UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13G
Under the Securities Exchange Act of 1934
(Amendment No. 19)*
MERCANTILE STORES COMPANY, INC.
(Name of Issuer)
Common Stock, $.14 2/3 par value
(Title of Class of Securities)
587533 10 0
(CUSIP Number)
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
CUSIP No. 587533 10 0
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Minot Mercantile Corporation
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)[ ]
(b)[ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 CITIZEN OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
5 SOLE VOTING POWER
None
NUMBER OF
----------------------------------------------------
SHARES 6 SHARED VOTING POWER
BENEFICIALLY 10,484,875
----------------------------------------------------
OWNED BY EACH 7 SOLE DISPOSITIVE POWER
REPORTING None
----------------------------------------------------
PERSON 8 SHARED DISPOSITIVE POWER
WITH 10,484,875
- --------------------------------------------------------------------------------
9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
10,484,875
- --------------------------------------------------------------------------------
10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES
- --------------------------------------------------------------------------------
11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
28.46%
- --------------------------------------------------------------------------------
12 TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
<PAGE>
This Statement on Schedule 13G (the "Schedule 13G") relates to the tender
offer by Dillard's, Inc. ("Dillard's"), a Delaware corporation, and MSC
Acquisitions, Inc. ("MSC"), a Delaware corporation and wholly owned subsidiary
of Dillard's, to acquire directly or indirectly all of the outstanding shares of
Common Stock, par value $.14 2/3 per share, of Mercantile Stores Company, Inc.
(the "Issuer"), at $80.00 per share.
Item 4. Ownership
(a) Pursuant to (i) the irrevocable option and the irrevocable proxy
granted to Dillard's by Minot Mercantile Corporation ("Minot Corp.") pursuant to
the Stockholders' Agreement dated as of May 16, 1998 by and among Dillard's,
Minot Corp. and each of the other persons listed on the signature pages thereof,
a copy of which is attached hereto as Exhibit A, (ii) the Agreement and Plan of
Merger dated as of May 16, 1998 by and among Minot Corp., Dillard's and MMC
Acquisition, Inc., a wholly-owned subsidiary of Dillard's (a copy of which is
attached hereto as Exhibit B), providing for the merger (the "Merger") of MMC
Acquisition, Inc. with Minot Corp., and (iii) the Proxy and Indemnification
Agreement dated as of May 16, 1998 by and between Dillard's and Minot Corp. (a
copy of which is attached hereto as Exhibit C) pursuant to which not less than
70% of all of the holders of Minot Corp.'s common stock have granted MMC
Acquisition, Inc. an irrevocable proxy to vote their Minot Corp. shares in favor
of the Merger, Minot Corp. may no longer be a beneficial owner of 10,484,875
shares of the Issuer (constituting 28.46% of the outstanding shares of the
Issuer).
(b) Percent of Class: 28.46%
(c) Number of shares as to which the person has:
(i) Sole power to vote or to direct the vote 0
(ii) Shared power to vote or to direct the vote 10,484,875
(iv) Sole power to dispose or to direct the disposition of 0
(iv) Shared power to dispose or to direct the disposition of 10,484,875
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: June 25, 1998
By: /s/ Minot K. Milliken
---------------------
Name: Minot K. Milliken
Title: Vice President
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit Description
<S> <C>
A Stockholders' Agreement, dated as of May 16, 1998, by and
among Dillard's, Inc. and Minot Mercantile Corporation and
each of the other parties listed on the signature pages of the
Agreement
B
Agreement and Plan of Merger dated as of May 16, 1998 by and
among Minot Mercantile Corporation, Dillard's, Inc. and MMC
Acquisition, Inc., a wholly-owned subsidiary of Dillard's,
Inc.
C
Proxy and Indemnification Agreement dated as of May 16, 1998
by and between Dillard's, Inc. and Minot Mercantile
Corporation.
</TABLE>
Exhibit A
STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT (this "Agreement"), dated as of May 16, 1998, by
and between Dillard's, Inc., a company organized under the laws of Delaware
("Purchaser"), and each of the parties listed on the signature page hereto
(individually a "Seller" and collectively, the "Sellers").
RECITALS
Concurrently herewith, Purchaser, MSC Acquisitions, Inc., a Delaware
corporation and a wholly-owned subsidiary of Purchaser, and Mercantile Stores
Company (the "Company"), a Delaware corporation, are entering into an Agreement
and Plan of Merger of even date herewith attached hereto (the "Merger
Agreement"; capitalized terms used but not defined herein shall have the
meanings set forth in the Merger Agreement), pursuant to which Sub agrees to
make a tender offer (the "Offer") for all outstanding shares of common stock,
$.14 2/3 par value per share (the "Common Stock"), of the Company, at $80 per
share (the "Offer Price"), net to the seller in cash, to be followed by a merger
(the "Merger") of Sub with and into the Company.
As a condition to their willingness to enter into the Merger Agreement and
make the Offer, Purchaser and Sub have required that each of the Sellers agree,
and each Seller has agreed, among other things, to grant to Purchaser the Option
and irrevocable proxy with respect to the number of shares of Common Stock of
such Seller set forth opposite such Seller's name on the signature page hereto,
together with any additional shares when and if they are acquired (such shares,
and any additional shares when and if they are acquired, being referred to
herein as the "Shares") on the terms and conditions provided for herein.
The Board of Directors of the Company has approved the Purchaser becoming
an "interested shareholder" for purposes of Section 203 of the Delaware General
Corporation Law and for all purposed under Article Eighth of the Company's
Certificate of Incorporation.
AGREEMENT
To implement the foregoing and in consideration of the mutual agreements
contained herein, the parties agree as follows:
1. Option to Purchase Shares.
1.1 Grant of Option. Each Seller hereby grants to Purchaser an irrevocable
option (the "Option") to purchase all of the Shares set forth below such
Seller's name on the signature page hereto at a purchase price of $80 per share
(the "Exercise Price") in cash (subject to adjustment pursuant to Section 7
below) for each Share purchased.
<PAGE>
2
1.2 Exercise of Option.
(a) Subject to applicable law (including Rule 10b-13 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), the Option may be
exercised by Purchaser, in whole or in part, at any time, or from time to time,
commencing upon the Exercise Date and prior to the Expiration Date (as
hereinafter defined). As used herein, the term "Exercise Date" means the first
to occur of any of the following dates:
(i) Seller fails to perform any agreement or covenant of Seller contained
herein in any material respect; or
(ii) the Merger Agreement is terminated and Purchaser is entitled to the
payment of a termination fee pursuant to any of the provisions set forth in
Section 8.3(a)(ii) of the Merger Agreement.
As used herein, the term "Expiration Date" means the first to occur of any
of the following dates:
(1) the Effective Time (as defined in the Merger Agreement);
(2) 12 months after the date of the termination of the Merger Agreement; or
(3) written notice of termination of this Agreement by Purchaser to the
Seller.
(b) In the event Purchaser wishes to exercise the Option, Purchaser shall
send a written notice to Seller of its intention to so exercise the Option (a
"Notice"), specifying the place, time and date of the closing of such purchase
(the "Closing"), which date shall not be less than two business days nor more
than five business days from the date on which a Notice is delivered; provided,
that the Closing shall be held only if such purchase would not otherwise then
violate or cause the violation of, any applicable law or regulations (including,
without limitation, the Hart-Scott-Rodino Antitrust Improvements Act of 1976
(the "HSR Act")) or any decree, order or injunction of any governmental agency,
authority or court, whether temporary, preliminary or permanent. If the Closing
shall be violative of any such laws or rules or any such decree, order or
injunction, then such Notice shall be deemed rescinded and of no effect and
Purchaser shall send a new Notice at such time as the Closing is not violative
of such laws, rules, decrees, orders or injunctions. Notwithstanding the
occurrence of such rescission, this Agreement shall remain in full force and
effect.
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3
(c) At the Closing, Seller shall deliver to Purchaser all of the Shares to
be purchased by delivery of a certificate or certificates evidencing such Shares
so purchased by Purchaser duly endorsed or with executed blank stock power
attached, in either event with signature guaranteed such that registered
ownership of the Shares may be registered for transfer on the books of the
Company and Purchaser will make payment to Seller of the aggregate Exercise
Price for the Shares being purchased upon exercise of the Option in immediately
available funds in the amount equal to the Exercise Price multiplied by the
number of Shares purchased pursuant to this Section 1.
(d) Notwithstanding any of the foregoing, with respect to the Shares held
by Minot Mercantile Corporation and Woodbank Mills, Inc. (collectively, the "C
Corps"), Purchaser shall form an acquisition subsidiary to acquire such Shares
in the form of a merger pursuant to a form of merger agreement reasonably
acceptable to the parties, and each party will use its best efforts to
consummate the acquisition of such Shares pursuant to the Option by merger.
2. Agreement to Tender. Each Seller hereby agrees to validly tender
pursuant to the Offer and not withdraw all Shares; provided, however, the C
Corps shall not be obligated to tender the Shares held by each of them because
such Shares will be acquired by Merger as contemplated by the Merger Agreement.
3. Irrevocable Proxy. Each Seller hereby irrevocably appoints Purchaser or
any designee of Purchaser the lawful agent, attorney and proxy of such
shareholder, during the term of this Agreement, to (a) vote the Shares in favor
adoption of the Merger Agreement; (b) vote the Shares against any action or
agreement that would result in a breach in any material respect of any covenant,
representation or warranty or any other obligation or agreement of the Company
under the Merger Agreement; and (c) vote the Shares against any action or
agreement (other than the Merger Agreement or the transactions contemplated
thereby) that would impede, interfere with, delay, postpone or attempt to
discourage the Merger or the Offer, including, but not limited to: (i) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company and its subsidiaries; (ii) a sale or
transfer of a material amount of assets of the Company and its subsidiaries or a
reorganization, recapitalization or liquidation of the Company and its
subsidiaries; (iii) any change in the management or board of directors of the
Company, except as otherwise agreed to in writing by Purchaser; (iv) any
material change in the present capitalization or dividend policy of the Company;
or (v) any other material change in the Company's corporate structure or
business. Each Seller intends this proxy to be irrevocable and coupled with an
interest and will take such further action or execute such other instruments as
may be necessary to effectuate the intent of this proxy and hereby revokes any
proxy previously granted by it with respect to the Shares. Each Seller shall not
<PAGE>
4
hereafter, unless and until this Agreement terminates pursuant to Section 8.6
hereof, purport to vote (or execute a consent with respect to) such Shares
(other than through this irrevocable proxy) or grant any other proxy or power of
attorney with respect to any Shares, deposit any Shares into a voting trust or
enter into any agreement (other than this Agreement), arrangement or
understanding with any person, directly or indirectly, to vote, grant any proxy
or give instructions with respect to the voting of such Shares. Notwithstanding
anything herein to the contrary, the Sellers may transfer as charitable gifts up
to an aggregate of 300,000 Shares.
4. Representations and Warranties.
4.1 Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to each Seller as follows:
(a) Due Authorization. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of Purchaser, and no other corporate
proceedings on the part of Purchaser are necessary to authorize this Agreement
or to consummate the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by Purchaser and constitutes a valid and
binding agreement of Purchaser, enforceable against Purchaser in accordance with
its terms, except that such enforceability (i) may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to
enforcement of creditors' rights generally and (ii) is subject to general
principles of equity.
(b) No Conflicts. Except for (i) filings under the HSR Act, if applicable,
(ii) the applicable requirements of the Exchange Act and the Securities Act of
1933, as amended (the "Securities Act"), (iii) the applicable requirements of
state securities, takeover or Blue Sky laws and (iv) such notifications,
filings, authorizing actions, orders and approvals as may be required under
other laws, (A) no filing with, and no permit, authorization, consent or
approval of, any state, federal or foreign public body or authority is necessary
for the execution of this Agreement by Purchaser and the consummation by
Purchaser of the transactions contemplated hereby and (B) neither the execution
and delivery of this Agreement by Purchaser nor the consummation by Purchaser of
the transactions contemplated hereby nor compliance by Purchaser with any of the
provisions hereof shall (1) conflict with or result in any breach of any
provision of the certificate of incorporation or by-laws (or similar documents)
<PAGE>
5
of Purchaser, (2) result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, material modification or acceleration)
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, agreement or other instrument or obligation to
which Purchaser is a party or by which it or any of its properties or assets may
be bound or (3) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Purchaser or any of its properties or assets, except in
the case of (2) or (3) for violations, breaches or defaults which would not in
the aggregate materially impair the ability of Purchaser to perform its
obligations hereunder.
(c) Good Standing. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of Delaware and has all requisite
corporate power and authority to execute and deliver this Agreement.
4.2 Representations and Warranties of Sellers. Each Seller hereby severally
and not jointly represents and warrants to Purchaser as follows:
(a) Ownership of Shares. Subject to Section 5.3, such Seller is the owner
of the Shares set forth below its name and has the power to vote and dispose of
such Shares. To Seller's knowledge, such Shares are validly issued, fully paid
and nonassessable, with no personal liability attaching to the ownership
thereof. Such Seller has good title to the Shares, free and clear of any
agreements, liens, adverse claims or encumbrances whatsoever with respect to the
ownership of or the right to vote such Shares.
(b) Power; Binding Agreement. Such Seller has the legal capacity, power and
authority to enter into and perform all of its obligations under this Agreement,
except for the approval of the holders of a majority of the stockholders of
Minot Mercantile Corporation is required with respect to their obligations under
Section 1. The execution, delivery and performance of this Agreement by such
Seller will not violate any other agreement to which such Seller is a party
including, without limitation, any voting agreement, stockholders agreement or
voting trust. This Agreement has been duly and validly authorized, executed and
delivered by such Seller and constitutes a valid and binding agreement of such
Seller, enforceable against such Seller in accordance with its terms, except
that such enforceability (i) may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to enforcement of
creditors' rights generally and (ii) is subject to general principles of equity.
<PAGE>
6
(c) No Conflicts. Except for (i) filings under the HSR Act, if applicable,
(ii) the applicable requirements of the Exchange Act and the Securities Act,
(iii) the applicable requirements of state securities, takeover or Blue Sky
laws, (iv) such notifications, filings, authorizing actions, orders and
approvals as may be required under other laws, (A) no filing with, and no
permit, authorization, consent or approval of, any state, federal or foreign
public body or authority is necessary for the execution of this Agreement by
such Seller and the consummation by such Seller of the transactions contemplated
hereby and (B) neither the execution and delivery of this Agreement by such
Seller nor the consummation by such Seller of the transactions contemplated
hereby nor compliance by such Seller with any of the provisions hereof shall (1)
conflict with or result in any breach of any provision of the certificate of
incorporation, by-laws, trust or charitable instruments (or similar documents)
of such Seller, (2) result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, material modification or acceleration)
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, agreement or other instrument or obligation to
which such Seller is a party or by which he or any of his properties or assets
may be bound or (3) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to such Seller or any of his properties or assets,
except in the case of (2) or (3) for violations, breaches or defaults which
would not in the aggregate materially impair the ability of such Seller to
perform his obligations hereunder.
5. Certain Covenants of Sellers. Each Seller hereby covenants and agrees as
follows:
5.1 No Solicitation. Such Seller shall not, directly or indirectly,
solicit, encourage, participate in or initiate any inquiries or the making of
any proposal by any person or entity (other than Purchaser or any affiliate of
Purchaser) which constitutes, or may reasonably be expected to lead to, (a) any
sale of the Shares or (b) any acquisition or purchase of a material portion of
the Company's assets or any equity interest in, or any merger, consolidation or
business combination with, the Company or any of its subsidiaries. If such
Seller receives an inquiry or proposal with respect to the sale of Shares, then
such Seller shall promptly inform Purchaser of the terms and conditions, if any,
of such inquiry or proposal and the identity of the person making it. Each
Seller will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing.
<PAGE>
7
5.2 Restriction on Transfer, Proxies and NonInterference. Each Seller
hereby agrees, while this Agreement is in effect, and except as contemplated
hereby, not to (a) sell, transfer, pledge, encumber, assign or otherwise dispose
of, or enter into any contract, option or other arrangement or understanding
with respect to the sale, transfer, pledge, encumbrance, assignment or other
disposition of, any of the Shares or (b) grant any proxies, deposit any Shares
into a voting trust or enter into a voting agreement with respect to any Shares
or (c) take any action that would make any representation or warranty of such
Seller contained herein untrue or incorrect or have the effect of preventing or
disabling such Seller from performing his obligations under this Agreement.
5.3 Legending of Certificates; Nominees Shares. If requested by Purchaser,
each Seller agrees to submit to Purchaser contemporaneously with or promptly
following execution of this Agreement all certificates representing the Shares
so that Purchaser may note thereon a legend referring to the option, proxy and
other rights granted to it by this Agreement. If any of the Shares beneficially
owned by such Seller are held of record by a brokerage firm in "street name" or
in the name of any other nominee (a "Nominee," and, as to such Shares, "Nominee
Shares"), each Seller agrees that, upon written notice by Purchaser requesting
it, such Seller will within five days of the giving of such notice execute and
deliver to Purchaser a limited power of attorney in such form as shall be
reasonably satisfactory to Purchaser enabling Purchaser to require the Nominee
to (i) grant to Purchaser an option and irrevocable proxy to the same effect as
Sections 1 and 3 hereof with respect to the Nominee Shares held by such Nominee,
(ii) tender such Nominee Shares in the Offer pursuant to Section 2 hereof and
(iii) submit to Purchaser the certificates representing such Nominee Shares for
notation of the above-referenced legend thereon.
5.4 Stop Transfer Order. In furtherance of this Agreement, concurrently
herewith, each Seller shall and hereby does authorize the Company's counsel to
notify the Company's transfer agent that there is a stop transfer order with
respect to all of the Shares (and that this Agreement places limits on the
voting and transfer of such shares).
6. Further Assurances. From time to time, at the other party's request and
without further consideration, each party hereto shall execute and deliver such
additional documents and take all such further action as may be necessary or
desirable to consummate the transactions contemplated by this Agreement,
including, without limitation, to vest in Purchaser good title to any Shares
purchased hereunder.
<PAGE>
8
7. Adjustments to Prevent Dilution, Etc. In the event of a stock dividend
or distribution, or any change in the Company's Common Stock by reason of any
stock dividend, split-up, reclassification, recapitalization, combination or the
exchange of shares, the term "Shares" shall be deemed to refer to and include
the Shares as well as all such stock dividends and distributions and any shares
into which or for which any or all of the Shares may be changed or exchanged. In
such event, the amount to be paid per share by Purchaser shall be
proportionately adjusted.
8. Miscellaneous.
8.1 Entire Agreement; Assignment. This Agreement (i) constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof and (ii) shall not
be assigned by operation of law or otherwise, provided that Purchaser may assign
its rights and obligations hereunder to any direct or indirect wholly owned
parent company or subsidiary of Purchaser, but no such assignment shall relieve
Purchaser of its obligations hereunder if such assignee does not perform such
obligations.
8.2 Amendments. This Agreement may not be modified, amended, altered or
supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.
8.3 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
If to the
Sellers: c/o Ivins Phillips & Barker
1700 Pennsylvania Avenue
Washington, D.C. 20006
If to Purchaser:
Dillard's, Inc.
1600 Cantrell Road
Little Rock, Arkansas 72201
Attention: James Freeman
<PAGE>
9
copy to: Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Alan G. Schwartz, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
8.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
8.5 Cooperation as to Regulatory Matters. If so requested by Purchaser,
promptly after the date hereof, the Seller will use its reasonable best efforts
to cause it and the Company (if required) to make all filings which are required
under the HSR Act and applicable requirements and to seek all regulatory
approvals required in connection with the transactions contemplated hereby. The
parties shall furnish to each other such necessary information and reasonable
assistance as may be requested in connection with the preparation of filings and
submissions to any governmental agency, including, without limitation, filings
under the provisions of the HSR Act. The Seller shall also use its reasonable
best efforts to cause the Company to supply Purchaser with copies of all
correspondence, filings or communications (or memoranda setting forth the
substance thereof) between the Company and its representatives and the Federal
Trade Commission, the Department of Justice and any other governmental agency or
authority and members of their respective staffs with respect to this Agreement
and the transactions contemplated hereby.
8.6 Termination. Except for the provisions of Sections 1 and 5.2 which
shall expire on the Expiration Date, this Agreement shall terminate on the
earlier of (i) the Effective Time or (ii) the termination of the Merger
Agreement in accordance with its terms.
8.7 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore, each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
8.8 Counterparts. This Agreement may be executed in two counterparts, each
of which shall be deemed to be an original, but both of which shall constitute
one and the same Agreement.
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10
8.9 Descriptive Headings. The descriptive headings used herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
8.10 Severability. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
<PAGE>
11
IN WITNESS WHEREOF, the Sellers and Purchaser have caused this Agreement to
be duly executed as of the day and year first above written.
DILLARD'S, INC.
By: /s/ James I. Freeman
-------------------------------
Name: James I. Freeman
Title: Senior Vice President and
Chief Financial Officer
[The Sellers listed on the attached signature pages]
<PAGE>
/s/ Roger Milliken
- - -------------------------------
Roger Milliken
Wilmington Trust Company
By: /s/ Carol M. Drummond
-------------------------------
Name: Carol M. Drummond
Title: Assistant Vice President
as the trustees of trusts
holding 2,120,485
shares of the common stock,
par value $.14 2/3 per share,
of Mercantile Stores Company, Inc.
<PAGE>
Wilmington Trust Company
By: /s/ Carol M. Drummond
-------------------------------
Name: Carol M. Drummond
Title: Assistant Vice President
as the trustee of trusts holding 1,654,311 shares of the common stock, par value
$.14 2/3 per share, of Mercantile Stores Company, Inc.
<PAGE>
/s/ Justine VR. Milliken
- ---------------------------------
Justine VR. Milliken
/s/ Minot K. Milliken
- ---------------------------------
Minot K. Milliken
as a majority of the trustees of trusts holding 27,645 shares of the common
stock, par value of $.14 2/3 per share, of Mercantile Stores Company, Inc.
<PAGE>
/s/ Justine VR. Milliken
- ---------------------------------
Justine VR. Milliken
/s/ Gerrish H. Milliken, Jr.
- ---------------------------------
Gerrish H. Milliken, Jr.
/s/ Minot K. Milliken
- ---------------------------------
Minot K. Milliken
as a majority of the trustees of trusts holding 25,065 shares of the common
stock, par value $.14 2/3 per share, of Mercantile Stores Company, Inc.
<PAGE>
Woodbank Mills, Inc.
By: /s/ Roger Milliken
-------------------------------
Name: Roger Milliken
Title: Chairman
as the holder of 27,413 shares of the common stock, par value $.14 2/3 per
share, of Mercantile Stores Company, Inc.
<PAGE>
Minot Mercantile Corporation
By: /s/ Roger Milliken
-------------------------------
Name: Roger Milliken
Title: Chairman
as the holder of 10,484,875 shares of the common stock, par value $.14 2/3 per
share, of Mercantile Stores Company, Inc.
<PAGE>
/s/ Roger Milliken
- ---------------------------------
Roger Milliken
/s/ Gerrish H. Milliken, Jr.
- ---------------------------------
Gerrish H. Milliken, Jr.
as a majority of the trustees of trusts holding 56,848 shares of the common
stock, par value $.14 2/3 per share, of Mercantile Stores Company, Inc.
<PAGE>
/s/ Roger Milliken
- ---------------------------------
Roger Milliken
/s/ Gerrish H. Milliken, Jr.
- ---------------------------------
Gerrish H. Milliken, Jr.
/s/ Minot K. Milliken
- ---------------------------------
Minot K. Milliken
as a majority of the trustees of trusts holding 258,178 shares of the common
stock, par value $.14 2/3 per share, of Mercantile Stores Company, Inc.
<PAGE>
/s/ Roger Milliken
- ---------------------------------
Roger Milliken
/s/ Minot K. Milliken
- ---------------------------------
Minot K. Milliken
as a majority of the trustees of trusts holding 22,104 shares of the common
stock, par value $.14 2/3 per share, of Mercantile Stores Company, Inc.
<PAGE>
/s/ Gerrish H. Milliken, Jr.
- --------------------------------
Gerrish H. Milliken, Jr.
/s/ Minot K. Milliken
- --------------------------------
Minot K. Milliken
as a majority of the trustees of trusts holding 32,419 shares of the common
stock, par value $.14 2/3 per share, of Mercantile Stores Company, Inc.
Exhibit B
---------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
Among
DILLARD'S, INC.
MMC ACQUISITION, INC.
and
MINOT MERCANTILE CORPORATION
Dated as of May 16, 1998
----------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
ARTICLE I
<TABLE>
<S> <C> <C>
THE MERGER .......................... 2
SECTION 1.1 The Merger ................................................ 2
SECTION 1.2 Closing; Effective Time ................................... 2
SECTION 1.3 Effects of the Merger ..................................... 2
SECTION 1.4 Certificate of Incorporation; By-Laws ..................... 3
SECTION 1.5 Directors and Officers .................................... 3
SECTION 1.6 Conversion of Securities .................................. 3
SECTION 1.7 Dissenting Shares and Section 262 Shares .................. 4
SECTION 1.8 Surrender of Shares; Stock Transfer Books ................. 5
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY ............. 6
SECTION 2.1 Corporate Organization; Subsidiaries and Employees ........ 6
SECTION 2.2 Certificate of Incorporation and By-Laws .................. 6
SECTION 2.3 Capitalization ............................................ 7
SECTION 2.4 Authority Relative to This Agreement ...................... 7
SECTION 2.5 No Conflict; Required Filings and Consents ................ 7
SECTION 2.6 Compliance ................................................ 8
SECTION 2.7 Limited Operations; Financial Statements; No Undisclosed
Liabilities ............................................... 8
SECTION 2.8 Absence of Litigation ..................................... 9
SECTION 2.9 Tax Matters ............................................... 9
SECTION 2.10 Investment Company ........................................ 9
SECTION 2.11 Brokers ................................................... 10
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
PARENT AND PURCHASER ............................... 10
SECTION 3.1 Corporate Organization .................................... 10
SECTION 3.2 Authority Relative to This Agreement ...................... 10
SECTION 3.3 No Conflict; Required Filings and Consents ................ 10
SECTION 3.4 Brokers ................................................... 11
SECTION 3.5 Funds ..................................................... 11
ARTICLE IV
CONDUCT PENDING THE CLOSING; ADDITIONAL AGREEMENTS ........ 11
SECTION 4.1 Conduct of Business of the Company Pending the Merger ..... 11
SECTION 4.2 Stockholders Meeting ...................................... 13
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
SECTION 4.3 No Solicitation; Affirmation of Covenants in Stockholders'
Agreement ................................................. 13
SECTION 4.4 Access to Information; Confidentiality .................... 13
SECTION 4.5 Notification of Certain Matters ........................... 13
SECTION 4.6 Further Action; Reasonable Best Efforts ................... 14
SECTION 4.7 Public Announcements ...................................... 14
ARTICLE V
CONDITIONS OF MERGER ............................ 14
SECTION 5.1 Conditions to Obligation of Each Party to Effect the Merger 14
SECTION 5.2 Additional Conditions to Obligation of Parent and Purchaser
to Effect the Merger ..................................... 15
SECTION 5.3 Additional Conditions to Obligation of the Company to Effect
the Merger ............................................... 16
ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER ......................... 16
SECTION 6.1 Termination ............................................... 16
SECTION 6.2 Effect of Termination ..................................... 17
SECTION 6.3 Amendment ................................................. 17
SECTION 6.4 Waiver .................................................... 17
ARTICLE VII
GENERAL PROVISIONS ................................. 17
SECTION 7.1 Survival of Representations, Warranties and Agreements .... 17
SECTION 7.2 Notices ................................................... 17
SECTION 7.3 Certain Definitions ....................................... 18
SECTION 7.4 Severability .............................................. 19
SECTION 7.5 Entire Agreement; Assignment .............................. 19
SECTION 7.6 Parties in Interest ....................................... 19
SECTION 7.7 Fees and Expenses ......................................... 19
SECTION 7.8 Governing Law ............................................. 19
SECTION 7.9 Headings .................................................. 20
SECTION 7.10 Counterparts .............................................. 20
Schedule 1.6(d) - Current Schedule of Assets and Liabilities
Exhibit A - Certificate of Incorporation of Surviving Corporation
</TABLE>
-ii-
<PAGE>
AGREEMENT AND PLAN OF MERGER, dated as of May 16, 1998 (this
"Agreement"), among DILLARD'S, INC., a Delaware corporation ("Parent"), MMC
ACQUISITION, INC., a Delaware corporation and a wholly owned subsidiary of
Parent ("Purchaser"), and MINOT MERCANTILE CORPORATION, a Delaware corporation
(the "Company").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Board of Directors of the Company has determined that it is in
the best interests of the Company and the stockholders of the Company to enter
into this Agreement with Parent and Purchaser, providing for the merger (the
"Merger") of Purchaser with the Company in accordance with the General
Corporation Law of the State of Delaware ("DGCL"), upon the terms and subject to
the conditions set forth herein;
WHEREAS, the Board of Directors of Parent and Purchaser have each approved
the Merger of Purchaser with the Company in accordance with the DGCL upon the
terms and subject to the conditions set forth herein;
WHEREAS, concurrently with the execution and delivery of this Agreement,
Parent, MSC Acquisition, Inc., a Delaware corporation and a wholly owned
subsidiary of Parent ("MSC MergerSub"), and Mercantile Stores Company, Inc., a
Delaware corporation ("MSC"), have entered into a merger agreement, dated as of
the date hereof (the "MSC Merger Agreement"), pursuant to which MSC MergerSub
has agreed to make a tender offer (the "Offer") for all outstanding shares of
common stock, $.14 2/3 par value per share (the "MSC Common Stock"), of MSC, at
$80.00 per share, or any higher price that may be paid pursuant to the Offer
(the "Offer Price"), net to the seller in cash, subject to the offer condition
contained therein (the "Offer Conditions"), to be followed by a merger (the "MSC
Merger") of MSC MergerSub with and into MSC, with MSC as the surviving
corporation;
WHEREAS, concurrently with the execution and delivery of this Agreement,
Parent, WMI Acquisition, Inc., a Delaware corporation and a wholly owned
subsidiary of Parent ("WMI MergerSub"), and Woodbank Mills, Inc., a Delaware
corporation ("Woodbank"), have entered into a merger agreement, dated as of the
date hereof (the "Woodbank Merger Agreement"), pursuant to which WMI MergerSub
will be merged with and into Woodbank (the "Woodbank Merger"), and Woodbank
shall be the surviving corporation;
WHEREAS, concurrently with the execution and delivery of this Agreement,
holders of not less than 70% of all of the holders (the "MMC Stockholders") of
the Company's common stock, par value $5.00 per share (referred to herein as the
"Shares" or "Company Common Stock"), have executed and delivered an agreement
(the "Proxy and Indemnification Agreement"), pursuant to which (i) the MMC
Stockholders have granted Parent an irrevocable proxy to vote their Shares in
favor of the adoption of this Agreement and the Merger at the Stockholders
Meeting (as defined herein), and (ii) the MMC Stockholders have agreed to
indemnify Parent and Purchaser in respect of any and all claims resulting from
the Merger, in each case, subject to the terms and conditions contained therein;
and
<PAGE>
2
WHEREAS, concurrently with the execution and delivery of this Agreement,
Parent and each of the Company, Woodbank and certain affiliated stockholders of
MSC (collectively, the "Related Sellers") have entered into a stockholders'
agreement, each dated as of the date hereof (each, a "Stockholders' Agreement"),
pursuant to which, among other things, each Related Seller has granted an option
in favor of Parent with respect to the shares of Company Common Stock
respectively held by such person, subject to the terms and conditions contained
therein;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Purchaser and the Company hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 The Merger. Upon the terms and subject to the conditions of
this Agreement and in accordance with the DGCL, at the Effective Time (as
defined in Section 1.2), Purchaser shall be merged with and into the Company. As
a result of the Merger, the separate corporate existence of Purchaser shall
cease and the Company shall continue as the surviving corporation of the Merger
(the "Surviving Corporation"). At Parent's election, any direct or indirect
subsidiary of Parent other than Purchaser may be merged with and into the
Company instead of the Purchaser. In the event of such an election, the parties
agree to execute an appropriate amendment to this Agreement in order to reflect
such election.
SECTION 1.2 Closing; Effective Time. Subject to the provisions of Article
V, the closing of the Merger (the "Closing") shall take place in New York City
at the offices of Simpson Thacher & Bartlett, 425 Lexington Avenue, New York,
New York, as soon as practicable but in no event later than the first business
day after the satisfaction or waiver of the conditions set forth in Article V,
or at such other place or at such other date as Parent and the Company may
mutually agree. The date on which the Closing actually occurs is hereinafter
referred to as the "Closing Date". At the Closing, the parties hereto shall
cause the Merger to be consummated by filing this Agreement or a certificate of
merger or a certificate of ownership and merger (the "Certificate of Merger")
with the Secretary of State of the State of Delaware, in such form as required
by and executed in accordance with the relevant provisions of the DGCL (the date
and time of the filing of the Certificate of Merger with the Secretary of State
of the State of Delaware (or such later time as is specified in the Certificate
of Merger) being the "Effective Time").
SECTION 1.3 Effects of the Merger. The Merger shall have the effects set
forth in the applicable provisions of the DGCL. Without limiting the generality
of the foregoing and subject thereto, at the Effective Time all the property,
rights, privileges, immunities, powers and franchises of the Company and
Purchaser shall vest in the Surviving Corporation, and all debts, liabilities
and duties of the Company and Purchaser shall become the debts, liabilities and
duties of the Surviving Corporation.
<PAGE>
3
SECTION 1.4 Certificate of Incorporation; By-Laws. (a) At the Effective
Time and without any further action on the part of the Company and Purchaser,
the Certificate of Incorporation of the Company, as in effect immediately prior
to the Effective Time, shall be amended and restated so as to read in its
entirety in the form set forth in Exhibit A hereto and, as so amended, until
thereafter and further amended as provided therein and under the DGCL, it shall
be the Certificate of Incorporation of the Surviving Corporation following the
Merger.
(b) At the Effective Time and without any further action on the part of the
Company and Purchaser, the By-Laws of Purchaser, as in effect immediately prior
to the Effective Time, shall be the By-Laws of the Surviving Corporation and
thereafter may be amended or repealed in accordance with their terms or the
Certificate of Incorporation of the Purchaser and as provided by law.
SECTION 1.5 Directors and Officers. The directors and officers of Purchaser
immediately prior to the Effective Time shall be the initial directors and
officers of the Surviving Corporation, each to hold office in accordance with
the Certificate of Incorporation and By-Laws of the Surviving Corporation.
SECTION 1.6 Conversion of Securities. At the Effective Time, by virtue of
the Merger and without any action on the part of Purchaser, the Company or the
holders of any of the following securities:
(a) Each share of the Company Common Stock, issued and outstanding
immediately prior to the Effective Time (other than any Shares to be cancelled
pursuant to Section 1.6(b), any Shares held by Woodbank and any Dissenting
Shares (as defined in Section 1.7(a)) shall be cancelled, extinguished and
converted into the right to receive an amount (the "Merger Consideration")
calculated as follows: (i) the Aggregate Value of Company Assets (as defined in
Section 1.6(d) below) immediately prior to the Effective Time divided by (ii)
the aggregate number of shares of Company Common Stock issued and outstanding
immediately prior to the Effective Time. The Merger Consideration shall be
payable to the holder of each Share, without interest, upon surrender of the
certificate formerly representing such Share in the manner provided in Section
1.8, less any required withholding taxes.
(b) Each share of Company Common Stock held in the treasury of the Company
and each Share owned by the Company, Parent, Purchaser or any other direct or
indirect subsidiary of such persons, in each case immediately prior to the
Effective Time, shall be cancelled and retired without any conversion thereof
and no payment or distribution shall be made with respect thereto.
(c) Each share of common stock of Purchaser issued and outstanding
immediately prior to the Effective Time shall be converted into and become one
validly issued, fully paid and nonassessable share of identical common stock of
the Surviving Corporation.
<PAGE>
4
(d) "Aggregate Value of Company Assets" means an amount equal to (i) the
product of (A) the aggregate number of outstanding shares of MSC Common Stock,
directly owned by the Company immediately prior to the Effective Time, and (B)
the Offer Price, plus (ii) the aggregate amount of Net Assets (as defined
below). "Net Assets" means the amount by which the Company's assets exceeds its
liabilities, each of which will be calculated from the Closing Balance Sheet (as
defined below). Attached hereto as Schedule 1.6(d) is a list of all of assets
and liabilities of the Company as of the date hereof.
(e) "Closing Balance Sheet" means a balance sheet of the Company reflecting
its assets and liabilities as of Closing, as prepared by the Company and
delivered to Parent, for its review and consent, no later than 15 days prior to
Closing. Parent shall, within five days of its receipt of the Closing Balance
Sheet, complete its review thereof and identify to the Company any items with
which Parent does not agree. Parent and the Company will promptly attempt to
resolve in good faith any disagreement as to items contained on the Closing
Balance Sheet. The Company will, as promptly as practicable after the date
hereof, undertake to liquidate and/or sell all of its investments and other
assets (other than its shares of MSC Common Stock) so that the Company's assets,
as reflected on the Closing Balance Sheet, will consist solely of cash and
short-term, highly liquid cash equivalents (with maturities of seven days or
less). The Closing Balance Sheet will set forth, in reasonable detail and
specificity (with notes where appropriate), all of the Company's assets and
liabilities as of the Closing, including without limitation all tax liabilities
incurred on account of any liquidations or sales of the Company's investments or
other assets and all liabilities, fees and expenses owing to the Company's
advisors. The amount of cash and cash equivalents that are held back to cover
the Company's liabilities, as identified on the Closing Balance Sheet, is
referred to as the "Holdback Amount". The Holdback Amount will be applied by
Parent and Purchaser to pay, upon presentment of proper invoices, to any
post-Closing fees, expenses, liabilities and other obligations of the Company.
(f) Promptly following the date on which all of the Company's liabilities
that were identified on the Closing Balance Sheet, together with all outstanding
"Losses" under and as defined in the Proxy and Indemnification Agreement, have
been paid in full, any remaining Holdback Amount shall be released to the Paying
Agent (as hereinafter defined) for distribution to the former holders of the
Shares.
SECTION 1.7 Dissenting Shares and Section 262 Shares. (a) Notwithstanding
anything in this Agreement to the contrary, shares of Company Common Stock that
are issued and outstanding immediately prior to the Effective Time and which are
held by stockholders who have not voted in favor of or consented to the Merger
and shall have delivered a written demand for appraisal of such shares of
Company Common Stock in the time and manner provided in Section 262 of the DGCL
and shall not have failed to perfect or shall not have effectively withdrawn or
lost their rights to appraisal and payment under the DGCL (the "Dissenting
Shares") shall not be converted into the right to receive the Merger
Consideration, but shall be entitled to receive the consideration as shall be
determined pursuant to Section 262 of the DGCL; provided, however, that if such
holder shall have failed to perfect or shall have effectively
<PAGE>
5
withdrawn or lost his, her or its right to appraisal and payment under the DGCL,
such holder's shares of Company Common Stock shall thereupon be deemed to have
been converted, at the Effective Time, into the right to receive the Merger
Consideration set forth in Section 1.6(a) of this Agreement, without any
interest thereon.
(b) The Company shall give Parent (i) prompt notice of any demands for
appraisal pursuant to Section 262 received by the Company, withdrawals of such
demands, and any other instruments served pursuant to the DGCL and received by
the Company and (ii) the opportunity to direct all negotiations and proceedings
with respect to demands for appraisal under the DGCL. The Company shall not,
except with the prior written consent of Parent or as otherwise required by
applicable law, make any payment with respect to any such demands for appraisal
or offer to settle or settle any such demands. Pursuant to the Proxy and
Indemnification Agreement, the MMC Stockholders shall indemnify, defend and hold
harmless Parent and Purchaser against any and all liabilities, damages,
expenses, losses or other claims that are paid in respect of any Dissenting
Shares (including reasonable attorneys' fees and expenses) in excess of the
aggregate Merger Consideration that would otherwise have been payable in respect
of such Dissenting Shares pursuant to Section 1.6(a).
SECTION 1.8 Surrender of Shares; Stock Transfer Books. (a) Prior to the
Effective Time, Purchaser shall designate a bank or trust company to act as
agent for the holders of Shares in connection with the Merger (the "Paying
Agent") to receive the Merger Consideration to which holders of Shares shall
become entitled pursuant to Section 1.6(a). When and as needed, Parent or
Purchaser will make available to the Paying Agent sufficient funds to make all
payments pursuant to Section 1.8(b). Such funds shall be invested by the Paying
Agent as directed by Purchaser or, after the Effective Time, the Surviving
Corporation, provided that such investments shall be in obligations of or
guaranteed by the United States of America, in commercial paper obligations
rated A-1 or P-1 or better by Moody's Investors Service, Inc. or Standard &
Poor's Corporation, respectively, or in certificates of deposit, bank repurchase
agreements or banker's acceptances of commercial banks with capital exceeding
$500 million. Any net profit resulting from, or interest or income produced by,
such investments will be payable to the Surviving Corporation or Parent, as
Parent directs.
(b) Promptly after the Effective Time, the Surviving Corporation shall
cause to be mailed to each record holder, as of the Effective Time, of an
outstanding certificate or certificates which immediately prior to the Effective
Time represented Shares (the "Certificates"), a form of letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon proper delivery of the Certificates to
the Paying Agent) and instructions for use in effecting the surrender of the
Certificates for payment of the Merger Consideration therefor. Upon surrender to
the Paying Agent of a Certificate, together with such letter of transmittal,
duly completed and validly executed in accordance with the instructions thereto,
and such other documents as may be required pursuant to such instructions, the
holder of such Certificate shall be entitled to receive in exchange therefor the
Merger Consideration for each Share formerly represented by such Certificate,
and such Certificate shall then be cancelled. No interest shall be paid or
accrued for the benefit of holders of the Certificates on the Merger
Consideration payable upon the surrender of the Certificates. If payment of the
Merger Consideration is to be made to a person other than the person in whose
<PAGE>
6
name the surrendered Certificate is registered, it shall be a condition of
payment that the Certificate so surrendered shall be properly endorsed or shall
be otherwise in proper form for transfer and that the person requesting such
payment shall have paid any transfer and other taxes required by reason of the
payment of the Merger Consideration to a person other than the registered holder
of the Certificate surrendered or shall have established to the satisfaction of
the Surviving Corporation that such tax either has been paid or is not
applicable.
(c) At any time following six months after the Effective Time, the
Surviving Corporation shall be entitled to require the Paying Agent to deliver
to it any funds (including any interest received with respect thereto) which had
been made available to the Paying Agent and which have not been disbursed to
holders of Certificates, and thereafter such holders shall be entitled to look
to the Surviving Corporation (subject to abandoned property, escheat or other
similar laws) only as general creditors thereof with respect to the Merger
Consideration payable upon due surrender of their Certificates. Notwithstanding
the foregoing, neither the Surviving Corporation nor the Paying Agent shall be
liable to any holder of a Certificate for Merger Consideration delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law.
(d) At the Effective Time, the stock transfer books of the Company shall be
closed and thereafter there shall be no further registration of transfers of
shares of Company Common Stock on the records of the Company. From and after the
Effective Time, the holders of Certificates evidencing ownership of Shares
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such Shares except as otherwise provided for herein or by
applicable law.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Purchaser that:
SECTION 2.1 Corporate Organization; Subsidiaries and Employees. (a) The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the requisite corporate power
and authority and any necessary governmental approvals to own, lease and operate
its properties and to carry on its business as it is now being conducted. The
Company is not qualified or licensed as a foreign corporation to do business in
any jurisdiction. When used in connection with the Company, the term "Material
Adverse Effect" means any change or effect that would be materially adverse to
the assets, liabilities, results of operations, financial condition or business
of the Company.
(b) The Company has no subsidiaries and no employees.
SECTION 2.2 Certificate of Incorporation and By-Laws. The Company has
heretofore furnished to Parent a complete and correct copy of the Certificate of
Incorporation and the By-Laws of the Company as currently in effect. Such
Certificate of Incorporation and By-
<PAGE>
7
Laws are in full force and effect and no other organizational documents are
applicable to or binding upon the Company. The Company is not in violation of
any of the provisions of its Certificate of Incorporation or By-Laws.
SECTION 2.3 Capitalization. The authorized capital stock of the Company
consists of 280,300 shares of Company Common Stock, of which (a) 280,300 shares
of Company Common Stock are issued and outstanding, all of which are validly
issued, fully paid and nonassessable and have been issued free of preemptive (or
similar) rights, and (b) no shares of Company Common Stock are held in the
treasury of the Company. Except as set forth above, there are outstanding (i) no
shares of capital stock or other voting securities of the Company, (ii) no
securities of the Company convertible into or exchangeable for shares of capital
stock or voting securities of the Company, (iii) no options or other rights to
acquire from the Company, and no obligation of the Company to issue, any capital
stock, voting securities or securities convertible into or exchangeable for
capital stock or voting securities of the Company and (iv) no equity
equivalents, interests in the ownership or earnings of the Company or other
similar rights (collectively, "Company Securities"). There are no outstanding
obligations of the Company or any of its subsidiaries to repurchase, redeem or
otherwise acquire any Company Securities. There are no other options, calls,
warrants or other rights, agreements, arrangements or commitments of any
character relating to the issued or unissued capital stock of the Company to
which the Company is a party. There are no outstanding contractual obligations
of the Company to provide funds to or make any investment (in the form of a
loan, capital contribution or otherwise) in any other entity and, except for the
shares of MSC Common Stock, the Company has no other direct or indirect equity
interests in any other person.
SECTION 2.4 Authority Relative to This Agreement. The Company has all
necessary corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action and no other corporate proceedings on the part of the Company
are necessary to authorize this Agreement or to consummate the transactions so
contemplated (other than, with respect to the Merger, the adoption of this
Agreement by the holders of a majority of the outstanding shares of Company
Common Stock and the filing of appropriate merger documents as required by the
DGCL). This Agreement has been duly and validly executed and delivered by the
Company and, assuming the due authorization, execution and delivery hereof by
Parent and Purchaser, constitutes a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms. As a
result of the foregoing actions, the only vote required to authorize the Merger
is the affirmative vote of a majority of the outstanding Shares.
SECTION 2.5 No Conflict; Required Filings and Consents. (a) The execution,
delivery and performance of this Agreement by the Company do not and will not:
(i) conflict with or violate the Certificate of Incorporation or By-Laws of the
Company or the equivalent organizational documents of any of its subsidiaries;
(ii) assuming that all consents, approvals and authorizations contemplated by
clauses (i), (ii) and (iii) of subsection (b) below have been obtained and all
filings described in such clauses have been made, conflict with or violate any
<PAGE>
8
law, rule, regulation, order, judgment or decree applicable to the Company or
any of its subsidiaries or by which its or any of their respective properties
are bound or affected; or (iii) result in any breach or violation of or
constitute a default (or an event which with notice or lapse of time or both
could become a default) or result in the loss of a material benefit under, or
give rise to any right of termination, amendment, acceleration or cancellation
of, or result in the creation of a lien or encumbrance on any of the properties
or assets of the Company or any of its subsidiaries pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries or its or any of
their respective properties are bound or affected, except, in the case of
clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults
or other occurrences which are not, individually or in the aggregate, reasonably
likely to have a Material Adverse Effect.
(b) The execution, delivery and performance of this Agreement by the
Company and the consummation of the Merger by the Company do not and will not
require any consent, approval, authorization or permit of, action by, filing
with or notification to, any governmental or regulatory authority, except for
(i) applicable requirements, if any, of the Hart- Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), state securities, takeover
and "blue sky" laws, (ii) the filing and recordation of appropriate merger or
other documents as required by the DGCL and (iii) such consents, approvals,
authorizations, permits, actions, filings or notifications the failure of which
to make or obtain are not, individually or in the aggregate, reasonably likely
to (x) prevent or materially delay the Company from performing its obligations
under this Agreement or (y) have a Material Adverse Effect.
SECTION 2.6 Compliance. The Company is not in conflict with, or in default
or violation of, (i) any law, rule, regulation, order, judgment or decree
applicable to the Company or by which its properties are bound or affected, or
(ii) any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the Company is a
party or by which the Company or its properties are bound or affected, except
for any such conflicts, defaults or violations which are not, individually or in
the aggregate, reasonably likely to have a Material Adverse Effect.
SECTION 2.7 Limited Operations; Financial Statements; No Undisclosed
Liabilities. (a) The Company operates solely as a "personal holding corporation"
within the meaning of Section 542 of the Internal Revenue Code of 1986, as
amended (the "Code"). Except for (i) this Agreement and the transactions
contemplated hereby, (ii) activities related to maintaining its corporate
existence and (iii) activities related to the Company's ownership of the shares
of MSC Common Stock and other investments (including, without limitation, the
investment and reinvestment of proceeds received on account of such investments
and distributions to the Company's stockholders), the Company has not engaged in
any business activities of any type or kind whatsoever or entered into any
agreements or arrangements with any person. The legal name of the Company is as
set forth in this Agreement. The Company has no trade names, fictitious names,
assumed names or "doing business as" names.
<PAGE>
9
(b) The Company has not incurred, directly or indirectly, any liabilities,
commitments, or obligations of any kind whatsoever, whether or not accrued and
whether or not contingent or absolute, other than liabilities disclosed in
Schedule 1.6(d) hereto.
(c) The Company has delivered to Parent true and correct copies of the
Company's audited balance sheets for the prior three fiscal years and the
related statements of consolidated income and retained earnings, and statements
of consolidated cash flows for each of the last three fiscal years, including
any related notes thereto (collectively, the "Company Financial Statements").
The Company Financial Statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto) and fairly
present in all material respects the financial position of the Company at the
respective date thereof and the results of its operations and changes in cash
flows for the periods indicated.
SECTION 2.8 Absence of Litigation. There are no suits, claims, actions,
proceedings or investigations pending or, to the best knowledge of the Company,
threatened against the Company or any of its subsidiaries, or any properties or
rights of the Company or any of its subsidiaries, before any court, arbitrator
or administrative, governmental or regulatory authority or body. As of the date
hereof, neither the Company nor any of its subsidiaries nor any of their
respective properties is or are subject to any order, writ, judgment,
injunction, decree, determination or award.
SECTION 2.9 Tax Matters. The Company has, or will have, (i) filed all Tax
Returns and reports required to be filed by it prior to the Closing Date (taking
into account extensions), (ii) paid or accrued all Taxes due and payable for all
taxable years or periods ending on or prior to the Closing Date, and (iii) paid
or accrued all Taxes for which a notice of assessment or collection has been
received (other than amounts being contested in good faith by appropriate
proceedings). All such Tax Returns are complete and correct in all material
respects. Neither the Internal Revenue Service (the "IRS") nor any other Taxing
authority has asserted any claim for Taxes, or is threatening to assert any
claims for Taxes, against the Company. The Company has withheld or collected and
paid over to the appropriate Taxing authorities all Taxes required by law to be
withheld or collected and paid over to such Taxing authorities. The Company has
not made an election under Section 341(f) of the Code. There are no liens for
Taxes upon any of the assets of the Company (other than liens for Taxes that are
not yet due or that are being contested in good faith by appropriate
proceedings). No extension of the statute of limitations on the assessment of
any Taxes has been granted by the Company and is currently in effect. As used
herein, "Taxes" shall mean any taxes of any kind, including but not limited to
those on or measured by or referred to as income, gross receipts, capital,
sales, use, ad valorem, franchise, profits, license, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, value added, property
or windfall profits taxes, customs, duties or similar fees, assessments or
charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any governmental authority. As
used herein, "Tax Return" shall mean any return, report or statement required to
be filed with any governmental authority with respect to Taxes.
<PAGE>
10
SECTION 2.10 Investment Company. The Company is not an "investment company"
or a company controlled by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or is exempt from all provisions of
such act.
SECTION 2.11 Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by and
on behalf of the Company (other than Goldman, Sachs & Co.'s engagement as
financial advisor on behalf of MSC).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
PARENT AND PURCHASER
Parent and Purchaser hereby, jointly and severally, represent and warrant
to the Company that:
SECTION 3.1 Corporate Organization. Each of Parent and Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the requisite corporate power and authority and
any necessary governmental authority to own, operate or lease its properties and
to carry on its business as it is now being conducted, except where the failure
to be so organized, existing and in good standing or to have such power,
authority and governmental approvals is not, individually or in the aggregate,
reasonably likely to prevent the consummation of the Merger.
SECTION 3.2 Authority Relative to This Agreement. Each of Parent and
Purchaser has all necessary corporate power and authority to enter into this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by each of Parent and Purchaser and the consummation by each of
Parent and Purchaser of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Parent and Purchaser
other than filing and recordation of appropriate merger documents as required by
the DGCL. This Agreement has been duly executed and delivered by Parent and
Purchaser and, assuming due authorization, execution and delivery by the
Company, constitutes a legal, valid and binding obligation of each such
corporation enforceable against such corporation in accordance with its terms.
SECTION 3.3 No Conflict; Required Filings and Consents. (a) The execution,
delivery and performance of this Agreement by Parent and Purchaser do not and
will not: (i) conflict with or violate the respective certificates of
incorporation or by-laws of Parent or Purchaser; (ii) assuming that all
consents, approvals and authorizations contemplated by clauses (i), (ii) and
(iii) of subsection (b) below have been obtained and all filings described in
such clauses have been made, conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to Parent or Purchaser or by which either
of them or their respective properties are bound or affected; or (iii) result in
any breach or violation of or constitute a default (or an
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11
event which with notice or lapse of time or both could become a default) or
result in the loss of a material benefit under, or give rise to any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the property or assets of Parent or
Purchaser pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to which
Parent or Purchaser is a party or by which Parent or Purchaser or any of their
respective properties are bound or affected, except, in the case of clauses (ii)
and (iii), for any such conflicts, violations, breaches, defaults or other
occurrences which are not, individually or in the aggregate, reasonably likely
to prevent or materially delay the consummation of the Merger.
(b) The execution, delivery and performance of this Agreement by Parent and
Purchaser do not and will not require any consent, approval, authorization or
permit of, action by, filing with or notification to, any governmental or
regulatory authority, except (i) for applicable requirements, if any, of the
Exchange Act and the rules and regulations promulgated thereunder, the HSR Act,
state securities, takeover and "blue sky" laws, (ii) the filing and recordation
of appropriate merger or other documents as required by the DGCL, and (iii) such
consents, approvals, authorizations, permits, actions, filings or notifications
the failure of which to make or obtain are not, individually or in the
aggregate, reasonably likely to prevent the consummation of the Merger.
SECTION 3.4 Brokers. No broker, finder or investment banker (other than
Morgan Stanley & Co. Incorporated) is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by and on behalf of Parent or Purchaser.
SECTION 3.5 Funds. Parent or Purchaser, at the expiration date of the Offer
and at the Effective Time, will have the funds necessary to consummate the
Merger.
ARTICLE IV
CONDUCT PENDING THE CLOSING; ADDITIONAL AGREEMENTS
SECTION 4.1 Conduct of Business of the Company Pending the Merger. The
Company covenants and agrees that, during the period from the date hereof to the
Effective Time, unless Parent shall otherwise agree in writing and except as
otherwise expressly contemplated by this Agreement, the Company shall not (i)
engage in any business activities of any type or kind whatsoever or enter into
any agreements or arrangements with any person, except as otherwise contemplated
pursuant to this Agreement and (ii) incur, directly or indirectly, any
liabilities, commitments, or obligations of any kind whatsoever, whether or not
accrued and whether or not contingent or absolute. By way of amplification and
not limitation, the Company shall not, between the date of this Agreement and
the Effective Time, directly or indirectly do, or commit to do, any of the
following without the prior written consent of Parent:
(a) Amend or otherwise change its certificate of incorporation or by-laws;
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12
(b) Issue, deliver, sell, pledge, dispose of or encumber, or authorize or
commit to the issuance, sale, pledge, disposition or encumbrance of, (i) any
shares of capital stock of any class, or any options, warrants, convertible
securities or other rights of any kind to acquire any shares of capital stock,
or any other ownership interest (including but not limited to stock appreciation
rights or phantom stock), of the Company or (ii) any assets of the Company;
(c) Declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any of its
capital stock;
(d) Reclassify, combine, split, subdivide or redeem, purchase or otherwise
acquire, directly or indirectly, any of its capital stock;
(e) (i) Acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or division
thereof, or otherwise form or commit to form any subsidiary; (ii) incur any
indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse, or otherwise as an accommodation become responsible for,
the obligations of any person, or make any loans, advances or capital
contributions to, or investments in, any other person; (iii) enter into any
contract or agreement other than in the ordinary course of business consistent
with past practice; or (iv) authorize any capital expenditures of any nature
whatsoever;
(f) Hire, appoint or engage, or commit to hire, appoint or engage, any
director, officer, employee, consultant or other advisor, or otherwise pay or
commit to pay any compensation, fringe benefits or severance or other
termination benefits to any such persons, other than the engagement of any agent
by the Company in connection with the liquidation and/or sale of the Company's
assets and investments in the manner contemplated herein;
(g) Make any Tax election, change any method of Tax accounting or settle or
compromise any federal, state, local or foreign Tax liability;
(h) Settle or compromise any pending or threatened suit, action or claim;
(i) Adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of the
Company (other than the Merger); or
(j) Take, or offer or propose to take, or agree to take in writing or
otherwise, any of the actions described in Sections 4.1(a) through 4.1(i) or any
action which would make any of the representations or warranties of the Company
contained in this Agreement untrue and incorrect as of the date when made if
such action had then been taken.
Notwithstanding anything contained in this Section 4.1, the Company shall
be entitled to liquidate and/or sell all or any of its investments and other
assets (other than its MSC
<PAGE>
13
Common Stock) and/or declare and pay dividends to its stockholders (other than
of its MSC Common Stock), so long as the Closing Balance Sheet accurately
reflects the results of any such liquidation, sale and/or dividend.
SECTION 4.2 Stockholders Meeting. Promptly following the date hereof, the
Company, acting through its Board of Directors, shall in accordance with and
subject to applicable law and the Company's Certificate of Incorporation and
By-Laws, duly call, give notice of, convene and hold a meeting of its
stockholders for the purpose of adopting this Agreement and the transactions
contemplated hereby (the "Stockholders Meeting"). The Company's Board of
Directors shall include, in any notice to stockholders of the Stockholders
Meeting, the unanimous recommendation of the Board of Directors that the
stockholders of the Company vote in favor of the adoption of this Agreement and
use its reasonable best efforts to obtain the necessary adoption of this
Agreement. At the Stockholders Meeting, Parent and Purchaser shall cause all
Shares subject to the MMC Stockholders' proxy under the Proxy and
Indemnification Agreement to be voted in favor of adoption of this Agreement.
SECTION 4.3 No Solicitation; Affirmation of Covenants in Stockholders'
Agreement. (a) The Company shall not, and the Company shall cause all of its
directors, agents, affiliates and associates to not, directly or indirectly,
solicit, encourage, participate in or initiate any inquiries or the making of
any proposal by any person or entity (other than Parent or any affiliate of
Parent) which constitutes, or may reasonably be expected to lead to, (i) any
sale of the Shares or (ii) any acquisition or purchase of any of the Company's
assets or any equity interest in, or any merger, consolidation or business
combination with, the Company. If the Company receives an inquiry or proposal
with respect to the sale of Shares, then the Company shall promptly inform
Parent of the terms and conditions, if any, of such inquiry or proposal and the
identity of the person making it. The Company and its directors, agents,
affiliates and associates will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing.
(b) The Company affirms and agrees that it shall comply in all respects
with the covenants set forth in its Stockholders' Agreement, including without
limitation the covenants set forth in Section 5 thereof.
SECTION 4.4 Access to Information; Confidentiality. From the date hereof to
the Effective Time, the Company shall, and shall cause its officers, directors
and other agents to, afford the officers, employees, auditors and other agents
of Parent, and financing sources who shall agree to be bound by the provisions
of this Section 4.4 as though a party hereto, complete access, consistent with
applicable law, at all reasonable times to all books and records of the Company,
and shall furnish Parent and such financing sources with all financial,
operating and other data and information as Parent, through its officers,
employees or agents, or such financing sources may from time to time reasonably
request. All information obtained by Parent and Purchaser pursuant to this
Section 4.4 shall be kept confidential in accordance with the Confidentiality
Agreement, dated on or about May 7, 1998 (the "Parent Confidentiality
Agreement"), between Parent and MSC. No investigation pursuant to this Section
4.4 shall affect any representations or warranties of the parties herein or the
conditions to the obligations of the parties hereto.
<PAGE>
14
SECTION 4.5 Notification of Certain Matters. The Company shall give prompt
notice to Parent, and Parent shall give prompt notice to the Company, of the
occurrence or non-occurrence of (i) any event the occurrence or non-occurrence
of which would be likely to cause any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect and (ii) any
failure of the Company, Parent or Purchaser, as the case may be, to comply with
or satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that the delivery
of any notice pursuant to this Section 4.5 shall not limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
SECTION 4.6 Further Action; Reasonable Best Efforts. (a) Upon the terms and
subject to the conditions hereof, each of the parties hereto shall use its
reasonable best efforts to take, or cause to be taken, all appropriate action,
and to do or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement as soon as practicable, including
but not limited to (i) cooperation in the preparation and filing of any required
filings under the HSR Act and any amendments to any thereof and (ii) using its
reasonable best efforts to promptly make all required regulatory filings and
applications including, without limitation, responding promptly to requests for
further information and to obtain all licenses, permits, consents, approvals,
authorizations, qualifications and orders of governmental authorities and any
other third parties as are necessary for the consummation of the transactions
contemplated by this Agreement and to fulfill the conditions to the Merger. In
case at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of each party to this Agreement shall use their reasonable best
efforts to take all such necessary action.
(b) The Company and Parent each shall keep the other apprised of the status
of matters relating to completion of the transactions contemplated hereby,
including promptly furnishing the other with copies of notices or other
communications received by Parent or the Company, as the case may be, or any of
their subsidiaries, from any governmental authority with respect to the Merger
or any of the other transactions contemplated by this Agreement. The parties
hereto will consult and cooperate with one another, and consider in good faith
the views of one another in connection with any analyses, appearances,
presentations, memoranda, briefs, arguments, opinions and proposals made or
submitted by or on behalf of any party hereto in connection with proceedings
under or relating to the HSR Act or any other antitrust law.
SECTION 4.7 Public Announcements. Parent and the Company shall consult with
each other before issuing any press release or otherwise making any public
statements with respect to the Merger and shall not issue any such press release
or make any such public statement prior to such consultation, except as may be
required by law or any listing agreement with its securities exchange.
<PAGE>
15
ARTICLE V
CONDITIONS OF MERGER
SECTION 5.1 Conditions to Obligation of Each Party to Effect the Merger.
The respective obligations of each party to effect the Merger shall be subject
to the satisfaction (or, in the case of Section 5.1(d) below, the waiver, to the
extent available, by Parent) at or prior to the Effective Time of the following
conditions:
(a) This Agreement shall have been adopted by the affirmative vote of the
stockholders of the Company by the requisite vote in accordance with the
Company's Certificate of Incorporation and the DGCL (which the Company has
represented shall be solely the affirmative vote of a majority of the
outstanding Shares).
(b) No statute, rule, regulation, executive order, decree, ruling,
injunction or other order (whether temporary, preliminary or permanent) shall
have been enacted, entered, promulgated or enforced by any United States,
foreign, federal or state court or governmental authority which prohibits,
restrains, enjoins or restricts the consummation of the Merger, the Offer or the
MSC Merger.
(c) Any waiting period applicable to the Merger under the HSR Act shall
have terminated or expired.
(d) All of the Offer Conditions, other than the consummation of the Merger,
shall have been satisfied and MSC MergerSub shall have determined to purchase
the shares of MSC Common Stock pursuant to the Offer; provided that, if the MSC
Merger Agreement is terminated under circumstances in which Parent is entitled
to the payment of the fees set forth in Section 8.3(a)(ii) of the MSC Merger
Agreement, Parent (in its sole and absolute discretion) shall be entitled to
waive the satisfaction of the conditions in this Section 5.1(d).
(e) The Woodbank Merger shall have been consummated.
SECTION 5.2 Additional Conditions to Obligation of Parent and Purchaser to
Effect the Merger. The obligations of Parent and Purchaser to effect the Merger
shall be subject to the satisfaction (or waiver) at or prior to the Effective
Time of the following conditions:
(a) The Company shall have performed in all material respects all covenants
and agreements required to be performed by it under this Agreement at or prior
to the Closing Date.
(b) The representations and warranties made herein by the Company shall
have been true and correct in all material respects on the date of this
Agreement and as of the Effective Time, except to the extent that any such
representation or warranty is made as of a specified date, in which case such
representation or warranty shall have been true and correct as of such date.
<PAGE>
16
(c) Each of (i) the Stockholder's Agreement of the Company (and the
Stockholder's Agreements for each other Related Seller), and (ii) the Proxy and
Indemnification Agreement shall continue to be in full force and effect, with no
amendments or other changes thereto.
SECTION 5.3 Additional Conditions to Obligation of the Company to Effect
the Merger. The obligations of the Company to effect the Merger shall be subject
to the satisfaction (or waiver) at or prior to the Effective Time of the
following conditions:
(a) Parent and Purchaser shall have performed in all material respects all
of their respective covenants and agreements required to be performed by them
under this Agreement at or prior to the Closing Date.
(b) The representations and warranties made herein by Parent and Purchaser
shall have been true and correct in all material respects on the date of this
Agreement and as of the Effective Time, except to the extent that any such
representation or warranty is made as of a specified date, in which case such
representation or warranty shall have been true and correct as of such date.
ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER
SECTION 6.1 Termination. This Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time prior to the Effective Time:
(a) By mutual written consent of Parent, Purchaser and the Company;
(b) By Parent or the Company if any court of competent jurisdiction or
other governmental body located or having jurisdiction within the United States
shall have issued a final order, injunction, decree, judgment or ruling or taken
any other final action restraining, enjoining or otherwise prohibiting the
Merger, the Offer or the MSC Merger and such order, injunction, decree,
judgment, ruling or other action is or shall have become final and
nonappealable;
(c) By Parent if due to an occurrence or circumstance which resulted in a
failure to satisfy any of the Offer Conditions (other than as a result of a
breach by Parent or MSC MergerSub of its obligations under the MSC Merger
Agreement), MSC MergerSub shall have (i) terminated the Offer or (ii) failed to
pay for shares of MSC Common Stock pursuant to the Offer on or prior to the
Outside Date (as defined in the MSC Merger Agreement);
(d) By the Company if (i) the MSC Merger Agreement is terminated and (ii)
Parent is no longer entitled to the payment of the fees set forth in Section
8.3(a)(ii) of the MSC Merger Agreement; or
<PAGE>
17
(e) By Parent prior to the purchase of shares of MSC Common Stock pursuant
to the Offer, if (i) there shall have been a breach of any representation,
warranty, covenant or agreement on the part of the Company contained in this
Agreement which is reasonably likely to have a Material Adverse Effect, which
shall not have been cured prior to the earlier of (A) 10 business days following
notice of such breach and (B) two business days prior to the date on which the
Offer expires, or (ii) the MSC Merger Agreement is terminated.
SECTION 6.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 6.1, this Agreement shall forthwith become void
and there shall be no liability on the part of any party hereto except as set
forth in Section 7.1; provided, however, that nothing herein shall relieve any
party from liability for any wilful breach hereof.
SECTION 6.3 Amendment. This Agreement may be amended by the parties hereto
by action taken by or on behalf of their respective Boards of Directors at any
time prior to the Effective Time; provided, however, that no amendment may be
made which would reduce the amount or change the type of consideration into
which each Share shall be converted upon consummation of the Merger without the
redelivery by the Company's stockholders of a stockholders' consent thereto.
This Agreement may not be amended except by an instrument in writing signed by
the parties hereto.
SECTION 6.4 Waiver. At any time prior to the Effective Time, any party
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
conditions contained herein. Any such extension or waiver shall be valid if set
forth in an instrument in writing signed by the party or parties to be bound
thereby.
ARTICLE VII
GENERAL PROVISIONS
SECTION 7.1 Survival of Representations, Warranties and Agreements. (a)
Except as set forth in Section 7.1(b), all representations, warranties and
agreements contained in this Agreement shall terminate and be extinguished at
the Effective Time or the earlier date of termination of this Agreement pursuant
to Section 6.1.
(b) Notwithstanding Section 7.1(a), (i) the covenants and agreements made
by the parties in this Agreement which by their terms contemplate performance
after the Effective Time (or after termination) shall survive the Effective Time
(or such termination) until fully performed, and (ii) the representations and
warranties of the Company contained herein shall survive the Effective Time
indefinitely.
SECTION 7.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have
<PAGE>
18
been duly given upon receipt) by delivery in person, by cable, telecopy,
telegram or telex or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties at the following addresses (or at
such other address for a party as shall be specified by like notice):
if to Parent or Purchaser:
Dillard's, Inc.
1600 Cantrell Road
Little Rock, Arkansas 72201
Attention: James I. Freeman
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Alan G. Schwartz, Esq.
if to the Company:
c/o Ivins Phillips & Barker
1700 Pennslyvania Avenue
Washington, D.C. 20006
Attention: Stuart Dunn, Esq.
with a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303
Attention: Russell B. Richards, Esq.
with a further copy to:
Morris, Nichols, Arsht & Tunnel
1201 N. Market Street
Wilminton, Delaware 19801
Attention: Andrew M. Johnston, Esq.
SECTION 7.3 Certain Definitions. For purposes of this Agreement, the term:
"affiliate" of a person means a person that directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, the first mentioned person;
"control" (including the terms "controlled by" and "under common control
with") means the possession, directly or indirectly or as trustee or executor,
of the power to direct or cause the direction of the management policies of a
person, whether through the ownership of stock, as trustee or executor, by
contract or credit arrangement or otherwise;
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19
"person" means an individual, corporation, partnership, association, trust,
unincorporated organization, other entity or group (as defined in Section
13(d)(3) of the Exchange Act); and "subsidiary" or "subsidiaries" of any person
means any corporation, partnership, joint venture or other legal entity of which
such person (either alone or through or together with any other subsidiary),
owns, directly or indirectly, 50% or more of the stock or other equity interests
the holder of which is generally entitled to vote for the election of the board
of directors or other governing body of such corporation or other legal entity.
SECTION 7.4 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.
SECTION 7.5 Entire Agreement; Assignment. This Agreement, together with the
Stockholders Agreements, Parent Confidentiality Agreement, the MSC Merger
Agreement, the Woodbank Merger Agreement and the Proxy and Indemnification
Agreement, constitutes the entire agreement among the parties with respect to
the subject matter hereof and supersedes all prior agreements and undertakings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof. This Agreement shall not be assigned by operation of law
or otherwise, except that Parent and Purchaser may assign all or any of their
respective rights and obligations hereunder to any direct or indirect wholly
owned subsidiary or subsidiaries of Parent, provided that no such assignment
shall relieve the assigning party of its obligations hereunder if such assignee
does not perform such obligations.
SECTION 7.6 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
SECTION 7.7 Fees and Expenses. Except as otherwise specifically provided
herein, in the MSC Merger Agreement and in the Proxy and Indemnification
Agreement, whether or not the transactions contemplated hereby are consummated,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby will be paid by the party incurring such costs
and expenses.
SECTION 7.8 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
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20
SECTION 7.9 Headings. The descriptive headings contained in this Agreement
are included for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
SECTION 7.10 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
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21
IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
DILLARD'S, INC.
By: /s/ James I. Freeman
--------------------------------------
Name: James I. Freeman
Title: Chief Financial Officer
MMC ACQUISITION, INC.
By: /s/ James I. Freeman
--------------------------------------
Name: James I. Freeman
Title: Chief Financial Officer
MINOT MERCANTILE CORPORATION
By: /s/ Roger Milliken
--------------------------------------
Name: Roger Milliken
Title: Chairman
Exhibit C
PROXY AND INDEMNIFICATION AGREEMENT
PROXY AND INDEMNIFICATION AGREEMENT (this "Agreement"), dated as of May 16,
1998, among DILLARD'S, INC., a Delaware corporation ("Parent"), and each of the
stockholders of MINOT MERCANTILE CORPORATION, a Delaware corporation (the
"Company"), that are signatories hereto (each, a "MMC Stockholder").
W I T N E S S E T H :
- - - - - - - - - - -
WHEREAS, concurrently with the execution and delivery of this Agreement,
Parent, MMC Acquisition, Inc., a Delaware corporation and a wholly owned
subsidiary of Parent ("Purchaser"), and the Company have entered into a merger
agreement, dated as of the date hereof (the "Merger Agreement"; capitalized
terms used but not defined herein shall have the meanings set forth in the
Merger Agreement), pursuant to which MMC MergerSub will be merged with and into
the Company (the "Merger"), and the Company shall be the surviving corporation;
and
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement and consummate the Merger, Parent and Purchaser have required that
each MMC Stockholder agree, and each MMC Stockholder has agreed, among other
things, (i) to grant to Parent the irrevocable proxy with respect to all of the
Company's common stock, par value $5.00 per share ("Company Common Stock"),
owned by such MMC Stockholder, together with any additional shares when and if
they are acquired (such shares, and any additional shares when and if they are
acquired, being referred to herein as such MMC Stockholder's "Shares" and
collectively as the "Shares") on the terms and conditions provided for herein,
and (ii) to indemnify and hold harmless Parent and Purchaser, in the manner
provided herein, on account of any Losses (as defined herein) arising out of or
relating to the Merger Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent and each MMC Stockholder hereby agree as follows:
1. Irrevocable Proxy. Each MMC Stockholder hereby irrevocably appoints
Parent or any designee of Parent the lawful agent, attorney and proxy of such
stockholder, during the term of this Agreement, to (a) vote such MMC
Stockholder's Shares in favor of the Merger and, if applicable, in favor of
Parent's exercise of its option under the Company's Stockholder's Agreement; (b)
vote such MMC Stockholder's Shares against any action or agreement that would
result in a breach in any material respect of any covenant, representation or
warranty or any other obligation or agreement of the Company under the Merger
Agreement; and (c) vote such MMC Stockholder's Shares against any action or
agreement (other than the Merger Agreement or the transactions contemplated
thereby) that would impede, interfere with, delay, postpone or attempt to
discourage the Merger or the Offer, including, but not limited to: (i) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company; (ii) a sale or transfer of a
material amount of assets of the Company or a reorganization, recapitalization
or liquidation of the Company; (iii) any change in the management or board of
directors of the Company, except as otherwise agreed to in writing by Purchaser;
<PAGE>
2
(iv) any material change in the present capitalization or dividend policy of the
Company; or (v) any other material change in the Company's corporate structure
or business. Each MMC Stockholder intends this proxy to be irrevocable and
coupled with an interest and will take such further action or execute such other
instruments as may be necessary to effectuate the intent of this proxy and
hereby revokes any proxy previously granted by it with respect to the Shares.
Each MMC Stockholder shall not hereafter, unless and until this Agreement
terminates pursuant to Section 7.6 hereof, purport to vote (or execute a consent
with respect to) his Shares (other than through this irrevocable proxy) or grant
any other proxy or power of attorney with respect to such Shares, deposit any
such Shares into a voting trust or enter into any agreement (other than this
Agreement), arrangement or understanding with any person, directly or
indirectly, to vote, grant any proxy or give instructions with respect to the
voting of such Shares.
2. Representations and Warranties.
2.1 Representations and Warranties of Parent. Parent hereby represents and
warrants to the MMC Stockholders as follows:
(a) Due Authorization. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of Parent, and no other corporate
proceedings on the part of Parent are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Parent and constitutes a valid and binding
agreement of Parent, enforceable against Parent in accordance with its terms,
except that such enforceability (i) may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to enforcement of
creditors' rights generally and (ii) is subject to general principles of equity.
(b) No Conflicts. Except for (i) filings under the HSR Act, if applicable,
(ii) the applicable requirements of the Exchange Act and the Securities Act of
1933, as amended (the "Securities Act"), (iii) the applicable requirements of
state securities, takeover or Blue Sky laws and (iv) such notifications,
filings, authorizing actions, orders and approvals as may be required under
other laws, (A) no filing with, and no permit, authorization, consent or
approval of, any state, federal or foreign public body or authority is necessary
for the execution of this Agreement by Parent and the consummation by Parent of
the transactions contemplated hereby and (B) neither the execution and delivery
of this Agreement by Parent nor the consummation by Parent of the transactions
contemplated hereby nor compliance by Parent with any of the provisions hereof
shall (1) conflict with or result in any breach of any provision of the
certificate of incorporation or by-laws (or similar documents) of Parent, (2)
result in a violation or breach of, or constitute (with or without notice or
lapse of time or both) a default (or give rise to any third party right of
termination, cancellation, material modification or acceleration) under any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, contract, agreement or other instrument or obligation to which Parent
is a party or by which it or any of its properties or assets may be bound or
<PAGE>
3
(3) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Parent or any of its properties or assets, except in the case of
(2) or (3) for violations, breaches or defaults which would not in the aggregate
materially impair the ability of Parent to perform its obligations hereunder.
(c) Good Standing. Parent is a corporation duly organized, validly existing
and in good standing under the laws of Delaware and has all requisite corporate
power and authority to execute and deliver this Agreement.
2.2 Representations and Warranties of each MMC Stockholder. Each MMC
Stockholder hereby represents and warrants to Parent as follows:
(a) Ownership of Shares. Such MMC Stockholder is the owner of his Shares
and has the power to vote and dispose of such Shares. To such MMC Stockholder's
knowledge, his Shares are validly issued, fully paid and nonassessable, with no
personal liability attaching to the ownership thereof. Such MMC Stockholder has
good title to his Shares, free and clear of any agreements, liens, adverse
claims or encumbrances whatsoever with respect to the ownership of or the right
to vote such Shares.
(b) Power; Binding Agreement. Such MMC Stockholder has the legal capacity,
power and authority to enter into and perform all of its obligations under this
Agreement. The execution, delivery and performance of this Agreement by such MMC
Stockholder will not violate any other agreement to which such MMC Stockholder
is a party including, without limitation, any voting agreement, stockholders
agreement or voting trust. This Agreement has been duly and validly authorized,
executed and delivered by such MMC Stockholder and constitutes a valid and
binding agreement of such MMC Stockholder, enforceable against such MMC
Stockholder in accordance with its terms, except that such enforceability (i)
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting or relating to enforcement of creditors' rights generally and (ii) is
subject to general principles of equity.
(c) No Conflicts. Except for (i) filings under the HSR Act, if applicable,
(ii) the applicable requirements of the Exchange Act and the Securities Act,
(iii) the applicable requirements of state securities, takeover or Blue Sky
laws, (iv) such notifications, filings, authorizing actions, orders and
approvals as may be required under other laws, (A) no filing with, and no
permit, authorization, consent or approval of, any state, federal or foreign
public body or authority is necessary for the execution of this Agreement by
such MMC Stockholder and the consummation by such MMC Stockholder of the
transactions contemplated hereby and (B) neither the execution and delivery of
this Agreement by such MMC Stockholder nor the consummation by such MMC
Stockholder of the transactions contemplated hereby nor compliance by such MMC
Stockholder with any of the provisions hereof shall (1) conflict with or result
in any breach of any provision of the certificate of incorporation, by-laws,
trust or charitable instruments (or similar documents) of such MMC Stockholder,
(2) result in a violation or breach of, or constitute (with or without notice or
lapse of time or both) a default (or give rise to any third party right of
termination, cancellation, material modification or acceleration) under any of
<PAGE>
4
the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, contract, agreement or other instrument or obligation to which such MMC
Stockholder is a party or by which such MMC Stockholder or any of his properties
or assets may be bound or (3) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to such MMC Stockholder or any of his
properties or assets, except in the case of (2) or (3) for violations, breaches
or defaults which would not in the aggregate materially impair the ability of
such MMC Stockholder to perform his obligations hereunder.
3. Certain Covenants of each MMC Stockholder. Each MMC Stockholder hereby
covenants and agrees as follows:
3.1 No Solicitation. Such MMC Stockholder shall not, directly or
indirectly, solicit, encourage, participate in or initiate any inquiries or the
making of any proposal by any person or entity (other than Parent or any
affiliate of Parent) which constitutes, or may reasonably be expected to lead
to, (a) any sale of the Shares or (b) any acquisition or purchase of a material
portion of the Company's assets or any equity interest in, or any merger,
consolidation or business combination with, the Company. If any MMC Stockholder
receives an inquiry or proposal with respect to the sale of Shares, then such
MMC Stockholder shall promptly inform Parent of the terms and conditions, if
any, of such inquiry or proposal and the identity of the person making it. Each
MMC Stockholder will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing.
3.2 Restriction on Transfer, Proxies and Non-Interference. Each MMC
Stockholder hereby agrees, while this Agreement is in effect, and except as
contemplated hereby, not to (a) sell, transfer, pledge, encumber, assign or
otherwise dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any of his Shares or (b) grant any proxies,
deposit any of his Shares into a voting trust or enter into a voting agreement
with respect to any of his Shares or (c) take any action that would make any
representation or warranty of such MMC Stockholder contained herein untrue or
incorrect or have the effect of preventing or disabling such MMC Stockholder
from performing his obligations under this Agreement.
4. Further Assurances. From time to time, at the other party's request and
without further consideration, each party hereto shall execute and deliver such
additional documents and take all such further action as may be necessary or
desirable to consummate the transactions contemplated by this Agreement.
5. Adjustments to Prevent Dilution, Etc. In the event of a stock dividend
or distribution, or any change in the Company Common Stock by reason of any
stock dividend, split-up, recapitalization, combination or the exchange of
shares, the term "Shares" shall be deemed to refer to and include the Shares as
well as all such stock dividends and distributions and any shares into which or
for which any or all of the Shares may be changed or exchanged.
6. Indemnification.
<PAGE>
5
6.1 General Indemnification. Each MMC Stockholder (collectively, the
"Indemnifying Party"), jointly and severally, indemnifies, defends and holds
Parent, Purchaser and Surviving Corporation and their respective directors,
officers, employees and affiliates (collectively, the "Indemnified Party")
harmless from any and all liabilities, damages, expenses, losses or other claims
(including, without limitation, reasonable attorneys' fees and expenses)
("Losses"), directly or indirectly, suffered or paid that arise out of or relate
to (i) the failure of any representation or warranty made by (A) the Company
under the Merger Agreement or (B) any MMC Stockholder hereunder, in each case to
be true and correct in all respects as of the date of this Agreement and as of
the Closing Date, (ii) any breach by (A) the Company of any of its covenants or
agreements contained in the Merger Agreement and (B) any MMC Stockholder of any
of its covenants or agreements contained herein, and (iii) the Company's
business, operations or conduct at any time on or prior to the Closing Date,
including, without limitation, any and all Taxes imposed on the Company in
respect of periods on or prior to the Closing Date; provided that, the aggregate
amount of the Holdback Amount (as defined in Section 1.6 of the Merger
Agreement) shall be applied to the payment of any Losses prior to any recourse
to any Indemnifying Party's indemnity hereunder.
6.2 Indemnification Procedures. If any indemnifiable claim is asserted by
any third party against or sought to be collected from any Indemnified Party,
such Indemnified Party shall promptly notify the Indemnifying Party of such
claim and the amount or the estimated amount thereof to the extent then feasible
(which estimate shall not be conclusive of the final amount of such claim);
provided, however, that failure to give such notification shall not affect the
indemnification provided hereunder except to the extent the Indemnifying Party
shall have been actually prejudiced as a result of such failure. The
Indemnifying Party shall have 20 days after receipt of such notice to assume the
conduct and control, through counsel reasonably acceptable to the Indemnified
Party and at the expense of the Indemnifying Party, of the settlement or defense
thereof; provided that the Indemnifying Party shall permit the Indemnified Party
to participate in such settlement or defense through counsel chosen by the
Indemnified Party so long as the fees and expenses of such counsel are borne by
the Indemnified Party. So long as the Indemnifying Party is reasonably
contesting any such claim in good faith, the Indemnified Party shall not pay or
settle any such claim; provided that the Indemnified Party may pay or settle any
such claim if the Indemnified Party waives its right to indemnification
hereunder in respect of such claim. If the Indemnifying Party does not notify
the Indemnified Party within 20 days after the receipt of the Indemnified
Party's notice of a claim of indemnity hereunder that it elects to undertake the
defense thereof, the Indemnified Party shall have the right to contest, pay or
settle the claim but shall not thereby waive any right to indemnity therefor
pursuant to this Agreement. The Indemnifying Party shall not, except with the
consent of the Indemnified Party, enter into any settlement that does not
include as an unconditional term thereof the unconditional release of the
Indemnified Party from all liability with respect to the related claim. The
obligations to indemnify and hold harmless pursuant to this Section 6 shall
survive the consummation of the transactions contemplated hereby.
<PAGE>
6
7. Miscellaneous.
7.1 Entire Agreement; Assignment. This Agreement, together with the Merger
Agreement, (i) constitutes the entire agreement among the parties with respect
to the subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and (ii) shall not be assigned by operation of law or
otherwise, provided that Parent may assign its rights and obligations hereunder
to any direct or indirect wholly owned parent company or subsidiary of Parent,
but no such assignment shall relieve Parent of its obligations hereunder if such
assignee does not perform such obligations.
7.2 Amendments. This Agreement may not be modified, amended, altered or
supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.
7.3 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at (i) in the case of any MMC Stockholder, c/o Ivins Phillips
& Barker, 1700 Pennsylvania Avenue, Washington, D.C. 20006, and (ii) in the case
of Parent, the following address:
if to Parent:
Dillard's, Inc.
1600 Cantrell Road
Little Rock, Arkansas 72201
Attention: James I. Freeman
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Alan G. Schwartz, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
7.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
<PAGE>
7
7.5 Cooperation as to Regulatory Matters. If so requested by Parent,
promptly after the date hereof, each MMC Stockholder will use its reasonable
best efforts to cause it and the Company (if required) to make all filings which
are required under the HSR Act and applicable requirements and to seek all
regulatory approvals required in connection with the transactions contemplated
hereby. The parties shall furnish to each other such necessary information and
reasonable assistance as may be requested in connection with the preparation of
filings and submissions to any governmental agency, including, without
limitation, filings under the provisions of the HSR Act. Each MMC Stockholder
shall also use its reasonable best efforts to cause the Company to supply Parent
with copies of all correspondence, filings or communications (or memoranda
setting forth the substance thereof) between the Company and its representatives
and the Federal Trade Commission, the Department of Justice and any other
governmental agency or authority and members of their respective staffs with
respect to this Agreement and the transactions contemplated hereby.
7.6 Termination. Except for the provisions of Section 6 which shall remain
in effect indefinitely, this Agreement shall terminate on the earlier of (i) the
Effective Time or (ii) the termination of the Merger Agreement in accordance
with its terms.
7.7 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore, each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
7.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same Agreement.
7.9 Descriptive Headings. The descriptive headings used herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
7.10 Severability. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
<PAGE>
8
IN WITNESS WHEREOF, Parent and each MMC Stockholder have caused this
Agreement to be duly executed as of the day and year first above written.
DILLARD'S, INC.
By: /s/ James I. Freeman
---------------------------------------
Name: James I. Freeman
Title: Chief Financial Officer
MMC STOCKHOLDERS (listed on next page)
<PAGE>
Woodbank Mills, Inc.
By: /s/ Roger Milliken
------------------
Name: Roger Milliken
Title: Chairman
as the holder of 139,000 shares
of the common stock,
par value $5.00 per share,
of Minot Mercantile Corporation
<PAGE>
/s/ Roger Milliken
------------------
Roger Milliken
/s/ Gerrish H. Milliken, Jr.
------------------------
Gerrish H. Milliken, Jr.
/s/ Minot K. Milliken
-----------------
Minot K. Milliken
as a majority of the trustees of trusts holding 32,646 shares of the common
stock, par value $5.00 per share, of Minot Mercantile Corporation
<PAGE>
/s/ Roger Milliken
------------------
Roger Milliken
/s/ Gerrish H. Milliken, Jr.
------------------------
Gerrish H. Milliken, Jr.
as a majority of the trustees of trusts holding 43,680 shares of the common
stock, par value $5.00 per share, of Minot Mercantile Corporation
<PAGE>
/s/ Roger Milliken
------------------
Roger Milliken
/s/ Minot K. Milliken
-----------------
Minot K. Milliken
as a majority of the trustees of trusts holding 5,660 shares of the common
stock, par value $5.00 per share, of Minot Mercantile Corporation
