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EXHIBIT(d)(2)
MTHM Draft
12/11/2000
AGREEMENT AND PLAN OF MERGER
DATED AS OF
December __, 2000
AMONG
IBP, INC.,
TYSON FOODS, INC.
AND
LASSO ACQUISITION CORPORATION
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MTHM Draft
12/11/2000
TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS.........................................................1
Section 1.01. Definitions............................................1
ARTICLE 2 THE OFFER...........................................................3
Section 2.01 The Offer...............................................3
Section 2.02 Company Actions.........................................5
Section 2.03 Company Board Representation; Section 14(f).............6
ARTICLE 3 THE MERGER..........................................................7
Section 3.01. The Merger.............................................7
Section 3.02. Conversion of Shares...................................8
Section 3.03. Surrender and Payment..................................8
Section 3.04. Stock Options..........................................9
Section 3.05. Withholding Rights....................................10
ARTICLE 4 THE SURVIVING CORPORATION..........................................10
Section 4.01. Certificate of Incorporation..........................10
Section 4.02. Bylaws................................................11
Section 4.03. Directors and Officers................................11
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................11
Section 5.01. Corporate Existence and Power.........................11
Section 5.02. Corporate Authorization...............................11
Section 5.03. Governmental Authorization............................11
Section 5.04. Non-Contravention.....................................11
Section 5.05. Capitalization........................................12
Section 5.06. Subsidiaries..........................................12
Section 5.07. SEC Filings...........................................13
Section 5.08. Financial Statements..................................13
Section 5.09. Disclosure Documents..................................14
Section 5.11. No Undisclosed Material Liabilities...................16
Section 5.12. Litigation............................................16
Section 5.13. Taxes.................................................17
Section 5.14. ERISA.................................................18
Section 5.15. Labor Matters.........................................20
Section 5.16. Compliance with Laws..................................21
Section 5.17. Licenses and Permits..................................21
Section 5.18. Intellectual Property.................................21
Section 5.19. Environmental Matters.................................22
Section 5.20. Finders' Fees.........................................23
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Section 5.21. Inapplicability of Certain Restrictions...............23
Section 5.22. Rights Plan...........................................23
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF PARENT...........................23
Section 6.01. Corporate Existence And Power.........................24
Section 6.02. Corporate Authorization...............................24
Section 6.03. Governmental Authorization............................24
Section 6.04. Non-Contravention.....................................24
Section 6.05. SEC Filings...........................................24
Section 6.08. Disclosure Documents..................................25
Section 6.09. Finders' Fees.........................................26
ARTICLE 7 COVENANTS OF THE COMPANY...........................................26
Section 7.01. Conduct of the Company................................26
Section 7.02. Stockholder Meeting...................................28
Section 7.03. Access to Information.................................28
Section 7.04. Other Offers..........................................29
Section 7.05. Notices Of Certain Events.............................31
Section 7.06. Tax Matters...........................................31
Section 7.07. Affiliates............................................31
ARTICLE 8 COVENANTS OF PARENT................................................32
Section 8.01. Parent Stockholder Meeting............................32
Section 8.02. Confidentiality.......................................32
Section 8.03. Voting Of Shares......................................32
Section 8.04. Director And Officer Liability........................32
Section 8.05. Employee Matters......................................32
Section 8.06. Obligations of Merger Co..............................33
Section 8.07. NYSE Listing..........................................33
Section 8.08. Acquisitions of Shares................................33
Section 8.09. Notices of Certain Events.............................33
Section 8.10. Reorganization Matters................................33
Section 8.11. Information Relating to Offer.........................33
Section 8.12. Conduct of Parent.....................................33
ARTICLE 9 COVENANTS OF PARENT AND THE COMPANY................................34
Section 9.01. Company Proxy Statement and Form S-4..................34
Section 9.03. Best Efforts..........................................34
Section 9.02. Certain Filings.......................................35
Section 9.04. Public Announcements..................................35
Section 9.05. Further Assurances....................................35
ARTICLE 10 CONDITIONS TO THE MERGER..........................................36
Section 10.01. Conditions to the Obligations of Each Party..........36
Section 10.02. Conditions to the Obligation of the Company..........36
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ARTICLE 11 TERMINATION.......................................................37
Section 11.01. Termination..........................................37
Section 11.02. Effect of Termination................................38
ARTICLE 12 MISCELLANEOUS.....................................................38
Section 12.01. Notices..............................................38
Section 12.02. Survival of Representations and Warranties...........40
Section 12.03. Amendments; No Waivers...............................40
Section 12.04. Expenses.............................................40
Section 12.05. Successors and Assigns; Benefit......................40
Section 12.06. Governing Law........................................41
Section 12.07. Counterparts; Effectiveness..........................41
Exhibit A Form of Affiliate's Agreement
Exhibit B MTHM Tax Opinion
Exhibit C Tax Representation Letter
Exhibit D Tax Representation Letter
Exhibit E Wachtell Tax Opinion
Exhibit F Tax Representation Letter
Exhibit G Tax Representation Letter
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of December __, 2000 among IBP, inc.,
a Delaware corporation (the "Company"), Tyson Foods, Inc., a Delaware
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corporation ("Parent"), and Lasso Acquisition Corporation, a Delaware
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corporation and a wholly-owned subsidiary of Parent ("Merger Co.").
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W I T N E S S E T H:
WHEREAS, (i) on December 12, 2000, Parent and Merger Co. commenced a tender
offer (the "Offer") to acquire 50.1% (the "Maximum Amount") of the issued and
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outstanding shares of Common Stock, par value $0.05 per share, of the Company
("Company Common Stock") for $26.00 per share (such amount, or any greater
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amount per share paid pursuant to the Offer, the "Per Share of Company Common
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Stock Amount") net to the seller in cash and (ii) on December 12, 2000, Parent
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and Merger Co. filed with the Securities and Exchange Commission (the "SEC") a
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Tender Offer Statement on Form TO, (together with all amendments and supplements
thereto, the "Form TO") promulgated under the Securities Exchange Act of 1934,
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as amended (such Act and the rules and regulations promulgated thereunder being
referred to herein as the "Exchange Act"), which Form TO included an offer to
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purchase (the "Offer to Purchase");
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[WHEREAS, on December __, 2000, the Company filed with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 promulgated under the
Exchange Act (together with all amendments and supplements thereto, the
"Schedule 14D-9") containing the recommendation of the Board of Directors of the
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Company.]
WHEREAS, the Boards of Directors of Parent, Merger Co. and the Company have
each determined that it is advisable and in the best interests of their
respective stockholders to consummate, and have approved, the business
combination transaction provided for herein including the offer and the Merger
(as defined in Section 3.01); and
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WHEREAS, Parent and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the transactions
contemplated by this Agreement and also to prescribe certain conditions to the
consummation of such transactions;
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements herein contained, the parties hereto agree
as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. Each of the following terms is defined in the
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Section set forth opposite such term:
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TERM SECTION
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Acquisition Proposal 7.04
Amended Offer to Purchase 2.01
Average Parent Common Stock Price 3.03
Balance Sheet 5.08
Balance Sheet Date 5.08
Code 5.14
Company Common Stock recitals
Company Disclosure Documents 5.09
Company Option 3.04
Company Proxy Statement 5.09
Company Stockholder Meeting 7.02
Company Securities 5.05
Company 10-K 5.07
Company 10-Qs 5.07
Confidentiality Agreement 8.02
Control Date 2.03
Delaware Law 2.02
Effective Time 3.01
Employee Plans 5.14
Environmental Laws 5.19
Environmental Permits 5.19
ERISA 5.14
ERISA Affiliate 5.14
Exchange Act recitals
Exchange Agent 3.03
Exchange Ratio 3.02
Form S-4 9.01
Form TO recitals
Form TO/A 2.01
Hazardous Substances 5.19
HSR Act 5.03
Independent Directors 2.03
Intellectual Property Right 5.18
International Plan 5.14
Lien 5.04
Material Adverse Effect 5.01
Maximum Amount recitals
Merger 3.01
Merger Consideration 3.02
Minimum Condition 2.01
Multiemployer Plan 5.14
NYSE 3.02
Offer recitals
Offer Documents 2.01
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TERM SECTION
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Offer to Purchase recitals
Option 3.04
Parent Balance Sheet 6.06
Parent Balance Sheet Date 6.06
Parent Common Stock 3.02
Parent Disclosure Documents 6.08
Parent Option 3.04
Parent 10-K 6.05
Payment Event 7.04
Permits 5.17
Per Share of Company Common Stock Amount Recitals
Person 3.03 and 7.04
Pre-Closing Tax Period 5.13
Preferred Stock 5.05
Rawhide Merger Agreement 2.02
Representatives 7.03
Returns 5.13
[Schedule 14D-9 [recitals/2.02]
SEC recitals
Securities Act 5.07
Special Committee 2.02
Stockholders recitals
Subsidiary 5.06
Subsidiary Securities 5.06
Superior Proposal 7.04
Surviving Corporation 3.01
Tax 5.13
Tax Asset 5.13
368(a) Reorganization 7.06
Title IV Plan 5.14
ARTICLE 2
THE OFFER
2.01 The Offer. (a) Provided that this Agreement shall not have been
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terminated in accordance with Section 11.01 and none of the events set forth in
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Annex I hereto shall have occurred and be continuing, as promptly as
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practicable, but in no event later than one business day, after the date hereof,
Parent shall cause Merger Co. to, and Merger Co. shall, file with the SEC, to
the extent required by the Exchange Act, an amended Form TO (the "Form TO/A"),
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an amended Offer to Purchase (the "Amended Offer to Purchase") and, if
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necessary, the related letter of transmittal and any related summary
advertisement (the Form TO/A, the Amended Offer to Purchase and such other
documents, together with all amendments and supplements thereto, the "Offer
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Documents"). The obligation of Merger Co. to consummate the Offer and to accept
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for
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payment and to pay for shares of Company Common Stock tendered pursuant to the
Offer shall be subject only to (i) the condition that there shall be validly
tendered in accordance with the terms of the Offer, prior to the expiration date
of the Offer and not withdrawn, a number of shares that, together with the
shares of Company Common Stock then owned by Parent and/or Merger Co.,
represents 50.1% of the shares of Company Common Stock outstanding (the "Minimum
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Condition") and (ii) the other conditions set forth in Annex I hereto. Merger
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Co. expressly reserves the right to waive any such condition (other than the
Minimum Condition) or the condition relating to the expiration of the HSR Act,
to increase the Per share of Company Common Stock Amount and to make any other
changes in the terms and conditions of the Offer. Notwithstanding the foregoing,
no change may be made which (i) decreases the Per share of Company Common Stock
Amount, (ii) changes the form of consideration to be paid in the Offer, (iii)
increases the Maximum Amount or the Minimum Condition, (iv) reduces the number
of shares of Company Common Stock sought to be purchased in the Offer, (v)
imposes conditions to the Offer in addition to those set forth in Annex I
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hereto, (vi) extends the expiration date of the Offer or (vii) otherwise alters
or amends any term of the Offer in any manner adverse to the holders of shares
of Company Common Stock; provided, however, that (x) Merger Co. may waive the
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Minimum Condition or (y) the Offer may be extended (1) for any period to the
extent required by law or by any rule, regulation, interpretation or position of
the Securities and Exchange Commission (the "SEC") or the staff thereof
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applicable to the Offer, and (2) for up to 60 business days after the initially
scheduled expiration date if upon any expiration of the Offer any condition to
the Offer shall not be satisfied and there is a reasonable basis to believe that
such condition could be satisfied within such 60 business day period. If at the
expiration date of the Offer a number of shares of Company Common Stock has been
validly tendered and not withdrawn that, together with the shares of Company
Common Stock then owned by Parent and/or Merger Co., exceeds the Maximum Amount,
the number of shares of Company Common Stock to be purchased by Merger Co.
pursuant to the Offer shall be prorated in accordance with Rule 14d-8
promulgated under the Exchange Act, so that the number of shares of Company
Common Stock purchased by Merger Co. pursuant to the Offer, together with the
shares of Company Common Stock then owned by Parent and Merger Co., will
represent 50.1% of the shares of Company Common Stock outstanding. Assuming the
prior satisfaction or waiver of the conditions of the Offer and subject to the
foregoing right to extend the Offer, Merger Co. shall pay for shares of Company
Common Stock tendered pursuant to the Offer as soon as practicable after
termination thereof.
(b) As soon as practicable following the filing of the Form TO/A with the
SEC, Merger Co. shall take such steps as are reasonably necessary to cause the
Amended Offer to Purchase to be disseminated to the holders of shares of Company
Common Stock as and to the extent required by applicable federal securities
laws. Parent, Merger Co. and the Company shall correct promptly any information
provided by any of them for use in the Offer Documents which shall have become
false or misleading, and Parent and Merger Co. shall take all steps necessary to
cause the Form TO/A as so corrected to be filed with the SEC and the other Offer
Documents as so corrected to be disseminated to holders of shares of Company
Common Stock, in each case as and to the extent required by applicable federal
securities laws. The Company and its counsel shall be given an opportunity to
review and comment on the Offer Documents prior to their being filed with the
SEC, and Parent and Merger Co. will provide the Company and its counsel in
writing with any
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comments that Parent or Merger Co. receives from the SEC or its staff with
respect to the Offer Documents promptly after receipt of any such comments.
(c) Parent shall provide or cause to be provided to Merger Co. on a timely
basis the funds necessary to accept for payment, and pay for, any shares of
Company Common Stock that Merger Co. becomes obligated to accept for payment,
and pay for, pursuant to the Offer.
2.02 Company Actions. (a) The Company hereby approves and consents to the
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Offer and represents that (i) the Board of Directors of the Company and acting
on the unanimous recommendation of a special committee of the Board of Directors
of the Company comprised of all members of the Board of Directors other than
Messrs. Bond, Chalsty, Lemon and Peterson (the "Special Committee"), at a
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meeting duly called and held, has, with Messrs. Bond, Chalsty, Lemon and
Peterson obstaining, [unanimously] (A) determined that this Agreement and the
transactions contemplated hereby, including the Offer and the Merger, taken
together, are fair to and in the best interests of the holders of shares of
Company Common Stock, (B) approved this Agreement and the transactions
contemplated hereby, including the Merger, which approval satisfies in full the
requirements of Section 203 of the General Corporation Law of the State of
Delaware (the "Delaware Law") with respect to the transactions contemplated
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hereby, (C) resolved to recommend that the stockholders of the Company accept
the Offer, tender their shares of Company Common Stock thereunder to Merger Co.
and, if required by applicable law in order to consummate the Merger, approve
and adopt this Agreement and the transactions contemplated hereby and (ii) the
Company has provided the applicable notice of termination to Rawhide Holdings
Corporation required by Section 10.1(e) of the Agreement and Plan of Merger,
dated as of October 1, 2000 among the Company, Rawhide Holdings Corporation and
Rawhide Acquisition Corporation ("Rawhide Merger Agreement"). The Company hereby
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consents to the inclusion in the Offer Documents of the recommendation of the
Board described in the immediately preceding sentence. The Company has been
advised by each of its directors and executive officers that they intend either
to tender all shares of Company Common Stock beneficially owned by them to
Merger Co. pursuant to the Offer or to vote such shares of Company Common Stock
in favor of the approval and adoption of the transactions contemplated hereby.
The Company further represents that J.P. Morgan Securities Inc. has delivered to
the Company's Board of Directors its written opinion that the consideration to
be paid in the Merger is fair to the holders of shares of Company Common Stock,
from a financial point of view.
(b) On the date the Offer Documents are filed with the SEC, the Company
shall file with the SEC [a Solicitation/Recommendation Statement on Schedule
14D-9 promulgated under the Exchange Act (together with all amendments and
supplements thereto, the "Schedule 14D-9")] [an amended Schedule 14D-9 (the
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"Schedule 14D-9/A")] containing the recommendation of the Board of Directors of
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the Company described in Section 2.02(a), and shall take such steps as are
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necessary to cause the Schedule 14D-9[/A] to be disseminated to the holders of
shares of Company Common Stock as and to the extent required by applicable
federal securities laws. The Company, Parent and Merger Co. shall correct
promptly any information provided by any of them for use in the Schedule
14D-9[/A] which shall have become false or misleading, and the Company shall
take all steps necessary to cause the Schedule 14D-9[/A] as so corrected to be
filed with the SEC and disseminated to holders of shares of Company Common
Stock, in each case as and to the extent required by applicable federal
securities laws. Parent and its counsel shall be given an
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opportunity to review and comment on the Schedule 14D-9[/A] prior to its being
filed with the SEC, and the Company will provide Parent and its counsel in
writing with any comments that the Company receives from the SEC or its staff
with respect to the Schedule 14D-9[/A] promptly after receipt of any such
comments.
(c) In connection with the Offer, the Company shall cause its transfer
agent to furnish Merger Co. promptly with mailing labels containing the names
and addresses of all record holders of shares of Company Common Stock and with
security position listings of shares of Company Common Stock held in stock
depositories, each as of a recent date, together with all other available
listings and computer files containing names, addresses and security position
listings of record holders and beneficial owners of shares of Company Common
Stock. The Company shall furnish Merger Co. with such additional information,
including, without limitation, updated listings and files of stockholders,
mailing labels and security position listings and such other assistance as
Parent, Merger Co. or their agents may reasonably request in communicating the
Offer to record and beneficial holders of shares of Company Common Stock.
Subject to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Offer or the Merger, Parent and Merger Co. shall hold in
confidence the information contained in such labels, listings and files, shall
use such information only in connection with the Offer and the Merger, and, if
this Agreement shall be terminated in accordance with Section 11.01, shall
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deliver to the Company all copies of, and any extracts or summaries from, such
information then in their possession or control.
(d) In connection with the Offer, the Company will furnish Parent with such
information (which will be treated and held in confidence by Parent) and
assistance as Parent or its Representatives may reasonably request in connection
with the preparation of the Offer and communicating the Offer to the record and
beneficial holders of shares of Company Common Stock.
2.03 Company Board Representation; Section 14(f). (a) Subject to compliance
-------------------------------------------
with Delaware Law, the Company's Certificate of Incorporation and other
applicable law, promptly upon the payment by Merger Co. for shares of Company
Common Stock purchased pursuant to the Offer, and from time to time thereafter,
the Company shall, upon request of Parent, promptly use its best efforts to take
all actions necessary to cause a majority of the directors of the Company to
consist of Parent's designees, including by accepting the resignations of those
incumbent directors designated by the Company or increasing the size of the
Board of Directors and causing Parent's designees to be elected. The date on
which Parent's designees constitute at least a majority of the Company's Board
of Directors is herein referred to as the "Control Date."
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(b) The Company's obligations to appoint Parent's designees to the Board of
Directors of the Company shall be subject to Section 14(f) of the Exchange Act
and Rule 14f-1 promulgated thereunder, if applicable. The Company shall promptly
take all actions required pursuant to such Section and Rule in order to fulfill
its obligations under this Section, and shall include in the Schedule 14D-9[/A]
such information with respect to the Company and its officers and directors as
is required under such Section and Rule to fulfill such obligations. Parent or
Merger Co. shall supply to the Company and be solely responsible for any
information with
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respect to either of them and their designees, officers, directors and
affiliates required by such Section 14(f) and Rule 14f-1.
(c) Following the election of designees of Parent pursuant to this Section
and prior to the Effective Time, any amendment of this Agreement or the
Certificate of Incorporation or Bylaws of the Company, any termination of this
Agreement by the Company, any extension by the Company of the time for the
performance of any of the obligations or other acts of Parent or Merger Co. or
waiver of any of the Company's rights hereunder shall require the concurrence of
a majority of the directors of the Company then in office who (i) neither were
designated by Parent nor are employees of the Company or any of its Subsidiaries
or, if there be just one such director, the concurrence of such director or (ii)
were a member of the Special Committee (the "Independent Directors"). If the
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number of Independent Directors shall be reduced below two for any reason
whatsoever, the remaining Independent Director shall designate a person to fill
such vacancy who shall be deemed to be an Independent Director for purposes of
this Agreement or, if no Independent Directors then remain, the other directors
shall designate two persons to fill such vacancies who shall not be officers or
affiliates of the Company or any of its Subsidiaries, or officers or affiliates
of Parent or any of its Subsidiaries, and such persons shall be deemed to be
Independent Directors for purposes of this Agreement. The Independent Directors
shall have the authority to retain such counsel and other advisors at the
expense of the Company as are reasonably appropriate to the exercise of their
duties in connection with this Agreement, subject to approval by the Company of
the terms of such retention, which approval shall not be unreasonably withheld.
In addition, the Independent Directors shall have the authority to institute any
action, on behalf of the Company, to enforce performance of this Agreement.
ARTICLE 3
THE MERGER
Section 3.01. The Merger. (a) At the Effective Time (as defined below), the
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Company shall be merged with (the "Merger") and into Merger Co. in accordance
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with Delaware Law (as defined below), whereupon the separate existence of the
Company shall cease, and Merger Co. shall be the surviving corporation and
wholly-owned subsidiary of Parent (the "Surviving Corporation").
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(b) As soon as practicable after satisfaction or, to the extent permitted
hereunder, waiver of all conditions to the Merger, the Company and Merger Co.
will file a certificate of merger with the Secretary of State of the State of
Delaware and make all other filings or recordings required by Delaware Law in
connection with the Merger. The consummation of the Merger being the "Closing"
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and the date such occurs being the "Closing Date." The Merger shall become
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effective at such time as the certificate of merger is duly filed with the
Secretary of State of the State of Delaware or at such later date or time as is
specified in the certificate of merger (the "Effective Time").
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(c) From and after the Effective Time, the Surviving Corporation shall
possess all the property, rights, privileges, immunities, powers and franchises
and be subject to all of the debts,
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liabilities, obligations, restrictions, disabilities and duties of the Company
and Merger Co., all as provided under Delaware Law.
Section 3.02. Conversion of Shares. At the Effective Time:
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(a) each share of Company Common Stock held by the Company or any
Subsidiary as treasury stock or owned by Parent or any subsidiary of Parent
immediately prior to the Effective Time shall be canceled, and no payment
shall be made with respect thereto;
(b) each share of common stock, par value $0.05 per share, of Merger
Co. outstanding immediately prior to the Effective Time shall be converted
into and become one share of common stock, par value $0.05 per share, of
the Surviving Corporation with the same rights, powers and privileges as
the shares so converted; and
(c) each share of Company Common Stock outstanding immediately prior
to the Effective Time shall, except as otherwise provided in Section
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3.02(a), be converted into the right to receive from Parent a number of
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shares (the "Merger Consideration") of Class A Common Stock, par value
--------------------
$0.10 per share, of Parent ("Parent Common Stock"), determined as set forth
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below (the "Exchange Ratio"):
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(i) If the Average Parent Common Stock Price is equal to or greater
than $15.40, the Exchange Ratio shall be 1.688 shares of Parent
Common Stock;
(ii) If the Average Parent Common Stock Price is less than $15.40 and
greater than $12.60, the Exchange Ratio shall be determined by
dividing $26.00 by the Average Parent Common Stock Price; and
(iii) If the Average Parent Common Stock Price is equal to or less
than $12.60, the Exchange Ratio shall be 2.063 shares of Parent
Common Stock.
For purposes of this Section 3.02, "Average Parent Common Stock Price" means the
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average of the closing price per share of Parent Common Stock on the New York
Stock Exchange, Inc. (the "NYSE") at the end of the regular session as reported
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on the Consolidated Tape, Network A for the fifteen consecutive trading days
ending on the fifth trading day immediately preceding the Effective Time.
Section 3.03. Surrender and Payment. (a) Prior to the Effective Time,
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Parent shall appoint an agent (the "Exchange Agent") for the purpose of
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exchanging certificates representing shares of Company Common Stock for the
Merger Consideration. Parent shall cause Merger Co. to make available to the
Exchange Agent, as soon as reasonably practicable as of or after the Effective
Time, the Merger Consideration to be delivered in respect of the shares of
Company Common Stock. Promptly after the Effective Time, the Surviving
Corporation will send, or will cause the Exchange Agent to send, to each holder
of shares of Company Common Stock at the Effective Time a letter of transmittal
for use in such exchange (which shall specify that the
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delivery shall be effected, and risk of loss and title shall pass, only upon
proper delivery of the certificates representing shares of Company Common Stock
to the Exchange Agent).
(b) Each holder of shares of Company Common Stock that have been converted
into a right to receive the Merger Consideration, upon surrender to the Exchange
Agent of a certificate or certificates representing such shares of Company
Common Stock, together with a duly executed and properly completed letter of
transmittal covering such shares of Company Common Stock, will be entitled to
receive the Merger Consideration in exchange for such shares of Company Common
Stock. Until so surrendered, each such certificate shall, after the Effective
Time, represent for all purposes, only the right to receive such Merger
Consideration.
(c) If any portion of the Merger Consideration is to be delivered to a
Person other than the registered holder of the shares of Company Common Stock
represented by the certificate or certificates surrendered in exchange therefor,
it shall be a condition to such delivery that the certificate or certificates so
surrendered shall be properly endorsed or otherwise be in proper form for
transfer and that the Person requesting such delivery shall pay to the Exchange
Agent any transfer or other taxes required as a result of such delivery to a
Person other than the registered holder of such shares of Company Common Stock
or establish to the satisfaction of the Exchange Agent that such tax has been
paid or is not payable. For purposes of this Agreement, "Person" means an
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individual, a corporation, a limited liability company, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or any agency or instrumentality thereof.
(d) After the Effective Time, there shall be no further registration of
transfers of shares of Company Common Stock. If, after the Effective Time,
certificates representing shares of Company Common Stock are presented to the
Surviving Corporation, they shall be canceled and exchanged for the
consideration provided for, and in accordance with the procedures set forth, in
this Article 3.
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(e) Any portion of the Merger Consideration made available to the Exchange
Agent pursuant to Section 3.03(a) that remains unclaimed by the holders of
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shares of Company Common Stock six months after the Effective Time shall be
returned to the Surviving Corporation, upon demand, and any such holder who has
not exchanged his shares of Company Common Stock for the Merger Consideration in
accordance with this Section prior to that time shall thereafter look only to
the Surviving Corporation for delivery of the Merger Consideration in respect of
his shares of Company Common Stock. Notwithstanding the foregoing, the Surviving
Corporation shall not be liable to any holder of shares of Company Common Stock
for any amount paid to a public official pursuant to applicable abandoned
property laws. Any shares of Parent Common Stock or amounts remaining unclaimed
by holders of shares of Company Common Stock two years after the Effective Time
(or such earlier date immediately prior to such time as such amounts would
otherwise escheat to or become property of any governmental entity) shall, to
the extent permitted by applicable law, become the property of the Surviving
Corporation free and clear of any claims or interest of any Person previously
entitled thereto.
Section 3.04. Stock Options. (a) At or immediately prior to the Effective
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Time, each employee stock option or director stock option to purchase Shares
outstanding under any
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Company stock option plans, whether or not vested or exercisable (each, a
"Company Option") shall, by virtue of the Merger and without any further action
--------------
on the part of any holder thereof, be assumed by Parent and deemed to constitute
an option (each, a "Parent Option") to acquire, on the same terms and conditions
-------------
as were applicable under such Company Option (subject to Section 3.04(b)), the
---------------
same number of shares of Parent Common Stock as the holder of such Company
Option would have been entitled to receive pursuant to Section 3.02(c) of this
---------------
Agreement had such holder exercised such Company Option in full immediately
prior to the Effective Time (rounded 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 share of Company Common Stock otherwise purchasable
pursuant to such Company Option divided by (y) the number of whole shares of
Parent Common Stock purchasable pursuant to the Parent Option in accordance with
the foregoing. The other terms of each such Company Option, and the plans under
which they were issued, shall continue to apply in accordance with their terms.
[Subject to further discussion.].
(b) Prior to the Effective Time, the Company shall (i) obtain any consents
from holders of Company Options and (ii) make any amendments to the terms of
such Company Options or Company stock option plans that, in the case of either
clauses (i) or (ii), are necessary or appropriate to give effect to the
transactions contemplated by Section 3.04(a); provided, however, that lack of
--------------- -------- -------
consent of any holder of a Company Option shall in no way affect the obligations
of the parties to consummate the Merger.
(c) At or prior to the Effective Time, Parent shall take all corporate
action necessary to reserve for issuance a sufficient number of shares of Parent
Common Stock for delivery upon exercise of the Parent Options. At or prior to
the Effective Time, Parent shall file a registration statement on Form S-8, with
respect to the shares of Parent Common Stock subject to such Parent Options.
Section 3.05. Withholding Rights. Each of the Surviving Corporation and
------------------
Parent shall be entitled to deduct and withhold from the consideration otherwise
deliverable to any Person pursuant to this Article 3 such amount as it is
---------
required to deduct and withhold with respect to the making of such delivery
under any provision of federal, state, local or foreign tax law. If the
Surviving Corporation or Parent, as the case may be, so withholds amounts, such
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the shares of Company Common Stock in respect of which the
Surviving Corporation or Parent made such deduction and withholding.
ARTICLE 4
THE SURVIVING CORPORATION
Section 4.01. Certificate of Incorporation. The certificate of
----------------------------
incorporation of Merger Co. in effect at the Effective Time shall be the
certificate of incorporation of the Surviving Corporation until amended in
accordance with applicable law.
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<PAGE>
Section 4.02. Bylaws. The bylaws of Merger Co. in effect at the Effective
------
Time shall be the bylaws of the Surviving Corporation until amended in
accordance with applicable law.
Section 4.03. Directors and Officers. From and after the Effective Time,
----------------------
until successors are duly elected or appointed and qualified in accordance with
applicable law, (a) the directors of Merger Co. at the Effective Time shall be
the directors of the Surviving Corporation, and (b) the officers of the Company
at the Effective Time shall be the officers of the Surviving Corporation.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent as of the date hereof and as
of the Effective Time that:
Section 5.01. Corporate Existence and Power. The Company is a corporation
-----------------------------
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted. The Company 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 for those jurisdictions where the
failure to be so qualified would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the condition
(financial or otherwise), business, assets, liabilities or results of operations
of the Company and the Subsidiaries taken as a whole ("Material Adverse
----------------
Effect"). The Company has heretofore delivered to Parent true and complete
------
copies of the Company's certificate of incorporation and bylaws as currently in
effect.
Section 5.02. Corporate Authorization. The execution, delivery and
-----------------------
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby are within the Company's corporate
powers and, except for the approval by the Company's stockholders by a majority
vote in connection with the consummation of the Merger, have been duly
authorized by all necessary corporate and stockholder action under the Company's
constituent documents and Delaware Law. This Agreement constitutes a valid and
binding agreement of the Company.
Section 5.03. Governmental Authorization. The execution, delivery and
--------------------------
performance by the Company of this Agreement and the consummation of the Merger
by the Company require no action by or in respect of, or filing with, any
governmental body, agency, official or authority other than (a) the filing of a
certificate of merger in accordance with Delaware Law; (b) compliance with any
applicable requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
1976 (the "HSR Act"); and (c) compliance with any applicable requirements of the
-------
Exchange Act.
Section 5.04. Non-Contravention. Except as set forth in Schedule 5.04, the
-----------------
execution, delivery and performance by the Company of this Agreement and the
consummation by the
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<PAGE>
Company of the transactions contemplated hereby do not and will not (a)
contravene or conflict with the certificate of incorporation or bylaws of the
Company, (b) assuming compliance with the matters referred to in Section 5.03,
------------
contravene or conflict with or constitute a violation of any provision of any
law, regulation, judgment, writ, injunction, order or decree of any court or
governmental authority binding upon or applicable to the Company or any
Subsidiary or any of their properties or assets, (c) constitute a default under
or give rise to a right of termination, cancellation or acceleration of any
right or obligation of the Company or any Subsidiary or to a loss of any benefit
to which the Company or any Subsidiary is entitled under any provision of any
material agreement, contract or other instrument binding upon the Company or any
Subsidiary or any license, franchise, permit or other similar authorization held
by the Company or any Subsidiary, or (d) result in the creation or imposition of
any Lien on any asset of the Company or any Subsidiary, except, in the case of
clauses (b) and (d) of this Section 5.04, for any such violation, failure to
------------
obtain any such consent or other action, default, right, loss or Lien that would
not, individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect. For purposes of this Agreement, "Lien" means, with respect to
----
any asset, any mortgage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such asset. The Rawhide Merger Agreement has been
terminated, is void and of no effect and the Company has no liabilities or
obligations thereunder.
Section 5.05. Capitalization. The authorized capital stock of the Company
--------------
consists of 200,000,000 shares of Company Common Stock and 25,000,000 shares of
preferred stock, par value $1.00 per share (the "Preferred Stock"). As of the
---------------
close of business on [December ___, 2000], there were outstanding [105,575,778]
shares of Common Stock and no shares of Preferred Stock. As of the close of
business on [December ___, 2000], there were outstanding stock options to
purchase an aggregate of [4,986,039] shares of Company Common Stock (of which
options to purchase an aggregate of [2,541,525] shares of Company Common Stock
were exercisable). All outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and nonassessable.
Except as set forth in Schedule 5.05 and this Section and except for changes
-------------
since December ___, 2000 resulting from the exercise of employee stock options
outstanding on such date, there are outstanding (a) no shares of capital stock
or other voting securities of the Company, (b) no securities of the Company
convertible into or exchangeable for shares of capital stock or voting
securities of the Company, and (c) no options or other rights to acquire from
the Company or any Subsidiary, and no obligation of the Company or any
Subsidiary to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of the
Company (the items in clauses (a), (b) and (c) of this Section 5.05 being
------------
referred to collectively as the "Company Securities"). There are no outstanding
------------------
obligations of the Company or any Subsidiary to repurchase, redeem or otherwise
acquire any Company Securities.
Section 5.06. Subsidiaries. (a) Each Subsidiary is a corporation duly
------------
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, has all corporate powers 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, except for those jurisdictions where failure
to be so qualified would not, individually or in the aggregate,
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<PAGE>
reasonably be expected to have a Material Adverse Effect. For purposes of this
Agreement, "Subsidiary" means 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 the Company and/or one or more Subsidiaries.
All Subsidiaries and their respective jurisdictions of incorporation are
identified in Schedule 5.06.
-------------
(b) Except as set forth in Schedule 5.06, all of the outstanding capital
-------------
stock of, or other ownership interests in, each Subsidiary, is owned by the
Company, directly or indirectly, free and clear of any Lien and free of any
other limitation or restriction (including any restriction on the right to vote,
sell or otherwise dispose of such capital stock or other ownership interests).
There are no outstanding (i) securities of the Company or any Subsidiary
convertible into or exchangeable for shares of capital stock or other voting
securities or ownership interests in any Subsidiary, and (ii) options or other
rights to acquire from the Company or any Subsidiary, and no other obligation of
the Company or any Subsidiary to issue, any capital stock, voting securities or
other ownership interests in, or any securities convertible into or exchangeable
for any capital stock, voting securities or ownership interests in, any
Subsidiary (the items in clauses (i) and (ii) of this Section 5.06(b) being
---------------
referred to collectively as the "Subsidiary Securities"). There are no
---------------------
outstanding obligations of the Company or any Subsidiary to repurchase, redeem
or otherwise acquire any outstanding Subsidiary Securities.
Section 5.07. SEC Filings. (a) The Company has delivered to Parent (i) the
-----------
Company's annual report on Form 10-K for the year ended December 25, 1999 (the
"Company 10-K"), (ii) its quarterly report on Form 10-Q for its fiscal quarter
------------
ended September 23, 2000, its quarterly report on Form 10-Q for its fiscal
quarter ended June 24, 2000 (as amended) and its quarterly report on Form 10-Q
for its fiscal quarter ended March 25, 2000 (together, the "Company 10-Qs"),
-------------
(iii) its proxy or information statements relating to meetings of, or actions
taken without a meeting by, the stockholders of the Company held since January
1, 1998, and (iv) all of its other reports, statements, schedules and
registration statements filed with the SEC since January 1, 1998.
(b) As of its filing date, each such report or statement filed pursuant to
the Exchange Act did not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.
(c) Each such registration statement, as amended or supplemented, if
applicable, filed pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), as of the date such statement or amendment became effective
--------------
did not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading.
Section 5.08. Financial Statements. The audited consolidated financial
--------------------
statements of the Company included in the Company 10-K and the unaudited
consolidated financial statements of the Company included in the Company 10-Qs
each fairly present, in conformity with generally accepted accounting principles
applied on a consistent basis (except as may be indicated in the
-13-
<PAGE>
notes thereto), the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates thereof and their consolidated results
of operations and changes in financial position for the periods then ended
(subject to normal year-end adjustments in the case of any unaudited interim
financial statements). For purposes of this Agreement, "Balance Sheet" means the
-------------
consolidated balance sheet of the Company as of December 25, 1999 set forth in
the Company 10-K and "Balance Sheet Date" means December 25, 1999.
------------------
Section 5.09. Disclosure Documents. (a) Each document required to be filed
--------------------
by the Company with the SEC in connection with the transactions contemplated by
this Agreement (the "Company Disclosure Documents"), including, without
----------------------------
limitation, (i) the Schedule 14D-9 (including information required by Rule 14F-1
under the Exchange Act) and (ii) the proxy or information statement of the
Company containing information required by Regulation 14A under the Exchange Act
(the "Company Proxy Statement"), if any, to be filed with the SEC in connection
-----------------------
with the Offer or the Merger and any amendments or supplements thereto will,
when filed, comply as to form in all material respects with the applicable
requirements of the Exchange Act except that no representation or warranty is
made hereby with respect to any information furnished to the Company by Parent
in writing specifically for inclusion in the Company Disclosure Documents.
(b) At the time the Schedule 14D-9[/A] and the Company Proxy Statement or
any amendment or supplement thereto is first mailed to stockholders of the
Company, and, with respect to the Company Proxy Statement only, at the time such
stockholders vote on adoption of this Agreement and at the Effective Time, the
Schedule 14D-9[/A] and the Company Proxy Statement, as supplemented or amended,
if applicable, will not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. At the time of the filing of any Company Disclosure Document other
than the Company Proxy Statement and at the time of any distribution thereof,
such Company Disclosure Document will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties contained in this
Section 5.09(b) will not apply to statements or omissions included in the
---------------
Company Disclosure Documents based upon information furnished to the Company in
writing by Parent specifically for use therein.
(c) Neither the information with respect to the Company or any Subsidiary
that the Company furnishes in writing to Parent specifically for use in the
Parent Disclosure Documents (as defined in Section 9.01) nor the information
------------
incorporated by reference from documents filed by the Company with the SEC or
any other governmental or regulatory authority will, at the time of the filing
thereof, at the time of any distribution thereof and at the time of the meeting
of the Company's stockholders, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
Section 5.10. Absence of Certain Changes. Except as set forth in Schedule
-------------------------- --------
5.10 hereto, the Company 10-K or the Company 10-Qs, since the Balance Sheet
----
Date, the Company and the
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<PAGE>
Subsidiaries have conducted their business in the ordinary course consistent
with past practice and there has not been:
(a) any event, occurrence or development of a state of circumstances
or facts which has had or reasonably could be expected to have a Material
Adverse Effect;
(b) other than regular quarterly dividends in an amount not in excess
of $.025 per share per quarter, any declaration, setting aside or payment
of any dividend or other distribution with respect to any shares of capital
stock of the Company, or any repurchase, redemption or other acquisition by
the Company or any Subsidiary of any outstanding shares of capital stock or
other securities of, or other ownership interests in, the Company or any
Subsidiary;
(c) any amendment of any material term of any outstanding security of
the Company or any Subsidiary that could reasonably be expected to be
materially adverse to the Company;
(d) any incurrence, assumption or guarantee by the Company or any
Subsidiary of any indebtedness for borrowed money other than in the
ordinary course of business and in amounts and on terms consistent with
past practices;
(e) any creation or assumption by the Company or any Subsidiary of any
material Lien on any material asset other than in the ordinary course of
business consistent with past practices;
(f) any making of any material loan, advance or capital contributions
to or investment in any Person other than loans, advances or capital
contributions to or investments in wholly-owned Subsidiaries made in the
ordinary course of business consistent with past practices;
(g) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of the Company or
any Subsidiary which, individually or in the aggregate, has had or would
reasonably be expected to have a Material Adverse Effect;
(h) any transaction or commitment made, or any contract or agreement
entered into, by the Company or any Subsidiary relating to its assets or
business (including the acquisition or disposition of any assets) or any
relinquishment by the Company or any Subsidiary of any contract or other
right, in either case, that has had or would reasonably be expected to have
a Material Adverse Affect, other than transactions and commitments in the
ordinary course of business consistent with past practice and those
contemplated by this Agreement;
(i) any change in any method of accounting or accounting practice by
the Company or any Subsidiary, except for any such change required by
reason of a concurrent change in generally accepted accounting principles;
-15-
<PAGE>
(j) any (i) grant of any severance or termination pay to any director
or executive officer of the Company or any Subsidiary, (ii) entering into
of any employment, deferred compensation or other similar agreement (or any
amendment to any such existing agreement) with any director or executive
officer of the Company or any Subsidiary, (iii) material increase in
benefits payable under any existing severance or termination pay policies
or employment agreements or (iv) increase in compensation, bonus or other
benefits payable to directors, officers or employees of the Company or any
Subsidiary, other than in the case of clauses (iii) and (iv) in the
ordinary course of business consistent with past practice;
(k) any labor dispute, other than routine individual grievances, or
any activity or proceeding by a labor union or representative thereof to
organize any employees of the Company or any Subsidiary, which employees
were not subject to a collective bargaining agreement at the Balance Sheet
Date, or any lockouts, strikes, slowdowns, work stoppages or threats
thereof by or with respect to such employees which have had or could
reasonably be expected to have a Material Adverse Effect; or
(l) any cancellation of any licenses, sublicenses, franchises, permits
or agreements to which the Company or any Subsidiary is a party, or any
notification to the Company or any Subsidiary that any party to any such
arrangements intends to cancel or not renew such arrangements beyond its
expiration date as in effect on the date hereof, which cancellation or
notification, individually or in the aggregate, has had or reasonably could
be expected to have a Material Adverse Effect.
Section 5.11. No Undisclosed Material Liabilities. Except as set forth in
-----------------------------------
Schedule 5.11, the Company 10-K or the Company 10-Qs, there are no liabilities
-------------
of the Company or any Subsidiary of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, and there is no
existing condition, situation or set of circumstances which could reasonably be
expected to result in such a liability, other than:
(a) liabilities disclosed or provided for in the Balance Sheet;
(b) liabilities incurred in the ordinary course of business consistent
with past practice since the Balance Sheet Date or as otherwise
specifically contemplated by this Agreement;
(c) liabilities under this Agreement; and
(d) other liabilities which individually or in the aggregate do not
and could not reasonably be expected to have a Material Adverse Effect.
Section 5.12. Litigation. Except as set forth in Schedule 5.12, the Company
---------- -------------
10-K or the Company 10-Qs, there is no action, suit, investigation or proceeding
(or any basis therefor) pending against, or to the knowledge of the Company
threatened against or affecting, the Company or any Subsidiary or any of their
respective properties before any court or arbitrator or any governmental body,
agency or official which could reasonably be expected to have a Material
-16-
<PAGE>
Adverse Effect, or which as of the date hereof in any manner challenges or seeks
to prevent enjoin, alter or materially delay the Merger or any of the other
transactions contemplated hereby.
Section 5.13. Taxes. (a) Except as set forth in Schedule 5.13 or as would
----- -------------
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect:
(i) all Tax returns, statements, reports and forms (including
estimated Tax returns and reports and information returns and
reports) required to be filed with any taxing authority with
respect to any Tax period (or portion thereof) ending on or
before the Effective Time (a) "Pre-Closing Tax Period") by or on
----------------------
behalf of the Company or any Subsidiary of the Company
(collectively, the "Returns"), were filed when due (including
-------
any applicable extension periods) in accordance with all
applicable laws; as of the time of filing, the Returns were true
and complete in all material respects;
(ii) the Company and its Subsidiaries have timely paid, or withheld
and remitted to the appropriate Taxing authority, all Taxes
shown as due and payable on the Returns that have or should have
been filed;
(iii) the charges, accruals and reserves for Taxes with respect to the
Company and any Subsidiary for any Pre-Closing Tax Period or
Straddle Period (including any Pre-Closing Tax Period or
Straddle Period for which no Return has yet been filed)
reflected on the Balance Sheet (in addition to any provision for
deferred income Taxes) are adequate to cover such Taxes as of
the Balance Sheet Date. "Straddle Board" is any tax period
--------------
beginning before the Effective Time but ending after the
Effective Time.
(iv) there is no claim (including under any indemnification or
Tax-sharing agreement), audit, action, suit, proceeding, or
investigation now pending or threatened in writing against or in
respect of any Tax or "Tax asset" of the Company or any
Subsidiary. For purposes of this Section 5.13, the term "Tax
------------ ---
Asset" shall include any net operating loss, net capital loss,
-----
investment Tax credit, foreign Tax credit, charitable deduction
or any other credit or Tax attribute which could be carried
forward or back to reduce Taxes;
(v) there are no Liens for Taxes upon the assets of the Company or
its Subsidiaries except for Liens for current Taxes not yet due;
and
(vi) neither the Company nor any Subsidiary is currently under any
obligation to pay any amounts of the type described in clause
(ii) or (iii) of the definition of "Tax", regardless of whether
such Tax is imposed on the Company or any Subsidiary.
(b) For purposes of this Section 5.13, "tax" means (i) any tax,
------------ ---
governmental fee or other like assessment or charge of any kind whatsoever
(including, but not limited to, withholding
-17-
<PAGE>
on amounts paid to or by any Person), together with any interest, penalty,
addition to tax or additional amount imposed by any governmental authority
responsible for the imposition of any such tax (domestic or foreign), (ii) in
the case of the Company or any Subsidiary, liability for the payment of any
amount of the type described in clause (i) as a result of being or having been
before the Effective Time a member of an affiliated, consolidated, combined or
unitary group (other than such a group of which the Company or any of its
Subsidiaries is the common parent), or a party to any agreement or arrangement,
as a result of which liability of the Company or any Subsidiary to a taxing
authority is determined or taken into account with reference to the liability of
any other Person, and (iii) liability of the Company or any Subsidiary for the
payment of any amount as a result of being party to any tax sharing agreement or
with respect to the payment of any amount of the type described in (i) or (ii)
as a result of any existing express obligation (including, but not limited to,
an indemnification obligation).
Section 5.14. ERISA. (a) Schedule 5.14 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 (including any
self-insured arrangements), health or medical benefits, employee assistance
program, disability or sick leave 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 the Company or
any Subsidiary and covers any employee or former employee of the Company or any
Subsidiary, or with respect to which the Company or any Subsidiary has any
liability with respect to any employee or former employee of the Company or any
Subsidiary (other than any such plan, contract, policy or arrangement that is an
International Plan, as defined below). Copies of such plans (and, if applicable,
related trust or funding agreements or insurance policies) and all amendments
thereto and written interpretations thereof have been made available to Parent
together with the most recent annual report (Form 5500 including, if applicable,
Schedule B thereto) and tax return (Form 990) prepared in connection with any
such plan or trust. Such plans are referred to collectively herein as the
"Employee Plans". For purposes of this Section 5.14, "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 Internal Revenue Code of 1986, as
amended (the "Code").
----
(b) Schedule 5.14 separately identifies each Employee Plan that is subject
-------------
to Title IV of ERISA (other than a Multiemployer Plan, as defined below) (a
"Title IV Plan"). Schedule 5.14 separately identifies each Employee Plan which
------------- -------------
is a multiemployer plan, as defined in Section 3(37) of ERISA (a) "Multiemployer
-------------
Plan"). Except as would not reasonably be expected to have a Material Adverse
----
Affect, if a "complete withdrawal" by Seller and all of its ERISA Affiliates
were to occur as of the Effective Time with respect to all Multiemployer Plans,
to the knowledge of the Company, none of the Company, any Subsidiary or any of
their ERISA Affiliates would incur any withdrawal liability under Title IV of
ERISA. Neither the Company nor any ERISA Affiliate of the Company has incurred
any liability under Title IV of ERISA (other than for PBGC Premium not yet due).
-18-
<PAGE>
(c) A current favorable Internal Revenue Service determination letter is in
effect with respect to each Employee Plan which is intended to be qualified
under Section 401(a) of the Code (or the relevant remedial amendment period has
not expired with respect to such Employee Plan), and the Company knows of no
circumstance giving rise to a material likelihood that such letter could be
revoked by the Internal Revenue Service. The Company has made available to
Parent copies of the most recent Internal Revenue Service determination letters
with respect to each such Plan. Each Employee Plan has been maintained in
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 Employee Plan, other than any
non-compliance which would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect. No events have occurred with
respect to any Employee Plan that would reasonably be expected to result in
payment or assessment of any material excise taxes under Sections 4972, 4975,
4976, 4977, 4979, 4980B, 4980D, 4980E or 5000 of the Code, other than any excise
taxes which would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
(d) The consummation of the transactions contemplated by this Agreement
will not (either alone or together with any termination of employment) entitle
any employee or independent contractor of the Company or any Subsidiary to
severance pay or accelerate the time of payment or vesting or trigger any
payment of funding (through a grantor trust or otherwise) of material
compensation or benefits under, materially increase the amount payable or
trigger any other material obligation pursuant to, any Employee Plan.
(e) Neither the Company nor any Subsidiary has any liability in respect of
post-retirement health, medical or life insurance benefits for retired, former
or current employees of the Company or its Subsidiaries except for coverage
under Section 4980B of the Code or coverage the full cost of which is paid for
by the retired, former or current employee.
(f) There has been no amendment to, written interpretation or announcement
(whether or not written) by the Company or any of its Affiliates relating to, or
change in employee participation or coverage under, an Employee Plan which would
increase the expense of maintaining such Employee Plan above the level of the
expense incurred in respect thereof for the fiscal year ended December 25, 1999,
except for any such increase which would not reasonably be expected to have a
Material Adverse Effect.
(g) Neither the Company nor any Subsidiary is a party to or subject to, or
is currently negotiating in connection with entering into, any collective
bargaining agreement or other contract or understanding with a labor union or
labor organization.
(h) Except for any failures which would not be reasonably expected to have
a Material Adverse Effect, all contributions and payments accrued under each
Employee Plan, determined in accordance with prior funding and accrual
practices, as adjusted to include proportional accruals for the period ending as
of the date hereof, have been discharged and paid on or prior to the date hereof
except to the extent reflected as a liability on the Balance Sheet.
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<PAGE>
(i) Schedule 5.14(i) identifies each International Plan (as defined below)
----------------
covering 100 employees or more. The Company has furnished to Parent copies of
each International Plan. Each International Plan has been maintained in
compliance with its terms and with the requirements prescribed by any and all
applicable statutes, orders, rules and regulations (including any special
provisions relating to qualified plans where such Plan was intended to so
qualify) and has been maintained in good standing with applicable regulatory
authorities, other than any non-compliance which would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
There has been no amendment to, written interpretation of or announcement
(whether or not written) by the Company or any Subsidiary relating to, or change
in employee participation or coverage under, any International Plan that would
increase the expense of maintaining such International Plan above the level of
expense incurred in respect thereof for the most recent fiscal year ended prior
to the date hereof, except for any such increase which would not reasonably be
expected to have a Material Adverse Effect. For purposes of this Section,
"International Plan" means any employment, severance or similar contract or
------------------
arrangement (whether or not written) or any plan, policy, fund, program or
arrangement or contract providing for severance, insurance coverage (including
any self-insured arrangements), workers' compensation, disability benefits,
supplemental unemployment benefits, vacation benefits, pension or retirement
benefits or for deferred compensation, profit-sharing, bonuses, stock options,
stock appreciation rights or other forms of incentive compensation or
post-retirement insurance, compensation or benefits that (i) is intended
primarily for the benefit of employees or beneficiaries based outside the U.S.,
(ii) is entered into, maintained, administered or contributed to by the Company
or any Subsidiary and (iii) covers any employee or former employee of the
Company or any Subsidiary.
Section 5.15. Labor Matters. Except as set forth in Schedule 5.15 and
------------- -------------
except for such matters as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, there are no (i) labor
strikes, disputes, slowdowns, representation or certification campaigns or work
stoppages or other concerted activities with respect to employees of any of the
Company or any Subsidiary pending, or to the knowledge of the Company,
threatened against or affecting the Company or any Subsidiary, (ii) grievance or
arbitration proceedings, decisions, side letters, letter agreements, letters of
understanding or settlement agreements arising out of collective bargaining
agreements to which the Company or any Subsidiary is a party, (iii) unfair labor
practice complaints pending or, to the knowledge of the Company, threatened
against the Company or any Subsidiary, or (iv) activities or proceedings of any
labor union or employee association to organize any such employees.
(b) Except to the extent set forth in Schedule 5.15 and except for such
-------------
matters as would not, individually or in the aggregate, have a Material Adverse
Effect, the Company and its Subsidiaries are in compliance with all applicable
laws respecting employment and employment practices, terms and conditions of
employment and wages and hours.
(c) Except to the extent set forth in Schedule 5.15 and except for such
-------------
matters as would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect, there are no pending administrative matters
with any federal, provincial, state or local agencies regarding (i) violations
or alleged violations of any federal, provincial, state or local wage and hour
law or any federal, provincial, state or local law with respect to
discrimination on
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the basis of race, color, creed, national origin, religion or any other basis
under such federal, provincial, state or local law, (ii) any claimed violation
of Title VII of the 1964 Civil Rights Act, as amended, (iii) any allegation or
claim arising out of Executive Order 11246 or any other applicable order
relating to governmental contractors or state contractors, or (iv) any violation
or alleged violation of the Age Discrimination and Employment Act, as amended,
or any other federal, provincial, state or local statute or ordinance, or any
other applicable laws with respect to wages, hours, employment practices and
terms and conditions of employment.
Section 5.16. Compliance with Laws. Except to the extent set forth in
--------------------
Schedules 5.11, 5.12 and 5.19, neither the Company nor any Subsidiary is in
-------------- ---- ----
violation of, or has since January 1, 1999 violated, and to the knowledge of the
Company none is under investigation with respect to or has been threatened to be
charged with or given notice of any violation of, any applicable law, rule,
regulation, judgment, injunction, order or decree, except for violations that
have not had and would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
Section 5.17. Licenses and Permits. Except as set forth on Schedule 5.17
-------------------- -------------
and except where the failure of the following to be true would not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect, (i) the Company or its Subsidiaries own, hold or possess adequate right
to use all material licenses, franchises, permits, certificates, approvals or
other similar authorizations affecting, or relating in any way to, the assets or
business of the Company and its Subsidiaries (the "Permits") required in
-------
connection with the operation of the business of the Company and its
Subsidiaries, (ii) the Permits are valid and in full force and effect, (iii)
neither the Company nor any Subsidiary is in default under, and no condition
exists that with notice or lapse of time or both would constitute a default
under, the Permits and (iv) none of the Permits will be terminated or impaired
or become terminable, in whole or in part, as a result of the transactions
contemplated hereby.
Section 5.18. Intellectual Property. Except as set forth in Schedule 5.18,
--------------------- -------------
the Company and the Subsidiaries own or possess adequate licenses or other
rights to use all Intellectual Property Rights necessary to conduct the business
now operated by them, except where the failure to own or possess such licenses
or rights has not had and would not be reasonably likely to have a Material
Adverse Effect and, to the knowledge of the Company, the Intellectual Property
Rights of the Company and the Subsidiaries do not conflict with or infringe upon
any Intellectual Property Rights of others to the extent that, if sustained,
such conflict or infringement has had and would be reasonably likely to have a
Material Adverse Effect. For purposes of this Agreement, an "Intellectual
------------
Property Right' means any trademark, service mark, trade name, mask work,
---------------
copyright, patent, software license, other data base, invention, trade secret,
know-how (including any registrations or applications for registration of any of
the foregoing) or any other similar type of proprietary intellectual property
right.
Section 5.19. Environmental Matters. (a) Except for such matters,
---------------------
individually or in the aggregate, as would not be reasonably expected to have a
Material Adverse Effect or as set forth in Schedule 5.19, the Company 10-K or
-------------
the Company 10-Qs:
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<PAGE>
(i) no notice, notification, demand, request for information,
citation, summons or order has been received, no complaint
has been filed, no penalty has been assessed, and no
investigation, action, claim, suit, proceeding or review
(or any basis therefor) is pending or, to the knowledge of
the Company or any Subsidiary, is threatened by any
governmental entity or other Person with respect to any
matters relating to the Company or any Subsidiary and
relating to or arising out of any Environmental Law;
(ii) there are no liabilities of or relating to the Company or
any Subsidiary of any kind whatsoever whether accrued,
contingent, absolute, determined, determinable or
otherwise, arising under or relating to any Environmental
Law, and there are no facts, conditions, situations or set
of circumstances that could reasonably be expected to
result in or be the basis for any such liability;
(iii) the Company and its Subsidiaries are and have been in
compliance with all Environmental Laws and have obtained
and are in compliance with all Environmental Permits; and
(iv) no Hazardous Substance has been discharged, disposed of,
dumped, injected, pumped, deposited, spilled, leaked,
emitted or released at any property now or previously
owned, leased or operated by the Company or any Subsidiary.
For purposes of this Section 5.19(a), the "Company" and "Subsidiary" shall
--------------- ------- ----------
include any entity which is, in whole or in part, a predecessor of the Company
or any Subsidiary.
(b) Since January 1, 1997, except as set forth in Schedule 5.19, there
-------------
has been no written environmental investigation, study, audit, test, review or
other analysis conducted of which the Company has knowledge in relation to the
current or prior business of the Company or any Subsidiary or any property or
facility now or previously owned, leased or operated by the Company or any
Subsidiary which has not been delivered (to the extent the Company has
possession thereof) to Parent at least five days prior to the date hereof.
(c) Except as set forth in Schedule 5.19, neither the Company nor any
-------------
Subsidiary owns, leases or operates or has owned, leased or operated any real
property, or conducts or has since January 1, 1997 conducted any operations, in
New Jersey or Connecticut.
(d) For purposes of this Section 5.19, the following terms shall have the
------------
meanings set forth below:
"Environmental Laws" means any federal, state, provincial, local
------------------
and foreign law (including, without limitation, common law), treaty,
judicial decision, regulation, rule, judgment, order, decree, injunction,
permit or governmental restriction or requirement or any agreement or
contract with any governmental authority or other third party, relating
to human health and safety, the environment or to pollutants,
contaminants, wastes or
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<PAGE>
chemicals or any toxic, radioactive, ignitable, corrosive, reactive or
otherwise hazardous substances, wastes or materials.
"Environmental Permits" means all permits, licenses, franchises,
---------------------
certificates, approvals and other similar authorizations of governmental
authorities relating to or required by Environmental Laws and affecting
the business of the Company or any of its Subsidiaries as currently
conducted.
"Hazardous Substances" means any pollutant, contaminant, waste or
--------------------
chemical or any toxic, radioactive, ignitable, corrosive, reactive or
otherwise hazardous substance, waste or material, or any substance, waste
or material having any constituent elements displaying of the foregoing
characteristics, including, without limitation, petroleum, its
derivatives, by-products and other hydrocarbons, which in any event is
regulated under Environmental Laws.
Section 5.20. Finders' Fees. Except for J.P. Morgan Securities Inc. and a
-------------
copy of whose engagement agreements have been provided to Parent, there is no
investment banker, broker, finder or other intermediary which has been retained
by or is authorized to act on behalf of the Company or any Subsidiary who might
be entitled to any fee or commission from Parent or any of its affiliates upon
consummation of the transactions contemplated by this Agreement.
Section 5.21. Inapplicability of Certain Restrictions. The Company has
---------------------------------------
taken all action necessary to exempt the Offer, the Merger, this Agreement, and
the transactions contemplated hereby from Section 203 of the Delaware Law.
Except to the extent otherwise provided in the condition set forth in Section
-------
10.03(c), the adoption of this Agreement by the affirmative vote of the holders
--------
of shares of Company Common Stock entitling such holders to exercise at least a
majority of the voting power of the shares of Company Common Stock is the only
vote of holders of any class or series of the capital stock of the Company
required to adopt this Agreement, or to approve the Merger or any of the other
transactions contemplated hereby and no higher or additional vote is required
pursuant to the Company's Certificate of Incorporation or otherwise.
Section 5.22. Rights Plan. The Company has not entered into, and its
-----------
Board of Directors has not adopted or authorized the adoption of, a shareholder
rights or similar agreement.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company as of the date hereof and
as of the Effective Time that:
Section 6.01. Corporate Existence And Power. Each of Parent and Merger
-----------------------------
Co. is a corporation duly incorporated, validly existing and in good standing
under the laws of Delaware and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted. Since the date of its incorporation,
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<PAGE>
Merger Co. has not engaged in any activities other than in connection with or as
contemplated by this Agreement.
Section 6.02. Corporate Authorization. The execution, delivery and
-----------------------
performance by Parent and Merger Co. of this Agreement and the consummation by
Parent and Merger Co. of the transactions contemplated hereby are within the
corporate powers of Parent and Merger Co. and have been duly authorized by all
necessary corporate and stockholder action. This Agreement constitutes a valid
and binding agreement of each of Parent and Merger Co.
Section 6.03. Governmental Authorization. The execution, delivery and
--------------------------
performance by Parent and Merger Co. of this Agreement and the consummation by
Parent and Merger Co. of the transactions contemplated by this Agreement require
no action by or in respect of, or filing with, any governmental body, agency,
official or authority other than (a) the filing of a certificate of merger in
accordance with Delaware Law, (b) compliance with any applicable requirements of
the HSR Act; and (c) compliance with any applicable requirements of the Exchange
Act.
Section 6.04. Non-Contravention. The execution, delivery and performance
-----------------
by Parent and Merger Co. of this Agreement and the consummation by Parent and
Merger Co. of the transactions contemplated hereby do not and will not (a)
contravene or conflict with the certificate of incorporation or bylaws of Parent
or Merger Co., (b) assuming compliance with the matters referred to in Section
-------
6.03, contravene or conflict with any provision of law, regulation, judgment,
----
order or decree binding upon Parent or Merger Co., or (c) constitute a default
under or give rise to any right of termination, cancellation or acceleration of
any right or obligation of Parent or Merger Co. or to a loss of any benefit to
which Parent or Merger Co. is entitled under any agreement, contract or other
instrument binding upon Parent or Merger Co.
Section 6.05. SEC Filings. (a) Parent has delivered to the Company (i)
-----------
Parent's annual report on Form 10-K for the year ended September 30, 2000 (the
"Parent 10-K"), (ii) its proxy or information statements relating to meetings
-----------
of, or actions taken without a meeting by, the stockholders of the Company held
since January 1, 1999, and (iii) all of its other reports, statements, schedules
and registration statements filed with the SEC since January 1, 1999.
(b) As of its filing date, each such report or statement filed pursuant
to the Exchange Act did not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.
(c) Each such registration statement, as amended or supplemented, if
applicable, filed pursuant to the Securities Act as of the date such statement
or amendment became effective did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
Section 6.06. Parent Financial Statements. The audited consolidated
---------------------------
financial statements and unaudited consolidated interim financial statements of
Parent included in the Parent 10-K fairly present, in all material respects, in
conformity with generally accepted accounting principles applied on a consistent
basis (except as may be indicated in the notes thereto), the consolidated
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<PAGE>
financial position of Parent and its consolidated subsidiaries as of the dates
thereof and their consolidated statements of income, stockholders' equity and
cash flows for the periods then ended (subject to normal year-end adjustments in
the case of any unaudited interim financial statements). For purposes of this
Agreement, "Parent Balance Sheet" means the consolidated balance sheet of Parent
--------------------
as of September 30, 2000 as set forth in the Company 10-K and "Parent Balance
--------------
Sheet Date" means September 30, 2000.
----------
Section 6.07. No Undisclosed Material Liabilities. Except as set forth in
-----------------------------------
[Schedule 6.07] or the Parent 10-K, there are no liabilities, commitments or
---------------
obligations of the Parent or any of its subsidiaries of any kind whatsoever
whether accrued, contingent, absolute, determined, determinable or otherwise,
and there is no existing condition, situation or set of circumstances that would
reasonably be likely to result in such a liability commitment or obligation,
other than:
(a) liabilities, commitments or obligations disclosed or provided for in
the Parent Balance Sheet or in the Parent 10-K;
(b) liabilities, commitments or obligations incurred in the ordinary
course of business consistent with past practice since the Parent Balance Sheet
Date;
(c) liabilities, commitments or obligations under this Agreement; and
(d) liabilities, commitments or obligations that individually or in the
aggregate have not had and are not reasonably likely to have a material adverse
effect on the condition (financial or otherwise), business, assets, liabilities
or results of operations of the Parent and its subsidiaries taken as a whole.
Section 6.08. Disclosure Documents. (a) Each document required to be
--------------------
filed by Parent with the SEC in connection with the transactions contemplated by
this Agreement (the "Parent Disclosure Documents"), including, without
---------------------------
limitation, (i) the Form TO/A and (ii) the Form S-4 (as defined in Section 9.01)
------------
to be filed with the SEC in connection with the Offer or the Merger and any
amendments or supplements thereto will, when filed, comply as to form in all
material respects with the applicable requirements of the Exchange Act except
that no representation or warranty is made hereby with respect to any
information furnished to Parent by the Company in writing specifically for
inclusion in the Company Disclosure Documents.
(b) At the time the Form TO/A and the Form S-4 or any amendment or
supplement thereto is first mailed to stockholders of the Company, and, with
respect to the Form S-4 only, at the time such Form S-4 is declared effective by
the SEC, the Form TO/A and the Form S-4, as supplemented or amended, if
applicable, will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading. At
the time of the filing of any Parent Disclosure Document other than the Form S-4
and at the time of any distribution thereof, such Parent Disclosure Document
will not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. The
representations and warranties contained in this Section 6.08(b) will not apply
---------------
to statements or omissions included in the Parent
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<PAGE>
Disclosure Documents based upon information furnished to Parent in writing by
the Company specifically for use therein.
(c) Neither the information with respect to Parent or any of its
subsidiaries that Parent furnishes in writing to the Company specifically for
use in the Company Disclosure Documents nor the information incorporated by
reference from documents filed by Parent with the SEC or any other governmental
or regulatory authority will, at the time of the filing thereof, at the time of
any distribution thereof and at the time of the meeting of the Company's
stockholders, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading.
Section 6.09. Finders' Fees. Except for Merrill Lynch & Co., whose fees
-------------
will be paid by Parent, there is no investment banker, broker, finder or other
intermediary who might be entitled to any fee or commission from the Company or
any of its affiliates upon consummation of the transactions contemplated by this
Agreement.
ARTICLE 7
COVENANTS OF THE COMPANY
Section 7.01. Conduct of the Company. From the date hereof until the
----------------------
Control Date, the Company and the Subsidiaries shall conduct their business in
the ordinary course consistent with past practice and shall use their reasonable
best efforts to preserve intact their business organizations and relationships
with third parties and to keep available the services of their present officers
and employees. Without limiting the generality of the foregoing, from the date
hereof until the Control Date and unless consented to in writing by Parent, the
Company will not and will cause its Subsidiaries not to:
(a) adopt or propose any change in its certificate of
incorporation or bylaws;
(b) except pursuant to existing agreements or arrangements, or as
specifically permitted by this Agreement:
(i) acquire (by merger, consolidation or acquisition of stock
or assets) any corporation, partnership or other business
organization or division thereof for an amount in excess of
$20 million in the aggregate, or sell, lease or otherwise
dispose of a subsidiary or an amount of assets or
securities for an amount in excess of $125 million in the
aggregate;
(ii) make any investment in an amount in excess of $20 million
in the aggregate whether by purchase of stock or
securities, contributions to capital or any property
transfer, or purchase for an amount in excess of $20
million in the aggregate, any property or assets of any
other individual or entity;
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<PAGE>
(iii) other than in the ordinary course of business consistent
with past practice, waive, release, grant, or transfer any
rights of material value;
(iv) other than in the ordinary course of business consistent
with past practice, modify or change in any material
respect any existing material license, lease, contract, or
other document;
(v) incur, assume or prepay an amount of long-term or
short-term debt in excess of $125 million in the aggregate
(net of cash and marketable securities);
(vi) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise)
for the obligations of any other person (other than any
Subsidiary) which, are in excess of $10 million in the
aggregate;
(vii) make any loans, advances or capital contributions to, or
investments in, any other person which are in excess of $20
million in the aggregate; or
(viii) authorize any new capital expenditures which, individually
or in the aggregate, would cause total capital expenditures
for the calendar year 2000 and the first quarter of
calendar year 2001 to exceed $565 million.
(c) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its
capital stock except regular quarterly dividends, other than cash
dividends and distributions by a wholly owned subsidiary of the Company
to the Company or to a subsidiary all of the capital stock of which is
owned directly or indirectly by the Company, or, other than consistent
with its past practice of acquiring shares of Company Common Stock to
meet its obligation to reserve and issue shares of Company Common Stock
under any stock option or compensation plan or arrangement of the
Company, redeem, repurchase or otherwise acquire or offer to redeem,
repurchase, or otherwise acquire any of its securities or any securities
of its Subsidiaries;
(d) except as specifically permitted by this Agreement, adopt or
amend any material bonus, profit sharing, compensation, severance,
termination, stock option, pension, retirement, deferred compensation,
employment or employee benefit plan, agreement, trust, plan, fund or
other arrangement for the benefit and welfare of any director, officer or
employee, or (except for normal increases in the ordinary course of
business that are consistent with past practices and that, in the
aggregate, do not result in a material increase in benefits or
compensation expense to the Company) increase in any manner the
compensation or fringe benefits of any director, officer or employee or
pay any benefit not required by any existing plan or arrangement
(including, without limitation, the granting of stock options or stock
appreciation rights or the removal of existing restrictions in any
benefit plans or agreements);
-27-
<PAGE>
(e) except as set forth in Schedule 7.01, pay, discharge or
-------------
satisfy any material claims, liabilities or obligations (whether
absolute, accrued, asserted or unasserted, contingent or otherwise) other
than the payment, discharge or satisfaction in the ordinary course of
business, consistent with past practices, of liabilities reflected or
reserved against in the consolidated financial statements of the Company
or incurred in the ordinary course of business, consistent with past
practices;
(f) except as set forth in Schedule 7.01, approve any new labor
-------------
agreements;
(g) take any action other than in the ordinary course of business
and consistent with past practices with respect to accounting policies or
procedures;
(h) agree or commit to do any of the foregoing; or
(i) knowingly take or agree or commit to take any action that
would make any representation and warranty of the Company hereunder
inaccurate in any material respect at, or as of any time prior to, the
Effective Time.
Section 7.02. Stockholder Meeting. (a) The Company shall cause a meeting
-------------------
of its stockholders (the "Company Stockholder Meeting") to be duly called and
---------------------------
held after the purchase of and payment for the shares of Company Common Stock
pursuant to the offer for the purpose of voting on the approval and adoption of
this Agreement and the Merger. Subject to Section 7.04, the Board of Directors
------------
of the Company shall recommend approval and adoption of this Agreement and the
Merger by the Company's stockholders and shall not withdraw such recommendation.
Section 7.03. Access to Information. From the date hereof until the
---------------------
Effective Time, the Company will (a) give Parent and its counsel, financial
advisors, auditors and other authorized representatives (collectively, the
"Representatives") reasonable access during normal business hours to the
---------------
offices, properties, books and records of the Company and the Subsidiaries, (b)
provide the Representatives access to and the right to consult with
representatives of the Company handling any labor negotiations with any union
representing employees of the Company, (c) furnish to Parent and the
Representatives such financial and operating data and other information as such
Persons may reasonably request in order to complete the transactions
contemplated hereby and (d) instruct the Company's employees, counsel and
financial advisors to cooperate with Parent in its investigation of the business
of the Company and the Subsidiaries; PROVIDED that (i) any information provided
to Parent or the Representatives pursuant to this Section shall be subject to
the Confidentiality Agreement and (ii) Parent shall inform the Representatives
receiving such information of the terms of the Confidentiality Agreement and
shall be responsible for any breach by such Representatives of such
Confidentiality Agreement; and PROVIDED FURTHER that no investigation pursuant
to this Section shall affect any representation or warranty given by the Company
to Parent hereunder.
Section 7.04. Other Offers. (a) Neither the Company nor any of its
------------
Subsidiaries shall (whether directly or indirectly through advisors, agents or
other intermediaries), nor shall the Company or any of its Subsidiaries
authorize or permit any of its or their officers, directors,
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<PAGE>
agents, representatives, advisors or Subsidiaries to (x) solicit, initiate or
take any action to facilitate or encourage the submission of inquiries,
proposals or offers from any Person (as defined below) (other than Parent)
relating to any Acquisition Proposal, or agree to or endorse any Acquisition
Proposal, (y) enter into or participate in any discussions or negotiations
regarding any Acquisition Proposal, or furnish to any Person any information
with respect to its business, properties or assets in connection with any
Acquisition Proposal or (z) grant any waiver or release under any standstill or
similar agreement with respect to any class of equity securities of the Company
or any of its Subsidiaries; PROVIDED, however, that, prior to the acceptance for
payment of shares of Company Common Stock pursuant to the Offer, the foregoing
shall not prohibit the Company (either directly or indirectly through advisors,
agents or other intermediaries) from (i) furnishing information pursuant to a
confidentiality letter deemed appropriate by the Special Committee (a copy of
which shall be provided for informational purposes only to Parent) concerning
the Company and its businesses, properties or assets to a Person who in the
judgment of the Special Committee has made a bona fide Acquisition Proposal,
(ii) engaging in discussions or negotiations with such a Person who in the
judgment of the Special Committee has made a bona fide Acquisition Proposal,
(iii) following receipt of a bona fide Acquisition Proposal, taking and
disclosing to its stockholders a position contemplated by Rule 14e-2(a) under
the Exchange Act or otherwise making disclosure to its stockholders, (iv)
following receipt of an Acquisition Proposal, failing to make or withdrawing or
modifying its recommendation referred to in Section 7.02 and/or (v) taking any
------------
non-appealable, final action ordered to be taken by the Company by any court of
competent jurisdiction but in each case referred to in the foregoing clauses
(i), (ii) and (iv) only if (i) the Company has complied with the terms of this
Section 7.04, (ii) the Company has received an unsolicited Acquisition Proposal
------------
which the Board of Directors of the Company determines in good faith is
reasonably likely to result in a Superior Proposal, and (iii) the Company shall
have delivered to Parent a prior written notice advising Parent that it intends
to take such action. The Company will immediately cease and cause its advisors,
agents and other intermediaries to cease any and all existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing. For purposes of this Section 7.04, the term "Person"
------------ ------
means any person, corporation, entity or "group," as defined in Section 13(d) of
the Exchange Act, other than Parent or any of its affiliates.
"Acquisition Proposal" means any offer or proposal for a merger,
--------------------
reorganization, consolidation, share exchange, business combination or
other similar transaction involving the Company or any of its
Subsidiaries or any proposal or offer to acquire, directly or indirectly,
securities representing more than 50% of the voting power of the Company,
or a substantial portion of the assets of the Company and its
Subsidiaries taken as a whole, other than the Offer and the Merger
contemplated by this Agreement.
"Superior Proposal" means any bona fide written Acquisition
-----------------
Proposal which (i) the Board of Directors of the Company determines in
good faith (after consultation with a financial advisor of nationally
recognized reputation and taking into account all the terms and
conditions of the Acquisition Proposal) is (a) more favorable to the
Company and its stockholders from a financial point of view than the
transaction contemplated hereunder, and (b) reasonably capable of being
completed, including a conclusion that its financing, to the extent
required, is then committed or is in the good faith judgment of the Board
of
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<PAGE>
Directors of the Company, reasonably capable of being financed by the
Person making such Acquisition Proposal.
(b) If a Payment Event (as hereinafter defined) occurs, the Company shall
pay to Parent, if pursuant to (x) below, simultaneously with the occurrence of
such Payment Event or, if pursuant to (y) below, within two business days
following such Payment Event, a fee of $70,000,000 (the "Termination Fee").
---------------
"Payment Event" means (x) the termination of this Agreement by the
-------------
Company or Parent pursuant to Sections 11.01(d) or (e); or (y) the
----------------- ---
termination of this Agreement pursuant to Sections 11.01(b), (f) or (h)
----------------- --- ---
if at the time of such termination (or, in the case of a termination
pursuant to Section 11.01(h), at the time of the stockholders meeting),
----------------
there shall have been outstanding an Acquisition Proposal pursuant to
which stockholders of the Company would receive cash, securities or other
consideration having an aggregate value in excess of $26.00 per share of
Company Common Stock, and within six months of any such termination
described in clause (y) above the Company enters into a definitive
agreement for or consummates such Acquisition Proposal or another
Acquisition Proposal with a higher per share of Company Common Stock
value than such Acquisition Proposal.
(c) Upon the termination of this Agreement pursuant to Sections 11.01(d),
(e) or (f) the Company shall reimburse Parent and its affiliates not later than
two business days after submission of reasonable documentation thereof for 100%
of their documented out-of-pocket fees and expenses (including, without
limitation, the reasonable fees and expenses of their counsel and investment
banking fees), actually incurred by any of them or on their behalf in connection
with this Agreement and the transactions contemplated hereby subject to a
maximum reimbursement amount of $7,500,000.
(d) The Company acknowledges that the agreements contained in this
Section 7.04 are an integral part of the transactions contemplated by this
------------
Agreement, and that, without these agreements, neither Parent nor Merger Co.
would enter into this Agreement; accordingly, if the Company fails to promptly
pay any amount due pursuant to this Section 7.04, and, in order to obtain such
------------
payment, the other party commences a suit which results in a judgment against
the Company for the fee or fees and expenses set forth in this Section 7.04, the
------------
Company shall also pay to Parent its costs and expenses incurred in connection
with such litigation.
(e) This Section 7.04 shall survive any termination of this Agreement,
------------
however caused, except a termination pursuant to Sections 11.01(a) or (c).
----------------- ---
Section 7.05. Notices Of Certain Events. The Company shall promptly
-------------------------
notify Parent of:
(a) any notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection with
the transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement;
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(c) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its knowledge threatened against, relating
to or involving or otherwise affecting the Company or any Subsidiary
which, if pending on the date of this Agreement, would have been required
to have been disclosed pursuant to Section 5.12 or which relate to the
------------
consummation of the transactions contemplated by this Agreement.
Section 7.06. Tax Matters. (a) Without the prior written consent of
-----------
Parent (such consent not to be unreasonably withheld), neither the Company nor
any of its Subsidiaries shall make or change any Tax election, change any annual
tax accounting period, adopt or change any method of tax accounting, file any
amended Returns or claims for Tax refunds, enter into any closing agreement,
surrender any Tax claim, audit or assessment, surrender any right to claim a Tax
refund, offset or other reduction in Tax liability surrendered, consent to any
extension or waiver of the limitations period applicable to any Tax claim or
assessment or take or omit to take any other action, if any such election,
action or omission would have the effect of increasing the Tax liability or
reducing any Tax asset of the Company or any of its Subsidiaries.
(b) The Company and each of its Subsidiaries will establish or cause to
be established in accordance with GAAP on or before the Effective Time an
adequate accrual for all Taxes due with respect to any Pre-Closing Tax Period or
Straddle Period.
(c) Neither the Company nor any of its Subsidiaries shall take any action
that would reasonably be likely to prevent the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code ("368(a)
------
Reorganization") and prior to the Effective Time, the Company and its
--------------
Subsidiaries shall use their best efforts to cause the Merger to qualify as a
368(a) Reorganization. The Company shall use its reasonable best efforts to
obtain the opinions referred to in Section 10.02.
-------------
Section 7.07. Affiliates. At least 40 days prior to the Effective Time,
----------
the Company shall deliver to Parent a letter identifying all known Persons who
may be deemed affiliates of the Company for the purposes of Rule 145 of the
Securities Act. The Company shall obtain a written agreement from each Person
who may be so deemed as soon as practicable and, in any event, at least 30 days
prior to the Effective Time, substantially in the form of Exhibit A hereto.
---------
ARTICLE 8
COVENANTS OF PARENT
Parent agrees that:
Section 8.01. Parent Stockholder Meeting. Parent shall cause a meeting of
--------------------------
its stockholders (the "Parent Stockholder Meeting") to be duly called and held
--------------------------
as soon as reasonably practicable for the purpose of voting on the issuance of
Parent Common Stock in the Merger and pursuant to Parent Options after the
Merger. The Board of Directors of the Company shall recommend approval of the
issuance of Parent Common Stock in the Merger pursuant to this Agreement and
shall not withdraw such recommendation.
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Section 8.02. Confidentiality. The Confidentiality Agreement dated
---------------
December 4, 2000 between the Company and Parent (the "Confidentiality
---------------
Agreement') shall continue in full force and effect prior to the Effective Time
----------
and after any termination of this Agreement.
Section 8.03. Voting Of Shares. Each of Parent and Merger Co. agrees to
----------------
vote, and to cause any of their subsidiaries to vote, all shares of Company
Common Stock beneficially owned by them in favor of adoption of this Agreement
at the Company Stockholder Meeting.
Section 8.04. Director And Officer Liability. For six years after the
------------------------------
Effective Time, Parent will cause the Surviving Corporation to indemnify and
hold harmless the present and former officers and directors of the Company in
respect of acts or omissions occurring prior to the Effective Time to the extent
provided under the Company's articles of incorporation and bylaws in effect on
the date hereof; PROVIDED that such indemnification shall be subject to any
limitation imposed from time to time under applicable law. For six years after
the Effective Time, Parent will cause the Surviving Corporation to use its best
efforts to provide officers' and directors' liability insurance in respect of
acts or omissions occurring prior to the Effective Time covering each such
Person currently covered by the Company's officers' and directors' liability
insurance policy on terms with respect to coverage and amount no less favorable
than those of such policy in effect on the date hereof, PROVIDED that if the
aggregate annual premiums for such insurance at any time during such period
shall exceed 200% of the per annum rate of premium paid by the Company in its
last full fiscal year for such insurance, then Parent shall cause the Surviving
Corporation to provide only such coverage as shall then be available at an
annual premium equal to 200% of such rate.
Section 8.05. Employee Matters. Parent agrees that, subject to applicable
----------------
law, the Surviving Corporation and its Subsidiaries will provide benefits to its
employees which will, in the aggregate, be comparable to those currently
provided by Parent and its Subsidiaries to their employees; PROVIDED, however,
that this Section 8.05 shall not apply to any employees represented for purposes
------------
of collective bargaining. Notwithstanding the foregoing, nothing herein shall
otherwise limit the Surviving Corporation's right to amend, modify or terminate
any Employee Plan.
Section 8.06. Obligations of Merger Co. Parent will take all action
------------------------
necessary to cause Merger Co. to perform its obligations under this Agreement
and to consummate the Merger on the terms and conditions set forth in this
Agreement.
Section 8.07. NYSE Listing. Parent shall use its reasonable best
------------
efforts to cause the shares of Parent Stock to be issued in connection with the
Merger to be listed on the NYSE, subject to official notice of issuance.
Section 8.08. Acquisitions of Shares. Neither Parent nor Merger Co. will
----------------------
acquire any shares of Company Common Stock prior to the Effective Time or the
termination of this Agreement, other than shares of Company Common Stock
purchased pursuant to the Offer.
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Section 8.09. Notices of Certain Events. Parent shall promptly notify the
-------------------------
Company of:
(a) any notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection with
the transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement;
(c) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its knowledge threatened against, relating
to or involving or otherwise affecting Parent or any of its subsidiaries
which relate to the consummation of the transactions contemplated by this
Agreement.
Section 8.10. Reorganization Matters. Neither Parent nor any of its
----------------------
subsidiaries shall take any action that would reasonably be likely to prevent
the Merger from qualifying as a 368(a) Reorganization and prior to the Effective
Time, the Parent and its Subsidiaries shall use their reasonable best efforts to
cause the Merger to qualify as a 368(a) Reorganization. Parent shall use its
reasonable best efforts to obtain the opinions referred to in Section 10.01(f).
----------------
Section 8.11. Information Relating to Offer. Parent shall, and shall use
-----------------------------
its reasonable best efforts to cause any depository or agent effecting the
Offer, to provide to the Company promptly as requested from time to time by the
Company current information regarding the status of the Offer and the number of
shares tendered and not validly withdrawn.
Section 8.12. Conduct of Parent. From the date hereof until the Effective
-----------------
Time, Parent and its subsidiaries shall conduct their business in the ordinary
course consistent with past practice and shall use their reasonable best efforts
to preserve intact their business organizations and relationships with third
parties and to keep available the services of their present officers and
employees.
ARTICLE 9
COVENANTS OF PARENT AND THE COMPANY
The parties hereto agree that:
Section 9.01. Company Proxy Statement and Form S-4. The Company shall
------------------------------------
promptly prepare the Company Proxy Statement and Parent shall promptly prepare
and file with the SEC the Registration Statement on Form S-4 containing
information required by Regulation S-K under the Exchange Act (the "Form S-4"),
--------
in which the Company Proxy Statement will be included. The Company, Parent and
Merger Co. shall cooperate with each other in the preparation of the Form S-4
and any amendment or supplement thereto, and each shall notify the other of the
receipt of any comments of the SEC with respect to the Form S-4 and of any
requests by the SEC for any amendment or supplement thereto or for additional
information, and shall provide to the other promptly copies of all
correspondence between Parent or the Company, as the case may be, or
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any of its Representatives and the SEC with respect to the Form S-4. Parent
shall give the Company and its counsel the opportunity to review the Form S-4
and all responses to requests for additional information by and replies to
comments of the SEC before their being filed with, or sent to, the SEC. Each of
the Company, Parent and Merger Co. agrees to use its best efforts, after
consultation with the other parties hereto, to respond promptly to all such
comments of and requests by the SEC. Each of the Company, Parent and Merger Co.
shall use its reasonable best efforts to cause the Form S-4 to be declared
effective by the SEC as promptly as practicable. Parent shall promptly take any
action (other than qualifying as a foreign corporation or taking any action
which would subject it to service of process in any jurisdiction where Parent is
not now so qualified or subject) required to be taken under foreign or state
securities or Blue Sky laws in connection with the issuance of Parent Common
Stock in the Merger. As promptly as practicable after the Form S-4 shall have
become effective, Parent and the Company shall fully cooperate with each other
to cause the Proxy Statement/Prospectus contained in the Form S-4 to be mailed
to stockholders of the Company and Parent. Parent will advise Company, promptly
after it receives notice thereof, of (i) the time when the Form S-4 becomes
effective, (ii) the issuance of any stop order with respect to the Form S-4,
(iii) the suspension of the qualification of Parent Common Stock for offering or
sale in any jurisdiction, or (iv) any request by the SEC for an amendment of the
Form S-4 or comments thereon and responses thereto or requests by the SEC for
additional information.
Section 9.03. Best Efforts. Subject to the terms and conditions of this
------------
Agreement, each party will use its 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. Subject to Section 7.04, each party
shall also refrain from taking, directly or indirectly, any action contrary to
or inconsistent with the provisions of this Agreement, including action which
would interfere with the Offer or impair such party's ability to consummate the
Merger and the other transactions contemplated hereby. Without limiting the
foregoing, the Company and its Board of Directors shall use their reasonable
best efforts to (a) take all action necessary so that no state takeover statute
or similar statute or regulation is or becomes applicable to the Offer, the
Merger or any of the other transactions contemplated by this Agreement and (b)
if any state takeover statute or similar statute or regulation becomes
applicable to any of the foregoing, take all action necessary so that the Offer,
the Merger and the other transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effect of such statute or regulation on
the Offer, the Merger and the other transactions contemplated by this Agreement.
Each of Parent and the Company shall use its best efforts to eliminate any
impediment under any antitrust, competition or trade regulation laws that may be
asserted by any governmental entity with respect to the Offer or the Merger so
as to enable the Merger to occur as soon as reasonably practicable.
Section 9.02. Certain Filings. (a) The Company and Parent shall use their
---------------
respective reasonable best efforts to take or cause to be taken, (i) all actions
necessary, proper or advisable by such party with respect to the prompt
preparation and filing with the SEC of the Company Disclosure Documents and the
Parent Disclosure Documents, and (ii) such actions as may be required to have
the Company Proxy Statement cleared and the Form S-4 declared effective by the
SEC, in each case as promptly as practicable.
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<PAGE>
(b) The Company and Parent shall cooperate with one another (i) in
determining whether any action by or in respect of, or filing with, any
governmental body, agency or official, or authority is required, or any actions,
consents, approvals or waivers are required to be obtained from parties to any
material contracts, in connection with or as a result of the consummation of the
transactions contemplated by this Agreement and (ii) in seeking any such
actions, consents, approvals or waivers or making any such filings, furnishing
information required in connection therewith or with the Company Disclosure
Documents and Parent Disclosure Documents and seeking timely to obtain any such
actions, consents, approvals or waivers.
Section 9.04. Public Announcements. Parent and the Company will 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 for any press release or public statement as may be required by
applicable law or any listing agreement with any national securities exchange,
will not issue any such press release or make any such public statement prior to
such consultation.
Section 9.05. Further Assurances. At and after the Effective Time, the
------------------
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or Parent, any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of the Company or Parent, any other actions and things to vest,
perfect or confirm of record or otherwise in the Surviving Corporation any and
all right, title and interest in, to and under any of the rights, properties or
assets of the Company acquired or to be acquired by the Surviving Corporation as
a result of, or in connection with, the Merger.
ARTICLE 10
CONDITIONS TO THE MERGER
Section 10.01. Conditions to the Obligations of Each Party. The
-------------------------------------------
obligations of the Company, Parent and Merger Co. to consummate the Merger are
subject to the satisfaction of the following conditions:
(a) this Agreement shall have been adopted by the stockholders of
the Company and the issuance of Parent Common Stock in the Merger shall
have been approved by the stockholders of Parent, each in accordance with
Delaware Law;
(b) any applicable waiting period under the HSR Act relating to
the Offer and the Merger shall have expired or been terminated;
(c) no provision of any applicable law or regulation and no
judgment, injunction, order of decree shall prohibit or restrain the
consummation of the Merger; PROVIDED, HOWEVER, that the Company and
Parent shall each use its reasonable efforts to have any such judgment,
order, decree or injunction vacated; and
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(d) the Form S-4 shall have been declared effective, no stop order
suspending the effectiveness of the Form S-4 shall be in effect and no
proceedings for such purpose shall be pending before or threatened by the
SEC;
(e) the shares of Parent Common Stock to be issued in the Merger
shall have been approved for listing in the NYSE, subject to official
notice of issuance;
(f) Parent shall have received an opinion of Milbank, Tweed,
Hadley & McCloy LLP substantially in the form of Exhibit B hereto, on the
---------
basis of certain facts, representations and assumptions set forth in such
opinion, dated the Effective Time, to the effect that the Merger will be
treated for federal income tax purposes as a 368(a) Reorganization and
that each of Parent, Merger Subsidiary and the Company 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 Parent, Merger Co. and the Company
substantially in the form of Exhibits C and D hereto.
---------- -
Section 10.02. Conditions to the Obligation of the Company. The
-------------------------------------------
obligation of the Company to consummate the Merger is subject to the
satisfaction of the following further conditions:
(a) Merger Co. shall have purchased shares of Company Common Stock
pursuant to the Offer;
(b) that the Company shall have received an opinion of Wachtell
Lipton Rosen & Katz substantially in the form of Exhibit E hereto, on the
---------
basis of certain facts, representations and assumptions set forth in such
opinion, dated the Effective Time, to the effect that the Merger will be
treated for federal income tax purposes as a 368(a) Reorganization and
that each of Parent, Merger Subsidiary and the Company 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 Parent, Merger Subsidiary and the Company
substantially in the form of Exhibits F and G hereto.
---------- -
ARTICLE 11
TERMINATION
Section 11.01. Termination. This Agreement may be terminated and the
-----------
transactions contemplated hereby may be abandoned at any time prior to the
Effective Time (notwithstanding any approval of this Agreement by the
stockholders of the Company):
(a) by mutual written consent of the Company and Parent;
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(b) by either the Company or Parent, if the Offer has not been
consummated by February 28, 2001, provided that the party seeking to
exercise such right is not then in breach in any material respect of any
of its obligations under this Agreement;
(c) by either the Company or Parent, if there shall be any law or
regulation that makes acceptance for payment of, and payment for, the
shares of Company Common Stock pursuant to the Offer, or consummation of
the Merger illegal or otherwise prohibited or any judgment, injunction,
order or decree enjoining Merger Co. from accepting for payment of, and
paying for, the shares of Company Common Stock pursuant to the Offer, or
Parent, Purchaser or the Company from consummating the Merger is entered
and such judgment, injunction, order or decree shall become final and
nonappealable;
(d) by Parent, prior to the purchase of the shares of Company
Common Stock pursuant to the Offer, if the Board of Directors of the
Company shall have withdrawn, or modified or amended in a manner adverse
to Parent, its approval or recommendation of this Agreement, the Offer
and the Merger or its recommendation that stockholders of the Company
tender their shares of Company Common Stock pursuant to the Offer, adopt
and approve this Agreement and the Merger or approved, recommended or
endorsed any proposal for a transaction other than the transactions
hereunder (including a tender or exchange offer for shares of Company
Common Stock) or if the Company has failed to call the Company
Stockholder Meeting or failed to mail the Company Proxy Statement to its
stockholders within 20 days after the Form S-4 is declared effective by
the SEC or failed to include in such statement the recommendation
referred to above;
(e) by the Company, if (i) the Board of Directors of the Company
authorizes the Company, subject to complying with the terms of this
Agreement, to enter into a binding written agreement concerning a
transaction that constitutes a Superior Proposal and the Company notifies
Parent in writing at least three days prior to the proposed effectiveness
of such termination that it intends to enter into such an agreement,
attaching a description of the material terms and conditions thereof and
permits Parent, within such three business day period to submit a new
offer, which shall be considered by the Special Committee in good faith
(it being understood that the Company shall not enter into any such
binding agreement during such three day period) and (ii) the Company
prior to such termination pursuant to this clause (e) pays to Parent in
immediately available funds the fees required to be paid pursuant to
Section 7.04. The Company agrees to notify Parent promptly if its
------------
intention to enter into a written agreement referred to in its
notification shall change at any time after giving such notification;
(f) by Parent, if prior to the acceptance for payment of the
shares of Company Common Stock under the Offer, there has been a breach
by the Company of any representation, warranty, covenant or agreement
contained in this Agreement that is not curable and such breach would
give rise to a failure of the condition set forth in (e) or (f) of Annex
-----
I hereof;
-
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<PAGE>
(g) by the Company, if prior to the acceptance for payment of the
Shares under the Offer there has been a breach by Parent of any
representation, warranty, covenant or agreement contained in this
Agreement that is not curable and such breach would give rise to a
failure of the condition set forth in (e) or (f) of Annex I hereof
-------
(which, for purposes of this Section 12.01(g) only shall apply mutatis
mutandis to Parent); ----------------
(h) by either the Company or Parent if, at a duly held
stockholders meeting of the Company or any adjournment thereof at which
this Agreement and the Merger are voted upon, the requisite stockholder
adoption and approval shall not have been obtained;
The party desiring to terminate this Agreement pursuant to Sections
--------
11.01(b)-11.01(h) shall give written notice of such termination to the other
-------- --------
party in accordance with Section 12.01.
-------------
Section 11.02. Effect of Termination. If this Agreement is terminated
---------------------
pursuant to Section 11.01, this Agreement shall become void and of no effect
with no liability on the part of any party hereto, except that termination of
this Agreement shall be without prejudice to any rights any party may have
hereunder against any other party for breach of this Agreement; PROVIDED that,
in the event of any such termination, no party shall under any circumstances
have any monetary liability to any other party based upon a breach of any
representation or warranty contained herein. The agreements contained in
Sections 7.04, 8.02, 11.02, 12.04 and 12.06 shall survive the termination
------------- ---- ----- ----- -----
hereof.
ARTICLE 12
MISCELLANEOUS
Section 12.01. Notices. All notices, requests and other communications to
-------
any party hereunder shall be in writing (including telecopy or similar writing)
and shall be given,
if to Parent or Merger Co., to:
John Tyson, Chairman of the Board,
President and Chief Executive Officer
Tyson Foods, Inc.
2210 West Oaklawn Drive
Springdale, Arkansas 72762
Telecopy: 501-290-4028
with a copy to:
Les Baledge, Esq.
Tyson Foods, Inc.
2210 West Oaklawn Drive
Springdale, Arkansas 72762
Telecopy: 501-290-7967
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<PAGE>
and with an additional copy to:
Mel M. Immergut, Esq.
Lawrence Lederman, Esq.
Milbank, Tweed, Hadley & McCloy LLP
1 Chase Manhattan Plaza
New York, New York 10005
Telecopy: 212-530-5219
if to the Company, to:
Robert L. Peterson, Chairman of the Board
and Chief Executive Officer, and
JoAnn R. Smith, Chairperson of the Special Committee,
c/o IBP, inc.
800 Stevens Port Drive
Dakota Dunes, South Dakota 57049
Telecopy: (605) 235-2427
with a copy to:
Sheila B. Hagen, Esq.
c/o IBP, inc.
800 Stevens Port Drive
Dakota Dunes, South Dakota 57049
Telecopy: (605) 235-2427
and with an additional copy to:
Richard D. Katcher, Esq.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Telecopy: 212-403-2222
or such other address or telecopy 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 telecopy, when such
telecopy is transmitted to the telecopy number specified in this Section and the
appropriate telecopy confirmation is received or (b) if given by any other
means, when delivered at the address specified in this Section.
Section 12.02. Survival of Representations and Warranties. The
------------------------------------------
representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive the
Effective Time except for the representations, warranties and agreements set
forth in Sections 8.04, 8.05, 12.04 and 12.06.
-------- ---- ---- ----- -----
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<PAGE>
Section 12.03. 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 each party to this Agreement or in the case of a waiver, by the party against
whom the waiver is to be effective; PROVIDED that after the adoption of this
Agreement by the stockholders of the Company, no such amendment or waiver shall,
without the further approval of such stockholders, alter or change (i) the
amount or kind of consideration to be received in exchange for any shares of
capital stock of the Company or (ii) any of the terms or conditions of this
Agreement if such alteration or change would adversely affect the rights of the
holders of any shares of capital stock of the Company.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 12.04. Expenses. Except as provided in Section 7.04, all costs
-------- ------------
and expenses incurred in connection with this Agreement shall be paid by the
party incurring such cost or expense.
Section 12.05. Successors and Assigns; Benefit. 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 Parent and
Merger Co. may make such an assignment to one or more of their affiliates.
Nothing in this Agreement, expressed or implied, shall confer on any Person
other than the parties hereto, and their respective successors and assigns, any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except that the present and former officers and directors of the
Company shall have the rights set forth in Section 8.04 hereof.
------------
Section 12.06. Governing Law. This Agreement shall be construed in
-------------
accordance with and governed by the law of the State of New York, except that,
insofar as the procedures of the Merger that are subject to Delaware Law because
the Parent, Merger Co. and the Company are incorporated in Delaware are
concerned, the law of the State of Delaware shall apply.
Section 12.07. Counterparts; Effectiveness. 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.
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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.
IBP, INC.
By:
-------------------------------------
Name: Robert L. Peterson
Title: Chairman & CEO
TYSON FOODS, INC.
By:
-------------------------------------
Name: John Tyson
Title: Chairman, President & CEO
LASSO ACQUISITION CORPORATION
By:
-------------------------------------
Name:
Title: President
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<PAGE>
ANNEX I
-------
CONDITIONS TO THE OFFER
The capitalized terms used in this Annex I shall have the meanings
-------
ascribed to them in the Agreement and Plan of Merger to which it is attached,
except that the term "Merger Agreement" shall be deemed to refer to such
Agreement and Plan of Merger.
Notwithstanding any other provision of the Offer, Merger Co. shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating
to Merger Co. obligation to pay for or return tendered shares of Company Common
Stock promptly after termination or withdrawal of the Offer), pay for, and may
(subject to any such rule or regulation) delay the acceptance for payment of any
tendered shares of Company Common Stock, and may (except as provided in the
Merger Agreement) amend or terminate the Offer as to any shares of Company
Common Stock not then paid for, if (i) the condition that shares of Company
Common Stock representing at least the Minimum Condition shall have been validly
tendered and not properly withdrawn prior to the expiration of the Offer shall
not have been satisfied, (ii) any applicable waiting period under the HSR Act
shall not have expired or terminated prior to the expiration of the Offer or
(iii) at any time on or after the date of the Merger Agreement and before the
time of payment for any such shares of Company Common Stock (whether or not any
shares of Company Common Stock have theretofore been accepted for payment or
paid for pursuant to the Offer), any of the following events shall have occurred
and remain in effect other than as a result of any action or inaction of Parent
or any of its Subsidiaries that constitutes a breach of this Agreement:
(a) there shall have been any law or order promulgated, entered,
enforced, enacted, issued or deemed applicable to the Offer or the Merger
by any court of competent jurisdiction or other competent governmental or
regulatory authority which, directly or indirectly, (1) prohibits, or
imposes any material limitations on, Parent's or Merger Co.'s ownership
or operation (or that of any of their respective subsidiaries or
affiliates) of any portion of their or the Company's businesses or assets
which is material to the business of all such entities taken as a whole,
or compels Parent or Merger Co. (or their respective subsidiaries or
affiliates) to dispose of or hold separate any portion of their or the
Company's business or assets which is material to the business of all
such entities taken as a whole, (2) prohibits, restrains or makes illegal
the acceptance for payment, payment for or purchase of shares of Company
Common Stock pursuant to the Offer or the consummation of the Merger, (3)
imposes material limitations on the ability of Merger Co. or Parent (or
any of their respective subsidiaries or affiliates) effectively to
acquire or to hold or to exercise full rights of ownership of the shares
of Company Common Stock purchased pursuant to the Offer including,
without limitation, the right to vote such shares of Company Common Stock
on all matters properly presented to the Company's stockholders, (4)
imposes material limitations on the ability of Merger Co. or Parent (or
any of their respective subsidiaries or affiliates) effectively to
control in any material respect any material portion of the business or
assets of the Company and the Subsidiaries taken as a whole, or (5)
otherwise materially adversely affects the Company and the Subsidiaries
taken as a whole;
<PAGE>
(b) there shall be instituted or pending any action, suit or
proceeding brought by a governmental or regulatory authority (1)
challenging the acquisition by Parent or Merger Co. of shares of Company
Common Stock or otherwise seeking to restrain or prohibit the making or
consummation of the Offer or the Merger or (2) that could reasonably be
expected to result, directly or indirectly, in any of the consequences
referred to in clauses (1) through (5) of paragraph (a) above;
(c) there shall have occurred (1) any general suspension of
trading in, or limitation on prices for, securities on any United States
national securities exchange or in the over-the-counter market, (2) a
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States (whether or not mandatory), (3) a
commencement of a war, armed hostilities or other international or
national calamity directly or indirectly involving the United States
which has a material adverse effect on general economic conditions in the
United States, (4) any limitation (whether or not mandatory) by any
United States Governmental or Regulatory Authority on the extension of
credit by banks or other financial institutions, (5) any decline in
either the Dow Jones Industrial Average or the Standard & Poor's 500
Index by an amount in excess of [__%] measured from the close of business
on the date of the execution of the Merger Agreement or (6) in the case
of any of the foregoing (other than clause (5) existing at the time of
the execution of the Merger Agreement, a material acceleration or
worsening thereof;
(d) except as disclosed in the Company SEC Reports filed prior to
the date of the execution of the Merger Agreement, since such date, there
shall have been any change, event or development having, or that could
reasonably be expected to have, individually or in the aggregate, a
material adverse effect on the Company and the Subsidiaries taken as a
whole;
(e) except as affected by actions specifically permitted by this
Agreement, the representations and warranties of the Company contained in
this Agreement and in any certificate or other writing delivered by the
Company pursuant hereto (x) that are qualified by materiality or Material
Adverse Effect shall be true at and as of the Effective Time as if made
at and as of such time, and (y) that are not qualified by materiality or
Material Adverse Effect shall be true in all material respects at and as
of the Effective Time as if made at and as of such time (except in
respect of representations made as of a specified date which shall be
required to be true as of such specified date) and (ii) Parent shall have
received a certificate signed on behalf of the Company by the President
or any Vice President of the Company to the foregoing effect;
(f) the Company shall not have performed and complied with, in all
material respects, each agreement and covenant required by the Merger
Agreement to be performed or complied with by it;
(g) the Merger Agreement shall have been terminated in accordance
with its terms;
-2-
<PAGE>
(h) Parent, Merger Co. and the Company shall have agreed that
Merger Co. shall amend the Offer to terminate the Offer or postpone the
payment for shares of Company Common Stock thereunder; or
(i) any person (which includes a "person" as such term is defined
in Section 13(d)(3) of the Exchange Act) other than Merger Co., any of
its affiliates, or any group of which any of them is a member shall have
acquired beneficial ownership of more than 5% of the outstanding shares
of Company Common Stock, or any group shall have been formed which
beneficially owns more than 5% of the outstanding shares of Company
Common Stock, in each case other than any person or group that has
disclosed such ownership prior to the date of this Agreement, and no such
person or group shall have increased its beneficial ownership in the
Company by more than 1% of the outstanding shares of Company Common
Stock.
which in the sole judgment of Parent and Merger Co., in any such case, and
regardless of the circumstances makes it inadvisable to proceed with the Offer
or with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Parent and Merger
Co., may be asserted by Parent and Merger Co. regardless of the circumstances
giving rise to any such condition and, subject to the terms and conditions of
the Merger Agreement, may be waived by Parent and Merger Co., in whole or in
part at any time and from time to time in the sole discretion of Parent and
Merger Co. The failure by Parent and Merger Co. at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right and each
such right shall be deemed an ongoing right which may be asserted at any time
and from time to time.
-3-
<PAGE>
EXHIBIT A
---------
[Form of Affiliate's Agreement]
[Date]
Tyson Foods, Inc.
2210 West Oaklawn Drive
Springdale, Arkansas 72762
Ladies and Gentlemen:
I have been advised that as of the date hereof I may be deemed to be an
"affiliate" of IBP, inc., a Delaware corporation (the "Company"), as that term
-------
is defined for purposes of paragraphs (c) and (d) of Rule 145 of the rules and
regulations (the "Rules and Regulations") of the Securities and Exchange
---------------------
Commission (the "Commission") under the Securities Act of 1933, as amended (the
----------
"Act"). Neither my entering into this agreement, nor anything contained herein,
---
shall be deemed an admission on my part that I am such an "affiliate".
Pursuant to the terms of the Agreement and Plan of Merger dated as of
___________, 2000 (the "Merger Agreement"), among , Tyson Foods, Inc. a Delaware
----------------
corporation ("Parent"), [Lasso Acquisition Corporation], a Delaware corporation
------
("Merger Co."), and the Company providing for the merger of the Company with and
---------
into Merger Co. (the "Merger"), and as a result of the Merger, I may receive
------
shares of Parent's Class A Common Stock, par value $0.10 per share (the "Parent
------
Securities"), in exchange for the shares of common stock, par value $0.05 per
----------
share, of the Company owned by me at the Effective Time (as defined in the
Merger Agreement) of the Merger.
I represent and warrant to Parent that in such event:
A. I shall not make any sale, transfer or other disposition of the Parent
Securities in violation of the Act or the Rules and Regulations.
B. I have carefully read this letter and the Merger Agreement and
discussed its requirements and other applicable limitations upon my ability to
sell, transfer or otherwise dispose of Parent Securities, to the extent I felt
necessary, with my counsel or counsel for the Company.
C. I have been advised that the issuance of Parent Securities to me
pursuant to the Merger has been registered with the Commission under the Act on
a Registration Statement on Form S-4. However, I have also been advised that,
since at the time the Merger was submitted for a vote of the stockholders of the
Company I may have been deemed to have been an affiliate of the Company and a
distribution by me of Parent Securities has not been registered under the Act,
the Parent Securities must be held by me indefinitely unless (i) a distribution
of Parent Securities by me has been registered under the Act, (ii) a sale of
Parent Securities by me is made in conformity with the volume and other
limitations of Rule 145 promulgated by the Commission under the Act or (iii) in
the opinion of counsel reasonably acceptable to Parent, some other
<PAGE>
exemption from registration is available with respect to a proposed sale,
transfer or other disposition of the Parent Securities by me.
D. I understand that Parent is under no obligation to register the sale,
transfer or other disposition of Parent Securities by me or on my behalf or to
take any other action necessary in order to make compliance with an exemption
from registration available.
E. I also understand that stop transfer instructions will be given to
Parent's transfer agents with respect to the Parent Securities and that there
will be placed on the certificates for the Parent Securities, or any
substitutions therefor, a legend stating in substance.
"The shares represented by this certificate were issued in a
transaction to which Rule 145 promulgated under the Securities Act of
1933, as amended, applies."
F. I also understand that unless the transfer by me of my Parent
Securities has been registered under the Act or is a sale made in conformity
with the provisions of Rule 145, Parent reserves the right to put the following
legend on the certificates issued to my transferee:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and were
acquired from a person who received such shares in a transaction to which
Rule 145 promulgated under such Act applies. The shares have been
acquired by the holder not with a view to, or for resale in connection
with, any distribution thereof within the meaning of such Act and may not
be sold, pledged or otherwise transferred except in accordance with an
exemption from the registration requirements of such Act."
-2-
<PAGE>
It is understood and agreed that the legends set forth in paragraph E and
F above shall be removed by delivery of substitute certificates without such
legend if the undersigned shall have delivered to Parent a copy of a letter from
the staff of the Commission, or an opinion of counsel reasonably acceptable to
Parent to the effect that such legend is not required for purposes of the Act.
Very truly yours,
-------------------------------
Name:
Accepted this ____ day of
__________, ____, by:
TYSON FOODS, INC.
By____________________________
Name:
Title:
-3-
<PAGE>
EXHIBIT B
---------
[MTHM Tax Opinion]
NY1:#3275905v3
<PAGE>
EXHIBIT C
---------
[Tax Representation Letter]
NY1:#3275905v3
<PAGE>
EXHIBIT D
---------
[Tax Representation Letter]
NY1:#3275905v3
<PAGE>
EXHIBIT E
---------
[Wachtell Tax Opinion]
NY1:#3275905v3
<PAGE>
EXHIBIT F
---------
[Tax Representation Letter]
NY1:#3275905v3
<PAGE>
EXHIBIT G
---------
[Tax Representation Letter]
NY1:#3275905v3
