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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
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AMERICAN MAIZE-PRODUCTS COMPANY
(NAME OF SUBJECT COMPANY)
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AMERICAN MAIZE-PRODUCTS COMPANY
(NAME OF PERSON(S) FILING STATEMENT)
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CLASS A COMMON STOCK, PAR VALUE $0.80 PER SHARE
(TITLE OF CLASS OF SECURITIES)
027339 20 9
(CUSIP NUMBER OF CLASS OF SECURITIES)
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CLASS B COMMON STOCK, PAR VALUE $0.80 PER SHARE
(TITLE OF CLASS OF SECURITIES)
027339 30 8
(CUSIP NUMBER OF CLASS OF SECURITIES)
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ROBERT M. STEPHAN, ESQ.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
AMERICAN MAIZE-PRODUCTS COMPANY
250 HARBOR DRIVE
STAMFORD, CONNECTICUT 06902
(203) 356-9000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICES AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
WITH A COPY TO:
MORTON A. PIERCE, ESQ.
DEWEY BALLANTINE
1301 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019-6092
(212) 259-8000
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ITEM 1. SECURITY AND SUBJECT COMPANY.
The name of the subject company is American Maize-Products Company, a Maine
corporation (the "Company"). The address of the principal executive offices of
the Company is 250 Harbor Drive, Stamford, Connecticut 06902. This statement
relates to the Company's Class A Common Stock, par value $0.80 per share (the
"Class A Common Stock"), and the Company's Class B Common Stock, par value $0.80
per share (the "Class B Common Stock" and, together with the Class A Common
Stock, the "Shares").
ITEM 2. TENDER OFFER OF THE BIDDER.
This statement relates to the tender offer made by Cerestar USA, Inc.
("Merger Sub"), a Delaware corporation and an indirect wholly-owned subsidiary
of Eridania Beghin-Say, S.A., a corporation organized under the laws of France
("Purchaser"), disclosed in a Tender Offer Statement on Schedule 14D-1 (the
"Schedule 14D-1") dated February 28, 1995, to purchase all outstanding Shares at
$40.00 per Share, net to the seller in cash (the "Offer"), upon the terms and
subject to the conditions set forth in the Offer to Purchase dated February 28,
1995 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer Documents").
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of February 22, 1995, among the Company, Purchaser and Merger Sub (the
"Merger Agreement"), which provides for the making of the Offer by Merger Sub,
subject to the conditions and upon the terms of the Merger Agreement, and for
the subsequent merger of Merger Sub with and into the Company (the "Merger").
The Schedule 14D-1 states that the principal executive offices of Purchaser
are located at 54 avenue Hoche, 75008 Paris, France and the principal executive
offices of Merger Sub are located at 1300 Fort Wayne National Bank Building,
Fort Wayne, Indiana 46802.
ITEM 3. IDENTITY AND BACKGROUND.
(a) The name and business address of the Company, which is the person
filing this statement, are set forth in Item 1 above.
(b) Certain contracts, agreements, arrangements and understandings between
the Company and certain of its executive officers, directors and affiliates are
described in Annex A hereto, which description is incorporated herein by
reference in its entirety.
Certain other contracts, agreements and understandings between the Company
and its directors, executive officers and affiliates and between the Company,
Purchaser and Merger Sub are set forth below:
(i) MERGER AGREEMENT. On February 22, 1995, the Company, Purchaser and
Merger Sub entered into the Merger Agreement. The following discussion of the
Merger Agreement and the transactions contemplated thereby, including the Offer
and the Merger, does not purport to be complete and is qualified in its entirety
by reference to the text of the Merger Agreement, a copy of which has been filed
as Exhibit (l) hereto and is incorporated herein by reference. Defined terms
used below and not defined herein have the respective meanings assigned to those
terms in the Merger Agreement.
The Offer. The Merger Agreement provides that Merger Sub will commence the
Offer and, subject to the terms of the Offer, Purchaser shall accept for payment
and pay for Shares which have been validly tendered pursuant to the Offer at a
price of $40.00 per Share, net to the seller in cash (the "Merger
Consideration"), promptly after expiration of the Offer. Purchaser may not,
without the prior written consent of the Company, (a) decrease the Merger
Consideration, (b) decrease the number of Shares to be purchased in the Offer,
(c) change the form of consideration payable in the Offer, (d) add to or change
the conditions of the Offer, (e) change or waive the Minimum Condition (as
defined below) or (f) make any other change in the terms or conditions of the
Offer which is adverse to the holders of the Shares.
If all of the conditions to the Offer are satisfied as of the scheduled
expiration date thereof, the Offer may not be extended without the prior written
consent of the Company. If as of the scheduled expiration date of the Offer the
conditions to the Offer have not been satisfied but are capable, using
reasonable efforts, of being
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satisfied within 90 days of the commencement of the Offer or waived by Purchaser
or Merger Sub, Purchaser shall extend the Offer until the earliest of (i) the
purchase of Shares pursuant to the Offer, (ii) 90 days from the commencement of
the Offer and (iii) the termination of the Merger Agreement.
Conditions to the Offer. The Merger Agreement provides that Merger Sub
will not be obligated to accept for payment any Shares tendered until the
expiration of all applicable waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and Merger Sub
shall not be required to accept for payment or pay for any Shares, or may delay
the acceptance for payment of or payment for, any Shares tendered, or may, in
its sole discretion, subject to the terms and conditions of the Merger
Agreement, terminate or amend the Offer as to any Shares not then paid for, if
(A) there have not been validly tendered prior to the expiration of the Offer
and not withdrawn, (i) a number of shares of Class A Common Stock which,
together with the number of shares of Class A Common Stock then beneficially
owned by Purchaser and its affiliates, constitute at least a majority of the
outstanding shares of Class A Common Stock on a fully-diluted basis and (ii) a
number of shares of Class B Common Stock which, together with the number of
shares of Class B Common Stock which Purchaser or its affiliates have purchased
or are then obligated to purchase under the Stock Purchase Agreement (all
conditions to the obligations of the parties under the Stock Purchase Agreement
(other than the completion of the Offer) having been satisfied) and the number
of shares of Class B Common Stock then beneficially owned by Purchaser and its
affiliates, constitute at least a majority of the outstanding shares of Class B
Common Stock on a fully-diluted basis (the "Minimum Condition") or (B) at any
time on or after February 22, 1995, and at or prior to the time of payment for
any such Shares, (whether or not any Shares have heretofore been accepted for
payment pursuant to the Offer) any of the following events shall have occurred
and be continuing:
(a) there shall have occurred (i) any general suspension of, or
limitation on times or prices for, trading in securities on any United
States national securities exchange or over-the-counter market, (ii) a
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States or France, (iii) the commencement of
a war, armed hostilities or other international or national calamity
directly or indirectly involving the United States having a material
adverse effect on the functioning of the financial markets in the United
States (iv) any limitation (whether or not mandatory) by any governmental
or regulatory authority, agency, commission or other entity, domestic or
foreign ("Governmental Entity"), on, or any other event having a material
adverse effect on, the extension of credit by banks or other lending
institutions in the United States or France, (v) any suspension of, or
material limitation (whether or not mandatory) on, the currency exchange
markets or the imposition of, or material changes in, any currency or
exchange control laws in the United States or France, or (vi) in the case
of any of the foregoing existing at the time of the commencement of the
Offer, a material acceleration or worsening thereof; or
(b) the Company shall have breached or failed to perform in any
material respect any of its obligations, covenants or agreements under the
Merger Agreement or the Stock Purchase Agreement or any representation or
warranty of the Company set forth in the Merger Agreement or the Stock
Purchase Agreement shall have been untrue or incorrect when made or
thereafter shall become untrue or incorrect, except where such breach,
failure to perform or lack of truthfulness or correctness has been caused
by or results from a breach by Purchaser or Merger Sub of any of their
obligations under the Merger Agreement or the Stock Purchase Agreement; or
(c) there shall have been instituted or be pending any action,
litigation or proceeding before any court or governmental, regulatory or
administrative agency, authority or commission, domestic or foreign, which
(i) challenges the acquisition by Purchaser or Merger Sub of the Shares, or
seeks to restrain, materially delay or prohibit the Offer, the Merger, the
Stock Purchase Agreement or other subsequent business combination or seeks
material damages in connection therewith; (ii) seeks to prohibit or
materially limit the ownership or operation by Purchaser, Merger Sub or
their affiliates and subsidiaries of any material portion of the business
or assets of the Company (including the business or assets of their
respective affiliates and subsidiaries), taken as a whole, or of Purchaser
or Merger Sub (including the business or assets of their respective
affiliates and subsidiaries) taken as a whole, in each case as a result of
the transactions contemplated by the Merger Agreement and the Stock
Purchase Agreement;
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(iii) seeks to impose material limitations on the ability of Purchaser or
Merger Sub (including the business or assets of their respective affiliates
and subsidiaries) to hold or to exercise full rights of ownership of the
Shares, including without limitation the right to vote any Shares purchased
by them on an equal basis on all matters properly presented to the holders
of such class of Shares; or
(d) there shall have been any action taken, or any statute, rule,
regulation, order or injunction sought, proposed, enacted, promulgated,
entered, enforced or deemed applicable to the Offer, the Merger or the
Stock Purchase Agreement (other than the application of the waiting period
provisions of the HSR Act), which would result in any of the consequences
referred to in clauses (i) through (iii) of paragraph (c) above; or
(e) it shall have been publicly disclosed or Purchaser shall have
learned that any person, entity or "group" (as defined in Section 13(d) of
the Securities Exchange Act of 1934, as amended, and the rules promulgated
thereunder, the "Exchange Act") shall have become the beneficial owner (as
defined in Section 13(d) of the Exchange Act and the rules promulgated
thereunder) of more than 25% of any class or series of capital stock of the
Company (including any class of the Shares), (other than acquisitions by
persons or groups who have publicly disclosed such ownership on or prior to
February 22, 1995 in a Schedule 13D or 13G (or amendments thereto on file
with the SEC); or
(f) the Board of Directors of the Company shall have amended modified
or withdrawn its recommendation of the Offer or the Merger, or shall have
failed to publicly reconfirm such recommendation upon request by Purchaser
or Merger Sub or shall have endorsed, approved or recommended any other
Acquisition Proposal (as defined below), or shall have resolved to do any
of the foregoing; or
(g) the Company and Purchaser or Merger Sub shall have reached an
agreement or understanding that the Offer be terminated or amended, or that
payment for the Shares be delayed; or
(h) the Dow Jones Industrial Average (as reported by The Wall Street
Journal) shall have lost 20% or more of the value it had at the date of the
Merger Agreement; or
(i) any other Regulatory Filings (as defined in Section 6.1(d) of the
Merger Agreement) and consents applicable to the Offer or the Stock
Purchase Agreement shall not have been obtained on terms and conditions
reasonably satisfactory to Purchaser or Merger Sub, or if Purchaser shall
have received notice under the Exon-Florio Amendment (as defined in Section
6.1(d) of the Merger Agreement) that the Committee on Foreign Investment in
the United States has determined to investigate the Offer or any related
transaction;
which, in any such case, and regardless of the circumstances (including any
action or inaction by Purchaser or Merger Sub other than a breach by Purchaser
or Merger Sub of the Merger Agreement or the Stock Purchase Agreement) giving
rise to any such conditions, makes it inadvisable to proceed with the Offer
and/or with such acceptance for payment of or payment for Shares.
The Board. The Merger Agreement provides that, upon request of Purchaser,
the Company shall, subject to compliance with applicable law and promptly
following the purchase by Merger Sub of more than 50 percent of the outstanding
shares of Class A Common Stock and more than 50 percent of the outstanding
shares of Class B Common Stock pursuant to the Offer, the Stock Purchase
Agreement or otherwise, take all actions necessary to cause persons designated
by Purchaser to become directors of the Company so that the total number of such
persons equals that number of directors, rounded up to the next whole number,
which represents (i) the product of (w) the total number of directors on the
Board of Directors the shares of Class A Common Stock are entitled to elect
multiplied by (x) the percentage that the number of shares of Class A Common
Stock so accepted for payment plus any shares of Class A Common Stock
beneficially owned by Purchaser or its affiliates on the date of the Merger
Agreement bears to the number of shares of Class A Common Stock outstanding at
the time of such acceptance for payment plus (ii) the product of (y) the total
number of directors on the Board of Directors the shares of Class B Common Stock
are entitled to elect multiplied by (z) the percentage that the number of shares
of Class B Common Stock so accepted for payment plus any shares of Class B
Common Stock beneficially owned by Purchaser or its affiliates on the date of
the Merger Agreement bears to the number of shares of Class B Common Stock
outstanding at the
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time of such acceptance for payment. In furtherance thereof, the Company shall
increase the size of the Company's Board of Directors, or use its best efforts
to secure the resignation of directors, or both, as is necessary to permit
Purchaser's designees to be elected to the Company's Board of Directors;
provided, however, that prior to the Effective Time (as defined in Section 2.3
of the Merger Agreement), the Company's Board of Directors shall always have at
least two members who are neither officers of Purchaser or the Company (or any
of their respective affiliates) nor designees of Purchaser (or any of its
affiliates), nor shareholders or affiliates of Purchaser, nor beneficial owners
of 5% or more of any class of capital stock of the Company (or any of their
respective affiliates) ("Insiders"). At such time, the Company, if so requested,
will use its best efforts to cause persons designated by Purchaser to constitute
the same percentage of each committee of such board, each board of directors of
each subsidiary of the Company and each committee of each such board (in each
case to the extent of the Company's ability to elect such persons).
For purposes of provisions of the Merger Agreement relating to termination
of the Merger, modification or amendment of the Merger Agreement, or waiver of
conditions to the Company's obligations to consummate the Merger, no action
taken by the Board of Directors of the Company prior to the Merger shall be
effective unless such action is approved by the affirmative vote of at least a
majority of the directors of the Company who are not Insiders.
The Company's obligations to appoint designees to the Board of Directors
will be subject to Section 14(f) of the Exchange Act and Rule 14f-1 thereunder.
In this regard, the Company has prepared and is filing with the Securities and
Exchange Commission (the "SEC") in connection herewith an Information Statement,
a copy of which is attached as Annex A to this Schedule 14D-9 and which is
incorporated herein by reference.
The Merger. The Merger Agreement provides that, subject to the terms and
conditions contained therein, at the Effective Time Merger Sub will be merged
with and into the Company and the separate corporate existence of Merger Sub
will thereupon cease. The Company will be the surviving corporation in the
Merger (the "Surviving Corporation") and the separate corporate existence of the
Company with all its rights, privileges, immunities, powers and franchises shall
continue unaffected by the Merger, except that the Certificate of Incorporation
of Merger Sub in effect at the Effective Time will be the Certificate of
Incorporation of the Surviving Corporation and the By-Laws of Merger Sub in
effect at the Effective Time shall be the By-Laws of the Surviving Corporation.
The directors of Merger Sub and the officers of the Company at the Effective
Time will, from and after the Effective Time, be the directors and officers,
respectively, of the Surviving Corporation until their successors have been duly
elected or appointed and qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's Certificate of
Incorporation and By-Laws.
As provided in the Merger Agreement, each Share issued and outstanding
immediately prior to the Effective Time (other than Shares owned by Purchaser,
Merger Sub or any other subsidiary or affiliate of Purchaser, and other than
Dissenting Shares, as hereinafter defined) shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into the
right to receive, without interest, an amount in cash equal to the Merger
Consideration or such greater amount which may be paid pursuant to the Offer.
Any Shares held by shareholders exercising appraisal rights pursuant to Section
909 of the Maine Business Corporation Act (the "MBCA") ("Dissenting Shares")
shall, by virtue of the Merger, be converted into the right to receive payment
from the Surviving Corporation of the "fair value" of such Shares as determined
in accordance with Section 909 of the MBCA. At the Effective Time, each share of
common stock of Merger Sub issued and outstanding immediately prior to the
Effective Time will, by virtue of the Merger and without any action on the part
of Merger Sub or the holders of such shares, be converted into one share of
common stock of the Surviving Corporation.
The Merger Agreement provides that immediately prior to the Effective Time,
each option or right to acquire Shares or stock appreciation rights with respect
to the Shares ("SARs"), shall, without any action on the part of the holder
thereof, and whether or not then exercisable, be converted into the right to
receive an amount (subject to withholding tax) in cash, if any, equal to the
product of (x) the Merger Consideration minus the current option, acquisition or
base price per share of such option or right and (y) the number of Shares
subject to such option or right, payable to the holder thereof without interest
thereon, at the Effective
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Time of the Merger and such option or right will be cancelled and retired and
shall cease to exist. If and to the extent required by the terms of the plans
governing such options or rights or pursuant to the terms of any option or right
granted thereunder, the Company shall use all reasonable efforts to obtain the
consent of each holder of outstanding stock options or rights to the foregoing
treatment of such stock options or rights and to take any other action
reasonably necessary to effectuate the foregoing provisions. The Company shall
take all reasonably necessary action to provide that the Stock Plans (as defined
in Section 6.1(b) of the Merger Agreement) shall be terminated as of the
Effective Time.
The Merger Agreement provides that following the consummation of the Offer,
the Company will take, consistent with applicable law and its Articles of
Incorporation and By-Laws, all action necessary to duly call, give notice of,
convene and hold a meeting of holders of Shares as promptly as practicable to
consider and vote upon the approval of the Merger Agreement and the Merger. The
Company has agreed, subject to fiduciary requirements of applicable law, that
the Board of Directors of the Company will recommend such approval and the
Company will take all lawful action to solicit such approval. Purchaser has
agreed that at any such meeting of the Company all of the Shares then owned by
the Purchaser Companies (as defined in Section 5.1(a) of the Merger Agreement)
will be voted in favor of the Merger Agreement. At the election of Purchaser, if
Purchaser or Merger Sub owns after the expiration of the Offer at least 90% of
the outstanding Shares of each class of the Company's stock, Purchaser, Merger
Sub and the Company have agreed to effect the Merger without shareholder action
in accordance with Section 904 of the MBCA.
Conditions to the Merger. Under the Merger Agreement, the respective
obligations of Purchaser, Merger Sub and the Company, to consummate the Merger
are subject to the fulfillment or waiver, where permissible, of the following
conditions: (a) the requisite approval, if any, of the shareholders of the
Company; (b) Merger Sub (or one of the Purchaser Companies) having purchased
enough Shares pursuant to the Offer and the Stock Purchase Agreement sufficient
to satisfy the Minimum Condition; provided, however, that this condition will be
deemed satisfied with respect to Purchaser and Merger Sub if the Purchaser
Companies shall have failed to purchase Shares pursuant to the Offer or the
Stock Purchase Agreement in violation of the terms thereof; (c) the expiration
or termination of all waiting periods under the HSR Act applicable to the
Merger; and (d) the compliance in all material respects by the other party with
all agreements and obligations of such party under the Merger Agreement or the
Stock Purchase Agreement prior to the Effective Time. The obligations of
Purchaser and Merger Sub to consummate the Merger are further conditioned on no
statute, rule, regulation, judgment, decree, injunction or other order having
been enacted, issued, promulgated, enforced or entered by any court or
governmental entity which prohibits or materially restricts the consummation of
the transactions contemplated by the Merger Agreement or the Stock Purchase
Agreement, or materially restricts the business operations of Purchaser, Merger
Sub or the Company as a result of such transactions. The obligations of the
Company to consummate the Merger are further conditioned on no statute, rule,
regulation, judgment, decree or other order having been enacted, issued,
promulgated, enforced or entered by any court or governmental entity which
prohibits consummation of the Merger Agreement or the Stock Purchase Agreement
in accordance with the terms thereof.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties. Representations and
warranties of Purchaser and Merger Sub include, without limitation, certain
matters relating to their organization and qualification to do business, their
authority to enter into the Merger Agreement and the Stock Purchase Agreement
and to consummate the transactions contemplated thereby, their filings with the
SEC in connection with the Offer, consents and approvals required for the
execution and delivery of the Merger Agreement and the Stock Purchase Agreement
and the consummation of the transactions contemplated thereby and the
availability of funds sufficient to consummate the Offer, the Merger and the
transactions contemplated by the Stock Purchase Agreement on the terms
contemplated thereby.
Representations and warranties of the Company include, without limitation,
certain matters relating to its organization and qualification to do business,
capitalization, authority to enter into the Merger Agreement and the Stock
Purchase Agreement and to consummate the transactions contemplated thereby,
consents and approvals required for the execution and delivery of the Merger
Agreement and the Stock Purchase Agreement and the consummation of the
transactions contemplated thereby, filings with the SEC, the
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absence of certain changes since December 31, 1993, litigation and liabilities,
employee benefit matters, taxes, compliance with law, intellectual property,
labor, insurance and environmental matters.
Interim Operations of the Company. Pursuant to the Merger Agreement, the
Company has agreed that, prior to the date on which a majority of the Company's
directors are Purchaser Insiders (unless Purchaser otherwise agrees in writing
and except as otherwise contemplated by the Merger Agreement or the Stock
Purchase Agreement): (a) the business of the Company and its subsidiaries will
be conducted only in the ordinary and usual course and, to the extent consistent
therewith, each of the Company and its subsidiaries shall use all reasonable
efforts to preserve its business organization and goodwill intact, keep
available the services of its officers and employees as a group and maintain its
existing relations with customers, suppliers, distributors, employees and others
having business relationships with it, in each case in all material respects;
(b) the Company and its subsidiaries will not (i) sell or pledge or agree to
sell or pledge any stock owned by it in any of its subsidiaries, (ii) adopt or
propose any amendment or change of their respective Articles or By-Laws, (iii)
split, combine or reclassify the outstanding Shares, or (iv) declare, set aside
or pay any dividend payable in cash, stock or property with respect to the
Shares, except for regular quarterly cash dividends not in excess of $0.17 per
Share; (c) except as provided for in the disclosure schedules to the Merger
Agreement, neither the Company nor any of its subsidiaries will (i) issue, sell,
pledge, dispose of or encumber any additional shares of, or securities
convertible or exchangeable for, or options, warrants, calls, commitments or
rights of any kind to acquire, any shares of its capital stock of any class of
the Company or its subsidiaries or any other property or assets other than, in
the case of the Company, shares of Class B Common Stock issuable pursuant to the
terms of the Stock Purchase Agreement and shares of Class A Common Stock
issuable pursuant to options outstanding on the date of the Merger Agreement
under the Stock Plans, (ii) transfer, lease, license, guarantee, sell, mortgage,
pledge, dispose of or encumber any material assets or incur or modify any
indebtedness or other liability or issue any debt securities or securities
convertible into or exchangeable for debt securities or assume, guarantee,
endorse or otherwise as an accommodation become responsible for the obligations
of any person, in each case other than in the ordinary and usual course of
business and in a manner consistent with past practice, (iii) acquire directly
or indirectly by redemption or otherwise any shares of the capital stock of the
Company, (iv) authorize or make capital expenditures in excess of $1,000,000
individually, (v) make any acquisition of assets (other than in the ordinary
course of business) or investment in the stock of any other person or entity, or
(vi) merge or consolidate with any other person; (d) except as provided for in
the disclosure schedules to the Merger Agreement, other than in the ordinary and
usual course of business consistent with past practice or pursuant to
obligations imposed by collective bargaining agreements, neither the Company nor
any of its subsidiaries will increase the compensation payable or to become
payable to its executive officers or employees, enter into any contract or other
binding commitment in respect of any such increase or grant any severance or
termination pay (other than pursuant to a Plan (as defined in Section 6.1(h) of
the Merger Agreement) or policy existing as of the date of the Merger Agreement)
to, or enter into any employment or severance agreement with any director,
officer or other employee of the Company or such subsidiaries, and neither the
Company nor any of its subsidiaries will establish, adopt, enter into, make any
new grants or awards under or amend, any collective bargaining agreement or
Plan, except as required by applicable law, including any obligation to engage
in good faith collective bargaining, to maintain tax-qualified status or as may
be required by any Plan existing as of the date of the Merger Agreement; (e)
neither the Company nor any of its subsidiaries will settle or compromise any
material claims or litigation or, except in the ordinary and usual course of
business, modify, amend or terminate any of its material Contracts (as defined
in Section 6.1(d)(ii) of the Merger Agreement) or waive, release or assign any
material rights or claims, or make any payment, direct or indirect, of any
material liability of the Company or any subsidiary before the same becomes due
and payable in accordance with its terms; (f) neither the Company nor any of its
subsidiaries will take any action, other than reasonable and usual actions in
the ordinary course of business and consistent with past practice with respect
to accounting policies or procedures (including tax accounting policies and
procedures) and except as may be required by the SEC or the Financial Accounting
Standards Board; (g) neither the Company nor any of its subsidiaries will make
any material tax election or permit any material insurance policy naming it as a
beneficiary or a loss payable payee to be cancelled or terminated without notice
to Purchaser, except in the ordinary and usual course of
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business; and (h) neither the Company nor any of its subsidiaries will authorize
or enter into an agreement to do any of the foregoing.
Employment Contracts and Employee Benefits. The Merger Agreement provides
that, from and after the Effective Time, Purchaser and the Surviving Corporation
will honor in accordance with their terms all existing individual employment,
severance, early retirement, deferred compensation, consulting and salary
continuation agreements listed and specifically denoted on the disclosure
schedules to the Merger Agreement between the Company and any of its
subsidiaries and any current or former officer, director, employee or consultant
of the Company or any of its subsidiaries. The Merger Agreement further provides
that, from the Effective Time through December 31, 1996, Purchaser will cause
the Surviving Corporation and its successors to provide the employees of the
Company and its subsidiaries with employee benefit plans and programs (other
than the Stock Plans) which in the aggregate are no less favorable in all
material respects than those provided to such employees on the date of the
Merger Agreement; provided, however, that the Surviving Corporation will not be
required to maintain any specific benefit plans or programs.
Purchaser has agreed to cause the Surviving Corporation to pay each person
employed at the Company's corporate headquarters in Stamford, Connecticut at the
consummation of the Offer whose employment is terminated by the Surviving
Corporation within one year following such consummation (other than termination
for cause) a lump-sum severance payment upon such termination equal to the
product of (x) one month of such employee's base salary at the time of
termination and (y) the number of full years of service such employee has
accumulated with the Company and the Surviving Corporation, up to a maximum of
12 years of service credit; provided that such severance provision shall not
apply to any employee who is eligible to receive a severance payment upon
termination by virtue of such employee's employment contract with the Company
and shall be reduced by any other severance payment due to the employee. The
Company has agreed that, prior to the Effective Time, the Company will amend its
Capital Accumulation Plan to provide that it shall not be permitted to invest in
Class A Common Stock or Class B Common Stock as of the Effective Time.
Acquisition Proposals. The Company has agreed that neither the Company nor
any of its subsidiaries will, and the Company will direct and use all reasonable
efforts to cause the respective officers and directors of the Company or its
subsidiaries and the employees, agents and representatives of the Company and
its subsidiaries (including, without limitation, any investment banker, attorney
or accountant retained by the Company or any of its subsidiaries) not to,
initiate, solicit or encourage, directly or indirectly, any inquiries or the
making of any proposal or offer (including, without limitation, any proposal or
offer to shareholders of the Company) with respect to a merger, consolidation or
similar transaction involving, or any purchase of (a) all or any significant
portion of the assets of the Company or any of its significant subsidiaries
(American Maize-Products Decatur Inc., American Maize-Products Dimmit Inc. or
Swisher International, Inc.), (b) 25% or more of the outstanding shares of the
Class A Common Stock and/or the Class B Common Stock of the Company or (c) a
majority of the outstanding shares of the capital stock of the Company's
significant subsidiaries (any such proposal or offer, an "Acquisition Proposal")
or, except to the extent legally required for the discharge by the Company's
Board of Directors of its fiduciary duties as advised by outside counsel to the
Company, engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with, any person relating to an
Acquisition Proposal, or otherwise facilitate any effort or attempt to make or
implement an Acquisition Proposal or enter into any agreement or understanding
with any other person or entity with the intent to effect any Acquisition
Proposal. The Company will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing. The Company will use all
reasonable efforts to take all necessary steps to inform the respective officers
and directors of the Company or its subsidiaries and the employees, agents and
representatives of the Company and its subsidiaries of its obligations pursuant
to the Merger Agreement. The Company will promptly notify Purchaser if any such
inquiries or proposals are received by, any such information is requested from
or any such negotiations or discussions are sought to be initiated or continued
with the Company, will promptly inform Purchaser of all terms and conditions
thereof and will promptly furnish Purchaser with copies of any such written
inquiries or proposals. The Company also will promptly request each person which
has prior to the execution of the Merger Agreement executed a
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confidentiality agreement in connection with its consideration of acquiring the
Company to return all confidential information heretofore furnished to such
person by or on behalf of the Company. The foregoing does not prohibit the
Company or its Board of Directors from taking and disclosing to the Company's
shareholders a position with respect to a tender offer by a third party pursuant
to Rules 14d-9 and 14e-2 promulgated under the Exchange Act or from making such
disclosure to the Company's shareholders which, as advised by outside counsel to
the Company, is required under applicable law.
Indemnification and Insurance. Pursuant to the Merger Agreement, Purchaser
has agreed that, from and after the Effective Time, it will indemnify and hold
harmless each present and former director or officer of the Company (in each
case solely in such person's capacity as a director or officer of the Company,
as the case may be), determined as of the Effective Time (the "Indemnified
Parties"), against any costs or expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, damages or liabilities incurred in connection
with any claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative, arising out of matters existing or
occurring at or prior to the Effective Time, whether asserted or claimed prior
to, at or after the Effective Time, to the fullest extent that the Company would
have been permitted under applicable law and required under its By-Laws or
pursuant to other agreements, each as in effect on the date of the Merger
Agreement, to indemnify such person (and Purchaser shall also advance expenses
as incurred to the fullest extent permitted under applicable law and required
under its By-Laws, provided that the person to whom expenses are advanced
provides an undertaking to repay such advances if it is ultimately determined
that such person is not entitled to indemnification); provided that any
determination required to be made with respect to whether an officer's or
director's conduct complies with the standards set forth under Maine law, the
Company's Articles of Incorporation and By-Laws shall be made by independent
counsel selected by the Surviving Corporation.
Purchaser has agreed to maintain or cause the Surviving Corporation to
maintain the Company's existing officers' and directors' liability insurance
policies or replacement policies covering the same persons and containing terms
which are, in the aggregate, no less advantageous to such persons than such
existing policies ("D&O Insurance") for a period of six years after the
Effective Time; provided, however, that in no event will Purchaser or the
Surviving Corporation be required to make annual premium payments to obtain such
Insurance Coverage in excess of 150% of the last annual premium paid prior to
the date of the Merger Agreement (the "Cap"). Purchaser has agreed further that
if the D&O Insurance cannot be obtained for an amount less than or equal to the
Cap during such six year period, Purchaser will use its best efforts to obtain,
or cause the Surviving Corporation to obtain, as much D&O Insurance as can be
obtained for the remainder of such period for a premium not in excess (on an
annualized basis) of the Cap.
Termination. The Merger Agreement provides that it may be terminated and
the Merger may be abandoned: (i) by the mutual consent of Purchaser and the
Company, by action of their respective Boards of Directors at any time prior to
the Effective Time, before or after the approval by holders of Shares; (ii) by
action of the Board of Directors of either Purchaser or the Company if (a)
Merger Sub, or any Purchaser Company, shall have terminated the Offer, in
accordance with the terms of the Offer as set forth in the Merger Agreement
without purchasing any Shares pursuant thereto; provided, in the case of
termination of the Merger Agreement by Purchaser, such termination of the Offer
is not in violation of the terms of the Offer, (b) the Merger shall not have
been consummated by November 30, 1995 whether or not such date is before or
after the approval by holders of Shares (provided such right of termination
shall not be available to any party whose failure to fulfill any obligation
under the Merger Agreement has been the cause or resulted in the failure of the
Merger not to have been consummated by such date), (c) any court of competent
jurisdiction has issued an injunction permanently restraining, enjoining or
otherwise prohibiting the consummation of the Offer or the Merger, which
injunction has become final and nonappealable or (d) the approval of
shareholders required by the Merger Agreement shall not have been obtained at a
meeting duly convened therefor; (iii) by action of the Board of Directors of
Purchaser, at any time prior to the purchase of Shares pursuant to the Offer, if
(a) the Board of Directors of the Company shall have withdrawn or modified in a
manner adverse to Purchaser or Merger Sub its approval or recommendation of the
Offer, the Merger Agreement or the Merger or (b) the Board of Directors of the
Company, upon request by Purchaser, shall fail to reaffirm such approval or
recommendation, or shall have resolved to do any of the foregoing referred to in
clause (a) or (b) of this
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clause (iii); (iv) by action of the Board of Directors of the Company, at any
time prior to the purchase of Shares pursuant to the Offer, if (a) Purchaser or
Merger Sub (or another Purchaser Company) shall have failed to commence the
Offer within the time required by the Merger Agreement, (b) any of the
representations and warranties of Purchaser or Merger Sub contained in the
Merger Agreement or the Stock Purchase Agreement were untrue or incorrect in any
material respect when made or have since become, and at the time of termination
remain, untrue or incorrect in any material respect, (c) Purchaser or Merger Sub
shall have breached or failed to perform in any material respect any of its
obligations, covenants or agreements under the Merger Agreement or the Stock
Purchase Agreement or any representation or warranty of Purchaser or Merger Sub
set forth in the Merger Agreement or the Stock Purchase Agreement shall have
been untrue or incorrect when made or thereafter shall become untrue or
incorrect, except where such breach, failure to perform or lack of truthfulness
or correctness has been caused by or results from a breach by the Company of any
of its obligations under the Merger Agreement or the Stock Purchase Agreement or
(d) the Company receives an offer with respect to an Acquisition Proposal and
the Board of Directors of the Company, in the exercise of its fiduciary duties
as advised by outside counsel to the Company, determines to recommend such
Acquisition Proposal to the Company's shareholders; provided that the Company
(x) shall notify Purchaser and Merger Sub promptly of receipt of such
Acquisition Proposal and (y) shall notify Purchaser and Merger Sub promptly of
its intention to recommend such Acquisition Proposal to the Company's
shareholders, but in no event shall the notice referred to in clause (y) be
given less than 24 hours prior to the earlier of the public announcement of such
recommendation or the Company's termination of the Merger Agreement.
Termination Fee. The Merger Agreement provides that if (i) the Offer shall
have remained open for the period required pursuant to the terms of the Merger
Agreement, (ii) the Minimum Condition shall not have been satisfied and the
Offer is terminated without the purchase of any Shares thereunder, (iii) the
Company receives an Acquisition Proposal (other than from one of the Purchaser
Companies) after the date of the Merger Agreement and prior to the termination
thereof and (iv) after the date of the Merger Agreement, but within one year of
the date of the Merger Agreement, any corporation, partnership, person, other
entity or group (as defined in Section 13(d)(3) of the Exchange Act) other than
Purchaser or Merger Sub or any of their respective subsidiaries or affiliates
shall have become the beneficial owner of more than 50% of the outstanding
shares of each of the Class A Common Stock and the Class B Common Stock, then
the Company, if requested by Purchaser, shall promptly, but in no event later
than two days after the date of such request, pay Purchaser a fee of 2.5% of the
total dollar value of the Offer, calculated as the product of (x) the number of
Shares outstanding as of the date of the Merger Agreement and (y) the Merger
Consideration, which amount shall be payable in immediately available funds.
Such fee will not be payable by the Company if the Merger Agreement is
terminated by the Company due to a breach by Purchaser or Merger Sub of its
obligations under the Merger Agreement or the Stock Purchase Agreement. The
Company has agreed that if the Company fails to pay promptly the amount due
pursuant to the termination fee provisions, and, in order to obtain such
payment, Purchaser or Merger Sub commences a suit which results in a judgment
against the Company for the fee pursuant to the termination fee provisions, the
Company shall pay to Purchaser or Merger Sub its costs and expenses (including
attorneys' fees) in connection with such suit, together with interest on the
amount of the fee.
Amendment and Waiver. Subject to the applicable provisions of the MBCA, at
any time prior to the Effective Time, Purchaser, Merger Sub and the Company may
modify or amend the Merger Agreement, by written agreement executed and
delivered by duly authorized officers of the respective parties. The conditions
to the obligations of Purchaser, Merger Sub and the Company may be waived by
each such party in whole or in part to the extent permitted by applicable law.
Expenses. Whether or not the Merger is consummated, all expenses incident
to preparing for, entering into and carrying out the Merger Agreement, the
consummation of the Merger and the transactions contemplated by the Stock
Purchase Agreement shall be paid by the party incurring such expenses.
(ii) STOCK PURCHASE AGREEMENT. Concurrently with the execution of the
Merger Agreement, Purchaser, Merger Sub and the Company entered into the Stock
Purchase Agreement. The following summary of the Stock Purchase Agreement does
not purport to be complete and is qualified in its entirety by reference to
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the text of the Stock Purchase Agreement, a copy of which is filed as Exhibit
(2) hereto and is incorporated herein by reference.
The Stock Purchase. Subject to the terms and conditions of the Stock
Purchase Agreement, the Company will sell to Merger Sub and Merger Sub will
purchase from the Company (the "Stock Purchase"), at a price per share equal to
the Merger Consideration, all shares of Class B Common Stock which are
authorized but unissued or held in treasury (an aggregate of 757,943 shares) and
which remain available for purchase following the exercise by the holders of
Class B Common Stock of preemptive rights in connection therewith (the
"Available Shares"). The Stock Purchase is expected to be consummated on the
date on which all of the conditions thereto are fulfilled or waived.
The Rights Offering. The Articles of Incorporation of the Company provide
that the holders of Class B Common Stock have preemptive rights in connection
with the issuance of additional shares of Class B Common Stock, including the
Stock Purchase. Therefore, on February 28, 1995 the Company filed with the SEC a
Registration Statement on Form S-3 (the "Registration Statement") with respect
to an offering to its Class B shareholders of up to 757,943 shares of Class B
Common Stock pursuant to such holders' preemptive rights (the "Rights
Offering"). Pursuant to the Rights Offering, holders of record of the Class B
Common Stock on March 3, 1995 (the "Record Date") will receive nontransferable
rights (the "Rights") to purchase up to an aggregate of 757,943 shares of Class
B Common Stock at a cash purchase price of $40.00 per share. Each holder will
receive .435 Rights for each share of Class B Common Stock held on the Record
Date. Each Right entitles the holder to purchase one share of Class B Common
Stock. The number of Rights to be issued for each share of Class B Common Stock
was determined by dividing the number of shares of Class B Common Stock offered
(757,943 shares) by the number of shares of Class B Common Stock that will be
outstanding on the Record Date (1,742,057 shares).
The Company has agreed in the Stock Purchase Agreement to mail, not later
than March 10, 1995 (the "Notice Date"), notice of the Company's intent to
conduct the Rights Offering. The Company has further agreed to mail, not later
than five business days after the Registration Statement is declared effective
by the Commission (the "Exercise Date"), a subscription right certificate
specifying the number of Shares for which the Rights issued to each Record Date
holder are exercisable along with a copy of the prospectus and other offering
materials related to the Rights Offering. The Rights Offering materials mailed
to Record Date holders will provide that the period during which Record Date
holders may exercise Rights shall expire on the later of (x) 30 days after the
Notice Date and (y) 5 days after the Exercise Date (the "Termination Date").
Prior to 10:00 p.m., New York time, on the Termination Date, the Company is
required to notify Purchaser in writing of the number of Available Shares
remaining for purchase by Purchaser. Following the Termination Date, the Rights
will no longer be exercisable and will have no value.
Conditions to the Stock Purchase. The obligations of each of the parties
to consummate the Stock Purchase is conditioned upon the following: (i) the
Offer shall have been successfully completed; (ii) the Registration Statement
shall have been declared effective by the SEC and no stop order shall have been
issued, and no proceeding for such purpose shall have been initiated or
threatened, with respect thereto; (iii) the waiting period provisions of the HSR
Act applicable to the Stock Purchase shall have expired or been terminated and
all required approvals of the SEC to permit the Offer and the Rights Offering to
be conducted simultaneously shall have been obtained; (iv) the Rights Offering
shall have been completed in conformity with the Registration Statement, the
Company's Articles of Incorporation and By-Laws and the MBCA; and (v) the
correctness of the representations and warranties, and the performance of all
obligations, of Purchaser and Merger Sub, on the one hand, and the Company, on
the other hand, under the Merger Agreement and the Stock Purchase Agreement. The
obligations of Purchaser and Merger Sub under the Stock Purchase Agreement are
further conditioned upon the approval for listing on the American Stock Exchange
of the shares of Class B Common Stock offered in the Rights Offering.
Representations and Warranties. The Company makes certain representations
and warranties in the Stock Purchase Agreement relating to, among other things,
its authority to enter into the Stock Purchase Agreement, the issuance of the
offered shares and the Rights, the Registration Statement and certain other
documents relating to the Rights Offering. Purchaser and Merger Sub make
representations and warranties
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relating to, among other things, their authority to enter into the Stock
Purchase Agreement and the sufficiency of funds available to consummate the
Stock Purchase.
Indemnification. The Company, Purchaser and Merger Sub have agreed to
indemnify each other against certain liabilities and expenses relating to the
Registration Statement, including liabilities under the Securities Act of 1933,
as amended.
Termination. The Stock Purchase Agreement shall terminate (i) by mutual
consent of the Company, Purchaser and Merger Sub or (ii) upon the termination of
the Merger Agreement.
(iii) CONFIDENTIALITY AGREEMENT. On January 30, 1995, the Company and
Purchaser entered into a confidentiality agreement (the "Confidentiality
Agreement") pursuant to which the Company agreed to supply certain information
to Purchaser and its affiliates, and Purchaser agreed to treat, and to cause its
affiliates, representatives and advisors to treat, such information as
confidential. Purchaser also agreed to indemnify the Company and its affiliates
and representatives from liabilities arising out of a breach or alleged breach
of the Confidentiality Agreement.
The foregoing summary of the Confidentiality Agreement does not purport to
be complete and is qualified in its entirety by reference to the text of the
Confidentiality Agreement, a copy of which is filed as Exhibit (3) hereto and is
incorporated herein by reference.
Certain conflicts of interest between the Company and its directors,
executive officers and affiliates are described below:
CERTAIN LITIGATION. On February 22, 1995, William Ziegler, III, Chairman
of the Board of the Company, on behalf of himself and, purportedly, GIH Corp.,
filed suit in Superior Court, Cumberland County, Maine seeking declaratory and
injunctive relief against the Merger Agreement, the Stock Purchase Agreement and
the transactions contemplated thereby. The complaint, entitled GIH Corp. and
William Ziegler, III v. American-Maize Products Co. et. al., alleges that the
approval by the remaining members of the Company's Board of Directors of the
Merger Agreement and Stock Purchase Agreement and their authorization of
"break-up" fee provisions in the Merger Agreement constituted a breach of their
fiduciary duties. The complaint asserts that the proposed issuance of additional
shares of Class B Common Stock by the Company pursuant to the Stock Purchase
Agreement is ultra vires and requests the court to declare such issuance
unlawful and void. The complaint also alleges that the defendant directors'
approval of certain termination agreements with senior officers of the Company
violated the directors' fiduciary duties. The Company believes all of the claims
contained in the complaint are without merit and intends to defend against them
vigorously.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(a) Recommendation; Background
On August 26, 1994, the Company retained CS First Boston Corporation ("CS
First Boston") to act as its financial advisor with respect to the Company's
review of its strategic and financial alternatives. The Company's Board of
Directors reviewed such alternatives at a meeting of the Board held on September
28, 1994. At such meeting, the Company's management reviewed the Company's
operating history and the opportunities for future growth. CS First Boston
presented the Board with a preliminary review of strategic alternatives,
including, among others, the separation of the Company's corn and tobacco
businesses. Following discussion, the Board directed CS First Boston to continue
with its review of alternatives.
At a meeting of the Company's Board of Directors held on October 26, 1994,
the Board continued its consideration of strategic alternatives with its
financial and legal advisors. CS First Boston reviewed with the Board its
preliminary assessment of the Company's strategic alternatives, including
continuing to operate the Company in its present form and selling either the
corn or tobacco businesses. CS First Boston provided various preliminary
recommendations to the Company with respect to its strategic alternatives, one
of which was to examine the sale of the tobacco business and use the proceeds of
such sale to accelerate the growth of the corn business. The Board then
discussed the financial condition and future outlook of the Company's businesses
and the potential timing and structure of a sale of the tobacco business. At
such meeting, William
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Ziegler, III, Chairman of the Board of the Company, stated that he opposed the
sale of the Company's tobacco business, and advised the Board that if it
proceeded with any such sale, he would direct his counsel to "take the necessary
steps to prevent that from happening." The Board directed CS First Boston and
management to prepare additional presentations regarding the sale of the tobacco
business for the Board's consideration. The Board also requested that Mr.
Ziegler describe in more detail his reasons for opposing any such sale in light
of Mr. Ziegler's previous expressions of interest in spinning off the tobacco
business to the Company's shareholders.
The Company's Board of Directors continued its consideration of the sale of
the Company's tobacco business at a Board meeting held on November 30, 1994.
During such meeting, Mr. Ziegler stated his views with respect to the control of
GIH Corp. and the Company. GIH Corp. owns approximately 13.4% of the Company's
Class A Common Stock and approximately 47.3% of the Company's Class B Common
Stock. All the shares of GIH Corp. are held directly by, or in various trusts
for the benefit of, Mr. Ziegler and his sister, Helen Z. Steinkraus. Control of
GIH Corp. is the subject of litigation initiated in New York Surrogate's Court
by the children of Mrs. Steinkraus challenging the prior distribution of the
controlling share of GIH Corp. common stock to a trust for the benefit of Mr.
Ziegler (the "One Share Litigation"). On April 4, 1994, the New York Surrogate's
Court issued a decision in favor of Mr. Ziegler, and Mrs. Steinkraus' children
have filed an appeal of such decision, which appeal was argued on February 15,
1995. Pursuant to certain settlement and stockholder agreements (the "Settlement
Agreements") entered into in March 1991, Mr. Ziegler, Mrs. Steinkraus and GIH
Corp. agreed that, until the final resolution of the One Share Litigation, their
shares of the Company's common stock would be voted for directors nominated by
the Company in accordance with certain agreed upon "succession resolutions"
adopted by the Company's Board of Directors in March 1991. These resolutions
provide for Board seats for Mr. Ziegler and Mrs. Steinkraus or their designees
and require that the majority of the Board consist of directors who are neither
employees of the Company nor members of the Ziegler or Steinkraus families.
At the November 30th Board meeting, Mr. Ziegler informed the Board that he
believed that the Settlement Agreements were no longer in effect as a result of
the Surrogate's Court decision. Mr. Ziegler stated his belief that he,
therefore, controlled GIH Corp. and the Company. Mr. Ziegler then indicated that
he is "unalterably opposed" to the sale of the tobacco business. Mr. Ziegler
stated that he would "fight this sale with all proper and legal means at [his]
disposal because of [his] very strong conviction that it will fundamentally
change the value of the Company." Mr. Ziegler further stated that "the Company
is not for sale."
CS First Boston then presented the Board with a review of certain financial
considerations relating to a sale of the tobacco business. Management of the
Company presented the Board with an analysis of the operating history and
prospects of the tobacco business. Following discussion and consideration, the
Board unanimously determined to terminate consideration of the sale of the
tobacco business at that time as not being in the best interests of the
Company's shareholders.
Subsequent to the Board meeting, the Company filed a Current Report on Form
8-K with the Commission, reporting Mr. Ziegler's position that the Settlement
Agreements were no longer in effect as a result of the Surrogate's Court
decision in the One Share Litigation, and stating that the Company disagreed
with Mr. Ziegler's position. The Company stated its position that such
agreements remained in effect, according to their terms, until final resolution
of the One Share Litigation, and that final resolution would not occur until the
appeals process with respect to such litigation was exhausted.
In early December 1994, representatives of Purchaser met with Mr. Ziegler
and other members of his family to express an interest in acquiring the Company
and seek the cooperation of Mr. Ziegler. Mr. Ziegler indicated that he was not
willing to sell his shares, and subsequently informed the Company's Board of
Directors of such meeting. On December 16, 1994, Patric J. McLaughlin, President
and Chief Executive Officer of the Company met with representatives of Purchaser
to discuss a potential transaction.
On December 19, 1994, Purchaser forwarded a letter to the Company proposing
to acquire the Company at a price of $32.00 per share. The Board considered
Purchaser's proposal at a meeting held on January 6, 1995. At such meeting, CS
First Boston reviewed with the Board certain financial considerations relating
to
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the proposal by Purchaser, and discussed the Company's strategic options.
Following discussion and consideration, the Board of Directors unanimously
determined that the $32.00 proposal by Purchaser was inadequate, and the Company
issued a press release to that effect on January 6, 1995. Such press release
also included Mr. Ziegler's statement that his shares were "not for sale or
tender." On January 9, 1995, Mr. Ziegler issued a press release stating that he
was the controlling stockholder of the Company and reiterating that the Ziegler
family shares were "not for sale or tender." The Company subsequently received
the written opinion of CS First Boston, dated as of January 6, 1995, that
Purchaser's proposal was inadequate to the Company's shareholders from a
financial point of view.
In mid-January 1995, alleged shareholders of the Company filed complaints
in Connecticut Superior Court in three purported class actions against the
Company and its Board of Directors, entitled Kenneth Steiner and William Steiner
v. American Maize-Products Co., et al., Alan Katz v. American Maize-Products
Co., et al. and Mitchell Saltzman and Miriam Sarnoff v. American Maize-Products
Co., et al. The actions allege that the Company's Board of Directors breached
its fiduciary duties to shareholders by not adequately considering Purchaser's
initial offer on December 19, 1994 to acquire the Company at a purchase price of
$32.00 per share, by rejecting such offer, by failing to make adequate
disclosure of the Offer and by placing personal interests, including an alleged
attempt by Mr. Ziegler to retain control of the Company, ahead of the interests
of the public shareholders. The complaints seek equitable relief and unspecified
damages. These claims are described in Item 8 below.
Over the next several days, management of the Company and its legal
advisors had conversations with Purchaser and its financial and legal advisors
regarding the possibility of Purchaser submitting a revised proposal. On January
20, 1995, Purchaser submitted a revised proposal to acquire the Company at a
price of $37.00 per share. The Company issued a press release on such date
announcing receipt of the revised offer from Purchaser and stating that CS First
Boston was acting as financial advisor to assist the Company in considering such
proposal. On January 23, 1995, Mr. Ziegler issued a press release reiterating
that the Shares which he owns or controls were "not for sale or tender."
At a meeting held on January 25, 1995 (with one director absent), the
Company's Board of Directors discussed Purchaser's revised proposal with its
legal and financial advisors, and unanimously authorized the Company's officers
to explore the revised proposal and any other potential transaction to maximize
stockholder value. In addition, employment agreements with seven Company
executives and an amendment to the employment agreement of Patric J. McLaughlin,
President and Chief Executive Officer of the Company, were approved by the Board
at such meeting (with two directors voting against the employment agreements and
one director voting against the amendment). Such employment agreements and
amendment had been approved by the Compensation Committee of the Company on
November 30, 1994. The employment agreements and amendment are filed as Exhibits
(4) through (11) hereto.
On January 30, 1995, the Company and Purchaser entered into the
Confidentiality Agreement, and Purchaser commenced a due diligence review of the
Company's businesses and operations. Shortly thereafter, Purchaser and its legal
advisors circulated drafts of the Merger Agreement and Stock Purchase Agreement.
During the next several weeks, the Company and Purchaser and their legal and
financial advisors met on several occasions to negotiate the terms of such
agreements and to discuss the proposed price and structure of a transaction.
Purchaser's due diligence review of the Company's operations also continued
during this time.
In addition, during such period, other parties expressed an interest in
exploring a potential acquisition of the Company or its corn or tobacco
businesses. The Company executed confidentiality agreements with eight such
parties, and provided certain non-public information regarding the Company to
such parties. In addition, CS First Boston held preliminary discussions with
such parties. Two such parties undertook extensive due diligence reviews of the
Company's businesses and operations.
In early February, the Company's legal and financial advisors attempted to
discuss Purchaser's proposal and other alternatives to maximize shareholder
value with Mr. Ziegler and his legal counsel. Mr. Ziegler's legal counsel
responded that Mr. Ziegler would not discuss these matters other than in a
meeting of the Company's Board of Directors.
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On February 20, 1995, Purchaser forwarded a letter to Mr. Ziegler, Mrs.
Steinkraus and the trustees for the Ziegler and Steinkraus trusts, stating that,
in connection with its proposal to acquire the Company, Purchaser would be
willing to discuss with such parties the acquisition of all GIH Corp. stock in
order to acquire the shares of Company stock held by GIH Corp. if such purchase
would be helpful in minimizing adverse tax consequences to such parties.
On February 21, 1995, CPC International Inc., a party that had signed a
confidentiality agreement, forwarded to the Company a preliminary, non-binding
proposal (the "CPC Proposal") to acquire the assets and certain liabilities of
the Company's corn business for approximately $500 million, subject to
adjustment for certain changes in net assets, financial assets and liabilities
and certain other liabilities and the conduct of additional due diligence. Such
proposed transaction would have been subject to a significant corporate-level
tax. Such transaction was conditioned upon, among other things, receipt of
irrevocable proxies of GIH Corp. and Mr. Ziegler to vote their shares in favor
of such transaction. The Company issued a press release announcing the CPC
Proposal on the morning of February 22, 1995. In addition, on February 21, 1995,
the Company received an indication of interest in a potential acquisition of the
Company from another third party with whom the Company had previously entered
into a confidentiality agreement. Such third party indicated that it would
require several weeks to conduct additional due diligence before being able to
make a proposal to the Company with respect to a potential transaction although
it was confident such proposal would likely be at a value in excess of the
$37.00 offer made by Purchaser.
At a meeting held on February 22, 1995, the Company's Board of Directors
considered Purchaser's proposal, the CPC Proposal, the other third party
indication of interest and the Company's other strategic alternatives. During
such meeting, CS First Boston and Lazard continued to negotiate price terms, and
the Company received a revised proposal from Purchaser during the meeting to
acquire the Company for $40 per share, which offer by its terms would expire at
midnight that same day. The Board reviewed with its legal advisor the terms of
the proposed Merger Agreement and Stock Purchase Agreement and its legal
obligations with respect to Purchaser's proposal and the other available
alternatives. CS First Boston reviewed with the Board certain financial
considerations relating to the CPC Proposal and Purchaser's offer. CS First
Boston also reviewed the status of the Company's discussions with other parties
that had expressed preliminary interest in exploring a potential transaction. CS
First Boston then delivered its oral opinion (subsequently confirmed in writing)
that the consideration to be received by the Company's stockholders pursuant to
the Offer and the Merger is fair to such stockholders from a financial point of
view. A copy of CS First Boston's written opinion is attached hereto and is
filed herewith as Exhibit (13).
During the meeting, Mr. Ziegler stated that the shares of Company common
stock owned or controlled by the Ziegler family were not for sale. Mr. Ziegler
then stated that he believed the transactions contemplated by the Stock Purchase
Agreement were illegal, and that Board authorization of such transactions would
constitute a breach of fiduciary duty. Mr. Ziegler further stated that he would
hold each director personally responsible for all the Company's costs in
connection with the Offer and the Merger, including severance payments and
"break-up" fees. Mr. Ziegler's legal counsel then stated that Mr. Ziegler and,
purportedly, GIH Corp. had, that day, commenced litigation in Maine Superior
Court against the Company and its directors seeking declaratory and injunctive
relief, and unspecified damages, in connection with the Merger Agreement and the
Stock Purchase Agreement, as well as certain alleged termination agreements with
senior officers of the Company. Copies of the complaint commencing such
litigation were then delivered to each director. Such litigation is described in
Item 3(b) above.
Following Mr. Ziegler's statement, counsel for Mrs. Steinkraus stated that
Mrs. Steinkraus was in favor of the Offer and the Merger and that GIH Corp.,
which pursuant to the Settlement Agreements was controlled equally by the
Ziegler and Steinkraus families, was not authorized to commence litigation
against the Company or its directors in this matter.
Thereafter, following extensive discussion and consideration, the Company's
Board of Directors (with Mr. Ziegler voting against, Leslie C. Liabo abstaining
and James E. Harwood and H. Barclay Morley absent) determined (i) that the
transactions contemplated by the Merger Agreement and the Stock Purchase
Agreement are fair to, and in the best interests of, the Company's stockholders,
(ii) to approve the Merger
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Agreement and the Stock Purchase Agreement and (iii) to recommend that the
Company's stockholders tender their shares pursuant to the Offer and approve the
Merger Agreement. On February 22, 1995, the Merger Agreement and the Stock
Purchase Agreement were executed.
(b) Reasons for Recommendation; Opinion of Financial Advisor.
In reaching its conclusions set forth in paragraph (a) above, the Board of
Directors considered a number of factors, including, without limitation, the
following:
(i) the opinion of CS First Boston, described below, to the effect
that the consideration to be received by the Company's shareholders in the
Offer and the Merger is fair, from a financial point of view, to the
shareholders;
(ii) presentations by management and CS First Boston to the Board of
Directors regarding the financial condition, results of operations,
business and prospects of the Company;
(iii) the uncertainties surrounding the continued management and
corporate governance of the Company as a result of the One Share Litigation
and the potential disruption in management continuity which might result if
Mr. Ziegler ultimately won the One Share Litigation;
(iv) the performance of the Company during Mr. Ziegler's tenure as
Chief Executive Officer compared to the more favorable performance of the
Company after the implementation of the Settlement Agreements and the
potential adverse financial consequences to shareholders if Mr. Ziegler
attempted to re-assert control of the Company;
(v) the position of legal counsel to the Company that the Settlement
Agreements are still in effect and Mr. Ziegler does not control the
Company, and the support of the Steinkraus family for a sale of the Company
to Purchaser;
(vi) the terms and conditions of the Merger Agreement and the Stock
Purchase Agreement, including the views of legal counsel to the Company
that, despite the assertions of Mr. Ziegler and his lawsuit, it was
appropriate to enter into such agreements if the Board, in the exercise of
its business judgment, determined to do so in the best interests of the
shareholders of the Company;
(vii) the opportunity that existed during the period following the
Company's January 6, 1995 press release to receive indications of interest
from other parties for the Company, the number of parties that executed
confidentiality agreements and the discussions with such parties conducted
by CS First Boston and the fact that, other than the CPC Proposal, no
proposals for a transaction resulted from such process;
(viii) the terms and conditions of the CPC Proposal, including the
potential continuing liabilities to the Company and price adjustments
associated therewith, certain due diligence requirements, the condition of
obtaining the proxies of Mr. Ziegler and GIH Corp., tax consequences and
the preliminary nature of such proposal;
(ix) a review of the other possible alternatives to the Offer and the
Merger, including, among others, the possibility of continuing to operate
the Company as an independent entity and the sale of the Company's corn
and/or tobacco businesses to alternative buyers;
(x) the trading prices of the Shares, including likely trading prices
if a transaction for the sale of all or part of the Company was not
consummated, and that the $40.00 price to the shareholders in the Offer and
the Merger represented a premium of approximately 49.5% over the closing
sales price for the Class A Common Stock and 52.4% over the closing sales
price for the Class B Common Stock on the American Stock Exchange ("AMEX")
on January 5, 1995, the last trading day prior to the first public
announcement that the Company had received an expression of interest
regarding a potential sale of the Company;
(xi) the provisions of the Merger Agreement that enable the Company to
(a) provide information to, and hold discussions with, unsolicited bidders
for the Company if required in the exercise of the directors' fiduciary
duties and (b) terminate the Merger Agreement prior to the consummation of
the
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Offer if the Company receives an offer with respect to an Acquisition
Proposal that the Board of Directors, in the exercise of its fiduciary
duties, determines to recommend to the Company's shareholders, provided
that the Company gives Purchaser 24-hour notice prior to such termination;
(xii) the terms of the Stock Purchase Agreement which provide that,
following the completion of the Rights Offering and the satisfaction of the
other conditions to the Stock Purchase Agreement, Purchaser will purchase
the Available Shares, and that such purchase may allow the Offer to be
consummated without the Class B shares held by GIH Corp. having been
tendered;
(xiii) the fact that the Stock Purchase Agreement terminates upon
termination of the Merger Agreement, such that if the Company terminates
the Merger Agreement in order to recommend an Alternative Proposal to its
shareholders, the Stock Purchase Agreement will not impede the consummation
of such Alternative Proposal; and
(xiv) the termination fee provisions of the Merger Agreement that
require the Company to pay to Purchaser a fee of 2.5% of the total amount
to have been paid by Purchaser for the Shares if the Merger Agreement is
terminated under certain circumstances.
In view of the wide variety of factors considered in connection with its
evaluation of the Offer and the Merger, the Board of Directors found it
impracticable to, and did not, quantify or otherwise attempt to assign relative
weight to the specific factors considered in reaching its determination.
Opinion of Financial Advisor.
As described above, at the meeting of the Board of Directors held on
February 22, 1995, CS First Boston delivered its oral opinion (subsequently
confirmed in writing) to the effect that based upon the assumptions made,
matters considered and limits of the review undertaken, as set forth in such
opinion, the consideration to be received by the shareholders of the Company in
the Offer and the Merger is fair to such holders from a financial point of view.
The full text of CS First Boston's written opinion, dated February 22,
1995, is attached hereto and filed as Exhibit (13) to this Schedule 14D-9.
Shareholders are urged to read the opinion in its entirety for the assumptions
made, matters considered and limits of the review undertaken by CS First Boston.
CS First Boston's opinion is directed only to the fairness of the consideration
to be received by the shareholders of the Company in the Offer and the Merger,
and does not constitute a recommendation to any shareholder of the Company as to
whether such shareholder should tender Shares in the Offer or how such
shareholder should vote on the Merger. The summary of the opinion of CS First
Boston set forth in this Schedule 14D-9 is qualified in its entirety by
reference to the full text of such opinion.
In arriving at its opinion, CS First Boston reviewed the Merger Agreement
and certain publicly available business and financial information relating to
the Company. CS First Boston's opinion does not address the Company's underlying
business decision to enter into the Merger Agreement. CS First Boston also
reviewed certain other information, including financial forecasts, furnished to
CS First Boston by the Company and met with the Company's management to discuss
the business and prospects of the Company. In addition, CS First Boston also
considered certain financial and stock market data of the Company, and compared
that data with similar data for other publicly held companies in businesses
similar to those of the Company and considered the financial terms of certain
other business combinations and other transactions which have recently been
effected. CS First Boston also considered such other information, financial
studies, analyses and investigations and financial, economic and market criteria
which it deemed relevant. With respect to outstanding patent and environmental
litigation involving the Company for which significant damages are alleged, CS
First Boston relied solely upon the judgment of the management of the Company
and its counsel in such matters that the outcome of the litigation will not have
a material adverse affect on the financial condition of the Company.
In connection with its review, CS First Boston did not assume any
responsibility for independent verification of any of the foregoing information
and relied on its being complete and accurate in all material respects. With
respect to the financial forecasts, CS First Boston assumed that they were
reasonably prepared
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on bases reflecting the best currently available estimates and judgments of the
Company's management as to the future financial performance of the Company. In
addition, CS First Boston did not make an independent evaluation or appraisal of
the assets or liabilities (contingent or otherwise) of the Company, nor was it
furnished with any such evaluations or appraisals. CS First Boston's opinion was
necessarily based upon financial, economic, market or other conditions as they
existed and could be evaluated on the date of the opinion. In connection with
its engagement, CS First Boston approached third parties to solicit indications
of interest in a possible acquisition of the Company and was approached by third
parties indicating such interest and held preliminary discussions with certain
of those parties.
In arriving at its opinion and making its presentation to the Board of
Directors, CS First Boston performed a variety of financial analyses, including
those summarized below. The summary set forth below includes certain of the
financial analyses discussed by CS First Boston with the Board of Directors, but
does not purport to be a complete description of the analyses performed by CS
First Boston in arriving at its opinion. Arriving at a fairness opinion is a
complex process that involves various determinations as to the most appropriate
and relevant methods of financial analysis and the application of those methods
to the particular circumstances and, therefore, such an opinion is not
necessarily susceptible to partial analysis or summary description. CS First
Boston believes that its analyses must be considered as a whole and that
selecting portions of its analyses or portions of the factors considered by it,
without considering all analyses and factors, could create an incomplete view of
the evaluation process underlying its opinion. In performing its analyses, CS
First Boston made numerous assumptions with respect to industry performance,
general business, economic, market and financial conditions and other matters,
many of which are beyond the control of the Company. Any estimates incorporated
in the analyses performed by CS First Boston are not necessarily indicative of
actual values or future results, which may be significantly more or less
favorable than suggested by such analyses. Additionally, estimates of the value
of businesses and securities neither purport to be appraisals nor necessarily
reflect the prices at which businesses or securities may actually be sold.
Accordingly, such analyses and estimates are inherently subject to substantial
uncertainty. No public company utilized as a comparison is identical to the
Company, and none of the similar transactions utilized as a comparison is
identical to the Offer and the Merger. Accordingly, an analysis of publicly
traded comparable companies and comparable acquisition transactions is not
mathematical; rather it involves complex considerations and judgments concerning
differences in financial and operating characteristics of the comparable
companies or the companies involved in comparable acquisition transactions and
other factors that could affect the public trading value of the comparable
companies or company or transaction to which they are being compared.
In the past, CS First Boston has performed certain investment banking
services for the Company and for Purchaser, and has received customary fees for
such services.
The following is a summary of the analyses performed by CS First Boston in
connection with its fairness opinion. CS First Boston's analyses are based on a
valuation of the Company's three business divisions: Fructose, Food Ingredients
and Tobacco.
FRUCTOSE
Discounted Cash Flow Analysis. CS First Boston calculated the estimated
unlevered after-tax cash flows that the Company's fructose business based in
Decatur, Alabama and Dimmitt, Texas ("Fructose") could be expected to generate
over the ten-year period ending December 31, 2004, using management's
projections of Fructose's future financial performance for 1995-1999 and
projections developed by CS First Boston, after discussions with management, for
January 1, 2000 through December 31, 2004. Using these projections, CS First
Boston then calculated estimated terminal values for Fructose at the end of the
ten-year period by applying multiples ranging from 5.5x to 6.5x (based on the
way businesses such as Fructose are valued in the public and private markets) to
such projections' projected 2004 operating cash flow (defined as operating
income plus depreciation and amortization ("EBITDA")). The unlevered cash flows
for the projected ten-year period and the range of terminal values were then
discounted to December 31, 1994 using annual discount rates ranging from 11% to
12% (chosen to reflect the weighted average cost of capital of businesses such
as Fructose) to imply a hypothetical enterprise value for Fructose. Two cases
were calculated: a base case, and an expansion case in which fructose production
at the Decatur, Alabama plant is increased.
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The discounted cash flow analysis indicated a hypothetical enterprise value for
Fructose of between $279.1 million to $316.8 million for the base case and a
hypothetical enterprise value for Fructose of between $324.7 million to $387.4
million for the expansion case.
Comparable Companies Analysis. CS First Boston reviewed certain publicly
available historical information for the period from January 1, 1993 to
September 30, 1994 and projected 1994 and projected 1995 financial results
(reflecting a composite of research analysts' estimates) of certain corn wet
milling and food ingredients companies considered by CS First Boston to be
reasonably comparable to Fructose, including Archer Daniels-Midland, ConAgra
Inc., CPC International Inc., Midwest Grain Products, Penwest Ltd. and Universal
Foods. CS First Boston then applied the comparable companies' multiples of the
latest 12-month period, projected 1994 and projected 1995 financial performance
(including sales, operating income, EBITDA, net income and earnings per share)
to imply a hypothetical enterprise value for Fructose. The comparable companies
analysis indicated a hypothetical enterprise value for Fructose of between
$250.0 million to $300.0 million.
Comparable Acquisitions Analysis. CS First Boston reviewed the acquisition
multiples of companies considered by CS First Boston to be reasonably comparable
to Fructose that were the target companies in certain recent transactions
involving partial or complete acquisitions. The comparable transactions involved
transactions for target companies in the corn wet milling and food ingredients
industries. CS First Boston calculated certain multiples (including sales,
EBITDA, operating income, net income and grind capacity) of the prices paid in
such acquisitions and applied such multiples to Fructose's latest 12-month
period ended December 31, 1994 results to imply a hypothetical enterprise value
for Fructose. The comparable acquisitions analysis indicated a hypothetical
enterprise value for Fructose of between $280.0 million to $330.0 million.
CS First Boston Reference Range. On the basis of the valuation
methodologies employed in the analyses above, CS First Boston developed an
enterprise value reference range for Fructose of between $300.0 million to
$340.0 million.
FOOD INGREDIENTS
Discounted Cash Flow Analysis. CS First Boston calculated the estimated
unlevered after-tax cash flows that the Company's food ingredients business
including its corn syrup business based in Hammond, Indiana ("Food Ingredients")
could be expected to generate over the ten-year period ending December 31, 2004,
using management's projections of Food Ingredients' future financial performance
for 1995-1999 and projections developed by CS First Boston, after discussions
with management, for projections from January 1, 2000 through December 31, 2004.
Using these projections, CS First Boston then calculated estimated terminal
values for Food Ingredients at the end of the ten-year period by applying
multiples ranging from 5.5x to 6.5x (based on the way businesses such as Food
Ingredients are valued in the public and private markets) to such projections'
projected 2004 EBITDA. The unlevered cash flows for the projected ten-year
period and the range of terminal values were then discounted to December 31,
1994 using annual discount rates ranging from 11% to 12% (chosen to reflect the
weighted average cost of capital of businesses such as Food Ingredients) to
imply a hypothetical enterprise value for Food Ingredients. The discounted cash
flow analysis indicated a hypothetical enterprise value for Food Ingredients of
between $95.0 million to $121.2 million.
Comparable Companies Analysis. CS First Boston reviewed certain publicly
available historical information for the period from January 1, 1993 to
September 30, 1994 and projected 1994 and projected 1995 financial results
(reflecting a composite of research analysts' estimates) of certain corn wet
milling and food ingredients companies considered by CS First Boston to be
reasonably comparable to Food Ingredients, including Archer Daniels-Midland,
ConAgra Inc., CPC International Inc., Midwest Grain Products, Penwest Ltd. and
Universal Foods. CS First Boston then applied the comparable companies'
multiples of the latest 12-month period, projected 1994 and projected 1995
financial performance (including sales, operating income, EBITDA, net income and
earnings per share) to imply a hypothetical enterprise value for Food
Ingredients. The comparable companies analysis indicated a hypothetical
enterprise value for Food Ingredients of between $80.0 million to $100.0
million.
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Comparable Acquisitions Analysis. CS First Boston reviewed the acquisition
multiples of companies considered by CS First Boston to be reasonably comparable
to Food Ingredients that were the target companies in certain recent
transactions involving partial or complete acquisitions. The comparable
transactions involved transactions for target companies in the corn wet milling
and food ingredients industries. CS First Boston calculated certain multiples
(including sales, EBITDA, operating income, net income and grind capacity) of
the prices paid in such acquisitions and applied such multiples to Food
Ingredient's latest 12-month period ended December 31, 1994 results to imply a
hypothetical enterprise value for Food Ingredients. The comparable acquisitions
analysis indicated a hypothetical enterprise value for Food Ingredients of
between $90.0 million to $110.0 million.
CS First Boston Reference Range. On the basis of the valuation
methodologies employed in the analyses above, CS First Boston developed an
enterprise value reference range for Food Ingredients of between $95.0 million
to $110.0 million.
TOBACCO
Discounted Cash Flow Analysis. CS First Boston calculated the estimated
unlevered after-tax cash flows that the Company's tobacco businesses ("Tobacco")
could be expected to generate over the ten-year period ending December 31, 2004,
using management's projections of Tobacco's future financial performance for
1995-1999 and projections developed by CS First Boston, after discussions with
management, for January 1, 2000 through December 31, 2004. Using these
projections, CS First Boston then calculated estimated terminal values for
Tobacco at the end of the ten-year period by applying multiples ranging from
5.0x to 5.5x (based on the way businesses such as Tobacco are valued in the
public and private markets) to such projections' projected 2004 EBITDA. The
unlevered cash flows for the projected ten-year period and the range of terminal
values were then discounted to December 31, 1994 using annual discount rates
ranging from 13% to 14% (chosen to reflect the weighted average cost of capital
businesses such as Tobacco) to imply a hypothetical enterprise value for
Tobacco. Two cases were calculated: a base case and an alternate case. The
alternate case assumes lower unit volume and pricing growth. The discounted cash
flow analysis indicated a hypothetical enterprise value for Tobacco of between
$226.4 million to $251.1 million for the base case and a hypothetical enterprise
value for Tobacco of between $173.9 to $190.1 million for the alternate case.
Comparable Companies Analysis. CS First Boston reviewed certain publicly
available historical information for the period from January 1, 1993 to
September 30, 1994 and projected 1994 and projected 1995 financial results
(reflecting a composite of research analysts' estimates) of certain tobacco
companies considered by CS First Boston to be reasonably comparable to Tobacco,
including Culbro Corp., Philip Morris Co., RJR Nabisco Holdings and UST Inc. CS
First Boston then applied the comparable companies' multiples of the latest
12-month period, projected 1994 and projected 1995 financial performance
(including sales, operating income, EBITDA, net income and earnings per share)
to imply a hypothetical enterprise value for Tobacco. The comparable companies
analysis indicated a hypothetical enterprise value for Tobacco of between $133.0
million to $178.0 million.
Comparable Acquisitions Analysis. CS First Boston reviewed the acquisition
multiples of companies considered by CS First Boston to be reasonably comparable
to Tobacco that were the target companies in certain recent transactions
involving partial or complete acquisitions. The comparable transactions involved
transactions for target companies in the tobacco industry. CS First Boston
calculated certain multiples (including sales, EBITDA, operating income and net
income) of the prices paid in such acquisitions and applied such multiples to
Tobacco's latest 12-month period ended December 31, 1994 results to imply a
hypothetical enterprise value for Tobacco. The comparable acquisitions analysis
indicated a hypothetical enterprise value for Tobacco of between $175.0 million
to $210.0 million.
LBO Analysis. CS First Boston estimated what a non-strategic financial
acquiror hypothetically might pay to acquire Tobacco. The leveraged buy-out
analysis indicated a hypothetical enterprise value for Tobacco of $165.0 to
$185.0 million.
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CS First Boston Reference Range. On the basis of the valuation
methodologies employed in the analyses above, CS First Boston developed an
enterprise value reference range for Tobacco of between $175.0 million to $200.0
million.
CONSOLIDATED VALUATION
CS First Boston Consolidated Reference Range Analysis. CS First Boston
based its consolidated reference range on the enterprise value reference ranges
computed for each of the Company's three segments (Fructose, Food Ingredients
and Tobacco) minus an unallocated overhead charge, plus cash, option proceeds,
overfunded pension and other assets, with deductions including debt, capital
leases, liabilities related to patent and environmental litigation (based on
estimates provided by the Company) and certain corporate level taxes based on
structures necessary to realize indicated values. The range of these adjustments
totaled between $202.5 million to $206.8 million. The reference range analysis
indicated a hypothetical reference range for the equity value of the Company of
between $33.49 per share to $41.25 per share.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The Company has retained CS First Boston on an exclusive basis to render
financial advisory services for the Company with respect to the Company's review
of its strategic and financial options, the Offer and matters arising in
connection therewith. CS First Boston is to receive an opinion fee of $675,000
for all opinions rendered with respect to the engagement, payable at the time
the first opinion is rendered by CS First Boston (the "Opinion Fee"). Strategic
advisory fees of $300,000 paid by the Company to CS First Boston in 1994 will be
credited against the Opinion Fee. In the event of a sale, directly or indirectly
and whether in one or a series of transactions, of (i) a majority or more of the
assets of the Company or (ii) capital stock representing the right to elect a
majority of the Board of Directors of the Company, or any recapitalization,
restructuring or liquidation of the Company by the current owners, a third party
or any combination thereof, or any other form of merger or disposition which
results in the effective sale of all or a significant portion of the Company
("Sale"), CS First Boston is to receive a transaction fee equal to 0.75% of the
aggregate consideration payable at the time of the closing of a Sale (the
"Transaction Fee"). The amount of any Opinion Fee actually paid in excess of the
strategic advisory fees paid in 1994 will be credited against the Transaction
Fee. If a transaction other than a Sale is consummated or a definitive agreement
is entered into that subsequently results in a strategic transaction other than
a Sale, customary fees as mutually agreed upon by the Company and CS First
Boston will be paid by the Company (which fees shall be calculated as if such
strategic transaction were a Sale). The Company has also agreed to reimburse CS
First Boston for its reasonable out-of-pocket expenses, including the reasonable
fees and expenses of its counsel, and any other advisor retained by CS First
Boston, and to indemnify CS First Boston and certain related persons and
entities.
Neither the Company nor any person acting on its behalf intends to employ,
retain or compensate any other person to make solicitations or recommendations
to the shareholders of the Company in connection with the Offer or the Merger.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
(a) To the best of the Company's knowledge, no transactions in Shares have
been effected within the past 60 days by the Company or by any executive
officer, director, affiliate or subsidiary of the Company except pursuant to the
Stock Purchase Agreement and except for purchases of Shares on behalf of, and
contributions of Shares by the Company to, the Company's 401(k) Plan, in which
the Company's executive officers participate.
(b) To the best of the Company's knowledge, except as described below, all
of the Company's executive officers, directors and affiliates currently intend
to tender their Shares pursuant to the Offer.
As described in Items 3(b) and 4(a) above, on February 22, 1995, William
Ziegler, III, Chairman of the Board of the Company, stated that the Shares owned
or controlled by the Ziegler family are not for sale or tender. Also on such
date, Mr. Ziegler filed suit in Maine Superior Court seeking declaratory and
injunctive relief against the Merger Agreement, the Stock Purchase Agreement and
the transactions contemplated
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thereby as well as unspecified damages. GIH Corp., the owner of approximately
13.4% of the Class A Common Stock and approximately 47.3% of the Class B Common
Stock, is a named plaintiff in such litigation. The control of GIH Corp. is in
dispute. As described above, Mr. Ziegler has taken the position that the
Settlement Agreements are no longer in effect as a result of the Surrogate's
Court decision in the One Share Litigation and that, therefore, he controls GIH
Corp. Mrs. Steinkraus and the Company believe that the Settlement Agreements
remain in effect until the appeals process in the One Share Litigation has been
exhausted and that, therefore, control of GIH Corp. is shared equally by the
Ziegler and Steinkraus families. Mrs. Steinkraus has indicated to the Company's
Board of Directors that she is in favor of the Offer and the Merger.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY SUBJECT COMPANY.
(a) Except as described in Item 3(b) above, no negotiation is being
undertaken or is underway by the Company in response to the Offer that relates
to or would result in (1) an extraordinary transaction, such as a merger or
reorganization, involving the Company or any subsidiary of the Company; (2) a
purchase, sale or transfer of a material amount of assets by the Company or any
subsidiary of the Company; (3) a tender offer for, or other acquisition of,
securities by or of the Company; or (4) any material change in the present
capitalization or dividend policy of the Company.
On February 23, 1995, Pexco Holdings, Inc., an affiliate of Usaha Tegas
sdn. bhd. ("UTSB"), a Malaysian private investment holding company, forwarded a
letter to Mr. Ziegler, Mrs. Steinkraus, GIH Corp. and the trustees of the
Ziegler and Steinkraus trusts (the "GIH Entities"), proposing that A.M.
Acquisition Corp. ("AMAC"), a wholly-owned subsidiary of UTSB, acquire all of
the Class B Common Stock owned by the GIH Entities at a purchase price of $44.00
per share (the "GIH Class B Acquisition"). Following execution of a definitive
agreement for such purchase, AMAC would agree to propose a merger transaction to
the Company pursuant to which all outstanding shares of the Company's common
stock (other than the Class B shares that are the subject of the GIH Class B
Acquisition) would be converted into the right to receive $40.25 per share in
cash. The GIH Class B Acquisition would be conditioned upon, among other things,
the amendment of the Company's Articles of Incorporation to provide that Section
910 of the MBCA shall not be applicable to the Company. (Section 910 provides
that following the acquisition by any person of 25% of the voting power, or 25%
or any class of voting stock, of a corporation, the acquiror must offer to
purchase all shares of the corporation's voting stock for "fair value.") The
obligations of all GIH Entities to effect the GIH Class B Acquisition would be
conditioned on the concurrent purchase by AMAC or any affiliate thereof of all
shares of Class A Common Stock owned by the GIH Entities at a price of not less
than $40.25 per share. The UTSB proposal will remain open until the close of
business on March 1, 1995.
On February 24, 1995, Mr. Ziegler forwarded a copy of the UTSB proposal to
the Company's Board of Directors.
(b) Except as set forth in paragraph (a) above and in Items 3(b) and 4
above, there are no transactions, Board resolutions, agreements in principle or
signed contracts in response to the Offer which relate to or would result in one
or more of the events referred to in Item 7(a) above.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
(a) Certain Litigation. In January 1995, alleged shareholders of the
Company filed complaints in Connecticut Superior Court in three purported class
actions against the Company and its Board of Directors, entitled Kenneth Steiner
and William Steiner v. American Maize-Products Co., et al., Alan Katz v.
American Maize-Products Co., et al. and Mitchell Saltzman and Miriam Sarnoff v.
American Maize-Products Co., et al. The actions allege that the Company's Board
of Directors breached its fiduciary duties to shareholders by not adequately
considering Purchaser's initial offer on December 19, 1994 to acquire the
Company at a purchase price of $32.00 per share, by rejecting such offer, by
failing to make adequate disclosure of the Offer and by placing personal
interests, including an alleged attempt by Mr. Ziegler to retain control of the
Company, ahead of the interest of the public shareholders. The complaints seek
equitable relief and unspecified damages.
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The Company believes that the allegations in the complaint are without merit and
intends to defend the actions vigorously.
(b) The information statement attached as Annex A hereto is being furnished
in connection with the possible designation by Purchaser, pursuant to the Merger
Agreement, of certain persons to be appointed to the Board of Directors of the
Company other than at a meeting of the Company's shareholders.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(1) -- Agreement and Plan of Merger, dated as of February 22, 1995, among
the Company, Purchaser and Merger Sub.
(2) -- Stock Purchase Agreement, dated February 22, 1995, by and between
the Company, Purchaser and Merger Sub.
(3) -- Confidentiality Agreement, dated January 30, 1995, between the
Company and Purchaser.
(4) -- Employment Agreement dated January 2, 1995 by and between the
Company and Robert M. Stephan.
(5) -- Employment Agreement dated January 2, 1995 by and between the
Company and Edward P. Norris.
(6) -- Employment Agreement dated January 2, 1995 by and between the
Company and Timothy Mann.
(7) -- Employment Agreement dated January 2, 1995 by and between the
Company and Charles A. Koons.
(8) -- Employment Agreement dated January 2, 1995 by and between the
Company and Michael J. Gorbitz.
(9) -- Employment Agreement dated January 2, 1995 by and between the
Company and Jane E. Downey.
(10)-- Employment Agreement dated January 2, 1995 by and between the
Company and Frederick M. Ash.
(11)-- Employment Agreement dated July 1, 1993 by and between the Company
and Patric J. McLaughlin, and First Amendment to Employment
Agreement dated January 2, 1995.
(12)-- Letter to shareholders of the Company dated February 28, 1995.*
(13)-- Opinion of CS First Boston Corporation dated February 22, 1995.*
(14)-- Press release issued by the Company on February 22, 1995.
- ---------------
* Included in copies mailed to shareholders.
22
<PAGE> 24
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
AMERICAN MAIZE-PRODUCTS COMPANY
By: /s/ PATRIC J. MCLAUGHLIN
------------------------------------
Patric J. McLaughlin
President and Chief Executive
Officer
Dated: February 28, 1995
<PAGE> 25
ANNEX A
AMERICAN MAIZE-PRODUCTS COMPANY
250 HARBOR DRIVE
STAMFORD, CT 06902
------------------------
INFORMATION STATEMENT PURSUANT TO
SECTION 14(F) OF THE SECURITIES
EXCHANGE ACT OF 1934 AND RULE 14F-1 THEREUNDER
------------------------
This Information Statement is being mailed on February 28, 1995, as part of
the American Maize-Products Company's (the "Company")
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
to the holders of record of the Company's Class A common stock, par value $0.80
per share (the "Class A Common Stock") and the Company's Class B common stock,
par value $0.80 per share (the "Class B Common Stock" and, together with the
Class A Common Stock, the "Shares"). Capitalized terms used and not otherwise
defined herein shall have the meaning set forth in the Schedule 14D-9. You are
receiving this Information Statement in connection with the possible election of
persons designated by Purchaser to seats on the Company's Board of Directors.
You are urged to read this Information Statement carefully. You are not,
however, required to take any action.
The Merger Agreement provides that, upon request of Purchaser, the Company
shall, subject to compliance with applicable law and promptly following the
purchase by Merger Sub of more than 50 percent of the outstanding shares of
Class A Common Stock and more than 50 percent of the outstanding shares of Class
B Common Stock pursuant to the Offer, the Stock Purchase Agreement or otherwise,
take all actions necessary to cause persons designated by Purchaser ("Purchaser
Designees") to become directors of the Company so that the total number of such
persons equals that number of directors, rounded up to the next whole number,
which represents (i) the product of (w) the total number of directors on the
Board of Directors the shares of Class A Common Stock are entitled to elect
multiplied by (x) the percentage that the number of shares of Class A Common
Stock so accepted for payment plus any shares of Class A Common Stock
beneficially owned by Purchaser or its affiliates on the date of the Merger
Agreement bears to the number of shares of Class A Common Stock outstanding at
the time of such acceptance for payment plus (ii) the product of (y) the total
number of directors on the Board of Directors the shares of Class B Common Stock
are entitled to elect multiplied by (z) the percentage that the number of shares
of Class B Common Stock so accepted for payment plus any shares of Class B
Common Stock beneficially owned by Purchaser or its affiliates on the date of
the Merger Agreement bears to the number of shares of Class B Common Stock
outstanding at the time of such acceptance for payment. In furtherance thereof,
the Company shall increase the size of the Company's Board of Directors, or use
its best efforts to secure the resignation of directors, or both, as is
necessary to permit Purchaser Designees to be elected to the Company's Board of
Directors; provided, however, that prior to the Effective Time, the Company's
Board of Directors shall always have at least two members who are neither
officers of Purchaser or the Company (or any of their respective affiliates) nor
designees of Purchaser (or any of its affiliates), nor shareholders or
affiliates of Purchaser, nor beneficial owners of 5% or more of any class of
capital stock of the Company (or any of their respective affiliates)
("Insiders"). At such time, the Company, if so requested, will use its best
efforts to cause persons designated by Purchaser to constitute the same
percentage of each committee of such board, each board of directors of each
subsidiary of the Company and each committee of each such board (in each case to
the extent of the Company's ability to elect such persons). This Information
Statement is required by Section 14(f) of the Exchange Act, and Rule 14f-1
promulgated thereunder.
For purposes of provisions of the Merger Agreement relating to termination
of the Merger, modification or amendment of the Merger Agreement, or waiver of
conditions to the Company's obligations to consummate the Merger, no action
taken by the Board of Directors of the Company prior to the Merger shall be
effective
A-1
<PAGE> 26
unless such action is approved by the affirmative vote of at least a majority of
the directors of the Company who are not Insiders.
Pursuant to the Merger Agreement, on February 28, 1995, Merger Sub
commenced the Offer. The Offer is scheduled to expire at 12:00 midnight, New
York City time, on March 27, 1995, unless extended pursuant to the terms of the
Offer. The terms of the Merger Agreement, a summary of the events leading up to
the Offer and the execution of the Merger Agreement and other information
concerning the Offer and the Merger are contained in the Schedule 14D-9.
The information contained in this Information Statement concerning
Purchaser, Merger Sub and Purchaser Designees has been furnished to the Company
by such persons, and the Company assumes no responsibility for the accuracy or
completeness of such information.
INFORMATION WITH RESPECT TO THE COMPANY
The outstanding voting securities of the Company as of February 21, 1995
consisted of 8,558,474 shares of Class A Common Stock and 1,742,057 shares of
Class B Common Stock. Class A Common Stock and Class B Common Stock are
substantially similar, except as to voting rights. Except as required by the
Maine Business Corporations Act (the "MBCA") or otherwise provided in the
Company's Articles of Incorporation or By-Laws, voting power is vested solely
with the holders of shares of the Class B Common Stock. The holders of Class A
Common Stock are entitled only to such limited voting rights as are described
below. The holders of Class A Common Stock are entitled to elect 30% of the
total membership of the Company's Board of Directors (or the nearest larger
whole number if such percentage is not a whole number), and the holders of Class
B Common Stock are entitled to elect the remaining members of the Company's
Board of Directors. In addition, holders of Class A Common Stock and holders of
Class B Common Stock are entitled to vote together as a single class with
respect to the following matters: (a) the reservation of any shares of capital
stock of the Company for options granted or to be granted to officers, directors
or employees of the Company and (b) the acquisition of the stock or assets of
any other company if (i) any officer, director or holder of 10% or more of any
class of shares of Common Stock has a direct or indirect interest in the company
or assets to be acquired or in the consideration to be paid in the transaction,
(ii) the transaction involves the issuance of Class A Common Stock or Class B
Common Stock or securities convertible into either, or any combination of the
three, and the aggregate number of shares of Common Stock so issued together
with the Class B Common Stock which could be issued upon conversion of such
securities approximates, in the reasonable judgment of the Board of Directors of
the Company, 20% of the aggregate number of shares of Class A Common Stock and
Class B Common Stock outstanding immediately prior to such transaction or (iii)
the transaction involves the issuance of Class A Common Stock or Class B Common
Stock and any additional consideration, and if the value of the aggregate
consideration to be issued has, in the reasonable judgment of the Board of
Directors of the Company, a combined fair value of approximately 20% or more of
the aggregate market value of shares of Class A Common Stock and Class B Common
Stock outstanding immediately prior to such transaction (each a "Voting
Acquisition Transaction"). A separate class vote consisting of the holders of
Class A Common Stock and holders of Class B Common Stock is required for any
Voting Acquisition Transaction involving a merger or consolidation of the
Company. Each share of Class A Common Stock and Class B Common Stock is entitled
to one vote per share.
A-2
<PAGE> 27
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of February 21, 1995 with
respect to the Shares beneficially owned by each person known by the Company to
be the beneficial owner of more than five percent of a class of the Company's
outstanding Common Stock.
<TABLE>
<CAPTION>
TITLE OF CLASS AMOUNT AND NATURE PERCENT
NAME OF COMMON STOCK OF BENEFICIAL OWNERSHIP OF CLASS
- ---------------------------- --------------- ----------------------------------- --------
<S> <C> <C> <C>
William Ziegler, III........ Class A(1) Aggregate Amount -- 1,330,098 15.5%
250 Harbor Drive Sole Voting Power -- 65,504 *
P.O. Box 10128 Shared Voting Power -- 1,264,594 14.8%
Stamford, CT 06904 Sole Investment Power -- 65,504 *
Shared Investment Power -- 1,264,594 14.8%
Class B(1) Aggregate Amount -- 949,920 54.5%
Sole Voting Power -- 73,762 4.2%
Shared Voting Power -- 876,158 50.3%
Sole Investment Power -- 73,762 4.2%
Shared Investment Power -- 876,158 50.3%
Helen Z. Steinkraus......... Class A(2) Aggregate Amount -- 1,257,989(3) 14.7%
250 Harbor Drive Sole Voting Power -- 3,394 *
P.O. Box 10128 Shared Voting Power -- 1,254,595 14.7%
Stamford, CT 06904 Sole Investment Power -- 3,394 *
Shared Investment Power -- 1,254,595 14.7%
Class B(2) Aggregate Amount -- 882,040(3) 50.6%
Sole Voting Power -- 5,883 *
Shared Voting Power -- 876,157 50.3%
Sole Investment Power -- 5,883 *
Shared Investment Power -- 876,157 50.3%
United States Trust......... Class A(4) Aggregate Amount -- 1,256,767 14.7%
Company of New York Sole Voting Power -- 0 --
114 West 47th Street Shared Voting Power -- 1,256,767 14.7%
New York, NY 10036 Sole Investment Power -- 0 --
Shared Investment Power -- 1,256,767 14.7%
14.7%
Class B(4) Aggregate Amount -- 876,158 50.3%
Sole Voting Power -- 0 --
Shared Voting Power -- 876,158 50.3%
Sole Investment Power -- 0 --
Shared Investment Power -- 876,158 50.3%
First Fidelity Bank......... Class A(5) Aggregate Amount -- 1,264,594 14.8%
P.O. Box 1297 Sole Voting Power -- 0 --
Stamford, CT 06904 Shared Voting Power -- 1,264,594 14.8%
Sole Investment Power -- 0 --
Shared Investment Power -- 1,264,594 14.8%
Class B(5) Aggregate Amount -- 876,158 50.3%
Sole Voting Power -- 0 --
Shared Voting Power -- 876,158 50.3%
Sole Investment Power -- 0 --
Shared Investment Power -- 876,158 50.3%
GIH Corp.................... Class A(6) Aggregate Amount -- 1,140,294 13.3%
250 Harbor Drive Sole Voting Power -- 1,140,294 13.3%
P.O. Box 10128 Shared Voting Power -- 0 --
Stamford, CT 06904 Sole Investment Power -- 1,140,294 13.3%
Shared Investment Power -- 0 --
Class B(6) Aggregate Amount -- 824,521 47.3%
Sole Voting Power -- 824,521 47.3%
Shared Voting Power -- 0 0
Sole Investment Power -- 824,521 47.3%
Shared Investment Power -- 0 0
</TABLE>
A-3
<PAGE> 28
<TABLE>
<CAPTION>
TITLE OF CLASS AMOUNT AND NATURE PERCENT
NAME OF COMMON STOCK OF BENEFICIAL OWNERSHIP OF CLASS
- ---------------------------- --------------- ----------------------------------- --------
<S> <C> <C> <C>
Archer Daniels Midland Co... Class A(7) Aggregate Amount -- 2,429,700 28.4%
4666 Faries Parkway Sole Voting Power -- 2,115,200 24.7%
P.O. Box 1470 Shared Voting Power -- 0 --
Decatur, IL 62525 Sole Investment Power -- 2,429,700 28.4%
Shared Investment Power -- 0 --
Marvin C. Schwartz.......... Class B(8) Aggregate Amount -- 143,300 8.2%
c/o Kenneth E. Leopold Sole Voting Power -- 143,300 8.2%
Neuberger & Berman Shared Voting Power -- 0 --
522 Fifth Avenue Sole Investment Power -- 143,300 8.2%
New York, NY 10036 Shared Investment Power -- 0 --
</TABLE>
- ---------------
* Does not exceed one percent of the total outstanding shares of such class.
(1) Based upon Schedule 13G, Amendment No. 16, dated February 13, 1995, filed
with the Securities and Exchange Commission (the "SEC"). Mr. Ziegler reports
that he shares voting and investment power over 1,264,594 and 876,158 of
such shares of the Company's Class A Common Stock and Class B Common Stock,
respectively. Mr. Ziegler shares voting and investment power of such shares
with First Fidelity Bank ("First Fidelity") as co-trustees of two trusts
(the "Ziegler Trusts"). Of such shares, 1,140,294 shares of the Company's
Class A Common Stock and 824,521 shares of the Company's Class B Common
Stock are owned by GIH Corp. ("GIH"). GIH is wholly owned by Mr. Ziegler,
Mrs. Steinkraus and the co-trustees of the Ziegler Trusts and the Steinkraus
Trusts.
(2) Based upon Schedule 13D, Amendment Nos. 1 and 3, dated March 2, 1992, filed
with the SEC and information received from United States Trust Company of
New York ("U.S. Trust"). Mrs. Steinkraus and U.S. Trust report that she
shares voting and investment power over 1,254,595 and 876,157 of such shares
of the Company's Class A Common Stock and the Company's Class B Common
Stock, respectively. Mrs. Steinkraus shares such voting and investment power
with U.S. Trust as co-trustees of two trusts (the "Steinkraus Trusts"). Of
such shares, 1,140,294 shares of the Company's Class A Common Stock and
824,521 shares of the Company's Class B Common Stock are owned by GIH. GIH
is wholly owned by Mr. Ziegler, Mrs. Steinkraus and the co-trustees of the
Ziegler Trusts and the Steinkraus Trusts.
(3) Excludes 132.25 shares of the Company's Class A Common Stock owned by Eric
M. Steinkraus and 695 shares of the Company's Class B Common Stock owned by
Philip C. Steinkraus (based upon Schedule 13D, Amendment Nos. 1 and 3, dated
March 2, 1992, filed with the SEC by Helen Z. Steinkraus, Eric M. Steinkraus
and Philip C. Steinkraus, who stated therein that they are members of a
group and have executed a joint filing agreement pursuant to Rule 13d-1(f)
under the Securities Exchange Act of 1934).
(4) Based upon Schedule 13G, Amendment No. 16, dated February 11, 1995, filed
with the SEC. U.S. Trust reports that it shares voting and investment power
with Mrs. Steinkraus as co-trustee of certain trusts. Included in such
shares are 1,140,294 shares of the Company's Class A Common Stock and
824,521 shares of the Company's Class B Common Stock owned by GIH.
(5) Based upon Schedule 13G dated April 8, 1994, filed with the SEC.
(6) Based upon Schedule 13G, Amendment No. 16, dated February 24, 1995, filed
with the SEC. See also Footnote Nos. 1 and 2 above.
(7) Based upon Schedule 13D, Amendment No. 7, dated September 17, 1993, filed
with the SEC.
(8) Based upon Schedule 13D, Amendment No. 1, dated January 10, 1991, filed with
the SEC.
A-4
<PAGE> 29
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information as of February 21, 1995,
as to shares of Common Stock beneficially owned by the Company's directors, the
Chief Executive Officer of the Company, and each of the four most highly
compensated executive officers, other than the Chief Executive Officer, and all
officers and directors of the Company as a group. Unless otherwise indicated in
the footnotes, each of the following persons has sole voting and investment
power with respect to the shares of the Company's Common Stock set forth in the
table.
<TABLE>
<CAPTION>
TITLE OF CLASS AMOUNT AND NATURE PERCENT
NAME OF COMMON STOCK OF BENEFICIAL OWNERSHIP OF CLASS
- ----------------------------------------------- --------------- ----------------------- --------
<S> <C> <C> <C>
William Ziegler, III........................... Class A 1,330,098(1)(2) 15.5%
Class B 949,920(1)(3) 54.5%
Charles B. Cook, Jr............................ Class A 2,336 *
Class B 2,669 *
Jane E. Downey................................. Class A 15,395(2) *
Class B -0- --
Paul F. Engler................................. Class A 2,500 *
Class B -0- --
James E. Harwood............................... Class A 1,000 *
Class B -0- --
John R. Kennedy................................ Class A 800 *
Class B 200 *
Charles A. Koons............................... Class A 16,083(2) *
Class B -0- --
Leslie C. Liabo................................ Class A 14,475(2) *
Class B 3,875 *
Patric J. McLaughlin........................... Class A 106,672(2) 1.3%
Class B -0- --
C. Alan MacDonald.............................. Class A 1,000 *
Class B -0- --
H. Barclay Morley.............................. Class A 2,500 *
Class B -0- --
Edward P. Norris............................... Class A 48,042(2) *
Class B -0- --
William L. Rudkin.............................. Class A 1,000(4) *
Class B -0- --
Wendell M. Smith............................... Class A -0- --
Class B 100 *
William C. Steinkraus.......................... Class A 110(5) *
Class B -0-(5) --
Robert M. Stephan.............................. Class A 20,117(2) *
Class B -0- --
Raymond S. Troubh.............................. Class A 3,000 *
Class B 500 *
All directors and officers as a group.......... Class A 1,643,851 19.2%
Class B 957,264 55.0%
</TABLE>
- ---------------
* Does not exceed one percent of the total outstanding shares of such class.
(1) Based upon Schedule 13G, Amendment No. 16, dated February 13, 1995, filed
with the SEC. Mr. Ziegler reports that he shares voting and investment power
over 1,264,594 and 876,158 of such shares of the Company's Class A Common
Stock and Class B Common Stock, respectively. Mr. Ziegler shares voting and
investment power of such shares with First Fidelity as co-trustees of the
Ziegler Trusts. Of such shares, 1,140,294 shares of the Company's Class A
Common Stock and 824,521 shares of the
A-5
<PAGE> 30
Company's Class B Common Stock are owned by GIH. GIH is wholly owned by Mr.
Ziegler, Mrs. Steinkraus and the co-trustees of the Ziegler Trusts and the
Steinkraus Trusts.
(2) Includes the following shares of the Company's Class A Common Stock that may
be acquired within 60 days pursuant to the exercise of options: Ms. Downey,
14,400 shares; Mr. Koons, 15,300 shares; Mr. Liabo, 8,000 shares; Mr.
McLaughlin, 96,000 shares: Mr. Norris, 36,750 shares; Mr. Stephan, 15,000
shares; Mr. Ziegler, 54,948 shares; and all directors and officers as a
group, 304,498 shares. Also includes shares of the Company's Class A Common
Stock credited under the Company's capital accumulation plan through
December 31, 1994 as follows: Ms. Downey, 995.4392 shares, Mr. McLaughlin,
8,666.5407 shares; Mr. Koons, 783.0609 shares; Mr. Norris, 11,167.1858
shares; and Mr. Stephan, 2,116.6837 shares.
(3) Excludes 1,003 shares of the Company's Class B Common Stock owned by Mr.
Ziegler's wife. Mr. Ziegler disclaims beneficial ownership of such shares.
(4) Excludes 587 shares of the Company's Class A Common Stock owned by Mr.
Rudkin's wife. Mr. Rudkin disclaims beneficial ownership of such shares.
(5) Excludes shares of the Company's Class A and Class B Common Stock owned by
Mrs. Steinkraus and disclosed above. Mr. Steinkraus disclaims beneficial
ownership of such shares.
DIRECTORS AND EXECUTIVE OFFICERS
PURCHASER DESIGNEES
As of the date of this Information Statement, Purchaser has not determined
who will be Purchaser Designees. However, it is expected that Purchaser
Designees shall be selected from among the directors and executive officers of
Purchaser and its affiliates. Certain information regarding the list of
candidates as Purchaser Designees will be provided at a later date when such
information becomes available. It is expected that the Purchaser Designees will
assume office promptly following the purchase by Purchaser pursuant to the Offer
and the Stock Purchase Agreement of such number of shares as represents at least
a majority of the outstanding shares of both the Company's Class A Common Stock
and Class B Common Stock.
A-6
<PAGE> 31
CURRENT AND CONTINUING DIRECTORS
The following table sets forth the ages (as of February 21, 1995) and other
information with respect to the current directors of the Company.
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
- ------------------------------------- --- --------------------------------------- --------
<S> <C> <C> <C>
CLASS A DIRECTORS
PAUL F. ENGLER (1)................... 65 President and Chief Executive Officer 1993
of Cactus Feeders, Inc. (farming,
ranching and cattle feeding).
JOHN R. KENNEDY...................... 64 President, Chief Executive Officer and 1992
a director of Federal Paper Board
Company, Inc. (paper and wood
products). Also a director of
DeVliegBullard, Inc., First Fidelity
Bancorporation, Magma Copper Company
and Chase Brass Industries, Inc.
WILLIAM L. RUDKIN (1)................ 68 Retired Chairman of Pepperidge Farm 1993
Incorporated (consumer food products).
WENDELL M. SMITH..................... 59 Chairman and Chief Executive Officer of 1993
Baldwin Technology Company, Inc.
(manufacturer of printing press
controls and accessories). Also a
director of Bowne & Company.
CLASS B DIRECTORS
CHARLES B. COOK, JR.................. 65 Vice Chairman and a director of Janney 1964
Montgomery Scott Inc. (investment
bankers).
JAMES E. HARWOOD..................... 58 President, Sterling Equities, Inc. 1992
(venture capitalists and management
advisors); formerly Corporate Vice
President of Technical Operations of
Schering Plough Corporation. Also a
director of Morgan Keegan & Company and
Leader Financial Corporation Inc.
LESLIE C. LIABO (1).................. 71 Former Vice Chairman of the Board of 1975
the Company (1986-1993)
C. ALAN MACDONALD.................... 61 General Partner, The Marketing 1992
Partnership, Inc.; formerly Chairman
and Chief Executive Officer of Lincoln
Snacks Company (1992-1994) and
President and Chief Executive Officer
of Nestle Foods Corporation. Also a
director of Lord Abbett & Company,
Fountainhead Water Company, J.B.
Williams Company, Great American
Restaurants and Lincoln Snacks Company.
PATRIC J. MCLAUGHLIN(1).............. 49 President and Chief Executive Officer 1988
of the Company since July 1, 1993;
formerly President and Chief Operating
Officer of the Company (1992-1993) and
President of its Corn Processing
Division (1984-1992).
</TABLE>
A-7
<PAGE> 32
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
- ------------------------------------- --- --------------------------------------- --------
<S> <C> <C> <C>
H. BARCLAY MORLEY.................... 65 Retired Chairman and Chief Executive 1991
Officer of Stauffer Chemical Company.
Also a director of Champion
International Corporation, Schering
Plough Corporation and The Bank of New
York Company.
WILLIAM C. STEINKRAUS (1)(2)......... 69 Private investor and Chairman Emeritus 1980
of United States Equestrian Team,
Incorporated, a charitable organization
responsible for providing United States
international equestrian
representation.
RAYMOND S. TROUBH.................... 68 Financial consultant. Also a director 1992
of ADT Limited; America West Airlines,
Inc.; Applied Power Incorporated; ARIAD
Pharmaceuticals, Inc.; Becton,
Dickinson and Company; Benson Eyecare
Corporation; Foundation Health
Corporation; General American Investors
Company, Inc.; Manville Corporation;
The Olsten Corporation; Petrie Stores
Corporation; Riverwood International
Corporation; Time Warner Inc.; Triarc
Companies, Inc.; and WHX Corporation.
WILLIAM ZIEGLER, III (1)(2).......... 66 Chairman of the Board of the Company 1958
since 1964; formerly Chief Executive
Officer of the Company (1976-1993).
</TABLE>
- ---------------
(1) Member of the Executive Committee.
(2) Mr. Ziegler and Mr. Steinkraus's wife are brother and sister.
AGREEMENTS AFFECTING BOARD MEMBERSHIP
The Company's Class B Common Stock has the power to elect 70% of the
Company's Board of Directors. GIH Corp. owns approximately 13.4% of the Class A
Common Stock and approximately 47.3% of the Class B Common Stock. All the shares
of GIH Corp. are held directly by, or in various trusts for the benefit of,
William Ziegler, III and his sister, Mrs. Helen Steinkraus.
Control over GIH Corp. is the subject of litigation initiated in New York
Surrogate's Court by the children of Mrs. Helen Steinkraus challenging the prior
distribution of the controlling share of GIH Corp. common stock to a trust for
the benefit of William Ziegler, III. On April 4, 1994, the New York Surrogate's
Court issued a decision in favor of Mr. Ziegler, and Mrs. Steinkraus' children
have filed an appeal of such decision. The appeal was argued on February 15,
1995.
Until the final resolution of the litigation described above, Mr. Ziegler,
Mrs. Steinkraus and GIH Corp. agreed in March, 1991 that their shares of the
Company will be voted for directors nominated by the Company in accordance with
the succession resolutions adopted by the Board of Directors in March, 1991. The
resolutions provide for Board seats for Mr. Ziegler and Mrs. Steinkraus or their
designees and require that the majority of the Board consist of directors who
are neither employees of the Company nor members of the Ziegler or Steinkraus
families.
Mr. Ziegler has informed the Board of Directors of the Company that it is
his position that the March, 1991 agreement is no longer in effect as a result
of the Surrogate's Court decision. The Company believes that the March, 1991
agreement remains in effect. See the Schedule 14D-9 for further information with
respect to the dispute over the control of GIH Corp.
A-8
<PAGE> 33
CERTAIN INFORMATION REGARDING THE BOARD OF DIRECTORS AND COMMITTEES THEREOF
The Board of Directors held twelve meetings during 1994. Attendance at
Board meetings averaged 96.2% and attendance at Board committee meetings
averaged 86.5%. Each incumbent director attended at least 75% of the Board
meetings and the meetings of Board committees on which the director served. The
principal standing committees of the Board are the Executive Committee, Audit
Committee, Compensation Committee and Pension Committee.
Executive Committee. The Executive Committee consists of six directors:
William L. Rudkin (Chair), Paul F. Engler, Leslie C. Liabo, Patric J.
McLaughlin, William C. Steinkraus and William Ziegler, III. Pursuant to the
By-Laws, the Executive Committee has all the powers and authority of the Board
of Directors in the management of the business and affairs of the Company,
except those powers which, by law, cannot be delegated by the Board of
Directors. The Executive Committee also serves as the nominating committee of
the Board of Directors. In this capacity it selects potential candidates for
director subject to ratification by the Board of Directors. The Executive
Committee considers shareholder recommendations for directors. The Executive
Committee met seven times in 1994.
Audit Committee. The Audit Committee consists of five directors: Wendell
M. Smith (Chair), Paul F. Engler, James E. Harwood, John R. Kennedy and Raymond
S. Troubh. The Audit Committee meets independently with the Company's internal
auditing staff, with senior management and with representatives of the Company's
independent accountants. The Audit Committee recommends the engagement or
discharge of the Company's independent accountants; reviews the scope, fees, and
results of the annual audit; reviews the performance of additional services by
the Company's independent accountants; monitors compliance with corporate
policies; and reviews the effectiveness of the Company's internal control
systems. The Audit Committee met four times in 1994.
Compensation Committee. The Compensation Committee consists of five
directors: H. Barclay Morley (Chair), Charles B. Cook, Jr., John R. Kennedy, C.
Alan MacDonald and William L. Rudkin. The committee approves the compensation of
officers and other senior executives, including salary, incentive bonus, and
stock options, in accordance with the Company's stock option and management
incentive plans. The Compensation Committee met four times in 1994. (See below
for the committee's report on 1994 compensation of executive officers.)
Pension Committee. The Pension Committee consists of six directors;
Charles B. Cook, Jr. (Chair), Paul F. Engler, James E. Harwood, Leslie C. Liabo,
C. Alan MacDonald and William Ziegler, III. The Pension Committee is responsible
for supervision of the investment of all assets held by the Company's pension
and savings plans. The Pension Committee met three times in 1994.
Directors who are not employees of the Company or its subsidiaries are paid
an annual retainer of $15,000 plus an attendance fee of $1,000 for each Board
meeting and each Board committee meeting. Directors are also reimbursed for
travel expenses to attend Board and committee meetings. Committee chairs receive
additional annual retainers ranging from $5,000 to $12,000. In lieu of the
annual director's retainer and Executive Committee attendance fees, Mr.
MacDonald received until October 1994 an annual retainer of $120,000 and was
granted 20,000 stock appreciation rights for his service as a director and
Chairman of the Executive Committee. In lieu of the annual director's retainer
and Board meeting attendance fees, Mr. Ziegler receives an annual retainer of
$120,000, use of an office and part-time secretarial support and use of a club
membership for his service as a director and Chairman of the Board.
Directors with five years or more of service as a non-employee member of
the Board participate in a directors' retirement plan that provides eligible
directors, upon retirement, with an annual retirement income equal to 50-100%
(depending on the number of years served) of the director's highest twelve
monthly consecutive retainers paid during the last 120 months of Board service.
For purposes of this calculation, the current annual retainer for the Chairman
of the Board is deemed to be $15,000.
A-9
<PAGE> 34
CERTAIN LEGAL PROCEEDINGS
On February 22, 1995, William Ziegler, III, Chairman of the Board of the
Company, on behalf of himself and, purportedly, GIH Corp., filed suit in
Superior Court, Cumberland County, Maine seeking declaratory and injunctive
relief against the Merger Agreement, the Stock Purchase Agreement and the
transactions contemplated thereby. The complaint, entitled GIH Corp. and William
Ziegler, III v. American-Maize Products Co. et. al., alleges that the approval
by the remaining members of the Company's Board of Directors of the Merger
Agreement and Stock Purchase Agreement and their authorization of "break-up" fee
provisions in the Merger Agreement constituted a breach of their fiduciary
duties. The complaint asserts that the proposed issuance of additional shares of
Class B Common Stock by the Company pursuant to the Stock Purchase Agreement is
ultra vires and requests the court to declare such issuance unlawful and void.
The complaint also alleges that the defendant directors' approval of certain
termination agreements with senior officers of the Company violated the
directors' fiduciary duties. The Company believes all of the claims contained in
the complaint are without merit and intends to defend against them vigorously.
In January 1995, alleged shareholders of the Company filed complaints in
Connecticut Superior Court in three purported class actions against the Company
and its Board of Directors, entitled Kenneth Steiner and William Steiner v.
American Maize-Products Co., et al., Alan Katz v. American Maize-Products Co.,
et al. and Mitchell Saltzman and Miriam Sarnoff v. American Maize-Products Co.,
et al. The actions allege that the Company's Board of Directors breached its
fiduciary duties to shareholders by not adequately considering Purchaser's
initial offer on December 19, 1994 to acquire the Company at a purchase price of
$32 per share, by rejecting such offer, by failing to make adequate disclosure
of the Offer and by placing personal interests, including an alleged attempt by
Mr. Ziegler to retain control of the Company, ahead of the interest of the
public shareholders. The complaints seek equitable relief and unspecified
damages. The Company believes that the allegations in the complaint are without
merit and intends to defend the actions vigorously.
EXECUTIVE OFFICERS
Set forth below is the age as of February 21, 1995 and certain other
information regarding each person, currently serving as an executive officer of
the Company.
<TABLE>
<CAPTION>
NAME AGE TITLE
-------------------------------------- --- --------------------------------------
<S> <C> <C>
William Ziegler, III(1)............... 66 Chairman of the Board
Patric J. McLaughlin(1)............... 49 President and Chief Executive Officer
Robert A. Britton..................... 48 Vice President, Treasurer and
Assistant Secretary
Jane E. Downey........................ 44 Vice President -- Human Resources
Thomas H. Fisher...................... 48 Director of Taxes
Edmond G. Herve, Jr................... 45 Controller
Charles A. Koons...................... 51 Vice President -- Corporate
Development and Planning
Edward P. Norris...................... 54 Vice President and Chief Financial
Officer
Robert M. Stephan..................... 52 Vice President, General Counsel and
Secretary
</TABLE>
- ---------------
(1) Member of Board of Directors and its Executive Committee
Messrs. Britton, Herve, Fisher, Koons and Norris have served in their
respective capacities with the Company for more than the past five years.
Mr. Ziegler retired as Chief Executive Officer effective July 1, 1993 and
remains Chairman of the Board of Directors; prior thereto he served as Chairman
and Chief Executive Officer since 1976.
Mr. McLaughlin was elected President and Chief Executive Officer of the
Company effective July 1, 1993; prior thereto he served as President and Chief
Operating Officer (1992-1993) and President of the Corn Processing Division
(1984-1992).
A-10
<PAGE> 35
Ms. Downey was elected Vice President -- Human Resources of the Company
effective August 1, 1993; prior thereto she served as Vice President -- Human
Resources of the Corn Processing Division (1988-1993).
Mr. Stephan was elected Vice President and General Counsel of the Company
in April, 1992 and Secretary in January, 1995. Prior thereto he served as Vice
President, General Counsel and Secretary of Erbamont, N.V. since 1983.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company subleases office space to and shares certain office facilities
with GIH Corp., of which Mr. Ziegler is President, for an annual fee of
approximately $15,000. Swisher International, Inc., a subsidiary of the Company,
has engaged the consulting services of Mr. Harwood in its business and paid Mr.
Harwood $30,000 in 1994 for such services. During 1994, the Company and its
subsidiaries have had purchase, sale, financial and other transactions in the
normal course of business with companies or organizations (including their
affiliates) with which some of the Company's directors are associated, including
the following: Champion International Corporation, The Bank of New York Company
and Janney Montgomery Scott Inc. To the best of the Company's knowledge, none of
the above transactions resulted in aggregate payments that were large enough to
require disclosure of such transactions by the Company. Management believes that
all of the above transactions were on terms that were reasonable and
competitive. Additional transactions of this nature may be expected to take
place in the ordinary course of business in the future.
In connection with his relocation from Illinois to Connecticut, Mr.
McLaughlin was granted a housing loan by the Company on April 29, 1993 in the
amount of $150,000 payable in three equal annual installments commencing April
29, 1994 with interest at the rate of 5.24% per annum. The note is secured by a
second mortgage on Mr. McLaughlin's principal residence.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and any persons who are beneficial owners of more than ten percent of
any class of the Company's Common Stock, to report their initial ownership of
Common Stock and any subsequent changes in that ownership to the SEC and the
American Stock Exchange. Based solely on the Company's review of forms submitted
to the Company in accordance with the Exchange Act, and the representations of
its officers and directors, the Company believes that all of its officers,
directors and greater than ten percent beneficial owners complied with all
filing requirements applicable to them with respect to transactions during the
fiscal year 1994.
A-11
<PAGE> 36
EXECUTIVE COMPENSATION
The following table sets forth compensation paid or awarded during the last
three fiscal years to the Chief Executive Officer and the four other most highly
compensated executive officers of the Company in 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------------
------------------------------------- SECURITIES
OTHER UNDERLYING ALL OTHER
NAME AND ANNUAL OPTIONS/ COMPEN-
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) SARS(2) SATION(3)
- -------------------------- ----- -------- -------- --------------- ------------------ ------------
($) ($) ($) (#) ($)
<S> <C> <C> <C> <C> <C> <C>
Patric J. McLaughlin...... 1994 $420,000 $396,000 $37,854 30,000 $ 34,489
President and Chief 1993 350,000 272,000 27,120 20,000 28,848
Executive Officer 1992 254,000 157,000 11,808 10,000 22,204
Edward P. Norris.......... 1994 206,000 127,200 39,922 12,000 29,120
Vice President and Chief 1993 185,850 108,000 36,224 6,000 29,356
Financial Officer 1992 166,100 98,000 20,211 3,000 29,025
Robert M. Stephan(4)...... 1994 177,250 108,000 30,775 7,000 27,120
Vice President, General 1993 166,750 94,000 28,733 5,000 27,165
Counsel and Secretary 1992 124,058 70,000 16,328 3,000 23,441
Charles A. Koons.......... 1994 148,000 79,500 28,253 5,000 22,920
Vice President,
Corporate 1993 140,500 68,000 27,138 3,000 22,620
Development and
Planning............. 1992 132,000 63,000 15,520 3,000 22,280
Jane E. Downey(5)......... 1994 125,000 69,300 51,474 6,000 45,860
Vice President, 1993 108,333 60,000 16,963 4,000 23,473
Human Resources
</TABLE>
- ---------------
(1) Amounts in this column represent tax reimbursements on life insurance and
company automobiles. The amounts with respect to life insurance are as
follows: Mr. McLaughlin $23,126; Mr. Norris $22,540; Mr. Stephan $17,119;
Mr. Koons $13,858 and Ms. Downey $33,309.
(2) All amounts in this column represent option grants and all such options were
immediately exercisable (see Option Grants in Last Fiscal Year and
Aggregated Option Exercises in Last Fiscal Year and Year-End Option Values
tables).
(3) Amounts in this column represent the following items as set forth in the
table below: (a) Company contributions to the executive's 401(k) plan
account (b) universal life insurance premiums paid by the Company on
policies owned by the executives.
<TABLE>
<CAPTION>
PATRIC J. EDWARD P. ROBERT M. CHARLES A. JANE E.
1994 MCLAUGHLIN NORRIS STEPHAN KOONS DOWNEY
------------------------------------- ---------- --------- --------- ---------- -------
<S> <C> <C> <C> <C> <C>
401(k) Contribution.................. $ 6,120 $ 6,120 $ 6,120 $ 5,920 $ 5,000
Life Insurance Premiums.............. 28,369 23,000 21,000 17,000 40,860
---------- --------- --------- ---------- -------
$ 34,489 $29,120 $27,120 $ 22,920 $45,860
</TABLE>
(4) Mr. Stephan was elected Secretary of the Company on January 25, 1995 and
Vice President and General Counsel of the Company on April 24, 1992. Prior
thereto, he served for a one-month period as Vice President and Associate
General Counsel of the Company.
(5) Ms. Downey was elected Vice President, Human Resources on August 1, 1993.
Prior thereto she served as Vice President -- Human Resources of the
Company's Corn Processing Division (1988-1993).
A-12
<PAGE> 37
STOCK OPTION TABLES
The following tables provide information with respect to stock options
granted to, exercised or held by the named executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------- POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(2)
OPTIONS EMPLOYEES PRICE EXPIRATION ---------------------------
NAME GRANTED(1) IN 1994 $/SH DATE 5%($) 10%($)
- --------------------------- ---------- ---------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Patric J. McLaughlin....... 30,000 17.80% $20.00 6/29/04 $646,200 $1,384,200
Edward P. Norris........... 12,000 7.12 20.00 6/29/04 258,480 553,680
Robert M. Stephan.......... 7,000 4.15 20.00 6/29/04 150,780 322,980
Charles A. Koons........... 5,000 2.97 20.00 6/29/04 107,700 230,700
Jane E. Downey............. 6,000 3.56 20.00 6/29/04 129,240 276,840
</TABLE>
- ---------------
(1) All amounts in this column represent option grants and all such options were
immediately exercisable.
(2) Potential realizable value is based on the assumed annual growth of the
Company's Class A Common Stock for the ten-year option term. Annual growth
of 5% results in a stock price of $41.54 per share and 10% results in a
price of $66.14 per share. Actual gains, if any, on stock option exercises
are dependent on the future performance of the stock. There can be no
assurance that the amounts reflected in this table will be achieved.
The following table details the value on December 31, 1994 of options to
purchase Common Stock held by those persons named in the Summary Compensation
Table above.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED OPTIONS AT FISCAL YEAR-END OPTIONS AT YEAR-END
ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------------- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Patric J. McLaughlin............. 2,750 $8,415 96,000 0 $ 779,156 0
Edward P. Norris................. 750 2,389 36,750 0 285,576 0
Robert M. Stephan................ 0 0 15,000 0 96,000 0
Charles A. Koons................. 0 0 15,300 0 85,563 0
Jane E. Downey................... 0 0 14,400 0 91,606 0
</TABLE>
A-13
<PAGE> 38
RETIREMENT BENEFITS
The approximate annual retirement benefits provided under Company
retirement plans for employees in higher salary classifications retiring from
the Company at age 62 or later are shown in the table below.
<TABLE>
<CAPTION>
EARNINGS 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 OR MORE
CREDITED FOR OF OF OF OF YEARS OF
RETIREMENT BENEFITS SERVICE SERVICE SERVICE SERVICE SERVICE
- ------------------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C>
$ 100,000 $ 18,568 $ 27,775 $ 36,981 $ 46,188 $ 55,395
150,000 29,175 43,595 58,014 72,434 86,853
250,000 50,389 75,234 100,080 124,925 149,770
350,000 71,603 106,874 142,145 177,416 212,687
450,000 92,817 138,513 184,210 229,906 275,603
550,000 114,031 170,153 226,275 282,397 338,520
650,000 135,245 201,793 268,341 334,888 401,436
750,000 156,458 233,432 310,405 387,379 464,352
850,000 177,672 265,071 352,471 439,870 527,269
</TABLE>
The amounts of earnings credited for retirement benefits ("Credited
Earnings") are essentially salaries and bonuses as shown in the Summary
Compensation Table above. The calculation of each individual's "Credited
Earnings" is based on the highest consecutive 60 months during his or her last
120 months of employment.
The amounts shown in the table are 10 year certain and continuous benefits,
converted to straight life annuities. Pay is assumed to remain constant to
Normal Retirement Date. The figures shown are not limited by any law or
regulation such as Section 415(b) and (e) or Section 401(a)(17) of the Internal
Revenue Code of 1986, as amended. The benefits shown reflect the total benefit
to be paid under both the 1952 Plan and the Supplemental Plan.
As of December 31, 1994, the executive officers named in the Summary
Compensation Table had the following credited years of service under the
retirement plan: Mr. McLaughlin 20.5 years; Mr. Norris 16.8 years, Mr. Stephan
2.8 years, Mr. Koons 18.0 years, and Ms. Downey 6.3 years.
PERFORMANCE MEASUREMENT COMPARISON
The following Performance Graph compares the Company's cumulative total
shareholder return on its Common Stock for a five-year period (1989-1994) with
the cumulative total return of the Wilshire 5000 stock index and the Russell
2000 stock index. The graph assumes that $100 was invested on December 31, 1989
in the Company's Class A Common Stock and that $100 was invested at that time in
each of the indexes. The comparison assumes that all dividends are reinvested.
The graph below shall not be deemed to be incorporated by reference into
any filing of the Company under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the extent that the
Company specifically incorporates such performance graph by reference, and shall
not otherwise be deemed filed under such Acts.
A-14
<PAGE> 39
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
MEASUREMENT PERIOD AMERICAN
(FISCAL YEAR COVERED) MAIZE WILSHIRE 5000 RUSSELL 2000
<S> <C> <C> <C>
1989 100.00 100.00 100.00
1990 104.61 93.82 80.49
1991 118.16 125.91 117.56
1992 127.04 137.20 139.21
1993 90.41 152.68 165.52
1994 152.39 152.58 162.51
</TABLE>
The Company actively operates in two business segments: (i) the corn wet
milling business, in which it manufactures and markets corn syrup, high fructose
corn syrup, corn starch and other corn derivatives, principally for use in
manufacturing processes in a variety of industries and (ii) the manufacture and
sale of consumer tobacco products through which the Company manufactures and
markets cigars and various smokeless tobacco products.
The Company does not believe there is either a published industry or
line-of-business mix or a group of companies whose overall business is
sufficiently similar to the Company's business to allow a meaningful benchmark
against which the Company can be compared. Competitors in each of the Company's
two business segments either operate in other, completely unrelated, businesses
or have a significantly different product index, effectively making overall
competitive comparisons from public information misleading. For these reasons,
the Company has elected to use a published index of companies of similar market
capitalization -- the Russell 2000 -- rather than a peer group, in addition to
the Wilshire 5000 broad equity market index. The Russell 2000 index has a median
market capitalization of approximately $130,000,000.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation Overview
The Compensation Committee of the Board of Directors (the "Committee") has
the responsibility for the design, implementation and administration of the
Company's executive compensation program. The Committee is comprised entirely of
outside independent directors.
The objective of the Company's executive compensation program is to attract
and retain the management talent necessary to maximize long-term profitability
and shareholder value. The program is designed to accomplish this objective
through plans that (i) motivate senior managers, and align their interests with
those of the Company's shareholders, by tying incentive compensation to Company
profitability and individual performance and (ii) provide a base level of
compensation that is competitive with other industrial companies in similar
businesses as well as a cross section of general industry.
A-15
<PAGE> 40
Elements of Compensation
The three principal components of the Company's executive compensation
program are salary, annual incentives and stock options, each of which is
discussed in detail below.
1. Salary
Of the three elements of executive compensation, salary is the least
affected by Company performance; although it is very much dependent on
individual performance. Salary is intended to provide a base level of
compensation that is competitive at the market median with companies of similar
type, particularly those in the food and kindred products industry group and
capital intensive process industries. The Committee reviews and approves salary
levels and increases for each employee of the Company and its subsidiaries whose
base salary exceeds $100,000.
Following a procedure used for all salaried employees of the Company, each
of the executive officers is assigned a salary range for his or her particular
job. The range is set at 80% to 120% of the median market value of the position.
The median market value is established by an evaluation of the degree of
accountability, expertise and problem solving required in each position and the
results of salary surveys conducted by major compensation consultants and
associations. The salary ranges are reviewed annually using current survey data
to determine the amount of adjustment, if any.
Individual salaries are reviewed every 9 to 18 months. The timing and
amount of any increase to salaried employees, including executive officers, are
both dependent upon (i) the performance of the individual and, to a lesser
extent (ii) the relationship of his or her actual salary to the midpoint of the
salary range.
Executive officer salaries are recommended by the Chief Executive Officer
and reviewed and approved by the Committee. The Chief Executive Officer's
recommendations on the amount of increase are based on his subjective evaluation
of each individual's performance in his or her respective functional area.
During 1994 the Committee concurred with and approved all salary recommendations
made by the Chief Executive Officer.
In determining Mr. McLaughlin's salary increase on July 1, 1994, the
Committee considered an executive compensation study prepared by an outside
compensation consultant. The Committee rated Mr. McLaughlin's performance based
on its evaluation of his contribution to the successful operations of the
Company during the preceding year. Mr. McLaughlin's base salary is subject to
the terms of his employment agreement. See "Employment Agreements".
2. Annual Incentives
The executive officers of the Company all participate in a Management
Incentive Plan under which annual cash bonuses are paid, based on the
achievement of specific financial and/or operational targets and each
participant's individual performance. The current plan was established in 1994
with the assistance of an outside compensation consultant.
For each business unit, bonuses are based on the achievement of financial
performance targets and individual performance goals. The financial objectives
are developed by the Committee during the first quarter of the year.
Each participant in the plan has a target bonus opportunity that is
expressed as a percentage of his or her base salary. The target bonus
opportunity ranges from 20% to 60% and is based on the potential of the position
to have a positive impact on the performance of the Company.
Seventy percent of the target bonus opportunity is tied directly to the
financial performance of the participant's business unit. The remaining thirty
percent of the target bonus opportunity is made available if certain thresholds
related to financial performance are met, and is awarded on a discretionary
basis that recognizes individual contributions.
A-16
<PAGE> 41
Performance above goal increases actual bonus awards, up to a maximum of
150% of the target bonus. Performance below goal decreases actual bonus awards,
and they are reduced to zero in the event the financial results are sufficiently
below target.
The discretionary portion of each participant's bonus is based on his or
her individual performance during the year. Individual performance ratings are
recommended to the Committee by management. The Committee sets Mr. McLaughlin's
performance rating based on its evaluation of the overall Company performance
during the year and its evaluation of his performance in relation to the
specific objectives which were set for him for the award year.
The Committee awarded Mr. McLaughlin a bonus of 150% of his target bonus
opportunity, based on the excellent performance of the Company in 1994.
3. Stock Options
Stock options are designed to provide long-term incentives and rewards tied
to increases in the price of the Company's common stock. The Committee believes
that stock options, which provide value to the participants only when the
Company's shareholders benefit from stock price appreciation, are an integral
component of the Company's executive compensation program.
Approximately 70 key employees, including the executive officers,
participate in shareholder-approved stock option plans. Stock options are issued
at an exercise price equal to 100% of the fair market value of the Company's
common stock on the date of grant. Options granted under the plans have terms of
up to ten years and may expire earlier in the event of termination of
employment.
In determining the 1994 stock option recipients and the overall number of
options granted, the Committee reviewed the details of the last two stock option
grants. The factors considered in awarding the specific number of options to
each participant included the individual's total compensation, organizational
level, and his or her potential for contributing to the successful operations of
the Company. The options granted were all incentive stock options except where
the limits of the plan and IRS regulations required the granting of
non-qualified options.
The Committee awarded Mr. McLaughlin 30,000 options in 1994 to recognize
his direct involvement in enhancing the operations of the Company.
Compliance with Internal Revenue Code Sections 162(m). Section 162(m) of
the Code, effective in 1994, generally disallows a tax deduction to public
companies for compensation over $1 million paid to the corporation's Chief
Executive Officer and four other most highly compensated executive officers.
Qualifying performance-based compensation will not be subject to the deduction
limit if certain requirements are met. Absent extraordinary circumstances, the
Company's current compensation programs are not likely to trigger the $1 million
limit on deductibility. Future grants of stock options, stock appreciation
rights and restricted stock under the 1994 Stock Plan would not be subject to
the deduction limit. The Company will consider whether new compensation programs
should be structured in a manner that would be exempt from the deduction limit
at the time such programs are designed.
Compensation Committee
H. Barclay Morley, Chair
Charles B. Cook, Jr.
John R. Kennedy
C. Alan MacDonald
William L. Rudkin
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Compensation Committee are current or former
employees of the Company or its affiliates.
A-17
<PAGE> 42
EMPLOYMENT AGREEMENTS
The Company entered into an employment agreement with Patric J. McLaughlin
as President and Chief Executive Officer (the "Agreement") commencing July 1,
1993 and terminating June 30, 1996, subject to automatic one-year extensions on
each anniversary date until July 1, 2000. The Agreement provides for a base
salary of $400,000 per annum, subject to annual reviews by the Compensation
Committee, plus an annual incentive bonus under the Company's management
incentive plan with a bonus "target" rate at 50% of base salary. Under the
Agreement, in the event Mr. McLaughlin's employment is terminated without
"cause," he shall be entitled to severance benefits until the Agreement's
termination date, including (i) salary, (ii) target bonus payments and (iii)
continued participation in welfare benefit plans, retirement plans and the
Company's 401(k) Plan. In such case, stock options awarded prior to his
termination without "cause" shall remain exercisable until the earlier of their
expiration date or the third anniversary of the termination of his employment.
In the event of termination of employment for "cause" or due to death or
disability, the Company shall not be obligated to make any severance payments to
Mr. McLaughlin. The Agreement provides that the Company will pay an amount
necessary to reimburse Mr. McLaughlin, on an after tax basis, for any excise tax
due under Section 4999 of the Code as a result of any payment under the
Agreement being treated as a "parachute payment" under Section 280G of the Code.
The Agreement contains provisions relating to nondisclosure of confidential
information by Mr. McLaughlin and nonsolicitation of Company employees for a
period of two years after his termination. The Agreement is not assignable by
either party, but is binding upon successors of the Company.
The Company entered into employment agreements with Jane E. Downey, Charles
A. Koons, Edward P. Norris, Robert M. Stephan and three other executive officers
of the Company (the "Agreements") commencing as of January 2, 1995 and
terminating December 31, 1997 subject to automatic one-year extensions as of
December 31, 1995 and each December 31st thereafter, unless timely notice is
given that the term shall not be extended. The Agreements provide that each of
the executive officers will serve the Company in the offices listed (with
respect to named executive officers) in the Summary Compensation Table and set
forth in the Agreements at specified annual base salary rates. The base salaries
are subject to annual reviews by the Compensation Committee, plus annual
incentive bonuses under the Company's management incentive plan at the bonus
"target" rate specified in each Agreement. The Agreements include provisions
that are effective in the event the employment of the executive officer is
terminated by the Company without "cause" or by the executive officer for "good
reason" (each as defined in the Agreements). In such cases, the executive
officer is entitled to severance benefits for the remainder of the agreement
term, including (i) salary, (ii) target bonus payments and (iii) continued
participation in welfare benefit plans, retirement plans and the Company's
401(k) Plan. In such case, stock options awarded prior to the executive
officer's termination without "cause" shall become fully vested and shall remain
exercisable until the earlier of their expiration date or the third anniversary
of the termination of his or her employment. Pursuant to the terms of the
Agreements, the Company will pay each executive officer an amount necessary to
reimburse him or her, on an after tax basis, for any excise tax due under
Section 4999 of the Code as a result of any payment under the Agreements being
treated as a "parachute payment" under Section 280G of the Code. The Agreements
contain a provision relating to nondisclosure of confidential information by the
executive officers. The Agreements are not assignable by either party, but are
binding upon successors of the Company.
February 28, 1995 American Maize-Products Company
A-18
<PAGE> 43
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
------ ---------------------------------------------------------------------- ------------
<S> <C> <C> <C>
(1) -- Agreement and Plan of Merger, dated as of February 22, 1995, among the
Company, Purchaser and Merger Sub.....................................
(2) -- Stock Purchase Agreement, dated February 22, 1995, by and between the
Company, Purchaser and Merger Sub.....................................
(3) -- Confidentiality Agreement, dated January 30, 1995, between the Company
and Purchaser.........................................................
(4) -- Employment Agreement dated January 2, 1995 by and between the Company
and Robert M. Stephan.................................................
(5) -- Employment Agreement dated January 2, 1995 by and between the Company
and Edward P. Norris..................................................
(6) -- Employment Agreement dated January 2, 1995 by and between the Company
and Timothy Mann......................................................
(7) -- Employment Agreement dated January 2, 1995 by and between the Company
and Charles A. Koons..................................................
(8) -- Employment Agreement dated January 2, 1995 by and between the Company
and Michael J. Gorbitz................................................
(9) -- Employment Agreement dated January 2, 1995 by and between the Company
and Jane E. Downey.
(10) -- Employment Agreement dated January 2, 1995 by and between the Company
and Frederick M. Ash..................................................
(11) -- Employment Agreement, dated July 1, 1993 by and between the Company
and Patric J. McLaughlin, and First Amendment to Employment Agreement,
dated January 2, 1995.................................................
(12) -- Letter to shareholders of the Company dated February 28, 1995.*.......
(13) -- Opinion of CS First Boston Corporation dated February 22, 1995.*......
(14) -- Press release issued by the Company on February 22, 1995..............
</TABLE>
- ---------------
* Included in copies mailed to stockholders.
<PAGE> 1
EXHIBIT 1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
AMONG
AMERICAN MAIZE-PRODUCTS COMPANY,
ERIDANIA BEGHIN-SAY, S.A.
AND
CERESTAR USA, INC.
DATED AS OF FEBRUARY 22, 1995
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of February 22,
1995, among American Maize-Products Company, a Maine corporation (the
"Company"), Eridania Beghin-Say, S.A., a corporation organized under the laws of
France ("Purchaser"), and Cerestar USA, Inc., a Delaware corporation and an
indirect wholly-owned subsidiary of Purchaser ("Merger Sub" and, together with
the Company, the "Constituent Corporations").
RECITALS
WHEREAS, the Boards of Directors of Purchaser and the Company each have
determined that it is in the best interests of their respective shareholders for
Purchaser to acquire the Company upon the terms and subject to the conditions
set forth herein; and
WHEREAS, to induce Purchaser to enter into this Agreement, the Company will
enter into a Stock Purchase Agreement, dated as of the date hereof, with
Purchaser and Merger Sub (the "Stock Purchase Agreement"), pursuant to which the
Company shall agree to undertake a rights offering to its existing holders of
Class B Common Stock (as defined in Section 5.1(a)) of 690,718 authorized but
unissued shares of Class B Common Stock and 67,225 treasury shares of Class B
Common Stock and grant to Purchaser the right to purchase, pursuant to the terms
and conditions set forth in the Stock Purchase Agreement, that number of the
offered shares of Class B Common Stock as are not subscribed to by the existing
holders of Class B Common Stock; and
WHEREAS, the Company, Purchaser and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with this
Agreement.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements, contained herein and in
the Stock Purchase Agreement, the parties hereto hereby agree as follows:
ARTICLE I
THE TENDER OFFER
1.1. Tender Offer. (a) Provided that this Agreement shall not have been
terminated in accordance with Article IX hereof, within five business days of
the date hereof, Merger Sub shall commence a tender offer (the "Offer") for any
and all of the outstanding Shares (as defined in Section 5.1(a)) at a price of
$40 in cash per share of common stock of the Company outstanding as of the date
hereof, net to the seller (the "Merger Consideration"). Subject to the terms and
conditions of the Offer, Purchaser shall promptly pay for all Shares duly
tendered that it is obligated to purchase thereunder. The Offer shall expire 20
business days after it is commenced and, if the conditions set forth in Annex A
are satisfied after the scheduled expiration date of the Offer, shall not be
extended without the prior written consent of the Company. If, as of the
scheduled expiration date of the Offer, all of the conditions to the Offer set
forth in Annex A have not been satisfied but are capable, using reasonable
efforts, of being satisfied within 90 days of the commencement of the Offer or,
to the extent permitted by this Agreement, waived by Purchaser or Merger Sub,
Purchaser shall extend the Offer from time to time until the earliest of (i) the
purchase of Shares pursuant to the Offer, (ii) the date which is 90 days from
the commencement of the Offer or (iii) the termination of this Agreement.
Without the prior written consent of the Company, Purchaser shall not (i)
decrease the Merger Consideration, (ii) decrease the number of Shares to be
purchased in the Offer, (iii) change the form of consideration payable in the
Offer, (iv) add to or change the conditions of the Offer set forth in Annex A
hereto, (v) change or waive the Minimum Condition or (vi) make any other change
in the terms or conditions of the Offer which is adverse to the holders of the
Shares. Subject to the fiduciary duties of the Company's Board of Directors as
advised by outside counsel to the Company, the Company's Board of Directors
shall recommend acceptance of the Offer to its shareholders in a
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
to be filed with the Securities and Exchange Commission (the "SEC") upon
commencement of the Offer. On
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the date of commencement of the Offer, Purchaser shall file with the SEC a
Tender Offer Statement on Schedule 14D-1 with respect to the Offer, which will
contain the Offer to Purchase, Letter of Transmittal and summary advertisement
(which Schedule 14D-1, Offer to Purchase and other documents, together with any
amendment or supplements thereto, are hereinafter referred to as the "Offer
Documents").
(b) Purchaser agrees, as to the Offer Documents, and the Company agrees, as
to the Schedule 14D-9, that such documents shall, in all material respects,
comply with the requirements of the Securities Exchange Act of 1934 (the
"Exchange Act") and the rules and regulations thereunder and other applicable
laws. The Company and its counsel, as to the Offer Documents, and Merger Sub and
its counsel, as to the Schedule 14D-9, shall be given an opportunity to review
such documents prior to their being filed with the SEC.
(c) In connection with the Offer, the Company shall cause its transfer
agent to furnish promptly to Merger Sub a list, as of a recent date, of the
record holders of Shares and their addresses, as well as mailing labels
containing the names and addresses of all record holders of Shares and lists of
security positions of Shares held in stock depositories. The Company shall
furnish Merger Sub with such additional information (including, but not limited
to, updated lists of holders of Shares and their addresses, mailing labels and
lists of security positions) and such other assistance as Purchaser or Merger
Sub or their agents may reasonably request in communicating the Offer to the
record and beneficial holders of Shares. Subject to the requirements of
applicable law and except for such steps as are necessary to disseminate the
Offer Documents and any other documents necessary to consummate the Offer and
the Merger (as hereinafter defined), Purchaser shall hold in confidence such
lists and other information, shall use such information only in connection with
the Offer and the Merger and, if this Agreement is terminated in accordance with
its terms, shall deliver to the Company all copies of such information (and
extracts or summaries thereof) then in its or its agents' or advisors'
possession.
ARTICLE II
THE MERGER; CLOSING; EFFECTIVE TIME
2.1. The Merger. Subject to the terms and conditions of this Agreement,
at the Effective Time (as defined in Section 2.3) Merger Sub shall be merged
with and into the Company and the separate corporate existence of Merger Sub
shall thereupon cease (the "Merger"). The Company shall be the surviving
corporation in the Merger (sometimes hereinafter referred to as the "Surviving
Corporation") and the separate corporate existence of the Company with all its
rights, privileges, immunities, powers and franchises shall continue unaffected
by the Merger, except as set forth in Section 3.1. The Merger shall have the
effects specified in the Maine Business Corporation Act (the "MBCA").
2.2. Closing. The closing of the Merger (the "Closing") shall take place
(i) at the offices of Sullivan & Cromwell, 125 Broad Street, New York, New York
at 10:00 a.m. on the first business day on which the last to be fulfilled or
waived of the conditions set forth in Article VIII hereof shall be fulfilled or
waived in accordance with this Agreement or (ii) at such other place and time
and/or on such other date as the Company and Purchaser may agree.
2.3. Effective Time. As soon as practicable following the Closing, and
provided that this Agreement has not been terminated or abandoned pursuant to
Article IX hereof, the Company, the Purchaser and Merger Sub shall cause
Articles of Merger (the "Maine Articles of Merger") to be executed and filed
with the Secretary of State of Maine as provided in Section 903 of the MBCA (or,
if permitted, Section 904 of the MBCA) and a Certificate of Merger (the
"Delaware Certificate of Merger") to be executed and filed with the Secretary of
State of Delaware as provided in Section 251 of the Delaware General Corporation
Law ("DGCL") (or if permitted, Section 253 of DGCL). The Merger shall become
effective (the "Effective Time") on the date on which the last of the following
actions shall have been completed: (a) the Maine Articles of Merger have been
duly filed with the Secretary of State of Maine or (b) the Delaware Certificate
of Merger has been duly filed with the Secretary of State of Delaware.
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ARTICLE III
CERTIFICATE OF INCORPORATION; BY-LAWS
OF THE SURVIVING CORPORATION
3.1. The Certificate of Incorporation. The Certificate of Incorporation
(the "Certificate") of Merger Sub in effect at the Effective Time shall be the
Certificate of the Surviving Corporation, shall be filed with the Secretary of
State of Maine as the Certificate for the Surviving Corporation and shall remain
in effect as such until duly amended in accordance with the terms thereof and
the MBCA.
3.2. The By-Laws. The By-Laws of Merger Sub in effect at the Effective
Time shall be the By-Laws of the Surviving Corporation and shall remain in
effect as such until duly amended in accordance with the terms thereof and the
MBCA.
ARTICLE IV
OFFICERS AND DIRECTORS
OF THE SURVIVING CORPORATION
4.1. Officers and Directors. The directors of Merger Sub and the officers
of the Company at the Effective Time shall, from and after the Effective Time,
be the directors and officers, respectively, of the Surviving Corporation until
their successors have been duly elected or appointed and qualified or until
their earlier death, resignation or removal in accordance with the Surviving
Corporation's Certificate and By-Laws.
4.2. Boards of Directors; Committees. (a) If requested by Purchaser, the
Company shall, subject to compliance with applicable law and promptly following
the purchase by Merger Sub of more than 50 percent of the outstanding shares of
Class A Common Stock (as defined in Section 5.1(a)) and more than 50 percent of
the outstanding shares of Class B Common Stock (as defined in Section 5.1(a))
pursuant to the Offer, the Stock Purchase Agreement or otherwise, take all
actions necessary to cause persons designated by Purchaser to become directors
of the Company so that the total number of such persons equals that number of
directors, rounded up to the next whole number, which represents (i) the product
of (w) the total number of directors on the Board of Directors the shares of
Class A Common Stock are entitled to elect multiplied by (x) the percentage that
the number of shares of Class A Common Stock so accepted for payment plus any
shares of Class A Common Stock beneficially owned by Purchaser or its affiliates
on the date hereof bears to the number of shares of Class A Common Stock
outstanding at the time of such acceptance for payment plus (ii) the product of
(y) the total number of directors on the Board of Directors the shares of Class
B Common Stock are entitled to elect multiplied by (z) the percentage that the
number of shares of Class B Common Stock so accepted for payment plus any shares
of Class B Common Stock beneficially owned by Purchaser or its affiliates on the
date hereof bears to the number of shares of Class B Common Stock outstanding at
the time of such acceptance for payment. In furtherance thereof, the Company
shall increase the size of the Company's Board of Directors, or use its best
efforts to secure the resignation of directors, or both, as is necessary to
permit Purchaser's designees to be elected to the Company's Board of Directors;
provided, however, that prior to the Effective Time, the Company's Board of
Directors shall always have at least two members who are neither officers of
Purchaser or the Company (or any of their respective affiliates) nor designees
of Purchaser (or any of its affiliates), nor shareholders or affiliates of
Purchaser, nor beneficial owners of 5% or more of any class of capital stock of
the Company (or any of their respective affiliates) ("Insiders"). At such time,
the Company, if so requested, will use its best efforts to cause persons
designated by Purchaser to constitute the same percentage of each committee of
such board, each board of directors of each subsidiary of the Company and each
committee of each such board (in each case to the extent of the Company's
ability to elect such persons). The Company's obligations to appoint designees
to the Board of Directors shall be subject to Section 14(f) of the Exchange Act
and Rule 14f-1 thereunder. The Company shall promptly take all actions required
pursuant to such Section and Rule in order to fulfill its obligations under this
Section 4.2 and Purchaser shall provide the Company with all information with
respect to itself and its officers and directors required by such Section and
Rule. The Company shall provide for inclusion in Purchaser's Schedule 14D-1
being mailed to shareholders contemporaneously with the commencement of the
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Offer such information with respect to the Company and its officers and
directors as is required under such Section and Rule in order to fulfill its
obligations under this Section 4.2.
4.3. Actions by Directors. For purposes of Article IX and Sections 10.3
and 10.4, no action taken by the Board of Directors of the Company prior to the
Merger shall be effective unless such action is approved by the affirmative vote
of at least a majority of the directors of the Company who are not Insiders.
ARTICLE V
CONVERSION OR CANCELLATION OF SHARES IN THE MERGER
5.1. Conversion or Cancellation of Shares. The manner of converting or
cancelling shares of the Company and Merger Sub in the Merger shall be as
follows:
(a) At the Effective Time, each share of the Class A Common Stock of the
Company, par value $0.80 per share (the "Class A Common Stock"), and each share
of the Class B Common Stock of the Company, par value $0.80 per share (the
"Class B Common Stock" and, together with the Class A Common Stock, the
"Shares") issued and outstanding immediately prior to the Effective Time (other
than Shares owned by Purchaser, Merger Sub or any other subsidiary or affiliate
of Purchaser (collectively, the "Purchaser Companies") or Shares which are held
by shareholders ("Dissenting Shareholders") exercising appraisal rights pursuant
to Section 909 of the MBCA) shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into the right to
receive, without interest, an amount in cash equal to the Merger Consideration
or such greater amount which may be paid pursuant to the Offer. All such Shares,
by virtue of the Merger and without any action on the part of the holders
thereof, shall no longer be outstanding and shall be cancelled and retired and
shall cease to exist, and each holder of a certificate representing any such
Shares shall thereafter cease to have any rights with respect to such Shares,
except the right to receive the Merger Consideration for such Shares upon the
surrender of such certificate in accordance with Section 5.2 or the right, if
any, to receive payment from the Surviving Corporation of the "fair value" of
such Shares as determined in accordance with Section 909 of the MBCA.
(b) At the Effective Time, each share of Common Stock, without par value,
of Merger Sub issued and outstanding immediately prior to the Effective Time
shall, by virtue of the Merger and without any action on the part of Merger Sub
or the holders of such shares, be converted into one share of common stock of
the Surviving Corporation.
(c) Immediately prior to the Effective Time, each option or right to
acquire Shares or stock appreciation rights with respect to the Shares ("SARs"),
shall, without any action on the part of the holder thereof, and whether or not
then exercisable, be converted into the right to receive an amount in cash, if
any, equal to the product of (x) the Merger Consideration minus the current
option, acquisition or base price per share of such option or right and (y) the
number of Shares subject to such option or right, payable to the holder thereof
without interest thereon, at the Effective Time of the Merger and such option or
right will be cancelled and retired and shall cease to exist; provided that the
Company shall be entitled to withhold, in accordance with applicable law, from
any such cash payment any amounts required to be withheld under applicable law.
If and to the extent required by the terms of the plans governing such options
or rights or pursuant to the terms of any option or right granted thereunder,
the Company shall use all reasonable efforts to obtain the consent of each
holder of outstanding stock options or rights to the foregoing treatment of such
stock options or rights and to take any other action reasonably necessary to
effectuate the foregoing provisions. The Company shall take all reasonably
necessary action to provide that the Stock Plans shall be terminated as of the
Effective Time.
(d) At the Effective Time, each Share issued and outstanding at the
Effective Time and owned by any of the Purchaser Companies, and each Share
issued and held in the Company's treasury at the Effective Time, shall, by
virtue of the Merger and without any action on the part of the holder thereof,
cease to be outstanding, shall be cancelled and retired without payment of any
consideration therefor and shall cease to exist.
5.2. Payment for Shares. Purchaser shall make available or cause to be
made available to the paying agent appointed by Purchaser with the Company's
prior approval (the "Paying Agent") amounts sufficient in
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the aggregate to provide all funds necessary for the Paying Agent to make
payments pursuant to Section 5.1(a) hereof to holders of Shares issued and
outstanding immediately prior to the Effective Time. Promptly after the
Effective Time, the Surviving Corporation shall cause to be mailed to each
person who was, at the Effective Time, a holder of record (other than any of the
Purchaser Companies) of issued and outstanding Shares a form (mutually agreed to
by Purchaser and the Company) of letter of transmittal and instructions for use
in effecting the surrender of the certificates which, immediately prior to the
Effective Time, represented any of such Shares in exchange for payment therefor.
Upon surrender to the Paying Agent of such certificates, together with such
letter of transmittal, duly executed and completed in accordance with the
instructions thereto, the Surviving Corporation shall promptly cause to be paid
to the persons entitled thereto a check in the amount to which such persons are
entitled, after giving effect to any withholdings required under Section 3406 of
the Internal Revenue Code of 1986, as amended (the "Code"). No interest will be
paid or will accrue on the amount payable upon the surrender of any such
certificate. If payment is to be made to a person other than the registered
holder of the certificate surrendered, it shall be a condition of such payment
that the certificate so surrendered shall be properly endorsed or otherwise in
proper form for transfer and that the person requesting such payment shall pay
any transfer or other taxes required by reason of the payment to a person other
than the registered holder of the certificate surrendered or establish to the
satisfaction of the Surviving Corporation or the Paying Agent that such tax has
been paid or is not applicable. One hundred and eighty days following the
Effective Time, the Surviving Corporation shall be entitled to cause the Paying
Agent to deliver to it any funds (including any interest received with respect
thereto) made available to the Paying Agent which have not been disbursed to
holders of certificates formerly representing Shares outstanding on the
Effective Time, and thereafter such holders shall be entitled to look to the
Surviving Corporation only as general creditors thereof with respect to the cash
payable upon due surrender of their certificates. Notwithstanding the foregoing,
neither the Paying Agent nor any party hereto shall be liable to any holder of
certificates formerly representing Shares for any amount paid to a public
official pursuant to any applicable abandoned property, escheat or similar law.
The Surviving Corporation shall pay all charges and expenses, including those of
the Paying Agent, in connection with the exchange of cash for Shares and
Purchaser shall reimburse the Surviving Corporation for such charges and
expenses.
5.3. Dissenters' Rights. If any Dissenting Shareholder shall be entitled
to be paid the "fair value" of his or her Shares, as provided in Section 909 of
the MBCA, the Company shall give Purchaser prompt notice thereof (and shall also
give Purchaser prompt notice of any withdrawals of such demands) and Purchaser
shall have the right to direct all negotiations and proceedings with respect to
any such demands. Neither the Company nor the Surviving Corporation shall,
except with the prior written consent of Purchaser, voluntarily make any payment
with respect to, or settle or offer to settle, any such demand for payment. If
any Dissenting Shareholder shall fail to perfect or shall have effectively
withdrawn or lost the right to dissent, the Shares held by such Dissenting
Shareholder shall thereupon be treated as though such Shares had been converted
into the Merger Consideration pursuant to Section 5.1.
5.4. Transfer of Shares After the Effective Time. No transfers of Shares
shall be made on the stock transfer books of the Surviving Corporation at or
after the Effective Time.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1. Representations and Warranties of the Company. The Company hereby
represents and warrants to Purchaser and Merger Sub that:
(a) Corporate Organization and Qualification. Each of the Company and its
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation and is
in good standing as a foreign corporation in each jurisdiction where the
properties owned, leased or operated, or the business conducted, by it require
such qualification, except for such failure to be so organized, existing or in
good standing, which, when taken together with all other such failures, would
not have a material adverse effect on the financial condition, properties,
business or results of operations of the Company and its subsidiaries taken as a
whole. Each of the Company and its subsidiaries has the corporate
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requisite power and authority to carry on its respective businesses as they are
now being conducted, except where the failure to have such power and authority,
when taken together with all other such failures, would not have a material
adverse effect on the financial condition, properties, business or results of
operations of the Company and its subsidiaries taken as a whole. The Company has
made available to Purchaser a complete and correct copy of the Company's
Restated Articles of Incorporation (the "Articles") and By-Laws, each as amended
to date. The Company's Articles and By-Laws so delivered are in full force and
effect;
(b) Authorized Capital. The authorized capital stock of the Company
consists of 2,500,000 shares of Series Preferred Stock, without par value (the
"Preferred Shares"), 15,000,000 shares of Class A Common Stock, par value $0.80
per share, and 2,500,000 shares of Class B Common Stock, par value $0.80 per
share, of which 8,558,474 shares of Class A Common Stock and 1,742,057 shares of
Class B Common Stock and no Preferred Shares were outstanding, and 345,429
shares of Class A Common Stock and 67,225 shares of Class B Common Stock were
held in treasury, on February 21, 1995. All of the outstanding Shares have been
duly authorized and are validly issued, fully paid and nonassessable. Other than
the shares of Class B Common Stock reserved for issuance pursuant to the Stock
Purchase Agreement, the Company has no Shares or Preferred Shares reserved for
issuance, except that, as of February 21, 1995, there were 570,698 shares of
Class A Common Stock reserved for issuance pursuant to options granted under the
1985 Stock Option Plan, 1986 Stock Option Plan and 1994 Stock Plan
(collectively, the "Stock Plans"). Each of the outstanding shares of capital
stock of each of the Company's subsidiaries is duly authorized, validly issued,
fully paid and nonassessable and owned, either directly or indirectly, by the
Company free and clear of all liens, pledges, security interests, claims or
other encumbrances. Except as set forth above, there are no shares of capital
stock of the Company authorized, issued or outstanding and except as set forth
above and as provided in the Stock Purchase Agreement, there are no preemptive
rights nor any outstanding subscriptions, options, warrants, rights, convertible
or exchangeable securities or other agreements or commitments of any character
of the Company or any of its subsidiaries relating to the issuance of, or any
securities convertible into or exchangeable for, the issued or unissued capital
stock, voting or other securities of the Company or any of its subsidiaries.
Except as set forth in Schedule 6.1(b), there are no outstanding obligations of
the Company or any subsidiary to repurchase, redeem or otherwise acquire any
capital stock or other securities of the Company or any of its subsidiaries, or
to provide funds to, or make any investment in (in the form of a loan, capital
contribution or otherwise), any other person. Except as set forth in Schedule
6.1(b), neither the Company nor any of its subsidiaries has authorized or
outstanding any bonds, debentures, notes or other indebtedness the holders of
which have the right to vote (or convertible or exchangeable into or exercisable
for securities having the right to vote) with the shareholders of the Company or
any of its subsidiaries on any matter. Except as set forth in Schedule 6.1(b),
after the Effective Time the Surviving Corporation will have no obligation to
issue, transfer or sell any Shares or common stock of the Surviving Corporation
pursuant to any Plan (as defined in Section 6.1(h));
(c) Corporate Authority. Subject only to approval of this Agreement by the
affirmative vote of a majority of the voting power of the outstanding shares of
the Class A Common Stock (voting as a class) and the affirmative vote of a
majority of the voting power of the outstanding shares of the Class B Common
Stock (voting as a class), the Company has the requisite corporate power and
authority and has taken all corporate action necessary in order to execute and
deliver this Agreement and the Stock Purchase Agreement and to consummate the
transactions contemplated hereby and thereby. This Agreement and the Stock
Purchase Agreement are valid and binding agreements of the Company enforceable
against the Company in accordance with their terms;
(d) Governmental Filings; No Violations. (i) Other than the filings
provided for in Section 2.3 hereof and Article IV of the Stock Purchase
Agreement, as required under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), the American Stock Exchange, Environmental
Laws (as defined in Section 6.1(k)) and the Exchange Act or deemed advisable
under Section 721 of Title VII of the Defense Production Act of 1950, as amended
by the Omnibus Trade and Competitiveness Act of 1988 (the "Exon-Florio
Amendment") (collectively, the "Regulatory Filings"), except as set forth in
Schedule 6.1(d), no notices, reports or other filings are required to be made by
the Company with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by the Company from, any
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governmental or regulatory authority, agency, commission or other entity,
domestic or foreign ("Governmental Entity"), in connection with the execution
and delivery of this Agreement and the Stock Purchase Agreement by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby, the failure to make or obtain any or all of which would have a material
adverse effect on the financial condition, properties, business or results of
operations of the Company and its subsidiaries taken as a whole, or would have a
material adverse effect on the Company's ability to consummate the transactions
contemplated by this Agreement or the Stock Purchase Agreement.
(ii) Except as disclosed in the Company Reports (as defined in Section
6.1(e)), the execution and delivery of this Agreement and the Stock Purchase
Agreement by the Company do not, and the consummation by the Company of the
transactions contemplated hereby and thereby will not, constitute or result in
(w) a breach or violation of, or a default under, the Articles or By-Laws of the
Company or the comparable governing instruments of any of its subsidiaries, (x)
a breach or violation of, a default under any Plan or any grant or award made
under any of the foregoing, (y) a breach or violation of, or a default under,
the acceleration of or the creation of a lien, pledge, security interest or
other encumbrance on assets (with or without the giving of notice or the lapse
of time) pursuant to any provision of any agreement, lease, contract, note,
mortgage, indenture, arrangement or obligation ("Contracts") of the Company or
any of its subsidiaries or any law, rule, ordinance or regulation or judgment,
decree, order, award or governmental or nongovernmental permit or license to
which the Company or any of its subsidiaries is subject or (z) any change in the
rights or obligations of any party under any of the Contracts, except, in the
case of clause (y) or (z) above, for such breaches, violations, defaults,
accelerations or changes that, alone or in the aggregate, would not have a
material adverse effect on the financial condition, properties, business or
results of operations of the Company and its subsidiaries taken as a whole or
that would not have a material adverse effect on the Company's ability to
consummate the transactions contemplated by this Agreement or the Stock Purchase
Agreement;
(e) Company Reports; Financial Statements. The Company has made available
to Purchaser each registration statement, schedule, report, proxy statement or
information statement prepared by it since December 31, 1993, including, without
limitation, (i) the Company's Annual Report on Form 10-K for the year ended
December 31, 1993, (ii) the Company's Quarterly Reports on Form 10-Q for the
periods ended March 30, 1994, June 30, 1994 and September 30, 1994 and (iii) the
Company's Current Reports on Form 8-K dated November 30, 1994 and January 6,
1995, each in the form (including exhibits and any amendments thereto) filed
with the SEC (collectively, the "Company Reports"). As of their respective
dates, the Company Reports did not, and any Company Reports filed with the SEC
subsequent to the date hereof will not, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances in
which they were made, not misleading; provided, however, that the foregoing
shall not apply to the extent that any such untrue statement of a material fact
or omission to state a material fact was made by the Company in reliance upon
and in conformity with written information concerning the Purchaser Companies
furnished to the Company by Purchaser specifically for use in the Company
Reports. Each of the consolidated balance sheets included in or incorporated by
reference into the Company Reports (including the related notes and schedules)
fairly presents the consolidated financial position of the Company and its
subsidiaries as of its date and each of the consolidated statements of income,
shareholders' equity and cash flows and of changes in financial position
included in or incorporated by reference into the Company Reports (including any
related notes and schedules) fairly presents the results of operations, retained
earnings and changes in financial position, as the case may be, of the Company
and its subsidiaries for the periods set forth therein (subject, in the case of
unaudited statements, to normal year-end audit adjustments which will not be
material in amount or effect), in each case in accordance with generally
accepted accounting principles consistently applied during the periods involved,
except as may be noted therein. Other than the Company Reports, the Company has
not filed any other definitive reports or statements with the SEC since December
31, 1993. As soon as practicable after receiving its auditor's opinion with
respect to the Company's financial statements for the year ended December 31,
1994 (the "1994 Financial Statements"), the Company shall make available to
Purchaser a copy of such 1994 Financial Statements (including such auditor's
opinion) and, either simultaneously therewith or as soon thereafter as is
practicable, a copy of the Company's Annual Report on Form 10-K,
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including documents incorporated therein by reference, for the year ended
December 31, 1994 (the "1994 10-K") in substantially the form to be filed with
the SEC;
(f) Absence of Certain Changes. Except as disclosed in the Company Reports
filed with the SEC prior to the date hereof or as set forth in Schedule 6.1(f),
since December 31, 1993, the Company and its subsidiaries have conducted their
respective businesses only in, and have not engaged in any transaction other
than according to, the ordinary and usual course of such businesses (except for
such departures from the ordinary and usual course of such businesses which,
individually or in the aggregate, would not be material to the business of the
Company and its subsidiaries taken as a whole) and there has not been (i) any
material adverse change in the financial condition, properties, business or
results of operations of the Company and its subsidiaries taken as a whole or
any development or combination of developments which is reasonably likely to
result in any such change; (ii) any declaration, setting aside or payment of any
dividend or other distribution with respect to the capital stock of the Company,
other than regular quarterly cash dividends not in excess of $0.17 per Share; or
(iii) any change by the Company in accounting principles or practices, except as
required by generally accepted accounting principles. Since December 31, 1993,
except as provided for herein, as disclosed in the Company Reports filed with
the SEC prior to the date hereof or as set forth in Schedule 6.1(f), and other
than in the ordinary course or as required by law or to maintain the
tax-qualified status of any Plan there has not been any material increase in the
compensation payable or which could become payable by the Company and its
subsidiaries to their officers or key employees, or any amendment of any Plans
which would result in any such increase;
(g) Litigation and Liabilities. Except as disclosed in the Company Reports
filed with the SEC prior to the date hereof or as set forth in Schedule 6.1(g),
there are no (i) civil, criminal or administrative actions, suits, claims,
hearings, investigations or proceedings pending or, to the knowledge of the
management of the Company, threatened against the Company or any of its
subsidiaries or (ii) obligations or liabilities, whether or not accrued,
contingent or otherwise, including, without limitation, those relating to
matters involving any Environmental Law (as defined in Section 6.1(k)), or any
other facts or circumstances of which the management of the Company is aware
that is reasonably likely to result in any claims against or obligations or
liabilities of the Company or any of its subsidiaries, that, alone or in the
aggregate, would have a material adverse effect on the financial condition,
properties, business or results of operations of the Company and its
subsidiaries taken as a whole;
(h) Employee Benefits. (i) Schedule 6.1(h) contains a complete and
accurate list of all existing bonus, deferred compensation, pension, retirement,
profit-sharing, thrift, savings, employee stock ownership, stock bonus, stock
purchase, restricted stock, stock option, severance and welfare benefit plans,
employment or severance agreements and all similar arrangements that are
maintained by the Company or any of its subsidiaries (the "Plans") for the
benefit of any employee or former employee or director or former director of the
Company or any of its subsidiaries (the "Employees"). Except as set forth on
Schedule 6.1(h) or pursuant to collective bargaining agreements or as is
required by law or to maintain tax-qualified status, neither the Company nor any
of its subsidiaries has any formal commitment, whether legally binding or not,
to create any additional Plan or to modify or change any existing Plan that
would provide a material increase in benefits for any Employee.
(ii) Each Plan has been operated and administered in all material respects
in accordance with its terms and with applicable law, including, but not limited
to, the Employment Retirement Income Security Act of 1974, as amended ("ERISA")
and the Code, except for any failures to comply with this provision which, when
taken together with all other failures to comply with this provision, would not
have a material adverse effect on the financial condition, properties, business
or results of operations of the Company and its subsidiaries taken as a whole.
Each Plan which is an "employee pension benefit plan" within the meaning of
Section 3(2) of ERISA (a "Pension Plan") and which is intended to be qualified
under Section 401(a) of the Code has received a favorable determination letter
from the Internal Revenue Service for "TRA" (as defined in Rev. Proc. 93-39),
has filed for such a determination letter or intends to file for such a
determination letter within the time period required by Rev. Proc. 95-12 or an
extension thereof. Except as would not have a material adverse effect on the
financial condition, properties, business or results of operations of the
Company and its subsidiaries taken as a whole, there is no pending or, to the
knowledge of the Company's management,
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threatened legal action, suit or claim relating to the Plans, other than claims
for benefits in the ordinary course of business. Neither the Company nor any of
its subsidiaries has engaged in a transaction with respect to any Plan that,
assuming the taxable period of such transaction expired as of the date hereof,
would subject the Company or any of its subsidiaries to a tax or penalty imposed
by either Section 4975 of the Code or Section 502(i) of ERISA in an amount which
would have a material adverse effect on the financial condition, properties,
business or results of operations of the Company and its subsidiaries taken as a
whole.
(iii) Except as set forth in Schedule 6.1(h), no unsatisfied liability
under Title IV of ERISA has been or, based on actions that have been taken or
that are proposed to be taken, is expected to be incurred by the Company or any
subsidiary with respect to any ongoing, frozen or terminated "single-employer
plan", within the meaning of Section 4001(a)(15) of ERISA, currently or within
the past five years maintained by any of them, or any single-employer plan of
any entity (an "ERISA Affiliate") which is considered one employer with the
Company under Section 4001 of ERISA or Section 414 of the Code, during its
affiliation with the Company (an "ERISA Affiliate Plan"). No notice of a
"reportable event", within the meaning of Section 4043 of ERISA for which the
30-day reporting requirement has not been waived, has been required to be filed
for any Pension Plan or by any ERISA Affiliate Plan within the 12-month period
ending on the date hereof. To the knowledge of the Company's management, the
Pension Benefit Guaranty Corporation (the "PBGC") has not instituted proceedings
to terminate any Pension Plan or ERISA Affiliate Plan and, to the knowledge of
the Company's management, no condition exists that presents a material risk that
such proceedings will be instituted.
(iv) All contributions required to be made under the terms of any Plan or
ERISA Affiliate Plan have been timely made or adequate reserves in respect
thereof have been established on the books of the Company. Neither any Pension
Plan nor any ERISA Affiliate Plan has an "accumulated funding deficiency"
(whether or not waived) within the meaning of Section 412 of the Code or Section
302 of ERISA and all required payments to the PBGC (other than insurance
premiums) with respect to each Pension Plan or ERISA Affiliate Plan have been
made on or before their due dates. Neither the Company nor its subsidiaries has
provided, or is required to provide, security to any Pension Plan or to any
ERISA Affiliate Plan pursuant to Section 401(a)(29) of the Code.
(v) Except as set forth on Schedule 6.1(h), with respect to each Pension
Plan which is a single-employer plan covered under Title IV of ERISA and each
ERISA Affiliate Plan, there has not been an adverse change in the financial
condition of such Plan(s) since the date of the latest actuarial report prepared
for such Plan(s) which would have caused a material change in the funded status
of such Plan(s) from the status as of such date. None of the Company, any of its
subsidiaries or an ERISA Affiliate (during its affiliation with the Company) has
contributed to or been obligated to contribute to a multiemployer plan (within
the meaning of Section 3(37) of ERISA) during the five years preceding the date
hereof.
(vi) All Plans covering foreign Employees comply in all material respects
with applicable local law except for any failures to comply with this provision
which, when taken together with all other failures to comply with this
provision, would not have a material adverse effect on the financial condition,
properties, businesses results of operations of the Company and its subsidiaries
taken as a whole. The Company and its subsidiaries have no material unfunded
liabilities with respect to any Pension Plan which covers foreign Employees.
(vii) With respect to each Plan, the Company has made available to
Purchaser, if applicable, true and complete copies of: (s) all current Plan
documents and all amendments thereto; (t) all current trust instruments and
insurance contracts; (u) the last two Forms 5500 filed with the Internal Revenue
Service; (v) the most recent actuarial report and financial statement; (w) the
most recent summary plan description; (x) any and all forms filed with the PBGC
during the last two years; (y) the most recent determination letter issued by
the Internal Revenue Service; and (z) any Forms 5310 or 5330 filed with the
Internal Revenue Service during the last two years.
(viii) Except as set forth on Schedule 6.1(h), or as contemplated by
Section 5.1(c) hereof or as would otherwise occur notwithstanding whether the
consummation of the transactions contemplated by this Agreement and the Stock
Purchase Agreement constitute a "Change in Control" or other trigger event in
the
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applicable Plan, the consummation of the transactions contemplated by this
Agreement and the Stock Purchase Agreement will not directly (or indirectly upon
a termination of employment): (i) entitle any Employee to severance or
termination pay or (ii) accelerate the timing of any payment or the vesting of
any rights or increase the amount of any compensation due any Employee.
(ix) Except as set forth on Schedule 6.1(h) and other than the transactions
contemplated by Section 5.1(c) hereof, as a direct or indirect result of the
consummation of the transactions contemplated hereby, neither the Company nor
the Purchaser will be obligated to make a payment to an individual that would
not be deductible as a result of the application of Section 280G of the Code;
(i) Brokers and Finders. Neither the Company nor any of its officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders fees in connection with
the transactions contemplated herein, except that the Company has employed CS
First Boston Corporation as its financial advisor, the arrangements with which
have been disclosed in writing to Purchaser prior to the date hereof; and CS
First Boston Corporation has delivered to the Board of Directors of the Company
its written opinion that the consideration to be received pursuant to the Offer
and the Merger is fair to the Company's shareholders from a financial point of
view, subject to the assumptions and qualifications set forth in such opinion;
(j) Takeover Statutes. The Board has taken all appropriate and necessary
action to approve the transactions contemplated by this Agreement and the Stock
Purchase Agreement such that the provisions of Section 611-A of the MBCA will
not apply to any of the transactions contemplated by this Agreement or the Stock
Purchase Agreement; to the Company's knowledge, except for Section 910 of the
MBCA, no other "fair price," "moratorium," "control share acquisition" or other
similar antitakeover statute or regulation is applicable to the Company, the
Shares, the Offer, the Merger, this Agreement, the Stock Purchase Agreement or
the transactions contemplated hereby or thereby;
(k) Environmental Matters. Except as disclosed in the Company Reports
filed with the SEC prior to the date hereof and except as set forth in Schedule
6.1(k) and except for such matters that, alone or in the aggregate, would not
have a material adverse effect on the financial condition, properties, business
or results of operations of the Company and its subsidiaries taken as a whole,
to the knowledge of the officers and managers of the Company having oversight of
the Company's compliance with law (i) the Company and its subsidiaries have
complied with all applicable Environmental Laws (as defined herein); (ii) the
properties presently owned or operated by the Company or its subsidiaries
(including, without limitation, soil, groundwater or surface water on or under
the properties, and buildings thereon) (the "Properties") do not contain any
Hazardous Substance (as defined herein) in concentrations exceeding any
applicable remediation standard, action level or written enforcement policy
under any applicable Environmental Law, do not, and, during the ownership or
operation of the Properties by the Company, have not, contained any underground
storage tanks, and do not have any asbestos present (and, during the ownership
or operation of the Properties by the Company, have not had any asbestos removed
therefrom); (iii) the properties formerly owned or operated by the Company or
its subsidiaries (including, without limitation, soil, groundwater or surface
water on or under the properties, and buildings thereon) (the "Former
Properties"), during the period of ownership or operation of such Former
Properties by the Company or any of its Subsidiaries, did not, as a result of
the action or omission of the Company or any of its subsidiaries, contain any
Hazardous Substance in concentrations exceeding any applicable remediation
standard, action level or written enforcement policy under applicable
Environmental law, did not contain any underground storage tanks and did not
have any asbestos present; (iv) neither the Company nor any of its subsidiaries
has received any formal notices, demand letters or request for information from
any Governmental Entity or any third party that the Company may be in violation
of, or liable under, any Environmental Law and none of the Company, its
subsidiaries or the Properties are subject to any court order, administrative
order or decree arising under any Environmental Law; and (v) no Hazardous
Substance has been disposed of, transferred, released or transported by the
Company or any of its subsidiaries from any of the Properties or Former
Properties during the time such Property or Former Property was owned or
operated by the Company or one of its subsidiaries, other than as would not be
expected to result in liability and allowed under applicable Environmental Law
at the time the disposal, transfer, release or
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transportation occurred and other than disposal at commercial or municipal
disposal sites that are not presently listed on the CERCLA National Priorities
List or any equivalent state list.
"Environmental Law" means (i) any Federal, state or local law, statute,
ordinance, rule, regulation, code, license, permit, authorization, approval,
consent, common law, legal doctrine, order, judgment, decree, injunction,
requirement or agreement with any Governmental Entity, relating to (x) the
protection, preservation or restoration of the environment (including, without
limitation, air, water vapor, surface water, groundwater, drinking water supply,
surface land, subsurface land, plant and animal life or any other natural
resource), or to human health or safety, or (y) the exposure to, or the use,
storage, recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of Hazardous Substances, in each case
as amended and as now in effect. "Hazardous Substance" means any substance
presently listed, defined, designated or classified as hazardous, toxic or
radioactive, or otherwise regulated for its potential adverse effect on the
environment or human health or safety, under any Environmental Law, whether by
type or by quantity, including any substance containing any such substance as a
component;
(l) Intellectual Property. Except as disclosed in the Company Reports
filed with the SEC prior to the date hereof and except as set forth in Schedule
6.1(l), the Company owns, or is licensed to use, all patents, trademarks,
tradenames, service marks, copyrights and any applications therefor, technology,
know-how, computer software programs or applications and tangible or intangible
proprietary information or material that are used or proposed to be used in the
business of the Company and its subsidiaries as currently conducted or proposed
to be conducted (the "Company IP Rights") and all such granted and issued
patents, registered trademarks and copyrights held by the Company or any
subsidiary of the Company are valid, enforceable and subsisting except for such
Company IP Rights the absence of which, individually or in the aggregate, would
not have a material adverse effect on the financial condition, properties,
business or results of operations of the Company and its subsidiaries taken as a
whole. Except as disclosed in the Company Reports filed with the SEC prior to
the date hereof and except as set forth in Schedule 6.1(l), no material claims
with respect to the Company IP Rights have been asserted or, to the knowledge of
management of the Company, are threatened by any person;
(m) Compliance with Laws. Except as disclosed in the Company Reports filed
with the SEC prior to the date hereof or as set forth in Schedule 6.1(m), the
Company and its subsidiaries each has all permits, licenses, certificates of
authority, orders and approvals of, and has made all filings, applications and
registrations with any Governmental Entity that are required in order to permit
it to carry on its business as it is presently conducted and the absence of
which would, individually or in the aggregate, have a material adverse effect on
the financial condition, properties, business or results of operations of the
Company and its subsidiaries taken as a whole; all such permits, licenses,
certificates of authority, orders and approvals are now in full force and
effect, and, to the best knowledge of management of the Company, no suspension
or cancellation of any of them is threatened, in each case except as would not,
individually or in the aggregate, have a material adverse effect on the
financial condition, properties, business or results of operations of the
Company and its subsidiaries taken as a whole;
(n) Taxes. (i) Except as set forth in Schedule 6.1(n), the Company and its
subsidiaries have duly filed all United States federal and foreign tax and
information returns, all state and local income, windfall profits, gross
receipts and franchise tax and information returns, and all state and local
sales, use, excise and real and personal property and other tax returns relating
to the Company and its subsidiaries for all periods for which returns are
required to be filed, except for those returns the failure of which to file
would not have a material adverse effect on the financial condition, properties,
business or results of operations of the Company and its subsidiaries taken as a
whole, and said filed returns are complete and accurate in all material
respects. Except as set forth in Schedule 6.1(n), all federal, state and local
tax returns with respect to income tax withholding and social security and
unemployment taxes relating to the Company and its subsidiaries have been duly
filed by the Company and its subsidiaries for all periods for which returns are
required to be filed, except for those returns the failure of which to file
would not have a material adverse effect on the financial condition, properties,
business or results of operations of the Company and its subsidiaries taken as a
whole, and said filed returns are complete and accurate in all material
respects. Except as set forth in Schedule 6.1(n), the Company and its
subsidiaries have paid or reserved for all Taxes due with respect to all filed
tax returns
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described in the preceding two sentences (the "Tax Returns") and all assessments
received to the extent that such taxes have been due. For all taxable years to
and including the taxable year ending December 31, 1990, all United States
federal income tax returns of the Company and its subsidiaries have been audited
or the period for assessment of taxes in respect of which such federal income
tax returns were required to be filed has expired and all deficiencies assessed
as a result of such audits have been paid and settled. Except as set forth in
Schedule 6.1(n), there are no issues currently pending which have been raised by
the Internal Revenue Service in connection with the examination of any United
States federal income tax returns of the Company and its subsidiaries, except
for issues the resolution of which is not likely to have a material adverse
effect on the financial condition, properties, business or results of operations
of the Company and its subsidiaries taken as a whole. To the best knowledge and
belief of the Company and its subsidiaries, there are no deficiencies or
assessments which have not been paid or settled nor any issues currently pending
which have been raised by any taxing authority in connection with the
examination of any Tax Returns other than United States federal income tax
returns of the Company and its subsidiaries except for deficiencies, assessments
or issues the payment, settlement or resolution of which is not likely to have a
material adverse effect on the financial condition, properties, business or
results of operations of the Company and its subsidiaries taken as a whole;
(o) Labor Matters. To the knowledge of the Company's management, (i) the
business of the Company and its subsidiaries is operating and has been operated
in compliance with applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, including the
Immigration Reform and Control Act ("IRCA"), the Worker Adjustment and
Retraining Notification Act of 1988 ("WARN Act"), any such applicable laws
respecting employment discrimination, equal employment opportunity, affirmative
action, employee privacy, wrongful or unlawful termination, workers'
compensation, occupational safety and health requirements, labor-management
relations and unemployment insurance, except as would not have a material
adverse effect on the financial condition, properties, business or results of
operations of the Company and its subsidiaries taken as a whole; (ii) there is
neither pending nor threatened against the Company or any of its subsidiaries
any labor strike or work stoppage, or any other labor dispute or grievance that
is likely to have a material adverse impact on the financial condition,
properties, business or results of the operation of the Company and its
subsidiaries taken as a whole, and neither the Company nor any of its
subsidiaries has experienced any work stoppage in the past 36 months; and (iii)
except for the contracts, agreements and other arrangements listed in Schedule
6.1(o), neither the Company nor any of its subsidiaries is a party to or
otherwise bound by any contract or other agreement with any labor union or
association representing any Employee; and
(p) Insurance. True and complete copies of all material insurance policies
maintained by the Company have been made available to Purchaser. Such policies
provide coverage for the operations of the Company and its subsidiaries in
amounts and covering such risks as the Company believes is necessary to conduct
its business. Neither the Company nor any of its subsidiaries has received
formal notice that any such policy is invalid or unenforceable.
6.2. Representations and Warranties of Purchaser and Merger
Sub. Purchaser and Merger Sub represent and warrant to the Company that:
(a) Corporate Organization and Qualification. Each of Purchaser and Merger
Sub is a corporation duly organized, validly existing and in good standing under
the laws of its respective jurisdiction of incorporation and is in good standing
as a foreign corporation in each jurisdiction where the properties owned, leased
or operated, or the business conducted, by it require such qualification except
for such failure to so qualify or to be in such good standing, which, when taken
together with all other such failures, would not have a material adverse effect
on the financial condition, properties, business or results of operations of
Purchaser and its subsidiaries, taken as a whole. All of the issued and
outstanding capital stock of Merger Sub is directly or indirectly owned by
Purchaser, free and clear of any liens, mortgages, pledges, charges, claims,
security interests or encumbrances that would, individually or in the aggregate,
have a material adverse effect on the ability of Purchaser or Merger Sub to
consummate the transactions contemplated by this Agreement or the Stock Purchase
Agreement.
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(b) Corporate Authority. Purchaser and Merger Sub each has the requisite
corporate power and authority and has taken all corporate action necessary in
order to execute and deliver this Agreement and the Stock Purchase Agreement and
to consummate the transactions contemplated hereby and thereby. This Agreement
and the Stock Purchase Agreement are valid and binding agreements of Purchaser
and Merger Sub enforceable against Purchaser and Merger Sub in accordance with
their terms.
(c) Governmental Filings; No Violations. (i) Other than the Regulatory
Filings, no notices, reports or other filings are required to be made by
Purchaser and Merger Sub with, nor are any consents, registrations, approvals,
permits or authorizations required to be obtained by Purchaser and Merger Sub
from, any Governmental Entity in connection with the execution and delivery of
this Agreement or the Stock Purchase Agreement by Purchaser and Merger Sub and
the consummation of the transactions contemplated hereby and thereby by
Purchaser and Merger Sub, the failure to make or obtain any or all of which
would have a material adverse effect on the ability of Purchaser or Merger Sub
to consummate the transactions contemplated by this Agreement or the Stock
Purchase Agreement.
(ii) The execution and delivery of this Agreement and the Stock Purchase
Agreement by Purchaser and Merger Sub do not, and the consummation of the
transactions contemplated hereby and thereby will not, constitute or result in
(x) a breach or violation of, or a default under, the Certificate or By-Laws (or
comparable governing instruments) of Purchaser or Merger Sub, (y) a breach or
violation of, a default under, the acceleration of or the creation of a lien,
pledge, security interest or other encumbrance on assets (with or without the
giving of notice or the lapse of time) pursuant to, any provision of any
Contract of Purchaser or Merger Sub or any law, rule, ordinance or regulation or
judgment, decree, order, award or governmental or nongovernmental permit or
license to which Purchaser or Merger Sub is subject or (z) any change in the
rights or obligations of any party under any Contract to which Purchaser or
Merger Sub is a party or is subject, except, in the case of clause (y) or (z)
above, for such breaches, violations, defaults, accelerations or changes that,
alone or in the aggregate, would not have a material adverse effect on the
ability of Purchaser or Merger Sub to consummate the transactions contemplated
by this Agreement or the Stock Purchase Agreement.
(d) Funds. Purchaser has or will have, and shall make available to Merger
Sub, as and when required, the funds necessary to consummate the Offer, the
Merger and the transactions contemplated by the Stock Purchase Agreement in
accordance with the terms hereof and thereof and to satisfy or refinance any
obligations relating to any outstanding indebtedness of the Company the maturity
of which may come due as a result of the Company entering into this Agreement,
the Stock Purchase Agreement and/or the consummation of the Offer or the Merger.
(e) No Material Misstatements. None of the Offer Documents will, on the
date of filing with the SEC or on the date first published, sent or given to
stockholders, as the case may be, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the foregoing
shall not apply to the extent that any such untrue statement of a material fact
or omission to state a material fact was made by Purchaser or Merger Sub in
reliance upon and in conformity with written information concerning the Company
furnished to Purchaser by the Company specifically for use in the Offer
Documents. None of the written information supplied by the Purchaser Companies
specifically for use in the Schedule 14D-9 or in connection with Section 14(f)
of the Exchange Act and Rule 14f-1 thereunder will, on the date of filing with
the SEC or on the date first mailed to stockholders, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
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ARTICLE VII
COVENANTS
7.1. Interim Operations of the Company. The Company covenants and agrees
that, prior to the date on which a majority of the Company's directors are
Purchaser Insiders (unless Purchaser shall otherwise agree in writing and except
as otherwise contemplated by this Agreement or the Stock Purchase Agreement):
(a) the business of the Company and its subsidiaries shall be
conducted only in the ordinary and usual course and, to the extent
consistent therewith, each of the Company and its subsidiaries shall use
all reasonable efforts to preserve its business organization and goodwill
intact, keep available the services of its officers and employees as a
group and maintain its existing relations with customers, suppliers,
distributors, employees and others having business relationships with it,
in each case in all material respects;
(b) the Company and its subsidiaries shall not (i) sell or pledge or
agree to sell or pledge any stock owned by it in any of its subsidiaries;
(ii) adopt or propose any amendment or change of their respective Articles
or By-Laws; (iii) split, combine or reclassify the outstanding Shares; or
(iv) declare, set aside or pay any dividend payable in cash, stock or
property with respect to the Shares, except for regular quarterly cash
dividends not in excess of $0.17 per Share;
(c) except as set forth in Schedule 7.1(c), neither the Company nor
any of its subsidiaries shall (i) issue, sell, pledge, dispose of or
encumber any additional shares of, or securities convertible or
exchangeable for, or options, warrants, calls, commitments or rights of any
kind to acquire, any shares of its capital stock of any class of the
Company or its subsidiaries or any other property or assets other than, in
the case of the Company, shares of Class B Common Stock issuable pursuant
to the terms of the Stock Purchase Agreement and shares of Class A Common
Stock issuable pursuant to options outstanding on the date hereof under the
Stock Plans; (ii) transfer, lease, license, guarantee, sell, mortgage,
pledge, dispose of or encumber any material assets or incur or modify any
indebtedness or other liability or issue any debt securities or securities
convertible into or exchangeable for debt securities or assume, guarantee,
endorse or otherwise as an accommodation become responsible for the
obligations of any person, in each case other than in the ordinary and
usual course of business and in a manner consistent with past practice;
(iii) acquire directly or indirectly by redemption or otherwise any shares
of the capital stock of the Company; (iv) authorize or make capital
expenditures in excess of $1,000,000 individually; (v) make any acquisition
of assets (other than in the ordinary course of business) or investment in
the stock of any other person or entity; or (vi) merge or consolidate with
any other person;
(d) except as set forth in Schedule 7.1(d), other than in the ordinary
and usual course of business consistent with past practice or pursuant to
obligations imposed by collective bargaining agreements, neither the
Company nor any of its subsidiaries shall increase the compensation payable
or to become payable to its executive officers or employees, enter into any
contract or other binding commitment in respect of any such increase or
grant any severance or termination pay (other than pursuant to a Plan or
policy existing as of the date hereof) to, or enter into any employment or
severance agreement with any director, officer or other employee of the
Company or such subsidiaries, and neither the Company nor any of its
subsidiaries shall establish, adopt, enter into, make any new grants or
awards under or amend, any collective bargaining agreement or Plan, except
as required by applicable law, including any obligation to engage in good
faith collective bargaining, to maintain tax-qualified status or as may be
required by any Plan existing as of the date hereof;
(e) neither the Company nor any of its subsidiaries shall settle or
compromise any material claims or litigation or, except in the ordinary and
usual course of business, modify, amend or terminate any of its material
Contracts or waive, release or assign any material rights or claims, or
make any payment, direct or indirect, of any material liability of the
Company or any subsidiary before the same becomes due and payable in
accordance with its terms;
(f) neither the Company nor any of its subsidiaries shall take any
action, other than reasonable and usual actions in the ordinary course of
business and consistent with past practice with respect to
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accounting policies or procedures (including tax accounting policies and
procedures) and except as may be required by the SEC or the Financial
Accounting Standards Board;
(g) neither the Company nor any of its subsidiaries shall make any
material tax election or permit any material insurance policy naming it as
a beneficiary or a loss payable payee to be cancelled or terminated without
notice to Purchaser, except in the ordinary and usual course of business;
and
(h) neither the Company nor any of its subsidiaries shall authorize or
enter into an agreement to do any of the foregoing.
7.2. Acquisition Proposals. The Company agrees that neither the Company
nor any of its subsidiaries shall, and the Company shall direct and use all
reasonable efforts to cause the respective officers and directors of the Company
or its subsidiaries and the employees, agents and representatives of the Company
and its subsidiaries (including, without limitation, any investment banker,
attorney or accountant retained by the Company or any of its subsidiaries) not
to, initiate, solicit or encourage, directly or indirectly, any inquiries or the
making of any proposal or offer (including, without limitation, any proposal or
offer to shareholders of the Company) with respect to a merger, consolidation or
similar transaction involving, or any purchase of (a) all or any significant
portion of the assets of the Company or any of its significant subsidiaries
listed in clause (c) of this Section 7.2, (b) 25% or more of the outstanding
shares of the Class A Common Stock and/or the Class B Common Stock of the
Company or (c) a majority of the outstanding shares of the capital stock of the
Company's significant subsidiaries (American Maize-Products Decatur Inc.,
American Maize-Products Dimmitt Inc. or Swisher International, Inc.) (any such
proposal or offer being hereinafter referred to as an "Acquisition Proposal")
or, except to the extent legally required for the discharge by the Company's
Board of Directors of its fiduciary duties as advised by outside counsel to the
Company, engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with, any person relating to an
Acquisition Proposal, or otherwise facilitate any effort or attempt to make or
implement an Acquisition Proposal or enter into any agreement or understanding
with any other person or entity with the intent to effect any Acquisition
Proposal. The Company shall immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing. The Company shall use all
reasonable efforts to take all necessary steps to inform the individuals or
entities referred to in the first sentence hereof of the obligations undertaken
in this Section 7.2. The Company shall promptly notify Purchaser if any such
inquiries or proposals are received by, any such information is requested from
or any such negotiations or discussions are sought to be initiated or continued
with the Company, shall promptly inform Purchaser of all terms and conditions
thereof and shall promptly furnish Purchaser with copies of any such written
inquiries or proposals. The Company also shall promptly request each person
which has heretofore executed a confidentiality agreement in connection with its
consideration of acquiring the Company to return all confidential information
heretofore furnished to such person by or on behalf of the Company. Nothing
contained in this Section 7.2 shall prohibit the Company or its Board of
Directors from taking and disclosing to the Company's stockholders a position
with respect to a tender offer by a third party pursuant to Rules 14d-9 and
14e-2 promulgated under the Exchange Act or from making such disclosure to the
Company's stockholders which, as advised by outside counsel to the Company, is
required under applicable law.
7.3. Meetings of the Company's Shareholders. Following the consummation
of the Offer, the Company shall take, consistent with applicable law and its
Articles and By-Laws, all action necessary to duly call, give notice of, convene
and hold a meeting of holders of Shares as promptly as practicable to consider
and vote upon the approval of this Agreement and the Merger. Subject to
fiduciary requirements of applicable law, the Board of Directors of the Company
shall recommend such approval and the Company shall take all lawful action to
solicit such approval, and the Company hereby consents to the inclusion in the
Offer of such recommendation. At any such meeting of the Company all of the
Shares then owned by the Purchaser Companies will be voted in favor of this
Agreement; provided, however, that the parties agree to, at the election of
Purchaser, effect the Merger without shareholder action under the procedures
provided for in Section 904 of the MBCA if Purchaser or Merger Sub owns after
the expiration of the Offer at least 90% of the outstanding Shares of each class
of the Company's stock. The Company's proxy or information statement with
respect to such meeting of shareholders (the "Proxy Statement"), at the date
thereof and at the date of
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<PAGE> 17
such meeting, will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that the foregoing shall not apply to the
extent that any such untrue statement of a material fact or omission to state a
material fact was made by the Company in reliance upon and in conformity with
written information concerning the Purchaser Companies furnished to the Company
by Purchaser specifically for use in the Proxy Statement. The Proxy Statement
shall not be filed, and no amendment or supplement to the Proxy Statement shall
be made by the Company, without consultation with Purchaser and its counsel.
None of the written information concerning the Purchaser Companies furnished to
the Company by Purchaser specifically for use in the Proxy Statement, at the
date hereof and at the date of the stockholders' meeting, will include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
7.4. Filings; Other Action. Subject to the terms and conditions herein
provided, the Company and Purchaser (a) shall promptly make their respective
filings and thereafter make any other required submissions under the HSR Act and
other Regulatory Filings with respect to the Offer, the Merger and the
transactions contemplated by the Stock Purchase Agreement; and (b) shall use
their best efforts promptly to take, or cause to be taken, all other action and
do, or cause to be done, all other things necessary, proper or appropriate under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement and the Stock Purchase Agreement as
soon as practicable.
7.5. Access. Upon reasonable notice, the Company shall (and shall cause
each of its subsidiaries to) afford Purchaser's officers, employees, counsel,
accountants and other authorized representatives ("Representatives") access,
during normal business hours throughout the period prior to the Effective Time,
to its employees, properties, books, Contracts and records and, during such
period, the Company shall (and shall cause each of its subsidiaries to) furnish
promptly to Purchaser all information concerning its business, properties and
personnel as Purchaser or its Representatives may reasonably request, provided
that no investigation pursuant to this Section 7.5 shall affect or be deemed to
modify any representation or warranty made by the Company. All requests for
information made pursuant to this Section shall be directed to an executive
officer of the Company or such person as may be designated by any such officer.
Upon any termination of this Agreement, Purchaser shall collect and deliver to
the Company all documents obtained by it or any of its Representatives then in
their possession and any copies thereof. All information obtained by Purchaser
and its Representatives pursuant to this Section 7.5 shall be subject to the
provisions of the confidentiality agreement, dated January 30, 1995, between
Purchaser and the Company (the "Confidentiality Agreement").
7.6. Notification of Certain Matters. (a) The Company shall, as promptly
as practicable, notify Purchaser of:
(i) any formal notice of any default or event that, with notice or
lapse of time or both, would become a default, received by the Company or
any of its subsidiaries subsequent to the date of this Agreement and prior
to the date on which a majority of the Company's Board of Directors are
designees of Purchaser, under any Contract to which the Company or any of
its subsidiaries is a party or is subject, except for defaults under such
Contracts which are, individually or in the aggregate, not material to the
financial condition, properties, business or results of operations of the
Company and its subsidiaries taken as a whole;
(ii) any formal notice of (y) any alleged or actual violation of an
Environmental Law or (z) any other state of affairs or event that, with the
lapse of time, is reasonably likely to become a violation of Environmental
Law, except in each case for violations that are not reasonably likely,
individually or in the aggregate, to have a material adverse effect on the
financial condition, properties, business or results of operations of the
Company and its subsidiaries taken as a whole, received by the Company or
any of its subsidiaries subsequent to the date of this Agreement and prior
to the date on which a majority of the Company's Board of Directors are
designees of Purchaser; and
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<PAGE> 18
(iii) any material adverse change in the financial condition,
properties, business or results of operations of the Company and its
subsidiaries taken as a whole or the occurrence of any event which, so far
as reasonably can be foreseen at the time of its occurrence, would result
in any such change, or any breach of any representation, warranty, covenant
or agreement contained herein, in each case if known by the Company's
management.
(b) Each of the Company and Purchaser shall promptly notify the other party
of:
(i) any notice or other communication from any third party alleging
that the consent of such third party is or may be required in connection
with the transactions contemplated by this Agreement or the Stock Purchase
Agreement;
(ii) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement or the Stock Purchase Agreement; and
(iii) 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
relate to the consummation of the transactions contemplated by this
Agreement or the Stock Purchase Agreement.
7.7. Publicity. The initial press release shall be a joint press release
and thereafter the Company and Purchaser shall, to the extent possible, consult
with each other prior to issuing any press releases or otherwise making public
statements with respect to the transactions contemplated hereby and prior to
making any filings with any Governmental Entity or with any national securities
exchange with respect thereto.
7.8. Indemnification; Directors' and Officers' Insurance. (a) From and
after the Effective Time, Purchaser agrees that it will indemnify and hold
harmless each present and former director or officer of the Company (in each
case solely in such person's capacity as a director or officer of the Company,
as the case may be), determined as of the Effective Time (the "Indemnified
Parties"), against any costs or expenses (including reasonable attorneys' fees),
judgments, fines, losses, claims, damages or liabilities (collectively, "Costs")
incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, arising
out of matters existing or occurring at or prior to the Effective Time, whether
asserted or claimed prior to, at or after the Effective Time, to the fullest
extent that the Company would have been permitted under applicable law and
required under its By-Laws or pursuant to other agreements, each as in effect on
the date hereof, to indemnify such person (and Purchaser shall also advance
expenses as incurred to the fullest extent permitted under applicable law and
required under its By-Laws provided that the person to whom expenses are
advanced provides an undertaking to repay such advances if it is ultimately
determined that such person is not entitled to indemnification); provided that
any determination required to be made with respect to whether an officer's or
director's conduct complies with the standards set forth under Maine law, the
Articles and the Company's By-Laws shall be made by independent counsel selected
by the Surviving Corporation.
(b) Any Indemnified Party wishing to claim indemnification under paragraph
(a) of this Section 7.8, upon learning of any such claim, action, suit,
proceeding or investigation, shall promptly notify Purchaser thereof. In the
event of any such claim, action, suit, proceeding or investigation (whether
arising before or after the Effective Time), (i) Purchaser or the Surviving
Corporation shall have the right to assume the defense thereof and Purchaser
shall not be liable to such Indemnified Parties for any legal expenses of other
counsel or any other expenses subsequently incurred by such Indemnified Parties
in connection with the defense thereof, (ii) the Indemnified Parties shall
cooperate in the defense of any such matter and (iii) Purchaser shall not be
liable for any settlement effected without its prior written consent; provided,
however, that any Indemnified Party wishing to claim indemnification under
paragraph (a) of this Section 7.8 shall first demand indemnity from the
Surviving Corporation in accordance with applicable law, the Surviving
Corporation's By-laws and any agreements or contracts by which the Surviving
Corporation is bound or is subject, and shall not make demand on Purchaser
unless and until the Surviving Corporation shall have refused such demand in
whole or in part, but in no event shall this period be longer than 30 days from
the date of such demand; and provided further that Purchaser shall not have any
obligation hereunder to any
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Indemnified Party when and if a court of competent jurisdiction shall ultimately
determine, and such determination shall have become final and nonappealable,
that the indemnification of such Indemnified Party in the manner contemplated
hereby is prohibited by applicable law.
(c) Purchaser shall maintain or cause the Surviving Corporation to maintain
the Company's existing officers' and directors' liability insurance policies or
replacement policies covering the same persons and containing terms which are,
in the aggregate, no less advantageous to such persons than such existing
policies ("D&O Insurance") for a period of six years after the Effective Time;
provided, however, that in no event shall Purchaser or the Surviving Corporation
be required to make annual premium payments to obtain such Insurance Coverage in
excess of 150% of the last annual premium paid prior to the date hereof (the
"Cap"); provided further that if the D&O Insurance cannot be obtained for an
amount less than or equal to the Cap during such six year period, Purchaser
shall use its best efforts to obtain, or cause the Surviving Corporation to
obtain, as much D&O Insurance as can be obtained for the remainder of such
period for a premium not in excess (on an annualized basis) of the Cap.
7.9. Takeover Statute. If any "fair price", "moratorium", "control share
acquisition" or other form of antitakeover statute or regulation shall become
applicable to the transactions contemplated hereby or by the Stock Purchase
Agreement, the Company and the members of the Board of Directors of the Company
shall grant such approvals and take such actions as are reasonably necessary so
that the transactions contemplated hereby or thereby may be consummated as
promptly as practicable on the terms contemplated hereby and otherwise act to
eliminate or minimize the effects of such statute or regulation on the
transactions contemplated hereby and the Company, Purchaser and Merger Sub
shall, without limiting the generality of any of the foregoing, satisfy the
respective obligations imposed on them by virtue of Section 910 of the MBCA.
7.10. Employment Contracts and Employee Benefits. (a) From and after the
Effective Time, Purchaser and the Surviving Corporation shall honor in
accordance with their terms all existing individual employment, severance, early
retirement, deferred compensation, consulting and salary continuation agreements
listed and specifically denoted on Schedule 6.1(h)(B) and (C) between the
Company and any of its subsidiaries and any current or former officer, director,
employee or consultant of the Company or any of its subsidiaries.
(b) From the Effective Time through December 31, 1996, Purchaser shall
cause the Surviving Corporation and its successors to provide the employees of
the Company and its subsidiaries with employee benefit plans and programs (other
than the Stock Option Plans) which in the aggregate are no less favorable in all
material respects than those provided to such employees on the date hereof;
provided, however, that the Surviving Corporation shall not be required to
maintain any specific benefit plans or programs.
(c) With respect to each Plan intended to be qualified under Section 401(a)
of the Code, the Company shall have filed, or cause to be filed, a determination
letter request for TRA prior to the earlier of (i) the Closing Date (if
following March 31, 1995) or (ii) the expiration of the time period required by
Rev. Proc. 95-12 or any extension thereof.
(d) Purchaser shall cause the Surviving Corporation to pay each person
employed at the Company's corporate headquarters in Stamford, Connecticut at the
consummation of the Tender Offer whose employment is terminated by the Surviving
Corporation within one year following such consummation (other than termination
for cause) a lump-sum severance payment upon such termination equal to the
product of (x) one month of such employee's base salary at the time of
termination and (y) the number of full years of service such employee has
accumulated with the Company and the Surviving Corporation, up to a maximum of
12 years of service credit; provided that this Section 7.10(d) shall not apply
to any employee who is eligible to receive a severance payment upon termination
by virtue of such employee's employment contract with the Company and shall be
reduced by any other severance payment due to the employee.
7.11. Investment. Prior to the Effective Time, the Company shall amend
its Capital Accumulation Plan (the "CAP") to provide that it shall not be
permitted to invest in Class A Common Stock or Class B Common Stock as of the
Effective Time.
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ARTICLE VIII
CONDITIONS
8.1. Conditions to Obligations of Purchaser and Merger Sub. The
respective obligations of Purchaser and Merger Sub to consummate the Merger are
subject to the fulfillment of each of the following conditions, any or all of
which may be waived in whole or in part by Purchaser or Merger Sub, as the case
may be, to the extent permitted by applicable law:
(a) Shareholder Approval. This Agreement shall have been duly approved by
the affirmative vote of a majority of the voting power of the outstanding shares
of the Class A Common Stock (voting as a class) and the affirmative vote of a
majority of the voting power of the outstanding shares of the Class B Common
Stock (voting as a class), in accordance with applicable law and the Articles
and By-Laws of the Company, if required by applicable law;
(b) Purchase of Shares. Merger Sub (or one of the Purchaser Companies)
shall have purchased enough Shares pursuant to the Offer and the Stock Purchase
Agreement sufficient to satisfy the Minimum Condition (as defined in Annex A);
provided, however, that this condition shall be deemed satisfied if the
Purchaser Companies shall have failed to purchase Shares pursuant to the Offer
or the Stock Purchase Agreement in violation of the terms thereof;
(c) Governmental and Regulatory Consents. The waiting period applicable to
the consummation of the Merger under the HSR Act shall have expired or been
terminated;
(d) Order. No court or other Governmental Entity of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, judgment, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and (x) prohibits consummation of
the transactions contemplated by this Agreement or the Stock Purchase Agreement,
(y) imposes material restrictions on the consummation of the transactions
contemplated by this Agreement or the Stock Purchase Agreement or (z) imposes
material restrictions on the business operations of Purchaser, Merger Sub or the
Company as a result of the transactions contemplated by this Agreement or the
Stock Purchase Agreement, either prior to or subsequent to the Merger; and
(e) Performance of Obligations. The Company shall have performed and
complied in all material respects with all agreements and obligations required
by this Agreement or the Stock Purchase Agreement to be performed or complied
with by it on or prior to the Effective Time, unless (i) Purchaser or Merger Sub
had actual knowledge of such nonperformance or noncompliance at the time of
acceptance of Shares for payment pursuant to the Offer or (ii) such
nonperformance or noncompliance occurs following the appointment or election of
Purchaser Insiders to a majority of the positions on the Company's Board of
Directors.
8.2. Conditions to Obligations of the Company. The obligations of the
Company to consummate the Merger are subject to the fulfillment of each of the
following conditions, any or all of which may be waived in whole or in part by
the Company to the extent permitted by applicable law:
(a) Shareholder Approval. This Agreement shall have been duly approved by
the affirmative vote of a majority of the voting power of the outstanding shares
of the Class A Common Stock (voting together as a class) and the affirmative
vote of a majority of the voting power of the outstanding shares of the Class B
Common Stock (voting as a class), in accordance with applicable law and the
Articles and By-Laws of the Company, if required by applicable law;
(b) Purchase of Shares. Merger Sub (or one of the Purchaser Companies)
shall have purchased enough Shares pursuant to the Offer and the Stock Purchase
Agreement sufficient to satisfy the Minimum Condition;
(c) Governmental and Regulatory Consents. The waiting period applicable to
the consummation of the Merger under the HSR Act shall have expired or been
terminated;
(d) Order. No court or other Governmental Entity of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, judgment, decree, injunction or other
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order (whether temporary, preliminary or permanent) which is in effect and
prohibits consummation of the transactions contemplated by this Agreement or the
Stock Purchase Agreement in accordance with the terms hereof and thereof; and
(e) Performance of Obligations. Purchaser and Merger Sub shall have
performed and complied in all material respects with all agreements and
obligations required by this Agreement or the Stock Purchase Agreement to be
performed or complied with by them on or prior to the Effective Time, unless the
Company had actual knowledge of such nonperformance or noncompliance at the time
of acceptance of Shares for payment pursuant to the Offer.
ARTICLE IX
TERMINATION
9.1. Termination by Mutual Consent. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, before or
after the approval by holders of Shares, by the mutual consent of Purchaser and
the Company, by action of their respective Boards of Directors.
9.2. Termination by either Purchaser or the Company. This Agreement may
be terminated and the Merger may be abandoned by action of the Board of
Directors of either Purchaser or the Company if (a) Merger Sub, or any Purchaser
Company, shall have terminated the Offer, in accordance with the terms of
Section 1.1(a) without purchasing any Shares pursuant thereto; provided, in the
case of termination of this Agreement by Purchaser, such termination of the
Offer is not in violation of the terms of the Offer, (b) the Merger shall not
have been consummated by November 30, 1995 whether or not such date is before or
after the approval by holders of Shares (provided that the right to terminate
this Agreement under this Section 9.2(b) shall not be available to any party
whose failure to fulfill any obligation under this Agreement has been the cause
or resulted in the failure of the Merger not to have been consummated by such
date), (c) any court of competent jurisdiction has issued an injunction
permanently restraining, enjoining or otherwise prohibiting the consummation of
the Offer or the Merger, which injunction has become final and nonappealable or
(d) the approval of shareholders required by Section 8.1(a) shall not have been
obtained at a meeting duly convened therefor.
9.3. Termination by Purchaser. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the purchase of Shares pursuant to
the Offer, by action of the Board of Directors of Purchaser, if (a) the Board of
Directors of the Company shall have withdrawn or modified in a manner adverse to
Purchaser or Merger Sub its approval or recommendation of the Offer, this
Agreement or the Merger or (b) the Board of Directors of the Company, upon
request by Purchaser, shall fail to reaffirm such approval or recommendation, or
shall have resolved to do any of the foregoing referred to in clause (a) or (b)
hereof.
9.4. Termination by the Company. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the purchase of Shares pursuant to
the Offer, by action of the Board of Directors of the Company, if (a) Purchaser
or Merger Sub (or another Purchaser Company) shall have failed to commence the
Offer within the time required in Section 1.1, (b) any of the representations
and warranties of Purchaser or Merger Sub contained in this Agreement or the
Stock Purchase Agreement were untrue or incorrect in any material respect when
made or have since become, and at the time of termination remain, untrue or
incorrect in any material respect or (c) Purchaser or Merger Sub shall have
breached or failed to perform in any material respect any of its obligations,
covenants or agreements under this Agreement or the Stock Purchase Agreement or
any representation or warranty of Purchaser or Merger Sub set forth in this
Agreement or the Stock Purchase Agreement shall have been untrue or incorrect
when made or thereafter shall become untrue or incorrect, except where such
breach, failure to perform or lack of truthfulness or correctness has been
caused by or results from a breach by the Company of any of its obligations
under this Agreement or the Stock Purchase Agreement; or (d) the Company
receives an offer with respect to an Acquisition Proposal and the Board of
Directors of the Company, in the exercise of its fiduciary duties as advised by
outside counsel to the Company, determines to recommend such Acquisition
Proposal to the
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Company's stockholders; provided that the Company (i) shall notify Purchaser and
Merger Sub promptly of receipt of such Acquisition Proposal and (ii) shall
notify Purchaser and Merger Sub promptly of its intention to recommend such
Acquisition Proposal to the Company's shareholders, but in no event shall the
notice referred to in clause (ii) be given less than 24 hours prior to the
earlier of the public announcement of such recommendation or the Company's
termination of this Agreement.
9.5. Effect of Termination and Abandonment. (a) In the event of
termination of this Agreement and abandonment of the Merger pursuant to this
Article IX, no party hereto (or any of its directors or officers) shall have any
liability or further obligation to any other party to this Agreement, except as
provided in Section 9.5(b) below and Section 10.2 and except that nothing herein
will relieve any party from liability for any willful breach of this Agreement.
(b) If (i) the Offer shall have remained open for the period required
pursuant to the terms of this Agreement, (ii) the Minimum Condition (as defined
in Annex A) shall not have been satisfied and the Offer is terminated without
the purchase of any Shares thereunder, (iii) the Company receives an Acquisition
Proposal (other than from one of the Purchaser Companies) following the date
hereof and prior to the termination of this Agreement and (iv) after the date
hereof, but within one year of the date hereof, any corporation, partnership,
person, other entity or group (as defined in Section 13(d)(3) of the Exchange
Act) other than Purchaser or Merger Sub or any of their respective subsidiaries
or affiliates shall have become the beneficial owner of more than 50% of the
outstanding shares of each of the Class A Common Stock and the Class B Common
Stock, then the Company, if requested by Purchaser, shall promptly, but in no
event later than two days after the date of such request, pay Purchaser a fee of
2.5% of the total dollar value of the Offer, calculated as the product of (x)
the number of Shares outstanding as of the date hereof and (y) the Merger
Consideration, which amount shall be payable in immediately available funds;
provided, however, that no fee will be payable by the Company hereunder if this
Agreement is terminated by the Company due to a breach by Purchaser or Merger
Sub of its obligations under this Agreement or the Stock Purchase Agreement. The
Company acknowledges that the agreements contained in this Section 9.5(b) are an
integral part of the transactions contemplated in this Agreement and the Stock
Purchase Agreement, and that, without these agreements, Purchaser and Merger Sub
would not enter into this Agreement or the Stock Purchase Agreement;
accordingly, if the Company fails to pay promptly the amount due pursuant to
this Section 9.5(b), and, in order to obtain such payment, Purchaser or Merger
Sub commences a suit which results in a judgment against the Company for the fee
set forth in this paragraph (b), the Company shall pay to Purchaser or Merger
Sub its costs and expenses (including attorneys' fees) in connection with such
suit, together with interest on the amount of the fee at the prime lending rate
for money borrowed as announced from time to time by Citibank, N.A. on the date
such payment was required to be made.
ARTICLE X
MISCELLANEOUS AND GENERAL
10.1. Payment of Expenses. Whether or not the Merger shall be
consummated, each party hereto shall pay its own expenses incident to preparing
for, entering into and carrying out this Agreement, the consummation of the
Merger and the transactions contemplated by the Stock Purchase Agreement.
10.2. Survival. The agreements of the Company, Purchaser and Merger Sub
contained in Sections 5.2 (but only to the extent that such Section expressly
relates to actions to be taken after the Effective Time), 5.3, 5.4, 7.8, 7.9,
7.10 and 10.1 shall survive the consummation of the Merger. The agreements of
the Company, Purchaser and Merger Sub contained in the last two sentences of
Section 7.5, Section 9.5 and Section 10.1 shall survive the termination of this
Agreement. All other representations, warranties, agreements and covenants in
this Agreement shall not survive the consummation of the Merger or the
termination of this Agreement.
10.3. Modification or Amendment. Subject to the applicable provisions of
the MBCA, at any time prior to the Effective Time, the parties hereto may modify
or amend this Agreement, by written agreement executed and delivered by duly
authorized officers of the respective parties.
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10.4. Waiver of Conditions. The conditions to each of the parties'
obligations to consummate the Merger are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable law.
10.5. Counterparts. For the convenience of the parties hereto, this
Agreement may be executed in any number of counterparts, each such counterpart
being deemed to be an original instrument, and all such counterparts shall
together constitute the same agreement.
10.6. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Maine.
10.7. Notices. Any notice, request, instruction or other document to be
given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid,
(a) If to Purchaser, addressed to Purchaser at:
54, avenue Hoche
75008 Paris, France
Attention: Ing. Luigi Brasca
Telephone: 33-1-40-53-57-10
Telecopier: 33-1-40-53-94-99
With a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Neil T. Anderson
Telephone: (212) 558-3653
Telecopier: (212) 558-3588
(b) If to Merger Sub, addressed to Merger Sub at:
1300 Fort Wayne National Bank Building
Fort Wayne, Indiana 46802
Attention: Andrew C. Harvard
Telephone: (219) 425-5226
Telecopier: (219) 425-5154
With a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Neil T. Anderson
Telephone: (212) 558-3653
Telecopier: (212) 558-3588
(c) If to the Company, addressed to the Company at:
250 Harbor Drive
Stamford, Connecticut 06902
Attention: Robert M. Stephan
Telephone: (203) 356-9000
Telecopier: (203) 324-4675
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With a copy to:
Dewey Ballantine
1301 Avenue of the Americas
New York, New York 10019-6092
Attention: Morton A. Pierce
Telephone: (212) 259-6640
Telecopier: (212) 259-6333
or to such other persons or addresses as may be designated in writing by the
party to receive such notice.
10.8. Entire Agreement, etc. (a) This Agreement, the Stock Purchase
Agreement and the Confidentiality Agreement (including any exhibits or Annexes
hereto or thereto) (i) constitute the entire agreement, and supersede all other
prior agreements, understandings, representations and warranties both written
and oral, among the parties, with respect to the subject matter hereof and
thereof and (ii) shall not be assignable by operation of law or otherwise and
are not intended to create any obligations to, or rights in respect of, any
persons other than the parties hereto and thereto; provided, however, that
Purchaser may designate, by written notice to the Company, another wholly-owned
direct or indirect subsidiary to be a Constituent Corporation in lieu of Merger
Sub, in the event of which, all references herein to Merger Sub shall be deemed
references to such other subsidiary except that all representations and
warranties made herein with respect to Merger Sub as of the date of this
Agreement shall be deemed representations and warranties made with respect to
such other subsidiary as of the date of such designation.
(b) It is expressly agreed that all of the persons (and their successors
and assigns) who are beneficiaries of Sections 5.1(c) and 7.8 (whether as
individuals or members of a class or group) shall be entitled to enforce such
Sections against Purchaser or the Surviving Corporation and such Sections shall
be binding on all successors and assigns of the Surviving Corporation or of
Purchaser.
10.9. Definition of "Subsidiary". When a reference is made in this
Agreement to a subsidiary of a party, the word "subsidiary" means any
corporation or other organization whether incorporated or unincorporated of
which at least a majority of the securities or interests having by the terms
thereof ordinary voting power to elect at least a majority of the board of
directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or controlled
by such party or by any one or more of its subsidiaries, or by such party and
one or more of its subsidiaries.
10.10. Obligation of Purchaser. Whenever this Agreement requires Merger
Sub to take any action, such requirement shall be deemed to include an
undertaking on the part of Purchaser to cause Merger Sub to take such action.
10.11. Captions. The Article, Section and paragraph captions herein are
for convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the parties hereto on the date first hereinabove
written.
AMERICAN MAIZE-PRODUCTS COMPANY
By: /s/ PATRIC J. MCLAUGHLIN
------------------------------------
Name: Patric J. McLaughlin
Title: President and Chief
Executive Officer
ERIDANIA BEGHIN-SAY, S.A.
By: /s/ ANDREW C. HARVARD
------------------------------------
Name: Andrew C. Harvard
Title: President
CERESTAR USA, INC.
By: /s/ STEFANO MELONI
------------------------------------
Name: Stefano Meloni
Title: Chairman
24
<PAGE> 26
ANNEX A
Certain Conditions of the Offer. Notwithstanding any other provision of
the Offer and provided that Merger Sub shall not be obligated to accept for
payment any Shares until expiration of all applicable waiting periods under the
HSR Act, Merger Sub shall not be required to accept for payment or pay for, or
may delay the acceptance for payment of or payment for, any tendered Shares, or
may, in its sole discretion, subject to Section 1.1 of this Agreement, terminate
or amend the Offer as to any Shares not then paid for if (a) there have not been
validly tendered prior to the expiration of the Offer and not withdrawn (i) a
number of shares of Class A Common Stock which, together with the number of
shares of Class A Common Stock then beneficially owned by Purchaser and its
affiliates, would constitute at least a majority of the outstanding shares of
Class A Common Stock on a fully-diluted basis and (ii) a number of shares of
Class B Common Stock which, together with the number of shares of Class B Common
Stock which the Purchaser or its affiliates have purchased or are then obligated
to purchase under the Stock Purchase Agreement (all conditions to the
obligations of the parties under the Stock Purchase Agreement (other than the
completion of the Offer) having been satisfied) and the number of shares of
Class B Common Stock then beneficially owned by Purchaser and its affiliates,
would constitute at least a majority of the outstanding shares of Class B Common
Stock on a fully-diluted basis (the "Minimum Condition"); or (b) at any time on
or after February 22, 1995, and at or prior to the time of payment for any of
such Shares (whether or not any Shares have theretofore been accepted for
payment pursuant to the Offer), any of the following events shall have occurred
and be continuing:
(i) there shall have occurred (u) any general suspension of, or
limitation on times or prices for, trading in securities on any United
States national securities exchange or over-the-counter market, (v) a
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States or France, (w) the commencement of a
war, armed hostilities or other international or national calamity directly
or indirectly involving the United States having a material adverse effect
on the functioning of the financial markets in the United States, (x) any
limitation (whether or not mandatory) by any governmental or regulatory
authority, agency, commission or other entity, domestic or foreign
("Governmental Entity"), on, or any other event having a material adverse
effect on, the extension of credit by banks or other lending institutions
in the United States or France, (y) any suspension of, or any material
limitation (whether or not mandatory) on, the currency exchange markets or
the imposition of, or material changes in, any currency or exchange control
laws in the United States or France or (z) in the case of any of the
foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof; or
(ii) the Company shall have breached or failed to perform in any
material respect any of its obligations, covenants or agreements under this
Agreement or the Stock Purchase Agreement or any representation or warranty
of the Company set forth in this Agreement or the Stock Purchase Agreement
shall have been untrue or incorrect when made or thereafter shall become
untrue or incorrect, except where such breach, failure to perform or lack
of truthfulness or correctness has been caused by or results from a breach
by Purchaser or Merger Sub of any of their obligations under this Agreement
or the Stock Purchase Agreement;
(iii) there shall have been instituted or be pending any action,
litigation or proceeding before any court or governmental, regulatory or
administrative agency, authority or commission, domestic or foreign, which
(a) challenges the acquisition by Purchaser or Merger Sub of the Shares, or
seeks to restrain, materially delay or prohibit the Offer, the Merger, the
Stock Purchase Agreement or other subsequent business combination or seeks
material damages in connection therewith; (b) seeks to prohibit or
materially limit the ownership or operation by Purchaser, Merger Sub or
their affiliates and subsidiaries of any material portion of the business
or assets of the Company (including the business or assets of their
respective affiliates and subsidiaries), taken as a whole or of Purchaser
or Merger Sub (including the business or assets of their respective
affiliates and subsidiaries) taken as a whole, in each case as a result of
the transactions contemplated by this Agreement and the Stock Purchase
Agreement; or (c) seeks to impose material limitations on the ability of
Purchaser or Merger Sub (including the business or assets of their
respective affiliates and subsidiaries) to hold or to exercise full rights
of ownership of the Shares,
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<PAGE> 27
including without limitation the right to vote any Shares purchased by them
on an equal basis on all matters properly presented to the holders of such
class of Shares; or
(iv) there shall have been any action taken, or any statute, rule,
regulation, order or injunction sought, proposed, enacted, promulgated,
entered, enforced or deemed applicable to the Offer, the Merger or the
Stock Purchase Agreement (other than the application of the waiting period
provisions of the HSR Act), which would result in any of the consequences
referred to in clauses (a) through (c) of paragraph (iii) above; or
(v) it shall have been publicly disclosed or Purchaser shall have
learned that any person, entity or "group" (as defined in Section 13(d) of
the Exchange Act and the rules promulgated thereunder) shall have become
the beneficial owner (as defined in Section 13(d) of the Exchange Act and
the rules promulgated thereunder) of more than 25% of any class or series
of capital stock of the Company (including any class of the Shares), (other
than acquisitions by persons or groups who have publicly disclosed such
ownership on or prior to February 22, 1995 in a Schedule 13D or 13G (or
amendments thereto on file with the Commission); or
(vi) the Board of Directors of the Company shall have amended,
modified or withdrawn its recommendation of the Offer or the Merger, or
shall have failed to publicly reconfirm such recommendation upon request by
Purchaser or Merger Sub, or shall have endorsed, approved or recommended
any other Acquisition Proposal, or shall have resolved to do any of the
foregoing; or
(vii) the Company and the Purchaser or Merger Sub shall have reached
an agreement or understanding that the Offer be terminated or amended, or
that payment for the Shares be delayed; or
(viii) the Dow Jones Industrial Average (as reported by The Wall
Street Journal) shall have lost 20% or more of the value it had at the date
of this Agreement; or
(ix) any other Regulatory Filings and consents applicable to this
Offer or the Stock Purchase Agreement shall not have been obtained on terms
and conditions reasonably satisfactory to Purchaser or Merger Sub, or if
the Purchaser shall have received notice under the Exon-Florio Amendment
that the Committee on Foreign Investment in the United States has
determined to investigate this Offer or any related transaction;
which in any such case, and regardless of the circumstances (including any
action or inaction by Purchaser or Merger Sub other than a breach by Purchaser
or Merger Sub of this Agreement or the Stock Purchase Agreement) giving rise to
any such conditions, makes it inadvisable to proceed with the Offer and/or with
such acceptance for payment of or payment for Shares.
The foregoing conditions are for the sole benefit of Purchaser and Merger
Sub and may be asserted by Purchaser or Merger Sub regardless of the
circumstances (including any action or inaction by Purchaser or Merger Sub other
than a breach by Purchaser or Merger Sub of this Agreement or the Stock Purchase
Agreement) giving rise to such condition or may be waived by Purchaser or Merger
Sub, in whole or in part at any time and from time to time in its sole
discretion, subject to the terms and conditions of this Agreement. The failure
by Purchaser or Merger Sub 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.
2
<PAGE> 1
EXHIBIT 2
EXECUTION COPY
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement"), made and entered into as
of this 22nd day of February, 1995, by and between American Maize-Products
Company, a Maine corporation (the "Company"), Cerestar USA, Inc., a Delaware
corporation ("Cerestar USA") and Eridania Beghin-Say, S.A., a corporation
organized under the laws of France ("EBS").
W I T N E S S E T H :
WHEREAS, the Company, Cerestar USA, an indirect wholly-owned subsidiary of
EBS, and EBS are entering into an Agreement and Plan of Merger, dated as of the
date hereof (the "Merger Agreement"), which provides, among other things, that
Cerestar USA, on the terms and subject to the conditions thereof, will acquire
the Company by means of a tender offer (the "Offer"), to be followed by a merger
(the "Merger") in which Cerestar USA will be merged with and into the Company;
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Cerestar USA and EBS have requested that the Company agree to issue
and sell to Cerestar USA up to 757,943 shares of Class B Common Stock, par value
$0.80 per share, of the Company (the "Offered Shares"), at a price of $40 per
share (the "Purchase Price") and upon the terms and subject to the conditions
hereof;
WHEREAS, in order to induce Cerestar USA and EBS to enter into the Merger
Agreement, the Company is willing to agree to issue and sell to Cerestar USA the
Offered Shares at the Purchase Price;
WHEREAS, the Articles of Incorporation of the Company provide that the
holders of issued and outstanding shares of Class B Common Stock are entitled to
preemptive rights;
WHEREAS, in order to satisfy the preemptive rights granted in the Company's
Articles of Incorporation, the Company has agreed to issue to each holder of
Class B Common Stock, on the terms set forth herein, certain nontransferable
rights (the "Rights") to subscribe for and purchase a pro rata portion of the
Offered Shares at the Purchase Price, such transaction generally being herein
referred to as the "Rights Offering"; and
WHEREAS, Cerestar USA desires to purchase from the Company, and the Company
desires to issue and sell to Cerestar USA, on the terms and subject to the
conditions hereof, that number of the Offered Shares remaining available for
issuance upon the expiration of unexercised Rights (the "Available Shares");
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF AVAILABLE SHARES
1.1. Purchase and Sale. Upon the terms and subject to the conditions of
this Agreement, and based on the representations, warranties, covenants and
agreements set forth in this Agreement, at the Closing (as defined in Section
1.3), the Company agrees to issue, sell and deliver to Cerestar USA and Cerestar
USA agrees to purchase, the Available Shares, each of which shall be validly
issued, fully paid and nonassessable and shall be free and clear of all liens,
charges, encumbrances, security interests, options, restrictions, claims or
third-party preemptive rights.
1.2. Consideration. At the Closing, Cerestar USA shall pay to the Company
an aggregate consideration equal to the Purchase Price times the number of
Available Shares (the "Consideration").
1.3. Closing. The closing of the purchase and sale of the Available
Shares (the "Closing") shall take place at the offices of Sullivan & Cromwell,
125 Broad Street, New York, New York on the date on which all of the conditions
set forth in Article III hereof shall be fulfilled or waived in accordance with
the terms of this
<PAGE> 2
Agreement and applicable law, or at such other time and/or on such other date
and/or place as the Company and Cerestar USA may agree. The date and time at
which the Closing actually occurs is referred to as the "Closing Date".
1.4. Closing Deliveries. On the Closing Date, the Company will deliver to
Cerestar USA a certificate or certificates representing the Available Shares to
be issued and sold, along with the certificates contemplated by Sections 3.3(a)
and 3.3(b) hereof, the opinion of counsel contemplated by Section 3.3(d) hereof
and such other closing documents as the Company and Cerestar USA shall
reasonably agree. On the Closing Date, Cerestar USA will deliver to the Company
an amount equal to the Consideration by certified or official bank check, along
with the certificates contemplated by Sections 3.2(b) and 3.3(b) hereof and such
other closing documents as the Company and Cerestar USA shall reasonably agree.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1. Representations and Warranties of the Company. The Company restates
each of the representations and warranties of the Company contained in the
Merger Agreement as though set forth herein in full and further represents and
warrants to Cerestar USA and EBS that:
(a) the execution and delivery of this Agreement by the Company and
the consummation by it of the transactions contemplated hereby have been
duly authorized by the Board of Directors of the Company and this Agreement
has been duly executed and delivered by the Company following such approval
and constitutes a valid and binding obligation of the Company;
(b) the aggregate number of shares of the Company's Class B Common
Stock that will be outstanding after the issuance of the Offered Shares
validly subscribed for through the exercise of Rights and the issuance of
the Available Shares pursuant to the terms of this Agreement shall not
exceed 2,500,000 shares;
(c) the Offered Shares issuable upon exercise of the Rights and the
Available Shares issuable to Cerestar USA pursuant to this Agreement have
been duly and validly authorized for issuance by all necessary corporate
action and such shares, when issued upon payment of the consideration
therefor, will be duly and validly issued, fully paid and nonassessable and
shall be free and clear of all liens, charges, encumbrances, security
interests, options, restrictions, claims or third-party preemptive rights;
(d) the Rights have been duly and validly authorized and, at or prior
to the Exercise Date (as defined in Section 4(g) hereof), will have been
validly issued and will constitute valid and legally binding obligations of
the Company, enforceable against the Company in accordance with their
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar
laws relating to creditor's rights or by general equity principles;
(e) each subscription warrant evidencing Rights will be duly and
validly authorized and executed by the Company and will be in substantially
the form included in the Registration Statement (as defined in Section
4(b)), and the Rights and the subscription warrants related thereto will
have substantially the terms set forth in the Prospectus (as defined in
Section 4(b));
(f) the Subscription Agent Agreement (the "Subscription Agent
Agreement"), between the Company and a subscription agent to be appointed,
will be in substantially the form filed as an exhibit to the Registration
Statement; and the Subscription Agent Agreement will have substantially the
terms set forth in the Prospectus; and the Subscription Agent Agreement has
been duly authorized and will be validly executed and delivered by the
Company and, assuming due authorization, execution and delivery by the
Subscription Agent, will constitute the valid and legally binding
obligation of the Company, enforceable against it in accordance with its
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar
laws relating to creditor's rights or by general equity principles and
except to the extent that rights to indemnification and contribution
thereunder may be limited by federal or state securities laws or public
policy relating thereto;
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<PAGE> 3
(g) the descriptions of the Merger Agreement, the Offer and this
Agreement contained in the Prospectus will conform, in all material
respects, to the terms thereof;
(h) at the time the Registration Statement becomes effective, the
Registration Statement will comply in all material respects with the
requirements of the Securities Act of 1933, as amended (the "Securities
Act") and the regulations thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and at the time the Registration Statement becomes effective
and at all times through termination of the Rights Offering, the Prospectus
will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading;
provided, however, that the foregoing shall not apply to the extent that
any such untrue statement of a material fact or omission to state a
material fact was made in reliance upon and in conformity with written
information furnished to the Company by EBS or Cerestar USA specifically
for use in the Registration Statement or the Prospectus;
(i) the financial statements and any supporting schedules included, or
incorporated by reference, in the Registration Statement present fairly the
financial position of the Company and its consolidated subsidiaries as at
the dates indicated and the results of their operations for the periods
specified, and said financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis, except as stated therein, and any supporting schedules included or
incorporated by reference in the Registration Statement present fairly the
information required to be stated therein.
2.2. Representations and Warranties of Cerestar USA and EBS. Cerestar USA
and EBS restate each of their respective representations and warranties
contained in the Merger Agreement as though set forth herein in full and further
represent and warrant to the Company that:
(a) the execution and delivery of this Agreement by Cerestar USA and
EBS and the consummation by them of the transactions contemplated hereby
have been duly authorized by the respective Boards of Directors of Cerestar
USA and EBS and this Agreement has been duly executed and delivered by
Cerestar USA and EBS following such approvals and constitutes a valid and
binding obligation of Cerestar USA and EBS;
(b) Cerestar USA will acquire the Available Shares for its own account
and not with a view to distribution or resale in any manner which would be
in violation of the Securities Act; and
(c) EBS has readily available, and will make available to Cerestar USA
as and when required, funds in an amount sufficient to satisfy EBS' and
Cerestar USA's obligations hereunder.
ARTICLE III
CONDITIONS TO THE CONSUMMATION OF
THE PURCHASE OF THE AVAILABLE SHARES
3.1. Conditions to the Obligations of the Company and Cerestar USA and
EBS. The respective obligations of the Company, Cerestar USA and EBS to
consummate the transactions contemplated hereby are subject to fulfillment of
each of the following conditions:
(a) Completion of Offer. The Offer shall be successfully completed
immediately prior to the consummation of the purchase of the Available
Shares contemplated by this Agreement upon the satisfaction, or waiver by
Cerestar USA in accordance with the terms of the Merger Agreement, of each
and every condition thereto contained in the Offer to Purchase.
(b) No Stop Order. The Registration Statement and any post-effective
amendment or supplement thereto shall have been declared effective by the
Commission and no stop order suspending the
3
<PAGE> 4
effectiveness of the Registration Statement or any amendment or supplement
thereto shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission.
(c) Other Governmental and Regulatory Consents. The waiting period
applicable to the consummation of the purchase of the Available Shares
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 shall have
expired or been terminated and all required approvals of the Commission to
permit the Offer and the Rights Offering to be conducted concurrently shall
have been obtained.
(d) Completion of Rights Offering. The Rights Offering shall have
been completed in conformance with all of the requirements related to the
Rights Offering provided in the Registration Statement, the Prospectus, the
Offering Materials (as defined in Section 4(b)), the subscription warrants,
the Articles of Incorporation and By-laws of the Company and the Maine
Business Corporations Act ("MBCA").
3.2. Conditions to Obligations of the Company. The obligations of the
Company to consummate the transactions contemplated hereby are also subject to
the fulfillment or waiver by the Company prior to the Closing Date of each of
the following conditions:
(a) Representations and Warranties. The representations and
warranties of Cerestar USA and EBS set forth in this Agreement shall be
true and correct in all material respects as of the date of this Agreement
and as of the Closing Date as though made on and as of the Closing Date
(except that representations and warranties that by their terms speak as of
the date of this Agreement or some other date shall be true and correct as
of such date), and the Company shall have received a certificate signed by
duly authorized officers of Cerestar USA and EBS to such effect.
(b) Performance of Obligations of Cerestar USA and EBS. Cerestar USA
and EBS shall have performed in all material respects all obligations
required to be performed by them under this Agreement and the Merger
Agreement at or prior to the Closing Date, and the Company shall have
received a certificate signed by duly authorized officers of Cerestar USA
and EBS to such effect.
3.3. Conditions to Obligation of Cerestar USA and EBS. The obligation of
Cerestar USA and EBS to consummate the transactions contemplated hereby are also
subject to the fulfillment or waiver by Cerestar USA and EBS prior to the
Closing Date of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and as of
the Closing Date as though made on and as of the Closing Date (except that
representations and warranties that by their terms speak as of the date of
this Agreement or some other date shall be true and correct as of such
date), and Cerestar USA and EBS shall have received a certificate signed by
a duly authorized officer of the Company to such effect.
(b) Performance of Obligations of the Company. The Company shall have
performed in all material respects all obligations required to be performed
by it under this Agreement and the Merger Agreement at or prior to the
Closing Date, and Cerestar USA and EBS shall have received a certificate
signed by a duly authorized officer of the Company to such effect.
(c) Listing. The Offered Shares shall have been approved for listing
on the American Stock Exchange.
ARTICLE IV
COVENANTS
4. Rights Offering; Registration of the Offered Shares.
(a) The Company will establish, in conformance with the applicable
provisions of the MBCA and the Articles of Incorporation and By-laws of the
Company, a record date, which date shall not be later than
4
<PAGE> 5
March 4, 1995 (the "Record Date"), for purposes of determining the holders of
record ("Record Date Holders") of the Company's Class B Common Stock entitled to
participate in the Rights Offering.
(b) Not later than 5 business days after the date of this Agreement, the
Company shall promptly prepare and file with the Commission, subject to
reasonable review and comment by Cerestar USA, a registration statement on Form
S-3 (in substantially the form attached hereto) for the registration under the
Securities Act of the Rights and the Offered Shares. The Company thereafter
shall use all reasonable efforts to cause the registration statement to be
declared effective by the Commission in as timely a manner as possible. The
registration statement in the form in which it becomes effective and the
prospectus on file with the Commission at the time the registration statement
becomes effective, including, in each case, the documents previously filed under
the Exchange Act and the rules and regulations of the Commission thereunder
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act are hereinafter called the "Registration Statement" and the
"Prospectus", respectively, except that if any Prospectus filed by the Company
pursuant to Rule 424(b) of the rules and regulations of the Commission under the
Securities Act differs from the Prospectus, the term "Prospectus" shall refer to
the Rule 424(b) Prospectus from and after the time it is mailed or otherwise
delivered to the Commission for filing. In connection with the Rights Offering,
the Company shall prepare, subject to reasonable review and comment by Cerestar
USA, such related transmittal letters, letters to stockholders, securities
dealers, commercial banks, trust companies and other nominees, subscription
warrants and instructions as to the use of such materials as are necessary to
effectuate the Rights Offering (such documents being hereinafter collectively
referred to as the "Offering Materials").
(c) The Company will mail to each Record Date Holder not later than five
(5) business days after the Record Date (the "Notice Date"), notice of the
Company's intention to conduct the Rights Offering. Such notice shall comply
with the requirements of Section 623 of the MBCA and shall include, without
limitation, a summary description of the procedures by which, and the
anticipated time period during which, the Record Date Holders will be issued
nontransferable subscription warrants evidencing the Rights and will be
permitted to exercise the Rights to acquire Offered Shares.
(d) The Company will promptly prepare and file an application to list the
Offered Shares on the American Stock Exchange and will use all reasonable
efforts to obtain approval of such listing prior to the Exercise Date.
(e) The Company will use all reasonable efforts to cause the Rights and the
Offered Shares to be qualified for offer and sale under the laws of such
jurisdictions of the United States as are required in connection with the Rights
Offering.
(f) The Company will notify Cerestar USA promptly (i) of the effectiveness
of the Registration Statement and any amendment thereto, (ii) of the receipt of
any comments from the Commission on the Registration Statement, (iii) of any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, (iv) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that purpose
or (v) of the enactment, issuance, promulgation, enforcement or entrance of any
Order or the initiation or threatened initiation of any proceeding for that
purpose. The Company will make every reasonable effort to prevent the issuance
of any stop order and, if any stop order is issued, to obtain the lifting
thereof at the earliest possible moment.
(g) Not later than five (5) business days after the Registration Statement
is declared effective by the Commission (the "Exercise Date"), the Company shall
mail to each Record Date Holder (i) a subscription warrant specifying the number
of Offered Shares for which the Rights issued to such Record Date Holder are
exercisable and the Purchase Price, (ii) a copy of the Prospectus and (iii) the
Offering Materials. The Offering Materials shall provide, inter alia,
instructions relating to the exercise of the Rights and shall state the date on
which the period during which Record Date Holders may exercise Rights shall
expire. Such date shall be the later of (x) 30 days after the Notice Date and
(y) 5 days after the Exercise Date (the "Expiration Date").
5
<PAGE> 6
(h) At the Exercise Date, the Company will notify Cerestar USA of the
mailing of the subscription warrants, the Prospectus and the Offering Materials;
as promptly as practicable following the close of business on each business day
between the Exercise Date and the Expiration Date, the Company will make readily
available to Cerestar USA full information regarding the subscriptions received
on such business day; and as soon as practicable and, in any event, before 10:00
P.M., New York time, on the Expiration Date, the Company will notify in writing
Cerestar USA of the number of Available Shares.
(i) The Company, during the period when the Prospectus is required to be
delivered under the Securities Act, will file promptly all documents required to
be filed by the Company with the Commission pursuant to Section 13 or 14 of the
Exchange Act subsequent to the time the Registration Statement becomes
effective.
(j) Without the written consent of Cerestar USA, the Company will not
extend the Expiration Time or permit any of the other terms or conditions of the
Rights Offering, as described in the Prospectus, to be amended, modified or
terminated in any material respect.
(k) Notwithstanding anything herein to the contrary, the Company shall not
be obligated to perform any of its obligations hereunder to the extent that the
timing or manner of such performance as provided for herein would violate any
applicable rules or regulations of the American Stock Exchange.
ARTICLE V
EXPENSES
The Company agrees with Cerestar USA and EBS that the Company will pay all
expenses incident to (i) the performance of the obligations of the Company under
this Agreement, including the preparation, negotiation, printing and
distribution of the Rights and any related materials, any preliminary
prospectus, the Registration Statement, the Prospectus, the Offering Materials,
and this Agreement, and (ii) the transactions contemplated hereby and by the
Prospectus, including the qualification of the Offered Shares for sale under the
laws of such United States jurisdictions as are required in connection with the
Offering, the filing fee of the National Association of Securities Dealers, Inc.
relating to the Offered Shares and the expenses incurred in distributing the
Prospectus and the Offering Materials.
ARTICLE VI
INDEMNIFICATION
6. Indemnification. (a) The Company agrees to indemnify and hold harmless
Cerestar USA, its officers, directors, employees and agents ("Representatives")
and each person, if any, who controls Cerestar USA within the meaning of Section
15 of the Securities Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever arising out of any untrue statement or alleged untrue statement
of material fact contained in the Registration Statement (or any amendment
thereto), or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein
not misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), including any document
incorporated or deemed to be incorporated by reference into any of such
documents, or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, unless such
untrue statement or omission or such alleged untrue statement or omission
was made in reliance upon and in conformity with written information
furnished to the Company by EBS or Cerestar USA herein or otherwise
expressly for use in the Registration Statement (or any amendment thereto)
or any such preliminary prospectus or the Prospectus (or any amendment or
supplement thereto);
(ii) against any and all loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement of any
litigation, commenced or threatened, or of any claim
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<PAGE> 7
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expenses whatsoever (including the
reasonable fees and disbursements of counsel chosen by Cerestar USA)
reasonably incurred in investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental entity or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above.
(b) EBS agrees to indemnify and hold harmless the Company, its officers,
directors, employees and agents and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever arising out of any untrue statement or alleged untrue statement
of material fact contained in the Registration Statement (or any amendment
thereto), or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein
not misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), including any document
incorporated or deemed to be incorporated by reference into any of such
documents, or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, if such untrue
statement or omission or such alleged untrue statement or omission was made
in reliance upon and in conformity with written information furnished to
the Company by EBS or Cerestar USA herein or otherwise expressly for use in
the Registration Statement (or any amendment thereto) or any such
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto);
(ii) against any and loss, liability, claim, damage and expense
whatsoever to the extent of the aggregate amount paid in settlement of any
litigation, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue statement
or omission, if such settlement is effected with the written consent of
EBS; and
(iii) against any and all expenses whatsoever (including the
reasonable fees and disbursements of counsel chosen by the Company)
reasonably incurred in investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental entity or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above.
(c) In case of any notice to an indemnifying party under this indemnity
agreement with respect to any loss, liability, claim, damage or expense with
respect to any claim made against an indemnified party, the indemnifying party
shall be entitled to participate at its own expense in the defense, or if it so
elects within a reasonable time after receipt of such notice, to assume the
defense of any suit brought to enforce any such claim; but if it so elects to
assume the defense, such defense shall be conducted by counsel chosen by it and
approved by Cerestar USA or any person or persons controlling Cerestar USA,
defendant or defendants in any suit so brought in the case of claims covered by
paragraph (a), or the Company in the case of claims covered by paragraph (b), in
each case, which approval shall not be unreasonably withheld. In the event that
the indemnifying party elects to assume the defense of any such suit and retain
such counsel, the indemnified party, defendant or defendants in the suit, shall
bear the fees and expenses of any additional counsel thereafter retained by
them; provided, however, that the indemnifying party shall have the right to
employ counsel to represent the indemnified party who may be subject to
liability arising out of any action in respect of which indemnity may be sought
against the indemnifying party if, in the reasonable judgment of Cerestar USA's
outside counsel in the case of actions covered by paragraph (a), or the
Company's outside counsel in the case of actions covered by paragraph (b), there
may be a conflict of interest such that multiple representation would violate
the Code of Professional Responsibility or like governing rules, in which event
the fees and expenses of appropriate separate counsel shall be borne by the
indemnifying party.
7
<PAGE> 8
(d) Each indemnified party shall give prompt notice to the indemnifying
party of any action threatened or commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify the indemnifying
party shall not relieve it from any liability which it may have otherwise than
on account of this indemnity agreement. An indemnifying party may participate at
its own expense in the defense of such action. In no event shall an indemnifying
party be liable for the fees and expenses of more than one counsel for an
indemnified party in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
ARTICLE VII
TERMINATION
7.1. Termination by Mutual Consent. This Agreement may be terminated at
any time prior to the Closing Date by the mutual consent of the Company,
Cerestar USA and EBS, by action of their respective Boards.
7.2. Termination of Merger Agreement. This Agreement will terminate,
without any action by the Company, Cerestar USA or EBS, upon the termination of
the Merger Agreement pursuant to Article IX thereof.
7.3. No Liability. The Company, Cerestar USA and EBS hereby agree that
any termination of this Agreement pursuant to this Article VII shall be without
liability to each party hereto, provided that such party is at such time not in
material breach of any of the terms of this Agreement.
ARTICLE VIII
MISCELLANEOUS AND GENERAL
8.1. Modification or Amendment. Subject to the applicable provisions of
the MBCA, at any time prior to the termination of this Agreement, the parties
hereto may modify or amend this Agreement, by written agreement executed and
delivered by duly authorized officers of the respective parties.
8.2. Waiver of Conditions. The conditions to each of the parties'
obligations to consummate the transactions contemplated herein are for the sole
benefit of such party and may be waived by such party in whole or in part to the
extent permitted by applicable law.
8.3. Counterparts. For the convenience of the parties hereto, this
Agreement may be executed in any number of counterparts, each such counterpart
being deemed to be an original instrument, and all such counterparts shall
together constitute the same agreement.
8.4. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Maine.
8.5. Notices. Any notice, request, instruction or other document to be
given hereunder by any party to the others shall be in writing and delivered
personally, by registered or certified mail, postage prepaid, or by facsimile
transmission
(a) If to EBS, addressed to EBS at:
54, avenue Hoche
75008 Paris, France
Attention: Ing. Luigi Brasca
Telephone: 33-1-40-53-57-10
Telecopier: 33-1-40-53-94-99
8
<PAGE> 9
With a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Neil T. Anderson
Telephone: (212) 558-3653
Telecopier: (212) 558-3588
(b) If to Cerestar USA, addressed to Cerestar USA at:
1300 Fort Wayne National Bank Building
Fort Wayne, Indiana 46802
Attention: Andrew C. Harvard
Telephone: (219) 425-5226
Telecopier: (219) 425-5154
With a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Neil T. Anderson
Telephone: (212) 558-3653
Telecopier: (212) 558-3588
(c) If to the Company, addressed to the Company at:
250 Harbor Drive
Stamford, Connecticut 06902
Attention: Robert M. Stephan
Telephone: (203) 356-9000
Telecopier: (203) 324-4675
With a copy to:
Dewey Ballantine
1301 Avenue of the Americas
New York, New York 10019-6092
Attention: Morton A. Pierce
Telephone: (212) 259-6640
Telecopier: (212) 259-6333
or to such other persons or addresses as may be designated in writing by the
party to receive such notice.
8.6. Entire Agreement, etc. This Agreement, the Merger Agreement and the
Confidentiality Agreement (as defined in the Merger Agreement) (including any
exhibits or Annexes hereto or thereto) (i) constitute the entire agreement, and
supersede all other prior agreements, understandings, representations and
warranties both written and oral, among the parties, with respect to the subject
matter hereof and thereof and (ii) shall not be assignable by operation of law
or otherwise and are not intended to create any obligations to, or rights in
respect of, any persons other than the parties hereto and thereto; provided,
however, that EBS may designate, by written notice to the Company, another
wholly-owned direct or indirect subsidiary in lieu of Cerestar USA, in the event
of which, all references herein to Cerestar USA shall be deemed references to
such other subsidiary except that all representations and warranties made herein
with respect to Cerestar USA as of the date of this Agreement shall be deemed
representations and warranties made with respect to such other subsidiary as of
the date of such designation.
9
<PAGE> 10
8.7. Definition of "Subsidiary". When a reference is made in this
Agreement to a subsidiary of a party, the word "subsidiary" means any
corporation or other organization whether incorporated or unincorporated of
which at least a majority of the securities or interests having by the terms
thereof ordinary voting power to elect at least a majority of the board of
directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or controlled
by such party or by any one or more of its subsidiaries, or by such party and
one or more of its subsidiaries.
8.8. Specific Performance. The Company acknowledges that Cerestar USA
will have no adequate remedy at law if the Company fails to perform any of its
obligations under this Agreement. In such event, the Company agrees that
Cerestar USA shall have the right, in addition to any other rights it may have,
to specific performance of this Agreement and that it will not take any action
to impede Cerestar USA's efforts to enforce such right of specific performance.
8.9. Public Announcement. The Company will consult with Cerestar USA
prior to making any public announcement or issuing any press release with
respect to this Agreement or the transactions contemplated hereby and the
Company shall not make any public announcement or issue any press release prior
to such consultation except as may be required by law.
8.10. Time of Essence. The parties hereto acknowledge that time is of the
essence with respect to the performance of their respective obligations provided
under, and the consummation of the transactions contemplated by, this Agreement.
8.11. Captions. The Article, Section and paragraph captions herein are
for convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the parties hereto on the date first hereinabove
written.
AMERICAN MAIZE-PRODUCTS COMPANY
By: /s/ PATRIC J. MCLAUGHLIN
------------------------------------
Name: Patric J. McLaughlin
Title: President and Chief
Executive Officer
CERESTAR USA, INC.
By: /s/ ANDREW C. HARVARD
------------------------------------
Name: Andrew C. Harvard
Title: President
ERIDANIA BEGHIN-SAY, S.A.
By: /s/ STEFANO MELONI
------------------------------------
Name: Stefano Meloni
Title: Chairman
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<PAGE> 1
Exhibit 3
January 30, 1995
Eridania Beghin-Say, S.A.
54, avenue Hoche
75008 Paris
France
Attention: Stefano Meloni
CONFIDENTIALITY AGREEMENT
Gentlemen:
You have expressed an interest in a possible transaction (a
"Transaction") involving American Maize-Products Company and/or one or more of
its subsidiaries or affiliates (collectively, the "Company") and, in connection
with such Transaction, the Company has agreed to make available to you
information pertaining to the Company which is not available to the general
public or is otherwise confidential or proprietary in nature (such information,
and all copies of, extracts from, analyses and other materials based on,
containing or otherwise reflecting such information, is hereinafter referred to
as the "Information"). As a condition to your being furnished the Information,
you (together with your subsidiaries and affiliates, the "Recipient") agree as
follows:
(1) (a) Non-disclosure: Recipient recognizes and acknowledges the
competitive value of the Information and the damage that could
result from the disclosure thereof to third parties.
Accordingly, Recipient agrees to keep the Information strictly
confidential and Recipient will not, without the prior written
consent of the Company, disclose the Information (or the fact
that the Information has been made available) to any third party
in any manner whatsoever, in whole or in part, except that
Recipient may disclose the Information to those of Recipient's
directors, officers, employees, agents, advisors or other
representatives (collectively, "Representatives") who (i) need to
know the Information for the purpose of evaluating the proposed
Transaction, (ii) have been informed of the confidential nature
of the Information and (iii) have agreed to keep the Information
confidential and be bound by the terms of this Agreement as if
they were parties hereto. Notwithstanding any such agreement by
Recipient's Representatives, Recipient agrees to be responsible
for and to indemnify the Company and its Representatives against
any breach by any of Recipient's Representatives of the matters
referred to herein.
(b) Restrictions on Use: The Information will not, without the prior
written consent of the Company, be used by Recipient or its
Representatives, directly or indirectly, for any purpose other
than the evaluation of the Transaction and such use shall
absolutely cease if and when the Company has so notified
Recipient. In addition, Recipient hereby acknowledges that
Recipient is aware (and, if applicable, that
<PAGE> 2
Recipient's Representatives have been advised) that the United
States securities laws prohibit any person who has material
non-public information about a company from purchasing or selling
securities of such company or from communicating such information
to a third party under circumstances in which it is reasonably
foreseeable that such third party is likely to purchase or sell
such securities.
(c) Return of Information: Upon the request of the Company, Recipient
shall, and shall cause its Representatives to, promptly return all
Information to the Company, without retaining any copies,
summaries or extracts thereof. In the event of such request, all
documents, analyses, compilations, studies or other materials
prepared by Recipient or its Representatives that contain or
reflect Information shall be destroyed and no copy thereof shall
be retained (such destruction to be confirmed in writing by a duly
authorized officer of Recipient). Notwithstanding the return or
destruction of the Information, Recipient and its Representatives
shall continue to be bound by their obligations of confidentiality
and other obligations hereunder.
For purposes of this Agreement, the term "Information" shall not include
such portions of the Information that (i) are or become generally
available to the public other than as a result of disclosure by Recipient
or its Representatives, (ii) become available to Recipient on a
non-confidential basis from a source not known by you after reasonable
inquiry to be subject to a confidentiality obligation to the Company,
whether by contractual, legal or fiduciary obligation or otherwise or
(iii) were, as evidenced by written records or other documentation
satisfactory to the Company, in Recipient's possession on a non-
confidential basis prior to the Company's disclosure to Recipient.
(2) Recipient acknowledges, on behalf of itself and its Representatives, that
neither the Company nor its Representatives make any representations or
warranties, express or implied, as to the accuracy or completeness of the
Information, that neither the Company nor its Representatives shall have
any liability whatsoever to Recipient or its Representatives or any other
person as a result of the use of the Information or any errors therein or
omissions therefrom by virtue of this Agreement and that Recipient and
its Representatives shall assume full responsibility for all conclusions
derived from the Information. Only those representations and warranties
that are made in a final definitive agreement between the Company and
Recipient regarding a Transaction, when, as and if executed and subject
to such limitations and restrictions as may be specified therein, will
have any legal effect. Recipient further acknowledges and agrees that
the Company shall at all times have the right, in its sole discretion, to
reject any and all proposals made by Recipient and/or its Representatives
in respect of a Transaction, to terminate discussions and negotiations
with Recipient and its Representatives at any time and to conduct any
process for a Transaction involving the Company as it may determine
(including, without limitation, negotiating with any other interested
parties, entering into a definitive agreement with such parties or
modifying any procedures relating to such process or Transaction, in each
case, without prior notice to Recipient or its Representatives).
(3) In the event that a Transaction is not consummated, neither Recipient nor
its Representatives shall, directly or indirectly, solicit for employment
any of the Company's personnel for a period of two years from the date
hereof, except with the prior written approval of the Company.
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<PAGE> 3
(4) In the event that you or any of your Representatives are required to
disclose any Information (i) in connection with any judicial or
administrative proceedings (by oral questions, interrogatories, requests
for information or documents, subpoena, investigative demand or similar
process) or (ii) in order, in the opinion of your outside legal counsel,
to avoid violating the federal securities laws, you will in advance of
such disclosure, provide the Company with prompt notice of such
requirement(s). You also agree, to the extent legally permissible, to
provide the Company, in advance of any such disclosure with copies of
any Information you intend to disclose (and, if applicable, the text of
the disclosure language itself) and to cooperate with the Company to the
extent it may seek to limit such disclosure. If, in the absence of a
protective order or the receipt of a waiver from the Company after a
request in writing therefor is made by you (such request to be made as
soon as practicable to allow the Company a reasonable amount of time to
respond thereto), you or your Representatives are legally required to
disclose Information to any tribunal in order to comply with the federal
securities laws, you may disclose such information without liability
hereunder.
(5) Recipient hereby agrees that money damages would not be a sufficient
remedy for any breach or threatened breach of this Agreement by
Recipient or its Representatives and that the Company shall be entitled,
without the requirement of posting a bond or other security, to specific
performance and injunctive or other equitable relief in the event of any
such breach or threatened breach, in addition to all other remedies
available to the Company at law or in equity.
Recipient hereby agrees to indemnify, defend, and hold harmless the
Company and its affiliates and Representatives (each an "Indemnified
Person") from and against any losses, claims, damages or liabilities
arising out of a breach or alleged breach of this Agreement by Recipient
or its Representatives and to reimburse each Indemnified Person for all
costs and expenses (including counsel fees) incurred in connection
therewith. Such indemnity agreement shall be in addition to any other
liabilities that Recipient or its Representatives may have to any
Indemnified Person.
(6) All inquiries for information about the Company or the Transaction and
any communications with the Company shall be made through: Donald
Meltzer or Larry Hamdan of CS First Boston Corporation, financial
advisor to the Company. Neither Recipient nor its Representatives will
contact any employee, customer or supplier of the Company (unless such
customer or supplier is also a stockholder or creditor of the Company)
in connection with a Transaction without the prior written consent of
the Company.
(7) (a) No failure or delay by the Company or its Representatives in
exercising any right, power or privilege under this Agreement
shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise of any
right, power or privilege hereunder. The invalidity or
unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of the remaining provisions
of this Agreement.
(b) This agreement shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to
principles or conflicts of laws. Recipient, on behalf of itself
and its Representatives, hereby irrevocably and unconditionally,
(i) submits to the jurisdiction of the State or Federal courts
sitting in New York for purposes of all suits, actions or
proceedings arising out of or relating to this Agreement (and
agrees not to commence any suit, action or proceeding relating
thereto except in such courts) and waives, to the fullest extent
3
<PAGE> 4
permitted by law, any objection which it may now or hereafter
have to the laying of venue of any such suit, action or
proceeding brought in any such court and any claim that any suit,
action or proceeding brought in such a court has been brought in
an inconvenient forum and (ii) consents to service of process in
any such suit, action or proceeding by mail as provided for under
the U.S. Federal Rules of Civil Procedure and waives any
objection which it might otherwise have with respect thereto.
If you agree to the terms and conditions of this Agreement, please
indicate your acceptance by signing and returning to the undersigned the
duplicate copy of this Agreement. This Agreement may be executed in several
counterparts, all of which together shall constitute one and the same agreement.
Very truly yours,
AMERICAN MAIZE-PRODUCTS COMPANY
By: /s/ Patric J. McLaughlin
--------------------------------------------
Name: Patric J. McLaughlin
Title: President and Chief Executive Officer
Agreed to as of the date first written above:
ERIDANIA BEGHIN-SAY, S.A.
By: /s/ Luigi Brasca
------------------------
Name: Luigi Brasca
Title: Director Planning
4
<PAGE> 1
Exhibit 4
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 2nd day of January, 1995 by and
between American Maize-Products Company (the "Company"), a Maine corporation
with offices at 250 Harbor Drive, Stamford, CT 06902 and Robert M. Stephan (the
"Executive"), a natural person residing at 119 West Hills Road, New Canaan, CT
06840.
W I T N E S S E T H
WHEREAS, the Executive is presently employed as Vice President
and General Counsel of the Company and, effective as of January 25, 1995, as
Secretary of the Company; and
WHEREAS, the Company desires to continue to employ the
Executive in such capacities; and
WHEREAS, the Executive desires to continue to be employed by
the Company in such capacities.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
1. Term. The Company hereby offers to continue to employ the
Executive as Vice President and General Counsel of the Company and, effective as
of January 25, 1995, as Secretary of the Company, and the Executive hereby
accepts such employment. This Agreement shall be effective as of the date hereof
and shall continue to be effective for the period ending on the "Expiration
Date" (such period being hereinafter referred to as the "Term"). The "Expiration
Date" shall initially be December 31, 1997, but effective as of December 31,
1995 and as of each December 31 thereafter, the Term shall automatically be
extended one additional year and the Expiration Date will be adjusted
accordingly, unless, not later than the preceding July 1 of such year, the Chief
Executive Officer on behalf of the Company or the Executive shall have given
notice to the other that the Term shall not be so extended. The period measured
from the date hereof through the Expiration Date (as applicable from time to
time), determined without regard to termination of the Executive's employment
hereunder on any earlier date, is hereinafter referred to as the "Period of
Service."
2. Services and Duties. While he is employed during the Term,
the Executive agrees to serve the Company as Vice President and General Counsel
and, effective as of January 25, 1995, as Secretary of the Company. In such
capacity, Executive shall perform all reasonable acts customarily associated
with such position.
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<PAGE> 2
3. Compensation and Benefits. While employed by the
Company, during the Term, the Executive shall receive the following
compensation and benefits:
(a) Base salary in the amount of One Hundred Eighty Thousand
Dollars ($180,000) per annum, payable in semi-monthly installments and
subject to such deductions as required by law, due in respect of the
various employee benefit plans in which the Executive participates or
as otherwise agreed by the Executive. Executive's base salary will be
reviewed annually by the Compensation Committee of the Board of
Directors for possible increases based upon Executive's performance.
(b) Annual incentive compensation based on individual and
company performance targets to be mutually agreed upon each year by the
parties. The amount of the annual incentive compensation payable will
be determined under the Company's management incentive plan (or any
successor plan) in effect from time to time, it being understood that
the annual incentive compensation "target" rate under the current plan
shall be forty percent (40%) of Executive's annual base salary.
(c) Benefit programs made available from time to time by the
Company to executives and/or other salaried employees, including but
not limited to the Company's retirement plans, with immediate vesting
of accrued benefits; 401(k) plan; executive life insurance program;
medical and dental plan; short-term and long-term disability coverage;
vacation and holidays.
(d) Stock options, restricted stock awards and/or stock
appreciation rights or any similar equity incentive rights as
determined by the Compensation Committee of the Board of Directors of
the Company.
4. Business Expense Reimbursement. While employed by the
Company, during the Term, Executive shall be entitled to reimbursement for all
reasonable and necessary out-of-pocket expenses incurred by him in performing
services hereunder, subject to appropriate documentation.
5. Termination of Employment.
(a) Death or Disability. Executive's employment shall
terminate upon his death or "disability," as hereinafter defined. For purposes
of this Agreement, the Executive shall be deemed to have terminated employment
as a result of a "disability" if (1) for medical reasons he is unable to perform
his material duties to the Company for a total of six (6) months, whether or not
consecutive, in any twelve (12) month period and (2) subject to applicable law,
the Company terminates the Executive's employment as a result of such
"disability" by written notice. The initial determination of the "medical
reasons" shall be made by a physician chosen by the Company whereby the
Executive shall submit to a reasonable medical examination. If the Executive
shall dispute such initial determination, the Executive shall submit to a
reasonable medical examination by
2
<PAGE> 3
a physician chosen by the Executive. If the Executive shall continue to dispute
the initial determination, the final determination shall be made by majority
vote of three physicians, one the Executive's chosen physician, one the
Company's chosen physician, and one chosen by such two physicians. Such final
determination will be final and binding for all purposes hereunder.
(b) Termination for "Cause". The Company may terminate the
Executive's employment for "cause." For purposes of this Agreement, the
Executive's employment shall be considered to have been terminated for "cause"
if such termination occurs on account of:
(i) the Executive's conviction by a court of competent
jurisdiction of any crime constituting a felony under the laws of the
United States or one of its political subdivisions (or the Executive's
plea of guilty or no lo contendere to a charge of any such crime); and
(ii) the Executive engaging in willful misconduct in the
performance of his material duties to the Company resulting in
demonstrable economic harm to the Company.
(c) Termination for "Good Reason". The Executive may terminate
his employment for "good reason." For purposes of this Agreement, "good reason"
means the occurrence of one of the following:
(i) the Executive suffers any diminution in his position,
title, reporting relationship, responsibilities or authority; or
(ii) the Executive is assigned additional responsibilities
without appropriate remuneration or that unreasonably increase his
work load; or
(iii) the adverse and substantial alteration of the nature and
quality of the secretarial and administrative support provided to the
Executive; or
(iv) the Executive suffers a decrease in his level of
compensation because of one or more of the following:
(A) the Executive's then-current level of base
salary as described in Section 3(a) is reduced; or
(B) with respect to any fiscal year of the Company,
the Company fails to provide the Executive with annual
incentive compensation which is based on terms and conditions
(including, but not limited to, the targeted percentage of
annual base salary payable) comparable to those described in
Section 3(b); or
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<PAGE> 4
(C) the Executive suffers a significant reduction in
employee benefit coverages (including but not limited to those
programs and arrangements described in Section 3(c)) that are
provided to the Executive; or
(v) without the Executive's prior written consent, the
Executive's office location is relocated by more than twenty-five (25)
miles from the existing location; provided, that, such relocation
increases the distance from the Executive's principal residence to such
office.
6. Consequences of Termination of Employment.
(a) Without "Cause" or for "Good Reason". In the event that
the Company terminates the Executive's employment without "cause" or the
Executive terminates his employment for "good reason" and subject to the
conditions set forth below, the Company shall provide the following payments
and benefits (each of which shall be calculated without regard to any reduction
or change that constitutes "good reason") to the Executive for the Period of
Service:
(i) The Company shall continue to pay to Executive the
semi-monthly base salary amounts under Section 3(a).
(ii) The Company shall continue to make incentive compensation
payments to the Executive under Section 3(b) in the amounts equivalent
to his "targeted" incentive compensation under the management incentive
plan in effect at the time of his termination.
(iii) To the extent provided below in Sections A, B and C, the
Executive shall continue to participate in the Company benefit programs
(including without limitation the Company's retirement plans; 401(k)
plan; executive life insurance program; medical and dental plan;
short-term and long-term disability coverage; accident insurance
coverage; Section 125 cafeteria plan) under Section 3(c) as described
herein.
A. Welfare Benefits. All employee welfare benefit
coverage shall apply to the Executive and any of his dependents who
would have been eligible for coverage if the Executive had continued to
be employed by the Company for the remaining Period of Service. The
Executive shall be required to make all employee contributions due in
respect of the benefit coverage on the same basis as active employees
of the Company. At the expiration of the Period of Service, the
Executive shall be treated as a then terminating employee of the
Company with respect to the right to elect continued medical and dental
coverages in accordance with Section 4980B of the Internal Revenue Code
of 1986, as amended (the "Code"), or any successor provision thereto
and with respect to any similar welfare benefit continuation rights.
The Executive shall receive age and
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<PAGE> 5
service credit during the Period of Service for purposes of retiree
medical coverage.
B. Retirement Plan Benefits. The Executive shall
continue active participation under the Company's tax-qualified and
supplemental defined benefit plans or any other tax qualified or
supplemental defined benefit plan of the Company or an affiliate in
which the Executive actively participates at the time of his
termination of employment ("Retirement Plans"), until the expiration of
the Period of Service. The calculation of Employee's pension benefit
under the Retirement Plans shall include credit for the amounts paid
under Sections 6(a)(i) and 6(a)(ii) and the duration of such payments
for purpose of determining length of service and age, and amounts
equivalent to the resulting benefit shall be paid out of a
non-qualified plan to the extent necessary to preserve the
tax-qualified status of any defined benefit plans intending to be tax
qualified. The Company shall take all necessary action to effectuate
the foregoing including amending the supplemental plan.
C. 401(k) Plan Benefits. The Executive shall continue
active participation under the Company's 401(k) Plan, or any other tax
qualified (or supplemental, if applicable) defined contribution plan of
the Company or an affiliate in which the Executive actively
participates at the time of his termination of employment ("401(k)
Plans") until the expiration of the Period of Service. To the extent
necessary to preserve tax-qualified status of any defined contribution
plan intended to be qualified, the Executive may instead receive a
lump-sum cash payment promptly following his termination of employment
equal to the aggregate employer contributions that would have been made
on behalf of the Executive under the 401(k) Plans until the expiration
of the Period of Service, assuming he had elected to make the maximum
contributions under the 401(k) Plan that is subject to employer
contributions.
(iv) Stock options which have been awarded to Executive prior
to his termination shall become immediately fully vested and
exercisable and shall remain exercisable until the earlier of their
expiration date or the third anniversary of termination of his
employment and the Company hereby agrees that all actions and consents
that are required to be taken or obtained in order to effectuate the
foregoing shall be so taken or obtained.
In addition, the Company shall pay to the Executive any
portion of accrued but unpaid base salary, incentive compensation payments,
stock option and equity incentive rights and employee benefits to which the
Executive is entitled up until the date of the Executive's termination of
employment.
(b) Any Other Termination of Employment. In the event of
termination by the Company of the Executive's employment for "cause" under
Section 5(b), termination of employment by the Executive other than for "good
reason," termination of the Executive's employment due to death or disability or
any other termination of the
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<PAGE> 6
Executive's employment other than as described in Section 6(a), the Executive
shall be entitled to his (i) accrued base salary through the date of
termination, (ii) incentive compensation bonus which has been accrued but not
yet paid, for any completed fiscal year of the Company ending prior to
termination of employment, and (iii) employee benefits (in accordance with the
terms of the applicable payroll practices and benefit programs).
7. Excise Tax Gross-Up Payment. Notwithstanding anything in this
Agreement to the contrary, in the event it shall be determined that any payment
or distribution by the Company or any other person or entity to or for the
benefit of the Executive is a "parachute payment" (within the meaning of Section
280G(b) (2) of the Code), whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise in connection
with, or arising out of, his employment with the Company or a change in
ownership or effective control of the Company or a substantial portion of its
assets (a "Payment"), and would be subject to the excise tax imposed by Section
4999 of the Code (the "Excise Tax"), concurrent with the making of such Payment,
the Company shall pay to the Executive an additional payment (the "Gross-Up
Payment") in an amount such that the net amount retained by the Executive, after
deduction of any Excise Tax on such Payment and any federal, state or local
income tax and Excise Tax on the Gross-Up Payment shall equal the amount of such
Payment.
8. No Obligation to Mitigate. It is further agreed that the
Executive shall be under no obligation to minimize or mitigate damages by
seeking other employment, and the obtaining of any such other employment shall
in no event effect any reduction of the Company's obligation to make the
payments and provide the benefit coverages required under this Agreement. In
addition, the Company's obligation to make the payments and provide the benefits
required under this Agreement shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other rights which the Company may have against the Executive.
9. Confidential Information. The Executive shall not during the
period of his employment or at any time thereafter disclose or communicate to
any unauthorized person, firm or corporation, or use for his own purposes, trade
secrets, confidential commercial information, or any other information,
knowledge or data of the Company or any of its affiliates which is not generally
known to the public and shall use his best efforts to prevent the publication or
disclosure by any person of any such secret, information, knowledge or data. All
documents and objects made, compiled, received, held or used by the Executive
while employed by the Company in connection with the business of the Company
shall be and remain the Company's property and shall be delivered by the
Executive to the Company upon the termination of the Executive's employment or
at any earlier time requested by the Company.
10. Non-Assignment; Successors. This Agreement and all rights
hereunder are personal to the Executive and shall not be assignable; provided,
however, all of the Executive's rights to compensation following his death shall
inure to the benefit of his heirs, estate, personal representatives or designees
or other legal representatives as
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<PAGE> 7
the case may be. Any person, firm or corporation (including, if applicable, any
ultimate parent entity thereof) succeeding to the business of the Company by
merger, purchase, consolidation or otherwise shall assume by contract or
operation of law all obligations of the Company hereunder.
11. Severability. The invalidity or unenforceability of any
provision of this Agreement shall in no way affect the validity or
enforceability of any other provision.
12. Entire Agreement. This Agreement constitutes the entire
agreement among the parties respecting the subject matter hereof and supersedes
any prior agreements respecting the subject matter hereof. No amendment to this
Agreement shall be deemed valid unless in writing and signed by the parties, and
no discharge of the terms of this Agreement shall be deemed valid unless by full
performance by the parties or by a writing signed by the parties. No waiver by a
party of any provisions or conditions of this Agreement shall be deemed a waiver
of similar or dissimilar provisions and conditions at the same time or any prior
or subsequent time.
13. Notice. Any notice required or permitted to be given by this
Agreement shall be effective only if in writing, delivered personally against
receipt therefor or mailed by certified or registered mail, return receipt
requested, to the parties at the addresses hereinafter set forth, or at such
other places that either party may designate by notice to the other.
Notice to the Company shall be addressed to:
American Maize-Products Company
250 Harbor Drive
Stamford, CT 06902
Notice to the Executive shall be addressed to him at the executive
offices of the Company, with a copy to him at his home address at:
119 West Hills Road
New Canaan, CT 06840
Such notice shall be deemed effectively given on the date
personally delivered or five (5) days after the same has been deposited in a
post box under the exclusive control of the United States Postal Service.
14. Governing Law. This Agreement shall be construed,
interpreted and enforced according to the laws of the State of Connecticut and
the parties submit to the jurisdiction of the courts of the State of Connecticut
for the purpose of any actions or proceedings which may arise with respect to
this Agreement.
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<PAGE> 8
15. Legal Expenses. The Company shall bear the expense of the
Executive of any dispute or controversy arising under or in connection with this
Agreement (including reasonable attorneys' fees and expert fees). In no event
shall the Executive be required to reimburse the Company for any of the costs or
expenses relating to any proceeding, including any enforcement proceeding of
this Agreement.
16. Captions and Headings. Captions and paragraph headings are
for convenience only, are not a part of this Agreement and shall not be used
to construe any provision of this Agreement.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one Agreement. It shall not be necessary
that any counterpart be signed by the parties hereto so long as each such party
shall have executed a counterpart.
IN WITNESS WHEREOF, the parties have executed these presents as of
the day and year first above written.
AMERICAN MAIZE-PRODUCTS COMPANY
By: /s/ Patric J. McLaughlin
-----------------------------------
Patric J. McLaughlin
President and Chief Executive Officer
/s/ Robert M. Stephan
-----------------------------------
Robert M. Stephan, Executive
<PAGE> 1
Exhibit 5
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 2nd day of January, 1995 by and
between American Maize-Products Company (the "Company"), a Maine corporation
with offices at 250 Harbor Drive, Stamford, CT 06902 and Edward P. Norris (the
"Executive"), a natural person residing at 104-40 Queens Boulevard, Forest
Hills, NY 11375.
W I T N E S S E T H
WHEREAS, the Executive is presently employed as Vice President
and Chief Financial Officer of the Company; and
WHEREAS, the Company desires to continue to employ the
Executive as Vice President and Chief Financial Officer of the Company; and
WHEREAS, the Executive desires to continue to be employed by
the Company in such capacities.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
1. Term. The Company hereby offers to continue to employ the
Executive as Vice President and Chief Financial Officer of the Company, and the
Executive hereby accepts such employment. This Agreement shall be effective as
of the date hereof and shall continue to be effective for the period ending on
the "Expiration Date" (such period being hereinafter referred to as the
"Term"). The "Expiration Date" shall initially be December 31, 1997, but
effective as of December 31, 1995 and as of each December 31 thereafter, the
Term shall automatically be extended one additional year and the Expiration
Date will be adjusted accordingly, unless, not later than the preceding July 1
of such year, the Chief Executive Officer on behalf of the Company or the
Executive shall have given notice to the other that the Term shall not be so
extended. The period measured from the date hereof through the Expiration Date
(as applicable from time to time), determined without regard to termination of
the Executive's employment hereunder on any earlier date, is hereinafter
referred to as the "Period of Service."
2. Services and Duties. While he is employed during the Term,
the Executive agrees to serve the Company as Vice President and Chief Financial
Officer. In such capacity, Executive shall perform all reasonable acts
customarily associated with such position.
3. Compensation and Benefits. While employed by the
Company, during the Term, the Executive shall receive the following
compensation and benefits:
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<PAGE> 2
(a) Base salary in the amount of Two Hundred Twelve Thousand
Dollars ($212,000) per annum, payable in semi-monthly installments and
subject to such deductions as required by law, due in respect of the
various employee benefit plans in which the Executive participates or
as otherwise agreed by the Executive. Executive's base salary will be
reviewed annually by the Compensation Committee of the Board of
Directors for possible increases based upon Executive's performance.
(b) Annual incentive compensation based on individual and
company performance targets to be mutually agreed upon each year by the
parties. The amount of the annual incentive compensation payable will
be determined under the Company's management incentive plan (or any
successor plan) in effect from time to time, it being understood that
the annual incentive compensation "target" rate under the current plan
shall be forty percent (40%) of Executive's annual base salary.
(c) Benefit programs made available from time to time by the
Company to executives and/or other salaried employees, including but
not limited to the Company's retirement plans; 401(k) plan; executive
life insurance program; medical and dental plan; short-term and
long-term disability coverage; vacation and holidays.
(d) Stock options, restricted stock awards and/or stock
appreciation rights or any similar equity incentive rights as
determined by the Compensation Committee of the Board of Directors of
the Company.
4. Business Expense Reimbursement. While employed by the
Company, during the Term, Executive shall be entitled to reimbursement for all
reasonable and necessary out-of-pocket expenses incurred by him in performing
services hereunder, subject to appropriate documentation.
5. Termination of Employment.
(a) Death or Disability. Executive's employment shall
terminate upon his death or "disability," as hereinafter defined. For purposes
of this Agreement, the Executive shall be deemed to have terminated employment
as a result of a "disability" if (1) for medical reasons he is unable to perform
his material duties to the Company for a total of six (6) months, whether or not
consecutive, in any twelve (12) month period and (2) subject to applicable law,
the Company terminates the Executive's employment as a result of such
"disability" by written notice. The initial determination of the "medical
reasons" shall be made by a physician chosen by the Company whereby the
Executive shall submit to a reasonable medical examination. If the Executive
shall dispute such initial determination, the Executive shall submit to a
reasonable medical examination by a physician chosen by the Executive. If the
Executive shall continue to dispute the initial determination, the final
determination shall be made by majority vote of three physicians,
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<PAGE> 3
one the Executive's chosen physician, one the Company's chosen physician, and
one chosen by such two physicians. Such final determination will be final and
binding for all purposes hereunder.
(b) Termination for "Cause". The Company may terminate the
Executive's employment for "cause." For purposes of this Agreement, the
Executive's employment shall be considered to have been terminated for "cause"
if such termination occurs on account of:
(i) the Executive's conviction by a court of competent
jurisdiction of any crime constituting a felony under the laws of the
United States or one of its political subdivisions (or the Executive's
plea of guilty or no lo contendere to a charge of any such crime); and
(ii) the Executive engaging in willful misconduct in the
performance of his material duties to the Company resulting in
demonstrable economic harm to the Company.
(c) Termination for "Good Reason". The Executive may terminate
his employment for "good reason." For purposes of this Agreement, "good reason"
means the occurrence of one of the following:
(i) the Executive suffers any diminution in his position,
title, reporting relationship, responsibilities or authority; or
(ii) the Executive is assigned additional responsibilities
without appropriate remuneration or that unreasonably increase his work
load; or
(iii) the adverse and substantial alteration of the nature and
quality of the secretarial and administrative support provided to the
Executive; or
(iv) the Executive suffers a decrease in his level of
compensation because of one or more of the following:
(A) the Executive's then-current level of base salary
as described in Section 3(a) is reduced; or
(B) with respect to any fiscal year of the Company,
the Company fails to provide the Executive with annual
incentive compensation which is based on terms and conditions
(including, but not limited to, the targeted percentage of
annual base salary payable) comparable to those described in
Section 3(b); or
(C) the Executive suffers a significant reduction in
employee benefit coverages (including but not limited to those
programs and
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<PAGE> 4
arrangements described in Section 3(c)) that are provided to
the Executive; or
(v) without the Executive's prior written consent, the
Executive's office location is relocated by more than twenty-five (25)
miles from the existing location; provided, that, such relocation
increases the distance from the Executive's principal residence to such
office.
6. Consequences of Termination of Employment.
(a) Without "Cause" or for "Good Reason". In the event that
the Company terminates the Executive's employment without "cause" or the
Executive terminates his employment for "good reason" and subject to the
conditions set forth below, the Company shall provide the following payments and
benefits (each of which shall be calculated without regard to any reduction or
change that constitutes "good reason") to the Executive for the Period of
Service:
(i) The Company shall continue to pay to Executive the
semi-monthly base salary amounts under Section 3(a).
(ii) The Company shall continue to make incentive compensation
payments to the Executive under Section 3(b) in the amounts equivalent
to his "targeted" incentive compensation under the management incentive
plan in effect at the time of his termination.
(iii) To the extent provided below in Sections A, B and C, the
Executive shall continue to participate in the Company benefit programs
(including without limitation the Company's retirement plans; 401(k)
plan; executive life insurance program; medical and dental plan;
short-term and long-term disability coverage; accident insurance
coverage; Section 125 cafeteria plan) under Section 3(c) as described
herein.
A. Welfare Benefits. All employee welfare benefit
coverage shall apply to the Executive and any of his dependents who
would have been eligible for coverage if the Executive had continued to
be employed by the Company for the remaining Period of Service. The
Executive shall be required to make all employee contributions due in
respect of the benefit coverage on the same basis as active employees
of the Company. At the expiration of the Period of Service, the
Executive shall be treated as a then terminating employee of the
Company with respect to the right to elect continued medical and dental
coverages in accordance with Section 4980B of the Internal Revenue Code
of 1986, as amended (the "Code"), or any successor provision thereto
and with respect to any similar welfare benefit continuation rights.
The Executive shall receive age and service credit during the Period of
Service for purposes of retiree medical coverage.
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<PAGE> 5
B. Retirement Plan Benefits. The Executive shall
continue active participation under the Company's tax-qualified
and supplemental defined benefit plans or any other tax qualified or
supplemental defined benefit plan of the Company or an affiliate in
which the Executive actively participates at the time of his
termination of employment ("Retirement Plans"), until the expiration
of the Period of Service. The calculation of Employee's pension
benefit under the Retirement Plans shall include credit for the
amounts paid under Sections 6(a)(i) and 6(a)(ii) and the duration of
such payments for purpose of determining length of service and age,
and amounts equivalent to the resulting benefit shall be paid out of
a non- qualified plan to the extent necessary to preserve the
tax-qualified status of any defined benefit plans intending to be tax
qualified. The Company shall take all necessary action to effectuate
the foregoing including amending the supplemental plan.
C. 401(k) Plan Benefits. The Executive shall
continue active participation under the Company's 401(k) Plan, or any
other tax qualified (or supplemental, if applicable) defined
contribution plan of the Company or an affiliate in which the Executive
actively participates at the time of his termination of employment
("401(k) Plans") until the expiration of the Period of Service. To the
extent necessary to preserve tax-qualified status of any defined
contribution plan intended to be qualified, the Executive may instead
receive a lump-sum cash payment promptly following his termination of
employment equal to the aggregate employer contributions that would
have been made on behalf of the Executive under the 401(k) Plans until
the expiration of the Period of Service, assuming he had elected to
make the maximum contributions under the 401(k) Plan that is subject to
employer contributions.
(iv) Stock options which have been awarded to Executive prior
to his termination shall become immediately fully vested and
exercisable and shall remain exercisable until the earlier of their
expiration date or the third anniversary of termination of his
employment and the Company hereby agrees that all actions and consents
that are required to be taken or obtained in order to effectuate the
foregoing shall be so taken or obtained.
In addition, the Company shall pay to the Executive any
portion of accrued but unpaid base salary, incentive compensation payments,
stock option and equity incentive rights and employee benefits to which the
Executive is entitled up until the date of the Executive's termination of
employment.
(b) Any Other Termination of Employment. In the event
of termination by the Company of the Executive's employment for "cause" under
Section 5(b), termination of employment by the Executive other than for "good
reason," termination of the Executive's employment due to death or disability or
any other termination of the Executive's employment other than as described in
Section 6(a), the Executive shall be entitled to his (i) accrued base salary
through the date of termination, (ii) incentive compensation bonus which has
been accrued but not yet paid, for any completed fiscal
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<PAGE> 6
year of the Company ending prior to termination of employment, and (iii)
employee benefits (in accordance with the terms of the applicable payroll
practices and benefit programs).
7. Excise Tax Gross-Up Payment. Notwithstanding anything in this
Agreement to the contrary, in the event it shall be determined that any payment
or distribution by the Company or any other person or entity to or for the
benefit of the Executive is a "parachute payment" (within the meaning of Section
280G(b) (2) of the Code), whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise in connection
with, or arising out of, his employment with the Company or a change in
ownership or effective control of the Company or a substantial portion of its
assets (a "Payment"), and would be subject to the excise tax imposed by Section
4999 of the Code (the "Excise Tax"), concurrent with the making of such Payment,
the Company shall pay to the Executive an additional payment (the "Gross-Up
Payment") in an amount such that the net amount retained by the Executive, after
deduction of any Excise Tax on such Payment and any federal, state or local
income tax and Excise Tax on the Gross-Up Payment shall equal the amount of such
Payment.
8. No Obligation to Mitigate. It is further agreed that the Executive
shall be under no obligation to minimize or mitigate damages by seeking other
employment, and the obtaining of any such other employment shall in no event
effect any reduction of the Company's obligation to make the payments and
provide the benefit coverages required under this Agreement. In addition, the
Company's obligation to make the payments and provide the benefits required
under this Agreement shall not be affected by any circumstances, including,
without limitation, any set-off, counterclaim, recoupment, defense or other
rights which the Company may have against the Executive.
9. Confidential Information. The Executive shall not during the period
of his employment or at any time thereafter disclose or communicate to any
unauthorized person, firm or corporation, or use for his own purposes, trade
secrets, confidential commercial information, or any other information,
knowledge or data of the Company or any of its affiliates which is not generally
known to the public and shall use his best efforts to prevent the publication or
disclosure by any person of any such secret, information, knowledge or data. All
documents and objects made, compiled, received, held or used by the Executive
while employed by the Company in connection with the business of the Company
shall be and remain the Company's property and shall be delivered by the
Executive to the Company upon the termination of the Executive's employment or
at any earlier time requested by the Company.
10. Non-Assignment; Successors. This Agreement and all rights
hereunder are personal to the Executive and shall not be assignable; provided,
however, all of the Executive's rights to compensation following his death shall
inure to the benefit of his heirs, estate, personal representatives or designees
or other legal representatives as the case may be. Any person, firm or
corporation (including, if applicable, any ultimate parent entity thereof)
succeeding to the business of the Company by merger, purchase,
6
<PAGE> 7
consolidation or otherwise shall assume by contract or operation of law all
obligations of the Company hereunder.
11. Severability. The invalidity or unenforceability of any provision
of this Agreement shall in no way affect the validity or enforceability of any
other provision.
12. Entire Agreement. This Agreement constitutes the entire agreement
among the parties respecting the subject matter hereof and supersedes any prior
agreements respecting the subject matter hereof. No amendment to this Agreement
shall be deemed valid unless in writing and signed by the parties, and no
discharge of the terms of this Agreement shall be deemed valid unless by full
performance by the parties or by a writing signed by the parties. No waiver by a
party of any provisions or conditions of this Agreement shall be deemed a waiver
of similar or dissimilar provisions and conditions at the same time or any prior
or subsequent time.
13. Notice. Any notice required or permitted to be given by this
Agreement shall be effective only if in writing, delivered personally against
receipt therefor or mailed by certified or registered mail, return receipt
requested, to the parties at the addresses hereinafter set forth, or at such
other places that either party may designate by notice to the other.
Notice to the Company shall be addressed to:
American Maize-Products Company
250 Harbor Drive
Stamford, CT 06902
Notice to the Executive shall be addressed to him at the executive
offices of the Company, with a copy to him at his home address at:
104-40 Queens Boulevard
Forest Hills, NY 11375
Such notice shall be deemed effectively given on the date personally
delivered or five (5) days after the same has been deposited in a post box under
the exclusive control of the United States Postal Service.
14. Governing Law. This Agreement shall be construed, interpreted and
enforced according to the laws of the State of Connecticut and the parties
submit to the jurisdiction of the courts of the State of Connecticut for the
purpose of any actions or proceedings which may arise with respect to this
Agreement.
15. Legal Expenses. The Company shall bear the expense of the
Executive of any dispute or controversy arising under or in connection with this
Agreement (including reasonable attorneys' fees and expert fees). In no event
shall the
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<PAGE> 8
Executive be required to reimburse the Company for any of the costs or
expenses relating to any proceeding, including any enforcement proceeding of
this Agreement.
16. Captions and Headings. Captions and paragraph headings are for
convenience only, are not a part of this Agreement and shall not be used to
construe any provision of this Agreement.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one Agreement. It shall not be necessary
that any counterpart be signed by the parties hereto so long as each such party
shall have executed a counterpart.
IN WITNESS WHEREOF, the parties have executed these presents as of the
day and year first above written.
AMERICAN MAIZE-PRODUCTS COMPANY
By: /s/ Patric J. McLaughlin
------------------------------------------
Patric J. McLaughlin
President and Chief Executive Officer
/s/ Edward P. Norris
------------------------------------------
Edward P. Norris, Executive
<PAGE> 1
Exhibit 6
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 2nd day of January, 1995 by and between
American Maize-Products Company (the "Company"), a Maine corporation with
offices at 250 Harbor Drive, Stamford, CT 06902 and Timothy Mann (the
"Executive"), a natural person residing at 2545 Sterling Oaks Court, Orange
Park, FL 32073.
W I T N E S S E T H
WHEREAS, the Executive is presently employed as President, Swisher
International, Inc.; and
WHEREAS, the Company desires to continue to employ the Executive as
President, Swisher International, Inc.; and
WHEREAS, the Executive desires to continue to be employed by the
Company in such capacities.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Term. The Company hereby offers to continue to employ the
Executive as President, Swisher International, Inc., and the Executive hereby
accepts such employment. This Agreement shall be effective as of the date hereof
and shall continue to be effective for the period ending on the "Expiration
Date" (such period being hereinafter referred to as the "Term"). The "Expiration
Date" shall initially be December 31, 1997, but effective as of December 31,
1995 and as of each December 31 thereafter, the Term shall automatically be
extended one additional year and the Expiration Date will be adjusted
accordingly, unless, not later than the preceding July 1 of such year, the Chief
Executive Officer on behalf of the Company or the Executive shall have given
notice to the other that the Term shall not be so extended. The period measured
from the date hereof through the Expiration Date (as applicable from time to
time), determined without regard to termination of the Executive's employment
hereunder on any earlier date, is hereinafter referred to as the "Period of
Service."
2. Services and Duties. While he is employed during the Term, the
Executive agrees to serve the Company as President, Swisher International, Inc.
In such capacity, Executive shall perform all reasonable acts customarily
associated with such position.
3. Compensation and Benefits. While employed by the Company, during
the Term, the Executive shall receive the following compensation and benefits:
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(a) Base salary in the amount of Two Hundred Twenty-Eight Thousand
Dollars ($228,000) per annum, payable in semi-monthly installments and
subject to such deductions as required by law, due in respect of the
various employee benefit plans in which the Executive participates or as
otherwise agreed by the Executive. Executive's base salary will be
reviewed annually by the Compensation Committee of the Board of Directors
for possible increases based upon Executive's performance.
(b) Annual incentive compensation based on individual and company
performance targets to be mutually agreed upon each year by the parties.
The amount of the annual incentive compensation payable will be
determined under the Company's management incentive plan (or any
successor plan) in effect from time to time, it being understood that the
annual incentive compensation "target" rate under the current plan shall
be forty percent (40%) of Executive's annual base salary.
(c) Benefit programs made available from time to time by the Company
to executives and/or other salaried employees, including but not limited
to the Company's retirement plans; 401(k) plan; executive life insurance
program; medical and dental plan; short-term and long-term disability
coverage; vacation and holidays.
(d) Stock options, restricted stock awards and/or stock appreciation
rights or any similar equity incentive rights as determined by the
Compensation Committee of the Board of Directors of the Company.
4. Business Expense Reimbursement. While employed by the Company,
during the Term, Executive shall be entitled to reimbursement for all reasonable
and necessary out-of-pocket expenses incurred by him in performing services
hereunder, subject to appropriate documentation.
5. Termination of Employment.
(a) Death or Disability. Executive's employment shall terminate upon
his death or "disability," as hereinafter defined. For purposes of this
Agreement, the Executive shall be deemed to have terminated employment as a
result of a "disability" if (1) for medical reasons he is unable to perform his
material duties to the Company for a total of six (6) months, whether or not
consecutive, in any twelve (12) month period and (2) subject to applicable law,
the Company terminates the Executive's employment as a result of such
"disability" by written notice. The initial determination of the "medical
reasons" shall be made by a physician chosen by the Company whereby the
Executive shall submit to a reasonable medical examination. If the Executive
shall dispute such initial determination, the Executive shall submit to a
reasonable medical examination by a physician chosen by the Executive. If the
Executive shall continue to dispute the initial determination, the final
determination shall be made by majority vote of three physicians, one the
Executive's chosen physician, one the Company's chosen physician, and one
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chosen by such two physicians. Such final determination will be final and
binding for all purposes hereunder.
(b) Termination for "Cause". The Company may terminate the
Executive's employment for "cause." For purposes of this Agreement, the
Executive's employment shall be considered to have been terminated for "cause"
if such termination occurs on account of:
(i) the Executive's conviction by a court of competent jurisdiction
of any crime constituting a felony under the laws of the United States or
one of its political subdivisions (or the Executive's plea of guilty or
no lo contendere to a charge of any such crime); and
(ii) the Executive engaging in willful misconduct in the performance
of his material duties to the Company resulting in demonstrable economic
harm to the Company.
(c) Termination for "Good Reason". The Executive may terminate his
employment for "good reason." For purposes of this Agreement, "good reason"
means the occurrence of one of the following:
(i) the Executive suffers any diminution in his position, title,
reporting relationship, responsibilities or authority; or
(ii) the Executive is assigned additional responsibilities without
appropriate remuneration or that unreasonably increase his work load; or
(iii) the adverse and substantial alteration of the nature and
quality of the secretarial and administrative support provided to the
Executive; or
(iv) the Executive suffers a decrease in his level of compensation
because of one or more of the following:
(A) the Executive's then-current level of base salary as
described in Section 3(a) is reduced; or
(B) with respect to any fiscal year of the Company, the
Company fails to provide the Executive with annual incentive
compensation which is based on terms and conditions (including, but
not limited to, the targeted percentage of annual base salary
payable) comparable to those described in Section 3(b); or
(C) the Executive suffers a significant reduction in
employee benefit coverages (including but not limited to those
programs and arrangements described in Section 3(c)) that are
provided to the Executive; or
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(v) without the Executive's prior written consent, the Executive's
office location is relocated by more than twenty-five (25) miles from the
existing location; provided, that, such relocation increases the distance
from the Executive's principal residence to such office.
6. Consequences of Termination of Employment.
(a) Without "Cause" or for "Good Reason". In the event that the
Company terminates the Executive's employment without "cause" or the Executive
terminates his employment for "good reason" and subject to the conditions set
forth below, the Company shall provide the following payments and benefits (each
of which shall be calculated without regard to any reduction or change that
constitutes "good reason") to the Executive for the Period of Service:
(i) The Company shall continue to pay to Executive the semi-monthly
base salary amounts under Section 3(a).
(ii) The Company shall continue to make incentive compensation
payments to the Executive under Section 3(b) in the amounts equivalent to
his "targeted" incentive compensation under the management incentive plan
in effect at the time of his termination.
(iii) To the extent provided below in Sections A, B and C, the
Executive shall continue to participate in the Company benefit programs
(including without limitation the Company's retirement plans; 401(k)
plan; executive life insurance program; medical and dental plan;
short-term and long-term disability coverage; accident insurance
coverage; Section 125 cafeteria plan) under Section 3(c) as described
herein.
A. Welfare Benefits. All employee welfare benefit coverage
shall apply to the Executive and any of his dependents who would have
been eligible for coverage if the Executive had continued to be
employed by the Company for the remaining Period of Service. The
Executive shall be required to make all employee contributions due in
respect of the benefit coverage on the same basis as active employees of
the Company. At the expiration of the Period of Service, the Executive
shall be treated as a then terminating employee of the Company with
respect to the right to elect continued medical and dental coverages in
accordance with Section 4980B of the Internal Revenue Code of 1986, as
amended (the "Code"), or any successor provision thereto and with
respect to any similar welfare benefit continuation rights. The
Executive shall receive age and service credit during the Period of
Service for purposes of retiree medical coverage.
B. Retirement Plan Benefits. The Executive shall continue
active participation under the Company's tax-qualified and supplemental
defined
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benefit plans or any other tax qualified or supplemental defined benefit
plan of the Company or an affiliate in which the Executive actively
participates at the time of his termination of employment ("Retirement
Plans"), until the expiration of the Period of Service. The calculation
of Employee's pension benefit under the Retirement Plans shall include
credit for the amounts paid under Sections 6(a)(i) and 6(a)(ii) and the
duration of such payments for purpose of determining length of service
and age, and amounts equivalent to the resulting benefit shall be paid
out of a non-qualified plan to the extent necessary to preserve the
tax-qualified status of any defined benefit plans intending to be tax
qualified. The Company shall take all necessary action to effectuate the
foregoing including amending the supplemental plan.
C. 401(k) Plan Benefits. The Executive shall continue active
participation under the Company's 401(k) Plan, or any other tax qualified
(or supplemental, if applicable) defined contribution plan of the Company
or an affiliate in which the Executive actively participates at the time
of his termination of employment ("401(k) Plans") until the expiration of
the Period of Service. To the extent necessary to preserve tax-qualified
status of any defined contribution plan intended to be qualified, the
Executive may instead receive a lump-sum cash payment promptly following
his termination of employment equal to the aggregate employer
contributions that would have been made on behalf of the Executive under
the 401(k) Plans until the expiration of the Period of Service, assuming
he had elected to make the maximum contributions under the 401(k) Plan
that is subject to employer contributions.
(iv) Stock options which have been awarded to Executive prior to his
termination shall become immediately fully vested and exercisable and
shall remain exercisable until the earlier of their expiration date or
the third anniversary of termination of his employment and the Company
hereby agrees that all actions and consents that are required to be taken
or obtained in order to effectuate the foregoing shall be so taken or
obtained.
In addition, the Company shall pay to the Executive any portion of
accrued but unpaid base salary, incentive compensation payments, stock option
and equity incentive rights and employee benefits to which the Executive is
entitled up until the date of the Executive's termination of employment.
(b) Any Other Termination of Employment. In the event of termination
by the Company of the Executive's employment for "cause" under Section 5(b),
termination of employment by the Executive other than for "good reason,"
termination of the Executive's employment due to death or disability or any
other termination of the Executive's employment other than as described in
Section 6(a), the Executive shall be entitled to his (i) accrued base salary
through the date of termination, (ii) incentive compensation bonus which has
been accrued but not yet paid, for any completed fiscal year of the Company
ending prior to termination of employment, and (iii) employee
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benefits (in accordance with the terms of the applicable payroll practices and
benefit programs).
7. Excise Tax Gross-Up Payment. Notwithstanding anything in this
Agreement to the contrary, in the event it shall be determined that any payment
or distribution by the Company or any other person or entity to or for the
benefit of the Executive is a "parachute payment" (within the meaning of Section
280G(b) (2) of the Code), whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise in connection
with, or arising out of, his employment with the Company or a change in
ownership or effective control of the Company or a substantial portion of its
assets (a "Payment"), and would be subject to the excise tax imposed by Section
4999 of the Code (the "Excise Tax"), concurrent with the making of such Payment,
the Company shall pay to the Executive an additional payment (the "Gross-Up
Payment") in an amount such that the net amount retained by the Executive, after
deduction of any Excise Tax on such Payment and any federal, state or local
income tax and Excise Tax on the Gross-Up Payment shall equal the amount of such
Payment.
8. No Obligation to Mitigate. It is further agreed that the
Executive shall be under no obligation to minimize or mitigate damages by
seeking other employment, and the obtaining of any such other employment shall
in no event effect any reduction of the Company's obligation to make the
payments and provide the benefit coverages required under this Agreement. In
addition, the Company's obligation to make the payments and provide the benefits
required under this Agreement shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other rights which the Company may have against the Executive.
9. Confidential Information. The Executive shall not during the
period of his employment or at any time thereafter disclose or communicate to
any unauthorized person, firm or corporation, or use for his own purposes, trade
secrets, confidential commercial information, or any other information,
knowledge or data of the Company or any of its affiliates which is not generally
known to the public and shall use his best efforts to prevent the publication or
disclosure by any person of any such secret, information, knowledge or data. All
documents and objects made, compiled, received, held or used by the Executive
while employed by the Company in connection with the business of the Company
shall be and remain the Company's property and shall be delivered by the
Executive to the Company upon the termination of the Executive's employment or
at any earlier time requested by the Company.
10. Non-Assignment; Successors. This Agreement and all rights
hereunder are personal to the Executive and shall not be assignable; provided,
however, all of the Executive's rights to compensation following his death shall
inure to the benefit of his heirs, estate, personal representatives or designees
or other legal representatives as the case may be. Any person, firm or
corporation (including, if applicable, any ultimate parent entity thereof)
succeeding to the business of the Company by merger, purchase, consolidation or
otherwise shall assume by contract or operation of law all obligations of the
Company hereunder.
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11. Severability. The invalidity or unenforceability of any
provision of this Agreement shall in no way affect the validity or
enforceability of any other provision.
12. Entire Agreement. This Agreement constitutes the entire
agreement among the parties respecting the subject matter hereof and supersedes
any prior agreements respecting the subject matter hereof. No amendment to this
Agreement shall be deemed valid unless in writing and signed by the parties, and
no discharge of the terms of this Agreement shall be deemed valid unless by full
performance by the parties or by a writing signed by the parties. No waiver by a
party of any provisions or conditions of this Agreement shall be deemed a waiver
of similar or dissimilar provisions and conditions at the same time or any prior
or subsequent time.
13. Notice. Any notice required or permitted to be given by this
Agreement shall be effective only if in writing, delivered personally against
receipt therefor or mailed by certified or registered mail, return receipt
requested, to the parties at the addresses hereinafter set forth, or at such
other places that either party may designate by notice to the other.
Notice to the Company shall be addressed to:
American Maize-Products Company
250 Harbor Drive
Stamford, CT 06902
Notice to the Executive shall be addressed to him at the executive
offices of the Company, with a copy to him at his home address at:
2545 Sterling Oaks Court
Orange Park, FL 32073
Such notice shall be deemed effectively given on the date personally
delivered or five (5) days after the same has been deposited in a post box under
the exclusive control of the United States Postal Service.
14. Governing Law. This Agreement shall be construed, interpreted
and enforced according to the laws of the State of Connecticut and the parties
submit to the jurisdiction of the courts of the State of Connecticut for the
purpose of any actions or proceedings which may arise with respect to this
Agreement.
15. Legal Expenses. The Company shall bear the expense of the
Executive of any dispute or controversy arising under or in connection with this
Agreement (including reasonable attorneys' fees and expert fees). In no event
shall the Executive be required to reimburse the Company for any of the costs or
expenses relating to any proceeding, including any enforcement proceeding of
this Agreement.
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16. Captions and Headings. Captions and paragraph headings are for
convenience only, are not a part of this Agreement and shall not be used to
construe any provision of this Agreement.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one Agreement. It shall not be necessary
that any counterpart be signed by the parties hereto so long as each such party
shall have executed a counterpart.
IN WITNESS WHEREOF, the parties have executed these presents as of
the day and year first above written.
AMERICAN MAIZE-PRODUCTS COMPANY
By: /s/ Patric J. Mclaughlin
-------------------------------------
Patric J. McLaughlin
President and Chief Executive Officer
/s/ Timothy Mann
-------------------------------------
Timothy Mann, Executive
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Exhibit 7
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 2nd day of January, 1995 by and between
American Maize-Products Company (the "Company"), a Maine corporation with
offices at 250 Harbor Drive, Stamford, CT 06902 and Charles A. Koons (the
"Executive"), a natural person residing at 75 Maywood Road, Darien, CT 06820.
W I T N E S S E T H
WHEREAS, the Executive is presently employed as Vice President,
Corporate Development and Planning of the Company; and
WHEREAS, the Company desires to continue to employ the Executive as
Vice President, Corporate Development and Planning of the Company; and
WHEREAS, the Executive desires to continue to be employed by the
Company in such capacities.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Term. The Company hereby offers to continue to employ the
Executive as Vice President, Corporate Development and Planning of the Company,
and the Executive hereby accepts such employment. This Agreement shall be
effective as of the date hereof and shall continue to be effective for the
period ending on the "Expiration Date" (such period being hereinafter referred
to as the "Term"). The "Expiration Date" shall initially be December 31, 1997,
but effective as of December 31, 1995 and as of each December 31 thereafter, the
Term shall automatically be extended one additional year and the Expiration Date
will be adjusted accordingly, unless, not later than the preceding July 1 of
such year, the Chief Executive Officer on behalf of the Company or the Executive
shall have given notice to the other that the Term shall not be so extended. The
period measured from the date hereof through the Expiration Date (as applicable
from time to time), determined without regard to termination of the Executive's
employment hereunder on any earlier date, is hereinafter referred to as the
"Period of Service."
2. Services and Duties. While he is employed during the Term, the
Executive agrees to serve the Company as Vice President, Corporate Development
and Planning . In such capacity, Executive shall perform all reasonable acts
customarily associated with such position.
3. Compensation and Benefits. While employed by the Company, during
the Term, the Executive shall receive the following compensation and benefits:
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<PAGE> 2
(a) Base salary in the amount of One Hundred Fifty-One Thousand Five
Hundred Dollars ($151,500 ) per annum, payable in semi-monthly installments
and subject to such deductions as required by law, due in respect of the
various employee benefit plans in which the Executive participates or as
otherwise agreed by the Executive. Executive's base salary will be reviewed
annually by the Compensation Committee of the Board of Directors for
possible increases based upon Executive's performance.
(b) Annual incentive compensation based on individual and company
performance targets to be mutually agreed upon each year by the parties.
The amount of the annual incentive compensation payable will be determined
under the Company's management incentive plan (or any successor plan) in
effect from time to time, it being understood that the annual incentive
compensation "target" rate under the current plan shall be thirty-five
percent (35%) of Executive's annual base salary.
(c) Benefit programs made available from time to time by the Company
to executives and/or other salaried employees, including but not limited to
the Company's retirement plans; 401(k) plan; executive life insurance
program; medical and dental plan; short-term and long-term disability
coverage; vacation and holidays.
(d) Stock options, restricted stock awards and/or stock appreciation
rights or any similar equity incentive rights as determined by the
Compensation Committee of the Board of Directors of the Company.
4. Business Expense Reimbursement. While employed by the Company,
during the Term, Executive shall be entitled to reimbursement for all reasonable
and necessary out-of-pocket expenses incurred by him in performing services
hereunder, subject to appropriate documentation.
5. Termination of Employment.
(a) Death or Disability. Executive's employment shall terminate upon
his death or "disability," as hereinafter defined. For purposes of this
Agreement, the Executive shall be deemed to have terminated employment as a
result of a "disability" if (1) for medical reasons he is unable to perform his
material duties to the Company for a total of six (6) months, whether or not
consecutive, in any twelve (12) month period and (2) subject to applicable law,
the Company terminates the Executive's employment as a result of such
"disability" by written notice. The initial determination of the "medical
reasons" shall be made by a physician chosen by the Company whereby the
Executive shall submit to a reasonable medical examination. If the Executive
shall dispute such initial determination, the Executive shall submit to a
reasonable medical examination by a physician chosen by the Executive. If the
Executive shall continue to dispute the initial determination, the final
determination shall be made by majority vote of three physicians,
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<PAGE> 3
one the Executive's chosen physician, one the Company's chosen physician, and
one chosen by such two physicians. Such final determination will be final and
binding for all purposes hereunder.
(b) Termination for "Cause". The Company may terminate the
Executive's employment for "cause." For purposes of this Agreement, the
Executive's employment shall be considered to have been terminated for "cause"
if such termination occurs on account of:
(i) the Executive's conviction by a court of competent jurisdiction
of any crime constituting a felony under the laws of the United States or
one of its political subdivisions (or the Executive's plea of guilty or no
lo contendere to a charge of any such crime); and
(ii) the Executive engaging in willful misconduct in the performance
of his material duties to the Company resulting in demonstrable economic
harm to the Company.
(c) Termination for "Good Reason". The Executive may terminate his
employment for "good reason." For purposes of this Agreement, "good reason"
means the occurrence of one of the following:
(i) the Executive suffers any diminution in his position, title,
reporting relationship, responsibilities or authority; or
(ii) the Executive is assigned additional responsibilities without
appropriate remuneration or that unreasonably increase his work load; or
(iii) the adverse and substantial alteration of the nature and
quality of the secretarial and administrative support provided to the
Executive; or
(iv) the Executive suffers a decrease in his level of compensation
because of one or more of the following:
(A) the Executive's then-current level of base salary as
described in Section 3(a) is reduced; or
(B) with respect to any fiscal year of the Company, the
Company fails to provide the Executive with annual incentive
compensation which is based on terms and conditions (including, but
not limited to, the targeted percentage of annual base salary
payable) comparable to those described in Section 3(b); or
(C) the Executive suffers a significant reduction in employee
benefit coverages (including but not limited to those programs and
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arrangements described in Section 3(c)) that are provided to the
Executive; or
(v) without the Executive's prior written consent, the Executive's
office location is relocated by more than twenty-five (25) miles from the
existing location; provided, that, such relocation increases the distance
from the Executive's principal residence to such office.
6. Consequences of Termination of Employment.
(a) Without "Cause" or for "Good Reason". In the event that the
Company terminates the Executive's employment without "cause" or the Executive
terminates his employment for "good reason" and subject to the conditions set
forth below, the Company shall provide the following payments and benefits (each
of which shall be calculated without regard to any reduction or change that
constitutes "good reason") to the Executive for the Period of Service:
(i) The Company shall continue to pay to Executive the semi-monthly
base salary amounts under Section 3(a).
(ii) The Company shall continue to make incentive compensation
payments to the Executive under Section 3(b) in the amounts equivalent to
his "targeted" incentive compensation under the management incentive plan
in effect at the time of his termination.
(iii) To the extent provided below in Sections A, B and C, the
Executive shall continue to participate in the Company benefit programs
(including without limitation the Company's retirement plans; 401(k)
plan; executive life insurance program; medical and dental plan;
short-term and long-term disability coverage; accident insurance
coverage; Section 125 cafeteria plan) under Section 3(c) as described
herein.
A. Welfare Benefits. All employee welfare benefit coverage
shall apply to the Executive and any of his dependents who would have
been eligible for coverage if the Executive had continued to be employed
by the Company for the remaining Period of Service. The Executive shall
be required to make all employee contributions due in respect of the
benefit coverage on the same basis as active employees of the Company. At
the expiration of the Period of Service, the Executive shall be treated
as a then terminating employee of the Company with respect to the right
to elect continued medical and dental coverages in accordance with
Section 4980B of the Internal Revenue Code of 1986, as amended (the
"Code"), or any successor provision thereto and with respect to any
similar welfare benefit continuation rights. The Executive shall receive
age and service credit during the Period of Service for purposes of
retiree medical coverage.
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B. Retirement Plan Benefits. The Executive shall continue
active participation under the Company's tax-qualified and supplemental
defined benefit plans or any other tax qualified or supplemental defined
benefit plan of the Company or an affiliate in which the Executive
actively participates at the time of his termination of employment
("Retirement Plans"), until the expiration of the Period of Service. The
calculation of Employee's pension benefit under the Retirement Plans
shall include credit for the amounts paid under Sections 6(a)(i) and
6(a)(ii) and the duration of such payments for purpose of determining
length of service and age, and amounts equivalent to the resulting
benefit shall be paid out of a non-qualified plan to the extent necessary
to preserve the tax-qualified status of any defined benefit plans
intending to be tax qualified. The Company shall take all necessary
action to effectuate the foregoing including amending the supplemental
plan.
C. 401(k) Plan Benefits. The Executive shall continue active
participation under the Company's 401(k) Plan, or any other tax qualified
(or supplemental, if applicable) defined contribution plan of the Company
or an affiliate in which the Executive actively participates at the time
of his termination of employment ("401(k) Plans") until the expiration of
the Period of Service. To the extent necessary to preserve tax-qualified
status of any defined contribution plan intended to be qualified, the
Executive may instead receive a lump-sum cash payment promptly following
his termination of employment equal to the aggregate employer
contributions that would have been made on behalf of the Executive under
the 401(k) Plans until the expiration of the Period of Service, assuming
he had elected to make the maximum contributions under the 401(k) Plan
that is subject to employer contributions.
(iv) Stock options which have been awarded to Executive prior to his
termination shall become immediately fully vested and exercisable and
shall remain exercisable until the earlier of their expiration date or
the third anniversary of termination of his employment and the Company
hereby agrees that all actions and consents that are required to be taken
or obtained in order to effectuate the foregoing shall be so taken or
obtained.
In addition, the Company shall pay to the Executive any portion of
accrued but unpaid base salary, incentive compensation payments, stock option
and equity incentive rights and employee benefits to which the Executive is
entitled up until the date of the Executive's termination of employment.
(b) Any Other Termination of Employment. In the event of termination
by the Company of the Executive's employment for "cause" under Section 5(b),
termination of employment by the Executive other than for "good reason,"
termination of the Executive's employment due to death or disability or any
other termination of the Executive's employment other than as described in
Section 6(a), the Executive shall be entitled to his (i) accrued base salary
through the date of termination, (ii) incentive compensation bonus which has
been accrued but not yet paid, for any completed fiscal
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year of the Company ending prior to termination of employment, and (iii)
employee benefits (in accordance with the terms of the applicable payroll
practices and benefit programs).
7. Excise Tax Gross-Up Payment. Notwithstanding anything in this
Agreement to the contrary, in the event it shall be determined that any payment
or distribution by the Company or any other person or entity to or for the
benefit of the Executive is a "parachute payment" (within the meaning of Section
280G(b) (2) of the Code), whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise in connection
with, or arising out of, his employment with the Company or a change in
ownership or effective control of the Company or a substantial portion of its
assets (a "Payment"), and would be subject to the excise tax imposed by Section
4999 of the Code (the "Excise Tax"), concurrent with the making of such Payment,
the Company shall pay to the Executive an additional payment (the "Gross-Up
Payment") in an amount such that the net amount retained by the Executive, after
deduction of any Excise Tax on such Payment and any federal, state or local
income tax and Excise Tax on the Gross-Up Payment shall equal the amount of such
Payment.
8. No Obligation to Mitigate. It is further agreed that the
Executive shall be under no obligation to minimize or mitigate damages by
seeking other employment, and the obtaining of any such other employment shall
in no event effect any reduction of the Company's obligation to make the
payments and provide the benefit coverages required under this Agreement. In
addition, the Company's obligation to make the payments and provide the benefits
required under this Agreement shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other rights which the Company may have against the Executive.
9. Confidential Information. The Executive shall not during the
period of his employment or at any time thereafter disclose or communicate to
any unauthorized person, firm or corporation, or use for his own purposes, trade
secrets, confidential commercial information, or any other information,
knowledge or data of the Company or any of its affiliates which is not generally
known to the public and shall use his best efforts to prevent the publication or
disclosure by any person of any such secret, information, knowledge or data. All
documents and objects made, compiled, received, held or used by the Executive
while employed by the Company in connection with the business of the Company
shall be and remain the Company's property and shall be delivered by the
Executive to the Company upon the termination of the Executive's employment or
at any earlier time requested by the Company.
10. Non-Assignment; Successors. This Agreement and all rights
hereunder are personal to the Executive and shall not be assignable; provided,
however, all of the Executive's rights to compensation following his death shall
inure to the benefit of his heirs, estate, personal representatives or designees
or other legal representatives as the case may be. Any person, firm or
corporation (including, if applicable, any ultimate parent entity thereof)
succeeding to the business of the Company by merger, purchase,
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consolidation or otherwise shall assume by contract or operation of law all
obligations of the Company hereunder.
11. Severability. The invalidity or unenforceability of any
provision of this Agreement shall in no way affect the validity or
enforceability of any other provision.
12. Entire Agreement. This Agreement constitutes the entire
agreement among the parties respecting the subject matter hereof and supersedes
any prior agreements respecting the subject matter hereof. No amendment to this
Agreement shall be deemed valid unless in writing and signed by the parties, and
no discharge of the terms of this Agreement shall be deemed valid unless by full
performance by the parties or by a writing signed by the parties. No waiver by a
party of any provisions or conditions of this Agreement shall be deemed a waiver
of similar or dissimilar provisions and conditions at the same time or any prior
or subsequent time.
13. Notice. Any notice required or permitted to be given by this
Agreement shall be effective only if in writing, delivered personally against
receipt therefor or mailed by certified or registered mail, return receipt
requested, to the parties at the addresses hereinafter set forth, or at such
other places that either party may designate by notice to the other.
Notice to the Company shall be addressed to:
American Maize-Products Company
250 Harbor Drive
Stamford, CT 06902
Notice to the Executive shall be addressed to him at the executive
offices of the Company, with a copy to him at his home address at:
75 Maywood Road
Darien, CT 06820
Such notice shall be deemed effectively given on the date personally
delivered or five (5) days after the same has been deposited in a post box under
the exclusive control of the United States Postal Service.
14. Governing Law. This Agreement shall be construed, interpreted
and enforced according to the laws of the State of Connecticut and the parties
submit to the jurisdiction of the courts of the State of Connecticut for the
purpose of any actions or proceedings which may arise with respect to this
Agreement.
15. Legal Expenses. The Company shall bear the expense of the
Executive of any dispute or controversy arising under or in connection with this
Agreement (including reasonable attorneys' fees and expert fees). In no event
shall the
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Executive be required to reimburse the Company for any of the costs or expenses
relating to any proceeding, including any enforcement proceeding of this
Agreement.
16. Captions and Headings. Captions and paragraph headings are for
convenience only, are not a part of this Agreement and shall not be used to
construe any provision of this Agreement.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one Agreement. It shall not be necessary
that any counterpart be signed by the parties hereto so long as each such party
shall have executed a counterpart.
IN WITNESS WHEREOF, the parties have executed these presents as of
the day and year first above written.
AMERICAN MAIZE-PRODUCTS COMPANY
By: /s/ Patric J. McLaughlin
-----------------------------------
Patric J. McLaughlin
President and Chief Executive Officer
/s/ Charles A. Koons
-----------------------------------
Charles A. Koons, Executive
8
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Exhibit 8
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 2nd day of January, 1995 by and
between American Maize-Products Company (the "Company"), a Maine corporation
with offices at 250 Harbor Drive, Stamford, CT 06902 and Michael J. Gorbitz (the
"Executive"), a natural person residing at 2525 St. Andrews Drive, Olympia
Fields, IL 60641.
W I T N E S S E T H
WHEREAS, the Executive is presently employed as President, Sweetener
Division of the Company; and
WHEREAS, the Company desires to continue to employ the Executive as
President, Sweetener Division of the Company; and
WHEREAS, the Executive desires to continue to be employed by the
Company in such capacities.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Term. The Company hereby offers to continue to employ the
Executive as President, Sweetener Division of the Company, and the Executive
hereby accepts such employment. This Agreement shall be effective as of the date
hereof and shall continue to be effective for the period ending on the
"Expiration Date" (such period being hereinafter referred to as the "Term"). The
"Expiration Date" shall initially be December 31, 1997, but effective as of
December 31, 1995 and as of each December 31 thereafter, the Term shall
automatically be extended one additional year and the Expiration Date will be
adjusted accordingly, unless, not later than the preceding July 1 of such year,
the Chief Executive Officer on behalf of the Company or the Executive shall have
given notice to the other that the Term shall not be so extended. The period
measured from the date hereof through the Expiration Date (as applicable from
time to time), determined without regard to termination of the Executive's
employment hereunder on any earlier date, is hereinafter referred to as the
"Period of Service."
2. Services and Duties. While he is employed during the Term, the
Executive agrees to serve the Company as President, Sweetener Division . In such
capacity, Executive shall perform all reasonable acts customarily associated
with such position.
3. Compensation and Benefits. While employed by the Company, during
the Term, the Executive shall receive the following compensation and benefits:
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<PAGE> 2
(a) Base salary in the amount of One Hundred Sixty-Five Thousand
Dollars ($165,000) per annum, payable in semi-monthly installments and
subject to such deductions as required by law, due in respect of the
various employee benefit plans in which the Executive participates or as
otherwise agreed by the Executive. Executive's base salary will be reviewed
annually by the Compensation Committee of the Board of Directors for
possible increases based upon Executive's performance.
(b) Annual incentive compensation based on individual and company
performance targets to be mutually agreed upon each year by the parties.
The amount of the annual incentive compensation payable will be determined
under the Company's management incentive plan (or any successor plan) in
effect from time to time, it being understood that the annual incentive
compensation "target" rate under the current plan shall be forty percent
(40%) of Executive's annual base salary.
(c) Benefit programs made available from time to time by the Company
to executives and/or other salaried employees, including but not limited to
the Company's retirement plans; 401(k) plan; executive life insurance
program; medical and dental plan; short-term and long-term disability
coverage; vacation and holidays.
(d) Stock options, restricted stock awards and/or stock appreciation
rights or any similar equity incentive rights as determined by the
Compensation Committee of the Board of Directors of the Company.
4. Business Expense Reimbursement. While employed by the Company,
during the Term, Executive shall be entitled to reimbursement for all reasonable
and necessary out-of-pocket expenses incurred by him in performing services
hereunder, subject to appropriate documentation.
5. Termination of Employment.
(a) Death or Disability. Executive's employment shall terminate upon
his death or "disability," as hereinafter defined. For purposes of this
Agreement, the Executive shall be deemed to have terminated employment as a
result of a "disability" if (1) for medical reasons he is unable to perform his
material duties to the Company for a total of six (6) months, whether or not
consecutive, in any twelve (12) month period and (2) subject to applicable law,
the Company terminates the Executive's employment as a result of such
"disability" by written notice. The initial determination of the "medical
reasons" shall be made by a physician chosen by the Company whereby the
Executive shall submit to a reasonable medical examination. If the Executive
shall dispute such initial determination, the Executive shall submit to a
reasonable medical examination by a physician chosen by the Executive. If the
Executive shall continue to dispute the initial determination, the final
determination shall be made by majority vote of three physicians, one the
Executive's chosen physician, one the Company's chosen physician, and one
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chosen by such two physicians. Such final determination will be final and
binding for all purposes hereunder.
(b) Termination for "Cause". The Company may terminate the
Executive's employment for "cause." For purposes of this Agreement, the
Executive's employment shall be considered to have been terminated for "cause"
if such termination occurs on account of:
(i) the Executive's conviction by a court of competent jurisdiction
of any crime constituting a felony under the laws of the United States or
one of its political subdivisions (or the Executive's plea of guilty or no
lo contendere to a charge of any such crime); and
(ii) the Executive engaging in willful misconduct in the performance
of his material duties to the Company resulting in demonstrable economic
harm to the Company.
(c) Termination for "Good Reason". The Executive may terminate his
employment for "good reason." For purposes of this Agreement, "good reason"
means the occurrence of one of the following:
(i) the Executive suffers any diminution in his position, title,
reporting relationship, responsibilities or authority; or
(ii) the Executive is assigned additional responsibilities without
appropriate remuneration or that unreasonably increase his work load; or
(iii) the adverse and substantial alteration of the nature and
quality of the secretarial and administrative support provided to the
Executive; or
(iv) the Executive suffers a decrease in his level of compensation
because of one or more of the following:
(A) the Executive's then-current level of base salary as
described in Section 3(a) is reduced; or
(B) with respect to any fiscal year of the Company, the Company
fails to provide the Executive with annual incentive compensation
which is based on terms and conditions (including, but not limited
to, the targeted percentage of annual base salary payable)
comparable to those described in Section 3(b); or
(C) the Executive suffers a significant reduction in employee
benefit coverages (including but not limited to those programs and
arrangements described in Section 3(c)) that are provided to the
Executive; or
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(v) without the Executive's prior written consent, the Executive's
office location is relocated by more than twenty-five (25) miles from the
existing location; provided, that, such relocation increases the distance
from the Executive's principal residence to such office.
6. Consequences of Termination of Employment.
(a) Without "Cause" or for "Good Reason". In the event that the
Company terminates the Executive's employment without "cause" or the Executive
terminates his employment for "good reason" and subject to the conditions set
forth below, the Company shall provide the following payments and benefits (each
of which shall be calculated without regard to any reduction or change that
constitutes "good reason") to the Executive for the Period of Service:
(i) The Company shall continue to pay to Executive the semi-monthly
base salary amounts under Section 3(a).
(ii) The Company shall continue to make incentive compensation
payments to the Executive under Section 3(b) in the amounts equivalent to
his "targeted" incentive compensation under the management incentive plan
in effect at the time of his termination.
(iii) To the extent provided below in Sections A, B and C, the
Executive shall continue to participate in the Company benefit programs
(including without limitation the Company's retirement plans; 401(k) plan;
executive life insurance program; medical and dental plan; short-term and
long-term disability coverage; accident insurance coverage; Section 125
cafeteria plan) under Section 3(c) as described herein.
A. Welfare Benefits. All employee welfare benefit coverage
shall apply to the Executive and any of his dependents who would have been
eligible for coverage if the Executive had continued to be employed by the
Company for the remaining Period of Service. The Executive shall be
required to make all employee contributions due in respect of the benefit
coverage on the same basis as active employees of the Company. At the
expiration of the Period of Service, the Executive shall be treated as a
then terminating employee of the Company with respect to the right to elect
continued medical and dental coverages in accordance with Section 4980B of
the Internal Revenue Code of 1986, as amended (the "Code"), or any
successor provision thereto and with respect to any similar welfare benefit
continuation rights. The Executive shall receive age and service credit
during the Period of Service for purposes of retiree medical coverage.
B. Retirement Plan Benefits. The Executive shall continue
active participation under the Company's tax-qualified and supplemental
defined
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<PAGE> 5
benefit plans or any other tax qualified or supplemental defined benefit
plan of the Company or an affiliate in which the Executive actively
participates at the time of his termination of employment ("Retirement
Plans"), until the expiration of the Period of Service. The calculation of
Employee's pension benefit under the Retirement Plans shall include credit
for the amounts paid under Sections 6(a)(i) and 6(a)(ii) and the duration
of such payments for purpose of determining length of service and age, and
amounts equivalent to the resulting benefit shall be paid out of a
non-qualified plan to the extent necessary to preserve the tax-qualified
status of any defined benefit plans intending to be tax qualified. The
Company shall take all necessary action to effectuate the foregoing
including amending the supplemental plan.
C. 401(k) Plan Benefits. The Executive shall continue
active participation under the Company's 401(k) Plan, or any other tax
qualified (or supplemental, if applicable) defined contribution plan of
the Company or an affiliate in which the Executive actively participates
at the time of his termination of employment ("401(k) Plans") until the
expiration of the Period of Service. To the extent necessary to preserve
tax-qualified status of any defined contribution plan intended to be
qualified, the Executive may instead receive a lump-sum cash payment
promptly following his termination of employment equal to the aggregate
employer contributions that would have been made on behalf of the
Executive under the 401(k) Plans until the expiration of the Period of
Service, assuming he had elected to make the maximum contributions under
the 401(k) Plan that is subject to employer contributions.
(iv) Stock options which have been awarded to Executive prior to his
termination shall become immediately fully vested and exercisable and shall
remain exercisable until the earlier of their expiration date or the third
anniversary of termination of his employment and the Company hereby agrees
that all actions and consents that are required to be taken or obtained in
order to effectuate the foregoing shall be so taken or obtained.
In addition, the Company shall pay to the Executive any portion of
accrued but unpaid base salary, incentive compensation payments, stock option
and equity incentive rights and employee benefits to which the Executive is
entitled up until the date of the Executive's termination of employment.
(b) Any Other Termination of Employment. In the event of termination
by the Company of the Executive's employment for "cause" under Section 5(b),
termination of employment by the Executive other than for "good reason,"
termination of the Executive's employment due to death or disability or any
other termination of the Executive's employment other than as described in
Section 6(a), the Executive shall be entitled to his (i) accrued base salary
through the date of termination, (ii) incentive compensation bonus which has
been accrued but not yet paid, for any completed fiscal year of the Company
ending prior to termination of employment, and (iii) employee
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<PAGE> 6
benefits (in accordance with the terms of the applicable payroll practices and
benefit programs).
7. Excise Tax Gross-Up Payment. Notwithstanding anything in this
Agreement to the contrary, in the event it shall be determined that any payment
or distribution by the Company or any other person or entity to or for the
benefit of the Executive is a "parachute payment" (within the meaning of Section
280G(b) (2) of the Code), whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise in connection
with, or arising out of, his employment with the Company or a change in
ownership or effective control of the Company or a substantial portion of its
assets (a "Payment"), and would be subject to the excise tax imposed by Section
4999 of the Code (the "Excise Tax"), concurrent with the making of such Payment,
the Company shall pay to the Executive an additional payment (the "Gross-Up
Payment") in an amount such that the net amount retained by the Executive, after
deduction of any Excise Tax on such Payment and any federal, state or local
income tax and Excise Tax on the Gross-Up Payment shall equal the amount of such
Payment.
8. No Obligation to Mitigate. It is further agreed that the
Executive shall be under no obligation to minimize or mitigate damages by
seeking other employment, and the obtaining of any such other employment shall
in no event effect any reduction of the Company's obligation to make the
payments and provide the benefit coverages required under this Agreement. In
addition, the Company's obligation to make the payments and provide the benefits
required under this Agreement shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other rights which the Company may have against the Executive.
9. Confidential Information. The Executive shall not during the
period of his employment or at any time thereafter disclose or communicate to
any unauthorized person, firm or corporation, or use for his own purposes, trade
secrets, confidential commercial information, or any other information,
knowledge or data of the Company or any of its affiliates which is not generally
known to the public and shall use his best efforts to prevent the publication or
disclosure by any person of any such secret, information, knowledge or data. All
documents and objects made, compiled, received, held or used by the Executive
while employed by the Company in connection with the business of the Company
shall be and remain the Company's property and shall be delivered by the
Executive to the Company upon the termination of the Executive's employment or
at any earlier time requested by the Company.
10. Non-Assignment; Successors. This Agreement and all rights
hereunder are personal to the Executive and shall not be assignable; provided,
however, all of the Executive's rights to compensation following his death shall
inure to the benefit of his heirs, estate, personal representatives or designees
or other legal representatives as the case may be. Any person, firm or
corporation (including, if applicable, any ultimate parent entity thereof)
succeeding to the business of the Company by merger, purchase, consolidation or
otherwise shall assume by contract or operation of law all obligations of the
Company hereunder.
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11. Severability. The invalidity or unenforceability of any
provision of this Agreement shall in no way affect the validity or
enforceability of any other provision.
12. Entire Agreement. This Agreement constitutes the entire
agreement among the parties respecting the subject matter hereof and supersedes
any prior agreements respecting the subject matter hereof. No amendment to this
Agreement shall be deemed valid unless in writing and signed by the parties, and
no discharge of the terms of this Agreement shall be deemed valid unless by full
performance by the parties or by a writing signed by the parties. No waiver by a
party of any provisions or conditions of this Agreement shall be deemed a waiver
of similar or dissimilar provisions and conditions at the same time or any prior
or subsequent time.
13. Notice. Any notice required or permitted to be given by this
Agreement shall be effective only if in writing, delivered personally against
receipt therefor or mailed by certified or registered mail, return receipt
requested, to the parties at the addresses hereinafter set forth, or at such
other places that either party may designate by notice to the other.
Notice to the Company shall be addressed to:
American Maize-Products Company
250 Harbor Drive
Stamford, CT 06902
Notice to the Executive shall be addressed to him at the executive
offices of the Company, with a copy to him at his home address at:
2525 St. Andrews Drive
Olympia Fields, IL 60641
Such notice shall be deemed effectively given on the date personally
delivered or five (5) days after the same has been deposited in a post box under
the exclusive control of the United States Postal Service.
14. Governing Law. This Agreement shall be construed, interpreted
and enforced according to the laws of the State of Connecticut and the parties
submit to the jurisdiction of the courts of the State of Connecticut for the
purpose of any actions or proceedings which may arise with respect to this
Agreement.
15. Legal Expenses. The Company shall bear the expense of the
Executive of any dispute or controversy arising under or in connection with this
Agreement (including reasonable attorneys' fees and expert fees). In no event
shall the Executive be required to reimburse the Company for any of the costs or
expenses relating to any proceeding, including any enforcement proceeding of
this Agreement.
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16. Captions and Headings. Captions and paragraph headings are for
convenience only, are not a part of this Agreement and shall not be used to
construe any provision of this Agreement.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one Agreement. It shall not be necessary
that any counterpart be signed by the parties hereto so long as each such party
shall have executed a counterpart.
IN WITNESS WHEREOF, the parties have executed these presents as of
the day and year first above written.
AMERICAN MAIZE-PRODUCTS COMPANY
By: /s/ Patric J. McLaughlin
-----------------------------------
Patric J. McLaughlin
President and Chief Executive Officer
/s/ Michael J. Gorbitz
-----------------------------------
Michael J. Gorbitz, Executive
8
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Exhibit 9
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 2nd day of January, 1995 by and between
American Maize-Products Company (the "Company"), a Maine corporation with
offices at 250 Harbor Drive, Stamford, CT 06902 and Jane E. Downey (the
"Executive"), a natural person residing at 3 Gull Road, Rowayton, CT 06853.
W I T N E S S E T H
WHEREAS, the Executive is presently employed as Vice President,
Human Resources of the Company; and
WHEREAS, the Company desires to continue to employ the Executive as
Vice President, Human Resources of the Company; and
WHEREAS, the Executive desires to continue to be employed by the
Company in such capacities.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Term. The Company hereby offers to continue to employ the
Executive as Vice President, Human Resources of the Company, and the Executive
hereby accepts such employment. This Agreement shall be effective as of the date
hereof and shall continue to be effective for the period ending on the
"Expiration Date" (such period being hereinafter referred to as the "Term"). The
"Expiration Date" shall initially be December 31, 1997, but effective as of
December 31, 1995 and as of each December 31 thereafter, the Term shall
automatically be extended one additional year and the Expiration Date will be
adjusted accordingly, unless, not later than the preceding July 1 of such year,
the Chief Executive Officer on behalf of the Company or the Executive shall have
given notice to the other that the Term shall not be so extended. The period
measured from the date hereof through the Expiration Date (as applicable from
time to time), determined without regard to termination of the Executive's
employment hereunder on any earlier date, is hereinafter referred to as the
"Period of Service."
2. Services and Duties. While she is employed during the Term, the
Executive agrees to serve the Company as Vice President, Human Resources . In
such capacity, Executive shall perform all reasonable acts customarily
associated with such position.
3. Compensation and Benefits. While employed by the Company, during
the Term, the Executive shall receive the following compensation and benefits:
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(a) Base salary in the amount of One Hundred Thirty-Two Thousand
Dollars ($132,000 ) per annum, payable in semi-monthly installments and
subject to such deductions as required by law, due in respect of the
various employee benefit plans in which the Executive participates or as
otherwise agreed by the Executive. Executive's base salary will be
reviewed annually by the Compensation Committee of the Board of Directors
for possible increases based upon Executive's performance.
(b) Annual incentive compensation based on individual and company
performance targets to be mutually agreed upon each year by the parties.
The amount of the annual incentive compensation payable will be determined
under the Company's management incentive plan (or any successor plan) in
effect from time to time, it being understood that the annual incentive
compensation "target" rate under the current plan shall be thirty-five
percent (35%) of Executive's annual base salary.
(c) Benefit programs made available from time to time by the Company
to executives and/or other salaried employees, including but not limited
to the Company's retirement plans; 401(k) plan; executive life insurance
program; medical and dental plan; short-term and long-term disability
coverage; vacation and holidays.
(d) Stock options, restricted stock awards and/or stock appreciation
rights or any similar equity incentive rights as determined by the
Compensation Committee of the Board of Directors of the Company.
4. Business Expense Reimbursement. While employed by the Company,
during the Term, Executive shall be entitled to reimbursement for all
reasonable and necessary out-of-pocket expenses incurred by her in performing
services hereunder, subject to appropriate documentation.
5. Termination of Employment.
(a) Death or Disability. Executive's employment shall terminate upon
her death or "disability," as hereinafter defined. For purposes of this
Agreement, the Executive shall be deemed to have terminated employment as
a result of a "disability" if (1) for medical reasons she is unable to
perform her material duties to the Company for a total of six (6) months,
whether or not consecutive, in any twelve (12) month period and (2)
subject to applicable law, the Company terminates the Executive's
employment as a result of such "disability" by written notice. The initial
determination of the "medical reasons" shall be made by a physician chosen
by the Company whereby the Executive shall submit to a reasonable medical
examination. If the Executive shall dispute such initial determination,
the Executive shall submit to a reasonable medical examination by a
physician chosen by the Executive. If the Executive shall continue to
dispute the initial determination, the final determination shall be made
by majority vote of three physicians, one the Executive's chosen
physician, one the Company's chosen physician, and one
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chosen by such two physicians. Such final determination will be final and
binding for all purposes hereunder.
(b) Termination for "Cause". The Company may terminate the
Executive's employment for "cause." For purposes of this Agreement, the
Executive's employment shall be considered to have been terminated for "cause"
if such termination occurs on account of:
(i) the Executive's conviction by a court of competent jurisdiction
of any crime constituting a felony under the laws of the United States or
one of its political subdivisions (or the Executive's plea of guilty or no
lo contendere to a charge of any such crime); and
(ii) the Executive engaging in willful misconduct in the performance
of her material duties to the Company resulting in demonstrable economic
harm to the Company.
(c) Termination for "Good Reason". The Executive may terminate her
employment for "good reason." For purposes of this Agreement, "good reason"
means the occurrence of one of the following:
(i) the Executive suffers any diminution in her position, title,
reporting relationship, responsibilities or authority; or
(ii) the Executive is assigned additional responsibilities without
appropriate remuneration or that unreasonably increase her work load; or
(iii) the adverse and substantial alteration of the nature and
quality of the secretarial and administrative support provided to the
Executive; or
(iv) the Executive suffers a decrease in her level of compensation
because of one or more of the following:
(A) the Executive's then-current level of base salary as
described in Section 3(a) is reduced; or
(B) with respect to any fiscal year of the Company, the Company
fails to provide the Executive with annual incentive compensation
which is based on terms and conditions (including, but not limited
to, the targeted percentage of annual base salary payable)
comparable to those described in Section 3(b); or
(C) the Executive suffers a significant reduction in employee
benefit coverages (including but not limited to those programs and
arrangements described in Section 3(c)) that are provided to the
Executive; or
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(v) without the Executive's prior written consent, the Executive's
office location is relocated by more than twenty-five (25) miles from the
existing location; provided, that, such relocation increases the distance
from the Executive's principal residence to such office.
6. Consequences of Termination of Employment.
(a) Without "Cause" or for "Good Reason". In the event that the
Company terminates the Executive's employment without "cause" or the Executive
terminates her employment for "good reason" and subject to the conditions set
forth below, the Company shall provide the following payments and benefits (each
of which shall be calculated without regard to any reduction or change that
constitutes "good reason") to the Executive for the Period of Service:
(i) The Company shall continue to pay to Executive the semi-monthly
base salary amounts under Section 3(a).
(ii) The Company shall continue to make incentive compensation
payments to the Executive under Section 3(b) in the amounts equivalent to
her "targeted" incentive compensation under the management incentive plan
in effect at the time of her termination.
(iii) To the extent provided below in Sections A, B and C, the
Executive shall continue to participate in the Company benefit programs
(including without limitation the Company's retirement plans; 401(k) plan;
executive life insurance program; medical and dental plan; short-term and
long-term disability coverage; accident insurance coverage; Section 125
cafeteria plan) under Section 3(c) as described herein.
A. Welfare Benefits. All employee welfare benefit coverage
shall apply to the Executive and any of her dependents who would have been
eligible for coverage if the Executive had continued to be employed by the
Company for the remaining Period of Service. The Executive shall be
required to make all employee contributions due in respect of the benefit
coverage on the same basis as active employees of the Company. At the
expiration of the Period of Service, the Executive shall be treated as a
then terminating employee of the Company with respect to the right to elect
continued medical and dental coverages in accordance with Section 4980B of
the Internal Revenue Code of 1986, as amended (the "Code"), or any
successor provision thereto and with respect to any similar welfare benefit
continuation rights. The Executive shall receive age and service credit
during the Period of Service for purposes of retiree medical coverage.
B. Retirement Plan Benefits. The Executive shall continue
active participation under the Company's tax-qualified and supplemental
defined
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benefit plans or any other tax qualified or supplemental defined benefit
plan of the Company or an affiliate in which the Executive actively
participates at the time of her termination of employment ("Retirement
Plans"), until the expiration of the Period of Service. The calculation of
Employee's pension benefit under the Retirement Plans shall include credit
for the amounts paid under Sections 6(a)(i) and 6(a)(ii) and the duration
of such payments for purpose of determining length of service and age, and
amounts equivalent to the resulting benefit shall be paid out of a
non-qualified plan to the extent necessary to preserve the tax-qualified
status of any defined benefit plans intending to be tax qualified. The
Company shall take all necessary action to effectuate the foregoing
including amending the supplemental plan.
C. 401(k) Plan Benefits. The Executive shall continue active
participation under the Company's 401(k) Plan, or any other tax qualified
(or supplemental, if applicable) defined contribution plan of the Company
or an affiliate in which the Executive actively participates at the time of
her termination of employment ("401(k) Plans") until the expiration of the
Period of Service. To the extent necessary to preserve tax-qualified status
of any defined contribution plan intended to be qualified, the Executive
may instead receive a lump-sum cash payment promptly following her
termination of employment equal to the aggregate employer contributions
that would have been made on behalf of the Executive under the 401(k) Plans
until the expiration of the Period of Service, assuming she had elected to
make the maximum contributions under the 401(k) Plan that is subject to
employer contributions.
(iv) Stock options which have been awarded to Executive prior to her
termination shall become immediately fully vested and exercisable and shall
remain exercisable until the earlier of their expiration date or the third
anniversary of termination of her employment and the Company hereby agrees
that all actions and consents that are required to be taken or obtained in
order to effectuate the foregoing shall be so taken or obtained.
In addition, the Company shall pay to the Executive any portion of
accrued but unpaid base salary, incentive compensation payments, stock option
and equity incentive rights and employee benefits to which the Executive is
entitled up until the date of the Executive's termination of employment.
(b) Any Other Termination of Employment. In the event of termination
by the Company of the Executive's employment for "cause" under Section 5(b),
termination of employment by the Executive other than for "good reason,"
termination of the Executive's employment due to death or disability or any
other termination of the Executive's employment other than as described in
Section 6(a), the Executive shall be entitled to her (i) accrued base salary
through the date of termination, (ii) incentive compensation bonus which has
been accrued but not yet paid, for any completed fiscal year of the Company
ending prior to termination of employment, and (iii) employee
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benefits (in accordance with the terms of the applicable payroll practices and
benefit programs).
7. Excise Tax Gross-Up Payment. Notwithstanding anything in this
Agreement to the contrary, in the event it shall be determined that any payment
or distribution by the Company or any other person or entity to or for the
benefit of the Executive is a "parachute payment" (within the meaning of Section
280G(b) (2) of the Code), whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise in connection
with, or arising out of, her employment with the Company or a change in
ownership or effective control of the Company or a substantial portion of its
assets (a "Payment"), and would be subject to the excise tax imposed by Section
4999 of the Code (the "Excise Tax"), concurrent with the making of such Payment,
the Company shall pay to the Executive an additional payment (the "Gross-Up
Payment") in an amount such that the net amount retained by the Executive, after
deduction of any Excise Tax on such Payment and any federal, state or local
income tax and Excise Tax on the Gross-Up Payment shall equal the amount of such
Payment.
8. No Obligation to Mitigate. It is further agreed that the
Executive shall be under no obligation to minimize or mitigate damages by
seeking other employment, and the obtaining of any such other employment shall
in no event effect any reduction of the Company's obligation to make the
payments and provide the benefit coverages required under this Agreement. In
addition, the Company's obligation to make the payments and provide the benefits
required under this Agreement shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other rights which the Company may have against the Executive.
9. Confidential Information. The Executive shall not during the
period of her employment or at any time thereafter disclose or communicate to
any unauthorized person, firm or corporation, or use for her own purposes, trade
secrets, confidential commercial information, or any other information,
knowledge or data of the Company or any of its affiliates which is not generally
known to the public and shall use her best efforts to prevent the publication or
disclosure by any person of any such secret, information, knowledge or data. All
documents and objects made, compiled, received, held or used by the Executive
while employed by the Company in connection with the business of the Company
shall be and remain the Company's property and shall be delivered by the
Executive to the Company upon the termination of the Executive's employment or
at any earlier time requested by the Company.
10. Non-Assignment; Successors. This Agreement and all rights
hereunder are personal to the Executive and shall not be assignable; provided,
however, all of the Executive's rights to compensation following her death shall
inure to the benefit of her heirs, estate, personal representatives or designees
or other legal representatives as the case may be. Any person, firm or
corporation (including, if applicable, any ultimate parent entity thereof)
succeeding to the business of the Company by merger, purchase, consolidation or
otherwise shall assume by contract or operation of law all obligations of the
Company hereunder.
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<PAGE> 7
11. Severability. The invalidity or unenforceability of any
provision of this Agreement shall in no way affect the validity or
enforceability of any other provision.
12. Entire Agreement. This Agreement constitutes the entire
agreement among the parties respecting the subject matter hereof and supersedes
any prior agreements respecting the subject matter hereof. No amendment to this
Agreement shall be deemed valid unless in writing and signed by the parties, and
no discharge of the terms of this Agreement shall be deemed valid unless by full
performance by the parties or by a writing signed by the parties. No waiver by a
party of any provisions or conditions of this Agreement shall be deemed a waiver
of similar or dissimilar provisions and conditions at the same time or any prior
or subsequent time.
13. Notice. Any notice required or permitted to be given by this
Agreement shall be effective only if in writing, delivered personally against
receipt therefor or mailed by certified or registered mail, return receipt
requested, to the parties at the addresses hereinafter set forth, or at such
other places that either party may designate by notice to the other.
Notice to the Company shall be addressed to:
American Maize-Products Company
250 Harbor Drive
Stamford, CT 06902
Notice to the Executive shall be addressed to her at the executive
offices of the Company, with a copy to her at her home address at:
3 Gull Road
Rowayton, CT 06853
Such notice shall be deemed effectively given on the date personally
delivered or five (5) days after the same has been deposited in a post box under
the exclusive control of the United States Postal Service.
14. Governing Law. This Agreement shall be construed, interpreted
and enforced according to the laws of the State of Connecticut and the parties
submit to the jurisdiction of the courts of the State of Connecticut for the
purpose of any actions or proceedings which may arise with respect to this
Agreement.
15. Legal Expenses. The Company shall bear the expense of the
Executive of any dispute or controversy arising under or in connection with this
Agreement (including reasonable attorneys' fees and expert fees). In no event
shall the Executive be required to reimburse the Company for any of the costs or
expenses relating to any proceeding, including any enforcement proceeding of
this Agreement.
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<PAGE> 8
16. Captions and Headings. Captions and paragraph headings are for
convenience only, are not a part of this Agreement and shall not be used to
construe any provision of this Agreement.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one Agreement. It shall not be necessary
that any counterpart be signed by the parties hereto so long as each such party
shall have executed a counterpart.
IN WITNESS WHEREOF, the parties have executed these presents as of
the day and year first above written.
AMERICAN MAIZE-PRODUCTS COMPANY
By: /s/ Patric J. McLaughlin
-----------------------------------
Patric J. McLaughlin
President and Chief Executive Officer
/s/ Jane E. Downey
-----------------------------------
Jane E. Downey, Executive
8
<PAGE> 1
Exhibit 10
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 2nd day of January, 1995 by and between
American Maize-Products Company (the "Company"), a Maine corporation with
offices at 250 Harbor Drive, Stamford, CT 06902 and Frederick M. Ash (the
"Executive"), a natural person residing at 928 Elm Street, Flossmoor, IL 60422.
W I T N E S S E T H
WHEREAS, the Executive is presently employed as President,
Ingredients Division of the Company; and
WHEREAS, the Company desires to continue to employ the Executive as
President, Ingredients Division of the Company; and
WHEREAS, the Executive desires to continue to be employed by the
Company in such capacities.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Term. The Company hereby offers to continue to employ the
Executive as President, Ingredients Division of the Company, and the Executive
hereby accepts such employment. This Agreement shall be effective as of the date
hereof and shall continue to be effective for the period ending on the
"Expiration Date" (such period being hereinafter referred to as the "Term"). The
"Expiration Date" shall initially be December 31, 1997, but effective as of
December 31, 1995 and as of each December 31 thereafter, the Term shall
automatically be extended one additional year and the Expiration Date will be
adjusted accordingly, unless, not later than the preceding July 1 of such year,
the Chief Executive Officer on behalf of the Company or the Executive shall have
given notice to the other that the Term shall not be so extended. The period
measured from the date hereof through the Expiration Date (as applicable from
time to time), determined without regard to termination of the Executive's
employment hereunder on any earlier date, is hereinafter referred to as the
"Period of Service."
2. Services and Duties. While he is employed during the Term, the
Executive agrees to serve the Company as President, Ingredients Division. In
such capacity, Executive shall perform all reasonable acts customarily
associated with such position.
3. Compensation and Benefits. While employed by the Company, during
the Term, the Executive shall receive the following compensation and benefits:
1
<PAGE> 2
(a) Base salary in the amount of Two Hundred Thousand Dollars
($200,000) per annum, payable in semi-monthly installments and subject to
such deductions as required by law, due in respect of the various employee
benefit plans in which the Executive participates or as otherwise agreed by
the Executive. Executive's base salary will be reviewed annually by the
Compensation Committee of the Board of Directors for possible increases
based upon Executive's performance.
(b) Annual incentive compensation based on individual and company
performance targets to be mutually agreed upon each year by the parties.
The amount of the annual incentive compensation payable will be determined
under the Company's management incentive plan (or any successor plan) in
effect from time to time, it being understood that the annual incentive
compensation "target" rate under the current plan shall be forty percent
(40%) of Executive's annual base salary.
(c) Benefit programs made available from time to time by the Company
to executives and/or other salaried employees, including but not limited to
the Company's retirement plans; 401(k) plan; executive life insurance
program; medical and dental plan; short-term and long-term disability
coverage; vacation and holidays.
(d) Stock options, restricted stock awards and/or stock appreciation
rights or any similar equity incentive rights as determined by the
Compensation Committee of the Board of Directors of the Company.
4. Business Expense Reimbursement. While employed by the Company,
during the Term, Executive shall be entitled to reimbursement for all reasonable
and necessary out-of-pocket expenses incurred by him in performing services
hereunder, subject to appropriate documentation.
5. Termination of Employment.
(a) Death or Disability. Executive's employment shall terminate upon
his death or "disability," as hereinafter defined. For purposes of this
Agreement, the Executive shall be deemed to have terminated employment as a
result of a "disability" if (1) for medical reasons he is unable to perform his
material duties to the Company for a total of six (6) months, whether or not
consecutive, in any twelve (12) month period and (2) subject to applicable law,
the Company terminates the Executive's employment as a result of such
"disability" by written notice. The initial determination of the "medical
reasons" shall be made by a physician chosen by the Company whereby the
Executive shall submit to a reasonable medical examination. If the Executive
shall dispute such initial determination, the Executive shall submit to a
reasonable medical examination by a physician chosen by the Executive. If the
Executive shall continue to dispute the initial determination, the final
determination shall be made by majority vote of three physicians, one the
Executive's chosen physician, one the Company's chosen physician, and one
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<PAGE> 3
chosen by such two physicians. Such final determination will be final and
binding for all purposes hereunder.
(b) Termination for "Cause". The Company may terminate the
Executive's employment for "cause." For purposes of this Agreement, the
Executive's employment shall be considered to have been terminated for "cause"
if such termination occurs on account of:
(i) the Executive's conviction by a court of competent jurisdiction
of any crime constituting a felony under the laws of the United States or
one of its political subdivisions (or the Executive's plea of guilty or no
lo contendere to a charge of any such crime); and
(ii) the Executive engaging in willful misconduct in the performance
of his material duties to the Company resulting in demonstrable economic
harm to the Company.
(c) Termination for "Good Reason". The Executive may terminate his
employment for "good reason." For purposes of this Agreement, "good reason"
means the occurrence of one of the following:
(i) the Executive suffers any diminution in his position, title,
reporting relationship, responsibilities or authority; or
(ii) the Executive is assigned additional responsibilities without
appropriate remuneration or that unreasonably increase his work load; or
(iii) the adverse and substantial alteration of the nature and
quality of the secretarial and administrative support provided to the
Executive; or
(iv) the Executive suffers a decrease in his level of compensation
because of one or more of the following:
(A) the Executive's then-current level of base salary as
described in Section 3(a) is reduced; or
(B) with respect to any fiscal year of the Company, the Company
fails to provide the Executive with annual incentive compensation
which is based on terms and conditions (including, but not limited
to, the targeted percentage of annual base salary payable)
comparable to those described in Section 3(b); or
(C) the Executive suffers a significant reduction in employee
benefit coverages (including but not limited to those programs and
arrangements described in Section 3(c)) that are provided to the
Executive; or
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<PAGE> 4
(v) without the Executive's prior written consent, the Executive's
office location is relocated by more than twenty-five (25) miles from the
existing location; provided, that, such relocation increases the distance
from the Executive's principal residence to such office.
6. Consequences of Termination of Employment.
(a) Without "Cause" or for "Good Reason". In the event that the
Company terminates the Executive's employment without "cause" or the Executive
terminates his employment for "good reason" and subject to the conditions set
forth below, the Company shall provide the following payments and benefits (each
of which shall be calculated without regard to any reduction or change that
constitutes "good reason") to the Executive for the Period of Service:
(i) The Company shall continue to pay to Executive the semi-monthly
base salary amounts under Section 3(a).
(ii) The Company shall continue to make incentive compensation
payments to the Executive under Section 3(b) in the amounts equivalent to
his "targeted" incentive compensation under the management incentive plan
in effect at the time of his termination.
(iii) To the extent provided below in Sections A, B and C, the
Executive shall continue to participate in the Company benefit programs
(including without limitation the Company's retirement plans; 401(k) plan;
executive life insurance program; medical and dental plan; short-term and
long-term disability coverage; accident insurance coverage; Section 125
cafeteria plan) under Section 3(c) as described herein.
A. Welfare Benefits. All employee welfare benefit coverage
shall apply to the Executive and any of his dependents who would have been
eligible for coverage if the Executive had continued to be employed by the
Company for the remaining Period of Service. The Executive shall be
required to make all employee contributions due in respect of the benefit
coverage on the same basis as active employees of the Company. At the
expiration of the Period of Service, the Executive shall be treated as a
then terminating employee of the Company with respect to the right to elect
continued medical and dental coverages in accordance with Section 4980B of
the Internal Revenue Code of 1986, as amended (the "Code"), or any
successor provision thereto and with respect to any similar welfare benefit
continuation rights. The Executive shall receive age and service credit
during the Period of Service for purposes of retiree medical coverage.
B. Retirement Plan Benefits. The Executive shall continue
active participation under the Company's tax-qualified and supplemental
defined
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<PAGE> 5
benefit plans or any other tax qualified or supplemental defined benefit
plan of the Company or an affiliate in which the Executive actively
participates at the time of his termination of employment ("Retirement
Plans"), until the expiration of the Period of Service. The calculation of
Employee's pension benefit under the Retirement Plans shall include credit
for the amounts paid under Sections 6(a)(i) and 6(a)(ii) and the duration
of such payments for purpose of determining length of service and age, and
amounts equivalent to the resulting benefit shall be paid out of a
non-qualified plan to the extent necessary to preserve the tax-qualified
status of any defined benefit plans intending to be tax qualified. The
Company shall take all necessary action to effectuate the foregoing
including amending the supplemental plan.
C. 401(k) Plan Benefits. The Executive shall continue active
participation under the Company's 401(k) Plan, or any other tax qualified
(or supplemental, if applicable) defined contribution plan of the Company
or an affiliate in which the Executive actively participates at the time of
his termination of employment ("401(k) Plans") until the expiration of the
Period of Service. To the extent necessary to preserve tax-qualified status
of any defined contribution plan intended to be qualified, the Executive
may instead receive a lump-sum cash payment promptly following his
termination of employment equal to the aggregate employer contributions
that would have been made on behalf of the Executive under the 401(k) Plans
until the expiration of the Period of Service, assuming he had elected to
make the maximum contributions under the 401(k) Plan that is subject to
employer contributions.
(iv) Stock options which have been awarded to Executive prior to his
termination shall become immediately fully vested and exercisable and shall
remain exercisable until the earlier of their expiration date or the third
anniversary of termination of his employment and the Company hereby agrees
that all actions and consents that are required to be taken or obtained in
order to effectuate the foregoing shall be so taken or obtained.
In addition, the Company shall pay to the Executive any portion of
accrued but unpaid base salary, incentive compensation payments, stock option
and equity incentive rights and employee benefits to which the Executive is
entitled up until the date of the Executive's termination of employment.
(b) Any Other Termination of Employment. In the event of termination
by the Company of the Executive's employment for "cause" under Section 5(b),
termination of employment by the Executive other than for "good reason,"
termination of the Executive's employment due to death or disability or any
other termination of the Executive's employment other than as described in
Section 6(a), the Executive shall be entitled to his (i) accrued base salary
through the date of termination, (ii) incentive compensation bonus which has
been accrued but not yet paid, for any completed fiscal year of the Company
ending prior to termination of employment, and (iii) employee
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<PAGE> 6
benefits (in accordance with the terms of the applicable payroll practices and
benefit programs).
7. Excise Tax Gross-Up Payment. Notwithstanding anything in this
Agreement to the contrary, in the event it shall be determined that any payment
or distribution by the Company or any other person or entity to or for the
benefit of the Executive is a "parachute payment" (within the meaning of Section
280G(b) (2) of the Code), whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise in connection
with, or arising out of, his employment with the Company or a change in
ownership or effective control of the Company or a substantial portion of its
assets (a "Payment"), and would be subject to the excise tax imposed by Section
4999 of the Code (the "Excise Tax"), concurrent with the making of such Payment,
the Company shall pay to the Executive an additional payment (the "Gross-Up
Payment") in an amount such that the net amount retained by the Executive, after
deduction of any Excise Tax on such Payment and any federal, state or local
income tax and Excise Tax on the Gross-Up Payment shall equal the amount of such
Payment.
8. No Obligation to Mitigate. It is further agreed that the
Executive shall be under no obligation to minimize or mitigate damages by
seeking other employment, and the obtaining of any such other employment shall
in no event effect any reduction of the Company's obligation to make the
payments and provide the benefit coverages required under this Agreement. In
addition, the Company's obligation to make the payments and provide the benefits
required under this Agreement shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other rights which the Company may have against the Executive.
9. Confidential Information. The Executive shall not during the
period of his employment or at any time thereafter disclose or communicate to
any unauthorized person, firm or corporation, or use for his own purposes, trade
secrets, confidential commercial information, or any other information,
knowledge or data of the Company or any of its affiliates which is not generally
known to the public and shall use his best efforts to prevent the publication or
disclosure by any person of any such secret, information, knowledge or data. All
documents and objects made, compiled, received, held or used by the Executive
while employed by the Company in connection with the business of the Company
shall be and remain the Company's property and shall be delivered by the
Executive to the Company upon the termination of the Executive's employment or
at any earlier time requested by the Company.
10. Non-Assignment; Successors. This Agreement and all rights
hereunder are personal to the Executive and shall not be assignable; provided,
however, all of the Executive's rights to compensation following his death shall
inure to the benefit of his heirs, estate, personal representatives or designees
or other legal representatives as the case may be. Any person, firm or
corporation (including, if applicable, any ultimate parent entity thereof)
succeeding to the business of the Company by merger, purchase, consolidation or
otherwise shall assume by contract or operation of law all obligations of the
Company hereunder.
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<PAGE> 7
11. Severability. The invalidity or unenforceability of any
provision of this Agreement shall in no way affect the validity or
enforceability of any other provision.
12. Entire Agreement. This Agreement constitutes the entire
agreement among the parties respecting the subject matter hereof and supersedes
any prior agreements respecting the subject matter hereof. No amendment to this
Agreement shall be deemed valid unless in writing and signed by the parties, and
no discharge of the terms of this Agreement shall be deemed valid unless by full
performance by the parties or by a writing signed by the parties. No waiver by a
party of any provisions or conditions of this Agreement shall be deemed a waiver
of similar or dissimilar provisions and conditions at the same time or any prior
or subsequent time.
13. Notice. Any notice required or permitted to be given by this
Agreement shall be effective only if in writing, delivered personally against
receipt therefor or mailed by certified or registered mail, return receipt
requested, to the parties at the addresses hereinafter set forth, or at such
other places that either party may designate by notice to the other.
Notice to the Company shall be addressed to:
American Maize-Products Company
250 Harbor Drive
Stamford, CT 06902
Notice to the Executive shall be addressed to him at the executive
offices of the Company, with a copy to him at his home address at:
928 Elm Street
Flossmoor, IL 60422
Such notice shall be deemed effectively given on the date personally
delivered or five (5) days after the same has been deposited in a post box under
the exclusive control of the United States Postal Service.
14. Governing Law. This Agreement shall be construed, interpreted
and enforced according to the laws of the State of Connecticut and the parties
submit to the jurisdiction of the courts of the State of Connecticut for the
purpose of any actions or proceedings which may arise with respect to this
Agreement.
15. Legal Expenses. The Company shall bear the expense of the
Executive of any dispute or controversy arising under or in connection with this
Agreement (including reasonable attorneys' fees and expert fees). In no event
shall the Executive be required to reimburse the Company for any of the costs or
expenses relating to any proceeding, including any enforcement proceeding of
this Agreement.
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<PAGE> 8
16. Captions and Headings. Captions and paragraph headings are for
convenience only, are not a part of this Agreement and shall not be used to
construe any provision of this Agreement.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one Agreement. It shall not be necessary
that any counterpart be signed by the parties hereto so long as each such party
shall have executed a counterpart.
IN WITNESS WHEREOF, the parties have executed these presents as of
the day and year first above written.
AMERICAN MAIZE-PRODUCTS COMPANY
By: /s/ Patric J. McLaughlin
-----------------------------------
Patric J. McLaughlin
President and Chief Executive Officer
/s/ Frederick M. Ash
-----------------------------------
Frederick M. Ash, Executive
8
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Exhibit 11
EMPLOYMENT AGREEMENT
AGREEMENT made and entered into as of July 1, 1993 by and between
American Maize-Products Company, a Maine corporation with offices at
250 Harbor Drive, Stamford, CT 06902 (the "Company") and Patric J. McLaughlin
of 164 West Road, New Canaan, CT 06840 (the "Employee").
WHEREAS, prior to the effective date of this Agreement, Employee was
employed by the Company in various capacities, and
WHEREAS, the Company and Employee desire to continue such employment
with the Company on the terms and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties agree as follows:
1. Employment and Term. The Company agrees to employ the Employee and
Employee agrees to serve the Company as President and Chief Executive Officer
of the Company commencing the date hereof and terminating June 30, 1996 (the
"Termination Date"), subject to the terms and conditions of this Agreement. On
each anniversary date of this Agreement starting with the first anniversary on
July 1, 1994, through and including the seventh anniversary on July 1, 2000, the
Termination Date shall be automatically extended for an additional twelve-month
period, unless prior thereto (i) the parties have agreed to terminate the
employment or (ii) the Company has given notice of termination under
paragraph 5.
2. Services and Duties. Employee shall have appropriate
responsibilities, duties and authorities commensurate with the task of serving
as President and Chief Executive Officer. Employee shall be responsible to the
Board of Directors and shall devote substantially all of his business
attention, skill and
<PAGE> 2
efforts to the faithful and diligent performance of his duties. The expenditure
of reasonable amounts of time by the Employee for personal or outside
charitable and professional activities shall not be deemed a breach of this
Agreement, provided such activities do not materially interfere with the
services required to be rendered by Employee under this Agreement and are not
contrary to the business or other interests of the Company.
3. Compensation and Benefits. During the period of his employment
under this Agreement, the Employee shall receive the following compensation and
benefits:
a. Base salary in the amount of Four Hundred Thousand Dollars
($400,000) per annum, payable in equal bi-weekly installments. Employee's
base salary will be reviewed annually by the Compensation Committee of the
Board of Directors for possible increases or decreases based upon
Employee's performance.
b. Annual incentive compensation based on individual and Company
performance targets to be mutually agreed upon each year by the parties.
The amount of the annual incentive compensation payable will be determined
by the Company's management incentive plan in effect from time to time, it
being understood that the annual incentive compensation "target" rate
under the current plan shall be fifty percent (50%) of Employee's annual
base salary.
c. Employee shall be entitled to participate in any benefit programs
made available from time to time by the Company to executives and/or other
salaried employees, including but not limited to the Company's retirement
plan; 401(K) plan; executive life insurance program; hospitalization,
surgical and major medical coverage for Employee and his dependents; sick
leave and short-term
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<PAGE> 3
disability; long-term disability coverage; vacation and holidays.
4. Business Expense Reimbursements and Perquisites. Employee shall be
entitled to reimbursement for all reasonable and necessary out-of-pocket
expenses incurred by him in performing services hereunder, subject to
appropriate documentation. The Company shall also reimburse Employee for the
cost of an annual physical examination. Employee shall be provided with the use
of an automobile under the conditions specified in the Company's policies
governing same.
5. Termination of Employment.
a. Employee's employment shall terminate upon his death.
b. In the event Employee becomes, in the good faith determination by
the Board of Directors based upon professional medical advice to the Board
of Directors, physically or mentally disabled so as to be unable, for a
period of more than 90 consecutive days, or for more than 120 days in the
aggregate during a twelve-month period, to perform his duties hereunder on
a full-time basis, the Company may at its option, terminate his employment
upon not less than five days written notice.
c. The Company may terminate the Employee's employment at any time
for cause, including but not limited to the occurrence of any of the
following: (i) a default or other breach by the Employee of his
obligations under this Agreement, (ii) failure by the Employee diligently
and competently to perform his duties under this Agreement, (iii)
misconduct, dishonesty or insubordination by the Employee, or (iv) any act
or omission by the Employee detrimental to the business reputation of the
Company or
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damaging to the Company's relationship with its customers, suppliers or
employees.
d. The Company may terminate the Employee's employment at any time
without cause. In the event that the Employee's employment is
terminated without cause and subject to the conditions set forth below,
the Company shall provide the following severance benefits to Employee
until the Termination Date:
(i) The Company shall continue to pay to Employee the
bi-weekly base salary amounts under paragraph 3(a).
(ii) The Company shall continue to make incentive
compensation payments to Employee under paragraph 3(b) in the amounts
equivalent to his "target" incentive compensation under the management
incentive plan in effect at the time of his termination.
(iii) Employee shall continue to participate in the
Company benefit plans under paragraph 3(c); provided, however, that
Employee shall not be entitled to any stock option grants or long-term
incentive compensation awards that have not previously been granted
prior to his termination. The calculation of Employee's pension benefit
under the Company's retirement plan shall include credit for the
amounts paid under subparagraphs 5(d)(i) and 5(d)(ii) and the duration
of such payments for purpose of determining length of service, and
amounts equivalent to the resulting benefit shall be paid out of a
non-qualified plan to the extent necessary.
(iv) Employee shall use his best efforts to find other
employment during the period he is entitled to receive severance
benefits from the Company. Any
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<PAGE> 5
compensation, fee or benefit earned by Employee from any part-
time or full-time employment in any capacity during the period he
is entitled to receive severance benefits from the Company shall be
deducted in full from the amounts otherwise payable under the above
three paragraphs.
(v) Stock options which have been awarded to Employee prior to
his termination shall remain exercisable until the earlier of their
expiration date or the third anniversary of termination of his
employment, subject to appropriate modification of the Company's stock
option plans.
Severance payments to the Employee by the Company described above
shall be in full and complete satisfaction of any and all obligations
owing to the Employee pursuant to this Agreement.
e. In the event of termination of employment under paragraph 5(a),
5(b) or 5(c), or termination of employment for any reason regardless of
cause on or after the Termination Date, the Company shall not be obligated
to make any severance payments to Employee, and Employee's entitlement to
compensation and benefits under paragraph 3 shall cease upon such
termination of employment.
6. Constructive Termination. It is mutually understood and agreed that
a substantial reduction in Employee's responsibilities, functions or authority
to a level not commensurate with the task of serving as President and Chief
Executive Officer or transfer of Employee to an inappropriate location shall,
upon election by the Employee, be deemed to be a termination of employment by
the Company, and the Employee shall be entitled to the severance benefits under
paragraph 5(d) unless the Company has grounds for termination under paragraph
5(c).
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7. Confidential Information. The Employee shall not, during the
period of his employment or at any time therafter disclose or communicate to
any unauthorized person, firm or corporation, or use for his own purposes,
trade secrets, confidential commercial information, or any other information,
knowledge or data of the Company or any of its affiliates which is not
generally known to the public and shall use his best efforts to prevent the
publication or disclosure by any person of any such secret, information,
knowledge or data. All documents and objects made, compiled, received, held or
used by the Employee while employed by the Company in connection with the
business of the Company shall be and remain the Company's property and shall be
delivered by the Employee to the Company upon the termination of the Employee's
employment or at any earlier time requested by the Company.
8. Employee Hiring Restriction. The Employee shall not, for a period
of two years after termination of his employment, employ or retain any person
as a consultant or otherwise who was employed by the Company or any of its
affiliates or induce such person to accept employment or retention other than
with the Company and its affiliates.
9. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement (except any dispute with respect to paragraph 7
or 8) shall be settled exclusively by arbitration in Connecticut or New York in
accordance with the rules of the American Arbitration Association then in
effect. Judgment upon the award rendered may be entered in any court having
jurisdiction thereof. The Company shall not be required to arbitrate any
dispute or claim arising under paragraph 7 or 8 but shall have the right to
institute judicial proceedings in any court of competent jurisdiction with
respect to such dispute or claim, and such judicial proceeding shall not be
stayed or delayed pending the outcome of any arbitration proceeding
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hereunder. The Employee agrees that a breach of paragraph 7 or 8 will result
in irreparable and continuing damage to the Company for which there will
be no adequate remedy at law and that the Company shall be entitled to
injunctive relief in the event of breach of paragraph 7 or 8.
10. Governing Law. The validity, construction, interpretation and
enforcement of this Agreement shall be determined and governed by the laws of
the State of Connecticut.
11. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the Employee's employment by the
Company, and supersedes and is in full substitution for any and all prior
understandings or agreements with respect to the Employee's employment. In the
event of conflict between this Agreement and the provisions of any Company
benefit plan under which Employee is entitled to receive benefits, the
provisions of this Agreement shall prevail.
12. Notices. Any notices required or permitted to be given under this
Agreement shall be sufficient if in writing and sent by certified mail to the
following address or to such other address as either party shall designate in
writing to the other:
To the Employee: To the Company:
Mr. Patric J. McLaughlin American Maize-Products Company
164 West Road 250 Harbor Drive
New Canaan, CT 06840 Stamford, CT 06902
13. Amendments and Waiver. This Agreement may be amended only by an
instrument in writing signed by the parties hereto, and any provision hereof
may be waived only by an instrument in writing signed by the party or parties
against whom or which enforcement of such waiver is sought. The failure of
either party hereto at any time to require the performance by the other
7
<PAGE> 8
party hereto of any provision hereof shall in no way affect the full right to
require such performance at any time thereafter, nor shall the waiver by either
party hereto of a breach of any provision hereof be taken or held to be a
waiver of any succeeding breach of such provision or a waiver of the provision
itself or a waiver of any other provision of this Agreement.
14. Assignments. Neither this Agreement nor any right or obligation
hereunder may be assigned by the Company (except to an affiliate or by the
Employee.
15. Scope. If any provision of this Agreement, or portion thereof, is
so broad, in scope or duration, so as to be unenforceable, such provision or
portion thereof shall be interpreted to be only so broad as is enforceable.
16. Survival of Covenants. The obligations of the Employee set forth
in paragraphs 7, 8 and 9 represent independent covenants by which the Employee
is and will remain bound notwithstanding any breach by the Company, and shall
survive the termination of this Agreement.
17. Withholding Taxes. All amounts payable under this Agreement shall
be subject to applicable deductions for withholding taxes, FICA, unemployment
compensation and the like.
18. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Company, its successors and assigns and the Employee, his
heirs, executors and administrators.
8
<PAGE> 9
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of
the date first written above.
<TABLE>
<CAPTION>
<S> <C>
EMPLOYEE AMERICAN MAIZE-PRODUCTS COMPANY
/s/ PATRIC J. MCLAUGHLIN By /s/ H. BARCLAY MORLEY
- ------------------------------ ----------------------------------
Patric J. McLaughlin Its Chairman, Compensation Committee
</TABLE>
9
<PAGE> 10
First Amendment
To Employment Agreement
AMENDMENT made and entered into as of the 2nd day of January, 1995,
by and between American Maize-Products Company, a Maine Corporation with offices
at 250 Harbor Drive, Stamford, Connecticut 06902 (the "Company") and Patric J.
McLaughlin of 164 West Road, New Canaan, Connecticut 06840 (the "Employee").
WHEREAS, the Employee and the Company entered into an employment
agreement as of July 1, 1993 ("Employment Agreement"), and
WHEREAS, Section 13 of the Employment Agreement provides that it may
be amended by an instrument signed by both parties, and
WHEREAS, the Company and the Employee desire to amend the Employment
Agreement and to continue the employment of the Employee with the Company on the
terms and subject to conditions set forth in the Employment Agreement as amended
by this Amendment.
NOW THEREFORE, for valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and Employee hereby
agree to add the following two provisions to the Employment Agreement:
1. Excise Tax Gross-Up Payment. Notwithstanding anything in
this Agreement to the contrary, in the event it shall be determined that
any payment or distribution by the Company or any other person or entity to
or for the benefit of the Employee is a "parachute payment" (within the
meaning of Section 280G(b)(2) of the Code), whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise in connection with, or arising out of, his employment with the
Company or a change in ownership or effective control of the Company or a
substantial portion of its assets (a "Payment"), and would be subject to
the excise tax imposed by Section 4999 of the Code (the "Excise Tax"),
concurrent with the making of such Payment, the Company shall pay to the
Employee an additional payment (the "Gross-Up Payment") in an amount such
that the net amount retained by the Employee, after deduction of any Excise
Tax on such Payment and any federal, state or local income tax and Excise
Tax on the Gross-Up Payment shall equal the amount of such Payment.
2. Legal Expenses. The Company shall bear the expense of the
Employee of any dispute or controversy arising under or in connection with
this Agreement (including reasonable attorneys' fees and expert fees). In
no event shall the Employee be required to reimburse the Company for any of
the costs or expenses relating to any proceeding, including any enforcement
proceeding of this Agreement.
1
<PAGE> 11
Except as expressly amended hereby, the Employment Agreement shall
continue in full force and effect in accordance with the provisions thereof.
IN WITNESS WHEREOF, the parties have executed this Amendment
effective as of the date first written above.
EMPLOYEE AMERICAN MAIZE-PRODUCTS COMPANY
Patric J. McLaughlin By: H. Barclay Morley
- ----------------------- -----------------------------------
Patric J. McLaughlin
Its: Chairman, Compensation Committee
-----------------------------------
2
<PAGE> 1
Exhibit 12
[LETTERHEAD OF AMERICAN MAIZE-PRODUCTS COMPANY]
February 28, 1995
Dear Shareholder:
I am pleased to inform you that on February 22, 1995, American
Maize-Products Company, Eridania Beghin-Say, S.A., and Cerestar USA, Inc., an
indirect wholly-owned subsidiary of Eridania ("Merger Sub") entered into an
agreement and plan of merger providing for the acquisition of all of the issued
and outstanding shares of American Maize common stock at a price of $40.00 per
share. In connection with the Merger Agreement, Eridania, Merger Sub and
American Maize simultaneously entered into a Stock Purchase Agreement providing
for the purchase by Merger Sub of shares of Class B Common Stock which are
authorized but unissued or held in treasury and which remain available for
issuance following the exercise by existing Class B shareholders of their
preemptive rights.
Pursuant to the Merger Agreement, Eridania has today commenced a cash
tender offer (the "Offer") for all outstanding shares of American Maize common
stock at $40.00 per share. The Merger Agreement provides that, subject to the
satisfaction or waiver of the conditions thereto, following the Offer, Merger
Sub will be merged with and into American Maize (the "Merger"), and each of the
outstanding shares not owned by Eridania or its affiliates by virtue of the
Offer or the Stock Purchase Agreement will be cancelled and converted into the
right to receive $40.00 per share in cash.
YOUR BOARD OF DIRECTORS HAS DETERMINED THAT THE OFFER AND THE MERGER ARE
FAIR TO, AND IN THE BEST INTERESTS OF, THE SHAREHOLDERS OF AMERICAN MAIZE. THE
BOARD OF DIRECTORS HAS APPROVED THE OFFER AND THE MERGER AGREEMENT AND
RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER AND TENDER ALL THEIR SHARES
PURSUANT TO THE OFFER.
In arriving at its recommendation, your Board of Directors gave careful
consideration to a number of factors described in the enclosed
Solicitation/Recommendation Statement on Schedule 14D-9, including the opinion
of CS First Boston Corporation that the consideration to be received by the
Company's shareholders in the Offer and the Merger is fair, from a financial
point of view, to such shareholders. The Schedule 14D-9 contains other important
information relating to the Offer, and you are encouraged to read the Schedule
14D-9 carefully.
Accompanying this letter is the Offer to Purchase of Eridania, dated
February 28, 1995, together with related materials including the Letter of
Transmittal to be used for tendering your shares. These documents set forth the
terms and conditions of the Offer and provide instructions as to how to tender
your shares. We urge you to read the enclosed material carefully before making
your decision with respect to tendering your shares.
Sincerely,
Patric J. McLaughlin
President and Chief Executive Officer
<PAGE> 1
Exhibit 13
(LOGO)
CS First Boston Corporation 55 East 52nd Street
New York, NY 10055-0186
Telephone 212 909 2000
February 22, 1995
Board of Directors
American Maize-Products Company
250 Harbor Drive
Stamford, CT 06904
Dear Sirs:
You have asked us to advise you with respect to the fairness to the
stockholders of American Maize-Products Company (the "Company") from a financial
point of view of the consideration to be received by such stockholders pursuant
to the terms of the Agreement and Plan of Merger, dated as of February 22, 1995
(the "Merger Agreement"), among the Company, Eridania Beghin-Say, S.A. (the
"Acquiror") and Cerestar USA, Inc. (the "Sub"). The Merger Agreement provides
for the Sub to make a tender offer at $40.00 per share in cash for the Class A
common stock, par value $0.80 per share (the "Class A Common Stock"), of the
Company and the Class B common stock, par value $0.80 per share (the "Class B
Common Stock"), of the Company (the "Offer"). The Offer will be followed by the
merger (the "Merger") of the Company with the Sub pursuant to which the Company
will become a wholly owned subsidiary of the Acquiror and each outstanding share
of Class A Common Stock and Class B Common Stock not owned by the Sub will be
converted into the right to receive $40.00 in cash.
In arriving at our opinion, we have reviewed certain publicly available
business and financial information relating to the Company and the Merger
Agreement. We have also reviewed certain other information, including financial
forecasts, provided to us by the Company and have met with the Company's
management to discuss the business and prospects of the Company.
We have also considered certain financial and stock market data of the
Company, and we have compared that data with similar data for other publicly
held companies in businesses similar to those of the Company and we have
considered the financial terms of certain other business combinations and other
transactions which have recently been effected. We also considered such other
information, financial studies, analyses and investigations and financial,
economic and market criteria which we deemed relevant. With respect to
outstanding patent and environmental litigation involving the Company for which
significant damages are alleged, we have relied solely upon the judgment of the
management of the Company and its counsel in such matters that the outcome of
the litigation will not have a material adverse affect on the financial
condition of the Company. Our opinion does not address the Company's underlying
business decision to enter into the Merger Agreement.
In connection with our review, we have not assumed any responsibility for
independent verification of any of the foregoing information and have relied on
its being complete and accurate in all material respects. With respect to the
financial forecasts, we have assumed that they have been reasonably prepared on
bases reflecting
<PAGE> 2
(LOGO)
Board of Directors
American Maize-Products Company
February 22, 1995
Page 2
the best currently available estimates and judgments of the Company's management
as to the future financial performance of the Company. In addition, we have not
made an independent evaluation or appraisal of the assets or liabilities
(contingent or otherwise) of the Company, nor have we been furnished with any
such evaluations or appraisals. Our opinion is necessarily based upon financial,
economic, market and other conditions as they exist and can be evaluated on the
date hereof. In connection with our engagement, we approached third parties to
solicit indications of interest in a possible acquisition of the Company and
held preliminary discussions with certain of these parties prior to the date
hereof.
We have acted as financial advisor to the Company and the Board of
Directors in connection with the Merger and will receive a fee for our services,
a significant portion of which is contingent upon the consummation of the
Merger. We will also receive a fee for rendering this opinion.
In the past, we have performed certain investment banking services for the
Company and have received customary fees for such services. In addition, we have
performed certain investment banking services for the Acquiror, including the
placement in August 1994 of $164 million of notes, and have received customary
fees for such services.
In the ordinary course of our business, CS First Boston and its affiliates
may actively trade the debt and equity securities of both the Company and the
Acquiror for their own account and for the accounts of customers and,
accordingly, may at any time hold a long or short position in such securities.
It is understood that this letter is for the information of the Company and
the Board of Directors only. This letter does not constitute a recommendation to
any stockholder as to how such stockholder should vote on the proposed Merger or
whether or not such stockholder should tender shares pursuant to the Offer and
is not to be quoted or referred to, in whole or in part, in any registration
statement, prospectus or proxy statement, or in any other document used in
connection with the offering or sale of securities, nor shall this letter be
used for any other purposes, without CS First Boston's prior written consent.
Based upon and subject to the foregoing, it is our opinion that, as of the
date hereof, the consideration to be received by the stockholders of the Company
in the Offer and the Merger is fair to such stockholders from a financial point
of view.
Very truly yours,
CS FIRST BOSTON CORPORATION
<PAGE> 1
Exhibit 14
Press Release of American Maize-Products Company
Stamford, Conn., February 22, 1995 -- American Maize-Products Company (ASE-AZE)
announced today that it has entered into a definitive merger agreement providing
for the acquisition of American Maize by Eridania Beghin-Say, S.A. The
agreement, which was approved by the American Maize Board of Directors, provides
that EBS will commence a tender offer for all outstanding shares of common stock
of American Maize at a purchase price of $40 per share. Following the successful
completion of the tender offer, a subsidiary of EBS will merge with American
Maize and each remaining share of American Maize will be converted into the
right to receive $40. The American Maize Board is recommending that American
Maize's stockholders accept the offer and approve the merger.
In connection with the merger agreement, the parties entered into a stock
purchase agreement, pursuant to which EBS will purchase, at a price of $40 per
share, all authorized but unissued shares of Class B common stock of American
Maize (an aggregate of 757,943 shares) which remain available for purchase
following the exercise by holders of the Class B common stock of preemptive
rights. In this connection, American Maize intends to distribute rights to its
Class B stockholders which will entitle such stockholders to purchase, at $40
per share, their proportionate share of the Class B stock available for purchase
by EBS.
The tender offer is subject to a number of conditions including, among others,
the receipt by EBS of a number of American Maize shares following the tender
offer which, together with the shares that EBS is then obligated to purchase
under the stock purchase agreement, constitutes a majority of the outstanding
shares of each class of American Maize stock. The stock purchase agreement is
conditioned upon, among other things, the completion of the tender offer and the
preemptive rights offering.
American Maize stated that it had been advised by William Ziegler, III, Chairman
of the Board, that he and GIH Corp., a Delaware corporation that Mr. Ziegler
claims to control, have commenced litigation in Superior Court, Cumberland
County, Maine seeking injuctive relief against the merger agreement and the
stock purchase agreement. The complaint names as defendants the remaining
members of the company's Board of Directors and asserts they wrongfully approved
the merger agreement and stock purchase agreement and states that a "break-up"
fee payable to EBS under certain
<PAGE> 2
conditions is illegal. The complaint also alleges that the Board wrongfully
approved certain severance contracts for its employees. The company believes
this litigation is without merit and intends to vigorously defend it.
American Maize, based in Stamford, Connecticut, produces corn sweeteners and a
variety of specialty food and industrial starches at plants in Hammond, Indiana,
Decatur, Alabama and Dimmitt, Texas. The Company also produces cigars and
smokeless tobacco products at plants located in Jacksonville, Florida and
Wheeling, West Virginia.
2
