SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 10, 1995
AMP Incorporated
(Exact name of registrant as specified in its charter)
Pennsylvania 1-4235 23-0332575
(State of Incorporation) (Commission (IRS Employer
File Number) Identification Number)
PO Box 3608 17105-3608
Harrisburg, Pennsylvania (Zip Code)
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (717) 564-0100
ITEM 5. Other Events.
On March 10, 1995, AMP Incorporated, a Pennsylvania corporation
(the "Company"), and M/A-Com, Inc., a Massachusetts corporation ("M/A-
Com"), jointly announced in a press release that they had entered into
an Agreement and Plan of Merger (the "Merger Agreement") pursuant to
which a wholly-owned subsidiary of the Company will, subject to the
satisfaction of certain conditions, merge with and into M/A-Com, and
M/A-Com will survive as a wholly-owned subsidiary of the Company.
Upon the effectiveness of the merger, holders of shares of common
stock of M/A-Com will receive shares of common stock of the Company at
an exchange rate of .28 shares of common stock of the Company for each
share of common stock of M/A-Com. Based on the March 8, 1995 closing
price of 37 5/8 for common stock of the Company, the acquisition was
valued at approximately $308.7 Million.
The parties to the Merger Agreement intend that the merger will
be tax free to the shareholders of M/A-Com and treated as a pooling of
interests for accounting purposes.
The Merger Agreement and the press release are attached as
Exhibits 99.A and 99.B hereto, respectively, and are incorporated
herein by reference.
ITEM 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits
99.A Agreement and Plan of Merger dated March 10, 1995 among
AMP Incorporated, AMP Merger Corp. and M/A-Com, Inc.
99.B Press release issued by AMP Incorporated and M/A-Com, Inc. on
March 10, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this current report to be signed
on its behalf by the undersigned hereunto duly authorized.
AMP Incorporated
By: /s/ J. E. Marley
-------------------------
James E. Marley,
Chairman of the Board
Date: March 20, 1995
EXHIBIT INDEX
Exhibit Number Description Page
99.A Agreement and Plan of Merger dated March 10,
1995 among AMP Incorporated, AMP Merger Corp.
and M/A-Com, Inc.
99.B Press release issued by AMP Incorporated and
M/A-Com, Inc. on March 10, 1995
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
DATED MARCH 10, 1995
AMONG
AMP INCORPORATED
AMP MERGER CORP.
AND
M/A-COM, INC.
TABLE OF CONTENTS Page
ARTICLE I THE MERGER 2
1.1 The Merger 2
1.2 Consummation of the Merger 2
1.3 Effects of the Merger 2
1.4 Articles of Organization; Bylaws 2
1.5 Directors and Officers 2
1.6 Time and Place of Closing 2
ARTICLE II CONVERSION AND EXCHANGE OF SHARES 3
2.1 Conversion of Shares 3
2.2 Exchange Procedures 5
2.3 Dividends and Distributions 7
2.4 No Fractional Securities 7
2.5 Adjustment of Exchange Rate 8
2.6 Transfers Following the Effective Time 8
ARTICLE III REPRESENTATIONS AND WARRANTIES 8
3.1 General Statement 8
3.2 Representations and Warranties of Parent
and Merger Sub 8
3.3 Representations and Warranties of the
Company 16
ARTICLE IV CONDUCT OF BUSINESS PENDING THE MERGER 23
4.1 Obligations of Each of the Parties 23
4.2 The Company's Obligations 24
4.3 Parent's Obligations 28
ARTICLE V ADDITIONAL AGREEMENTS 29
5.1 Registration Statement; Proxy Statement;
Auditors' Letters; Other Regulatory
Matters 29
5.2 Alternative Proposals 31
5.3 Indemnification and Insurance 32
5.4 Certain Benefits 35
5.5 Pooling; Reorganization 37
5.6 Rights Agreement 37
ARTICLE VI CONDITIONS TO CLOSING; CLOSING DELIVERIES 37
6.1 Conditions to Each Party's Obligations 37
6.2 Conditions to the Company's Obligations 38
6.3 Conditions to Parent's Obligations 40
6.4 Closing Deliveries. 42
ARTICLE VII TERMINATION/EFFECT OF TERMINATION 42
7.1 Right to Terminate 42
7.2 Certain Effects of Termination 44
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ARTICLE VIII MISCELLANEOUS 44
8.1 Non Survival of Representations,
Warranties and Agreements 44
8.2 Amendment 45
8.3 Publicity 45
8.4 Notices 45
8.5 Expenses; Transfer Taxes; Certain Payments 46
8.6 Entire Agreement; Representations and
Warranties 47
8.7 Extension; Waiver 47
8.8 Counterparts 48
8.9 Severability 48
8.10 Applicable Law 48
8.11 Binding Effect; Benefit 48
8.12 Assignability 48
8.13 Governmental Reporting 48
8.14 Consent to Jurisdiction 49
8.15 Definitions 49
8.16 Headings 50
8.17 Interpretation 50
(ii)
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER ("Agreement") is made and
entered into on March 10, 1995 among AMP INCORPORATED, a Pennsylvania
corporation ("Parent"), AMP MERGER CORP., a Massachusetts corporation
and a wholly-owned subsidiary of Parent ("Merger Sub"), and M/A-COM,
INC., a Massachusetts corporation (the "Company").
R E C I T A L S
A. The Company and its subsidiaries are a supplier to the
wireless telecommunications, surveillance and the defense-related
industries of radio frequency, microwave and millimeter wave
semiconductors, components and subsystems, utilizing advanced circuit
and semiconductor technologies, for systems applications in wireless
communications, sensor systems, radar, navigation, missile guidance,
electronic warfare and surveillance in air, ground, sea and space
environments.
B. The respective boards of directors of Parent, Merger Sub and
the Company, and Parent as the sole stockholder of Merger Sub, have
approved the merger of Merger Sub with and into the Company (the
"Merger") on the terms and subject to the conditions set forth in this
Agreement and in accordance with the Massachusetts Business
Corporation Law (the "MBCL").
C. Merger Sub and the Company intend that the Merger will be
treated as a tax free reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"),
that this Agreement shall constitute a plan of reorganization for the
purposes of Section 368 of the Code and that the Merger will be
treated as a pooling of interests in accordance with Accounting
Principles Board Opinion No. 16.
D. It is the understanding of all the parties hereto that
Parent seeks, as a result of the Merger, to acquire the Company, its
subsidiaries and all of their respective assets and liabilities,
subject to the terms and conditions of this Agreement.
A G R E E M E N T S
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as
follows:
ARTICLE I
THE MERGER
1.1 The Merger. On the terms and subject to the conditions set forth
in this Agreement, at the Effective Time (as herein defined), in
accordance with this Agreement and the MBCL, Merger Sub shall merge
with and into the Company, the separate existence of Merger Sub shall
cease and the Company shall continue as the surviving corporation.
The Company, in its capacity as the corporation surviving the Merger,
is sometimes referred to herein as the "Surviving Corporation".
1.2 Consummation of the Merger. In order to effectuate the Merger,
on the Closing Date (as herein defined), the parties hereto shall
cause articles of merger (the "Articles of Merger") to be filed with
the Secretary of State of the Commonwealth of Massachusetts, in such
form as required by, and executed in accordance with, Section 78 of
the MBCL. The Merger shall be effective as of the time of filing of
the Articles of Merger (the "Effective Time").
1.3 Effects of the Merger. At and after the Effective Time, the
Merger shall have the effects provided for in this Agreement and as
set forth in Section 80 of the MBCL.
1.4 Articles of Organization; Bylaws. Without limiting the
obligations of Parent or the Surviving Corporation under Section 5.3
hereof, at and after the Effective Time, the Articles of Organization
and By-Laws of Merger Sub, as in effect immediately prior to the
Effective Time, shall be the Articles of Organization and By-Laws of
the Surviving Corporation, and shall thereafter continue in effect
until amended as provided therein and in accordance with the MBCL.
1.5 Directors and Officers. At and after the Effective Time, the
directors and officers of Merger Sub holding office immediately prior
to the Effective Time shall be the directors and officers of the
Surviving Corporation, until their respective successors shall have
been duly elected or appointed and qualified or until their earlier
death, resignation or removal in accordance with the Articles of
Organization and By-Laws of the Surviving Corporation.
1.6 Time and Place of Closing. Subject to the provisions of Articles
VI and VII hereof, the transaction contemplated by this Agreement
shall be consummated (the "Closing") at 10:00 a.m., prevailing
business time, at the offices of Skadden, Arps, Slate, Meagher & Flom,
One Beacon Street, Boston, Massachusetts 02108, on the day which is
two (2) business days after the first date on which each of the
conditions to Closing set forth in Section 6.1 hereof shall have been
satisfied or waived, or on
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such other date, or at such other place, as shall be agreed upon by the
parties hereto. The date on which the Closing shall occur in accordance
with the preceding sentence is referred to in this Agreement as the "Closing
Date".
ARTICLE II
CONVERSION AND EXCHANGE OF SHARES
2.1 Conversion of Shares. As of the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any shares
of common stock, par value $1.00 per share, of the Company (the
"Company Common") or the holder of any shares of common stock, par
value $1.00 per share, of Merger Sub ("Merger Sub Common"):
(a) each share of Merger Sub Common issued and outstanding
immediately prior to the Effective Time shall be converted into one
(1) share of Company Common;
(b) all shares of Company Common that are owned by the Company as
treasury stock and any shares of Company Common owned by Parent,
Merger Sub or any other subsidiary of Parent shall be cancelled and
retired and shall cease to exist and no stock of Parent or other
consideration shall be delivered in exchange therefor;
(c) subject to the provisions of Sections 2.4 and 2.5 hereof, each
share of Company Common issued and outstanding immediately prior to
the Effective Time (including, without limitation, shares of
restricted stock issued to employees and former employees of the
Company and the Company Subsidiaries, as defined herein) shall be
converted into the right to receive (together with any dividends and
other distributions payable as provided in Section 2.3 hereof) twenty-
eight one hundredths (0.28) of one (1) share (the "Exchange Rate") of
fully paid and nonassessable shares of common stock, no par value per
share, of Parent ("Parent Common"), together with any Parent Rights
(as defined herein) attached thereto (together with the Parent Common,
the "Merger Consideration"). All such shares of Company Common, when
so converted, shall no longer be outstanding and shall automatically
be cancelled and retired and shall cease to exist, and each holder of
a certificate representing any such shares shall cease to have any
rights with respect thereto, except the right to receive the shares of
Parent Common and any cash in lieu of fractional shares as provided in
Section 2.4 hereof, together with any dividends and other
distributions payable as provided in Section 2.3 hereof, all to be
issued or paid in consideration for such certificate upon the surrender
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thereof in accordance with Section 2.2. "Parent Rights"
means (i) the rights attached to each share of Parent Common pursuant
to the Shareholder Rights Plan adopted by Parent's Board of Directors
on October 25, 1989, and the Amendment Rights Agreement dated
September 4, 1992, between Parent and Chemical Bank and (ii) any other
rights which may become attached to shares of Parent Common on the
date hereof or subsequent hereto;
(d) notwithstanding Section 2.1(c), each share of Company Common
outstanding immediately prior to the Effective Time and which is held
by stockholders who have complied with the procedure for appraisal set
forth in the MBCL ("Dissenting Stock") shall not be converted into or
represent a right to receive the Merger Consideration in respect of
such shares unless and until the holder thereof shall have failed to perfect,
or shall have lost, his or her right to, or withdrawn his or her demand for,
appraisal of and payment for his or her shares of Company Common under the
MBCL, at which time his or her shares of Company Common shall be converted
into the right to receive the Merger Consideration in respect of such shares.
The Company shall give Parent prompt notice upon receipt by the Company of any
written demands for appraisal rights, withdrawal of such demands, and any
other written communications delivered to the Company pursuant to the
MBCL; and
(e) all options (individually, a "Company Option" and collectively, the
"Company Options") outstanding at the Effective Time under the M/A-COM
Long Term Incentive Plan, the M/A-COM 1983 Stock Option and
Performance Incentive Stock Option Plan, the M/A-COM 1981 Stock Option
and Performance Incentive Stock Option Plan, the M/A-COM 1980 Stock
Option and Performance Incentive Stock Option Plan and the Stock
Option Plan and Agreement with Thomas A. Vanderslice, as corrected and
restated as of September 11, 1991 (all as amended through the
Effective Time and collectively, the "Company Stock Option Plans")
shall remain outstanding following the Effective Time for the
remainder of their terms and in accordance with the terms of the
respective Company Stock Option Plans. At the Effective Time, such
Company Options (as amended or adjusted as a result of the Merger in
accordance with the applicable Company Stock Option Plan) shall, by
virtue of the Merger and without any further action on the part of
Company or the holder of any such Company Options, become fully vested
and exercisable (to the extent not already fully vested and
exercisable) pursuant to (and only pursuant to) their terms and in
accordance with the terms of the respective Company Stock Option Plans
and shall be assumed by Parent. From and after the Effective Time,
each Company Option assumed by Parent shall be exercisable (i) for
that whole number of
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shares of Parent Common (rounded up to the nearest whole share) into which
the number of shares of Company Common subject to such Company Option
immediately prior to the Effective Time would be converted under this Section
2.1 and (ii) at an option price per share of Parent Common equal to the
option price per share of Company Common subject to such Company Option in
effect immediately prior to the Effective Time divided by the Exchange Rate
(the option price per share, as so determined, being rounded upward to the
nearest full cent). From and after the date of this Agreement, no additional
options shall be granted by the Company or the Company Subsidiaries
under the Company Stock Option Plans or otherwise.
2.2 Exchange Procedures.
(a) Immediately prior to the Effective Time, Parent shall deposit
with an exchange agent (the "Exchange Agent"), to be mutually
acceptable to Parent and the Company, in trust for the holders of
record of Company Common immediately prior to the Effective Time (the
"Company Stockholders") certificates representing the aggregate shares
of Parent Common issuable pursuant to Section 2.1(a) hereof in
exchange for the total outstanding shares of Company Common
immediately prior to the Effective Time. From time to time Parent
shall make available to the Exchange Agent sufficient cash to make all
cash payments in lieu of fractional shares pursuant to Section 2.4
hereof. All deposits with the Exchange Agent pursuant to this Section
2.2 together with any dividends or distributions with respect to
shares of Parent Common as contemplated by Section 2.3 are referred to
as the "Exchange Fund". The Exchange Fund shall not be used for any
purpose except as provided in this Agreement.
(b) As soon as practicable after the Effective Time, Parent and the
Surviving Corporation shall cause the Exchange Agent to mail to each
Company Stockholder a letter of transmittal and instructions for use
in effecting the surrender of certificates representing shares of
Company Common outstanding immediately prior to the Effective Time
("Certificates") in appropriate and customary form with such
provisions as the Company and Parent may reasonably specify. Upon
surrender of a Certificate for cancellation to the Exchange Agent,
together with such letter of transmittal, duly and properly executed,
the holder of such Certificate shall be entitled to receive in
exchange therefor a certificate representing that number of whole
shares of Parent Common (together with any Parent Rights attached
thereto) which such holder has a right to receive pursuant to the provisions
of this Article II, together with any dividends and other distributions
payable as provided in
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Section 2.3 hereof, but subject to the payment of cash in lieu of fractional
shares as provided in Section 2.4 hereof, and the Certificate so surrendered
shall be cancelled. Until surrendered as contemplated by this Section 2.2,
each Certificate shall, at and after the Effective Time, be deemed to
represent only the right to receive, upon surrender of such
Certificate, the Merger Consideration with respect to the shares of
Company Common represented thereby, together with any dividends and
other distributions payable as provided in Section 2.3 hereof, but
subject to the payment of cash in lieu of fractional shares as
provided in Section 2.4 hereof. Shares of Parent Common issued in the
Merger shall be issued as of and be deemed to be outstanding as of the
Effective Time. Parent shall cause all such shares of Parent Common
issued pursuant to the Merger to be duly authorized, validly issued,
fully paid and nonassessable and not subject to preemptive rights.
(c) If any certificate representing shares of Parent Common is to be
issued in a name other than that in which the Certificate surrendered
in exchange therefor is registered or any payment in lieu of
fractional shares pursuant to Section 2.4 hereof is to be paid other
than to the registered holder of the Certificate so surrendered, it
shall be a condition of such exchange and/or payment, as the case may
be, that the Certificate so surrendered shall be properly endorsed and
otherwise in proper form for transfer and that the person requesting
such exchange and/or payment, as the case may be, shall pay any
transfer or other taxes required by reason of the issuance of
certificates for such shares of Parent Common in a name other than
that of, and/or payment to a person other than, as the case may be,
the registered holder of the Certificate so surrendered.
(d) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and upon the
posting by such person of a bond in such amount as Parent or the
Surviving Corporation may reasonably direct as indemnity against any
claim that may be made against it with respect to such Certificate, the
Exchange Agent will issue in respect of such lost, stolen or
destroyed Certificate the Merger Consideration with respect to the
shares of Company Common represented thereby (subject to the payment
of cash in lieu of fractional shares in accordance with Section 2.4
hereof) and such person shall be entitled to the dividend and other
distribution rights provided in Section 2.3 hereof.
(e) Any portion of the Exchange Fund which remains unclaimed by the
Company Stockholders for one (1) year after the Effective Time shall
be delivered to Parent, upon demand
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of Parent, and the Company Stockholders shall thereafter look only to Parent
for payment of their claim for the Merger Consideration in respect of their
shares of Company Common (and cash in lieu of fractional shares and dividends
or distributions with respect to Parent Common as contemplated by Section
2.3). Neither the Company nor Parent shall be liable to any Company
Stockholder for any such Merger Consideration or cash properly
delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.
(f) Parent or the Exchange Agent shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this
Agreement to any holder of a Certificate surrendered for the Merger
Consideration (and cash in lieu of fractional shares and dividends or
distributions with respect to Parent Common as contemplated by Section
2.3) such amount as Parent or the Exchange Agent is required to deduct
and withhold with respect to the making of such payment under the
Code, or any provision of any state, local or foreign tax law. To the
extent that amounts are so deducted and withheld, such amounts shall
be treated for all purposes of this Agreement as having been paid to
the holder of such Certificate.
2.3 Dividends and Distributions. No dividends or other distributions
declared or made with respect to Parent Common with a record date on
or after the date of the Effective Time will be paid to the holder of
a Certificate entitled by reason of the Merger to receive certificates
representing Parent Common until such holder surrenders such
Certificate as provided in Section 2.2 hereof, provided that there
shall be paid forthwith by Parent to the person in whose name certificates
representing shares of Parent Common shall be issued pursuant to the terms
of this Article II (a) at the time of surrender of such Certificate, the
amount of any dividends and other distributions theretofore paid with respect
to that number of whole shares of such Parent Common represented by such
surrendered Certificate pursuant to the terms of this Article II, which
dividends or other distributions had a record date on or after the date of
Effective Time and a payment date prior to such surrender and (b) at
the appropriate payment date, the amount of dividends and other
distributions payable with respect to that number of whole shares of
Parent Common represented by such surrendered Certificate pursuant to
the terms of this Article II, which dividends or other distributions
have a record date on or after the date of Effective Time and a
payment date subsequent to such surrender.
2.4 No Fractional Securities. Notwithstanding any other provision of
this Agreement to the contrary, no certificates or scrip representing
fractional shares of Parent Common shall be issued upon the surrender
for exchange of a Certificate pursuant
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to Section 2.2 hereof and no Parent dividend or other distribution or stock
split shall relate to any fractional shares of Parent Common, and such
fractional interests shall not entitle the owner thereof to vote or to any
rights of a stockholder of Parent. In lieu of any such fractional shares,
each holder of a Certificate who would otherwise have been entitled to a
fraction of a share of Parent Common upon surrender of such
Certificates for exchange pursuant to Section 2.2 hereof will be paid
an amount in cash (without interest) equal to such fraction of a share
multiplied by the Final Parent Stock Price (as herein defined). For
the purposes of the preceding sentence, the "Final Parent Stock Price"
shall mean the average of the per share closing prices on the NYSE (as
herein defined) of Parent Common as reported in the NYSE Composite
Transactions during the twenty consecutive trading days ending on the
fifth business day prior to the Closing Date as reported in the Wall
Street Journal.
2.5 Adjustment of Exchange Rate. In the event of any
reclassification, stock split (including a reverse split), stock
dividend or other general distribution of securities, cash or other
property (other than a cash dividend at an annual rate not to exceed
$.92 per share) with respect to Parent Common (or if a record date
with respect to any of the foregoing should occur) on or after the date of
this Agreement and on or prior to the date of the Effective Time, appropriate
and equitable adjustments, if any, shall be made to the Exchange Rate.
2.6 Transfers Following the Effective Time. The stock transfer books
of the Company shall be closed as of the Effective Time, and
thereafter there shall be no further registrations of transfers of
shares of Company Common that were outstanding prior to the Effective
Time.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 General Statement. The parties make the representations and
warranties to each other which are set forth in this Article III.
None of such representations and warranties shall survive the
Effective Time. All representations and warranties of the Company are
made subject to the exceptions noted in the schedule delivered by the
Company to Parent concurrently herewith and identified by the parties
as the "Company Disclosure Schedule".
3.2 Representations and Warranties of Parent and Merger Sub. Parent
and Merger Sub jointly and severally represent and warrant to the
Company that:
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(a) Parent is a corporation duly organized, validly existing and in
good standing under the laws of the Commonwealth of Pennsylvania.
Merger Sub is a wholly-owned subsidiary of Parent and a corporation
duly organized, validly existing and in good standing under the laws
of the Commonwealth of Massachusetts.
(b) Parent (i) has all requisite corporate power and authority to
own, lease and operate its properties and carry on its business as now
being conducted and (ii) is duly qualified and in good standing to do
business in each jurisdiction in which the nature of its business or
the nature or location of its assets require such qualification and
where the failure to be so qualified and in good standing would have a
Material Adverse Effect on Parent. For purposes of this Agreement, "Material
Adverse Effect" means, with respect to Parent, a materially adverse effect on
the business, results of operation, financial condition, properties or assets
of Parent and its subsidiaries (including Merger Sub) (each such corporation,
partnership or other entity being referred to herein individually as a
"Parent Subsidiary" and collectively, as the "Parent Subsidiaries"), taken as
a whole. Merger Sub was formed solely for the purpose of engaging in the
transaction contemplated by this Agreement and has not engaged in any
activities other than in connection with or as contemplated by this
Agreement.
(c) Each of Parent and Merger Sub has all necessary corporate power
and authority to enter into this Agreement and to consummate the
transaction contemplated hereby. The execution and delivery of this
Agreement by Parent and Merger Sub and the performance by Parent and
Merger Sub of their respective obligations hereunder have been duly
authorized and approved by all requisite corporate action and no other
corporate proceedings on the part of Parent or Merger Sub are
necessary to authorize this Agreement or for Parent and Merger Sub to
consummate the Merger. This Agreement has been duly executed and
delivered by duly authorized officers of Parent and Merger Sub and
constitutes a valid and binding obligation of each of Parent and
Merger Sub, enforceable against Parent and Merger Sub in accordance
with its terms.
(d) No consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or
commission or other governmental authority or instrumentality, (each
of the foregoing being a "Governmental Entity"), is required by or
with respect to Parent or Merger Sub in connection with the execution
and delivery of this Agreement by Parent or Merger Sub or the
consummation by Parent or Merger Sub of the transaction
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contemplated hereby, except for (i) the filing of the Articles of Merger with
the Secretary of State of the Commonwealth of Massachusetts and
appropriate documents with the relevant authorities of other states in
which the Company is qualified to do business, (ii) notices under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and the expiration (or earlier termination) of all applicable waiting
periods thereunder, (iii) consents of foreign governments having
jurisdiction, (iv) the filing with the Securities and Exchange Commission
(the "SEC") of a registration statement on Form S-4 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the Parent Common to be offered to the Company
Stockholders and the declaration of effectiveness of the Registration
Statement and (v) the filings necessary to obtain all state securities law
or "Blue Sky" permits or approvals required to carry out the transaction
contemplated by this Agreement (collectively, the "Regulatory Approvals").
(e) Neither the execution and delivery of this Agreement by Parent
and Merger Sub, nor the consummation by Parent and Merger Sub of the
transaction contemplated hereby, will (i) conflict with or result in a
breach of any of the terms or provisions of Parent's or Merger Sub's
Articles of Incorporation or Organization or By-Laws, (ii) violate any
statute or administrative regulation, or any order, writ, injunction,
judgment or decree of any court or governmental authority or any
arbitration award to which Parent or Merger Sub is a party or by which
Parent or Merger Sub is bound, or (iii) violate, conflict with,
breach, constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or result
in the creation of any lien or other encumbrance upon any of the
properties or assets of Parent or Merger Sub under, any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Parent or Merger Sub is a party or
to which they or any of their respective properties or assets are
subject, except in the case of clauses (ii) and (iii) for such
violations, conflicts, breaches, defaults, terminations, accelerations
or creations of liens or other encumbrances that do not and will not,
individually or in the aggregate, (x) have a Material Adverse Effect
on Parent or (y) materially impair the ability of Parent or Merger Sub
to perform their respective obligations under this Agreement.
(f) As of the date hereof, the authorized capital stock of Parent
consists solely of Parent Common. As of March 1, 1995, 700,000,000
shares of Parent Common were
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authorized, 209,650,332 shares of Parent Common were issued and outstanding
and 14,989,668 shares of Parent Common were issued but not outstanding and
held in Parent's treasury. As of the date hereof, the authorized capital
stock of Merger Sub consists of 10,000 shares of Merger Sub Common. As of
March 8, 1995, there were 1,000 shares of Merger Sub Common issued and
outstanding. There are no other shares of capital stock of Parent or Merger
Sub authorized, issued or outstanding. All of the issued and outstanding
shares of Parent Common and Merger Sub Common have been duly
authorized, validly issued and are fully paid and nonassessable.
Except as disclosed in Parent's SEC Documents (as herein defined),
there are no subscriptions, options, warrants, rights (including
preemptive rights), calls, convertible securities or other agreements
or commitments of any character relating to the issued or unissued
capital stock or other securities of either Parent or Merger Sub
obligating Parent or Merger Sub, as the case may be, to issue any
securities of any kind.
(g) Parent has timely filed (and has delivered to the Company a true
and complete copy of) each report, schedule, registration statement
and definitive proxy statement required to be filed by Parent with the
SEC since January 1, 1993 (such documents are referred to herein as
"Parent's SEC Documents"). As of their respective dates, Parent's SEC
Documents comply in all material respects with the requirements of the
Securities Act or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as the case may be, and the applicable rules and
regulations of the SEC thereunder, and none of Parent's SEC Documents,
as of their respective dates, 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 therein, in light of the
circumstances under which they were made, not misleading. The
financial statements of Parent included in Parent's SEC Documents
comply, as of their respective dates, in all material respects with
all applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles ("GAAP")
consistently applied (except as may be indicated in the notes thereto
or, in the case of unaudited statements, as permitted by Form 10-Q of
the SEC) and fairly present in all material respects the consolidated
financial position of Parent as at the dates thereof and the
consolidated results of its operations, cash flows and changes in
financial position for the periods indicated therein.
(h) Except as disclosed in Parent's SEC Documents filed prior to the
date of this Agreement and furnished to
11
the Company, Parent and the Parent Subsidiaries do not have any liabilities
or obligations of any nature (whether accrued, absolute, contingent or
otherwise) other than liabilities or obligations (i) which were incurred
after September 30, 1994 in the ordinary course of business or (ii) which
would not, individually or in the aggregate, have a Material Adverse Effect
on Parent.
(i) Except as disclosed in Parent's SEC Documents filed prior to the
date of this Agreement and furnished to the Company, since September
30, 1994: (i) Parent has not suffered or, to Parent's knowledge, been
threatened with any change (other than changes generally affecting the
industries in which Parent or any Parent Subsidiary operates or
changes relating to the transactions contemplated by this Agreement)
having a Material Adverse Effect; and (ii) Parent and the Parent
Subsidiaries have operated only in the ordinary course of business
consistent with past practice.
(j) (i) As used in this Agreement, the term (A) "Taxes" means all
federal, state, local, foreign and other income, sales, use, ad
valorem, transfer, franchise, withholding, payroll, employment, gross
receipts, property, severance, duties, net worth, excise or other
taxes, charges, levies or like assessments of any kind, together with
any interest, penalties and additions with respect thereto, and the
term "Tax" means any one of the foregoing Taxes, and (B) "Returns"
means all returns, declarations, reports, statements and other
documents required to be filed in respect of Taxes, and the term
"Return" means any one of the foregoing Returns.
(ii) There have been properly completed and
filed on a timely basis all Returns required to be filed by Parent or
a Parent Subsidiary in each case where the failure to properly
complete or file any Return would have a Material Adverse Effect on
Parent. As of the time of filing, the foregoing Returns correctly
reflected the facts regarding the income, business, assets,
operations, activities, status or other matters of Parent or, as
applicable, a Parent Subsidiary or any other information required to
be shown thereon, in each case where the failure to do so would have a
Material Adverse Effect on Parent.
(iii) With respect to all amounts in respect of
Taxes imposed upon Parent or any Parent Subsidiary, or for which
Parent or any Parent Subsidiary is liable to taxing authorities, with
respect to all taxable periods or portions of periods
12
ending on or before the date hereof, all applicable Tax laws have been
complied with where the failure to comply with such laws would have a
Material Adverse Effect on Parent, and all amounts that are required to have
been paid by Parent to taxing authorities on or before the date hereof
have been paid where the failure to pay such amounts would have a
Material Adverse Effect on Parent.
(iv) No issues have been raised or are currently
pending by any tax authority in connection with any of the Returns
which, if resolved adversely to Parent and the Parent Subsidiaries,
would have a Material Adverse Effect on Parent. There are no material
outstanding waivers of the applicable statutes of limitation with
respect to Tax liabilities of Parent or any Parent Subsidiary.
(v) The unpaid Taxes of Parent and the Parent
Subsidiaries do not exceed the reserve for tax liability (excluding
any reserve for deferred Taxes) included in the financial statements included
in the Form 10-Q of Parent dated September 30, 1994 by an amount which would
have a Material Adverse Effect on Parent.
(k) Since the last filing of Parent's SEC Documents, there have been
no changes to, including termination of, the employee benefit plans
(as defined in Section 3(2) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")) Parent and the Parent Subsidiaries
maintain, administer or contribute to for the benefit of employees or
former employees of Parent and the Parent Subsidiaries which changes
would have a Material Adverse Effect on Parent.
(l) There is no litigation or proceeding, in law or in equity, and
there are no proceedings or governmental investigations before any
commission or other administrative authority, pending or, to Parent's
knowledge, threatened against Parent or any Parent Subsidiary with
respect to or affecting Parent's or any Parent Subsidiary's
operations, business or financial condition which has a reasonable
probability of being decided adversely to Parent or any Parent
Subsidiary and which, if so decided adversely would have a Material
Adverse Effect on Parent.
(m) Neither Parent nor any Parent Subsidiary is a party to, or bound
by, any judgment, writ, injunction, decree, order or arbitration award
(or agreement entered into in any administrative, judicial or
arbitration proceeding with any governmental authority) with respect
to or affecting the properties, assets, personnel or business
13
activities of Parent or any subsidiary of Parent, the enforcement or
operation of which or compliance with which would have a Material
Adverse Effect on Parent.
(n) Except with respect to Environmental Laws (as defined and which
are addressed in Section 3.2(o)), neither Parent nor any Parent
Subsidiary is in violation of, noncompliance with, or delinquent in
respect to, any judgment, writ, injunction, decree, order or
arbitration award or law, statute, or regulation of or agreement with,
or any permit from, any Governmental Entity to which the property,
assets, personnel or business activities of Parent or any Parent Subsidiary
are subject, which violation, noncompliance or delinquency would have a
Material Adverse Effect on Parent.
(o) (i) Except for noncompliances or liabilities that would not have
a Material Adverse Effect on Parent, Parent, the Parent Subsidiaries
and their respective assets and business are in compliance with, and
not otherwise subject to liability under, any Environmental Laws (as
herein defined) or any Environmental Permits (as herein defined).
Every written notice, citation, or complaint which Parent or any
Parent Subsidiary has received in the past five (5) years of any
alleged violation of, or liability under, any Environmental Law or
Environmental Permit has been corrected where the failure to do so
would have a Material Adverse Effect on Parent. Parent and the Parent
Subsidiaries possess all Environmental Permits which are required by
them for the operation of their business where the failure to do so
would have a Material Adverse Effect on Parent.
(ii) For purposes of this Agreement (A)
"Environmental Laws" means all applicable federal, state, local and
foreign statutes, regulations, ordinances, rules, regulations, and all
applicable court orders and decrees and arbitration awards, which
pertain to environmental matters or contamination of any type
whatsoever. "Environmental Laws" include, without limitation, those
relating to: manufacture, processing, use, distribution, treatment,
storage, disposal, generation or transportation of Hazardous Materials
(as herein defined); air, soil, surface or ground water or noise
pollution; Releases (as herein defined); protection of wildlife,
endangered species, wetlands or natural resources; above-ground and
underground storage tanks, vessels and related equipment and
containers; health and safety of employees and other persons; the
14
Comprehensive Environmental Response, Compensation and Liability Act,
42 U.S.C. 9601, et seq., as amended and reauthorized ("CERCLA"); and
notification requirements relating to the foregoing; (B) "Environmental
Permits" means licenses, permits, registrations, governmental approvals,
agreements and consents which are required under or are issued pursuant to
Environmental Laws; (C) "Hazardous Materials" means pollutants, contaminants,
pesticides, petroleum and petroleum products, radioactive substances, solid
wastes or hazardous or extremely hazardous, special, dangerous or toxic
wastes, substances, chemicals or materials within the meaning of any
Environmental Law, including, without limitation, any (x) "hazardous
substance" as defined in CERCLA, and (y) any "hazardous waste" as
defined in the Resource Conservation and Recovery Act, 42 U.S.C.,
6902 et seq., as amended and reauthorized; and (D) "Release" means any
spill, discharge, leak, emission, escape, injection, dumping, or other
release or threatened release of any Hazardous Materials into the
environment, whether or not notification or reporting to any
governmental agency was or is, required, including, without
limitation, any release which is subject to CERCLA.
(p) Neither Parent nor any Parent Subsidiary has taken any action
which would (i) violate any requirement, including the continuity-of-
business-enterprise requirement of 26 C.F.R. 1.368-1(d), for tax-free
reorganization status under Section 368(a) of the Code with respect to
the Merger or (ii) prevent the accounting for the Merger as a pooling
of interests in accordance with Accounting Principles Board Opinion
No. 16, the interpretative releases pursuant thereto and the
pronouncements of the SEC.
(q) No broker, finder or investment banker (other than Lehman
Brothers, Inc., whose brokerage, finder's, or other fee will be paid
by Parent) is entitled to any brokerage, finder's or other fee or
commission in connection with the transaction contemplated hereby
based upon arrangements made by or on behalf of Parent.
(r) As of the Closing Date, neither Parent nor any Parent Subsidiary
will beneficially own any shares of Company Common. Parent does not
"own" and has not within the past three years "owned" (as such terms are
defined in Section 3 of Chapter 110F of the MGL) and does not "beneficially
own" (as such term is defined in the Rights Agreement (as defined in Section
3.3(c)) ten percent (10%) or more of the outstanding shares of Company Common.
15
3.3 Representations and Warranties of the Company. The Company
represents and warrants to Parent and Merger Sub that, except as set
forth in the Company Disclosure Schedule:
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the Commonwealth of Massachusetts.
The Company Disclosure Schedule contains a list of the name and
jurisdiction of organization of each subsidiary of the Company (each
such corporation, partnership or other entity being referred to herein
individually as a "Company Subsidiary" and collectively, as the
"Company Subsidiaries"). Each Company Subsidiary is a corporation
duly organized, validly existing and in good standing under the laws
of its place of incorporation.
(b) The Company and each Company Subsidiary (i) has all requisite
corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted and (ii) is duly
qualified and in good standing in each jurisdiction in which the
nature of its business or the nature or location of its assets require
such qualification and where the failure to be so qualified and in
good standing would have a Material Adverse Effect on the Company.
For the purposes of this Agreement, "Material Adverse Effect" means,
with respect to the Company, a materially adverse effect on the
business, results of operation, financial condition, properties or
assets of the Company and the Company Subsidiaries, taken as a whole.
(c) The Company has all necessary corporate power and authority to
enter into this Agreement and, subject to approval and adoption of
this Agreement by the holders of two-thirds of the outstanding shares
of Company Common, to consummate the transaction contemplated hereby.
The execution and delivery of this Agreement by the Company and,
subject to approval and adoption of this Agreement by the stockholders of
the Company, the performance by the Company of its obligations
hereunder have been duly authorized by all requisite corporate action
and, except for actions required by Section 5.6, no other corporate
proceedings on the part of the Company are necessary to authorize this
Agreement or for the Company to consummate the Merger. This Agreement
has been duly executed and delivered by duly authorized officers of
the Company and constitutes a valid and binding obligation of the
Company enforceable against it in accordance with its terms. The
Company has taken all action necessary to ensure that so long as this
Agreement shall not have been terminated pursuant to Article VII
hereof, (i) neither Parent or Merger Sub shall, by virtue of the
execution and delivery of this Agreement, be deemed to be an
"Acquiring Person" (as that term is defined in that
16
certain Rights Agreement dated as of July 29, 1986, as amended and restated
effective May 16, 1990 (the "Rights Agreement"), between the Company and The
First National Bank of Boston) and (ii) that no "Rights" (as that term
is defined in the Rights Agreement) are issued or required to be
issued to the stockholders of the Company by virtue of the execution
and delivery of this Agreement. As of the date of this Agreement, the
Company has not amended the Rights Agreement, redeemed the Rights
thereunder or taken any other action to make the Rights Agreement or
the Rights thereunder inapplicable, in each case, with respect to (i)
any person or entity other than Parent and Merger Sub or (ii) any
Alternative Proposal (as defined in Section 5.2) (or any other
substantially similar proposal).
(d) No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required by or
with respect to the Company or any Company Subsidiary in connection
with the execution and delivery of this Agreement by the Company or
the consummation by the Company of the transaction contemplated
hereby, except for (i) the filing of the Articles of Merger with the
Secretary of State of the Commonwealth of Massachusetts and the filing
of appropriate documents with the relevant authorities of other states
in which the Company is qualified to do business, (ii) notices under
the HSR Act and the expiration (or earlier termination) of all
applicable waiting periods thereunder, (iii) consents of foreign governments
having jurisdiction, (iv) the filing with the SEC of the Proxy Statement -
Prospectus (as herein defined) and (v) filings, consents or approvals which
may be required in connection with activities of the Company requiring the
receipt of security clearance from various Federal governmental departments
and agencies.
(e) Neither the execution and delivery of this Agreement by the
Company, nor the consummation by the Company of the transaction
contemplated hereby, will (i) conflict with or result in a breach of
any of the terms or provisions of the Company's Articles of
Organization or By-Laws, (ii) violate any statute or administrative
regulation, or any order, writ, injunction, judgment or decree of any
court or governmental authority or any arbitration award to which the
Company or any Company Subsidiary is a party or by which the Company
or any Company Subsidiary is bound, or (iii) violate, conflict with,
breach, constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or result
in the creation of any lien or other encumbrance upon any of the
properties or
17
assets of the Company or any Company Subsidiary under,
any note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to which the Company or
any Company Subsidiary is a party or to which they or any of their
respective properties or assets are subject, except in the case of
clauses (ii) and (iii) for such violations, conflicts, breaches,
defaults, terminations, accelerations or creations of liens or other
encumbrances that do not and will not, individually or in the
aggregate, (x) have a Material Adverse Effect on the Company or (y)
materially impair the Company's ability to perform its obligations
under this Agreement. Assuming the accuracy of the representation
contained in Section 3.2(r) hereof, the Company's Board of Directors
has taken and will continue to take any action necessary such that the
provisions of (i) Chapter 110C of the MGL, (ii) Chapter 110D of the
MGL and (iii) Chapter 110F of the MGL will not apply to the Merger.
(f) As of the date hereof, the authorized capital stock of the
Company consists solely of Company Common. As of March 9, 1995,
100,000,000 shares of Company Common were authorized, 26,262,451
shares of Company Common were issued and outstanding and 17,743,258
shares of Company Common were issued but not outstanding and held in
the treasury of the Company. There are no other shares of capital
stock of the Company authorized, issued or outstanding. All of the
issued and outstanding shares of Company Common have been validly
issued and are fully paid and nonassessable. There are no outstanding
subscriptions, options, warrants, rights (including preemptive
rights), calls, convertible securities or other agreements or
commitments of any character relating to the issued or unissued
capital stock or other securities of the Company obligating the
Company to issue any securities of any kind.
(g) All of the outstanding shares of capital stock of, and all other
ownership interests in, each Company Subsidiary (i) are validly
issued, fully paid and nonassessable and free of any preemptive
rights, and (ii) other than director qualifying shares, are owned of
record and beneficially by the Company, a Company Subsidiary or a
nominee of the Company, free and clear of all liens, claims, pledges,
agreements, voting or other restrictions, charges or other
encumbrances. There are no outstanding subscriptions, options,
warrants, rights (including preemptive rights), calls, convertible
securities or other agreements or commitments of any character
relating to the issued or unissued capital stock or other securities
(other than investment securities) of any Company Subsidiary
obligating such Company Subsidiary to issue any securities of any
kind.
18
(h) The Company has timely filed (and has delivered to Parent a true
and complete copy of) each report, schedule, registration statement
and definitive proxy statement required to be filed by the Company
with the SEC since October 2, 1993 (such documents are referred to
herein as the "Company's SEC Documents"). As of their respective
dates, the Company's SEC Documents comply in all material respects
with the requirements of the Securities Act or the Exchange Act, as
the case may be, and the applicable rules and regulations of the SEC
thereunder, and none of the Company's SEC Documents, as of their respective
dates, 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 therein, in light of the circumstances under which they were made,
not misleading. The financial statements of the Company included in the
Company's SEC Documents comply, as of their respective dates, in all material
respects with all applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with GAAP consistently applied (except as may be indicated in the
notes thereto or, in the case of unaudited statements, as permitted by
Form 10-Q of the SEC) and fairly present in all material respects the
consolidated financial position of the Company as at the dates thereof and
the consolidated results of its operations, cash flows and changes in
financial position for the periods indicated therein.
(i) Except as disclosed in the Company's SEC Documents filed prior to
the date of this Agreement and furnished to the Company, the Company
and the Company Subsidiaries do not have any liabilities or
obligations of any nature (whether accrued, absolute, contingent or
otherwise) other than liabilities or obligations (i) which were
incurred after October 1, 1994 in the ordinary course of business or
(ii) which would not, individually or in the aggregate, have a
Material Adverse Effect on the Company.
(j) Except as disclosed in the Company's SEC Documents filed prior to
the date of this Agreement and furnished to the Company, since October
1, 1994: (i) the Company has not suffered or, to the Company's
knowledge, been threatened with any change (other than changes
generally affecting the industries in which the Company or any Company
Subsidiary operates or changes relating to the transactions
contemplated by this Agreement) having a Material Adverse Effect on
the Company; and (ii) the Company and the Company Subsidiaries have
operated only in the ordinary course of business consistent with past
practice.
19
(k) (i) There have been properly completed and filed on a timely basis
all Returns required to be filed by the Company or a Company
Subsidiary in each case where the failure to properly complete or file
any Return would have a Material Adverse Effect on the Company. As of
the time of filing, the foregoing Returns correctly reflected the
facts regarding the income, business, assets, operations, activities,
status or other matters of the Company or, as applicable, a Company
Subsidiary or any other information required to be shown thereon, in
each case where the failure to do so would have a Material Adverse
Effect on the Company.
(ii) With respect to all amounts in respect of Taxes
imposed upon the Company or any Company Subsidiary, or for which the
Company or any Company Subsidiary is liable to taxing authorities,
with respect to all taxable periods or portions of periods ending on
or before the date hereof, all applicable Tax laws have been complied
with where the failure to comply with such laws would have a Material
Adverse Effect on the Company, and all amounts that are required to
have been paid by the Company to taxing authorities on or before the
date hereof have been paid where the failure to pay such amounts would
have a Material Adverse Effect on the Company.
(iii) No issues have been raised or are currently pending by any
tax authority in connection with any of the Returns which, if decided
adversely to the Company or any Company Subsidiary would have a
Material Adverse Effect on the Company. There are no material
outstanding waivers of the applicable statutes of limitation with
respect to Tax liabilities of the Company or any Company Subsidiary.
(iv) The Company has not agreed to make, nor is it required to make,
any adjustment under section 481(a) of the Code by reason of a change
in accounting method or otherwise.
(v) Neither the Company nor any Company Subsidiary is a party to any
agreement, contract, arrangement or plan that has resulted or would
result, separately or in the aggregate, in the payment of any "excess
parachute payments" within the meaning of section 280G of the Code.
(vi) The unpaid Taxes of the Company and the Company Subsidiaries do
not exceed the reserve for tax liability (excluding any reserve for
deferred
20
Taxes) included in the financial statements included in the
Form 10-K of the Company dated October 1, 1994 by an amount that would
have a Material Adverse Effect on the Company.
(l) (i) The Company and the Company Subsidiaries maintain, administer
or contribute to only those employee benefit plans (as defined in
Section 3(3) of ERISA, whether or not excluded from coverage under
specific Titles or Subtitles of ERISA), or deferred compensation,
severance, vacation, sick leave, fringe benefit, stock purchase, stock
option, stock-related plan, incentive, insurance or similar contract,
policy, arrangement or commitment, for the benefit of employees or
former employees of the Company and the Company Subsidiaries which are
described in the Company Disclosure Schedule (the "Company Plans").
(ii) All Company Plans comply with and are and have been
operated in accordance with each applicable provision of ERISA, the
Code (including, without limitation, the requirements of Code section
401(a) to the extent any Company Plan is intended to conform to that
section, subject to any pending application to the Internal Revenue
Service for a "determination letter" to such effect), other Federal
statutes, state law (including, without limitation, state insurance
law) and the regulations and rules promulgated pursuant thereto or in
connection therewith, except in any case where the failure to so
comply or so be operated would not have a Material Adverse Effect on
the Company.
(iii) Neither the Company nor any trade or business, whether or not
incorporated, that together with the Company would be deemed a "single
employer" within the meaning of Section 4001 of ERISA (a "Company
ERISA Affiliate") has failed to make any contributions or to pay any
amounts due as required by the terms of any Company Plan or ERISA or
any other applicable law. All contributions and payments with
respect to Company Plans that are required to be made by the Company
or any Company ERISA Affiliate have been made or will be accrued on
the financial statements filed with, or incorporated by reference in,
the Company's SEC Documents.
(iv) Neither the Company nor any Company ERISA Affiliate
has incurred any liability to the Pension Benefit Guaranty Corporation
as a result of the voluntary or involuntary termination of any pension
plan subject to Title IV of ERISA (other than
21
liabilities paid in full); and neither the Company nor any Company ERISA
Affiliate has made a complete or partial withdrawal from a multiemployer
plan, as such term is defined in Section 3(37) of ERISA, resulting in
withdrawal liability, as such term is defined in Section 4201 of ERISA
(without regard to subsequent reduction or waiver of such liability
under either Section 4207 or 4208 of ERISA) (other than liabilities
paid in full).
(m) There is no litigation or proceeding, in law or in equity, and
there are no proceedings or governmental investigations before any
commission or other administrative authority, pending or, to the
Company's knowledge, threatened against the Company or any Company
Subsidiary with respect to or affecting the Company's or any Company
Subsidiary's operations, business or financial condition which has a
reasonable probability of being decided adversely to the Company or
any Company Subsidiary and which, if so decided adversely, would have
a Material Adverse Effect on the Company.
(n) Neither the Company nor any Company Subsidiary is a party to, or
bound by, any judgment, writ, injunction, decree, order or arbitration
award (or agreement entered into in any administrative, judicial or
arbitration proceeding with any governmental authority) with respect to or
affecting the properties, assets, personnel or business activities of the
Company or any Company Subsidiary, the enforcement or operation of which or
compliance with which would have a Material Adverse Effect on the Company.
(o) Except with respect to Environmental Laws (which are addressed in
Section 3.3(p)), neither the Company nor any Company Subsidiary is in
violation of, noncompliance with, or delinquent in respect to, any
judgment, writ, injunction, decree, order or arbitration award or law,
statute, or regulation of or agreement with, or any permit from, any
Governmental Entity, to which the property, assets, personnel or
business activities of the Company or any Company Subsidiary are
subject, which violation, noncompliance or delinquency would have a
Material Adverse Effect on the Company.
(p) Except for non-compliance or liabilities that would not have a
Material Adverse Effect on the Company, the Company, the Company
Subsidiaries and their respective assets and business are in
compliance with, and not otherwise subject to liability under, any
Environmental Laws or any Environmental Permits. Every written
notice, citation or complaint which the Company or any Company
Subsidiary has received in the past five (5) years of any
22
alleged violation of, or liability under, any Environmental Law or
Environmental Permit has been corrected where the failure to do so
would have a Material Adverse Effect on the Company. The Company and
the Company Subsidiaries possess all Environmental Permits which are
required by them for the operation of their business where the failure
to do so would have a Material Adverse Effect on the Company.
(q) Each of the Company and the Company Subsidiaries owns, licenses
or otherwise has the right to use all patents, copyrights, trademarks,
trade names and rights in respect of the foregoing, adequate for the
conduct of its business substantially as now conducted without any
known conflict with any rights of others, which conflict, if decided
adversely to the Company or any Company Subsidiary, would have a Material
Adverse Effect on the Company.
(r) The Company has not taken any action which would (i) violate any
requirement, including the continuity-of-business-enterprise
requirement of 26 C.F.R. 1.368-1(d), for tax-free reorganization
status under Section 368(a) of the Code with respect to the Merger or
(ii) prevent the accounting for the Merger as a pooling of interests
in accordance with Accounting Principles Board Opinion No. 16, the
interpretative releases pursuant thereto and the pronouncements of the
SEC.
(s) No broker, finder or investment banker (other than Lazard Freres
& Co., whose brokerage, finder's, or other fee will be paid by the
Company) is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated hereby
based upon arrangements made by or on behalf of the Company.
(t) The Company has received the written opinion of Lazard Freres &
Co. (the "Fairness Opinion") on the date of this Agreement to the
effect that, as of the date of this Agreement, the consideration to be
received in the Merger by the Company Stockholders is fair, from a
financial point of view, to the Company Stockholders. The Company has
provided a true and correct copy of the Fairness Opinion to Parent.
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE MERGER
4.1 Obligations of Each of the Parties. From and after the date
hereof and until and including the Effective Time, the following shall
apply with equal force to the Company, on the one hand, and Parent and
Merger Sub, on the other hand:
23
(a) Each party shall promptly give the other party written notice of
the existence or occurrence of any event or condition which would make
any representation or warranty herein contained of either party untrue
or which might reasonably be expected to prevent the consummation of
the transaction contemplated hereby.
(b) Subject to the fiduciary duties of directors under applicable
law, no party shall intentionally perform any act which, if performed,
or omit to perform any act which, if omitted to be performed, would
prevent or excuse the performance of this Agreement by any party
hereto.
(c) Subject to the terms and conditions of this Agreement and the
fiduciary duties of directors under applicable law, each of the
parties hereto agrees to use its reasonable best efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective
the transaction contemplated by this Agreement as expeditiously as
reasonably practicable.
(d) Parent and the Company shall confer on a regular and frequent
basis with respect to Regulatory Approvals and operational and
transitional matters.
(e) The Company and Parent shall file on a timely basis all reports,
schedules and statements required to be filed by it with the SEC
between the date hereof and the Effective Time and shall provide to
the other party copies of all such reports promptly after the same are
filed. As of their respective dates, each such report, schedule and
statement shall be true and correct in all material respects and
comply in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the
applicable rules and regulations of the SEC thereunder.
4.2 The Company's Obligations. From and after the date hereof and
until and including the Effective Time, the following are the
Company's obligations:
(a) The Company, acting through its Board of Directors, shall: (i)
subject to the fiduciary duties of directors under applicable law,
call a meeting of its stockholders for the purpose of voting on the
approval and adoption of the Agreement (the "Meeting") so that the
Meeting shall be held as promptly as practicable after the
effectiveness of the Registration Statement and in accordance with
applicable law (but in any event use its best efforts to so call and hold the
Meeting prior to the date referenced in Section 7.1(b)(ii) hereof); and
(ii)
24
recommend to the stockholders of the Company the approval and adoption
of this Agreement, provided, however, that the Board of Directors of the
Company may fail to make such recommendation, or withdraw, modify or change
such recommendation, if the Board of Directors of the Company determines in
good faith, after consultation with counsel, that the failure to do any of
the above could reasonably be deemed a breach of its fiduciary duties under
applicable law.
(b) Subject to any restrictions under applicable law, any
confidentiality requirements of any agreement to which the Company or
any Company Subsidiary is a party or any confidentiality privileges
applicable to communications between the Company or any Company
Subsidiary and its attorneys or accountants, the Company shall
continue to give to Parent's officers, employees, agents, attorneys,
consultants and accountants reasonable access for reasonable purposes
in light of the transaction contemplated by this Agreement during
normal business hours to all of the properties, books, contracts,
documents, present and expired insurance policies, records and
personnel of or with respect to the Company and each Company
Subsidiary and shall furnish to Parent and such persons as Parent
shall designate to the Company such information as Parent or such
persons may at any time and from time to time reasonably request;
provided, that all such access and furnishing of information shall be
coordinated by Parent with a designee of the Company and shall be
conducted in such a manner so as not to unreasonably interfere with
the normal business operations of the Company or any Company
Subsidiary. To the extent the Company or a Company Subsidiary is
precluded from furnishing information by virtue of a confidentiality
agreement with a third party, if Parent shall so request the Company
shall use commercially reasonable efforts to obtain a waiver of the
provisions of such agreement in order to permit disclosure of such
information to Parent. It is expressly understood and agreed that all
information obtained pursuant to this subsection (b) is subject to the
terms and conditions of that certain Confidentiality Agreement dated
January 23, 1995 (the "Confidentiality Agreement") between Parent and
the Company, and Parent expressly reaffirms its obligations thereunder.
(c) The Company shall, and shall cause each Company Subsidiary to,
carry on its business in the usual and ordinary course of business,
consistent with past practices and use reasonable best efforts to
preserve intact its business organization, employees and advantageous
business relationships. Without the prior written consent of Parent
(such consent not to be unreasonably withheld), and without limiting
the generality of any other provision of this
25
Agreement, except as set forth in the Company Disclosure Schedule or
pursuant to obligations in effect on the date hereof (and identified in
the Company Disclosure Schedule or the Company SEC Documents) or as
contemplated by this Agreement, the Company shall not, and shall not
permit any Company Subsidiary to:
(i) amend its Articles of Organization or By-Laws;
(ii) make any change in its authorized capital stock; adjust, split,
combine or reclassify any capital stock; or, except pursuant to the
terms of the Company Plans, issue any shares of stock of any class or
issue or become a party to any subscription, warrant, rights, options,
convertible securities or other agreements or commitments of any
character relating to its issued or unissued capital stock, or other
equity securities, or grant any stock appreciation or similar rights;
(iii) other than in the ordinary course of business consistent with
past practice, (A) incur any indebtedness for borrowed money or (B)
assume, guarantee, endorse or otherwise as an accommodation become
responsible for the obligations of any other individual, corporation
or other entity;
(iv) sell, transfer, mortgage, encumber or otherwise dispose of,
without fair consideration therefor, any of its material properties or
assets to any individual, corporation or other entity other than the Company
or a Company Subsidiary, or cancel, release or assign, without fair
consideration therefor, any material indebtedness of any such person or
cancel, release or compromise, without fair consideration therefor, any
material claims against any such person (provided that nothing in this
Section 4.2(c) shall prevent or prohibit (i) the merger of any Company
Subsidiary into the Company or (ii) mergers (or other business combinations)
among Company Subsidiaries);
(v) make any material (x) investments, either by purchase of stock
or securities, in (y) contributions to capital to, or (z) purchases of
any property or assets from, any other individual, corporation or
other entity other than the Company or a Company Subsidiary;
(vi) except in the ordinary course of business consistent with past
practice, enter into or
26
terminate any material contract or agreement, or make any change in any
of its material leases or contracts, it being understood that it shall not
be a breach of this covenant for the Company or any Company Subsidiary to
renew any contracts or leases without material adverse changes of terms;
(vii) change its method of accounting in effect at October 1, 1994,
except as may be required by changes in GAAP upon the advice of its
independent accountants;
(viii) except in the ordinary course of business consistent with past
practice, (x) increase the compensation payable to any director,
officer, employee or consultant or (y) enter into or make any change
to any new or existing employment, employment related, employee
benefit, severance or other similar agreement, arrangement or plan
with, or for the benefit of, new or existing directors, officers,
employees or consultants; and
(ix) pay or declare any dividend or make any distribution on its
securities of any class or purchase or redeem any of its securities of
any class.
(d) At least twenty (20) days prior to the Closing Date, the Company
shall deliver to Parent a letter identifying all persons who are or
will be, at the time of the record date for the Meeting, "affiliates"
of the Company for purposes of Rule 145 under the Securities Act. The
Company shall use reasonable efforts to cause each person named in the
letter delivered by it to deliver to Parent prior to the Closing Date
a written "Affiliates" agreement, in customary form. Such
"Affiliates" agreement shall provide, among other things, the
following:
(i) that such person shall not take any action which
could jeopardize the treatment of the Merger as a pooling of interests
for accounting purposes (including, without limitation, that (A) such
person has not or, as applicable, shall not sell, transfer or
otherwise dispose of any shares of Company Common or any other shares
of capital stock of the Company at any time during the thirty (30) day
period on or prior to the Closing Date and (B) such person shall not
sell, transfer or otherwise dispose of any shares of Parent Common
(whether or not received in the Merger) or any other shares of capital
stock of Parent until after such time as results covering at least
thirty (30) days of the combined operations of
27
Parent and the Company have been published by Parent, in the form of a
quarterly earnings report, an effective registration statement filed with
the SEC, a report to the SEC on Form 10-K, 10-Q or 8-K, or any other public
filing or announcement which includes such combined results of
operations); and
(ii) that such person shall dispose of Parent Common
to be received by such person in the Merger only pursuant to an
effective registration statement under the Securities Act or in
accordance with the provisions of paragraph (d) of Rule 145
thereunder, if applicable, or pursuant to an available exemption from
registration under the Securities Act.
4.3 Parent's Obligations. From and after the date hereof and until
and including the Effective Time, the following are Parent's
obligations:
(a) Subject to any restrictions under applicable law, any
confidentiality requirements of any agreement to which Parent or any
Parent Subsidiary is a party or any confidentiality privileges
applicable to communications between Parent or any Parent Subsidiary
and its attorneys or accountants, Parent shall continue to give to the
Company's officers, employees, agents, attorneys, consultants and
accountants reasonable access for reasonable purposes in light of the
transaction contemplated by this Agreement during normal business
hours to all of the properties, books, contracts, documents, present
and expired insurance policies, records and personnel of or with
respect to Parent and each subsidiary of Parent and shall furnish to
the Company and such persons as the Company shall designate to Parent
such information as the Company or such persons may at any time and
from time to time reasonably request; provided, that all such access
and furnishing of information shall be coordinated by the Company with
a designee of Parent and shall be conducted in such a manner so as not
to unreasonably interfere with the normal business operations of
Parent or any Parent Subsidiary. To the extent Parent or a Parent
Subsidiary is precluded from furnishing information by virtue of a
confidentiality agreement with a third party, if the Company shall so
request Parent shall use commercially reasonable efforts to obtain a
waiver of the provisions of such agreement in order to permit
disclosure of such information to the Company; provided, however, that
this sentence shall not apply with respect to confidentiality
agreements with vendors or customers of Parent or any Parent
Subsidiary. It is expressly understood and agreed that all
information obtained pursuant to this Section 4.3 is subject to the
terms and provisions of the
28
Confidentiality Agreement, and the Company expressly reaffirms its
obligations thereunder.
(b) Parent shall, and shall cause each Parent Subsidiary to, carry on
its business in the usual and ordinary course of business, consistent
with past practices and use reasonable best efforts to preserve intact
its business organization, employees and advantageous business
relationships. Without the prior written consent of the Company, and
without limiting the generality of any other provision of this
Agreement, Parent shall not, and shall not permit any Parent
Subsidiary to, except pursuant to obligations in effect on the date
hereof and except as contemplated by this Agreement:
(i) change its method of accounting in effect at December 31, 1994,
except as may be required by changes in GAAP upon the advice of its
independent accountants; or
(ii) pay or declare any extraordinary dividend or make any
extraordinary distribution on its securities of any class.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Registration Statement; Proxy Statement; Auditors' Letters; Other
Regulatory Matters.
(a) As promptly as practicable after the execution of this Agreement,
Parent and the Company shall cooperate and promptly prepare and the
Company shall file with the SEC a proxy statement (the "Proxy
Statement - Prospectus") with respect to the Meeting in connection
with the Merger. At an appropriate time mutually determined by Parent
and the Company prior to the clearance of the Proxy Statement -
Prospectus, Parent and the Company shall cooperate and promptly
prepare and Parent shall file with the SEC the Registration Statement,
with respect to the Parent Common issuable in the Merger (and with
respect to the outstanding Company Options or Company restricted
stock, unit, PCDU or any similar executive compensation awards,
following the Merger), in which Registration Statement the Proxy
Statement - Prospectus shall be included as a prospectus with respect
to such shares of Parent Common. The respective parties shall cause
the Proxy Statement - Prospectus and the Registration Statement to
comply as to form in all material respects with the applicable
provisions of the Securities Act, the Exchange Act and the rules and
regulations
29
thereunder. Parent shall use all reasonable efforts, and Company will
cooperate with Parent, to have the Registration Statement declared
effective by the SEC as promptly as practicable. Parent shall use its
best efforts to obtain, prior to the effective date of the Registration
Statement, all necessary state securities law or "Blue Sky" permits or
approvals required to carry out the transaction contemplated by this
Agreement and will pay all expenses incident thereto. Parent agrees
that the Proxy Statement - Prospectus and each amendment or supplement
thereto at the time of mailing thereof and at the time of the Meeting,
or, in the case of the Registration Statement and each amendment or
supplement thereto, at the time it is filed or becomes effective, shall
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 Parent in reliance
upon and in conformity with written information concerning the Company
furnished to Parent by the Company specifically for use in the Proxy
Statement - Prospectus. The Company agrees that the written information
concerning the Company provided by it for inclusion in the Proxy Statement
- - Prospectus and each amendment or supplement thereto, at the time of mailing
thereof and at the time of the Meeting, or, in the case of written
information concerning the Company provided by the Company for inclusion
in the Registration Statement or any amendment or supplement thereto, at
the time it is filed or becomes effective, shall 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.
Except as otherwise required by law, no amendment or supplement to the
Proxy Statement - Prospectus shall be made by Parent or the Company without
the approval of the other party. Parent shall advise the Company, promptly
after it receives notice thereof, of the time when the Registration Statement
shall become effective or any supplement or amendment has been filed, the
issuance of any stop order, the suspension of the qualification of the Parent
Common issuable in connection with the Merger for offering or sale in any
jurisdiction, or any request by the SEC for amendment of the Proxy Statement -
Prospectus or the Registration Statement or comments thereon and responses
thereto or requests by the SEC for additional information.
(b) The Company shall use its reasonable best efforts to cause to be
delivered to Parent a letter of Price Waterhouse LLP, the Company's
independent auditors, dated a
30
date within two business days before the date on which the Registration
Statement shall become effective and addressed to the Company, customary
in scope and substance for letters delivered by independent public
accountants in connection with registration statements similar to the
Registration Statement.
(c) Parent shall use its reasonable best efforts to cause to be
delivered to the Company a letter of Arthur Andersen & Co., Parent's
independent auditors, dated a date within two business days before the
date on which the Registration Statement shall become effective and
addressed to Parent, customary in scope and substance for letters
delivered by independent public accountants in connection with
registration statements similar to the Registration Statement.
(d) Parent shall use its best efforts to have authorized, as soon as
practicable, for listing on the New York Stock Exchange ("NYSE"), upon
official notice of issuance, the shares of Parent Common to be issued
in the Merger (or with respect to the outstanding Company Options or
Company restricted stock, unit, PCDU or any similar executive
compensation awards, following the Merger).
5.2 Alternative Proposals. Subject to the proviso of this Section
5.2, prior to the Effective Time, the Company agrees that (a) neither
it nor any of the Company Subsidiaries shall, and it shall use reasonable
efforts to cause its officers, directors, employees, agents and
representatives (including, without limitation, any investment banker,
attorney or accountant retained by it or any of the Company Subsidiaries)
not to, initiate, solicit or encourage, directly or indirectly, any inquiries
or the making or implementation of any proposal or offer (including, without
limitation, any proposal or offer to its stockholders) with respect to a
merger, acquisition, consolidation or similar transaction involving, or any
purchase of all or any significant portion of the assets or any equity
securities of, the Company or any Company Subsidiary (any such proposal or
offer being hereinafter referred to as an "Alternative Proposal") or engage
in any negotiations or enter into any agreement concerning, or provide
any confidential information or data to, or have any discussions with,
any person relating to an Alternative Proposal, or otherwise
facilitate any effort or attempt to make or implement an Alternative
Proposal, (b) it 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, and it
shall take the necessary steps to inform the individuals or entities
referred to above of the obligations undertaken in this Section 5.2,
and (c) it shall notify Parent as promptly as practicable if any such
inquiries or proposals are received by,
31
any such information is requested from, or any such negotiations or discussions
are sought to be initiated or continued with, it; provided, however, that
nothing contained in this Section 5.2 shall prohibit the Board of Directors
of the Company from (w) after notice to Parent, furnishing information
to, or entering into negotiations or discussions with, any person or
entity that makes an unsolicited bona fide Alternative Proposal if the
Board of Directors of the Company determines in good faith, after
consultation with counsel, that the failure to do so could reasonably
be deemed a breach of its fiduciary duties under applicable law, (x)
failing to make, withdrawing, modifying or changing the recommendation
referred to in Section 4.2(a)(ii) if the Board of Directors of the
Company determines in good faith, after consultation with counsel,
that making such recommendation, or the failure to withdraw, modify or
change such recommendation, could reasonably be deemed a breach of its
fiduciary duties under applicable law, (y) recommending to the
stockholders of the Company an Alternative Proposal that the Board of
Directors of the Company determines in good faith, after consultation
with its financial advisor, is likely to be more favorable, from a financial
point of view, to the stockholders of the Company than the Merger or (z) to
the extent applicable, complying with Rule 14e-2 promulgated under the
Exchange Act with regard to an Alternative Proposal.
5.3 Indemnification and Insurance.
(a) Parent and the Surviving Corporation hereby jointly and severally
agree that from and after the Effective Time, Parent and the Surviving
Corporation shall indemnify, defend and hold harmless each person who
is now, or has been at any time prior to the date of this Agreement or
who becomes prior to the Effective Time, a director, officer, employee
or agent of the Company or any Company Subsidiary or a director,
officer, employee, agent or trustee of any employee benefit plan for
employees of the Company or any Company Subsidiary (or any person who
now serves, or has served at any time prior to the date of this
Agreement or who serves prior to the Effective Time, any other
corporation or entity in any such capacity at the request of the
Company) (individually, an "Indemnified Person", and collectively, the
"Indemnified Persons") against (i) all losses, claims, damages, costs,
expenses, liabilities or judgments arising out of or relating to, or
amounts that are paid in settlement (with the approval of the
indemnifying party, which approval shall not be unreasonably withheld)
of, or in connection with, any claim, action, suit, proceeding or
investigation based in whole or in part on or arising in whole or in
part out of the fact that such person is or was a director, officer,
employee or agent of the Company or any Company Subsidiary or a
director, officer, employee, agent or trustee of any
32
employee benefit plan for employees of the Company or any Company Subsidiary
(or is serving or served any other corporation or entity in any such capacity
at the request of the Company), whether pertaining to any matter
existing or occurring at or prior to the Effective Time and whether
asserted or claimed prior to or at or after, the Effective Time
("Indemnifiable Claims") and (ii) all Indemnifiable Claims based in
whole or in part on, or arising in whole or in part out of, or
pertaining to this Agreement, the Merger or any other transaction
contemplated hereby or thereby, in each case to the full extent a corporation
is permitted under the MBCL (notwithstanding the By-Laws of the Company, the
Surviving Corporation or Parent) to indemnify its own directors, officers,
employees and agents, as the case may be (and Parent and the Surviving
Corporation, as the case may be, will pay expenses in advance of the final
disposition of any such claim, action, suit, proceeding or investigation to
each Indemnified Person to the full extent permitted by law, subject to
receipt of a written undertaking from such Indemnified Person to repay all
amounts advanced in the event a final and non-appealable judicial
determination is made that such person was not entitled to indemnification
under the MBCL). Without limiting the foregoing, in the event any
Indemnifiable Claim is brought against any Indemnified Person (whether arising
before or after the Effective Time), (i) such Indemnified Person shall
promptly provide notice to Parent and the Surviving Corporation in accordance
with subsection (g) hereof, (ii) if Parent and/or the Surviving
Corporation elects to defend such Indemnifiable Claim (provided, that
Parent and/or the Surviving Corporation shall not have the right to
elect to defend or defend any Indemnifiable Claim (x) referred to in
clause (ii) of the first sentence of this Section 5.3(a) or (y) any
Indemnifiable Claim referred to in clause (i) of the first sentence of
this Section 5.3(a) which is first asserted before the second
anniversary of the Effective Time), Parent and/or the Surviving
Corporation shall defend the Indemnified Person at their expense,
(iii) if Parent and/or the Surviving Corporation does not (or does not
have the right to) elect to defend such Indemnifiable Claim pursuant
to clause (ii) of this sentence, such Indemnified Person may retain
counsel to defend such claim satisfactory to him or her with the
consent of Parent and the Surviving Corporation, which consent may not
be unreasonably withheld, and Parent and the Surviving Corporation, as
the case may be, shall pay all reasonable fees and expenses of such
counsel for such Indemnified Person promptly as statements therefor
are received, and (iv) regardless of whether Parent and/or the
Surviving Corporation shall have elected to defend such Indemnifiable
Claim pursuant to clause (ii) of this sentence, Parent and the
Surviving Corporation will use all reasonable efforts to
33
assist in the vigorous defense of any such matter, provided that neither
Parent nor the Surviving Corporation shall be liable for any settlement of
any claim effected without their written consent, which consent shall not be
unreasonably withheld. Notwithstanding anything herein to the contrary, in
any case in which Parent and/or the Surviving Corporation elect to defend an
Indemnifiable Claim pursuant to clause (ii) of the preceding sentence, neither
Parent nor the Surviving Corporation may settle any such Indemnifiable Claim
without the prior written consent of the Indemnified Person to which such
Indemnifiable Claim relates, unless such settlement (x) provides for a
dismissal with prejudice of such Indemnifiable Claim, (y) provides for an
unconditional release with respect to such Indemnifiable Claim or (z) does
not contain any admission or acknowledgment of liability or responsibility
of the Indemnified Person with respect to the Indemnifiable Claim.
(b) Notwithstanding anything to the contrary in Section 1.4 or this
Section 5.3, Parent and Merger Sub agree that all rights to
indemnification existing in favor, and all limitations on the personal
liability of, the Indemnified Persons provided for in the Company's
Articles of Organization or By-Laws or the charters or by-laws or
similar organizational documents of any Company Subsidiary as in
effect on the date of this Agreement with respect to matters occurring
prior to the Effective Time shall survive the Merger and shall
continue in full force and effect for a period of not less than six
(6) years from the Effective Time; provided, however, that all rights
to indemnification in respect of any Indemnifiable Claim asserted or
made within such period shall continue until the final disposition of
such claim.
(c) For a period of six (6) years after the Effective Time, Parent
and the Surviving Corporation shall cause to be maintained in effect
directors' and officers' liability insurance covering each Indemnified
Person who is currently covered by the Company's directors' and
officers' insurance with respect to claims arising from facts or
events which occurred at or prior to the Effective Time, which
insurance shall be no less favorable than such insurance maintained in
effect by the Company on the date hereof in terms of coverage and
amounts, to the extent such liability insurance can be maintained at an
annual cost not greater than 150 percent of the Company's fiscal 1995
annual premium for its directors' and officers' liability insurance (it
being understood that in any such case Parent shall purchase or cause
the Surviving Corporation to purchase as much coverage as possible for
such 150 percent premium amount).
34
(d) With respect to each Indemnified Person who is party to, or the
beneficiary of, an agreement with the Company or any Company
Subsidiary providing for the indemnification of such person by the
Company or any Company Subsidiary in effect on the date hereof, Parent
and the Surviving Corporation hereby jointly and severally agree to be
bound, and perform all obligations required to be performed, by the
Company or any Company Subsidiary under any such agreement.
(e) The provisions of this Section 5.3 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Person, his
or her heirs and representatives.
(f) In the event Parent or the Surviving Corporation or any of the
successors or assigns of either of them (i) consolidates with or
merges into any other person or entity and shall not be the continuing
or surviving corporation or entity of such consolidation or merger or
(ii) transfers or conveys all or substantially all of its properties
and assets to any person or entity, then, and in each such case,
proper provision shall be made so that the successors and assigns of
Parent or the Surviving Corporation, as the case may be, assume the
obligations set forth in this Section 5.3.
(g) Any Indemnified Person wishing to claim indemnification under
this Section 5.3, upon learning of any Indemnifiable Claim, shall
notify Parent and the Surviving Corporation thereof, provided their
failure to provide any such notice shall not relieve either Parent or
the Surviving Corporation of their obligations under this Section 5.3,
except to the extent Parent or the Surviving Corporation is actually
and materially prejudiced by such lack of notice.
5.4 Certain Benefits.
(a) Each of Parent and Merger Sub acknowledges that consummation of
the transactions contemplated by this Agreement will constitute a
"Transaction," "Corporate Transaction," "Reorganization," "Sale of
Business," "change in control," "Change in Control," "merger" or
"acquisition by an entity or Person of beneficial ownership of more
than 40%" of the Company Common or voting power of the Company (to the
extent any such concept is applicable) for the purposes of the Company
Plans. From and after the Effective Time, Parent will cause the
Surviving Corporation to honor in accordance with their terms
(including, without limitation, terms providing for equitable
adjustment and trust funding) all agreements, employee benefit plans,
programs or policies or other arrangements described in the Company's
SEC Documents or previously disclosed in writing
35
by the Company to Parent between the Company or any of its subsidiaries
and any current or former officer, director, or employee of the Company
or any Company Subsidiary in effect prior to the Effective Time; provided,
however, that nothing herein shall preclude any changes effected on a
prospective basis to any employee benefit plan that are permitted
under this Section 5.4.
(b) Parent and Merger Sub agree that, from the Effective Time and
until at least December 31, 1996, subject to applicable law, the
Surviving Corporation and its subsidiaries will provide benefit plans
to employees employed by the Company or any Company Subsidiary as of
the Effective Time which will, in the aggregate, be no less favorable
than those provided by the Company and the Company Subsidiaries to
their employees prior to the Effective Time, and thereafter will
provide benefits no less favorable than those provided by Parent and
the Parent Subsidiaries to their employees in comparable positions.
Without limiting the generality of the foregoing, each of Parent and
Merger Sub agrees that awards granted to and contingent payments
promised to current and former employees of the Company or any Company
Subsidiary under each of the FY 1995 Field Sales Engineer Incentive
Compensation Plan, the FY 1995 Variable Pay for Performance Plan and
the FY 1995 Incentive Plan for Executive Officers, in respect of each
performance period or cycle in effect as of the Effective Time shall
not be terminated or amended and shall be fully honored pursuant to
the terms of each respective plan.
(c) If any salaried employee of the Company or any Company Subsidiary
becomes a participant in any employee benefit plan, practice or policy
of Parent, any of its affiliates or the Surviving Corporation, such
employee shall, to the extent permitted by applicable law, be given
credit under such plan for all service prior to the Effective Time
with the Company or any Company Subsidiary, or any predecessor
employer (to the extent such credit was given by the Company or any
Company Subsidiary) and prior to the time such employee becomes such a
participant, for purposes of eligibility and vesting and for
determining vacation benefits but not for purposes of any other
benefit accrual.
(d) This Section 5.4 is intended for the irrevocable benefit of, and
to grant third party rights to, the employees of the Company or any
Company Subsidiary, employed as of the Effective Time, and shall be
binding on all successors and assigns of Parent, the Company and the
Surviving Corporation. Each of the employees of the Company or any
Company Subsidiary employed as of the Effective Time
36
shall be entitled to enforce the covenants contained in this Section 5.4.
(e) In the event the Surviving Corporation or any of its successors
or assigns (i) consolidates with or merges into any other person or
entity and shall not be the continuing or surviving corporation or
entity of such consolidation or merger or (ii) transfers or conveys
all or substantially all of its properties and assets to any person or
entity, then, in each such case, proper provision shall be made so
that the successors and assigns of the Surviving Corporation assume
the obligations set forth in this Section 5.4.
4.5 Pooling; Reorganization. From and after the date hereof and
until the Effective Time, neither Parent nor the Company shall (a)
knowingly take any action, or knowingly fail to take any action, that
would be reasonably likely to jeopardize the treatment of the Merger
as a pooling of interests for accounting purposes, (b) knowingly take
any action, or knowingly fail to take any action, that would be
reasonably likely to jeopardize qualification of the Merger as a
reorganization within the meaning of Section 368(a) of the Code or (c)
enter into any contract, agreement, commitment or arrangement with
respect to either of the foregoing. Following the Effective time,
Parent shall use its best efforts to conduct its business in a manner
that would not jeopardize the characterization of the Merger as a
pooling of interests for accounting purposes and as a reorganization
within the meaning of Section 368(a) of the Code.
5.6 Rights Agreement. The Company shall take all action necessary to
redeem the Rights as of the Effective Time. So long as this Agreement
shall have not been terminated pursuant to Article VII hereof, the
Company shall not amend the Rights Agreement, redeem the Rights with
respect to an Alternative Proposal or take any action to make the
Rights Agreement or the Rights thereunder inapplicable with respect to
any Alternative Proposal.
ARTICLE VI
CONDITIONS TO CLOSING; CLOSING DELIVERIES
6.1 Conditions to Each Party's Obligations. The respective
obligations of each party to effect the transaction contemplated
hereby shall be subject to the fulfillment at or prior to the
Effective Time of the following conditions:
(a) This Agreement and the Merger shall have been approved by the
requisite vote of the stockholders of the Company.
37
(b) This Agreement and the Merger shall have been approved by each
Governmental Entity whose approval is required for the consummation of
the Merger and the transaction contemplated hereby, such approvals
shall remain in full force and effect and all waiting periods relating
to such approvals shall have expired and the waiting period applicable
to the transaction contemplated hereby under the HSR Act shall have
expired or been earlier terminated.
(c) The Registration Statement shall have become effective in
accordance with the provisions of the Securities Act. No stop order
suspending the effectiveness of the Registration Statement shall have
been issued by the SEC and remain in effect. All necessary state
securities or "Blue Sky" authorizations shall have been received.
(d) Parent Common issuable in the Merger (or with respect to the
outstanding Company Options or Company restricted stock, unit, PCDU or
any similar executive compensation awards, following the Merger) shall
have been authorized for listing on the NYSE, upon official notice of
issuance.
(e) No Governmental Entity or court of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any law, rule,
regulation, executive order, judgment, decree, injunction or other
order (whether temporary, preliminary or permanent) which is then in
effect and has the effect of making the Merger or the transaction
contemplated hereby illegal (each party agreeing to use all reasonable
best efforts to have any such judgment, decree, injunction or other
order to be vacated or lifted).
6.2 Conditions to the Company's Obligations. The obligations of the
Company to consummate the Merger are subject to the fulfillment (or
waiver) of all of the following conditions on or prior to the Closing
Date:
(a) Each and every representation and warranty made by Parent or
Merger Sub shall be true and correct in all material respects when
made and, except to the extent such representations and warranties
speak as of an earlier date, as of the Closing Date as though made on
and as of the Closing Date, except (i) for changes specifically
permitted by this Agreement and (ii) for such failures of
representations and warranties not otherwise qualified by Material
Adverse Effect to be true and correct which would not have a Material
Adverse Effect on Parent.
(b) All obligations of Parent and Merger Sub to be performed
hereunder through, and including on, the Closing Date (including,
without limitation, all obligations which
38
Parent and Merger Sub would be required to perform at the Closing if the
transaction contemplated hereby was consummated) shall have been performed
in all material respects.
(c) The Company shall have received an opinion of Skadden, Arps,
Slate, Meagher & Flom, counsel to the Company, in form and substance
reasonably satisfactory to the Company, dated as of the Effective
Time, substantially to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion which are
consistent with the state of facts existing at the Effective Time, the
Merger will be treated for Federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code and
that accordingly: (i) no gain or loss will be recognized by Parent,
Merger Sub or the Company as a result of the Merger; (ii) no gain or
loss will be recognized by the Company Stockholders who exchange their
shares of Company Common solely for shares of Parent Common pursuant
to the Merger (except with respect to cash received in lieu of
fractional shares as contemplated by Section 2.4 hereof); (iii) the
tax basis of the Parent Common received by Company Stockholders who
exchange all of their shares of Company Common solely for shares of
Parent Common in the Merger will be the same as the tax basis of the
shares of Company Common surrendered in exchange therefor (reduced by
any amount allocable to a fractional share interest for which cash is
received as contemplated by Section 2.4 hereof); and (iv) the holding
period of Parent Common (including the holding period of any
fractional share interest) in the hands of the Company Stockholders
will include the holding period of their Company Common exchanged
therefor. In rendering such opinion, Skadden, Arps, Slate, Meagher &
Flom may require and rely upon representations contained in
certificates of officers of Parent, Merger Sub, the Company and
others.
(d) Since the date hereof, Parent and the Parent Subsidiaries shall
not have suffered any change resulting in a Material Adverse Effect on
Parent.
(e) The Company shall have received a "pooling letter" from Price
Waterhouse LLP, the Company's independent auditors, dated not earlier than
five (5) days prior to the Closing Date, to the effect that, subject to
customary qualifications no event has occurred with respect to the Company
which would preclude the Merger from being treated as a pooling of interests
for accounting purposes.
(f) The Company shall have received the written opinion of Lazard
Freres & Co., financial adviser to the Company, dated as of the date
of the Proxy Statement -
39
Prospectus, to the effect that, as of the date of the Proxy Statement -
Prospectus, the consideration to be received by the Company Stockholders
is fair, from a financial point of view, to the Company Stockholders.
6.3 Conditions to Parent's Obligations. The obligations of Parent
and Merger Sub to consummate the Merger are subject to the fulfillment
(or waiver) of all of the following conditions on or prior to the
Closing Date:
(a) Each and every representation and warranty made by the Company
shall be true and correct in all material respects when made and,
except to the extent such representations and warranties speak as of
an earlier date, as of the Closing Date as though made on and as of
the Closing Date, except (i) for changes specifically permitted by
this Agreement, (ii) for such failures of representations and
warranties not otherwise qualified by Material Adverse Effect to be
true and correct which would not have a Material Adverse Effect on the
Company, (iii) that any changes or developments with respect to any
item or matter disclosed in Part V of the Company Disclosure Schedule
(and any adverse change resulting therefrom in, or adverse effect
thereof on, the business, results of operation, financial condition,
properties or assets of the Company or any Company Subsidiary) shall
be disregarded for purposes of determining whether each and every such
representation and warranty is true and correct as of the Closing Date
and (iv) that any changes or developments with respect to any item or
matter disclosed in the Company Disclosure Schedule (other than in
Part V) (and any adverse change resulting therefrom in, or adverse
effect thereof on, the business, results of operation, financial
condition, properties or assets of the Company or any Company
Subsidiary) shall be disregarded for purposes of determining whether each
and every such representation and warranty is true and correct as of the
Closing Date if the probable aggregate adverse change resulting therefrom
(determined in accordance with this Section 6.3(a)) in, or the probable
aggregate adverse effect thereof (determined in accordance with this
Section 6.3(a)) on, the financial condition of the Company and the Company
Subsidiaries taken as whole is less than or equal to $25,000,000. Any
determination by Parent or Merger Sub regarding the probable adverse change
resulting from, or the probable adverse effect of, any change or development
referred to in clause (iv) of this Section 6.3(a) or clause (ii) of Section
6.3(d) shall be made by the Board of Directors of Parent, in good faith,
after consultation with its advisors expert in the area of such item or
matter, after consultation with the Company and its advisors expert in
the area of such item or matter and after consideration of all
reasonable strategies identified by the Company or such
40
experts for mitigating such change or effect and the generally accepted
accounting principles applicable to the determination of whether a change
or effect is probable.
(b) All obligations of the Company to be performed hereunder through,
and including on, the Closing Date (including, without limitation, all
obligations which the Company would be required to perform at the
Closing if the transaction contemplated hereby was consummated) shall
have been performed in all material respects.
(c) Parent shall have received the opinion of Altheimer & Gray,
counsel for Parent, dated as of the Closing Date, to the effect that
the Merger shall be treated for Federal income tax purposes as a
reorganization with the meaning of Section 368(a) of the Code, and
that Parent and the Company shall each be a party to that
reorganization with the meaning of Section 368(a) of the Code.
(d) Since the date hereof, the Company and the Company Subsidiaries
shall not have suffered any change resulting in a Material Adverse
Effect on the Company, except (i) that any changes or developments
with respect to any matter disclosed in Part V of the Company
Disclosure Schedule (and any adverse change resulting therefrom in, or
adverse effect thereof on, the business, results of operation,
financial condition, properties or assets of the Company or any
Company Subsidiary) shall be disregarded for purposes of determining
whether the Company has suffered any such change and (ii) that any
changes or developments with respect to any item or matter disclosed
in the Company Disclosure Schedule (other than in Part V) (and any
adverse change resulting therefrom in, or adverse effect thereof on,
the business, results of operation, financial condition, properties or
assets of the Company or any Company Subsidiary) shall be disregarded
for purposes of determining whether the Company has suffered any such
change if the probable aggregate adverse change resulting therefrom
(determined in accordance with Section 6.3(a)) in, or the probable
aggregate adverse effect thereof (determined in accordance with
Section 6.3(a)) on, the financial condition of the Company and the
Company Subsidiaries taken as a whole is less than or equal to
$25,000,000.
(e) Parent shall have received a "pooling letter" from Arthur
Andersen & Co., Parent's independent auditors, dated not earlier than
five (5) days prior to the Closing Date to the effect that, subject to
customary qualifications and in reliance on the "pooling letter" of
Price Waterhouse LLP contemplated by Section 6.2(e), the Merger will
be treated as a pooling of interests for accounting purposes.
41
(f) Parent shall have received an "Affiliates" agreement contemplated
by Section 4.2(d) from each person named in the letter delivered to
Parent by the Company pursuant to Section 4.2(d).
6.4 Closing Deliveries.
(a) At the Closing, the Company shall cause to be delivered to Parent
and Merger Sub all of the following:
(i) a closing certificate dated the Closing Date and executed on
behalf of the Company by a duly authorized officer of the Company to
the effect set forth in Sections 6.3(a) and (b) hereof; and
(ii) certified copies of such corporate records of the Company and the
Company Subsidiaries and copies of such other documents as Parent or
its counsel may reasonably have requested in connection with the
consummation of the transaction contemplated hereby.
(b) At the Closing, Parent shall cause to be delivered to the Company
all of the following:
(i) a closing certificate dated the Closing Date and executed on
behalf of Parent by a duly authorized officer of Parent to the effect
set forth in Sections 6.2(a) and (b) hereof; and
(ii) certified copies of such corporate records of Parent and Merger
Sub and copies of such other documents as the Company or its counsel
may reasonably have requested in connection with the consummation of
the transaction contemplated hereby.
ARTICLE VII
TERMINATION/EFFECT OF TERMINATION
7.1 Right to Terminate. Anything to the contrary herein
notwithstanding, this Agreement and the transaction contemplated
hereby may be terminated at any time prior to the Effective Time by
prompt notice given in accordance with Section 8.4:
(a) by the mutual written consent of Parent, Merger Sub and the
Company (with the approval of their respective Boards of Directors);
42
(b) by Parent (with the approval of its Board of Directors) or the
Company (with the approval of its Board of Directors) if:
(i) any Governmental Entity whose approval is
required for consummation of the Merger has denied approval of the
Merger and such denial has become final and nonappealable (each party
agreeing to use all reasonable best efforts to obtain such approval); or
(ii) the Effective Time shall not have occurred at or
before 11:59 p.m. Boston time on September 1, 1995;
provided, however, that the right to terminate this Agreement
under this Section 7.1(b) shall not be available to any party whose
failure to fulfill any of its obligations under this Agreement has
been the cause of or resulted in the occurrence of any of the events
in clauses (i) or (ii) above;
(c) by Parent (with the approval of its Board of Directors), by
giving written notice of such termination to the Company, if (i) there
has been a material breach of any material agreement of the Company
herein, such that in the reasonable opinion of Parent, the condition
to closing in Section 6.3(b) could not be expected to be satisfied by
the termination date contemplated by Section 7.1(b)(ii) or (ii) there
has been a material breach of any material representation or warranty
of the Company herein such that, in the reasonable opinion of Parent,
the condition to closing in Section 6.3(a) could not be expected to be
satisfied by the termination date contemplated by Section 7.1(b)(ii);
or
(d) by the Company (with the approval of its Board of Directors), by
giving written notice of such termination to Parent, if (i) there has
been a material breach of any agreement of Parent or Merger Sub
herein, such that in the reasonable opinion of the Company, the
condition to closing in Section 6.2(b) could not be expected to be
satisfied by the termination date contemplated by Section 7.1(b)(ii),
(ii) there has been a material breach of any material representation
or warranty of Parent or Merger Sub herein, such that in the
reasonable opinion of the Company, the condition to closing in Section
6.2(a) could not be expected to be satisfied by the termination date
contemplated by Section 7.1(b)(ii), (iii) the Company's stockholders
do not approve and adopt this Agreement at the Meeting, (iv) the Board
of Directors of the Company fails to make, withdraws, or modifies or
changes the recommendation referred to in
43
Section 4.2(a)(ii) based on its good faith determination, after consultation
with counsel, that making such recommendation, or the failure to withdraw,
modify or change such recommendation, could reasonably be deemed a breach of
its fiduciary duties under applicable law or (v) the Board of Directors of
the Company recommends to the stockholders of the Company an Alternative
Proposal that the Board of Directors of the Company determines in good faith,
after consultation with its financial advisor, is likely to be more favorable,
from a financial point of view, to the stockholders of the Company than the
Merger.
7.2 Certain Effects of Termination. In the event of the termination
of this Agreement as provided in Section 7.1 hereof:
(a) except as provided in Section 8.5 hereof and subsections (b) and
(c) of this Section 7.2, this Agreement shall forthwith become void,
there shall be no liability on the part of Parent, Merger Sub or the
Company or any of their respective affiliates, officers or directors
and all rights and obligations of any party hereto shall cease;
provided, however, that nothing herein shall relieve any party from
liability for the willful breach of any of its representations,
warranties, covenants or agreements set forth in this Agreement, prior
to such termination;
(b) each party, if so requested by the other party, will return
promptly every document furnished to it by or on behalf of the other
party in connection with the transaction contemplated hereby, whether
so obtained before or after the execution of this Agreement, and any
copies thereof (except for copies of documents publicly available)
which may have been made, and will use reasonable efforts to cause its
representatives and any representatives of financial institutions and
investors and others to whom such documents were furnished promptly to
return such documents and any copies thereof any of them may have
made; and
(c) each party hereto shall continue to abide by the terms of the
Confidentiality Agreement notwithstanding any termination of this
Agreement.
This Section 7.2 shall survive any termination of this Agreement.
ARTICLE VIII
MISCELLANEOUS
8.1 Non Survival of Representations, Warranties and Agreements. The
agreements contained in Articles I and II hereof, Sections 4.2(b) and
4.3(a) hereof,
44
Article V hereof, Section 7.2 hereof and this Article VIII, and, without
limitation, by the specific enumeration of the foregoing, each other
agreement contained in this Agreement or in any certificate or other document
delivered pursuant to this Agreement and which contemplates performance at
any time after the Effective Time, shall survive the Merger. None of the
representations, warranties or agreements (other than those agreements
referred to in the previous sentence of this Section 8.1) contained in
this Agreement or in any certificate or other document delivered pursuant
to this Agreement shall survive the Merger.
8.2 Amendment. This Agreement may be amended by the parties hereto,
with the approval of their respective Boards of Directors, at any time
prior to the Effective Time, whether before or after approval hereof
by the stockholders of the Company, but, after such approval by the
stockholders of the Company, no amendment shall be made without the
further approval of such stockholders if such amendment would violate
Section 78 of the MBCL. This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the parties
hereto.
8.3 Publicity. Except as otherwise required by law or applicable
stock exchange rules, press releases and other publicity concerning
the transaction contemplated by this Agreement shall be made only with
the prior agreement of the Company and Parent. Notwithstanding the
foregoing, Parent and the Company shall use their reasonable efforts
to consult with each other with respect to, and agree upon, the text
of any press release or other public statement, before issuing any
such press release or otherwise making public statements with respect
to the transaction contemplated hereby and in making any filings with
any federal or state governmental or regulatory agency or with any
national securities exchange with respect thereto.
8.4 Notices. All notices required or permitted to be given hereunder
shall be in writing and may be delivered by hand, by facsimile, by
nationally recognized private courier, or by United States mail.
Notices delivered by mail shall be deemed given three (3) business
days after being deposited in the United States mail, postage prepaid,
registered or certified mail, return receipt requested. Notices
delivered by hand by facsimile, or by nationally recognized private
courier shall be deemed given on the day of receipt (if such day is a
business day or, if such day is not a business day, the next
succeeding business day); provided, however, that a notice delivered
by facsimile shall only be effective if and when confirmation is
received of receipt of the facsimile at the number provided in this
Section 8.4. All notices shall be addressed as follows:
45
If to the Company:
100 Chelmsford Street
Lowell, Massachusetts 01853-3294
Attention: Chairman and Chief Executive Officer
Fax: (508) 656-2555
with a copy to:
Skadden, Arps, Slate, Meagher & Flom
One Beacon Street
Boston, Massachusetts 01208
Attention: David T. Brewster, Esq.
Fax: (617) 573-4822
If to Parent or Merger Sub:
470 Friendship Road, M/S 176-34
Harrisburg, Pennsylvania 17111
Attention: Corporate Development
Fax: (717) 780-4433
with a copy to:
Altheimer & Gray
10 South Wacker Drive
Suite 4000
Chicago, Illinois 60606
Attention: David W. Schoenberg, Esq.
Fax: (312) 715-4800
and/or to such other respective addresses and/or addressees as may be
designated by notice given in accordance with the provisions of this
Section 8.4.
8.5 Expenses; Transfer Taxes; Certain Payments.
(a) Each party hereto shall bear all fees and expenses incurred by such
party in connection with, relating to or arising out of the
negotiation, preparation, execution, delivery and performance of this
Agreement and the consummation of the transaction contemplated hereby,
including, without limitation, financial advisors', attorneys',
accountants' and other professional fees and expenses, except that (a)
the filing fee in connection with the filing of the Registration
Statement or the Proxy Statement - Prospectus with the SEC (other than
the portion of such filing fee allocable to the shares of Parent
Common to be issued following the Merger with respect to the
outstanding Company Options or Company restricted stock, unit, PCDU or
any similar executive compensation awards which portion shall be borne
by Parent) and (b) the expenses incurred in connection with the
printing and mailing of the Registration Statement and the Proxy
Statement - Prospectus shall be shared equally by the Company and
Parent.
46
(b) So long as Parent and Merger Sub shall have not breached their
obligations hereunder, if this Agreement is terminated by the Company
pursuant to clause (v) of Section 7.1(d) hereof (it being hereby
agreed that, if the Board of Directors of the Company recommends to
the stockholders of the Company an Alternative Proposal that the Board
of Directors of the Company determines in good faith, after
consultation with its financial advisor, is likely to be more
favorable, from a financial point of view, to the stockholders of the
Company than the Merger, this Agreement shall be deemed to have been
terminated by the Company pursuant to clause (v) of 7.1(d) hereof
effective as of the date of such recommendation without any further
action by the Company), the Company shall promptly, but in no event
later than two (2) business days after such termination, pay Parent a
fee of $11,000,000, which amount shall be payable by wire transfer of
same day funds. If the Company fails to promptly pay the amount due
pursuant to this Section 8.5(b), and, in order to obtain such payment,
Parent or Merger Sub commences a suit which results in a judgment
against the Company for all or a substantial portion of the fee set
forth in this Section 8.5(b), the Company shall pay to Parent and
Merger Sub their costs and expenses (including reasonable attorneys'
fees) in connection with such suit.
8.6 Entire Agreement; Representations and Warranties. This Agreement
and the instruments to be delivered by the parties pursuant to the
provisions hereof constitute the entire agreement between the parties
and shall be binding upon and inure to the benefit of the parties
hereto and their respective legal representatives, successors and
permitted assigns. Each Exhibit, schedule and the Company Disclosure
Schedule, shall be considered incorporated into this Agreement. The
parties make no representations or warranties to each other, except as
contained in this Agreement, and any and all prior representations and
warranties made by any party or its representatives, whether verbally
or in writing, are deemed to have been merged into this Agreement, it
being intended that no such prior representations or warranties shall
survive the execution and delivery of this Agreement.
8.7 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by the respective Boards
of Directors, may to the extent legally allowed, (i) extend the time
for performance of any of the obligations or other acts of the other
parties hereto, (ii) waive any inaccuracies in the representations and
warranties contained herein or in any documents delivered pursuant
hereto and (iii) waive compliance with any the terms, covenants or
conditions contained herein. Notwithstanding anything herein to the
contrary, the failure in any one or more instances of a party to
insist upon performance of any of the terms, covenants or
47
conditions of this Agreement, to exercise any right or privilege in this
Agreement conferred, or the waiver by said party of any breach of any
of the terms, covenants or conditions of this Agreement, shall not be
construed as a subsequent waiver of any such terms, covenants,
conditions, rights or privileges, but the same shall continue and
remain in full force and effect as if no such forbearance or waiver
had occurred. No waiver shall be effective unless it is in writing
and signed by an authorized representative of the waiving party.
8.8 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, and all
such counterparts shall constitute but one instrument.
8.9 Severability. The invalidity or unenforceability of any
provision of this Agreement or portion of a provision shall not affect
the validity or enforceability of any other provision of this
Agreement or the remaining portion of the applicable provision.
8.10 Applicable Law. This Agreement shall be governed and controlled
as to validity, enforcement, interpretation, construction, effect and
in all other respects by the internal laws of the Commonwealth of
Massachusetts applicable to contracts made in that Commonwealth.
8.11 Binding Effect; Benefit. This Agreement shall inure to the
benefit of and be binding upon the parties hereto, and their
successors and permitted assigns. Except as expressly provided herein
(including, without limitation, in Article II hereof and Sections 5.3
and 5.4 hereof), nothing in this Agreement, express or implied, shall
confer on any person other than the parties hereto, and their
respective successors and permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement,
including, without limitation, third party beneficiary rights.
8.12 Assignability. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by either party
without the prior written consent of the other party.
8.13 Governmental Reporting. Notwithstanding anything in this
Agreement to the contrary, nothing in this Agreement shall be
construed to mean that a party hereto or other person must make or
file, or cooperate in the making or filing of, any return or report to
any Governmental Entity in any manner that such person or such party
reasonably believes or reasonably is advised is not in accordance with
law.
48
8.14 Consent to Jurisdiction. This Agreement has been executed and
delivered in and shall be deemed to have been made in the Commonwealth
of Massachusetts. The Company, Parent and Merger Sub each agree to
the exclusive jurisdiction of any state or Federal court within the City
of Boston, Massachusetts, having subject matter jurisdiction, with respect
to any claim or cause of action arising under or relating to this Agreement,
and waives personal service of any and all process upon it, and consents that
all services of process be made by registered mail, directed to it at its
address as set forth in Section 8.4 hereof, and service so made shall be
deemed to be completed when received. The Company, Parent and Merger Sub
each waive any objection based on forum non conveniens and waive any objection
to venue of any action instituted hereunder. Nothing in this Section 8.14
shall affect the right of the Company or Parent to serve legal process in
any other manner permitted by law.
8.15 Definitions. The following terms are defined in the following
sections of this Agreement:
Defined Term Where Found
Agreement Preamble
Alternative Proposal 5.2
Articles of Merger 1.2
CERCLA 3.2(o)(ii)
Certificates 2.2(b)
Closing 1.6
Closing Date 1.6
Code Recitals
Company Preamble
Company Common 2.1
Company Disclosure Schedule 3.1
Company ERISA Affiliate 3.3(l)(iii)
Company Option 2.1(e)
Company Plans 3.3(l)(i)
Company Stockholders 2.2(a)
Company Stock Option Plans 2.1(e)
Company Subsidiary 3.3(a)
Company's SEC Documents 3.3(h)
Confidentiality Agreement 4.2(b)
Dissenting Stock 2.1(d)
Effective Time 1.2
Environmental Laws 3.2(n)(ii)
Environmental Permits 3.2(n)(ii)
ERISA 3.2(k)
Exchange Act 3.2(g)
Exchange Agent 2.2(a)
Exchange Fund 2.2(a)
Fairness Opinion 3.3(t)
Final Parent Stock Price 2.4
GAAP 3.2(g)
49
Governmental Entity 3.2(d)
Hazardous Materials 3.2(o)(ii)
HSR Act 3.2(d)
Indemnifiable Claim 5.3(a)
Indemnified Person(s) 5.3(a)
Material Adverse Effect 3.2(b) and 3.3(b)
MBCL Recitals
Meeting 2.1(d)
Merger Recitals
Merger Consideration 2.1(c)
Merger Sub Preamble
NYSE 5.1(b)
Parent Preamble
Parent Common 2.1(c)
Parent Disclosure Schedule 3.1
Parent's SEC Documents 3.2(g)
Proxy Statement - Prospectus 5.1(a)
Registration Statement 3.2(d)
Regulatory Approvals 3.2(d)
Release 3.2(o)(ii)
Return(s) 3.2(j)(i)
Rights 3.3(c)
Rights Agreement 3.3(c)
SEC 3.2(d)
Securities Act 3.2(d)
Stock Option Agreement 3.3(c)(i)
Surviving Corporation 1.1
Tax(es) 3.2(j)(i)
8.16 Headings. The headings contained in this Agreement are for
convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.
8.17 Interpretation. Whenever the term "including" is used in this
Agreement it shall mean "including, without limitation," (whether or
not such language is specifically set forth) and shall not be deemed
to limit the range of possibilities to those items specifically
enumerated. All joint obligations herein shall be deemed to be joint
and several whether specifically so specified.
50
IN WITNESS WHEREOF, the parties have executed this Agreement on
the date first above written.
PARENT:
AMP INCORPORATED
By: /s/ William J. Hudson
William J. Hudson
Chief Executive Officer and President
ATTEST:
[seal]
/s/ David F. Henschel
David F. Henschel
Secretary
MERGER SUB:
AMP MERGER CORP.
By: /s/ Howard S. Harris
Howard S. Harris
President
ATTEST:
[seal]
/s/ David W. Schoenberg
David W. Schoenberg
Clerk and Assistant
Treasurer
THE COMPANY:
M/A-COM, INC.
By: /s/ Thomas A. Vanderslice
Thomas A. Vanderslice
Chairman of the Board, President
and Chief Exective Officer
ATTEST:
[seal]
/s/ Stephen P. Zezima
Stepehn P. Zezima
Assistant Treasurer
news from
AMP
AMP Incorporated
P.O. Box 3608
Harrisburg, PA 17105-3608
CONTACT: AMP Incorporated Richard Skaare 717/780-7174
Thea Hocker 717/780-7302
M/A-COM Inc. Tori Dillon 508/656-2515
AMP AND M/A-COM ANNOUNCE MERGER AGREEMENT
TO SERVE WORLDWIDE, HIGH-GROWTH TELEPHONY MARKET
HARRISBURG, PA, March 9, 1995 -- AMP Incorporated (NYSE-AMP), the
world's leading supplier of interconnection products and services and
M/A-COM, Inc. (NYSE-MAI), a world leader in the design and manufacture
of microwave, millimeter wave, wireless telephone and radio frequency
interconnection components to the wireless data and telecommunications
industries, today jointly announced that the directors of both
companies have approved a definitive merger agreement.
The proposed merger will be conducted as an exchange of stock, with
the stockholders of M/A-COM receiving 0.280 AMP common shares for each
M/A-COM share. This exchange will be structured as a tax-free
reorganization for federal income tax purposes and as a pooling of
interests for accounting purposes.
This merger will enhance AMP's strategic presence in the high-growth
market for advanced wireless components. William J. Hudson, president
and CEO of AMP Incorporated, said "M/A-COM's Microelectronic Division
presents an exciting opportunity for AMP to immediately obtain a broad
range of proven wireless products, as well as world-class
manufacturing and engineering capabilities in this rapidly-growing
field. M/A-COM serves major OEMs worldwide by providing solutions to
microwave, wireless telephony and radio frequency interconnect
applications in the form of discrete semiconductors, integrated
circuits, multi-function assemblies, cables, connectors, antennas and
other related devices and components. This customer base is a subset
of the same customers to which AMP provides interconnect solutions
worldwide. Consequently the merger of our two companies will enable
us to offer a much broader range of product solutions to a wide base
of customers."
James E. Marley, chairman of AMP, noted the following additional
attributes of M/A-COM that make this acquisition a particularly good
fit for AMP: "M/A-COM has achieved a broad presence as a component
supplier to OEMs
- - more -
AMP & M/A-COM Merger - 2
across the wide range of emerging wireless applications and
technologies. This multi-customer, multi-market strategy mirrors the
practice which has made AMP so successful with our traditional
interconnection products and value-added systems. Additionally, M/A-
COM's Interconnect Division and Antenna & Cable Division will provide
direct synergistic benefits to AMP's core terminal and connector
business. Their radio frequency connectors and antenna and cable
offerings will significantly broaden AMP's position in these important
markets."
M/A-COM's Chairman and CEO Thomas A. Vanderslice was equally
enthusiastic about the proposed merger: "This linkage with AMP's
global infrastructure will dramatically accelerate M/A-COM's ability
to service the component needs of leading wireless OEMs worldwide, all
of whom are already AMP customers. AMP's strong technical and
financial resource base will also enable us to maintain a leading-edge
presence in the design and development of advanced wireless components
for emerging applications far into the next century."
On a pro forma basis, the combined sales of the two companies for
calendar year 1994 was approximately $4.5 billion. It is anticipated
that the transaction will not have a significant impact on AMP's 1996
earnings per share.
The merger is expected to close in June, subject to the timing
requirements associated with the required regulatory filing and
approval by the shareholders of M/A-COM. AMP anticipates incurring
certain transactional and restructuring expenses relating to the
acquisition in 1995; however, in whole, these charges are not expected
to be material to AMP's 1995 earnings.
M/A-COM will be set up as a wholly-owned AMP subsidiary, serving as
the cornerstone of a new AMP business group dedicated to the wireless
industry. The leadership of this new organization, the Global
Wireless Products Group, will report directly to Bill Hudson. This
independent structure will support the growth of the company's
combined presence in the wireless market, while providing flexibility
over time to selectively integrate or realign particular business
elements of M/A-COM or AMP to fully capitalize on the synergistic
opportunities presented by this merger.
AMP, headquarters in Harrisburg, PA, supplies connectors and
interconnection systems to a wide range of markets around the world.
Employing 30,400 people in 36 countries, the company ranks within the
top 150 of the Fortune 500 list and had a record $4.03 billion sales
in 1994. M/A-COM, headquartered in Lowell, MA, is a leading worldwide
supplier of high performance components for wireless applications.
M/A-COM, with 3,500 employees, reported sales of $342 million in its
fiscal year 1994 which ended October 1, 1994.
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