AGREEMENT AND PLAN OF MERGER
DATED AS OF
OCTOBER 2, 2000
BY AND BETWEEN
MINNESOTA MINING AND MANUFACTURING COMPANY,
BARBADOS ACQUISITION, INC.
AND
ROBINSON NUGENT, INC.
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TABLE OF CONTENTS
Page
ARTICLE I.................................................................1
Section 1.1 The Merger................................................1
Section 1.2 The Closing; Effective Time...............................2
Section 1.3 Subsequent Actions........................................2
Section 1.4 Articles of Incorporation; Bylaws; Directors and
Officers of the Surviving Corporation...................2
ARTICLE II................................................................3
Section 2.1 Effect of the Merger on Capital Stock; Conversion of
Securities..............................................3
Section 2.2 Exchange of Certificates..................................5
ARTICLE III...............................................................7
Section 3.1 Organization and Qualification; Subsidiaries..............7
Section 3.2 Articles of Incorporation and Bylaws......................8
Section 3.3 Capitalization............................................8
Section 3.4 Power and Authority; Authorization; Valid & Binding.......9
Section 3.5 No Conflict; Required Filings and Consents...............10
Section 3.6 SEC Reports; Financial Statements........................11
Section 3.7 Absence of Certain Changes...............................11
Section 3.8 Litigation and Liabilities...............................12
Section 3.9 No Violation of Law; Permits.............................12
Section 3.10 Employee Matters; ERISA.................................13
Section 3.11 Labor Matters...........................................15
Section 3.12 Environmental Matters...................................15
Section 3.13 Board Action; Vote Required.............................17
Section 3.14 Brokers.................................................18
Section 3.15 Tax Matters.............................................18
Section 3.16 Intellectual Property...................................19
Section 3.17 Insurance...............................................20
Section 3.18 Contracts and Commitments...............................20
Section 3.19 Title to Assets.........................................21
Section 3.20 State Takeover Statutes.................................22
Section 3.21 Rights Agreement........................................22
Section 3.22 Product Warranty........................................22
Section 3.23 Product Liability.......................................23
ARTICLE IV...............................................................23
Section 4.1 Existence; Corporate Authority...........................23
Section 4.2 Authorization, Validity and Effect of Agreements.........23
Section 4.3 No Violation.............................................24
Section 4.4 Interested Stockholder...................................25
Section 4.5 Parent Public Reports; Financial Statements..............25
ARTICLE V................................................................25
Section 5.1 Interim Operations of The Company........................25
Section 5.2 No Solicitation..........................................28
ARTICLE VI...............................................................31
Section 6.1 Meetings of Stockholders.................................31
Section 6.2 Filings; Other Action....................................31
Section 6.3 Publicity................................................31
Section 6.4 Registration Statement...................................32
Section 6.5 Listing Application......................................32
Section 6.6 Further Action...........................................32
Section 6.7 Expenses.................................................33
Section 6.8 Notification of Certain Matters..........................33
Section 6.9 Access to Information....................................34
Section 6.10 Insurance; Indemnity....................................34
Section 6.11 Employee Benefit Plans..................................36
Section 6.12 Rights Agreement........................................37
ARTICLE VII..............................................................37
Section 7.1 Conditions to Obligations of the Parties to
Consummate the Merger..................................37
Section 7.2 Additional Conditions to Obligations of Parent
and Merger Sub.........................................38
Section 7.3 Additional Conditions to Obligations of the Company......39
ARTICLE VIII.............................................................40
Section 8.1 Termination..............................................40
Section 8.2 Effect of Termination and Abandonment....................42
Section 8.3 Amendment................................................43
ARTICLE IX...............................................................43
Section 9.1 Non-Survival of Representations, Warranties
and Agreements.........................................43
Section 9.2 Notices..................................................43
Section 9.3 Certain Definitions; Interpretation......................44
Section 9.4 Headings.................................................46
Section 9.5 Severability.............................................46
Section 9.6 Entire Agreement; No Third-Party Beneficiaries...........46
Section 9.7 Assignment...............................................46
Section 9.8 Governing Law............................................46
Section 9.9 Counterparts.............................................47
Section 9.10 Confidential Nature of Information......................47
Exhibit A - Voting and Stock Option Agreement...........................A-1
Exhibit B - Form of Articles of Incorporation...........................B-1
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INDEX OF DEFINED TERMS
DEFINED TERM SECTION
401(k) Plan.........................................................6.11(b)
Acquisition Proposal.................................................5.2(c)
Acquisition Transaction..............................................5.2(c)
Action..............................................................6.10(b)
affiliate........................................................9.3(a)(ii)
Agreement..........................................................preamble
Audited Balance Sheet..................................................3.19
Average Price........................................................2.1(b)
Barbados Acquisition...............................................preamble
Board of Directors..............................................9.3(a)(iii)
Business Combination.................................................2.1(c)
Cap.................................................................6.10(a)
Certificates.........................................................2.2(b)
Closing..............................................................1.2(a)
Closing Date.........................................................1.2(a)
Code...............................................................recitals
Company............................................................preamble
Company Benefit Plan................................................3.10(a)
Company Common Shares..............................................recitals
Company Contracts......................................................3.18
Company Disclosure Letter.......................................Article III
Company Employee....................................................3.10(b)
Company Employees...................................................3.10(b)
Company ERISA Affiliate.............................................3.10(d)
Company Multiemployer Plan..........................................3.10(a)
Company Options......................................................2.1(e)
Company Pension Plan................................................3.10(c)
Confidentiality Agreement...............................................9.6
Control.........................................................9.3(a)(iii)
Dallas Facility......................................................7.2(g)
Effective Time.......................................................1.2(b)
Encumbrance............................................................3.16
Environmental Claim..............................................3.12(e)(i)
Environmental Laws..............................................3.12(e)(ii)
Environmental Permits...............................................3.12(b)
ERISA............................................................9.3(a)(iv)
Exchange Act.........................................................3.5(a)
Exchange Agent.......................................................2.2(a)
Exchange Ratio.......................................................2.1(b)
Form S-4................................................................6.4
GAAP.................................................................3.6(b)
Governmental Entity..................................................3.5(b)
Hazardous Materials............................................3.12(e)(iii)
HSR Act..............................................................3.5(b)
IBCL....................................................................1.1
Indemnified Party...................................................6.10(b)
Intellectual Property..................................................3.16
knowledge.........................................................9.3(a)(v)
Material Adverse Effect...........................................9.3(a)(i)
Merger.............................................................recitals
Merger Consideration.................................................5.2(e)
Merger Consideration.................................................2.2(b)
Merger Sub.........................................................preamble
Merger Sub Articles of Incorporation.................................1.4(a)
MPP Plan............................................................6.11(a)
NYSE.................................................................2.1(b)
Parent.............................................................preamble
Parent Common Stock..................................................2.1(b)
Parent Public Reports...................................................4.5
Paying Agent.........................................................2.2(b)
PCBs..............................................................3.12(iii)
Pension Plan........................................................3.10(c)
Person...........................................................9.3(a)(vi)
Proposing Party......................................................5.2(b)
Proxy Statement/Prospectus..............................................6.4
Recapitalization.....................................................2.1(c)
Release.........................................................3.12(e)(iv)
Rescission Offers........................................................37
Rights..................................................................3.3
Rights Agreement.......................................................3.21
SEC..................................................................3.5(b)
SEC Reports..........................................................3.6(a)
Securities Act.......................................................3.5(a)
Significant Subsidiary..........................................9.3(a)(vii)
Stock Option Agreement.............................................recitals
Stock Option Plan....................................................2.1(e)
Subsidiary.....................................................9.3(a)(viii)
Superior Transaction.................................................5.2(e)
Surviving Corporation...................................................1.1
Tax.................................................................3.15(i)
Tax Return..........................................................3.15(i)
Taxable.............................................................3.15(i)
Taxes...............................................................3.15(i)
Termination Date.....................................................8.1(b)
Termination Fee......................................................8.2(b)
Trading Day..........................................................2.1(b)
Triggering Event.....................................................8.2(b)
VIP.................................................................6.11(b)
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of October 2, 2000 (this
"Agreement"), by and among Minnesota Mining and Manufacturing Company a
Delaware corporation, Barbados Acquisition, Inc. an Indiana corporation and
a wholly owned Subsidiary of Parent ("Barbados Acquisition" or "Merger
Sub") and Robinson Nugent, Inc. (the "Company"), an Indiana corporation.
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Parent, Merger Sub
and the Company have each determined that the merger of Merger Sub with and
into the Company (the "Merger") upon the terms and subject to the
conditions set forth in this Agreement is advisable, and in the best
interests of their respective corporations and stockholders and have
approved the Merger;
WHEREAS, it is intended that, for federal income tax purposes,
the Merger will qualify as a tax-free reorganization under Section 368 of
the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder (the "Code");
WHEREAS, concurrently with the execution and delivery of this
Agreement and as a condition and inducement to Parent's and Merger Sub's
willingness to enter into this Agreement, Parent and the stockholders of
the Company listed on Exhibit A have executed and delivered a Voting and
Stock Option Agreement (a "Stock Option Agreement"), dated as of this date,
pursuant to which those stockholders have agreed to vote in favor of the
Merger and, among other things, are granting to Parent an option to
purchase, under certain circumstances, all of the common shares, no par
value, of the Company (the "Company Common Shares") beneficially owned by
them, with an exercise price of $19.00 per share.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained in this Agreement, and intending to be
legally bound hereby, the parties agree as follows (certain capitalized
terms used herein are defined in Section 9.3):
ARTICLE I
Section 1.1 The Merger. At the Effective Time and subject to and upon
the terms and conditions of this Agreement and in accordance with the
Indiana Business Corporation Law ("IBCL"), Merger Sub shall be merged with
and into the Company and the separate corporate existence of Merger Sub
shall cease. The Company shall continue as the surviving corporation
(sometimes referred to as the "Surviving Corporation") in the Merger. The
Merger shall have the effects specified in Section 23-1-40-6 of the IBCL.
Section 1.2 The Closing; Effective Time. (a) The closing of the Merger
(the "Closing") shall take place (i) at the offices of Parent, 3M Center,
St. Paul, MN 55133 at 10:00 A.M. local time, on the second business day
following the date on which the last to be satisfied or waived of the
conditions set forth in Article VII (other than those conditions that by
their nature are to be satisfied at the Closing, but subject to the
satisfaction or, where permitted, waiver of those conditions) shall be
satisfied or waived in accordance with this Agreement or (ii) at such other
place, time and/or date as the Company and Parent shall agree (the date of
the Closing, the "Closing Date").
(b) On the Closing Date, the Company and Merger Sub shall cause
articles of merger in respect of the Merger to be properly executed and
filed with the Secretary of State of the State of Indiana as provided in
Section 23-1-40-5 of the IBCL. The Merger shall become effective at such
time at which the articles of merger shall be duly filed with the Secretary
of State of Indiana or at such later time reflected in the articles of
merger as shall be agreed by the Company and Parent (the time that the
Merger becomes effective, the "Effective Time").
Section 1.3 Subsequent Actions. If, at any time after the Effective
Time, the Surviving Corporation shall consider or be advised that any
deeds, bills of sale, assignments, assurances or any other actions or
things are necessary or desirable to continue, vest, perfect or confirm of
record or otherwise the Surviving Corporation's right, title or interest
in, to or under any of the rights, properties, privileges, franchises or
assets of either of its constituent corporations acquired or to be acquired
by the Surviving Corporation as a result of, or in connection with, the
Merger, or otherwise to carry out the intent of this Agreement, the
officers and directors of the Surviving Corporation shall be authorized to
execute and deliver, in the name and on behalf of either of the constituent
corporations of the Merger, all such deeds, bills of sale, assignments and
assurances and to take and do, in the name and on behalf of each of such
corporations or otherwise, all such other actions and things as may be
necessary or desirable to vest, perfect or confirm any and all right, title
and interest in, to and under such rights, properties, privileges,
franchises or assets in the Surviving Corporation or otherwise to carry out
the intent of this Agreement.
Section 1.4 Articles of Incorporation; Bylaws; Directors and Officers
of the Surviving Corporation. Unless otherwise agreed by Parent, Merger Sub
and the Company prior to the Closing, at the Effective Time:
(a) The Articles of Incorporation of the Company (the "Company
Articles of Incorporation") shall be amended at the Effective Time to read
in the form of Exhibit B and, as so amended, such Articles of Incorporation
shall be the Articles of Incorporation of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law;
(b) The bylaws of the Company as in effect immediately prior to
the Effective Time shall be at and after the Effective Time (until amended
as provided by law, the Company Certificate of Incorporation and the bylaws
of the Company, as applicable) the bylaws of the Surviving Corporation;
(c) The officers of Merger Sub immediately prior to the Effective
Time shall continue to serve in their respective offices of the Surviving
Corporation from and after the Effective Time, until their successors are
elected or appointed and qualified or until their resignation or removal;
and
(d) The directors of Merger Sub immediately prior to the
Effective Time shall be the directors of the Surviving Corporation from and
after the Effective Time, until their successors are elected or appointed
and qualified or until their resignation or removal.
ARTICLE II
Section 2.1 Effect of the Merger on Capital Stock; Conversion of
Securities. At the Effective Time, by virtue of the Merger and without any
action on the part of any holder of any capital stock of the Company,
Merger Sub or Parent:
(a) Cancellation of Certain Company Common Shares. Each Company
Common Share that is owned by the Company as treasury stock and all Company
Common Shares that are owned by Parent shall be canceled and shall cease to
exist, and no stock of Parent or other consideration shall be delivered in
exchange therefor. All references to Company Common Shares include the
Rights attached thereto.
(b) Conversion of Company Common Shares. Subject to the
provisions of this Section 2.1, each Company Common Share other than shares
canceled pursuant to Section 2.1(a), issued and outstanding immediately
prior to the Effective Time, shall by virtue of the Merger and without any
action on the part of the holder thereof be converted into, subject to
Section 2.1(c), the right to receive that number of fully paid,
non-assessable shares of common stock, $ 0.01 par value, of Parent ("Parent
Common Stock") equal to the Exchange Ratio. All such Company Common Shares
shall no longer be outstanding and shall automatically be canceled and
retired and shall cease to exist, and each certificate previously
evidencing any such shares shall thereafter represent the right only to
receive the Merger Consideration (as defined in Section 2.2(b)). The
holders of such certificates previously evidencing such Company Common
Shares outstanding immediately prior to the Effective Time shall cease to
have any rights with respect to such Company Common Shares except as
otherwise provided herein or by law. Such certificates previously
evidencing Company Common Shares shall be exchanged for certificates
evidencing whole shares of Parent Common Stock issued in consideration
therefor upon the surrender of such certificates in accordance with the
provisions of Section 2.2. No fractional shares of Parent Common Stock
shall be issued, and, in lieu thereof, a cash payment shall be made
pursuant to Section 2.2(d). The "Exchange Ratio" shall be equal to $19.00
divided by either (i) the Average Price of Parent Common Stock if such
Average Price is no greater than $100.00 and no less than $82.00, (ii)
$100.00 if the Average Price of Parent Common Stock is greater than
$100.00, in which case the Exchange Ratio shall equal 0.19 or (iii) $82.00
if the Average Price of Parent Common Stock is less than $82.00, in which
case the Exchange Ratio shall equal 0.2317. "Average Price" means the
average of the closing prices as reported in The Wall Street Journal's New
York Stock Exchange Composite Transactions Reports for each of the 20
consecutive Trading Days in the period ending on the business day preceding
the Effective Time. "Trading Day" means a day on which the New York Stock
Exchange, Inc. (the "NYSE") is open for trading.
(c) Anti-Dilution Provisions. If between the date of this
Agreement and the Effective Time, the number of shares of Parent Common
Stock or Company Common Shares issued and outstanding changes as a result
of a stock split, reverse stock split, stock dividend, stock combination,
recapitalization, reclassification, reorganization or similar transaction
(a "Recapitalization") with a record date within such period, the Exchange
Ratio shall be proportionately adjusted to provide the holders of Company
Common Shares the same economic effect as contemplated by this Agreement.
If, between the date hereof and the Effective Time, Parent shall merge or
consolidate with or into any other corporation (a "Business Combination")
and the terms thereof shall provide that Parent Common Stock shall be
converted into or exchanged for the shares of any other corporation or
entity, then provision shall be made so that shareholders of the Company
who would be entitled to receive shares of Parent Common Stock pursuant to
this Agreement shall be entitled to receive, in lieu of each share of
Parent Common Stock issuable to such shareholders as provided herein, the
same kind and amount of securities or assets as shall be distributable upon
such Business Combination with respect to one share of Parent Common Stock
and the parties shall agree on an appropriate restructuring of the
transactions contemplated herein.
(d) Conversion of Common Stock of Merger Sub. At the Effective
Time, each share of common stock of Merger Sub issued and outstanding
immediately prior to the Effective Time, and all rights in respect thereof,
shall forthwith cease to exist and be converted into one validly issued,
fully paid and nonassessable common share of the Surviving Corporation.
(e) Options. In accordance with Section 6.11, as soon as
practicable but not more than five (5) days from the date hereof, the
Company shall provide written notice to each holder of a Company Option of
the execution of this Agreement which notice shall include the election by
the Company to terminate all Company Options as of the 30th day immediately
following the date of the sending of such notice as contemplated by the
provisions of the Company's 1993 Employee and Non-Employee Director Stock
Option Plan (the "Stock Option Plan"), so that as of the Closing Date all
Company Options will have been either exercised and satisfied in full or
terminated. For purposes of this Agreement, "Company Options" shall mean
subscriptions, options, warrants, calls, commitments, agreements,
conversion rights or other rights of any character (contingent or
otherwise) to purchase or otherwise acquire from the Company or any of its
Subsidiaries at any time, or upon the happening of any stated event, any
shares of the capital stock of the Company.
Section 2.2 Exchange of Certificates. (a) Deposit with Exchange Agent.
As soon as practicable after the Effective Time, Parent shall deposit with
a bank or trust company mutually agreeable to Parent and the Company (the
"Exchange Agent"), pursuant to an agreement in form and substance
reasonably acceptable to Parent and the Company, when required,
certificates representing shares of Parent Common Stock required to effect
the conversion of Company Common Stock into Parent Common Shares in
accordance with Section 2.1(b) and an amount of cash in respect of
fractional shares pursuant to Section 2.2(d).
(b) Exchange and Payment Procedures. As soon as practicable after
the Effective Time, Parent shall cause Parent's transfer agent and
registrar as paying agent (the "Paying Agent") to mail to each holder of
record of a certificate or certificates representing Company Common Shares
(the "Certificates") that have been converted pursuant to Section 2.1: (i)
a letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only
upon actual delivery of the Certificates to Parent's Paying Agent) and (ii)
instructions for effecting the surrender of the Certificates and receiving
the Merger Consideration. Upon surrender of a Certificate to the Paying
Agent for cancellation, together with a duly executed letter of transmittal
and such other documents as the Paying Agent may require, the holder of
such Certificate shall be entitled to receive in exchange therefor (i) a
certificate representing that number of shares of Parent Common Stock into
which the Company Common Shares previously represented by such Certificate
are converted in accordance with Section 2.1(b) and (ii) the cash in lieu
of fractional shares of Parent Common Stock to which such holder has the
right to receive pursuant to Section 2.2(d) (the shares of Parent Common
Stock and cash described in clauses (i) and (ii) above being referred to
collectively as the "Merger Consideration"). In the event the Merger
Consideration is to be delivered to any Person who is not the Person in
whose name the Certificate surrendered in exchange therefor is registered
in the transfer records of the Company, the Merger Consideration may be
delivered to a transferee if the Certificate is presented to the Paying
Agent, accompanied by all documents required to evidence and effect such
transfer and by evidence satisfactory to the Paying Agent that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.2, each Certificate (other than a
certificate representing Company Common Shares to be canceled in accordance
with Section 2.1(a)) shall be deemed at any time after the Effective Time
to represent only the right to receive upon such surrender the Merger
Consideration contemplated by this Section 2.2. No interest will be paid or
will accrue on any cash payable to holders of Certificates pursuant to
provisions of this Article II.
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions declared or made after the Effective Time
with respect to shares of Parent Common Stock with a record date after the
Effective Time shall be paid to the holder of any unsurrendered Certificate
with respect to the shares of Parent Common Stock represented thereby and
no cash payment in lieu of fractional shares shall be paid to any such
holder pursuant to Section 2.2(d) until the holder of record of such
Certificate shall surrender such Certificate. Subject to the effect of
unclaimed property, escheat and other applicable laws, following surrender
of any such Certificate, there shall be paid to the record holder of the
certificates representing whole shares of Parent Common Stock issued in
exchange therefor, without interest, (i) at the time of such surrender, the
amount of any cash payable in lieu of a fractional share of Parent Common
Stock to which such holder is entitled pursuant to Section 2.2(d) and the
amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole shares of Parent
Common Stock and (ii) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the Effective
Time but prior to surrender and a payment date subsequent to surrender
payable with respect to such whole shares of Parent Common Stock.
(d) No Fractional Securities. In lieu of the issuance of any
fractional securities in connection with the Merger, each holder of Company
Common Shares who would otherwise have been entitled to a fraction of a
share of Parent Common Stock upon surrender of Certificates for exchange
pursuant to this Article II will be paid an amount in cash (without
interest), rounded to the nearest cent, determined by multiplying (a) the
per share closing price on the NYSE of Parent Common Stock on the date of
the Effective Time by (b) the fractional interest to which such holder
would otherwise be entitled (after taking into account all Company Common
Shares then held of record by such holder).
(e) Closing of Transfer Books. If, after the Effective Time,
Certificates are presented to the Surviving Corporation for transfer, they
shall be canceled and exchanged for certificates representing the
appropriate number of shares of Parent Common Stock and the appropriate
amount of cash as provided in this Section 2.2.
(f) Termination of Exchange Agent. Any certificates representing
shares of Parent Common Stock deposited with the Exchange Agent pursuant to
Section 2.2(a) and not exchanged within six months after the Effective Time
pursuant to this Section 2.2 shall be returned by the Exchange Agent to
Parent, which shall thereafter act as Exchange Agent. All cash held by the
Exchange Agent for payment to the holders of unsurrendered Certificates and
unclaimed at the end of six months from the Effective Time shall be
returned to Parent, after which time any holder of unsurrendered
Certificates shall look as a general creditor only to Parent for payment of
such cash to which such holder may be due subject to applicable law.
(g) Escheat. The Company shall not be liable to any Person for
such shares or funds delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
(h) Withholding Rights. Parent shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this
Agreement such amounts as Parent is required to deduct and withhold with
respect to the making of such payment under the Code or any provision of
state, local or foreign tax law. To the extent that amounts are so withheld
by Parent, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the Company Common Shares in
respect of which such deduction and withholding was made by Parent.
ARTICLE III
Except as set forth in the corresponding sections or subsections
of the disclosure letter, dated this date, delivered by the Company to
Parent (the "Company Disclosure Letter"), the Company hereby represents and
warrants to Parent and Merger Sub as follows:
Section 3.1 Organization and Qualification; Subsidiaries. (a) The
Company is a corporation duly organized and validly existing under the laws
of the State of Indiana and with respect to which no articles of
dissolution have been filed. Each of the Subsidiaries of the Company is a
corporation or other business entity duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation or
organization, and each of the Company and its Subsidiaries has the
requisite corporate or other organizational power and authority to own,
operate or lease its properties and to carry on its business as it is now
being conducted, and is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character
of its properties owned, operated or leased or the nature of its activities
makes such qualification necessary, in each case except as would not,
individually or in the aggregate, have or reasonably be expected to have a
Material Adverse Effect.
(b) All of the outstanding shares of capital stock and other
equity securities of the Subsidiaries of the Company have been validly
issued and are fully paid and nonassessable, and are owned, directly or
indirectly, by the Company, free and clear of all pledges and security
interests. There are no subscriptions, options, warrants, calls,
commitments, agreements, conversion rights or other rights of any character
(contingent or otherwise) entitling any Person to purchase or otherwise
acquire from the Company or any of its Subsidiaries at any time, or upon
the happening of any stated event, any shares of capital stock or other
equity securities of any of the Subsidiaries of the Company. The Company
Disclosure Letter lists the name and jurisdiction of incorporation or
organization of each Subsidiary of the Company.
(c) Except for interests in its Subsidiaries, neither the Company
nor any of its Subsidiaries owns directly or indirectly any capital stock
of, or other equity or voting or similar interest (including a joint
venture interest) in any Person or has any monetary or other obligation or
made any commitment to acquire any such interest or make any such
investment.
Section 3.2 Articles of Incorporation and Bylaws. The Company has
furnished, or otherwise made available, to Parent a complete and correct
copy of the Company Articles of Incorporation and its bylaws, as amended to
the date of this Agreement. Such Articles of Incorporation and bylaws are
in full force and effect. The Company is not in violation of any of the
provisions of the Articles of Incorporation or bylaws.
Section 3.3 Capitalization. The authorized capital stock of the
Company consists of 15,000,000 Company Common Shares, and no shares of
preferred stock. As of October 2, 2000, (a) 5,128,740 Company Common Shares
were outstanding, (b) 5,128,740 rights to purchase Company Common Shares
("Rights") issued pursuant to the Company's Rights Agreement were
outstanding, (c) Company Options to purchase an aggregate of 785,235 shares
of Company Common Stock were outstanding, all of which were granted under
the Stock Option Plan, 785,235 Company Common Shares were reserved for
issuance upon the exercise of outstanding Company Options, 123,245 Company
Common Shares were reserved for future grants under the Stock Option Plan
and 5,128,740 Company Common Shares were reserved for issuance under the
Company's Rights Agreement, (d) 1,885,901 Company Common Shares were held
by the Company in its treasury, and (e) no shares of capital stock of the
Company were held by the Company's Subsidiaries. Except for the Rights, the
Company has no outstanding bonds, debentures, notes or other obligations
entitling the holders thereof to vote (or which are convertible into or
exercisable for securities having the right to vote) with the stockholders
of the Company on any matter. Since June 30, 2000, the Company (i) has not
issued any Company Common Shares other than upon the exercise of Company
Options, (ii) has granted no Company Options to purchase Company Common
Shares under the Stock Option Plan or otherwise, and (iii) has not split,
combined or reclassified any of its shares of capital stock. All issued and
outstanding Company Common Shares are duly authorized, validly issued,
fully paid, nonassessable and free of preemptive rights. Except for the
Rights, there are no other shares of capital stock or voting securities of
the Company, and no existing options, warrants, calls, subscriptions,
convertible securities, or other rights, agreements or commitments which
obligate the Company or any of its Subsidiaries to issue, transfer or sell
any shares of capital stock of, or equity interests in, the Company or any
of its Subsidiaries and there are no stock appreciation rights or limited
stock appreciation rights outstanding other than those attached to such
Company Options. There are no outstanding obligations of the Company or any
Subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock of the Company and there are no performance awards
outstanding under the Stock Option Plan or any other outstanding stock
related awards. After the Effective Time, the Surviving Corporation will
have no obligation to issue, transfer or sell any shares of capital stock
of the Company, the Parent or the Surviving Corporation pursuant to any
Company Benefit Plan, including the Stock Option Plan. There are no voting
trusts or other agreements or understandings to which the Company or any of
its Subsidiaries is a party with respect to the voting of capital stock of
the Company or any of its Subsidiaries. No Company Common Shares have been
repurchased by the Company or any of its Subsidiaries since June 30, 2000.
Section 3.4 Power and Authority; Authorization; Valid & Binding. The
Company has the necessary corporate power and authority to enter into and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby, except that the Merger is
subject to the approval of this Agreement by the Company's stockholders as
required by the IBCL. The execution and delivery of this Agreement by the
Company, the performance by it of its obligations hereunder and the
consummation by the Company of the transactions contemplated hereby, have
been duly authorized by all necessary corporate action on the part of the
Company (other than with respect to the Merger and the adoption and
approval of this Agreement by its stockholders as required by the IBCL).
This Agreement has been duly executed and delivered by the Company and,
assuming the due authorization, execution and delivery of this Agreement by
Parent and Merger Sub, this Agreement constitutes a legal, valid and
binding obligation of the Company enforceable against it in accordance with
the terms hereof, subject to bankruptcy, insolvency, fraudulent transfer,
moratorium, reorganization and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
Section 3.5 No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by the Company does not, and the
performance by the Company of its obligations hereunder and the
consummation by the Company of the transactions contemplated hereby, will
not (i) violate or conflict with the Articles of Incorporation or the
bylaws of the Company, (ii) subject to obtaining or making the notices,
reports, filings, waivers, consents, approvals or authorizations referred
to in paragraph (b) below, conflict with or violate any law, regulation,
court order, judgment or decree applicable to the Company or any of its
Subsidiaries or by which any of their respective property is bound or
affected, other than the filings required under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the Securities Act of 1933,
as amended (the "Securities Act"), (iii) require any consent, approval or
authorization of, or declaration, filing or registration with, any
Governmental Entity or (iv) result in any breach of or constitute a default
(or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, cancellation,
vesting, modification, alteration or acceleration of any obligation under,
result in the creation of a lien, claim or encumbrance on any of the
properties or assets of the Company or any of its Subsidiaries pursuant to,
result in the loss of any material benefit under (including an increase in
the price paid by, or cost to, the Company or any of its Subsidiaries),
require the consent of any other party to, or result in any obligation of
the part of the Company or any of its Subsidiaries to repurchase (with
respect to a bond or a note), any agreement, contract, instrument, bond,
note, indenture, permit, license or franchise to which the Company or any
of its Subsidiaries is a party or by which the Company, any of its
Subsidiaries or any of their respective property is bound or affected,
except, in the case of clauses (ii) and (iii) above, as would not,
individually or in the aggregate, have or reasonably be expected to have a
Material Adverse Effect.
(b) Except for applicable requirements, if any, under the
premerger notification requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), the filing of
articles of merger with respect to the Merger as required by the IBCL,
filings with the Securities and Exchange Commission (the "SEC") under the
Securities Act, and the Exchange Act, any filings required pursuant to any
state securities or "blue sky" laws, or pursuant to the rules and
regulations of any stock exchange on which the Company Common Shares are
listed, neither the Company nor any of its Subsidiaries is required to
submit any notice, report or other filing with any Governmental Entity in
connection with the execution, delivery, performance or consummation of
this Agreement or the Merger. Except as set forth in the immediately
preceding sentence, no waiver, consent, approval or authorization of any
governmental or regulatory authority, court, agency, commission or other
Governmental Entity or any securities exchange or other self-regulatory
body, domestic or foreign ("Governmental Entity"), is required to be
obtained by the Company or any of its Subsidiaries in connection with its
execution, delivery, performance or consummation of this Agreement or the
transactions contemplated hereby except for such waivers, consents,
approvals or authorizations that, if not obtained or made, would not,
individually or in the aggregate, have or reasonably be expected to have a
Material Adverse Effect.
Section 3.6 SEC Reports; Financial Statements. (a) The Company has
filed all forms, reports and documents (including all exhibits, schedules
and annexes thereto) required to be filed by it with the SEC since June 30,
1997, including any amendments or supplements (collectively, including any
such forms, reports and documents filed after this date, the "SEC
Reports"), and, with respect to the SEC Reports filed by the Company after
the date hereof and prior to the Closing Date, will deliver or make
available to Parent all of its SEC Reports in the form filed with the SEC.
The SEC Reports (i) were (and any SEC Reports filed after this date will
be) in all material respects in compliance with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations promulgated thereunder, and (ii) as of their respective filing
dates, did not (and any SEC Reports filed after this date will not) contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(b) The financial statements, including all related notes and
schedules, contained in the SEC Reports (or incorporated therein by
reference) fairly present (or, with respect to financial statements
contained in the SEC Reports filed after this date, will fairly present)
the consolidated financial position of the Company and its consolidated
subsidiaries as of the respective dates and the consolidated results of
operations, retained earnings and cash flows of the Company and its
consolidated subsidiaries for the respective periods indicated, in each
case in accordance with generally accepted accounting principles ("GAAP"),
applied on a consistent basis throughout the periods involved (except for
changes in accounting principles disclosed in the notes) and the rules and
regulations of the SEC, except that interim financial statements are
subject to normal year-end adjustments which are not and are not expected
to be, individually or in the aggregate, material in amount and do not
include certain notes which may be required by GAAP but which are not
required by Form 10-Q of the SEC.
Section 3.7 Absence of Certain Changes. Except as disclosed in the SEC
Reports filed prior to this date, (a) since June 30, 2000, the Company and
each of its Subsidiaries has conducted its business in the ordinary and
usual course of its business consistent with past practice and there has
not been any change in the financial condition, business, prospects or
results of operations of the Company and its Subsidiaries, or any
development or combination of developments that, individually or in the
aggregate, has had or would be expected to have a Material Adverse Effect
and (b) since June 30, 2000, there has not been any action by the Company
which if taken after the date hereof would constitute a breach of Section
5.1 hereof.
Section 3.8 Litigation and Liabilities. (a) Except as disclosed in the
SEC Reports filed prior to this date, there are no civil, criminal or
administrative actions, suits or claims, proceedings (including
condemnation proceedings) or hearings or investigations, pending or, to the
knowledge of the Company, threatened against, or otherwise adversely
affecting the Company or any of its Subsidiaries or any of their respective
properties and assets, except for any of the foregoing which would not,
individually or in the aggregate, have or reasonably be expected to have a
Material Adverse Effect.
(b) Neither the Company nor any of its Subsidiaries has any
liabilities or obligations, (absolute, accrued, contingent or otherwise),
except (i) liabilities and obligations in the respective amounts reflected
or reserved against in the Company's consolidated balance sheet as of June
30, 2000 included in the SEC Reports, (ii) liabilities and obligations
incurred in the ordinary course of business since June 30, 2000 consistent
with past practice which individually or in the aggregate would not have or
reasonably be expected to have a Material Adverse Effect or (iii)
liabilities permitted to be incurred pursuant to Section 5.1.
Section 3.9 No Violation of Law; Permits. The business of the Company
and each of its Subsidiaries is not in violation of any statutes of law,
ordinances, regulations, judgments, orders or decrees of any Governmental
Entity, any permits, franchises, licenses, authorizations or consents
granted by any Governmental Entity, and the Company and each of its
Subsidiaries has obtained all permits, franchises, licenses, authorizations
or consents necessary for the conduct of its business, except, in each
case, as would not, individually or in the aggregate, have or reasonably be
expected to have a Material Adverse Effect. Neither the Company nor any of
its Subsidiaries is subject to any cease and desist or other order,
judgment, injunction or decree issued by, or is a party to any written
agreement, consent agreement or memorandum of understanding with, is a
party to any commitment letter or similar undertaking to, is subject to any
order or directive by, or has adopted any board resolutions at the request
of, any Governmental Entity that restricts the conduct of its business
(whether the type of business, the location or otherwise) and which,
individually or in the aggregate, would have or reasonably be expected to
have a Material Adverse Effect, nor has the Company been advised that any
Governmental Entity has proposed issuing or requesting any of the
foregoing.
Section 3.10 Employee Matters; ERISA. (a) Set forth in the Company
Disclosure Letter is a complete list of each Company Benefit Plan. The term
"Company Benefit Plan" shall mean (i) each plan, program, policy, contract
or agreement providing for compensation, severance, termination pay,
performance awards, stock or stock-related awards, fringe benefits or other
employee benefits of any kind, including, without limitation, any "employee
benefit plan," within the meaning of Section 3(3) of ERISA but excluding
any "multiemployer plan" within the meaning of Sections 3(37) or 4001(a)(3)
of ERISA, and (ii) each employment, severance, consulting, non-compete,
confidentiality, or similar agreement or contract, in each case, with
respect to which the Company or any Subsidiary of the Company has or may
have any liability (accrued, contingent or otherwise). As of the date
hereof, the Company is not a party to any Company Multiemployer Plan. The
term "Company Multiemployer Plan" shall mean any "multiemployer plan"
within the meaning of Section 4001(a)(3) of ERISA in respect to which the
Company or any Subsidiary of the Company has or may have any liability
(accrued, contingent or otherwise).
(b) The Company has provided or made available, or has caused to
be provided or made available, to Parent (i) current, accurate and complete
copies of all documents embodying each Company Benefit Plan, including all
amendments, written interpretations (which interpretation could be regarded
as increasing the liabilities of the Company and its Subsidiaries taken as
a whole under the relevant Company Benefit Plan) and all trust or funding
agreements with respect thereto; (ii) the most recent annual actuarial
valuation, if any, prepared for each Company Benefit Plan; (iii) the most
recent annual report (Series 5500 and all schedules), if any, required
under ERISA in connection with each Company Benefit Plan or related trust;
(iv) the most recent determination letter received from the Internal
Revenue Service, if any, for each Company Benefit Plan and related trust
which is intended to satisfy the requirements of Section 401(a) of the
Code; (v) if any Company Benefit Plan is funded, the most recent annual and
periodic accounting of such Company Benefit Plan's assets; (vi) the most
recent summary plan description together with the most recent summary of
material modifications, if any, required under ERISA with respect to each
Company Benefit Plan; and (vii) all material communications to any one or
more current, former or retired employee, officer, consultant, independent
contractor, agent or director of the Company or any Subsidiary of the
Company (each, a "Company Employee" and collectively, the "Company
Employees") relating to each Company Benefit Plan (which communication
could be regarded as increasing the liabilities of the Company and its
Subsidiaries taken as a whole under the relevant Company Benefit Plan).
(c) All Company Benefit Plans have been administered in all
respects in accordance with the terms thereof and all applicable laws
except for violations which, individually or in the aggregate, would not
have or reasonably be expected to have a Material Adverse Effect. Each
Company Benefit Plan which is an "employee pension benefit plan" within the
meaning of Section 3(2) of ERISA ("Pension Plan") and which is intended to
be qualified under Section 401(a) of the Code (each, an " Company Pension
Plan"), has received a favorable determination letter from the Internal
Revenue Service, and the Company is not aware of any circumstances that
would reasonably be expected to result in the revocation or denial of this
qualified status. Except as otherwise set forth in the Company Disclosure
Letter or in the SEC Reports filed prior to this date, there is no pending
or, to the Company's knowledge, threatened, claim, litigation, proceeding,
audit, examination or investigation relating to any Company Benefit Plans
or Company Employees that, individually or in the aggregate, would have or
reasonably be expected to have a Material Adverse Effect.
(d) No material liability under Title IV of ERISA has been or is
reasonably expected to be incurred by the Company or any Subsidiaries of
the Company or any entity which is considered a single employer with the
Company or any Subsidiary of the Company under Section 4001(a)(15) of ERISA
or Section 414 of the Code (a "Company ERISA Affiliate"). No notice of a
"reportable event," within the meaning of Section 4043 of ERISA for which
the 30-day reporting requirement has not been waived, has been required to
be filed for any Company Pension Plan within the past twelve (12) months.
(e) All contributions, premiums and payments (other than
contributions, premiums or payments that are not material, in the
aggregate) required to be made under the terms of any Company Benefit Plan
have been made. No Company Pension Plan has an "accumulated funding
deficiency" (whether or not waived) within the meaning of Section 412 of
the Code or Section 302 of ERISA. Neither the Company nor any Subsidiaries
of the Company nor any Company ERISA Affiliate has provided, or is required
to provide, security to any Company Pension Plan pursuant to Section
401(a)(29) of the Code.
(f) As of the Closing Date, neither the Company, any Subsidiary
of the Company nor any Company ERISA Affiliate will have incurred any
withdrawal liability as described in Section 4201 of ERISA for withdrawals
that have occurred on or prior to the Closing Date that has not previously
been satisfied. Neither the Company, any Subsidiary of the Company nor any
Company ERISA Affiliate has knowledge that any Company Multiemployer Plan
fails to qualify under Section 401(a) of the Code, is insolvent or is in
reorganization within the meaning of Part 3 of Subtitle E of Title IV of
ERISA nor of any condition that would reasonably be expected to result in a
Company Multiemployer Plan becoming insolvent or going into reorganization.
(g) Except as set forth in the Company Disclosure Letter, the
execution of, and performance of the transactions contemplated in, this
Agreement will not (either alone or upon the occurrence of any additional
or subsequent events) (i) constitute an event under any Company Benefit
Plan, trust or loan that will or may result in any payment (whether of
severance pay or otherwise), acceleration, forgiveness of indebtedness,
vesting, distribution, increase in benefits or obligation to fund benefits
with respect to any Company Employee, or (ii) result in the triggering or
imposition of any restrictions or limitations on the right of the Company,
any Subsidiary of the Company or Parent to amend or terminate any Company
Benefit Plan. Except as set forth in the Company Disclosure Letter, no
payment or benefit which will or may be made by the Company, any Subsidiary
of the Company, Parent or any of their respective affiliates with respect
to any Company Employee will be characterized as an "excess parachute
payment," within the meaning of Section 280G(b)(1) of the Code.
(h) Set forth in the Company Disclosure Letter is a list of all
outstanding and unexercised options granted under the Company's Stock
Option Plan, specifying the name of each optionee, the date on which each
option was granted, the number of shares that may be purchased pursuant to
each option, the exercise price at which such shares may be purchased, the
vesting period for each option, and the expiration date of each option.
Immediately prior to the Closing, there will be no Company Options
outstanding.
Section 3.11 Labor Matters. Except as set forth in the SEC Reports
filed prior to this date, and except for those matters that would not,
individually or in the aggregate, have or reasonably be expected to have a
Material Adverse Effect, there is no (i) work stoppage, slowdown, lockout
or labor strike against the Company or any Subsidiary of the Company by
Company Employees (or any union that represents them) pending or, to the
knowledge of the Company, threatened, or (ii) alleged unfair labor
practice, labor dispute (other than routine grievances), union organizing
activity or labor arbitration proceeding pending or, to the knowledge of
the Company, threatened against the Company or any of its Subsidiaries
relating to their businesses. Neither the Company nor any of its
Subsidiaries is a party to, or bound by, any collective bargaining
agreement or other contracts with a labor union or labor organization. The
Company is in compliance with all laws regarding employment, employment
practices, terms and conditions of employment and wages and laws, except
for such noncompliance which, either individually or in the aggregate,
would not have or reasonably be expected to have a Material Adverse Effect.
Section 3.12 Environmental Matters. Except as set forth in the SEC
Reports filed prior to this date and except for those matters that would
not, individually or in the aggregate, have or reasonably be expected to
have a Material Adverse Effect:
(a) The Company and each of its Subsidiaries is in compliance
with all applicable Environmental Laws, and neither the Company nor any of
its Subsidiaries has received any written communication from any Person or
Governmental Entity that alleges that the Company or any of its
Subsidiaries is not in compliance with applicable Environmental Laws.
(b) The Company and each of its Subsidiaries has obtained or has
applied for all applicable environmental, health and safety permits,
licenses, variances, approvals and authorizations required under
Environmental Laws (collectively, the "Environmental Permits") necessary
for the construction of its facilities or the conduct of its operations,
and all those Environmental Permits are in effect or, where applicable, a
renewal application has been timely filed and is pending agency approval,
and the Company and its Subsidiaries are in compliance with all terms and
conditions of such Environmental Permits.
(c) There is no Environmental Claim pending or, to the knowledge
of the Company, threatened (i) against the Company or any of its
Subsidiaries, (ii) against any Person whose liability for any Environmental
Claim has been retained or assumed contractually by the Company or any of
its Subsidiaries, or (iii) against any real or personal property or
operations which the Company or any of its Subsidiaries owns, leases or
operates, in whole or in part.
(d) There have been no Releases of any Hazardous Material that
would be likely to form the basis of any Environmental Claim against the
Company or any of its Subsidiaries, or against any Person whose liability
for any Environmental Claim has been retained or assumed contractually by
the Company or any of its Subsidiaries.
(e) None of the properties owned, leased or operated by the
Company, its Subsidiaries or any predecessor thereof are now, or were in
the past, listed on the National Priorities List of Superfund Sites or any
analogous state list (excluding easements that transgress those Superfund
sites).
For purposes of this Agreement:
(i) "Environmental Claim" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, investigations, proceedings or notices of noncompliance or
violation (written or oral) by any Person (including any federal, state,
local or foreign governmental authority) alleging potential liability
(including, without limitation, potential responsibility for or liability
for enforcement, investigatory costs, cleanup costs, governmental response
costs, removal costs, remedial costs, natural resources damages, property
damages, personal injuries or penalties) arising out of, based on or
resulting from (A) the presence, or Release or threatened Release into the
environment, of any Hazardous Materials at any location, whether or not
owned, operated, leased or managed by the Company or any of its
Subsidiaries; or (B) circumstances forming the basis of any violation or
alleged violation of any Environmental Law; or (C) any and all claims by
any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from the presence or
Release of any Hazardous Materials.
(ii) "Environmental Laws" means all applicable foreign,
federal, state and local laws, rules, requirements and regulations relating
to pollution, the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata) or
protection of human health as it relates to the environment including,
without limitation, laws and regulations relating to Releases of Hazardous
Materials, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials or relating to management of asbestos in buildings.
(iii) "Hazardous Materials" means (A) any petroleum or any
by-products or fractions thereof, asbestos or asbestos-containing
materials, urea formaldehyde foam insulation, any form of natural gas,
explosives, polychlorinated biphenyls ("PCBs"), radioactive materials,
ionizing radiation, electromagnetic field radiation or microwave
transmissions; (B) any chemicals, materials or substances, whether waste
materials, raw materials or finished products, which are now defined as or
included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous substances," "restricted
hazardous wastes," "toxic substances," "toxic pollutants," "pollutants,"
"contaminants," or words of similar import under any Environmental Law; and
(C) any other chemical, material or substance, whether waste materials, raw
materials or finished products, regulated or forming the basis of liability
under any Environmental Law.
(iv) "Release" means any release, spill, emission, leaking,
injection, deposit, disposal, discharge, dispersal, leaching or migration
into the environment (including without limitation ambient air, atmosphere,
soil, surface water, groundwater or property).
Section 3.13 Board Action; Vote Required. (a) The Company's Board of
Directors has unanimously approved this Agreement and the transactions
contemplated hereby, including the Merger, has determined that the Merger
is advisable, fair to and in the best interests of the Company and its
stockholders and has resolved to recommend to stockholders that they vote
in favor of approving this Agreement and approving the Merger.
(b) Approval of this Agreement by a majority of the votes
entitled to be cast with respect thereto by the holders of Company Common
Shares is sufficient to constitute approval of this Agreement and the
transactions contemplated hereby on behalf of the stockholders of the
Company. The Merger will give rise to no dissenters' rights under the IBCL.
Section 3.14 Brokers. Set forth in the Company Disclosure Letter is a
list of each broker, finder or investment banker and other Person entitled
to any brokerage, finder's, investment banking or other similar fee or
commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Company or
any of its Subsidiaries and the expected amounts of such fees and
commissions. The Company has previously provided to Parent copies of any
agreements giving rise to any such fee or commission.
Section 3.15 Tax Matters. (a) All Tax Returns required to be filed by
the Company or its Subsidiaries on or prior to the Effective Time have been
or will be prepared in good faith and timely filed with the appropriate
Governmental Entity on or prior to the Effective Time and all such Tax
Returns are (or, as to Tax Returns not filed on the date hereof, will be)
complete and accurate in all material respects.
(b) All material Taxes that are required to be paid by the
Company or its Subsidiaries, either (x) have been fully paid on a timely
basis (except with respect to matters contested in good faith as set forth
in the Company Disclosure Letter) or (y) are adequately reflected as a
liability on the Company's or its Subsidiaries' books and records and
financial statements and remitted to the appropriate Governmental Entity.
All Taxes required to be collected or withheld from third parties by the
Company or its Subsidiaries have been collected or withheld.
(c) The Company and its Subsidiaries have made due and sufficient
accruals and reserves for their respective liabilities for Taxes in their
respective books and records and financial statements.
(d) The Company and each of its Subsidiaries have not waived any
statute of limitations, or agreed to any extension of time, with respect to
Taxes or a Tax assessment or deficiency, which waiver or extension is in
effect.
(e) As of this date, (A) there are not pending or, threatened in
writing, any audits, examinations, investigations or other proceedings in
respect of Taxes or Tax matters and (B) there are not any unresolved
questions or claims concerning the Company's or any of its Subsidiary's Tax
liability that (i) were raised by any taxing authority in a communication
to the Company or any Subsidiary and (ii) would be individually or in the
aggregate, material to the Company and its Subsidiaries taken as a whole,
after taking into account any reserves for Taxes set forth on the most
recent balance sheet contained in the SEC Reports filed prior to this date.
(f) The Company has made available to Parent true and correct
copies of the United States federal income and all material state income or
franchise Tax Returns filed by the Company and its Subsidiaries for each of
its fiscal years ended on or about June 30, 1997, 1998 and 1999.
(g) The Company has not distributed the stock of a "controlled
corporation" (as defined in section 355(a) of the Code) in a transaction
subject to section 355 of the Code within the past two years or before such
time if the distribution was part of a plan (or series of related
transactions) of which the Merger is also a part.
(h) Neither Company nor any of its Subsidiaries (i) has any
liability under Treasury Regulation Section 1.1502-6 or analogous state,
local or foreign Law for any Taxes, other than for Taxes of Company or its
Subsidiaries or (ii) is a party to a Tax sharing or Tax indemnity contract
or any other contract of a similar nature with any entity other than
Company or any of its Subsidiaries that remains in effect.
(i) Neither the Company nor any of its Subsidiaries know of any
fact relating to the Company or its Subsidiaries that could reasonably be
expected to prevent the Merger from qualifying as a reorganization within
the meaning of Section 368(c) of the Code.
As used in this Agreement, (i) the term "Tax" (including, with
correlative meaning, the terms "Taxes" and "Taxable") includes all federal,
state, local and foreign income, profits, franchise, gross receipts,
license, premium, environmental (including taxes under Section 59A of the
Code), capital stock, severance, stamp, payroll, sales, employment,
unemployment, disability, use, transfer, property, withholding, excise,
production, occupation, windfall profits, customs duties, social security
(or similar), registration, value added, alternative or add-on minimum,
estimated, occupancy and other taxes, duties or governmental assessments of
any nature whatsoever, together with all interest, penalties and additions
imposed with respect to such amounts and any interest in respect of such
penalties and additions, and (ii) the term "Tax Return" includes all
returns and reports (including elections, declarations, disclosures,
schedules, estimates and information returns) required to be supplied to a
Tax authority relating to Taxes.
Section 3.16 Intellectual Property. Neither the Company nor any of its
Subsidiaries currently utilizes, any patented invention, trademark, trade
name, service mark, copyright, software, trade secret or know-how
(collectively, "Intellectual Property"), except for those which are owned,
possessed or lawfully used by the Company or its Subsidiaries in their
business operations, and neither the Company nor any of its Subsidiaries
infringes upon or unlawfully uses any patented invention, trademark, trade
name, service mark, copyright, or trade secret owned or validly claimed by
another Person except, in each case, as would not, individually or in the
aggregate, have or reasonably be expected to have a Material Adverse
Effect. The Company and its Subsidiaries own, have a valid license to use
or have the right validly to use all patented inventions, trademarks,
tradenames, service marks, copyrights, trade secrets, know how and software
necessary to carry on their respective businesses except the failure of
which to own, validly license or have the right validly to use,
individually or in the aggregate, would not have or reasonably be expected
to have a Material Adverse Effect. All ownership rights, license rights and
other rights to use any patented invention, trademark, trade name, service
mark, copyright, software, trade secret or know-how necessary to carry on
the businesses of the Company and its Subsidiaries are transferable free of
any lien, pledge, change, security interest or other encumbrance (each, an
"Encumbrance"), except the failure of which to be freely transferable would
not have or reasonably be expected to have a Material Adverse Effect.
Neither the Company nor its Subsidiaries are aware of any third party
infringement or misappropriation of any patent, trademark, trade name,
service mark, copyright, software, trade secret or know-how owned by the
Company or its Subsidiaries.
Section 3.17 Insurance. Except to the extent adequately accrued on the
most recent balance sheet contained in the SEC Reports filed as of this
date, neither the Company nor its Subsidiaries has any obligation
(contingent or otherwise) to pay in connection with any insurance policies
any retroactive premiums or "retro-premiums" that, individually or in the
aggregate, would have or reasonably be expected to have a Material Adverse
Effect. The Company and its Subsidiaries have obtained and maintained in
full force and effect insurance with insurance companies or associations in
such amounts, on such terms and covering such risks, as is customarily
carried by reasonably prudent persons conducting businesses or owning or
leasing assets similar to those conducted, owned or leased by the Company,
except where the failure to obtain or maintain such insurance, individually
or in the aggregate, would not have or be reasonably be expected to have a
Material Adverse Effect.
Section 3.18 Contracts and Commitments. Set forth in the Company
Disclosure Letter is a complete and accurate list of all of the following
contracts (written or oral), plans, undertakings, commitments or agreements
("Company Contracts") to which the Company or any of its Subsidiaries is a
party or by which any of them is bound as of the date of this Agreement:
(a) each distribution, supply, inventory purchase, franchise,
license, sales, agency or advertising contract involving annual
expenditures or liabilities in excess of $100,000 which is not cancelable
(without material penalty, cost or other liability) within one year;
(b) each promissory note, loan, agreement, indenture, evidence of
indebtedness or other instrument providing for the lending of money,
whether as borrower, lender or guarantor, in excess of $100,000;
(c) each contract, lease, agreement, instrument or other
arrangement containing any covenant limiting the freedom of the Company or
any of its subsidiaries to engage in any line of business or compete with
any person;
(d) each joint venture or partnership agreement that is material
to the Company and its Subsidiaries taken as a whole; and
(e) any contract that would constitute a "material contract" (as
such term is defined in Item 601(b)(10) of Regulation S-K of the SEC).
True and complete copies of the written Company Contracts, as
amended to date, that would be required to be filed as exhibits to the
Company's Form 10-K if such Form 10-K were being filed on this date, that
have not been filed prior to the date hereof as exhibits to the SEC Reports
have been delivered or made available to Parent.
Each Company Contract is valid and binding on the Company, and
any Subsidiary of the Company which is a party thereto and, to the
knowledge of the Company, each other party thereto and is in full force and
effect, and the Company and its Subsidiaries have performed and complied
with all obligations required to be performed or compiled with by them
under each Company Contract, except in each case as would not, individually
or in the aggregate, have or reasonably be expected to have a Material
Adverse Effect.
Section 3.19 Title to Assets. The Company and its Subsidiaries have
good and marketable title to all of their real and personal properties and
assets reflected in the audited consolidated balance sheet of the Company
as of June 30, 2000 (the "Audited Balance Sheet") (other than assets
disposed of since June 30, 2000 in the ordinary course of business, and
properties and assets acquired since June 30, 2000), in each case free and
clear of all Encumbrances except for (i) Encumbrances which secure
indebtedness reflected in the SEC Reports; (ii) liens for Taxes accrued but
not yet due; (iii) liens arising as a matter of law in the ordinary course
of business with respect to obligations incurred after the date of the
Audited Balance Sheet, provided that the obligations secured by such liens
are not delinquent; and (iv) such imperfections of title and Encumbrances,
if any, as would not have or reasonably be expected to have a Material
Adverse Effect. The Company and its Subsidiaries own, or have valid
leasehold interests in, all properties and assets used in the conduct of
their business. Any real property and other assets held under lease by the
Company or any of its Subsidiaries are held under valid, subsisting and
enforceable leases with such exceptions which, individually or in the
aggregate, would not reasonably be expected to interfere with the use made
or proposed to be made by the Company or any of its Subsidiaries of such
property.
Section 3.20 State Takeover Statutes. The Board of Directors of the
Company has approved the Merger and this Agreement and such approval is
sufficient to render inapplicable to the Merger, this Agreement and the
transactions contemplated by this Agreement, the provisions of Section
23-1-43 of the IBCL to the extent, if any, such section is applicable to
the transactions contemplated by this Agreement. The Board of Directors of
the Company has amended the bylaws of the Company so as to render
inapplicable to the Stock Option Agreement and the other transactions
contemplated by this Agreement the provisions of IC 23-1-42. To the
Company's knowledge, no other state takeover statute or similar statute or
regulation applies to the Merger or the transactions contemplated hereby.
Section 3.21 Rights Agreement. No "Distribution Date" or "Triggering
Event" (as such terms are defined in the Rights Agreement, dated as of
April 21, 1998, between the Company and Compushare Investor Services, LLC,
as successor rights agent, as amended (the "Rights Agreement")) has
occurred as of this date. This Agreement and the Stock Option Agreement,
and the consummation of the transactions contemplated hereunder and
thereunder, including the Merger, have been approved by at least two-thirds
(2/3) of the Disinterested Directors (as defined in the Rights Agreement).
The Rights Agreement has been amended so that neither the execution or
delivery of this Agreement, nor the exchange of the Company Common Shares
for the shares of Parent Common Stock and cash in accordance with Article
II will cause (A) the Rights issued pursuant to the Rights Agreement to
become exercisable under the Rights Agreement, (B) Parent or Merger Sub to
be deemed an "Acquiring Person" (as defined in the Rights Agreement), or
(C) the "Shares Acquisition Date" or a "Triggering Event" (each as defined
in the Rights Agreement) to occur upon any such event. The execution and
delivery of this Agreement and the Stock Option Agreement and the
consummation of the transactions contemplated hereby and thereby will not
result in the ability of any Person to exercise any Rights or cause the
Rights to separate from the Company Common Shares to which they are
attached or to be triggered or become exercisable.
Section 3.22 Product Warranty. Each product manufactured, sold,
leased, or delivered by any of the Company and its Subsidiaries has been in
substantial conformity with all applicable contractual commitments and all
express and implied warranties, and none of the Company and its
Subsidiaries has any liability (and there is no basis for any present or
future action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand against any of them giving rise to any liability) for
replacement or repair thereof or other damages in connection therewith
other than liabilities that would not have or reasonably be expected to
have a Material Adverse Effect, subject only to the reserve for product
warranty claims as adjusted for the passage of time through the Closing
Date in accordance with the past custom and practice of the Company and its
Subsidiaries. No product manufactured, sold, leased, or delivered by any of
the Company and its Subsidiaries is subject to any guaranty, warranty, or
other indemnity beyond the applicable standard terms and conditions of sale
or lease. The Company Disclosure Letter includes copies of the standard
terms and conditions of sale or lease for each of the Company and its
Subsidiaries (containing applicable guaranty, warranty, and indemnity
provisions).
Section 3.23 Product Liability. None of the Company and its
Subsidiaries has any liability (and there is no basis for any present or
future action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand against any of them giving rise to any liability) arising
out of any injury to individuals or property as a result of the ownership,
possession, or use of any product manufactured, sold, leased, or delivered
by any of the Company and its Subsidiaries, other than liabilities that
would not have or reasonably be expected to have a Material Adverse Effect.
ARTICLE IV
Parent and Merger Sub hereby represent and warrant to the Company as
of the date of this Agreement as follows:
Section 4.1 Existence; Corporate Authority. Parent and Merger Sub are
corporations duly incorporated, validly existing and in good standing under
the laws of their jurisdiction of incorporation and have all requisite
corporate power and authority to own, operate and lease its properties and
carry on its business as now conducted, except where the failure to have
such power and authority, individually or in the aggregate, would not
materially adversely affect their ability to consummate the Merger. Merger
Sub is directly and wholly owned by Parent and has conducted no business
other than in connection with the transactions contemplated by this
Agreement.
Section 4.2 Authorization, Validity and Effect of Agreements. Parent
and Merger Sub have the necessary corporate power and authority to enter
into and deliver this Agreement and to perform their obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Parent and Merger Sub, the performance by
them of their respective obligations hereunder and the consummation by
Parent and Merger Sub of the transactions contemplated hereby, have been
duly authorized by all necessary corporate action on their part. This
Agreement has been duly executed and delivered by Parent and Merger Sub
and, assuming the due authorization, execution and delivery of this
Agreement by the Company, this Agreement constitutes a legal, valid and
binding obligation of Parent and Merger Sub enforceable against each of
them in accordance with the terms hereof, subject to bankruptcy,
insolvency, fraudulent transfer, moratorium, reorganization and similar
laws of general applicability relating to or affecting creditors' rights
and to general equity principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law). The Parent Company
Stock, when issued and delivered in accordance with the terms and
conditions of this Agreement, will be validly issued and fully paid and
non-assessable.
Section 4.3 No Violation. (a) The execution and delivery of this
Agreement by Parent and Merger Sub does not, and the performance by Parent
and Merger Sub of their obligations hereunder and the consummation by
Parent and Merger Sub of the transactions contemplated hereby, will not (i)
violate or conflict with the Merger Sub's articles of incorporation,
Parent's certificate of incorporation or the bylaws of Parent or Merger
Sub, (ii) subject to obtaining or making the notices, reports, filings,
waivers, consents, approvals or authorizations referred to in paragraph (b)
below, conflict with or violate any law, regulation, court order, judgment
or decree applicable to Parent or any of its Subsidiaries (including Merger
Sub) or by which any of their respective property is bound or affected,
other than the filings required under the Exchange Act and the Securities
Act, except, in the case of clause (ii) above, as would not, individually
or in the aggregate, have or reasonably be expected to have a material
adverse effect on their ability to consummate the Merger.
(b) Except for applicable requirements, if any, under the
premerger notification requirements of the HSR Act, the filing of articles
of merger with respect to the Merger as required by the IBCL, filings with
the SEC under the Securities Act and the Exchange Act, any filings required
pursuant to any state securities or "blue sky" laws, or pursuant to the
rules and regulations of any stock exchange on which shares of Parent
Common Stock are listed, neither Parent nor any of its Subsidiaries
(including Merger Sub) is required to submit any notice, report or other
filing with any Governmental Entity in connection with the execution,
delivery, performance or consummation of this Agreement or the Merger,
except where the failure to submit such notice, report or other filing
would not, individually or in the aggregate, have or reasonably be expected
to have a material adverse effect on Parent's or Merger Sub's ability to
consummate the Merger or otherwise prevent Parent or Merger Sub from
performing its obligations under this Agreement. Except as set forth in the
immediately preceding sentence, no waiver, consent, approval or
authorization of any governmental or regulatory authority, court, agency,
commission or other governmental entity or any securities exchange or other
self-regulatory body, domestic or foreign Governmental Entity is required
to be obtained by Parent or any of its Subsidiaries (including Merger Sub)
in connection with its execution, delivery, performance or consummation of
this Agreement or the transactions contemplated hereby except for such
waivers, consents, approvals or authorizations that, if not obtained or
made, would not, individually or in the aggregate, have or be expected to
have a material adverse effect on Parent's or Merger Sub's ability to
consummate the Merger or otherwise prevent Parent or Merger Sub from
performing their obligations under this Agreement.
Section 4.4 Interested Stockholder. As of the date hereof, (i) neither
Parent, Merger Sub nor any of their affiliates is, with respect to the
Company, an "Interested Shareholder", as such term is defined in Section
23-1-43-10 of the IBCL and (ii) neither Parent, Merger Sub nor any of their
affiliates beneficially owns any Company Common Shares.
Section 4.5 Parent Public Reports; Financial Statements. Parent has
delivered to the Company true and complete copies of, including all
amendments thereto, its Annual Report for the calendar year ended December
31, 1999, the annual report on Form 10-K for the year ended December 31,
1999, the quarterly reports on Form 10-Q for the quarters ended March 31,
2000 and June 30, 2000 (collectively, the "Parent Public Reports"). The
consolidated financial statements of and contained in the Parent Public
Reports present fairly the financial position of Parent and its
consolidated subsidiaries at the respective dates of the balance sheet and
the results of operations for the periods then ended, in conformity with
generally accepted accounting principles applied on a consistent basis. The
Parent Public Reports do not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they
will be made, not misleading.
ARTICLE V
Section 5.1 Interim Operations of The Company. The Company covenants
and agrees as to itself and its Subsidiaries that, after this date and
prior to the Effective Time (unless Parent shall otherwise approve in
writing, or unless as otherwise expressly contemplated by this Agreement or
expressly disclosed in the Company Disclosure Letter):
(i) the business of the Company and its Subsidiaries shall
be conducted in all material respects in the ordinary and usual course and,
to the extent consistent therewith, each of the Company and its
Subsidiaries shall use its reasonable commercial efforts to preserve its
business organization intact in all material respects, keep available the
services of its officers and employees as a group (subject to changes in
the ordinary course) and maintain its existing relations and goodwill in
all material respects with customers, suppliers, regulators, distributors,
creditors, lessors, and others having business dealings with it;
(ii) the Company shall not issue, deliver, grant or sell any
additional Company Common Shares or any Company Options (other than the
issuance, delivery, grant or sale of Company Common Shares or Company
Options pursuant to the exercise or conversion of Company Options
outstanding as of this date);
(iii) the Company shall not (A) amend its Articles of
Incorporation or bylaws, amend or take any action under the Rights
Agreement, or adopt any other shareholders rights plan or enter into any
agreement with any of its stockholders in their capacity as such; (B)
split, combine, subdivide or reclassify its outstanding shares of capital
stock; (C) declare, set aside or pay any dividend or distribution payable
in cash, stock or property in respect of any of its capital stock; or (D)
repurchase, redeem or otherwise acquire or permit any of its Subsidiaries
to purchase, redeem or otherwise acquire, any shares of its capital stock
or any Company Options (it being understood that this provision shall not
prohibit the exercise (cashless or otherwise) of Company Options);
(iv) the Company shall not, and shall not cause or permit
any of its Subsidiaries to, take any action that would prevent the Merger
from qualifying as a "reorganization" within the meaning of Section 368 of
the Code or take any action that it knows would cause any of its
representations and warranties in this Agreement to become inaccurate in
any material respect;
(v) except as expressly permitted by this Agreement, and
except as required by applicable law or pursuant to contractual obligations
in effect on this date; the Company shall not, and shall not permit its
Subsidiaries to, (A) enter into, adopt or amend (except for renewals on
substantially identical terms) any agreement or arrangement relating to
severance, (B) enter into, adopt or amend (except for renewals on
substantially identical terms) any employee benefit plan or employment or
consulting agreement (including, without limitation, the Company Benefit
Plans referred to in Section 3.10); or (C) grant any stock options or other
equity related awards;
(vi) except for borrowings under lines of credit existing as
of this date in the ordinary course of business consistent with past
practice, neither the Company nor any of its Subsidiaries shall issue,
incur or amend the terms of any indebtedness for borrowed money or
guarantee any such indebtedness (other than indebtedness of the Company or
any wholly-owned Subsidiary);
(vii) neither the Company nor any of its Subsidiaries shall
make any capital expenditures in an aggregate amount in excess of the
aggregate amount reflected in the capital expenditure budget, a copy of
which is attached to the Company Disclosure Letter;
(viii) other than in the ordinary course of business
consistent with past practice, neither the Company nor any of its
Subsidiaries shall transfer, lease, license, sell, mortgage, pledge,
encumber or otherwise dispose of any of its or its Subsidiaries' property
or assets (including capital stock of any of its Subsidiaries) material to
the Company and its Subsidiaries taken as a whole, except pursuant to
contracts existing as of this date (the terms of which have been previously
disclosed to Parent);
(ix) neither the Company nor any of its Subsidiaries shall
issue, deliver, sell or encumber shares of any class of its capital stock
or any securities convertible into, or any rights, warrants or options to
acquire, any such shares, except any such shares issued pursuant to options
and other awards outstanding on this date under Company Benefit Plans;
(x) neither the Company nor any of its Subsidiaries shall
acquire any business, including any facilities, whether by merger,
consolidation, purchase of property or assets or otherwise, except to the
extent provided for in the capital expenditure budget attached to the
Company Disclosure Letter;
(xi) The Company shall not change its accounting policies,
practices or methods except as required by GAAP or by the rules and
regulations of the SEC;
(xii) other than pursuant to this Agreement, the Company
shall not, and shall not permit any of its Subsidiaries to, take any action
to cause Company Common Shares to cease to be listed on the Nasdaq National
Market System;
(xiii) The Company shall not, and shall not permit any of
its Subsidiaries to, enter into any Company Contract described in clauses
(c) and (d) of Section 3.18, or enter into or amend any distribution,
supply, inventory purchase, franchise, license, sales agency or advertising
contract outside of the ordinary course of business consistent with past
practice in scope and amount but in no event for a term (or an extension of
a term) beyond the date that is one year after the Closing Date;
(xiv) The Company shall not, and shall not cause or permit
any of its Subsidiaries to, change or, other than in the ordinary course of
business consistent with past practice, make any material Tax election,
settle any audit or file any amended Tax Returns; or
(xv) The Company shall not enter into, or permit any of its
Subsidiaries to enter into, any commitments or agreements to do any of the
foregoing.
Section 5.2 No Solicitation. (a) The Company shall immediately cease
and terminate any existing solicitation, initiation, encouragement,
activity, discussion or negotiation with any Persons conducted heretofore
by the Company, its Subsidiaries or any of their respective representatives
with respect to any proposed, potential or contemplated Acquisition
Transaction and request the return or destruction of all non-public
information furnished in connection therewith.
(b) From and after this date, without the prior written consent
of Parent, the Company will not, will not authorize or permit any of its
Subsidiaries to, and shall use its reasonable best efforts to cause any of
its or their respective officers, directors, employees, financial advisors,
agents or other representatives not to, directly or indirectly, solicit,
initiate or encourage (including by way of furnishing information) or take
any other action to facilitate any inquiries or the making of any proposal
which constitutes or may reasonably be expected to lead to an Acquisition
Proposal from any Person, engage in any discussion or negotiations relating
thereto or accept any Acquisition Proposal or enter into any contract or
understanding requiring it to abandon, terminate or fail to consummate the
Merger or any of the other transactions contemplated by this Agreement;
provided that, at any time prior to receipt of the stockholder approval
referred to in Section 6.1, the Company may, subject to compliance with
this Section 5.2(b), furnish information to, and negotiate or otherwise
engage in discussions with, any Person (a "Proposing Party") who (x)
delivers a bona fide written Acquisition Proposal which was not solicited,
initiated, encouraged or facilitated by the Company, directly or
indirectly, after the date of this Agreement or otherwise resulted from a
breach of this Section 5.2, and (y) enters into an appropriate
confidentiality agreement with the Company (which agreement shall be no
less favorable to the Company than the Confidentiality Agreement and a copy
of which will be delivered to Parent promptly after the execution thereof),
if, but only if, the Board of Directors of the Company determines in good
faith by a majority vote, (i) after consultation with, and receipt of
advice from, its outside legal counsel, that failing to take such action
would constitute a breach of the fiduciary duties of such Board of
Directors under the IBCL, and (ii) after consultation with the Company's
independent financial advisors, that such proposal could reasonably be
expected to lead to a Superior Transaction.
(c) The Company shall notify Parent orally and in writing of any
such inquiries, offers or proposals (including, without limitation, the
terms and conditions of any such offers or proposals, any amendments or
revisions, and the identity of the Person making it), as promptly as
practicable following the receipt, and shall keep Parent reasonably
informed of the status and material terms of any such inquiry, offer or
proposal. For purposes of this Agreement, "Acquisition Proposal" shall
mean, with respect to the Company, any inquiry, proposal or offer from any
Person (other than Parent or any of its Subsidiaries) relating to any (i)
direct or indirect acquisition or purchase of a business of the Company or
any of its Subsidiaries, that constitutes 15% or more of the consolidated
net revenues, net income or assets of Company and its Subsidiaries, (ii)
direct or indirect acquisition or purchase of 15% or more of any class of
equity securities of the Company or any of its Subsidiaries whose business
constitutes 15% or more of the consolidated net revenues, net income or
assets of the Company and its Subsidiaries, (iii) tender offer or exchange
offer that if consummated would result in any Person beneficially owning
15% or more of the capital stock of the Company, or (iv) merger,
consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving the Company or any of its
Subsidiaries whose business constitutes 15% or more of the consolidated net
revenues, net income or assets of the Company and its Subsidiaries. Each of
the transactions referred to in clauses (i) - (iv) of the definition of
Acquisition Proposal, other than any such transaction to which Parent or
any of its Subsidiaries is a party, is referred to as an "Acquisition
Transaction".
(d) If, prior to the approval of this Agreement by the
stockholders of the Company, the Board of Directors of the Company
determines in good faith by a majority vote, with respect to any written
proposal from a Proposing Party for an Acquisition Transaction received
after the date hereof that was not solicited, initiated, encouraged or
facilitated by the Company, directly or indirectly, after the date of this
Agreement or did not otherwise result from a breach of this Section 5.2,
that, based upon (x) the written opinion (a copy of which shall have been
delivered to Parent) from the Company's independent financial advisors that
the Acquisition Transaction is a Superior Transaction and (y) the advice of
the Company's outside legal counsel, that such Acquisition Transaction is a
Superior Transaction and is in the best interest of the Company and its
stockholders and failure to enter into such Acquisition Transaction would
constitute a breach of the fiduciary duties of the Board of Directors of
the Company under the IBCL, then the Company may terminate this Agreement
and enter into an acquisition agreement for the Superior Transaction;
provided that, prior to any such termination, and in order for such
termination to be effective, (i) the Company shall provide Parent three
business days' written notice that it intends to terminate this Agreement
pursuant to this Section 5.2(d), identifying the Superior Transaction and
the parties thereto and delivering an accurate description of all material
terms of the Superior Transaction to be entered into, and (ii) on the date
of termination (provided that the opinion and advice referred to in clauses
(x) and (y) above shall continue in effect without revocation, revision or
modification), the Company shall deliver to Parent (A) a written notice of
termination of this Agreement pursuant to this Section 5.2(d), (B) a wire
transfer of immediately available funds in the amount of the Termination
Fee, (C) a written acknowledgment from the Company that the termination of
this Agreement and the entry into the Superior Transaction are a Triggering
Event, and (D) a written acknowledgment from each other party to the
Superior Transaction that it has read the Company's acknowledgment referred
to in clause (C) above and will not contest the matters thus acknowledged
by the Company, including the payment of the Termination Fee.
(e) "Superior Transaction" shall mean an Acquisition Transaction
which the Board of Directors of the Company, reasonably determines is more
favorable to the Company and its stockholders than the Merger and which is
not subject to any financing condition; provided, however, that, without
limiting the foregoing, an Acquisition Transaction shall not constitute a
Superior Transaction unless, in the written opinion (with only customary
qualifications) of the Company's independent financial advisors, the value
of the consideration to be paid in the Acquisition Transaction is more
favorable to the stockholders of such company from a financial point of
view than the Merger Consideration. Reference in the foregoing definition
to the "Merger" and "Merger Consideration" shall include, as applicable,
any proposed alteration of the terms of this Agreement submitted by Parent
in writing in response to any Acquisition Proposal.
(f) Nothing in this Section 5.2 shall prevent the Board of
Directors of the Company, from taking, and disclosing to the Company's
stockholders, a position contemplated by Rule 14d-9 and Rule 14e-2(a)
promulgated under the Exchange Act or making any disclosure required under
the IBCL (subject, however, to compliance with the balance of this sentence
where applicable), and the Company's Board of Directors may prior to the
date of its stockholders meeting, withdraw, modify or change its
recommendation if, but only if and only to the extent that, the Board of
Directors determines in good faith that such withdrawal, modification or
change is required in order to comply with its fiduciary duties to its
stockholders under the IBCL after receiving advice from its outside legal
counsel; provided that in the case of a tender offer, the Board of
Directors of the Company shall not recommend that stockholders tender their
Company Common Shares in such tender offer unless (i) such tender offer is
determined to be a Superior Transaction in accordance with the provisions
of Section 5.2(d) and (ii) the Company has provided Parent with not less
than three business days, prior written notice of any such action;
provided, further, that in no event shall the Company or its Board of
Directors take, agree, or resolve to take any action prohibited by Section
5.2(b) or 5.2(d) except as expressly permitted by such Sections.
(g) Notwithstanding anything to the contrary contained herein,
the Company shall not take any action to make the provisions of IC 23-1-43
inapplicable to any Acquisition Transaction in respect of the Company
(including any Superior Transaction) or release any standstill agreements
or other similar restrictions prior to the termination of this Agreement in
accordance with its terms.
ARTICLE VI
Section 6.1 Meetings of Stockholders. The Company will take all action
necessary in accordance with applicable law and its Articles of
Incorporation and its bylaws to convene a meeting of its stockholders as
promptly as practicable to consider and vote upon the approval and
authorization of this Agreement and the Merger. The Board of Directors of
the Company shall recommend this approval and the Company shall take all
lawful action to solicit such approval including, without limitation,
timely mailing the Proxy Statement/Prospectus.
Section 6.2 Filings; Other Action. Subject to the terms and conditions
herein provided, the Company, Parent and Merger Sub shall: (a) make
promptly their respective filings, and any other submissions, under the HSR
Act with respect to the Merger and the other transactions contemplated
hereby, and (b) use their reasonable best efforts to cooperate with one
another in (i) determining which other filings are required to be made
prior to the expiration of the Effective Time with, and which consents,
approvals, permits or authorizations are required to be obtained prior to
the Effective Time from, Governmental Entities or other third parties in
connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and (ii) timely making
all such filings and timely seek all such consents, approvals, permits,
authorizations and waivers; and (b) use their reasonable best efforts to
take, or cause to be taken, all other actions and do, or cause to be done,
all other things necessary, proper or appropriate to consummate and make
effective the transactions contemplated by this Agreement; provided,
however, that such reasonable best efforts shall not include (i) the sale
or divestiture of any assets of Parent (or its affiliates) or (ii) the
licensing of any Intellectual Property of Parent, or its affiliates or
Intellectual Property to be acquired under this Agreement. If, at any time
after the Effective Time, any further action is necessary or desirable to
carry out the purpose of this Agreement, the proper officers and directors
of Parent or the Surviving Corporation shall take all such necessary
action.
Section 6.3 Publicity. The initial press release relating to this
Agreement shall be issued jointly by the Company, Parent and Merger Sub.
Thereafter, subject to their respective legal obligations, the Company,
Parent and Merger Sub shall consult with each other, and use reasonable
efforts to agree upon the text of any press release, before issuing any
such press release or otherwise making public statements with respect to
the transactions contemplated hereby and in making any filings with any
Governmental Entity or with any national securities exchange with respect
thereto.
Section 6.4 Registration Statement. The parties shall cooperate and
promptly prepare, and Parent shall file with the SEC as soon as
practicable, a Registration Statement on Form S-4 (the "Form S-4") under
the Securities Act with respect to the Parent Common Stock issuable in the
Merger, a portion of which Registration Statement shall also serve as the
joint proxy statement/prospectus with respect to the meeting of the Company
stockholders in connection with the Merger (the "Proxy
Statement/Prospectus"). The parties will cause the Proxy
Statement/Prospectus and the Form S-4 to comply as to form in all material
respects with the applicable provisions of the Securities Act, the Exchange
Act and the rules and regulations thereunder. Parent shall use its
reasonable best efforts to, and the Company will cooperate with Parent to,
have the Form S-4 declared effective by the SEC as promptly as practicable.
Parent shall use its reasonable best efforts to obtain, prior to the
effective date of the Form S-4, all necessary state securities law or "blue
sky" permits or approvals required to carry out the Merger (provided that
Parent shall not be required to qualify to do business in any jurisdiction
in which it is not now so qualified). Each of the parties agree that the
information provided by it for inclusion in the Proxy Statement/Prospectus
and each amendment or supplement thereto, at the time of mailing thereof,
at the time of the meeting of the Company stockholders, and at the time it
is filed or becomes effective, will not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Section 6.5 Listing Application. Parent shall as soon as reasonably
practicable prepare and submit to the NYSE and all other securities
exchanges on which the shares of Parent Common Stock are listed a listing
application with respect to the shares of Parent Common Stock issuable in
the Merger, and shall use its reasonable best efforts to obtain, prior to
the Effective Time, approval for the listing of such Parent Common Stock on
such exchanges, subject to official notice of issuance.
Section 6.6 Further Action. Each of the parties shall, subject to the
fulfillment at or before the Effective Time of each of the conditions of
performance set forth in this Agreement or the waiver thereof, use its
reasonable best efforts to perform those further acts and execute those
documents as may be reasonably required to effect the transactions
contemplated hereby. Each of the parties agrees to use its reasonable best
efforts to obtain in a timely manner all necessary waivers, consents,
approvals and opinions and to effect all necessary registrations and
filings, and to use its reasonable best efforts to take, or cause to be
taken, all other actions and to do, or cause to be done, all other things
necessary, proper or advisable to consummate and make effective as promptly
as practicable the Merger. In furtherance of the foregoing, the Company
shall use its reasonable best efforts to procure the execution of
agreements between the Surviving Corporation and employees of the Company
identified by Parent on terms satisfactory to Parent and such employees.
Section 6.7 Expenses. Whether or not the Merger is consummated, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby (including the Merger) shall be paid by
the party incurring those expenses except as expressly provided in this
Agreement and except that (a) the filing fees in connection with the filing
of the Form S-4 and the Proxy Statement/Prospectus with the SEC, (b) all
filing fees in connection with any filings, permits or approvals required
under applicable state securities or "blue sky" laws, and (c) the expenses
incurred in connection with printing and mailing of the Form S-4 and the
Proxy Statement/Prospectus, shall be shared by Parent and the Company
equally, and the filing fees, if any, incurred by the Company in connection
with the filing of the Company notification under the HSR Act shall be paid
by Parent.
Section 6.8 Notification of Certain Matters. Each party shall give
prompt notice to the other parties of the following:
(a) the occurrence or nonoccurrence of any event whose occurrence
or nonoccurrence is reasonably expected to cause any of the conditions
precedent set forth in Article VII not to be satisfied; and
(b) any facts relating to that party which would make it
necessary or advisable to amend the Proxy Statement/Prospectus or the Form
S-4 in order to make the statements therein not untrue or misleading or to
comply with applicable law; provided, however, that the delivery of any
notice pursuant to this Section 6.8 shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice.
(c) From time to time after the date of this Agreement and prior
to the Effective Time, the Company will promptly supplement or amend the
Disclosure Letter with respect to any matter hereafter arising which, if
existing or occurring at or prior to the date of this Agreement, would have
been required to be set forth or described in the Disclosure Letter which
is necessary to correct any information in the Disclosure Letter or in any
representation and warranty of the Company that has been rendered
inaccurate thereby. For purposes of determining the accuracy of the
representations and warranties of the Company contained in Article III in
order to determine the fulfillment of the conditions set forth in Sections
7.2(a), the schedules delivered by the Company shall be deemed to include
only that information contained therein on the date of this Agreement and
shall be deemed to exclude any information contained in any subsequent
supplement or amendment thereto.
Section 6.9 Access to Information. (a) From the date of this Agreement
until the Closing, upon reasonable notice, the Company shall, and shall
cause its Subsidiaries to, (i) give Parent and its authorized
representatives full access to all books, records, personnel, offices and
other facilities and properties of the Company and its Subsidiaries and
their accountants and accountants' work papers, (ii) permit Parent to make
such copies and inspections thereof as Parent may reasonably request and
(iii) furnish Parent with such financial and operating data and other
information with respect to the business and properties of the Company and
its Subsidiaries as Parent may from time to time reasonably request;
provided that no investigation or information furnished pursuant to this
Section 6.9 shall affect any representation or warranty made herein by the
Company or the conditions to the obligations of Parent and Merger Sub to
consummate the transactions contemplated by this Agreement. Parent will
endeavor to describe information requests with as much specificity as is
practicable. Each of Parent and the Company shall designate a
representative to coordinate information and other requests pursuant to
this Section 6.9. All access shall be subject to the condition that such
examinations shall be conducted during normal business hours and in a
manner designed to minimize to the extent practicable disruption to the
normal business operations of the Company.
Section 6.10 Insurance; Indemnity. (a) Parent will maintain in effect
for not less than three years after the Effective Time, the Company's
current directors and officers insurance policies, if such insurance is
obtainable (or policies of at least the same coverage containing terms and
conditions no less advantageous to the current and all former directors and
officers of the Company) with respect to acts or failures to act prior to
the Effective Time, including acts relating to the transactions
contemplated by this Agreement; provided, however, that in order to
maintain or procure such coverage, Parent shall not be required to maintain
or obtain policies providing such coverage except to the extent such
coverage can be provided at an annual cost of no greater than two times the
most recent annual premium paid by the Company prior to the date hereof
(the "Cap"); and provided, further, that if equivalent coverage cannot be
obtained, or can be obtained only by paying an annual premium in excess of
the Cap, Parent shall only be required to obtain as much coverage as can be
obtained by paying an annual premium equal to the Cap.
(b) From and after the Effective Time, Parent shall indemnify and
hold harmless to the fullest extent permitted under applicable law, each
Person who is, or has been at any time prior to the date hereof or who
becomes prior to the Effective Time, an officer or director of the Company
or any of its Subsidiaries (each, an "Indemnified Party") against all
losses, claims, damages, liabilities, costs or expenses (including
attorneys' fees), judgments, fines, penalties and amounts paid in
settlement in connection with any claim, action, suit, proceeding or
investigation arising out of or pertaining to acts or omissions, or alleged
acts or omissions, by them in their capacities as such, which acts or
omissions occurred prior to the Effective Time, whether asserted or claimed
prior to, at or after the Effective Time. In the event of any such claim,
action, suit, proceeding or investigation (an "Action"), the Parent shall
control the defense of such Action with counsel selected by the Parent,
which counsel shall be reasonably acceptable to the Indemnified Party;
provided, however, that the Indemnified Party shall be permitted to
participate in the defense of such Action through counsel selected by the
Indemnified Party, which counsel shall be reasonably acceptable to the
Parent, at the Indemnified Party's expense. Notwithstanding the foregoing,
if there is any conflict between the Parent and any Indemnified Parties or
there are additional defenses available to any Indemnified Parties, the
Indemnified Parties shall be permitted to participate in the defense of
such Action with counsel selected by the Indemnified Parties, which counsel
shall be reasonably acceptable to the Parent, and Parent shall cause Parent
to pay the reasonable fees and expenses of such counsel, as accrued and in
advance of the final disposition of such Action to the fullest extent
permitted by applicable law; provided, however, that the Parent shall not
be obligated to pay the reasonable fees and expenses of more than one
counsel for all Indemnified Parties in any single Action except to the
extent that, in the opinion of counsel for the Indemnified Parties, two or
more of such Indemnified Parties have conflicting interests in the outcome
of such Action. The Parent shall not be liable for any settlement effected
without its written consent, which consent shall not unreasonably be
withheld.
(c) The Surviving Corporation shall keep in effect all provisions
in its articles of incorporation and by-laws that provide for exculpation
of director and officer liability and indemnification (and advancement of
expenses related thereto) of the past and present officers and directors of
the Company to the fullest extent permitted by the IBCL and such provisions
shall not be amended except as either required by applicable law or to make
changes permitted by law that would enhance the rights of past or present
officers and directors to indemnification or advancement of expenses.
(d) If the Surviving Corporation or any of its respective
successors or assigns (i) shall consolidate with or merge into any other
corporation or other entity and shall not be the continuing or surviving
corporation or entity of the consolidation or merger or (ii) shall transfer
all or substantially all of its properties and assets to any individual,
corporation or other entity, then and in each such case, proper provisions
shall be made so that the successors and assigns of the Surviving
Corporation shall assume all of the obligations set forth in this Section
6.10.
(e) The provisions of this Section 6.10 are intended to be for
the benefit of, and shall be enforceable by, each of the Indemnified
Parties, their heirs and their representatives.
Section 6.11 Employee Benefit Plans. The Company agrees to promptly
take all actions necessary to cause the following to occur on or prior to
the Closing Date:
(a) Termination of Money Purchase Pension Plan. As the plan
sponsor, the Company will (i) adopt all amendments to the Robinson Nugent,
Inc. Retirement Plan (the "MPP Plan") necessary to make such Plan comply
with the applicable legal requirements as changed by the laws described in
Rev. Proc. 99-23 issued by the Internal Revenue Service, (ii) amend the MPP
Plan to fully vest the entire account balances of all the participants in
such Plan effective as of the Closing Date, (iii) take all actions
necessary to terminate the MPP Plan effective as of the Closing Date, and
(iv) direct the trustee of the MPP Plan to prepare for the distribution of
the account balances of all participants as soon as reasonably possible
following the receipt of a favorable determination letter from the Internal
Revenue Service.
(b) Merger of 401(k) Plan. As the plan sponsor, the Company will
(i) adopt all amendments to the Company's 401(k) plan (the "401(k) Plan")
necessary to make such Plan comply with the applicable legal requirements
as changed by the laws described in Rev. Proc. 99-23 issued by the Internal
Revenue Service, (ii) approve the merger of such 401(k) Plan with the 3M
Voluntary Investment Plan and Employee Stock Ownership Plan (the "VIP")
effective as of the Closing Date, and (iii) direct the trustee of the
401(k) Plan to prepare for the transfer of the assets and records of such
Plan to the trustee of the VIP as soon as reasonably possible following the
Closing Date.
(c) Termination of Stock Option Plan. As the plan sponsor, the
Company will cause all of the Company Options to be either exercised and
satisfied in full or terminated prior to the Closing Date. As soon as
practicable, but in no event later than 5 days from the date hereof, the
Company shall provide written notice to each holder of a Company Option of
the execution of this Agreement which notice shall be effective to
terminate all Company Options as of the 30th day immediately following the
date of the sending of the notice as contemplated in Section 6(i) of the
Stock Option Plan.
(d) Annual Reports. As the plan sponsor, the Company will (i)
cause to be filed with the appropriate government agency the annual reports
(Form 5500s) that have not been filed by the respective due dates with
respect to the MPP Plan and the 401(k) Plan, (ii) pay the appropriate
penalties for the late filing of such annual reports under the U.S.
Department of Labor's Delinquent Filer Voluntary Compliance Program, (iii)
file reasonable cause statements with the Internal Revenue Service with
respect to the late filing of such annual reports, and (iv) comply with the
summary annual report requirements of ERISA with respect to such annual
reports.
(e) Securities Registration. The Company will file and cause to
become effective the registration statement required by the Securities Act
with respect to the offering and purchase of Company Common Shares by
participants in the 401(k) Plan with respect to the investment of the
assets of their account balances under such Plan.
(f) Rescission Offers. As soon as practicable, but in no event
later than five days after the date hereof, the Company shall commence an
offer to repurchase Company Common Shares from each individual who
exercised Company Options under the Stock Option Plan prior to August 31,
2000 and an offer to repurchase Company Common Shares from each individual
who purchased Company Common Shares under the Company's 401(k) Plan (the
"Rescission Offers") during the twelve month period prior to the filing of
the registration statement contemplated in Section 6.11(e) in respect of
such plan, each substantially on the terms furnished to Parent prior to the
date hereof and in compliance with all applicable federal and state
securities laws.
(g) Bonus Plan. The Company shall complete and furnish to Parent
the documentation of the Company's Bonus Plan for the fiscal year ending
June 30, 2001, which documentation shall be reasonably satisfactory to
Parent in both form and substance.
Section 6.12 Rights Agreement. The Board of Directors of the Company
shall take all action requested by Parent in order to render the Company
Rights inapplicable to the Merger and the other transactions contemplated
hereby.
ARTICLE VII
Section 7.1 Conditions to Obligations of the Parties to Consummate the
Merger. The respective obligation of each party to consummate the Merger
shall be subject to the satisfaction of each of the following conditions:
(a) Stockholder Approval. This Agreement and the Merger shall
have been approved and adopted by the holders of a majority of the
outstanding Company Common Shares in accordance with the IBCL and the rules
and regulations of the Nasdaq National Market System.
(b) Legality. No order, decree or injunction shall have been
entered or issued by any Governmental Entity which is in effect and has the
effect of making the Merger illegal or otherwise prohibiting consummation
of the Merger. Each party agrees that, in the event that any such order,
decree or injunction shall be entered or issued, it shall use its
reasonable best efforts to cause any such order, decree or injunction to be
lifted or vacated.
(c) Registration Statement Effective. The Form S-4 shall have
become effective prior to the mailing of the Proxy Statement/Prospectus to
the Company's stockholders and no stop order suspending the effectiveness
of the Form S-4 shall then be in effect.
(d) Blue Sky Approvals. All such consents, approvals,
authorizations, orders, registrations, filings, qualifications, licenses or
permits as may be required under state securities or "blue sky" laws in
connection with the shares of Parent Common Stock to be issued pursuant to
the Merger have been obtained.
(e) Stock Exchange Listing. The shares of Parent Common Stock to
be issued pursuant to the Merger shall have been duly approved for listing
on the New York Stock Exchange, subject to official notice of issuance.
(f) Tax Opinion. Parent and the Company shall each have received
an opinion of Fried, Frank, Harris, Shriver & Jacobson, based on certain
factual representations of the Company, Parent, and Merger Sub, dated as of
the Closing Date, to the effect that the Merger will be treated for federal
income tax purposes as a reorganization within the meaning of Section
368(a) of the Code, in form and substance reasonably satisfactory to Parent
and the Company.
(g) Antitrust. The waiting period (and any extension thereof)
under the HSR Act applicable to the Merger shall have expired or been
terminated and any other approval or waiting period required prior to the
Effective Time under any other applicable competition, merger control,
antitrust or similar law or regulation shall have been obtained or
terminated or shall have expired, other than those the failure of which to
have been obtained or terminated or to have expired would not (x)
reasonably be expected to have a Material Adverse Effect (it being
understood for purposes of this clause (x) that no party may rely on the
failure of this condition to be satisfied if such failure was caused by
such party's failure to comply with the terms of Section 6.2) or (y) result
in the commission of a criminal offense.
Section 7.2 Additional Conditions to Obligations of Parent and Merger
Sub. The obligations of Parent and Merger Sub to consummate the Merger
shall also be subject to the satisfaction or waiver of each of the
following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company contained in this Agreement shall be true and
correct on and as of the Closing Date (except to the extent such
representations and warranties shall have been expressly made as of an
earlier date, in which case such representations and warranties shall have
been true and correct as of such earlier date) with the same force and
effect as if made on and as of the Closing Date, except to the extent that
any failures of such representations and warranties to be so true and
correct (determined without regard to materiality qualifiers or limitations
contained therein), in the aggregate, would not reasonably be expected to
have resulted in a Material Adverse Effect.
(b) Agreements and Covenants. The Company shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or
before the Effective Time.
(c) Certificates. Parent shall have received a certificate of an
executive officer of the Company that the conditions set forth in
paragraphs (a) and (b) above have been satisfied.
(d) Options. All Company Options shall have been exercised or
terminated.
(e) Resignations. Parent shall have received the resignation of
each of the directors of the Company effective as of the Effective Time.
(f) Stock Option Agreement. The Stock Option Agreement shall be
in full force and effect.
(g) Lease Agreement. The sale of the Company's manufacturing
facility in Dallas, Texas (the "Dallas Facility") shall have taken place
and the Dallas Facility shall have been leased to the Company on the terms
described in the Contract for Purchase and Sale/Leaseback between the
Company and Sam & JB, LLC, an Indiana limited liability company, and the
lease agreement attached thereto as Exhibit B, each in the form attached to
the Disclosure Letter as Exhibit 7.2(g).
(h) Rescission Offers. The Rescission Offers shall have been
completed in accordance with Section 6.11(f).
Section 7.3 Additional Conditions to Obligations of the Company. The
obligations of the Company to consummate the Merger shall also be subject
to the satisfaction or waiver of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Parent and Merger Sub contained in this Agreement shall be
true on and as of the Closing Date (except to the extent such
representations and warranties shall have been expressly made as of an
earlier date, in which case such representations and warranties shall have
been true and correct as of such earlier date) with the same force and
effect as if made on and as of the Closing Date, except to the extent that
any failures of such representations and warranties to be so true and
correct (determined without regard to materiality qualifiers or limitations
contained therein), would not, individually or in the aggregate, have or
reasonably be expected to have a material adverse effect on Parent's or
Merger Sub's ability to consummate the Merger or otherwise prevent Parent
or Merger Sub from performing their obligations under this Agreement.
(b) Agreements and Covenants. Parent and Merger Sub shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by
them on or before the Effective Time.
(c) Certificates. The Company shall have received a certificate
of an executive officer of Parent and Merger Sub that the conditions set
forth in paragraphs (a) and (b) above have been satisfied.
(d) Consents. The Company shall have received evidence, in form
and substance reasonably satisfactory to it, that Parent and Merger Sub
shall have obtained (i) all consents, approvals, authorizations,
qualifications and orders of all Governmental Entities (including any in
connection with Environmental Laws) legally required in connection with
this Agreement and the transactions contemplated hereby and (ii) all
consents, approvals, authorizations and qualifications of third parties
required in connection with this Agreement and the transactions
contemplated hereby, except in the case of clauses (i) and (ii) for those
the failure of which to be obtained would not, individually or in the
aggregate reasonably be expected to have a material adverse effect on
Parent's and Merger Sub's ability to consummate the Merger or otherwise
prevent Parent and Merger Sub from performing their obligations under this
Agreement. This condition shall not be applicable to consents, approvals,
authorizations, qualifications and orders under any competition, merger
control antitrust or similar law or regulation, which are the subject of
Section 7.1(h).
ARTICLE VIII
Section 8.1 Termination. This Agreement may be terminated at any time
before the Effective Time (except as otherwise provided) as follows:
(a) by mutual written consent of each of the Company and Parent;
(b) by any party, if the Effective Time shall not have occurred
on or before February 28, 2001 (the "Termination Date"); provided, however,
that the right to terminate this Agreement under this Section 8.1(b) shall
not be available to any party whose failure to fulfill any obligation under
this Agreement has been the cause of, or resulted in, the failure of the
Effective Time to occur on or before the Termination Date;
(c) by any party, if a Governmental Entity shall have issued an
order, decree or injunction having the effect of making the Merger illegal
or permanently prohibiting the consummation of the Merger, and such order,
decree or injunction shall have become final and nonappealable (but only if
such party shall have used its reasonable best efforts to cause such order,
decree or injunction to be lifted or vacated);
(d) by either Parent or the Company, if (x) there shall have been
a material breach by the other of any of its representations, warranties,
covenants or agreements contained in this Agreement, which breach would
result in the failure to satisfy one or more of the conditions set forth in
Section 7.2(a) or (b) (in the case of a breach by the Company) or Section
7.3(a) or (b) (in the case of a breach by Parent), and such breach shall be
incapable of being cured or, if capable of being cured, shall not have been
cured within 30 days after written notice thereof shall have been received
by the party alleged to be in breach.
(e) by Parent, if after a duly held stockholders' meeting,
including any adjournments or postponements, the condition set forth in
Section 7.1(a) has not been satisfied.
(f) by Parent, if (i) the Board of Directors of the Company shall
or shall resolve to (A) either not recommend that the Company's
stockholders vote in favor of this Agreement or withdraw its
recommendation, (B) modify its recommendation of approval of this Agreement
in a manner adverse to Parent or Merger Sub, or (C) approve, recommend or
fail to take a position that is adverse to any proposed Acquisition
Transaction (other than the Merger) involving the Company or any of its
Subsidiaries, or (ii) the Board of Directors of the Company shall have
refused to affirm to Parent its recommendation of approval of this
Agreement as promptly as practicable (but in any case within five days)
after receipt of any reasonable written request for such affirmation from
Parent or (iii) the Company shall have failed as promptly as practicable
after the Form S-4 is declared effective by the SEC to call a special
stockholders meeting or mail the Proxy Statement/Prospectus to its
stockholders or failed to include its recommendation of approval of this
Agreement in the Proxy Statement/Prospectus or failed to hold the a special
stockholders meeting when scheduled.
(g) by the Company pursuant to, but only in compliance with,
Section 5.2; or
Notwithstanding anything herein to the contrary, no termination
by the Company pursuant to this Section 8.1 under circumstances requiring
payment of a Termination Fee shall be effective unless, concurrently with
such termination, the fee is paid in full by the Company, in accordance
with Section 8.2.
Section 8.2 Effect of Termination and Abandonment. (a) In the event of
termination of this Agreement pursuant to this Article VIII, this Agreement
shall become void (other than this Section 8.2) with no liability on the
part of either party (or of any of its representatives); provided, however,
no such termination shall relieve either party from any liability for
damages resulting from any willful or intentional breach of this Agreement
whether or not any fees contemplated by this Section 8.2 are payable.
(b) Upon the happening of a Triggering Event, the Company shall
pay to Parent (or to any Subsidiary of Parent designated in writing by
Parent to the Company) the amount of $3,450,000 (the "Termination Fee").
"Triggering Event" means any one of the following:
(i) a termination of this Agreement by Parent pursuant to
Section 8.1(f);
(ii) a termination of this Agreement by Parent pursuant to
Section 8.1(d) or 8.1(e), if any Acquisition Proposal is publicly
proposed or announced on or after the date hereof and prior to the
meeting of the Company's Stockholders and (in the case of Section
8.1(e) only) such Acquisition Proposal has not been publicly rejected
by the Board of Directors of the Company;
(iii) a termination of this Agreement by the Company
pursuant to Section 8.1(g); or
(iv) if any Acquisition Transaction is entered into, agreed
to or consummated by the Company within twelve months of a termination
of this Agreement by (A) Parent or the Company pursuant to Section
8.1(b), or (B) Parent pursuant to Section 8.1(d) or 8.1(e), the
entering into, agreeing to or consummation of such Acquisition
Transaction.
Payment of the Termination Fee shall be made by wire transfer of
immediately available funds (1) on the second business day after such
termination in the case of clauses (i) and (ii) of the definition of
Triggering Event, (2) on or prior to the date of such termination, in the
case of clause (iii) of the definition of Triggering Event, or (3) on the
earlier of the date a contract is entered into with respect to an
Acquisition Transaction or is consummated, in the case of clause (iv) of
the definition of Triggering Event. In no event shall more than one
Termination Fee be payable under this Agreement.
(c) Any Termination Fee payable hereunder shall be payable by
wire transfer of immediately available funds.
(d) The parties acknowledge that the agreements contained in this
Section 8.2 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, Parent would not enter into
this Agreement. Accordingly, if the Company fails to pay promptly amounts
due pursuant to this Section 8.2, and, in order to obtain such payment,
Parent commences a suit which results in a judgment against the Company for
such amount (or any portion thereof), the Company shall pay the costs and
expenses (including attorneys fees) of the other party in connection with
such suit, together with interest on such amount in respect of the period
from the date such amount became due until paid at the prime rate of The
Chase Manhattan Bank in effect from time to time during such period.
Section 8.3 Amendment. This Agreement may be amended at any time
before the Effective Time but only pursuant to a writing executed and
delivered by the Company and Parent.
ARTICLE IX
Section 9.1 Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this
Agreement shall terminate at the Effective Time or upon the termination of
this Agreement pursuant to Section 8.1, as the case may be, except that (a)
the agreements set forth in Sections 1.3, 6.10 and 6.11 shall survive the
Effective Time, and (b) the agreements set forth in Sections 6.7, 8.2 and
this Article IX shall survive termination indefinitely.
Section 9.2 Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been
duly given or made as of the date of receipt and shall be delivered
personally or mailed by registered or certified mail (postage prepaid,
return receipt requested), sent by overnight courier or sent by telecopy,
to the applicable party at the following addresses or telecopy numbers (or
at such other address or telecopy number for a party as shall be specified
by like notice):
(a) if to the Company:
Robinson Nugent, Inc.
880 East Eight Street
P. O. Box 1208
New Albany, IN 47151
Attention: Patrick Duffy
Telecopy No.: (317) 594-1836
with a copy to:
Ice Miller
One American Square
Box 82001
Indianapolis, IN 46282-0002
Attention: Berkely W. Duck III, Esq.
Telecopy No.: (317) 592-4642
(b) if to Parent or Merger Sub:
Minnesota Mining and Manufacturing Company
3M Center
St. Paul, Minnesota 55114
Telecopy: (651) 736-9469
Attention: General Counsel
with a copy to
Minnesota Mining and Manufacturing Company
3M Center
St. Paul, Minnesota 55114
Telecopy: (651) 736-9469
Attention: Gregg Larson, Esq.
with a further copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attention: Jean Hanson, Esq.
Telecopy No.: (212) 859-4000
Section 9.3 Certain Definitions; Interpretation. (a) For purposes of
this Agreement, the following terms shall have the following meanings:
(i) "Material Adverse Effect" means any change,
circumstance, event, effect or state of facts (x) that has or can
reasonably be expected to have a material adverse effect on the business,
operations, results of operations, assets, prospects, or conditions
(financial or otherwise) of the Company or any of its Subsidiaries having a
value of $150,000 individually or $1,500,000 in the aggregate (except for
purposes of Section 7.2(a), a value of $3,000,000 in the aggregate), or the
ability of the Company and its Subsidiaries to conduct their business after
the closing consistent in all material respects with the manner conducted
in the past, or (y) that will prevent or materially impair the Company's
ability to consummate the Merger; provided, however, that a Material
Adverse Effect will not be deemed to have occurred if the change,
circumstance, event, effect or state of facts results primarily from (i)
changes in general business conditions in the connector industry or (ii)
the public announcement or pendency of the Merger that reasonably would be
expected to have only a temporary effect on the Company.
(ii) "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.
(iii) "Board of Directors" of the Company includes any
committee thereof.
(iv) "control" (including the terms "controlled by" and
"under common control with") means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies
of a Person, whether through the ownership of stock, as trustee or
executor, by contract or credit arrangement or otherwise.
(v) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended and the rules and regulations promulgated
thereunder.
(vi) "knowledge" of the Company with respect to any matter
means actual knowledge of any of the Company's senior executive officers
after reasonable investigation and due diligence. Such Persons and their
respective areas of responsibility are set forth on Section 9.3 of the
Company Disclosure Letter.
(vii) "Person" means an individual, corporation,
partnership, limited liability company, association, trust, unincorporated
organization, entity or group (as defined in the Exchange Act).
(viii) "Significant Subsidiary" shall have the meaning set
forth in Rule 1-02 of Regulation S-X of the SEC.
(ix) "Subsidiary" of a Person means any corporation or other
legal entity of which that Person (either alone or through or together with
any other Subsidiary or Subsidiaries) is the general partner or managing
entity or of which at least a majority of the stock (or other equity
interests the holders of which are generally entitled to vote for the
election of the board of directors or others performing similar functions
of such corporation or other legal entity) is directly or indirectly owned
or controlled by that Person (either alone or through or together with any
other Subsidiary or Subsidiaries).
(b) When a reference is made in this Agreement to Articles,
Sections, Company Disclosure Letter or Exhibits, this reference is to an
Article or a Section of, or an Exhibit to, this Agreement, unless otherwise
indicated. The table of contents and headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be
understood to be followed by the words "without limitation."
Section 9.4 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 9.5 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 materially adverse to any party. Upon a determination that
any term or other provision is invalid, illegal or incapable of being
enforced, the parties 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 maximum extent possible.
Section 9.6 Entire Agreement; No Third-Party Beneficiaries. This
Agreement, the Company Disclosure Letter and the Confidentiality Agreement
dated November 30, 1999 between Parent and the Company (the
"Confidentiality Agreement") constitute the entire agreement and supersede
any and all other prior agreements and undertakings, both written and oral,
among the parties hereto, or any of them, with respect to the subject
matter hereof and, except for Section 6.10 (Insurance; Indemnity), does
not, and is not intended to, confer upon any Person other than the parties
hereto any rights or remedies hereunder.
Section 9.7 Assignment. This Agreement shall not be assigned by any
party by operation of law or otherwise without the express written consent
of each of the other parties.
Section 9.8 Governing Law. This Agreement shall be governed by and
construed in accordance with, the laws of the State of Indiana without
regard to the conflicts of laws provisions thereof. Each of the parties
hereto hereby irrevocably and unconditionally waives any right it may have
to trial by jury in connection with any litigation arising out of or
relating to this Agreement, the Merger or any of the other transactions
contemplated hereby or thereby.
Section 9.9 Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties in separate counterparts,
each of which when executed shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
Section 9.10 Confidential Nature of Information. Between the date of
this Agreement and the Effective Time the parties hereto will hold and will
cause their respective officers, directors, employees, representatives,
consultants and advisors to hold in strict confidence in accordance with
the terms of the Confidentiality Agreement, all documents and information
furnished to such party by or on behalf of the other party in connection
with the transactions contemplated by this Agreement. If the transactions
contemplated by this Agreement are not consummated, such confidence shall
be maintained in accordance with such Confidentiality Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed as of the date first written above by their respective
officers thereunto duly authorized.
MINNESOTA MINING AND
MANUFACTURING COMPANY
By: /s/ Robert J. Burgstahler
------------------------------------
Name: Robert J. Burgstahler
Title: Vice President, Finance and
Administrative Services
BARBADOS ACQUISITION, INC.
By: /s/ John Woodworth
------------------------------------
Name: John Woodworth
Title: President
ROBINSON NUGENT, INC.
By: /s/ Larry W. Burke
----------------------------
Name: Larry W. Burke
Title: President and CEO
