii) other than in the ordinary course of business
consistent with past practice, make any tax election or enter into any
settlement or compromise of any tax liability that in either case is
material to the business of UCC and the UCC Subsidiaries, taken as a whole;
or
(l) agree, resolve or commit to do any of the foregoing;
provided that the limitations set forth in clauses 6.1(a) through 6.1(l)
shall not apply to any action, transaction or event occurring exclusively
between UCC and any wholly-owned UCC Subsidiary or between any wholly-owned
UCC Subsidiaries.
Section 6.2. Shareholder Meeting. UCC shall cause a meeting
of its shareholders (the "UCC Shareholder Meeting") to be duly called and held
as soon as reasonably practicable for the purpose of obtaining the UCC
Shareholder Approval. Unless otherwise required by its fiduciary duties (as
determined in good faith by a majority of its members on the basis of the
written advice of its outside legal counsel), (i) UCC's Board of Directors
shall recommend approval and adoption by its shareholders of this Agreement
(the "UCC Recommendation"), (ii) neither UCC's Board of Directors nor any
committee thereof shall amend, modify, withdraw, condition or qualify the UCC
Recommendation in a manner adverse to IP or take any action or make any
statement inconsistent with the UCC Recommendation and (iii) UCC shall take
all lawful action to solicit the UCC Shareholder Approval.
Section 6.3. Acquisition Proposals; Board Recommendation. (a)
UCC agrees that it shall not, nor shall it permit any UCC Subsidiary to, nor
shall it authorize or knowingly permit any officer, director, employee,
investment banker, attorney, accountant, agent or other advisor or
representative of UCC or any UCC Subsidiary, directly or indirectly, to (i)
solicit, initiate or knowingly facilitate or encourage the submission of any
Acquisition Proposal, (ii) participate in any discussions or negotiations
regarding, or furnish to any Person any information with respect to, or take
any other action knowingly to facilitate any inquiries or the making of any
proposal that constitutes, or may be reasonably expected to lead to, any
Acquisition Proposal, (iii) grant any waiver or release under any standstill or
similar agreement with respect to any class of UCC's equity securities or (iv)
enter into any agreement with respect to any Acquisition Proposal, other than
in the manner contemplated by Section 6.3(d); provided, however, that UCC may
take any action(s) described in the foregoing clauses (i), (ii), (iii), or (iv)
in respect of any Person, but only if (A) such Person delivers a bona fide
written Acquisition Proposal that, in the reasonable judgment of UCC's Board
of Directors (after consultation with an investment bank of nationally
recognized reputation) could be reasonably likely to lead to the delivery to
UCC of a Superior Proposal and (B) UCC's Board of Directors determines in good
faith, on the basis of written advice from its outside legal counsel, that it
is required to take such action(s) in order to comply with its fiduciary duties
under applicable law; provided, further, that, (x) prior to UCC taking any such
action(s) in respect of such Person, such Person shall have entered into a
confidentiality agreement with UCC on customary terms, and UCC shall provide
the notice contemplated by Section 6.3(c) and (y) UCC shall not enter into any
agreement with respect to any Acquisition Proposal without first complying
with Section 6.3(d). Without limiting the foregoing, it is understood that
any violation of the restrictions set forth in the preceding sentence by any
officer, director, investment banker, attorney, accountant, agent or other
advisor or representative of UCC or any UCC Subsidiary, whether or not such
individual is purporting to act on behalf of UCC or any UCC Subsidiary or
otherwise, shall be deemed to be a breach of this Section 6.3 by UCC. UCC
shall cease and cause to be terminated immediately all existing discussions or
negotiations with any Persons conducted heretofore with respect to, or that
could be reasonably expected to lead to, any Acquisition Proposal.
(b) Unless UCC's Board of Directors has previously withdrawn, or is
concurrently therewith withdrawing, the UCC Recommendation in accordance with
Section 6.2, neither UCC's Board of Directors nor any committee thereof shall
recommend any Acquisition Proposal to UCC shareholders. Notwithstanding the
foregoing, nothing contained in this Section 6.3(b) or elsewhere in this
Agreement shall prevent UCC's Board of Directors from complying with Rule
14e-2 under the 1934 Act with respect to any Acquisition Proposal or making
any disclosure required by applicable law.
(c) UCC shall notify IP promptly (but in no event later than 24
hours) after receipt by UCC or any UCC Subsidiary (or any of their respective
directors, officers, agents or advisors), of any Acquisition Proposal or any
negotiations, discussions or contacts concerning, or any request for nonpublic
information or for access to the properties, books or records of UCC or any
UCC Subsidiary or any request for a waiver or release under any standstill or
similar agreement, by any Person that has made an Acquisition Proposal. Such
notice to IP shall be made orally and in writing and shall indicate the
identity of the offeror and the terms and conditions of such proposal, inquiry,
contact or request. UCC shall keep IP informed, on a reasonably current
basis, of the status and details (including amendments or proposed amendments)
of any such Acquisition Proposal or request and the status of any negotiations
or discussions.
(d) Pursuant to the terms of Section 10.1, either IP or UCC may
terminate this Agreement if UCC's Board of Directors shall have determined,
pursuant to the terms of this Section 6.3, (i) to approve or recommend an
Acquisition Proposal after concluding that such Acquisition Proposal
constitutes a Superior Proposal and (ii) to enter into a binding agreement
concerning such Acquisition Proposal; provided that UCC may not exercise its
right to terminate under this Section 6.3(d) and Section 10.1(c)(iii) (and may
not enter into a binding written agreement with respect to such an Acquisition
Proposal) unless (1) UCC shall have provided to IP at least five Business
Days' prior written notice that its Board of Directors has authorized and
intends to terminate this Agreement pursuant to this Section 6.3(d) and Section
10.1(c)(iii), specifying the material terms and conditions of such Acquisition
Proposal and providing the most current version of the agreement relating
thereto, if any, (2) IP does not make, within five Business Days of receiving
such notice, an offer such that a majority of UCC's Board of Directors
determines that (A) the foregoing Acquisition Proposal no longer constitutes a
Superior Proposal or (B) its fiduciary duties no longer require it to take such
action(s), and (3) on or prior to such termination, UCC shall have paid to IP
the Termination Fee (as defined in Section 10.3(b)); provided, further, that IP
may exercise its right to terminate under this Section 6.3(d) and Section
10.1(d)(iii) five Business Days after receiving the notice contemplated by this
Section 6.3(d). In connection with the foregoing, UCC agrees that it will (x)
not enter into a binding agreement with respect to such an Acquisition
Proposal until at least the sixth Business Day after it has provided the
notice to IP required hereby, (y) negotiate in good faith with IP, and
consider in good faith any offer made by IP, during that period and (z) notify
IP promptly if its intention to enter into such an agreement shall change at
any time after such notification.
Section 6.4. Transfer Taxes. All state, local, foreign or
provincial sales, use, real property transfer, stock transfer or similar taxes
(including any interest or penalties with respect thereto) attributable to the
Merger (collectively, the "Transfer Taxes") shall be timely paid by UCC, which
payments, if any, shall be made from the Escrow Account as and if required by
3.3(h).
ARTICLE 7
Covenants of IP
IP agrees that:
Section 7.1. IP Interim Operations. Except as set forth in the
IP Disclosure Schedule or as otherwise expressly contemplated hereby, without
the prior consent of UCC (which consent shall not be unreasonably withheld or
delayed), from the date hereof until the Effective Time, IP shall and shall
cause each of the IP Subsidiaries to, conduct their business in all material
respects in the ordinary course consistent with past practice and shall use
commercially reasonable efforts to (i) preserve intact its present business
organization, (ii) maintain in effect all material foreign, federal, state and
local licenses, approvals and authorizations, including, without limitation,
all material licenses and permits that are required for IP or any IP
Subsidiary to carry on its business and (iii) preserve existing relationships
with its material customers, lenders, suppliers and others having material
business relationships with it. Without limiting the generality of the
foregoing, except as otherwise expressly contemplated by this Agreement, from
the date hereof until the Effective Time, without the prior consent of UCC
(which consent shall not be unreasonably withheld or delayed), IP shall not,
not shall it permit any IP Subsidiary to:
(a) make any amendment to IP's restated certificate of
incorporation that changes any material term or provision of the IP Common
Shares;
(b) make any material changes to MergerSub's certificate of
incorporation;
(c) engage in any material repurchase at a premium,
recapitalization, restructuring or reorganization with respect to IP's capital
stock, including, without limitation, by way of any extraordinary dividend on,
or other extraordinary distributions with respect to, IP's capital stock;
(d) acquire by merging or consolidating with, or by purchasing a
substantial portion of the assets of or equity in, or by any other manner, any
Person or any business or division thereof, or otherwise acquire any assets,
unless IP concludes in good faith that such acquisition or the entering into
of a definitive agreement relating to or the consummation of such transaction
would not (i) impose any material delay in the obtaining of, or significantly
increase the risk of not obtaining, any authorizations, consents, orders,
declarations or approvals of any Governmental Entity necessary to consummate
the Merger or the expiration or termination of any applicable waiting period,
(ii) significantly increase the risk of any Governmental Entity entering an
order prohibiting the consummation of the Merger or (iii) significantly
increase the risk of not being able to remove any such order on appeal or
otherwise; or
(e) agree, resolve or otherwise commit to do any of the foregoing.
Section 7.2. Shareholder Meeting; Board Recommendation. IP
shall cause a meeting of its shareholders (the "IP Shareholder Meeting") to be
duly called and held as soon as reasonably practicable for the purpose of
obtaining the IP Shareholder Approval. Unless otherwise required by its
fiduciary duties (as determined in good faith by a majority of its members on
the basis of the written advice of its outside legal counsel), (i) IP's Board
of Directors shall recommend (the "IP Recommendation") approval and adoption
by its shareholders of (x) the issuance of IP Common Shares pursuant to the
Merger and (y) an amendment to IP's restated certificate of incorporation to
increase the number of authorized IP Common Shares, (ii) neither IP's Board of
Directors nor any committee thereof shall amend, modify, withdraw, condition
or qualify the IP Recommendation in a manner adverse to UCC or take any action
or make any statement inconsistent with the IP Recommendation and (iii) IP
shall take all lawful action to solicit the IP Shareholder Approval.
Section 7.3. Director and Officer Liability. (a) IP and the
Surviving Corporation agree that the indemnification obligations set forth in
UCC's articles of incorporation, as amended, and UCC's bylaws, in each case
as of the date of this Agreement, shall survive the Merger and shall not be
amended, repealed or otherwise modified for a period of six years after the
Effective Time in any manner that would adversely affect the rights thereunder
of the individuals who on or prior to the Effective Time were directors,
officers, employees or agents of UCC or the UCC Subsidiaries.
(b) To the fullest extent permitted under applicable law and
regardless of whether the Merger becomes effective, UCC shall indemnify and
hold harmless, and, after the Effective Time, IP shall, and shall cause the
Surviving Corporation to, indemnify and hold harmless, to the fullest extent
permitted under applicable law, each present and former director or officer of
UCC and each UCC Subsidiary and each such person who served at the request of
UCC or any UCC Subsidiary as a director, officer, trustee, partner or
fiduciary of another Person, pension or other employee benefit plan or
enterprise (collectively, the "Indemnified Parties") against all costs and
expenses (including reasonable attorneys' fees), judgments, fines, losses,
claims, damages, liabilities and settlement amounts paid in connection with
any claim, action, suit, proceeding or investigation (whether arising before
or after the Effective Time), whether civil, administrative or investigative,
arising out of or pertaining to any action or omission in their capacity as an
officer or director, in each case occurring before the Effective Time
(including the transactions contemplated by this Agreement). Without limiting
the foregoing, in the event of any such claim, action, suit, proceeding or
investigation, (i) UCC or IP and the Surviving Corporation, as the case may
be, shall pay the reasonable fees and expenses of one counsel selected by each
Indemnified Party, which one counsel shall be reasonably satisfactory to UCC
or to IP and the Surviving Corporation, as the case may be, promptly after
statements therefor are received (unless the Surviving Corporation shall elect
to defend such action) and (ii) UCC or IP and the Surviving Corporation, as
applicable, shall cooperate in the defense of any such matter; provided,
however, that neither UCC nor IP or the Surviving Corporation shall be liable
for any settlement effected without its prior written consent (which consent
shall not be unreasonably withheld).
(c) For six years from the Effective Time, the Surviving
Corporation shall provide to UCC's current directors and officers liability
insurance protection of the same kind and scope as that provided by UCC's
directors' and officers' liability insurance policies as of the date hereof;
provided, however, that in no event shall the Surviving Corporation be
required to expend in any one year an amount in excess of 200% of the annual
premiums currently paid by UCC for such insurance; and, provided, further,
that if the annual premiums of such insurance coverage exceed such amount, the
Surviving Corporation shall be obligated to obtain a policy with the greatest
coverage available for a cost not exceeding such amount.
(d) If UCC or the Surviving Corporation or any of their respective
successors or assigns (i) consolidates with or merges into any other person or
shall not be the continuing or surviving corporation or entity in such
consolidation or merger or (ii) transfers all or substantially all its
properties and assets to any Person, then, and in each case, proper provision
shall be made so that the successors and assigns of UCC or the Surviving
Corporation, as the case may be, honor the indemnification obligations set
forth in this Section 7.3.
(e) The obligations of UCC, the Surviving Corporation, and IP under
this Section 7.3 shall not be terminated or modified in such a manner as to
adversely affect any director, officer, employee, agent or other person to
whom this Section 7.3 applies without the consent of such affected director,
officer, employees, agents or other persons (it being expressly agreed that
each such director, officer, employee, agent or other person to whom this
Section 7.3 applies shall be third-party beneficiaries of this Section 7.3).
Section 7.4. Employee Benefits. (a) During the period
commencing on the Effective Time and ending on the first anniversary thereof,
IP shall provide (or shall cause the Surviving Corporation to provide)
employees of UCC and the UCC Subsidiaries with salary and benefits under
employee benefit plans that are no less favorable in the aggregate than those
currently provided by UCC and the UCC Subsidiaries to such employees
(including, without limitation, benefits pursuant to qualified and
nonqualified retirement plans, savings plans, medical, dental, disability and
life insurance plans and programs, deferred compensation arrangements, bonus
and incentive compensation plans, and retiree benefit plans, policies and
arrangements). For purposes of any employee benefit plan or arrangement
maintained by IP, the Surviving Corporation or any IP Subsidiary, IP shall
recognize (or cause to be recognized) service with UCC and the UCC
Subsidiaries and any predecessor entities (and any other service credited by
UCC under similar benefit plans) for all purposes (including, without
limitation, for vesting, eligibility to participate, severance, and benefit
accrual, provided, however, that solely to the extent necessary to avoid
duplication of benefits, amounts payable under employee benefit plans provided
by IP, the Surviving Corporation or an IP Subsidiary may be reduced by amounts
payable under similar UCC Employee Plans with respect to the same periods of
service). Any benefits accrued by employees of UCC or any UCC Subsidiary
prior to the Effective Time under any defined benefit pension plan of UCC or
any UCC Subsidiary that employ a final average pay formula shall be calculated
based on such employees' final average pay with IP, the Surviving Corporation
or any IP Subsidiary or other Affiliate employing such employees. From and
after the Effective Time, IP shall, and shall cause the IP Subsidiaries to,
waive any pre-existing condition limitations and credit any deductibles and
out-of-pocket expenses that are applicable and/or covered under the UCC
Employee Plans, and are incurred by the employees and their beneficiaries
during the portion of the calendar year prior to participation in the benefit
plans provided by IP, the Surviving Corporations and the IP Subsidiaries. The
provisions of this Section 7.4 shall not create in any employee or former
employee of UCC or any UCC Subsidiary any rights to employment or continued
employment with IP or UCC or any of their respective Subsidiaries or
Affiliates.
(b) IP shall, and shall cause the Surviving Corporation and the IP
Subsidiaries to, provide at least 30 days' advance written notice of
termination of employment ("Advance Notice") of any employees or former
employees of UCC or any UCC Subsidiary.
(c) (i) Notwithstanding anything to the contrary in UCC's Deferred
Stock Unit Plan for Outside Directors (the "Stock Unit Plan"), the amounts
payable to participants pursuant to Section 9(c) of the Stock Unit Plan shall
be paid in IP Common Shares. The number of IP Common Shares payable to any
participant in the Stock Unit Plan shall be an amount equal to (i) the number
of stock units credited to such participant's account under the Stock Unit
Plan immediately prior to the Closing Date multiplied by (ii) the Exchange
Ratio; and
(ii) Notwithstanding anything to the contrary in UCC's
Restricted Stock Performance Plan (the "RSPP"), any amounts payable to
participants pursuant to Article X of the RSPP shall be paid in IP
Common Shares. The number of IP Common Shares payable to any
participant in the RSPP shall be an amount equal to (i) the amount
payable to such participant determined in accordance with Article X of
the RSPP, divided by (ii) the Average IP Share Price;
provided that, in the case of each of clauses (c)(i) and (c)(ii) of this
Section 7.4, UCC shall take any necessary steps to obtain the consent of
each participant under both the Stock Unit Plan and the RSPP to the matters
contemplated by such respective clauses.
(d) From and after the Effective Time, subject to Section 7.4(c),
IP shall honor, and shall cause the Surviving Corporation and the IP
Subsidiaries to honor, in accordance with its terms, UCC's severance programs
in effect as of the Closing Date (including, without limitation, the Severance
Policy for Key Employees, the Severance Policy for Certain Bonus Eligible
Employees and the Severance Policy for Salaried Employees), and each existing
UCC employment, change of control, severance and termination agreement between
UCC or any UCC Subsidiary, and any officer, director or employee of UCC or any
UCC Subsidiary, including without limitation all legal and contractual
obligations pursuant to existing benefit compensation plans of UCC in effect as
of the Effective Time (including any UCC employee benefit plan providing for
payments or other obligations as a result of a change in control of UCC).
Section 7.5. Stock Exchange Listing. IP shall use its best
efforts to cause the IP Common Shares to be issued in connection with the
Merger to be listed on the NYSE, subject to official notice of issuance.
Section 7.6. Conduct of MergerSub. IP will take all action
necessary to cause MergerSub to perform its obligations under this Agreement
and to consummate the Merger on the terms and conditions set forth in this
Agreement.
ARTICLE 8
Covenants of IP and UCC
The parties hereto agree that:
Section 8.1. Reasonable Best Efforts. Subject to the terms and
conditions hereof, each party will use reasonable best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement as promptly as
practicable; provided that, for these purposes, reasonable best efforts of
UCC, the Surviving Corporation, IP and/or MergerSub shall be deemed to include
(i) offering to enter into, and entering into, any settlement, undertaking,
consent decree, stipulation or agreement or agreeing to any order regarding
antitrust matters in connection with any objections of any Governmental Entity
to the transactions contemplated hereby and (ii) offering to divest to others
and/or hold separate, and divesting or otherwise holding separate (including by
establishing a trust or otherwise), or taking any other action (or otherwise
agreeing to do any of the foregoing) with respect to, any portion of its and/or
its Subsidiaries' business, assets or properties, other than any such action
pursuant to clause(s) (i) and/or (ii) requiring any divestiture, holding
separate (including by establishing a trust or otherwise) or sale (by whatever
means) of (or any agreement to do any of the foregoing) any of the facilities
described in Section 8.01 of the UCC Disclosure Schedule.
Section 8.2. Certain Filings; Cooperation in Receipt of
Consents. (a) Promptly after the date hereof, IP and UCC shall prepare and IP
shall file with the SEC the Registration Statement, in which the Proxy
Statement/Prospectus will be included as IP's prospectus. Each of UCC and IP
shall use all reasonable efforts to have the Registration Statement declared
effective under the Securities Act as promptly as practicable after such filing
and to keep the Registration Statement effective as long as is necessary to
consummate the Merger. Each of UCC and IP shall mail the Proxy
Statement/Prospectus to their respective shareholders as promptly as
practicable after the Registration Statement is declared effective under the
Securities Act and, if necessary, after the Proxy Statement/Prospectus shall
have been so mailed, promptly circulate amended, supplemental or supplemented
proxy material, and, if required in connection therewith, resolicit proxies.
IP shall also take any action required to be taken under any applicable state
securities or blue sky laws in connection with the issuance of IP Common
Shares in the Merger.
(b) No amendment or supplement to the Proxy Statement/Prospectus
will be made by UCC or IP without the approval of the other party, which will
not be unreasonably withheld or delayed. Each party will advise the other
party, promptly after it receives notice thereof, of the time when the
Registration Statement has become effective or any supplement or amendment has
been filed, the issuance of any stop order, the suspension of the
qualification of the IP Common Shares issuable in connection with the Merger
for offering or sale in any jurisdiction, or any request by the SEC for
amendment of the Proxy Statement/Prospectus or comments thereon and responses
thereto or requests by the SEC for additional information. If at any time
prior to the Effective Time, UCC or IP discovers any information relating to
either party, or any of their respective Affiliates, officers or directors,
that should be set forth in an amendment or supplement to the Proxy
Statement/Prospectus, so that such document would not include any misstatement
of a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, the party that discovers such information shall promptly
notify the other parties hereto and an appropriate amendment or supplement
describing such information shall be promptly filed with the SEC and, to the
extent required by law or regulation, disseminated to the shareholders of UCC
and IP.
(c) UCC and IP shall cooperate with one another in (i) determining
whether any other action by or in respect of, or filing with, any Governmental
Entity is required, or any actions, consents, approvals or waivers are required
to be obtained from parties to any material contracts, in connection with the
consummation of the transactions contemplated hereby, (ii) seeking any such
other actions, consents, approvals or waivers or making any such filings,
furnishing information required in connection therewith and seeking promptly
to obtain any such actions, consents, approvals or waivers and (iii) setting a
mutually acceptable date for the UCC Shareholder Meeting and the IP
Shareholder Meeting, so as to enable them to occur, to the extent practicable,
on the same date. Each party shall permit the other party to review any
communication given by it to, and consult with each other in advance of any
meeting or conference with, any Governmental Entity or, in connection with any
proceeding by a private party, with any other Person, and to the extent
permitted by the applicable Governmental Entity or other Person, give the
other party the opportunity to attend and participate in such meetings and
conferences, in each case in connection with the transactions contemplated
hereby.
Section 8.3. Public Announcements. The parties shall consult
with each other before issuing any press release or making any public statement
with respect to this Agreement and the transactions contemplated hereby and,
except as may be required by applicable law or any listing agreement with any
national securities exchange, will not issue any such press release or make any
such public statement prior to such consultation.
Section 8.4. Access to Information; Notification of Certain
Matters. (a) From the date hereof until the Effective Time and subject to
applicable law, UCC and IP shall (i) give to the other party, its counsel,
financial advisors, auditors and other authorized representatives reasonable
access to the offices, properties, books and records of such party, (ii)
furnish or make available to the other party, its counsel, financial advisors,
auditors and other authorized representatives such financial and operating
data and other information as such Persons may reasonably request and (iii)
instruct its employees, counsel, financial advisors, auditors and other
authorized representatives to cooperate with the reasonable requests of the
other party in its investigation. Any investigation pursuant to this Section
shall be conducted in such manner as not to interfere unreasonably with the
conduct of the business of the other party. Unless otherwise required by law,
each of UCC and IP will hold, and will cause its respective officers,
employees, counsel, financial advisors, auditors and other authorized
representatives to hold, any nonpublic information obtained in any such
investigation in confidence in accordance with Section 8.8. No information or
knowledge obtained in any investigation pursuant to this Section 8.4 shall
affect or be deemed to modify any representation or warranty made by any party
hereunder.
(b) Each party hereto shall give prompt notice to each other party
hereto of:
(i) any communication received by such party from, or given
by such party to, any Governmental Entity in connection with any of the
transactions contemplated hereby; and
(ii) any actions, suits, claims, investigations or
proceedings commenced or, to its knowledge, threatened against,
relating to or involving or otherwise affecting such party or any of
its Subsidiaries that, if pending on the date of this Agreement, would
have been required to have been disclosed pursuant to Section 4.11,
4.12, 4.13, 4.14, 4.18 or 5.10, as the case may be, or that relate to
the consummation of the transactions contemplated by this Agreement
provided, however, that the delivery of any notice pursuant to this Section
8.4(b) shall not limit or otherwise affect the remedies available hereunder
to the party receiving such notice.
Section 8.5. Further Assurances. At and after the Effective
Time, the officers and directors of the Surviving Corporation will be
authorized to execute and deliver, in the name and on behalf of UCC or
MergerSub, any deeds, bills of sale, assignments or assurances and to take and
do, in the name and on behalf of UCC or MergerSub, any other actions and
things to vest, perfect or confirm of record or otherwise in the Surviving
Corporation any and all right, title and interest in, to and under any of the
rights, properties or assets of UCC acquired or to be acquired by the
Surviving Corporation as a result of, or in connection with, the Merger.
Section 8.6. Tax and Accounting Treatment. (a) Prior to the
Effective Time, each party shall use its best efforts to cause the Merger to
qualify as a 368 Reorganization, and will not take any action reasonably likely
to cause the Merger not so to qualify. IP shall not take, or cause the
Surviving Corporation to take, any action after the Effective Time reasonably
likely to cause the Merger not to qualify as a 368 Reorganization.
(b) Each party will use its best efforts to cause the Merger to
qualify for "pooling of interest" accounting treatment as described in Section
4.21(a), and will not take any action reasonably likely to cause the Merger
not so to qualify.
(c) Each party shall use its best efforts to obtain the opinions
referred to in Sections 9.1(f) and 9.02(b).
Section 8.7. Affiliate Letters. (a) UCC shall use its best
efforts to deliver to IP, within 45 days of the date hereof, a letter agreement
substantially in the form of Exhibit A-1 hereto executed by each Person who
may be deemed to be an "affiliate" of UCC under the Securities Act.
(b) IP shall use its best efforts to obtain, within 45 days of the
date hereof, a letter agreement substantially in the form of Exhibit A-2 hereto
executed by each Person who may be deemed to be an "affiliate" of IP under the
Securities Act.
(c) Within 30 days following the date hereof, UCC shall cause to be
delivered to IP a letter identifying, to the best of UCC's knowledge, all
Persons who may be deemed to be "affiliates" of UCC for purposes of Rule
145(c) under the Securities Act. UCC shall use commercially reasonable efforts
to cause each such Person who is so identified to deliver to IP on or prior to
the Effective Time a letter agreement substantially in the form of Exhibit A-3
to this Agreement.
Section 8.8. Confidentiality. Prior to the Effective Time and
after any termination of this Agreement each party hereto will hold, and will
use its best efforts to cause its officers, directors, employees, accountants,
counsel, consultants, advisors and agents to hold, in confidence, unless
compelled to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information concerning the
other parties hereto and the Subsidiaries furnished to such party in
connection with the transactions contemplated by this Agreement, except to the
extent that such information can be shown to have been (a) previously known on
a nonconfidential basis by such party, (b) in the public domain through no
fault of such party or (c) later lawfully acquired by such party from sources
other than any of the other parties hereto; provided that such party may
disclose such information to its officers, directors, employees, accountants,
counsel, consultants, advisors and agents in connection with the transactions
contemplated by this Agreement so long as such Persons are informed by such
party of the confidential nature of such information and are directed by such
party to treat such information confidentially. Each party hereto's obligation
to hold any such information in confidence shall be satisfied if it exercises
the same care with respect to such information as it would take to preserve
the confidentiality of its own similar information. If this Agreement is
terminated, each party hereto will, and will use its best efforts to cause its
officers, directors, employees, accountants, counsel, consultants, advisors
and agents to, destroy or deliver to the party from whom such material was
obtained, upon request, all documents and other materials, and all copies
thereof, obtained by such party or on its behalf from any such other parties
in connection with this Agreement that are subject to such confidence.
Section 8.9. IP Standstill. If this Agreement is terminated,
then, for two years after the date of such termination, IP and each of its
successors or assigns will not, and will cause its Affiliates not to:
(i) acquire, offer or propose or otherwise seek to acquire,
or agree to acquire, directly or indirectly, by merger, purchase or
otherwise, beneficial ownership of any assets or in excess of 1% of
any class of securities of UCC or its Affiliates or any direct rights
or options to acquire (through purchase, exchange, conversion or
otherwise) any assets or in excess of 1% of any class of securities of
UCC or its Affiliates;
(ii) make, or in any way participate in, directly or
indirectly, any "solicitation" of "proxies" (as such terms are defined
in Rule 14a-1 of Regulation 14A promulgated by the SEC as of the date
hereof, disregarding clause (iv) of Rule 14a-1(1)(2), but including
any solicitation exempted pursuant to Rule 14a-2(b)(1) to vote
(including by the execution of actions by written consent), or seek to
advise, encourage or influence any person or entity with respect to
the voting of, any voting securities of UCC;
(iii) call, or in any way participate in a call for, any
meeting of shareholders of UCC (or take any action with respect to
shareholders acting by written consent);
(iv) form, join or in any way participate in a "group" (within
the meaning of Section 13(d)(3) of the Exchange Act) with respect to
any voting securities of UCC; or
(v) otherwise act to control or influence, or seek to
control or influence, UCC or the management, Board of Directors,
policies or affairs of UCC, including without limitation, (A) making
any offer or proposal to acquire any securities or assets of UCC or
any of its Affiliates or soliciting or proposing to effect or
negotiate any form of business combination, restructuring,
recapitalization or other extraordinary transaction involving UCC, its
Affiliates or any of their respective securities or assets, (B)
seeking board representation or the removal of any directors or a
change in the composition or size of the Board of Directors of UCC,
(C) making any request to amend or waive any provision of this Section
8.9, (D) disclosing any intent, purpose, plan or proposal with respect
to matters covered by this Section 8.9 or UCC, its Affiliates or the
boards of directors, management, policies or affairs or securities or
assets of UCC or its Affiliates that is inconsistent with this Section
8.9, including an intent, purpose, plan or proposal that is
conditioned on, or would require, waiver, amendment, nullification or
invalidation of any provision of this Section 8.9, or take any action
that could require UCC or any of its Affiliates to make any public
disclosure relating to any such intent, purpose, plan, proposal or
condition, or (E) assisting, advising or encouraging any person with
respect to, or seeking to do, any of the foregoing;
provided, however, that this Section 8.9 shall not apply if UCC does not
pay any portion of the Termination Fee when due or if IP terminates this
Agreement as a result of a willful breach of this Agreement by UCC;
provided, further, that, if this Section 8.9 is effective against IP (and
each of its successors and their respective Affiliates) during any such
two-year period after the date of any such termination, and either (x) UCC
shall have entered into an agreement with respect to any transaction that
constitutes an Acquisition Proposal (assuming for this purpose that this
Agreement had been effective at such time) for at least a majority of
either the voting securities of UCC then outstanding or the assets of UCC
and the UCC Subsidiaries, taken as a whole or (y) any Person or "group" (as
defined in Section 13(d)(3) of the Exchange Act) (other than UCC or any of
its Affiliates (excluding, for this purpose, UCC's management acting
independently of UCC)) shall have commenced any tender or exchange offer
that constitutes an Acquisition Proposal (assuming for this purpose that
this Agreement had been effective at such time) for at least a majority of
the voting securities of UCC then outstanding which offer is recommended by
UCC's Board of Directors to its shareholders, then at the time of the
public announcement of such agreement or of the commencement of such offer,
as applicable, this Section 8.9 shall terminate and have no further force
or effect and there shall be no rights, liabilities or obligations under
this Section 8.09 on the part of IP, UCC, MergerSub, or any of their
respective officers, directors, shareholders, agents or Affiliates.
Section 8.10. ASR 135. IP shall use its best efforts to
publish as promptly as reasonably practical, but in no event later than 90
days after the end of the first month after the Effective Time in which there
are at least 30 days of post-Merger combined operations (which month may be
the month in which the Effective Time occurs), combined sales and net income
figures as contemplated by and in accordance with the terms of SEC Accounting
Series Release No. 135.
Section 8.11. Integration Committee. IP recognizes that UCC
has a talented group of officers and employees that will be important to the
future growth of the combined companies. In recognition of the foregoing,
promptly after the date hereof, IP will establish an Integration Committee
composed of senior executive officers of both IP and UCC, as selected by IP's
Chairman, who will have direct access to him and will be responsible for
proposing alternatives and recommendations to him regarding the matters and
issues arising in connection with the integration of the two companies and
their respective businesses, assets and organizations (including, without
limitation, matters arising in connection with the matters contemplated by
Section 7.4).
ARTICLE 9
Conditions to the Merger
Section 9.1. Conditions to the Obligations of Each Party. The
obligations of UCC, IP and MergerSub to consummate the Merger are subject to
the satisfaction of the following conditions:
(a) each of the UCC Shareholder Approval and the IP Shareholder
Approval shall have been obtained.
(b) the IP Common Shares to be issued in the Merger shall have been
authorized for listing on the NYSE, subject to official notice of issuance.
(c) (i) the Proxy Statement/Prospectus shall have become effective
in accordance with the provisions of the Securities Act, no stop order
suspending the effectiveness of the Proxy Statement/Prospectus shall have been
issued by the SEC and no proceedings for that purpose shall have been
initiated by the SEC and not concluded or withdrawn and (ii) all state
securities or blue sky authorizations necessary to carry out the transactions
contemplated hereby shall have been obtained and be in effect;
(d) (i) any applicable waiting period under the HSR Act relating to
the Merger shall have expired or been earlier terminated and (ii) if required
by applicable law, the parties shall have received a decision from the European
Commission under Regulation 4064/89 that the proposed Merger and any matters
arising therefrom fall within either Article 6.1(a) or Article 6.1(b) of such
Regulation and that, in any event, the Merger will not be referred to any
competent authority or dealt with by the European Commission pursuant to
Article 9.3 of such Regulation;
(e) no Governmental Entity of competent authority or jurisdiction
shall have issued any order, injunction or decree, or taken any other action,
which permanently restrains, enjoins or otherwise prohibits the consummation
of the Merger;
(f) (i) IP shall have received a letter from Arthur Andersen LLP
dated as of the Closing Date and addressed to IP, stating that Arthur Andersen
LLP believes that the acquisition of UCC by IP should be treated as a "pooling
of interests" in conformity with GAAP as described in Accounting Principles
Board Opinion No. 16 and applicable rules and regulations of the SEC and such
letter shall not have been withdrawn or modified in any material respect and
(ii) UCC shall have received a letter from PricewaterhouseCoopers LLP dated as
of the Closing Date and addressed to UCC, stating that PricewaterhouseCoopers
LLP believes that UCC is a pooling candidate for purposes of the transactions
contemplated in conformity with GAAP as described in Accounting Principles
Board Opinion No. 16 and applicable rules and regulations of the SEC and such
letter shall not have been withdrawn or modified in any material respect.
Section 9.2. Conditions to the Obligations of UCC. The
obligations of UCC to consummate the Merger are subject to the satisfaction of
the following further conditions:
(a) (i) IP and MergerSub each shall have performed in all material
respects all of its obligations hereunder required to be performed by it at or
prior to the time of the filing of the Articles of Merger, (ii) (A) the
representations and warranties of IP contained in this Agreement that are
qualified by reference to an IP Material Adverse Effect shall be true and
correct when made and at and as of the time of filing the Articles of Merger,
as if made at and as of such time and (B) all other representations and
warranties of IP shall have been true and correct when made and at and as of
the time of the filing of the Articles of Merger as if made at and as of such
time, except for such inaccuracies as are not reasonably likely, individually
or in the aggregate, to have an IP Material Adverse Effect, and (iii) UCC shall
have received a certificate signed by the Chief Executive Officer or Chief
Financial Officer of IP to the foregoing effect;
(b) UCC shall have received an opinion of Sullivan & Cromwell in
form and substance reasonably satisfactory to UCC, on the basis of certain
facts, representations and assumptions set forth in such opinion, dated as of
the date of the filing of the Articles of Merger, to the effect that the
Merger will be treated for federal income tax purposes as a 368 Reorganization
and that each of IP, MergerSub and UCC will be a party to the reorganization
within the meaning of Section 368(b) of the Code. In rendering such opinion,
such counsel shall be entitled to rely upon representations of officers of UCC
and IP substantially to the effect of Exhibits B and C hereto respectively,
with such modifications as shall be reasonably necessary; and
(c) The parties shall have obtained or made all consents,
approvals, actions, orders, authorizations, registrations, declarations,
announcements and filings contemplated by Sections 4.3 and 5.3 which if not
obtained or made (i) would render consummation of the Merger illegal or (ii)
(assuming the Effective Time had occurred) would be reasonably likely to have
an IP Material Adverse Effect.
Section 9.3. Conditions to the Obligations of IP and
MergerSub. The obligations of IP and MergerSub to consummate the Merger are
subject to the satisfaction of the following further conditions:
(a) (i) UCC shall have performed in all material respects all of
its obligations hereunder required to be performed by it at or prior to the
Effective Time, (ii) (A) the representations and warranties of UCC contained
in this Agreement that are qualified by reference to a UCC Material Adverse
Effect shall be true and correct when made and at and as of the time of the
filing of the Articles of Merger, as if made at and as of such time and (B) all
other representations and warranties of UCC shall have been true and correct
when made and at and as of the time of filing of the Articles of Merger, as if
made as of such time, except for such inaccuracies as are not reasonably
likely, individually or in the aggregate, to have a UCC Material Adverse
Effect, and (iii) IP shall have received a certificate signed by the Chief
Executive Officer, President or Chief Financial Officer of UCC to the
foregoing effect; and
(b) The parties shall have obtained or made all consents,
approvals, actions, orders, authorizations, registrations, declarations,
announcements and filings contemplated by Sections 4.3 and 5.3 which if not
obtained or made (i) would render consummation of the Merger illegal or (ii)
(assuming the Effective Time had occurred) would be reasonably likely to have
an IP Material Adverse Effect or a UCC Material Adverse Effect.
ARTICLE 10
Termination
Section 10.1. Termination. This Agreement may be
terminated at any time prior to the Effective Time by written notice by the
terminating party to the other party (except if such termination is
pursuant to Section 10.1(a)), whether before or after the UCC Shareholder
Approval and/or the IP Shareholder Approval shall have been obtained:
(a) by mutual written agreement of IP and UCC.
(b) by either IP or UCC, if
(i) the Merger shall not have been consummated by
September 30, 1999 (the "End Date"); provided, however, that the right
to terminate this Agreement under this Section 10.1(b)(i) shall not be
available to any party whose breach of any provision of this Agreement
has resulted in the failure of the Merger to occur on or before the
End Date;
(ii) there shall be any law or regulation that makes
consummation of the Merger illegal or otherwise prohibited or any
judgment, injunction, order or decree of any Governmental Entity
having competent jurisdiction enjoining UCC, IP or MergerSub from
consummating the Merger is entered and such judgment, injunction,
judgment or order shall have become final and nonappealable and, prior
to such termination, the parties shall have used reasonable best
efforts to resist, resolve or lift, as applicable, such law,
regulation, judgment, injunction, order or decree;
(iii) at the IP Shareholder Meeting (including any adjournment
or postponement thereof), the IP Shareholder Approval shall not have
been obtained; or
(iv) at the UCC Shareholder Meeting (including any
adjournment or postponement thereof), the UCC Shareholder Approval
shall not have been obtained.
(c) by UCC, (i) if IP's Board of Directors shall have amended,
modified, withdrawn, conditioned or qualified the IP Recommendation in a
manner adverse to UCC; (ii) if a breach of any representation, warranty,
covenant or agreement on the part of IP or MergerSub set forth in this
Agreement shall have occurred which would cause the condition set forth in
Section 9.2(a) not to be satisfied, and such condition shall be incapable of
being satisfied by the End Date; or (iii) as contemplated by Section 6.3(d).
(d) by IP, (i) if UCC's Board of Directors shall have (A) amended,
modified, withdrawn, conditioned or qualified the UCC Recommendation in a
manner adverse to IP and/or (B) recommended any Acquisition Proposal to UCC's
shareholders; (ii) if there shall have occurred a willful and material breach
of Section 6.3 by UCC, any UCC Subsidiary or any of their respective officers,
directors, employees, advisors or other agents; (iii) pursuant to the terms of
Section 6.3(d); or (iv) if a breach of or failure to perform any
representation, warranty, covenant or agreement on the part of UCC set forth
in this Agreement shall have occurred which would cause the condition set
forth in Section 9.3(a) not to be satisfied, and such condition is incapable of
being satisfied by the End Date.
Section 10.2. Effect of Termination. If this Agreement is
terminated pursuant to Section 10.1 (including any such termination by way of
Section 6.3(d)), there shall be no liability or obligation on the part of IP,
UCC, MergerSub, or any of their respective officers, directors, shareholders,
agents or Affiliates, except as set forth in Section 10.3 which (without
limiting in any respect the respective rights and obligations of the parties
set forth in Section 11.9 prior to any termination in accordance with the
terms of this Agreement) shall be the sole and exclusive remedy of the parties
hereto in the event of such termination; provided that the provisions of
Sections 8.8, 8.9 (except as noted therein and, solely in connection with
Section 8.9, Section 11.9), 10.2, 10.3, 11.1, 11.4, 11.5, 11.7, 11.8 and 11.10
of this Agreement shall remain in full force and effect and survive any
termination of this Agreement.
Section 10.3. Fees and Expenses. (a) Except as set forth in
this Section 10.3, all fees and expenses incurred in connection herewith and
the transactions contemplated hereby shall be paid by the party incurring such
expenses, whether or not the Merger is consummated.
(b) If this Agreement is terminated pursuant to Section
10.1(c)(iii), Section 10.1(d)(i)(B), Section 10.1(d)(ii) or Section
10.01(d)(iv) (but only if the failure to satisfy the condition specified
therein results from a willful breach by UCC of any of its representations,
warranties, covenants or agreements contained herein), UCC shall (i) pay to IP
a termination fee equal to $150 million (the "Termination Fee") and (ii)
reimburse IP for its actual, documented out-of-pocket expenses incurred to
third parties in connection with the transactions contemplated hereby not to
exceed $10 million.
(c) If this Agreement is terminated by either party pursuant to
Section 10.1(b)(iv) and (x) prior to the UCC Shareholder Meeting, any Person or
"group" (as defined in Section 13(d)(3) of the Securities Act) shall have
publicly announced an intention (whether or not conditional) to make an
Acquisition Proposal and (y) concurrently with or within 12 months after such
termination, a Third Party Acquisition Event occurs with the party that had
publicly announced such Acquisition Proposal or any Affiliate thereof, UCC
shall (i) (A) pay to IP 50% of the Termination Fee within one Business Day of
the entering into of any agreement constituting such a Third Party Acquisition
Event and (B) reimburse IP at such time for IP's actual, documented
out-of-pocket expenses incurred to third parties in connection with the
transactions contemplated hereby not to exceed $10 million and (ii) within one
Business Day of any consummation of the transaction contemplated by such Third
Party Acquisition Event (including any revisions or amendments thereto) pay to
IP 50% of the Termination Fee.
A "Third Party Acquisition Event" means (i) the consummation of
an Acquisition Proposal involving the purchase of a majority of either the
equity securities of UCC or of the consolidated assets of UCC and the UCC
Subsidiaries, taken as a whole, or any such transaction that, if it had been
proposed prior to the termination of this Agreement would have constituted an
Acquisition Proposal or (ii) the entering into by UCC or any of the UCC
Subsidiaries of a definitive agreement with respect to any such transaction.
(d) If this Agreement is terminated pursuant to Section
10.01(d)(i)(A), (i) UCC shall (A) pay to IP 50% of the Termination Fee and (B)
reimburse IP for IP's actual, documented out-of-pocket expenses incurred to
third parties in connection with the transaction contemplated by this
Agreement not to exceed $10 million and (ii) if concurrently with or within 12
months after such termination a Third Party Acquisition Event occurs, then UCC
shall pay to IP 50% of the Termination Fee within one Business Day of the
consummation of the transaction contemplated by such Third Party Acquisition
Event.
(e) If this Agreement is terminated pursuant to Section
10.1(b)(iii) or 10.01(c)(ii) (but only if the failure to satisfy the condition
specified therein results from a willful breach by IP or MergerSub of any of
its representations, warranties, covenants or agreements contained herein), IP
shall (i) pay to UCC the Termination Fee and (ii) reimburse UCC for its
actual, documented out-of-pocket expenses incurred to third parties in
connection with the transactions contemplated hereby not to exceed $10
million.
(f) If this Agreement is terminated pursuant to Section
10.01(c)(i), then IP shall (i) pay to UCC 50% of the Termination Fee and (ii)
reimburse UCC for UCC's actual, documented out-of-pocket expenses incurred to
third parties in connection with the transactions contemplated by this
Agreement not to exceed $10 million.
(g) Any payment of the Termination Fee (and reimbursement of
expenses) pursuant to this Section 10.3 shall be made within one Business Day
after termination of this Agreement (or as otherwise expressly set forth in
this Agreement). If one party fails to pay to (or reimburse) the other
promptly any fee or expense due hereunder (including the Termination Fee), the
defaulting party shall pay the costs and expenses (including legal fees and
expenses) in connection with any action, including the filing of any lawsuit
or other legal action, taken to collect payment, together with interest on the
amount of any unpaid fee and/or expense at the publicly announced prime rate
of Citibank, N.A. from the date such fee was required to be paid to the date
it is paid.
ARTICLE 11
Miscellaneous
Section 11.1. Notices. Except as otherwise expressly set
forth in Section 6.3(c), all notices, requests and other communications to
any party hereunder shall be in writing (including facsimile or similar
writing) and shall be given,
if to IP or MergerSub, to:
International Paper Company
Two Manhattanville Road
Purchase, NY 10577
Attention: William B. Lytton
Facsimile: (914) 397-1909
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Attention: Dennis S. Hersch
Facsimile: (212) 450-4800
if to UCC, to:
Union Camp Corporation
1600 Valley Road
Wayne, NJ 07470
Attention: Dirk R. Soutendijk
Facsimile: (973) 628-2640
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
Attention: James C. Morphy
Facsimile: (212) 558-3588
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. Each such notice,
request or other communication shall be effective (a) if given by facsimile,
when such facsimile is transmitted to the facsimile number specified in this
Section and the appropriate facsimile confirmation is received or (b) if given
by any other means, when delivered at the address specified in this Section.
Section 11.2. Survival of Representations, Warranties and
Covenants after the Effective Time. The representations and warranties
contained herein and in any certificate or other writing delivered pursuant
hereto shall not survive the Effective Time or the termination of this
Agreement. The covenants contained in Articles 2 and 3 and Sections 6.04,
7.03, 7.04, 8.10, 8.11, 11.02, 11.04, 11.05, 11.06, 11.07 and 11.10 shall
survive the Effective Time.
Section 11.3. Amendments; No Waivers. (a) Any provision of
this Agreement may be amended or waived prior to the Effective Time if, and
only if, such amendment or waiver is in writing and signed, in the case of an
amendment, by UCC, IP and MergerSub or in the case of a waiver, by the party
against whom the waiver is to be effective; provided that (i) after the UCC
Shareholder Approval, no such amendment or waiver shall, without the further
approval of such shareholders, be made that would require such approval under
any applicable law, rule or regulation and (ii) after the IP Shareholder
Approval, no such amendment or waiver shall, without the further approval of
such shareholders, be made that would require such approval under any
applicable law, rule or regulation.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights
or remedies provided by law.
Section 11.4. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other parties hereto, except that IP or
MergerSub may transfer or assign to any wholly owned IP Subsidiary the right
to enter into the transactions contemplated by this Agreement, provided that no
such assignment shall be permitted if it would delay or impede the Merger or
any of the other transactions contemplated by this Agreement, and any such
transfer or assignment will not relieve IP or MergerSub of its obligations
hereunder. Any purported assignment in violation hereof shall be null and
void.
Section 11.5. Governing Law. Except to the extent that the
laws of the State of New York, the Commonwealth of Virginia, the State of
Delaware or any other jurisdiction are mandatorily applicable to the matters
arising under or in connection with this Agreement, this Agreement shall be
construed in accordance with and governed by the internal laws of the State of
New York.
Section 11.6. Counterparts; Effectiveness; Third Party
Beneficiaries. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement shall become
effective when each party hereto shall have received counterparts hereof
signed by all of the other parties hereto. Except as set forth in Sections
3.4, 7.3 and 7.4(b), no provision of this Agreement is intended to confer upon
any Person other than the parties hereto any rights or remedies hereunder.
Section 11.7. Jurisdiction. Except as otherwise expressly
provided in this Agreement, the parties hereto agree that any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby shall be brought in the United States District Court for the Southern
District of New York or any other New York State court sitting in New York
City, and each of the parties hereby consents to the exclusive jurisdiction of
such courts (and of the appropriate appellate courts therefrom) in any such
suit, action or proceeding and irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court
or that any such suit, action or proceeding which is brought in any such court
has been brought in an inconvenient forum. Process in any such suit, action
or proceeding may be served on any party anywhere in the world, whether within
or without the jurisdiction of any such court. Without limiting the
foregoing, each party agrees that service of process on such party as provided
in Section 11.1 shall be deemed effective service of process on such party.
Section 11.8. Waiver of Jury Trial. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
Section 11.9. Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms. It is accordingly
agreed that the parties shall be entitled to specific performance of the terms
hereof, this being in addition to any other remedy to which they are entitled
at law or in equity.
Section 11.10. Entire Agreement. This Agreement (together
with the exhibits and schedules hereto) constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersede
all prior agreements and understandings, both oral and written, between the
parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
UNION CAMP CORPORATION
By: /s/ W. Craig McClelland
--------------------------------
Name: W. Craig McClelland
Title: Chief Executive Officer
INTERNATIONAL PAPER COMPANY
By: /s/ James P. Melican
--------------------------------
Name: James P. Melican
Title: Executive Vice President
MAPLE ACQUISITION, INC.
By: /s/ James P.Melican
--------------------------------
Name: James P. Melican
Title: President
EXHIBIT 99.1
International Paper, Union Camp Corporation
Announce Merger
Business Wire -- November 24, 1998
- ------------------------------------------------------------------------------
PURCHASE, N.Y.--(BUSINESS WIRE)--Nov. 24, 1988--International Paper (NYSE:IP)
and Union Camp Corporation (NYSE:UCC) announced today they have agreed to
merge in a tax-free, stock-for-stock exchange.
Union Camp and International Paper are diversified forest products companies
with $4.4 billion and $20.1 billion respectively in 1997 net sales. The
transaction, which is valued at $6.6 billion, including assumption of debt, is
subject to approval by International Paper and Union Camp shareholders, as
well as by regulatory agencies. It is expected to close at the end of the
first quarter of next year.
In the merger, which both companies' boards of directors have unanimously
approved, each outstanding share of Union Camp will be exchanged for
International Paper shares having a value of $71, subject to certain
adjustments described in the table below. The merger is expected to be
accounted for as a pooling of interests and is expected to be accretive to
International Paper's earnings in the first full year of operations.
"This is a unique opportunity to combine two great companies with low cost,
high-quality assets and long traditions of customer service. In addition,
cost savings resulting from this combination will create significant value for
shareowners. Union Camp's expertise in marketing and manufacturing quality
products will add value to the combined enterprise-offering substantial
opportunities for growth and success," said W. Craig McClelland, Union Camp's
Chairman and Chief Executive Officer.
"It's a perfect fit", stated John T. Dillon, Chairman and Chief Executive
Officer of International Paper. "By merging, we're teaming two world-class
companies in the paper, packaging, and related forest products businesses.
This combination will allow us to be even more competitive in the global
marketplace and better serve our customers."
The merger is expected to result in $300 million in cost savings through a
combination of reductions in overhead, process improvements, facility
rationalization, purchasing and logistics savings.
Three members of Union Camp's board of directors, including McClelland and two
members to be named, will join International Paper's board when the
transaction closes. McClelland, who turns age 65 in April, 1999, was
scheduled to retire from Union Camp at that time. Dillon will continue to
serve as Chairman and Chief Executive Office of International Paper. Upon
completion of the merger, Union Camp shareholders will own approximately 25%
and International Paper shareholders will own approximately 75% of the
combined company.
Union Camp Corporation (www.unioncamp.com), based in Wayne, N.J., is a leading
manufacturer of paper, packaging, chemicals and wood products and ranks among
the nations' 200 largest industrial firms. Union Camp employs nearly 18,000
worldwide at operations in 40 countries.
International Paper (www.internationalpaper.com), in its 100th year of
operation, is a worldwide producer of printing papers, packaging and forest
products. The company also operates building materials and specialty
businesses in global markets, as well as a broadly based distribution network.
Headquartered in Purchase, N.Y., International Paper has operations in 3
countries, employs more than 80,000 people and exports its products to more
than 130 nations.
Statements in this press release that are not historical are forward-looking
statements, which are subject to risks and uncertainties that could cause
actual results to differ materially. The expected increases in profitability
and reduction in costs are subject to risks and uncertainties, including
general economic conditions, fluctuation in supply and demand, operating rates
and competitive pricing pressures.
Table 1
Calculation of Exchange Ratio of
International Paper Shares per Union Camp Co. share
International Paper Exchange Ratio of
Average Share Price IP Shares per Value per
at Closing Union Camp Share Union Camp Share
Less than $43.70 Fixed at 1.6247 1.6247 times IP price
$43.70 - $48.30 Exchange Ration changes $71
to maintain $71
Greater than $48.30 Fixed at 1.4700 1.4700 times IP price
CONTACT: Media Contacts:
James E. Lee, IP
(914) 397-1565
Tom Lambrix, UCC
(973) 628-2253
or
Analyst Contacts:
Carol Tutundgy, IP
(914) 397-1632
Mary Winn Settino, IP
(914) 397-1623
Judy Pirro, IP
(914) 397-1667
Patricia Spinella, UCC
(973) 628-2273
