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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
dated as of
June 25, 2000
among
NABISCO HOLDINGS CORP.,
PHILIP MORRIS COMPANIES INC.,
and
STRIKE ACQUISITION CORP.
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TABLE OF CONTENTS
PAGE
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ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS................................................1
ARTICLE 2
THE MERGER
SECTION 2.01. THE MERGER.................................................5
SECTION 2.02. CONVERSION OF SHARES.......................................6
SECTION 2.03. SURRENDER AND PAYMENT......................................6
SECTION 2.04. DISSENTING SHARES..........................................7
SECTION 2.05. STOCK OPTIONS..............................................8
SECTION 2.06. ADJUSTMENTS................................................8
SECTION 2.07. WITHHOLDING RIGHTS.........................................8
SECTION 2.08. LOST CERTIFICATES..........................................9
ARTICLE 3
THE SURVIVING CORPORATION
SECTION 3.01. CERTIFICATE OF INCORPORATION...............................9
SECTION 3.02. BYLAWS.....................................................9
SECTION 3.03. DIRECTORS AND OFFICERS.....................................9
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.01. CORPORATE EXISTENCE AND POWER..............................9
SECTION 4.02. CORPORATE AUTHORIZATION...................................10
SECTION 4.03. GOVERNMENTAL AUTHORIZATION................................10
SECTION 4.04. NON-CONTRAVENTION.........................................10
SECTION 4.05. CAPITALIZATION............................................11
SECTION 4.06. SUBSIDIARIES..............................................11
SECTION 4.07. SEC FILINGS...............................................12
SECTION 4.08. FINANCIAL STATEMENTS......................................13
SECTION 4.09. DISCLOSURE DOCUMENTS......................................13
SECTION 4.10. ABSENCE OF CERTAIN CHANGES................................13
SECTION 4.11. NO UNDISCLOSED LIABILITIES................................15
SECTION 4.12. COMPLIANCE WITH LAWS AND COURT ORDERS.....................15
SECTION 4.13. LITIGATION................................................16
SECTION 4.14. FINDERS' FEES.............................................16
SECTION 4.15. OPINION OF FINANCIAL ADVISORS.............................16
SECTION 4.16. TAXES.....................................................16
SECTION 4.17. EMPLOYEE BENEFIT PLANS....................................17
SECTION 4.18. ENVIRONMENTAL MATTERS.....................................20
SECTION 4.19. INTELLECTUAL PROPERTY.....................................21
SECTION 4.20. ANTITAKEOVER STATUTE......................................21
SECTION 4.21. REAL PROPERTY.............................................21
SECTION 4.22. CONTRACTS; JOINT VENTURES.................................21
SECTION 4.23. INDEBTEDNESS..............................................22
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT
SECTION 5.01. CORPORATE EXISTENCE AND POWER.............................22
SECTION 5.02. CORPORATE AUTHORIZATION...................................23
SECTION 5.03. GOVERNMENTAL AUTHORIZATION................................23
SECTION 5.04. NON-CONTRAVENTION.........................................23
SECTION 5.05. DISCLOSURE DOCUMENTS......................................23
SECTION 5.06. FINDERS' FEES.............................................24
SECTION 5.07. FINANCING.................................................24
ARTICLE 6
COVENANTS OF THE COMPANY
SECTION 6.01. CONDUCT OF THE COMPANY....................................24
SECTION 6.02. STOCKHOLDER ACTION BY WRITTEN CONSENT; INFORMATION
MATERIAL..................................................27
SECTION 6.03. ACCESS TO INFORMATION.....................................28
SECTION 6.04. NO SOLICITATION; OTHER OFFERS.............................28
SECTION 6.05. THIRD PARTY STANDSTILL AGREEMENTS.........................29
ARTICLE 7
COVENANTS OF PARENT
SECTION 7.01. CONFIDENTIALITY...........................................30
SECTION 7.02. OBLIGATIONS OF MERGER SUBSIDIARY..........................30
SECTION 7.03. DIRECTOR AND OFFICER LIABILITY............................30
SECTION 7.04. EMPLOYEE MATTERS..........................................31
ARTICLE 8
COVENANTS OF PARENT AND THE COMPANY
SECTION 8.01. REASONABLE BEST EFFORTS...................................33
SECTION 8.02. CERTAIN FILINGS...........................................33
SECTION 8.03. PUBLIC ANNOUNCEMENTS......................................33
SECTION 8.04. FURTHER ASSURANCES........................................33
SECTION 8.05. NOTICES OF CERTAIN EVENTS.................................34
ARTICLE 9
CONDITIONS TO THE MERGER
SECTION 9.01. CONDITIONS TO OBLIGATIONS OF EACH PARTY...................34
SECTION 9.02. CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER
SUBSIDIARY................................................35
SECTION 9.03. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY..............35
ARTICLE 10
TERMINATION
SECTION 10.01. TERMINATION..............................................36
SECTION 10.02. EFFECT OF TERMINATION....................................38
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. NOTICES..................................................38
SECTION 11.02. NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES...........39
SECTION 11.03. AMENDMENTS; NO WAIVERS...................................40
SECTION 11.04. EXPENSES.................................................40
SECTION 11.05. SUCCESSORS AND ASSIGNS...................................41
SECTION 11.06. GOVERNING LAW............................................41
SECTION 11.07. JURISDICTION.............................................41
SECTION 11.08. WAIVER OF JURY TRIAL.....................................42
SECTION 11.09. COUNTERPARTS; EFFECTIVENESS; BENEFIT.....................42
SECTION 11.10. ENTIRE AGREEMENT.........................................42
SECTION 11.11. CAPTIONS.................................................42
SECTION 11.12. SEVERABILITY.............................................42
SECTION 11.13. SPECIFIC PERFORMANCE.....................................42
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of June 25, 2000, among Nabisco
Holdings Corp., a Delaware corporation (the "Company"), Philip Morris Companies
Inc., a Virginia corporation ("Parent"), and Strike Acquisition Corp., a
Delaware corporation and a wholly-owned subsidiary of Parent ("Merger
Subsidiary").
WHEREAS, the respective Boards of Directors of Parent, Merger Subsidiary
and the Company have approved this Agreement, and deem it advisable and in the
best interests of their respective stockholders to consummate the merger of
Merger Subsidiary with and into the Company on the terms and conditions set
forth herein; and
WHEREAS, as a condition and inducement to Parent entering this Agreement,
concurrently with the execution and delivery of this Agreement, Parent and
Nabisco Group Holdings Corp., a Delaware corporation ("NGH"), a significant
stockholder of the Company, are entering into a voting and indemnity agreement
(the "NGH Voting Agreement") pursuant to which, among other things, NGH has
agreed to vote its Shares in favor of the above-described merger, subject to
approval by NGH's stockholders.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as used herein, have
the following meanings:
"Affiliate" means, with respect to any Person, any other Person directly
or indirectly controlling, controlled by or under common control with such
Person.
"Benefit Arrangement" means any employment, severance or similar contract,
plan, policy, fund or arrangement (whether or not written) providing for
compensation, bonus, profit-sharing, stock option, or other stock-related rights
or other forms of incentive or deferred compensation, perquisites, vacation
benefits, insurance coverage (including any self-insured arrangements), health
or medical benefits, disability benefits, worker's compensation, supplemental
unemployment benefits, severance benefits and post-employment or retirement
benefits (including compensation, pension, health, medical or life insurance or
other benefits) that (i) is not an Employee Plan, (ii) is entered into,
maintained, administered or contributed to,
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as the case may be, by the Company or any of its Affiliates and (iii) covers any
employee or former employee of the Company or any of its Subsidiaries employed
in the United States.
"Business Day" means a day other than Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close.
"Class A Shares" means the shares of Class A common stock, $0.01 par
value, of the Company.
"Class B Shares" means the shares of Class B common stock, $0.01 par
value, of the Company.
"Code" means the Internal Revenue Code of 1986.
"Company Balance Sheet" means the consolidated balance sheet of the
Company as of December 31, 1999 and the footnotes thereto set forth in the
Company 10-K.
"Company Intellectual Property Rights" means all material Intellectual
Property Rights owned or licensed and used or held for use by the Company or any
of its Subsidiaries.
"Company 10-K" means the Company's annual report on Form 10-K for the
fiscal year ended December 31, 1999.
"Controlled Group Liability" means any and all liabilities (i) under Title
IV of ERISA, (ii) under Section 302 of ERISA, (iii) under Sections 412 and 4971
of the Code, (iv) as a result of a failure to comply with the continuation
coverage requirements of Section 601 et seq. of ERISA and Section 4980B of the
Code and (v) under corresponding or similar provisions of foreign laws or
regulations, other than such liabilities that arise solely out of, or relate
solely to, the Employee Plans, Benefit Arrangements and International Plans
listed in the Company Disclosure Schedule.
"Delaware Law" means the General Corporation Law of the State of Delaware.
"Employee Arrangement" means any Benefit Arrangement, Employee Plan or
International Plan.
"Employee Plan" means any "employee benefit plan", as defined in Section
3(3) of ERISA, that (i) is subject to any provision of ERISA, (ii) is
maintained, administered or contributed to by the Company or any of its
Affiliates and (iii) covers any employee or former employee of the Company or
any of its Subsidiaries.
"Environmental Laws" means any federal, state, local or foreign law,
regulation, rule, order or decree, in each case as in effect on the date hereof,
that has as its principal purpose the protection of the environment or the
effect of the environment on human health and safety.
"Environmental Permits" means all permits, licenses, certificates or
approvals
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necessary for the operation of the Company or any of its Subsidiaries as
currently conducted to comply with all applicable Environmental Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" of any entity means any other entity that, together with
such entity, would be treated as a single employer under Section 414 of the Code
or Section 4001(b)(1) or 4001(a)(14) of ERISA.
"Governmental Entity" means any federal, state, local or foreign
government or any court, tribunal, administrative agency or commission or other
governmental or other regulatory authority or agency, domestic, foreign or
supranational.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
"Intellectual Property Right" means any trademark, service mark, trade
name, mask work, invention, patent, trade secret, copyright, know-how or
proprietary information contained on any website, processes, formulae, products,
technologies, discoveries, apparatus, Internet domain names, trade dress and
general intangibles of like nature (together with goodwill), customer lists,
confidential information, licenses, software, databases and compilations
including any and all collections of data and all documentation thereof
(including any registrations or applications for registration of any of the
foregoing) or any other similar type of proprietary intellectual property right.
"International Plan" means any employment, severance or similar contract
or arrangement (whether or not written) or any plan, policy, fund, program or
arrangement or contract providing for compensatory severance, insurance coverage
(including any self-insured arrangements), workers' compensation, disability
benefits, supplemental unemployment benefits, vacation benefits, pension or
retirement benefits or for deferred compensation, profit-sharing, bonuses, stock
options, stock appreciation rights or other forms of incentive compensation or
post-retirement insurance, compensation or benefits that (i) is not an Employee
Plan or a Benefit Arrangement, (ii) is entered into, maintained, administered or
contributed to by the Company or any of its Affiliates and (iii) covers any
employee or former employee of the Company or any of its Subsidiaries.
"Lien" means, with respect to any property or asset, any mortgage, lien,
pledge, charge, security interest, encumbrance or other adverse claim of any
kind in respect of such property or asset. For purposes of this Agreement, a
Person shall be deemed to own subject to a Lien, any property or asset that it
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such property or asset.
"Material Adverse Effect" means, with respect to any Person, a material
adverse effect on the condition (financial or otherwise), business, assets or
results of operations of such Person and its Subsidiaries, taken as a whole
except any such effect resulting from or arising in
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connection with: (i) changes in circumstances or conditions affecting food
companies in general, (ii) changes in general economic or business conditions or
in financial markets in the United States or (iii) this Agreement or the
transactions contemplated hereby or the announcement hereof.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
3(37) of ERISA.
"1933 Act" means the Securities Act of 1933.
"1934 Act" means the Securities Exchange Act of 1934.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"SEC" means the Securities and Exchange Commission.
"Shares" means the Class A Shares and the Class B Shares.
"Significant Joint Ventures" means, together with their Subsidiaries, (i)
Bladeland Limited, (ii) Nabisco South Africa (Proprietary) Limited, (iii) PT
Nabisco Foods, (iv) Beijing Yili Food Company, (v) Beijing Nabisco Food Company
and (vi) any comparable joint venture or partnership of the Company or any of
its Subsidiaries.
"Subsidiary" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at any time directly or indirectly owned by such Person.
"Tax Sharing Agreement" means the Tax Sharing Agreement dated as of June
14, 1999 among NGH, R.J. Reynolds Tobacco Holdings, Inc., R. J. Reynolds Tobacco
Company and the Company, as such agreement may be amended from time to time.
"Title IV Plan" means a plan subject to Title IV of ERISA other than any
Multiemployer Plan.
"Withdrawal Liability" means liability to or with respect to a
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan, as those terms are defined in Part I of Subtitle E of Title
IV of ERISA.
Any reference in this Agreement to a statute shall be to such statute, as
amended from time to time, and to the rules and regulations promulgated
thereunder.
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(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
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Acquisition Proposal......................... 6.04
Agents....................................... 6.04
Certificates................................. 2.03
Change in Tax Law............................ 10.01
Company Disclosure Schedule.................. Article 4
Company Employees............................ 7.04
Company Information Statement................ 4.09
Company Properties........................... 4.21
Company SEC Documents........................ 4.07
Company Securities........................... 4.05
Company Subsidiary Securities................ 4.06
Confidentiality Agreement.................... 6.03
Contracts.................................... 4.22
Effective Time............................... 2.01
Exchange Agent............................... 2.03
Filed Contracts.............................. 4.22
Financing Agreements......................... 5.07
GAAP......................................... 4.08
Indemnified Person........................... 7.03
IRS.......................................... 4.16
JV Agreements................................ 4.22
Merger....................................... 2.01
Merger Consideration......................... 2.02
NGH.......................................... recitals
NGH Stockholder Meeting...................... 10.01
NGH Voting Agreement......................... recitals
Preferred Shares............................. 4.05
RJR.......................................... 10.01
Superior Proposal............................ 6.04
Surviving Corporation........................ 2.01
Tax Return................................... 4.16
Taxes........................................ 4.16
Taxing Authority............................. 4.16
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ARTICLE 2
THE MERGER
SECTION 2.01. The Merger. (a) At the Effective Time, Merger Subsidiary
shall be merged (the "Merger") with and into the Company in accordance with
Delaware Law, whereupon the separate existence of Merger Subsidiary shall cease,
and the Company shall be the surviving corporation (the "Surviving
Corporation").
(b) As soon as practicable after satisfaction or, to the extent permitted
hereunder, waiver of all conditions to the Merger, the Company and Merger
Subsidiary will file a certificate of merger with the Delaware Secretary of
State and make all other filings or recordings required by Delaware Law in
connection with the Merger. The Merger shall become effective at such time (the
"Effective Time") as the certificate of merger is duly filed with the Delaware
Secretary of State or at such later time as is specified in the certificate of
merger.
(c) From and after the Effective Time, the Surviving Corporation shall
possess all the rights, powers, privileges and franchises and be subject to all
of the obligations, liabilities, restrictions and disabilities of the Company
and Merger Subsidiary, all as provided under Delaware Law.
SECTION 2.02. Conversion of Shares. At the Effective Time:
(a) except as otherwise provided in Section 2.02(b) or Section 2.04, each
Share outstanding immediately prior to the Effective Time shall be converted
into the right to receive $55.00 in cash, without interest (the "Merger
Consideration");
(b) each Share held by the Company as treasury stock or owned by Parent or
any of its Subsidiaries immediately prior to the Effective Time shall be
canceled, and no payment shall be made with respect thereto; and
(c) each share of common stock of Merger Subsidiary outstanding
immediately prior to the Effective Time shall be converted into and become one
share of common stock of the Surviving Corporation with the same rights, powers
and privileges as the shares so converted and shall constitute the only
outstanding shares of capital stock of the Surviving Corporation.
SECTION 2.03. Surrender and Payment. (a) Prior to the Effective Time,
Parent shall appoint an agent (the "Exchange Agent") reasonably acceptable to
the Company for the purpose of exchanging certificates representing Shares (the
"Certificates") for the Merger Consideration. At the Effective Time, Parent will
deposit with the Exchange Agent the Merger Consideration to be paid in respect
of the Shares. Promptly after the Effective Time, Parent will send, or will
cause the Exchange Agent to send, to each holder of Shares at the Effective Time
a letter of transmittal and instructions (which shall specify that the delivery
shall be effected, and risk of loss and title shall pass, only upon proper
delivery of the Certificates to the Exchange Agent) for use in such exchange.
(b) Each holder of Shares that have been converted into the right to
receive the Merger Consideration will be entitled to receive, upon surrender to
the Exchange Agent of a Certificate,
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together with a properly completed letter of transmittal, the Merger
Consideration payable for each Share represented by such Certificate. Until so
surrendered, each such Certificate shall represent after the Effective Time for
all purposes only the right to receive such Merger Consideration.
(c) If any portion of the Merger Consideration is to be paid to a Person
other than the Person in whose name the surrendered Certificate is registered,
it shall be a condition to such payment that the Certificate so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and that
the Person requesting such payment shall pay to the Exchange Agent any transfer
or other taxes required as a result of such payment to a Person other than the
registered holder of such Certificate or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable.
(d) After the Effective Time, there shall be no further registration of
transfers of Shares. If, after the Effective Time, Certificates are presented to
the Surviving Corporation, they shall be canceled and exchanged for the Merger
Consideration provided for, and in accordance with the procedures set forth, in
this Article 2.
(e) Any portion of the Merger Consideration made available to the Exchange
Agent pursuant to Section 2.03(a) (and any interest or other income earned
thereon) that remains unclaimed by the holders of Shares one year after the
Effective Time shall be returned to Parent, upon demand, and any such holder who
has not exchanged Shares for the Merger Consideration in accordance with this
Section 2.03 prior to that time shall thereafter look only to Parent for payment
of the Merger Consideration in respect of such Shares without any interest
thereon. Notwithstanding the foregoing, Parent shall not be liable to any holder
of Shares for any amount paid to a public official pursuant to applicable
abandoned property, escheat or similar laws. Any amounts remaining unclaimed by
holders of Shares three years after the Effective Time (or such earlier date
immediately prior to such time when the amounts would otherwise escheat to or
become property of any governmental authority) shall become, to the extent
permitted by applicable law, the property of Parent free and clear of any claims
or interest of any Person previously entitled thereto.
(f) Any portion of the Merger Consideration made available to the Exchange
Agent pursuant to Section 2.03(a) to pay for Shares for which appraisal rights
have been perfected shall be returned to Parent, upon demand.
SECTION 2.04. Dissenting Shares. Notwithstanding Section 2.02, Shares
outstanding immediately prior to the Effective Time and held by a holder who has
not voted in favor of the Merger or consented thereto in writing and who has
demanded appraisal for such Shares in accordance with Delaware Law shall not be
converted into a right to receive the Merger Consideration, unless such holder
fails to perfect, withdraws or otherwise loses its right to appraisal. If, after
the Effective Time, such holder fails to perfect, withdraws or loses its right
to appraisal, such Shares shall be treated as if they had been converted as of
the Effective Time into
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a right to receive the Merger Consideration. The Company shall give Parent
prompt notice of any demands received by the Company for appraisal of Shares.
Except as required by applicable law or with the prior written consent of
Parent, the Company shall not make any payment with respect to, or settle or
offer to settle, any such demands.
SECTION 2.05. Stock Options. (a) At or immediately prior to the Effective
Time, each employee or director stock option to purchase Shares outstanding
under any stock option or compensation plan or arrangement of the Company,
whether or not vested or exercisable, shall be canceled, and the Company shall
pay each holder of any such option at the time provided below for each such
option an amount in cash determined by multiplying (i) the excess, if any, of
the Merger Consideration per Share over the applicable exercise price of such
option by (ii) the number of Shares such holder could have purchased (assuming
full vesting of all options) had such holder exercised such option in full
immediately prior to the Effective Time. In the case of each such option that is
outstanding on the date hereof, such payment shall be made before, at or
promptly after the Effective Time. In all other cases, such payment shall be
made when and if such option is exercised (or vests, if converted into a right
to receive cash) in accordance with its terms.
(b) Prior to the Effective Time, the Company shall (i) use its best
efforts to obtain any consents from holders of options to purchase Shares
granted under the Company's stock option or compensation plans or arrangements
and (ii) make any amendments to the terms of such stock option or compensation
plans or arrangements that, in the case of either clauses (i) or (ii), are
necessary to give effect to the transactions contemplated by Section 2.05(a).
Notwithstanding any other provision of this Section, payment may be withheld in
respect of any employee stock option until such necessary consents are obtained,
and the Company shall withhold from such payments all amounts required by
applicable law or regulation to be withheld for taxes or otherwise.
SECTION 2.06. Adjustments. If, during the period between the date of this
Agreement and the Effective Time, any change in the outstanding Shares shall
occur, including by reason of any reclassification, recapitalization, stock
split or combination, exchange or readjustment of Shares, or stock dividend
thereon with a record date during such period, the Merger Consideration and any
other amounts payable pursuant to this Agreement shall be appropriately
adjusted.
SECTION 2.07. Withholding Rights. Each of the Surviving Corporation and
Parent shall be entitled to deduct and withhold from the consideration otherwise
payable to any Person pursuant to this Article 2 such amounts as it is required
to deduct and withhold with respect to the making of such payment under any
provision of federal, state, local or foreign tax law. If the Surviving
Corporation or Parent, as the case may be, so withholds amounts, such amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of the Shares in respect of which the Surviving Corporation or Parent, as
the case may be, made such deduction and withholding.
SECTION 2.08. Lost Certificates. If any Certificate shall have been lost,
stolen or
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destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and, if required by the
Surviving Corporation, the posting by such Person of a bond, in such reasonable
amount as the Surviving Corporation may direct, as indemnity against any claim
that may be made against it with respect to such Certificate, the Exchange Agent
will pay, in exchange for such lost, stolen or destroyed Certificate, the Merger
Consideration to be paid in respect of the Shares represented by such
Certificate, as contemplated by this Article.
ARTICLE 3
THE SURVIVING CORPORATION
SECTION 3.01. Certificate of Incorporation. The certificate of
incorporation of the Company in effect at the Effective Time shall be the
certificate of incorporation of the Surviving Corporation until amended in
accordance with applicable law.
SECTION 3.02. Bylaws. The bylaws of Merger Subsidiary in effect at the
Effective Time shall be the bylaws of the Surviving Corporation until amended in
accordance with applicable law.
SECTION 3.03. Directors and Officers. From and after the Effective Time,
until successors are duly elected or appointed and qualified in accordance with
applicable law, (i) the directors of Merger Subsidiary at the Effective Time
shall be the directors of the Surviving Corporation and (ii) the officers of the
Company at the Effective Time shall be the officers of the Surviving
Corporation.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the corresponding sections or subsections of the
disclosure schedule delivered by the Company to Parent on or prior to the date
hereof (the "Company Disclosure Schedule") or in the Company SEC Documents, the
Company represents and warrants to Parent that:
SECTION 4.01. Corporate Existence and Power. The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware and has all corporate powers and all governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted, except for those licenses, authorizations, permits,
consents and approvals the absence of which would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on the
Company. The Company is duly qualified to do business as a foreign corporation
and is in good standing in
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each jurisdiction where such qualification is necessary, except for those
jurisdictions where failure to be so qualified would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on the
Company. The Company has heretofore made available to Parent true and complete
copies of the certificate of incorporation and bylaws of the Company as
currently in effect.
SECTION 4.02. Corporate Authorization. (a) The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby are within the Company's corporate
powers and, except for the affirmative vote of the holders of a majority of the
outstanding Shares in connection with the consummation of the Merger, have been
duly authorized by all necessary corporate action on the part of the Company.
The affirmative vote of the holders of a majority of the outstanding Shares is
the only vote of the holders of any of the Company's capital stock necessary in
connection with the consummation of the Merger. This Agreement has been duly
executed and delivered by the Company and constitutes a valid and binding
agreement of the Company.
(b) At a meeting duly called and held, the Company's Board of Directors
has (i) determined that this Agreement and the transactions contemplated hereby
are fair to and in the best interests of the Company's stockholders, (ii)
declared advisable, approved and adopted this Agreement and the transactions
contemplated hereby and (iii) resolved (subject to Section 6.04(c)) to recommend
approval and adoption of this Agreement and the Merger by its stockholders.
SECTION 4.03. Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby require no action by or in respect of,
or filing with, any Governmental Entity, other than (i) the filing of a
certificate of merger with respect to the Merger with the Delaware Secretary of
State and appropriate documents with the relevant authorities of other states in
which the Company is qualified to do business, (ii) compliance with any
applicable requirements of the HSR Act and of laws, rules and regulations in
foreign jurisdictions governing antitrust or merger control matters, (iii)
compliance with any applicable requirements of the 1933 Act, the 1934 Act and
any other applicable securities or takeover laws, whether state or foreign and
(iv) any actions or filings the absence of which would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company or materially to impair the ability of the Company to consummate the
transactions contemplated by this Agreement.
SECTION 4.04. Non-contravention. The execution, delivery and performance
by the Company of this Agreement and the consummation of the transactions
contemplated hereby do not and will not (i) contravene, conflict with, or result
in any violation or breach of any provision of the certificate of incorporation
or bylaws of the Company or of the similar organizational documents of any of
its material Subsidiaries, (ii) assuming compliance with the matters referred to
in Section 4.03, contravene, conflict with, or result in a violation or breach
of any provision of any applicable law, regulation, judgment, injunction, order
or decree, (iii) require any consent or
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other action by any Person under, constitute (with or without notice or lapse of
time or both) a default under, or cause or permit the termination, cancellation,
acceleration or other change of any right or obligation or the loss of any
benefit to which the Company or any of its Subsidiaries is entitled under any
provision of any agreement or other instrument binding upon the Company or any
of its Subsidiaries (or their respective Company Properties) or any license,
franchise, permit, certificate, approval or other similar authorization
affecting, or relating in any way to, the assets or business of the Company and
its Subsidiaries or (iv) result in the creation or imposition of any Lien on any
asset of the Company or any of its Subsidiaries, except, in the case of clauses
(ii), (iii) and (iv), for such matters as would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on the Company
or prevent or materially delay the consummation of the Merger.
SECTION 4.05. Capitalization. (a) The authorized capital stock of the
Company consists of (i) 1 billion shares of common stock, $0.01 par value per
share, of which (x) 265,000,000 shares have been designated as Class A Shares,
(y) 213,250,000 shares have been designated as Class B Shares and (z) the
remaining 521,750,000 shares may be designated by the Board of Directors of the
Company as either Class A Shares or Class B Shares prior to issuance, and (ii)
75,000,000 shares of preferred stock, par value $0.01 per share (the "Preferred
Shares"). As of June 22, 2000, there were outstanding: (1) 52,704,984 Class A
Shares (including equivalents payable in cash or Class A Shares); (2)
213,250,000 Class B Shares; (3) employee and director stock options to purchase
an aggregate of 20,913,569 Class A Shares; and (4) no Preferred Shares. All
shares of capital stock of the Company outstanding as of the date hereof have
been duly authorized and validly issued and are fully paid and nonassessable.
All Class A Shares issuable upon exercise of outstanding employee or director
stock options have been duly authorized and, when issued in accordance with the
terms thereof, will be validly issued and will be fully paid and nonassessable.
(b) Except as set forth in this Section 4.05 and for changes since June
22, 2000 resulting from the exercise of employee or director stock options
outstanding on such date, there are no outstanding (i) shares of capital stock
or voting securities of the Company, (ii) securities of the Company convertible
into or exchangeable for shares of capital stock or voting securities of the
Company or (iii) options or other rights to acquire from the Company or other
obligation of the Company to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of the Company (the items in clauses (i), (ii) and (iii) being
referred to collectively as the "Company Securities"). There are no outstanding
obligations of the Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any of the Company Securities.
SECTION 4.06. Subsidiaries. (a) Each Subsidiary of the Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, has all powers and all governmental
licenses, authorizations, permits, consents and approvals required to carry on
its business as now conducted, except for those licenses, authorizations,
permits, consents and approvals the absence of which would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company.
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Each such Subsidiary is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction where such qualification is
necessary, except for those jurisdictions where failure to be so qualified would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company. All material Subsidiaries of the Company and
their respective jurisdictions of incorporation are identified in the Company
10-K. Section 4.06 of the Company Disclosure Schedule identifies the Company's
direct and indirect percentage ownership of each Subsidiary.
(b) All of the outstanding capital stock of, or other voting securities or
ownership interests in, each Subsidiary of the Company, is owned by the Company,
directly or indirectly, free and clear of any Lien and free of any other
limitation or restriction (including any restriction on the right to vote, sell
or otherwise dispose of such capital stock or other voting securities or
ownership interests). There are no outstanding (i) securities of the Company or
any of its Subsidiaries convertible into or exchangeable for shares of capital
stock or other voting securities or ownership interests in any Subsidiary of the
Company or (ii) options or other rights to acquire from the Company or any of
its Subsidiaries, or other obligation of the Company or any of its Subsidiaries
to issue, any capital stock or other voting securities or ownership interests
in, or any securities convertible into or exchangeable for any capital stock or
other voting securities or ownership interests in, any Subsidiary of the Company
(the items in clauses (i) and (ii) being referred to collectively as the
"Company Subsidiary Securities"). There are no outstanding obligations of the
Company or any of its Subsidiaries (i) to repurchase, redeem or otherwise
acquire any of the Company Subsidiary Securities, (ii) to register any Company
Subsidiary Securities under the 1933 Act or any state securities law or (iii) to
grant preemptive or antidilutive rights with respect to any Company Subsidiary
Securities.
SECTION 4.07. SEC Filings. (a) The Company has made available to Parent
(i) the Company's annual reports on Form 10-K for its fiscal years ended
December 31, 1999 and 1998, (ii) its quarterly report on Form 10-Q for its
fiscal quarter ended March 31, 2000, (iii) its proxy or information statements
relating to meetings of, or actions taken without a meeting by, the stockholders
of the Company held since December 31, 1999 and (iv) all of its other reports,
statements, schedules and registration statements filed with the SEC since
December 31, 1999 (the documents referred to in this Section 4.07(a),
collectively, the "Company SEC Documents").
(b) As of its filing date, each Company SEC Document complied as to form
in all material respects with the applicable requirements of the 1933 Act and
the 1934 Act, as the case may be.
(c) As of its filing date (or, if amended or superceded by a filing prior
to the date hereof, on the date of such filing), each Company SEC Document filed
pursuant to the 1934 Act did not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading.
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(d) Each Company SEC Document that is a registration statement, as amended
or supplemented, if applicable, filed pursuant to the 1933 Act, as of the date
such statement or amendment became effective, did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
(e) Other than Nabisco, Inc., no Subsidiary of the Company is subject to
the periodic reporting requirements of the 1934 Act.
SECTION 4.08. Financial Statements. The audited consolidated financial
statements and unaudited consolidated interim financial statements (including
the related notes) of the Company included in the Company SEC Documents fairly
present in all material respects, in conformity with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis (except as
may be indicated in the notes thereto), the consolidated financial position of
the Company and its consolidated Subsidiaries as of the dates thereof and their
consolidated results of operations and cash flows for the periods then ended
(subject to normal year-end adjustments that are not expected to be material in
amount in the case of any unaudited interim financial statements).
SECTION 4.09. Disclosure Documents. The information statement of the
Company to be filed with the SEC in connection with the Merger (the "Company
Information Statement") and any amendments or supplements thereto will, when
filed, comply as to form in all material respects with the applicable
requirements of the 1934 Act. At the time the Company Information Statement or
any amendment or supplement thereto is first mailed to stockholders of the
Company, the Company Information Statement, as supplemented or amended, if
applicable, will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
The representations and warranties contained in this Section 4.09 will not apply
to statements or omissions included in the Company Information Statement based
upon information furnished to the Company by Parent specifically for use
therein.
SECTION 4.10. Absence of Certain Changes. Since December 31, 1999, the
business of the Company and its Subsidiaries has been conducted in the ordinary
course consistent with past practices and there has not been:
(a) any event, occurrence, development or state of circumstances or facts
that, either individually or in the aggregate, has had or is reasonably likely
to have a Material Adverse Effect on the Company;
(b) any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of capital stock of the Company (other
than customary quarterly cash dividends on the Shares in an amount not greater
than $.188 per Share per quarter), or any repurchase, redemption or other
acquisition by the Company or any of its Subsidiaries of any outstanding shares
of capital stock or other securities of, or other ownership interests in, the
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Company or any of its Subsidiaries;
(c) any amendment of any material term of any outstanding security of the
Company or any of its Subsidiaries;
(d) any incurrence, assumption or guarantee by the Company or any of its
Subsidiaries of any indebtedness for borrowed money other than in the ordinary
course of business and in amounts and on terms consistent with past practices;
(e) any creation or other incurrence by the Company or any of its
Subsidiaries of any Lien on any material asset other than in the ordinary course
of business consistent with past practices;
(f) any making of any loan, advance or capital contributions to or
investment in any Person not wholly owned, directly or indirectly, by the
Company, other than immaterial amounts in the ordinary course of business
consistent with past practices;
(g) any damage, destruction or other casualty loss (whether or not covered
by insurance) affecting the business or assets of the Company or any of its
Subsidiaries that has had or would reasonably be expected to have a Material
Adverse Effect on the Company;
(h) any transaction or commitment made, or any contract or agreement
entered into, by the Company or any of its Subsidiaries relating to its assets
or business (including the acquisition or disposition of any assets) or any
relinquishment by the Company or any of its Subsidiaries of any contract or
other right, in either case, material to the Company and its Subsidiaries, taken
as a whole, other than transactions and commitments in the ordinary course of
business consistent with past practices and those contemplated by this
Agreement;
(i) any change in any method of accounting, method of tax accounting or
accounting principles or practice by the Company or any of its Subsidiaries,
including, without limitation, any amendment of the Tax Sharing Agreement,
except for any such change which is not significant or which is required by
reason of a concurrent change in GAAP;
(j) any (i) grant of any severance or termination pay to (or amendment to
any existing arrangement with) any director, officer or (to the extent material
in the aggregate) employee of the Company or any of its Subsidiaries, (ii)
establishment, adoption or amendment (except as required by applicable law) of
any collective bargaining, bonus, profit-sharing, thrift, pension, retirement or
other benefit plan or arrangement covering any director, officer or employee of
the Company or any of its Subsidiaries, (iii) other than as disclosed in Section
4.10(j)(iii) of the Company Disclosure Schedule, increase in compensation, bonus
or other benefits payable to any director or executive officer (or other officer
with an employment agreement) of the Company, or (iv) other than in the ordinary
course of business consistent with past practice, increase in compensation,
bonus or other benefits payable to any employee not described in clause (iii) of
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the Company or any of its Subsidiaries;
(k) any material labor dispute, other than routine individual grievances,
or any activity or proceeding by a labor union or representative thereof to
organize any employees of the Company or any of its Subsidiaries, which
employees were not subject to a collective bargaining agreement at December 31,
1999, or any material lockouts, strikes, slowdowns, work stoppages or threats
thereof by or with respect to such employees;
(l) any settlement or waiver of a material litigation or claim; or
(m) any agreement to do any of the foregoing.
SECTION 4.11. No Undisclosed Liabilities. There are no liabilities or
obligations of the Company or any of its Subsidiaries of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable or otherwise,
other than:
(a) liabilities or obligations disclosed or provided for in the Company
Balance Sheet or in the notes thereto or in the Company SEC Documents filed
prior to the date hereof,
(b) liabilities or obligations incurred in the ordinary course of business
that would not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect on the Company,
(c) immaterial liabilities or obligations not incurred in the ordinary
course which, taken together, are not material to the Company and its
Subsidiaries taken as a whole,
(d) liabilities or obligations under this Agreement, or
(e) liabilities or obligations incurred in connection with the
transactions contemplated hereby and disclosed in the Company Disclosure
Schedule.
No representations or warranties with respect to environmental matters are
being made in this Section 4.11.
SECTION 4.12. Compliance with Laws and Court Orders. Neither the Company
nor any of its Subsidiaries nor any of their respective properties is in
violation of, or has since December 31, 1999 violated, any applicable law,
statute, ordinance, rule, regulation, judgment, injunction, order or decree,
except for violations that have not had and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on the Company
or prevent or materially delay the consummation of the Merger. The Company and
its Subsidiaries are in compliance with the terms of all required governmental
licenses, authorizations, permits, consents and approvals, except where the
failure so to comply would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company.
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SECTION 4.13. Litigation. There is no action, suit, investigation or
proceeding pending, or, to the knowledge of the Company, threatened, against the
Company or any of its Subsidiaries, or any of their respective properties before
any court or arbitrator or before or by any Governmental Entity, that, if
determined or resolved adversely in accordance with the plaintiff's demands,
would reasonably be expected to have a Material Adverse Effect on the Company or
prevent or materially delay the consummation of the Merger. Neither the Company
nor any of its Subsidiaries is subject to any outstanding order, writ,
injunction or decree that, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect on the Company or prevent or
materially delay the consummation of the Merger.
SECTION 4.14. Finders' Fees. Except for UBS Warburg LLC, Morgan Stanley &
Co. Incorporated and Bear, Stearns & Co. Inc., copies of whose engagement
agreements have been provided to Parent, there is no investment banker, broker,
finder or other intermediary that has been retained by or is authorized to act
on behalf of the Company or any of its Subsidiaries who might be entitled to any
fee or commission from the Company or any of its Affiliates in connection with
the transactions contemplated by this Agreement. The fees, commissions and
expenses of UBS Warburg, LLC, Morgan Stanley & Co. Incorporated, Bear, Stearns &
Co. Inc., Davis Polk & Wardwell, Deloitte & Touche LLP and any other advisors
retained by the Company or NGH in connection with the transactions contemplated
by this Agreement to be paid by the Company will not exceed $50 million.
SECTION 4.15. Opinion of Financial Advisors. The Company has received an
opinion of UBS Warburg LLC and an opinion of Morgan Stanley & Co. Incorporated,
each dated as of the date of this Agreement and each to the effect that, as of
the date of such opinion, the Merger Consideration is fair to the Company's
stockholders from a financial point of view. Complete and correct signed copies
of such opinions will be delivered to Parent as soon as practicable after the
date of this Agreement.
SECTION 4.16. Taxes. (a) The Company and each of its Subsidiaries has
timely filed (or has had timely filed on its behalf) or will file or cause to be
timely filed all material Tax Returns required by applicable law to be filed by
it or on its behalf prior to or as of the Effective Time, and all such Tax
Returns are, or will be at the time of filing, true and complete in all material
respects.
(b) The Company and each of its Subsidiaries has paid (or has had paid on
its behalf), or, where payment is not yet due, has established (or has had
established on its behalf and for its sole benefit and recourse) or (with
respect to new contingencies arising after the date hereof) will establish or
cause to be established in accordance with GAAP on or before the Effective Time
an adequate accrual for the payment of, all taxes due with respect to any period
ending prior to or as of the Effective Time.
(c) The federal income Tax Returns filed with respect to the Company and
its Subsidiaries have been examined and settled with the Internal Revenue
Service (the "IRS") (or the applicable statutes of limitation for the assessment
of federal income Taxes for such periods
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have expired) for all years through 1994.
(d) There are no material Liens or encumbrances for Taxes on any of the
assets of the Company or any of its Subsidiaries.
(e) The Company and its Subsidiaries have complied in all material
respects with all applicable laws, rules and regulations relating to the payment
and withholding of Taxes.
(f) No federal, state, local or foreign audits or administrative
proceedings are pending with regard to any material Taxes or Tax Return of the
Company or its Subsidiaries and none of them has received a written notice of
any proposed audit or proceeding regarding any pending audit or proceeding.
(g) "Taxes" shall mean any and all taxes, charges, fees, levies or other
assessments, including income, gross receipts, excise, real or personal
property, sales, withholding, social security, retirement, unemployment,
occupation, use, goods and services, service use, license, value added, capital,
net worth, payroll, profits, withholding, franchise, transfer and recording
taxes, fees and charges, and any other taxes, assessment or similar charges
imposed by the IRS or any taxing authority (whether domestic or foreign
including any state, county, local or foreign government or any subdivision or
taxing agency thereof (including a United States possession)) (a "Taxing
Authority"), whether computed on a separate, consolidated, unitary, combined or
any other basis; and such term shall include any interest whether paid or
received, fines, penalties or additional amounts attributable to, or imposed
upon, or with respect to, any such taxes, charges, fees, levies or other
assessments. "Tax Return" shall mean any report, return, document, declaration
or other information or filing required to be supplied to any Taxing Authority
or jurisdiction (foreign or domestic) with respect to Taxes, including
information returns, any documents with respect to or accompanying payments of
estimated Taxes, or with respect to or accompanying requests for the extension
of time in which to file any such report, return, document, declaration or other
information.
SECTION 4.17. Employee Benefit Plans. (a) The Company has made available
to Parent copies of each material Employee Plan (and, if applicable, related
trust agreements) and all amendments thereto and written interpretations thereof
together with the most recent annual report (Form 5500 including, if applicable,
Schedule B thereto), summary plan description and any material modifications
thereto, annual financial report and actuarial valuation report prepared in
connection with any such Employee Plan and all trust agreements, insurance
contracts and other funding vehicles relating thereto. The Company Disclosure
Schedule identifies each such Employee Plan that is (i) a Multiemployer Plan,
(ii) a Title IV Plan or (iii) maintained in connection with any trust described
in Section 501(c)(9) of the Code.
(b) Each material Employee Plan that is intended to be qualified under
Section 401(a) of the Code is so qualified and has been so qualified during the
period since its adoption; each trust created under any such Plan is exempt from
tax under Section 501(a) of the Code and has
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been so exempt since its creation. The Company has made available to Parent the
most recent determination letter of the Internal Revenue Service relating to
each such Employee Plan. Each material Employee Plan has been maintained in
substantial compliance with its terms and with the requirements prescribed by
any and all applicable statutes, orders, rules and regulations, including ERISA
and the Code.
(c) The Company has made available to Parent copies (or if there is no
written plan document, any existing written descriptions) of each material
Benefit Arrangement (and, if applicable, related trust agreements) and all
amendments thereto and written interpretations thereof. Each such Benefit
Arrangement has been maintained in substantial compliance with its terms and
with the requirements prescribed by any and all applicable statutes, orders,
rules and regulations and has been maintained in good standing with applicable
regulatory authorities.
(d) There has been no failure of a group health plan (as defined in
Section 5000(b)(1) of the Code) to meet the requirements of Code Section
4980B(f) with respect to a qualified beneficiary (as defined in Section
4980B(g)). Neither the Company nor any of its Subsidiaries has contributed to a
nonconforming group health plan (as defined in Section 5000(c)) and no ERISA
Affiliate of the Company or any of its Subsidiaries has incurred a tax under
Section 5000(a) that is or could become a liability of the Company or any of its
Subsidiaries.
(e) The Company has made available to Parent copies of each material
International Plan. Each such International Plan has been maintained in
substantial compliance with its terms and with the requirements prescribed by
any and all applicable statutes, orders, rules and regulations (including any
special provisions relating to qualified plans where such Plan was intended so
to qualify) and has been maintained in good standing with applicable regulatory
authorities. There has been no amendment to, written interpretation of or
announcement (whether or not written) by the Company or any of its Subsidiaries
relating to, or change in employee participation or coverage under, any material
International Plan that would increase materially the expense of maintaining
such International Plan above the level of expense incurred in respect thereof
for the most recent fiscal year ended prior to the date hereof. Each such
International Plan that is intended to be funded and/or book-reserved is fully
funded and/or book-reserved, as appropriate, based upon reasonable actuarial
assumptions.
(f) The Company Disclosure Schedule contains a complete list of all
material Employee Arrangements. Except as specifically provided in the foregoing
documents made available to Parent, no amendments to any such Employee
Arrangement have been adopted or approved nor has the Company or any of its
Affiliates undertaken to make any such amendments or to adopt or approve any new
material Employee Arrangement.
(g) All material contributions required to be made to any Employee
Arrangement or any trust or other arrangement funding any of the foregoing by
applicable law or regulation or by any plan document or other contractual
undertaking, and all material premiums due or payable with respect to insurance
policies funding any Employee Arrangement, for any period through
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the date hereof have been timely made or paid in full.
(h) With respect to each Title IV Plan: (i) there does not exist any
accumulated funding deficiency within the meaning of Code Section 412 or Section
302 of ERISA, whether or not waived; (ii) no reportable event within the meaning
of Section 4043(c) of ERISA for which the 30-day notice requirement has not been
waived has occurred, and the consummation of the transactions contemplated by
this Agreement will not result in the occurrence of any such reportable event;
(iii) all premiums to the PBGC have been timely paid in full; (iv) no material
liability (other than for premiums to the PBGC) under Title IV of ERISA has been
or is expected to be incurred by the Company or any of its Subsidiaries; and (v)
the PBGC has not instituted proceedings to terminate any such Title IV Plan and,
to the Company's knowledge, no condition exists that presents a risk that such
proceedings will be instituted or which would constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any such Title IV Plan.
(i) There does not now exist, nor do any circumstances exist that could
result in, any Controlled Group Liability that would be a material liability of
the Company or any of its Subsidiaries following the Closing. None of the
Company and its Subsidiaries nor any of their respective ERISA Affiliates has
incurred any material Withdrawal Liability that has not been satisfied in full.
With respect to each Employee Plan that is a Multiemployer Plan: (i) if the
Company or any of its Subsidiaries or any of their respective ERISA Affiliates
were to experience a withdrawal or partial withdrawal from such plan, no
material Withdrawal Liability would be incurred; and (ii) none of the Company
and its Subsidiaries, nor any of their respective ERISA Affiliates has received
any notification, nor has any reason to believe, that any such Employee Plan is
in reorganization, has been terminated, is insolvent, or may reasonably be
expected to be in reorganization, to be insolvent, or to be terminated.
(j) The Company Disclosure Schedule sets forth: (i) an accurate and
complete list of each material Employee Arrangement under which the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby could (either alone or in conjunction with any other event
such as termination of employment) result in, cause the accelerated vesting,
funding or delivery of, or increase the amount or value of, any payment or
benefit to any employee, officer or director of the Company, or any of its
Subsidiaries, or for which the Company or any of its Subsidiaries could be
liable, or would limit the right of the Company or any of its Subsidiaries to
amend, merge, terminate or receive a reversion of assets from any material
Employee Arrangement or related trust; (ii) the aggregate dollar amounts payable
by the Company and its Subsidiaries pursuant to or with respect to bonuses and
other incentive compensation in connection with or as a result of the
consummation of the transactions contemplated hereby; (iii) the aggregate
liabilities of the Company and its Subsidiaries, together with any corresponding
assets held in any grantor trust of the Company and its Subsidiaries, pursuant
to each Employee Arrangement (other than Employee Plans that are qualified under
Section 401(a) of the Code) providing any supplemental or excess retirement
benefits or other deferred compensation (whether elective or nonelective), in
each case determined as of the date
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set forth in the Company Disclosure Schedule and (iv) the aggregate amounts of
change-of-control severance and other change-of-control payments (whether
contingent or not) that have been or will be deferred under the Company's
Deferred Compensation Plan. No outstanding options to purchase Shares granted to
any current or former employee or director of the Company or any of its
Affiliates contain any provision that would entitle the holder to receive any
cash payment with respect thereto in connection with the consummation of the
transactions contemplated hereby in excess of the amounts provided for in
Section 2.05 hereof.
(k) There are no pending or threatened claims (other than claims for
benefits in the ordinary course), investigations, lawsuits or arbitrations which
have been asserted or instituted, and, to the Company's knowledge, no set of
circumstances exists which may reasonably be expected to give rise to a claim or
lawsuits, against the material Employee Arrangements, any fiduciaries thereof
with respect to their duties to such Employee Arrangements or the assets of any
of the trusts under any of such Employee Arrangements which could reasonably be
expected to result in any material liability of the Company or any of its
Subsidiaries to the PBGC, the Department of Treasury, the Department of Labor,
or any other U.S. or foreign governmental authority, or to any of such Employee
Arrangements, any participant in any such Employee Arrangement, or any other
party. Without limiting the generality of the foregoing, neither the Company nor
any of its Affiliates has any actual or contingent liability under any such
Employee Arrangement or under any applicable law or regulation for pay or
benefits incurred as a result of corporate restructuring, downsizing, layoffs or
similar events that has not been fully satisfied or adequately reserved for in
the audited consolidated financial statements (including the related notes) and
unaudited consolidated financial statements (including the related notes) of the
Company included in the Company SEC Documents.
SECTION 4.18. Environmental Matters. Except as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company:
(i) no written notice, demand, request for information, citation,
summons or order has been received, no penalty has been assessed, and no
investigation, action, claim, suit or proceeding is pending or, to the
knowledge of the Company, threatened by any Governmental Entity or other
Person which alleges a violation by the Company or any Subsidiary of the
Company of any Environmental Law;
(ii) the Company and its Subsidiaries are in compliance with all
Environmental Laws and all Environmental Permits; and
(iii) there are no liabilities or obligations of the Company or any
of its Subsidiaries of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise arising (x) under or in
connection with any Environmental Law or any related claim or (y) in
connection with any environmental matter.
SECTION 4.19. Intellectual Property. The Company and its Subsidiaries own,
or are
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validly licensed or otherwise have the right to use, all Company Intellectual
Property Rights used in the conduct of their businesses, except where the
failure to own or possess valid rights to such Company Intellectual Property
Rights would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Company. No Company Intellectual Property
Right is subject to any outstanding judgment, injunction, order, decree or
agreement restricting the use thereof by the Company or any of its Subsidiaries
or restricting the licensing thereof by the Company or any of its Subsidiaries
to any Person, except for any judgment, injunction, order, decree or agreement
which would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Company. Neither the Company nor any of
its Subsidiaries is infringing on any other Person's Intellectual Property
Rights and to the knowledge of the Company no Person is infringing on any
Company Intellectual Property Rights, except, in either case, as would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect on the Company. Except for such matters as would not reasonably
be expected to have a Material Adverse Effect on the Company, as of May 31, 2000
(i) neither the Company nor any of its Subsidiaries was a defendant in any
action, suit, investigation or proceeding relating to, or otherwise was notified
of, any alleged claim of infringement of any Intellectual Property Right and
(ii) the Company and its Subsidiaries had no outstanding claim or suit for any
continuing infringement by any other Person of any Company Intellectual Property
Rights.
SECTION 4.20. Antitakeover Statute. The Company has taken all action
necessary to exempt the Merger and this Agreement and the transactions
contemplated hereby from the provisions of Section 203 of Delaware Law.
SECTION 4.21. Real Property. Except as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect on the
Company: (i) the Company or its Subsidiaries have good and marketable fee title
or a valid leasehold interest in all of the real property and related equipment
used by the Company or its Subsidiaries or otherwise reflected in the Company's
financial statements identified in Section 4.08 above (collectively, the
"Company Properties"), in each case free and clear of any Liens or rights of
third parties and (ii) the Company Properties (taking into account, without
limitation, all Liens related thereto, all zoning and other restrictions
applicable thereto and the condition thereof) are suitable and adequate for the
conduct of the businesses of the Company and its Subsidiaries as currently
conducted.
SECTION 4.22. Contracts; Joint Ventures. (a) Except for employee benefit
plans and any contracts filed as an exhibit to any Company SEC Documents ("Filed
Contracts"), Section 4.22(a) of the Company Disclosure Schedule lists all oral
or written contracts, agreements, guarantees and leases that exist as of the
date hereof to which the Company or any of its Subsidiaries is a party or by
which it is bound which are or would be required to be filed as an exhibit to
the Company SEC Documents (the listed contracts and the Filed Contracts, the
"Contracts"). All of the Contracts governed by the laws of the United States or
any state and, to the knowledge of the Company, all of the Contracts governed by
the laws of any foreign jurisdiction, are valid and binding obligations of the
Company or such Subsidiary and, to the
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knowledge of the Company, the valid and binding obligation of each other party
thereto, with only such exceptions as would not, individually or in the
aggregate, have a Material Adverse Effect on the Company. Neither the Company or
such Subsidiary nor, to the knowledge of the Company, any other party thereto is
in violation of or in default in respect of, nor has there occurred an event or
condition which with the passage of time or giving of notice (or both) would
constitute a default under or permit the termination of, any such Contract,
except such violations or defaults under or terminations which would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
(b) The Company has made available to Parent complete and correct copies
of all agreements relating to the formation and governance of the Significant
Joint Ventures (the "JV Agreements"). Other than as contained in the JV
Agreements, the Company has no obligations of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, to loan
funds to, make capital contributions to, or guarantee indebtedness or other
obligations of, the Significant Joint Ventures.
SECTION 4.23. Indebtedness. At the date hereof, the Company and its
Subsidiaries have outstanding indebtedness for borrowed money (including,
without limitation, off-balance sheet indebtedness, guarantees of third party
indebtedness and capitalized lease obligations) in an aggregate principal amount
not greater than $4.5 billion.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company that:
SECTION 5.01. Corporate Existence and Power. Each of Parent and Merger
Subsidiary is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
corporate powers and all governmental licenses, authorizations, permits,
consents and approvals required to carry on its business as now conducted,
except for those licenses, authorizations, permits, consents and approvals the
absence of which would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on Parent. Since the date of its
incorporation, Merger Subsidiary has not engaged in any activities other than in
connection with or as contemplated by this Agreement or in connection with
arranging any financing required to consummate the transactions contemplated
hereby.
SECTION 5.02. Corporate Authorization. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement and the
consummation by Parent and Merger Subsidiary of the transactions contemplated
hereby are within the corporate powers of Parent and Merger Subsidiary and have
been duly authorized by all necessary corporate action. This Agreement has been
duly executed and delivered by Parent and Merger Subsidiary and
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constitutes a valid and binding agreement of each of Parent and Merger
Subsidiary.
SECTION 5.03. Governmental Authorization. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement and the
consummation by Parent and Merger Subsidiary of the transactions contemplated
hereby require no action by or in respect of, or filing with, any Governmental
Entity, other than (i) the filing of a certificate of merger with respect to the
Merger with the Delaware Secretary of State and appropriate documents with the
relevant authorities of other states in which Parent is qualified to do
business, (ii) compliance with any applicable requirements of the HSR Act and of
laws, rules and regulations in foreign jurisdictions governing antitrust or
merger control matters, (iii) compliance with any applicable requirements of the
1933 Act, the 1934 Act and any other applicable securities or takeover laws,
whether state or foreign and (iv) any actions or filings the absence of which
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on Parent or materially to impair the ability of Parent
and Merger Subsidiary to consummate the transactions contemplated by this
Agreement.
SECTION 5.04. Non-contravention. The execution, delivery and performance
by Parent and Merger Subsidiary of this Agreement and the consummation by Parent
and Merger Subsidiary of the transactions contemplated hereby do not and will
not (i) contravene, conflict with, or result in any violation or breach of any
provision of the certificate of incorporation or bylaws of Parent or Merger
Subsidiary, (ii) assuming compliance with the matters referred to in Section
5.03, contravene, conflict with, or result in any violation or breach of any
provision of any law, regulation, judgment, injunction, order or decree or (iii)
require any consent or other action by any Person under, constitute (with or
without notice of lapse of time or both) a default under, or cause or permit the
termination, cancellation, acceleration or other change of any right or
obligation or the loss of any benefit to which Parent or Merger Subsidiary is
entitled under any provision of any agreement or other instrument binding upon
Parent or Merger Subsidiary, except, in the case of clauses (ii) and (iii), for
such matters as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Parent or prevent or materially delay
the consummation of the Merger.
SECTION 5.05. Disclosure Documents. The information with respect to Parent
and any of its Subsidiaries that Parent furnishes to the Company specifically
for use in the Company Information Statement will not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading at the time such Company Information
Statement or any amendment or supplement thereto is first mailed to stockholders
of the Company.
SECTION 5.06. Finders' Fees. Except for Chase Securities Inc., Credit
Suisse First Boston and Wasserstein Perella & Co., Inc., whose fees will be paid
by Parent, there is no investment banker, broker, finder or other intermediary
that has been retained by or is authorized to act on behalf of Parent who might
be entitled to any fee or commission from the Company or any of its Affiliates
upon consummation of the transactions contemplated by this Agreement.
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SECTION 5.07. Financing. Parent has received and furnished copies to the
Company of fully executed and operative agreements (the "Financing Agreements")
with Chase Securities Inc. and Credit Suisse First Boston Corp. dated as of June
22, 2000 pursuant to which such entities have agreed, subject to the terms and
conditions thereof, to provide financing to Parent in an amount sufficient,
together with existing credit facilities, cash on hand and other liquid
securities owned directly or indirectly by Parent, to pay all cash amounts
payable to Company stockholders and optionholders in connection with the
transactions contemplated by this Agreement, to effect, assuming the accuracy of
the Company's representations in this Agreement, all necessary refinancing of
existing indebtedness of the Company and its Subsidiaries or of Parent and its
Subsidiaries that is required as a result of the transactions contemplated by
this Agreement, and to pay all related fees and expenses. As of the date hereof,
Parent knows of no facts or circumstances that could reasonably be expected to
result in any of the conditions set forth in the Financing Agreements not being
satisfied.
ARTICLE 6
COVENANTS OF THE COMPANY
The Company agrees that:
SECTION 6.01. Conduct of the Company. From the date hereof until the
Effective Time, the Company and its Subsidiaries shall conduct their business
and operate their properties in the ordinary course consistent with past
practice and shall use their reasonable best efforts to preserve intact their
business organizations and relationships with third parties and to keep
available the services of their present officers and employees. Without limiting
the generality of the foregoing, except with the prior written consent of Parent
or as contemplated by this Agreement or as set forth in the Company Disclosure
Schedule, from the date hereof until the Effective Time neither the Company nor
any of its Subsidiaries shall:
(a) declare, set aside or pay any dividend or other distribution with
respect to any share of its capital stock, other than (x) customary quarterly
cash dividends on the Shares in an amount not to exceed $.188 per Share per
quarter and (y) dividends and other distributions paid by any Subsidiary of the
Company to the Company or any wholly-owned Subsidiary of the Company;
(b) repurchase, redeem or otherwise acquire any shares of capital stock or
other securities of, or other ownership interests in, the Company or any of its
Subsidiaries;
(c) issue, deliver, pledge, encumber or sell any Shares, or any securities
convertible into Shares, or any rights, warrants or options to acquire any
Shares, other than (i) issuances pursuant to stock-based awards or options that
are outstanding on the date hereof, as referenced in Section 4.05 of this
Agreement, or are granted in accordance with the following clause (ii), and (ii)
additional options to acquire Shares granted at fair market value or other
awards based on
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Shares under the terms of the Company's stock plans as in effect on the date
hereof in the ordinary course consistent with past practice, but in no event
shall such options and awards relate to more than 100,000 Shares, nor shall any
such options or awards be granted to any officers or directors of the Company or
contain any provisions relating to the acceleration of vesting that are
triggered by the execution of this Agreement or the consummation of the Merger;
(d) amend its Certificate of Incorporation or By-Laws or other comparable
organizational documents or amend any terms of the outstanding securities of the
Company or its Subsidiaries;
(e) merge or consolidate with any other Person, make any investment in any
other Person, including any joint venture, or acquire the stock or assets or
rights of any other Person other than (i) pursuant to existing contracts or
commitments as set forth in Section 6.01 of the Company Disclosure Schedule,
(ii) in each case in the ordinary course of business consistent with past
practice, purchases of raw materials, property, plant and equipment, services
and items used or consumed in the manufacturing process, (iii) capital
expenditures made pursuant to the Company's 2000 Capital Expenditure Program, a
copy of which has been made available to Parent, or (iv) transactions that are
in the ordinary course consistent with past practice and not individually in
excess of $5 million;
(f) sell, lease, license or otherwise dispose of any Subsidiary or any
assets, securities, rights or property other than (but for purposes of clauses
(i) - (iii), excluding matters addressed in Section 6.01(r)) (i) pursuant to
existing contracts or commitments as set forth in Section 6.01 of the Company
Disclosure Schedule, (ii) sales of inventory and equipment in the ordinary
course of business consistent with past practice, or (iii) transactions that are
in the ordinary course consistent with past practice and not individually in
excess of $10 million;
(g) incur any indebtedness (whether or not reflected on the Company's
balance sheet) for borrowed money, guarantee any such indebtedness, enter into
any new or amend existing facilities relating to indebtedness, issue or sell any
debt securities or warrants or other rights to acquire any debt securities or
guarantee any debt securities, other than any indebtedness, guarantee or
issuance incurred under current facilities (or renewals or replacements thereof
made in consultation with Parent) in the ordinary course of business consistent
with past practice in an aggregate amount not to exceed $4.6 billion outstanding
at any time or incurred between the Company and any of its wholly owned
Subsidiaries or between any of such wholly owned Subsidiaries;
(h) except as required under any collective bargaining agreement (whether
now or hereafter in effect) or under Section 2.05 or as may be mutually agreed
upon between Parent and the Company, enter into or adopt any new, or amend any
existing, Employee Arrangement, other than as required by law, except that, in
order to retain a current employee or recruit a new employee, in each case
consistent with past practice, the Company or its Subsidiaries may amend
Employee Arrangements with individual employees who are not officers or
directors of the
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Company if such amendments will result in not more than a de minimis additional
cost to the Company or its Subsidiaries and will not materially increase the
obligations of the Company or its Subsidiaries;
(i) except (i) as permitted under Section 6.01(h) or (ii) to the extent
required under any collective bargaining agreement (whether now or hereafter in
effect) or by written employment agreements existing on the date of this
Agreement and listed in the Company Disclosure Schedule, increase the
compensation payable or to become payable to its officers, directors or
employees, except for increases in the ordinary course of business consistent
with past practice in salaries or wages of employees (who are not executive
officers or directors of the Company or any of its Subsidiaries) that, in any
event, do not result in aggregate increases in such compensation by more than 2%
over the compensation in effect on the date of this Agreement;
(j) renew any collective bargaining agreement or enter into any new
collective bargaining agreement, if such renewed or new collective bargaining
agreement would materially increase the costs and/or obligations imposed on the
Company and its Subsidiaries thereunder;
(k) contribute any amount to any Employee Arrangement or any trust or
other arrangement funding any Employee Arrangement, except to the extent
required by the existing terms of such Employee Arrangement, trust or other
funding arrangement, by any collective bargaining agreement now or hereafter in
effect, by any written employment agreement existing on the date of this
Agreement and listed in the Company Disclosure Schedule, or by applicable law;
(l) (i) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other reorganization
or (ii) enter into any agreement or exercise any discretion providing for
acceleration of payment or performance as a result of a change of control of the
Company or its Subsidiaries;
(m) renew or enter into any non-compete, exclusivity or similar agreement
that would restrict or limit, in any material respect, the operations of the
Company or its Subsidiaries, or, after the Effective Time, of Parent or its
Subsidiaries;
(n) enter into, modify in any material respect, amend in any material
respect or terminate any (i) Contract or (ii) agreement having a term longer
than one year and having an aggregate value over its term greater than $10
million;
(o) (i) renew, enter into, amend or waive any material right under (A) any
contract with or loan to any Affiliate of the Company (other than its
wholly-owned Subsidiaries), except with respect to certain employment matters as
permitted under other covenants contained herein, (B) any distribution agreement
that is not terminable without penalty on thirty days notice, other than any
distribution agreement which involves or would be expected to involve monthly
sales not in excess of $25,000 and which is otherwise in the ordinary course of
business consistent with past
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practice or (C) any JV Agreement except as permitted under Section 6.01(e)(2) of
the Company Disclosure Schedule, or (ii) exercise any voting or veto rights
under the United Biscuits transaction documents (as set forth in Section 4.10(h)
of the Company Disclosure Schedule) with respect to acquisitions, dispositions
or the incurrence of additional indebtedness, other than (x) the refinancing
described in such documents and (y) the fulfillment of any existing commitments
of the Company and its Subsidiaries under such documents;
(p) settle or compromise any material litigation, or waive, release or
assign any material claims, including with respect to any Company Intellectual
Property Rights;
(q) adopt any change, other than as required by the SEC or by GAAP, in its
accounting policies, procedures or practices;
(r) sell, license, lease or otherwise dispose of any Company Intellectual
Property Rights or any brand or line of business, other than pursuant to
agreements in place on the date hereof and disclosed in Section 6.01(r) of the
Company Disclosure Schedule;
(s) agree or commit to do any of the foregoing.
SECTION 6.02. Stockholder Action by Written Consent; Information Material.
In lieu of calling a meeting of the Company's stockholders, the Company will
seek approval and adoption of this Agreement and the Merger by written consent
of NGH. Such approval will be sought so that, on the same Business Day as the
NGH Stockholder Meeting, such consent shall be obtained and shall be effective
(assuming that the NGH Stockholder Approval (as defined in the NGH Voting
Agreement) is obtained). Subject to Section 6.04(c), the Board of Directors of
the Company shall recommend approval and adoption of this Agreement and the
Merger by the Company's stockholders. In connection with such action by written
consent, the Company will (i) promptly prepare and file with the SEC, use its
best efforts to have cleared by the SEC and thereafter mail to its stockholders
as promptly as practicable the Company Information Statement, (ii) use its best
efforts to obtain the necessary approvals by its stockholders of this Agreement
and the transactions contemplated hereby and (iii) otherwise comply with all
legal requirements applicable to such approvals.
SECTION 6.03. Access to Information. From the date hereof until the
Effective Time and subject to applicable law and the Confidentiality Agreement
dated as of April 19, 2000 between NGH and Parent, as modified (the
"Confidentiality Agreement"), the Company shall (i) give Parent, its counsel,
financial advisors, auditors and other authorized representatives reasonable
access to the offices, properties, books and records of the Company and its
Subsidiaries, (ii) furnish to Parent, its counsel, financial advisors, auditors
and other authorized representatives such financial and operating data and other
information as such Persons may reasonably request, (iii) instruct the
employees, counsel, financial advisors, auditors and other authorized
representatives of the Company and its Subsidiaries to cooperate with Parent in
its investigation of the Company and its Subsidiaries and (iv) promptly advise
Parent orally and in writing of any
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fact or circumstance reasonably likely to have a Material Adverse Effect on the
Company. Any investigation pursuant to this Section shall be conducted in such
manner as not to interfere unreasonably with the conduct of the business of the
Company and its Subsidiaries. No information or knowledge obtained by Parent in
any investigation pursuant to this Section shall affect or be deemed to modify
any representation or warranty made by the Company hereunder.
SECTION 6.04. No Solicitation; Other Offers. (a) From the date hereof
until the earlier of the Effective Time and the termination of this Agreement in
accordance with Article 10, the Company and its Subsidiaries will not, and the
Company will use its reasonable best efforts to cause the officers, directors,
employees, investment bankers, consultants or other agents or representatives
(collectively, "Agents") of the Company and its Subsidiaries not to, directly or
indirectly, (i) solicit, initiate or encourage the submission of any Acquisition
Proposal, (ii) engage in discussions or negotiations with any Person concerning
an Acquisition Proposal, (iii) disclose any nonpublic information relating to
the Company or any of its Subsidiaries to any Person who, to the knowledge of
the Company, is considering making, or has made, an Acquisition Proposal or (iv)
take any other action to facilitate any inquiries or the making of any proposal
that constitutes or that could reasonably be expected to lead to an Acquisition
Proposal. The Company will notify Parent promptly (but in no event later than 24
hours) after receipt by the Company of any Acquisition Proposal or any request
for nonpublic information relating to the Company or any of its Subsidiaries by
any Person who, to the knowledge of the Company, is making, or has made, an
Acquisition Proposal. The Company shall promptly provide such notice orally and
in writing and shall identify the Person making, and all terms and conditions
of, any such Acquisition Proposal or request. The Company shall keep Parent
promptly informed of the status and details of any such Acquisition Proposal
(including amendments or proposed amendments) or request and any discussions or
negotiations pursuant to Section 6.04(b) and the Company shall provide to Parent
copies of any written communications between the Company and any Person making
the Acquisition Proposal. The Company shall, and the Company shall use
reasonable best efforts to cause its Subsidiaries and the Agents of the Company
and its Subsidiaries to, cease immediately and cause to be terminated all
activities, discussions and negotiations, if any, with any Persons conducted
prior to the date hereof with respect to any Acquisition Proposal. Nothing
contained in this Agreement shall prevent the Board of Directors of the Company
from complying with Rule 14d-9 or Rule 14e-2 under the 1934 Act with respect to
any Acquisition Proposal.
(b) Notwithstanding the foregoing, the Company may prior to receipt of the
NGH Stockholder Approval (as defined in the NGH Voting Agreement), negotiate or
otherwise engage in substantive discussions with, and furnish nonpublic
information to, any Person in response to an unsolicited Acquisition Proposal by
such Person if (i) the Company has complied with the terms of Section 6.04(a),
(ii) the Board of Directors of the Company determines in good faith that such
Acquisition Proposal is likely to result in a Superior Proposal and, after
consultation with outside legal counsel, that the failure to take such action
would constitute a breach of its fiduciary duties under applicable law, (iii)
such Person executes a confidentiality agreement with terms no less favorable to
the Company than those contained in the Confidentiality Agreement (except as to
the standstill provisions) and (iv) the Company shall have delivered to Parent
prior
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written notice advising Parent that it intends to take such action.
(c) The Board of Directors of the Company shall be permitted to withdraw,
or modify in a manner adverse to Parent, its recommendation to its stockholders
referred to in Section 6.02 hereof, but only if (i) the Company has complied
with the terms of Section 6.04(a), (ii) the Company has received an unsolicited
Acquisition Proposal which the Board of Directors determines in good faith
constitutes a Superior Proposal, (iii) the Board of Directors of the Company
determines in good faith, after consultation with outside legal counsel, that
the failure to take such action would constitute a breach of its fiduciary
duties under applicable law and (iv) the Company shall have delivered to Parent
a prior written notice advising Parent that it intends to take such action.
(d) For purposes of this Agreement:
"Acquisition Proposal" means any offer or proposal for a merger,
reorganization, consolidation, share exchange, business combination, or other
similar transaction involving the Company or any of its Subsidiaries or any
proposal or offer to acquire, directly or indirectly, more than 35% of the
voting securities of the Company, or a substantial portion of the assets of the
Company and its Subsidiaries taken as a whole, other than the transactions
contemplated by this Agreement.
"Superior Proposal" means any bona fide written Acquisition Proposal (i)
on terms that the Board of Directors of the Company determines in good faith
(after consultation with a financial advisor of nationally recognized reputation
and taking into account all the terms and conditions of the Acquisition Proposal
including the legal, financial and regulatory aspects of the proposal) provide
greater value to the Company's stockholders than the transaction contemplated
hereunder, as amended pursuant to Section 10.01(d) if applicable and (ii) that
is reasonably likely to be consummated by the Person making such Acquisition
Proposal.
(e) The Company will promptly provide to Parent any information regarding
the Company provided to any Person making an Acquisition Proposal that was not
previously provided to Parent.
SECTION 6.05. Third Party Standstill Agreements. During the period from
the date of this Agreement until the Effective Time or earlier termination of
this Agreement, the Company shall not terminate, amend, modify or waive any
provision of any confidentiality or standstill agreement relating to the making
of an Acquisition Proposal to which it or any of its Subsidiaries is a party
(other than any involving Parent or its Subsidiaries). During such period, the
Company agrees to use reasonable best efforts to enforce, to the fullest extent
permitted under applicable law, the provisions of any such agreements, including
seeking injunctions to prevent any breaches of such agreements and to enforce
specifically the terms and provisions thereof in any court of the United States
or any state thereof having jurisdiction.
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ARTICLE 7
COVENANTS OF PARENT
Parent agrees that:
SECTION 7.01. Confidentiality. Prior to the Effective Time and after any
termination of this Agreement, Parent will hold, and will use its reasonable
best efforts to cause its officers, directors, employees, accountants, counsel,
consultants, advisors and agents to hold, in confidence all documents and
information concerning the Company or any of its Subsidiaries furnished to
Parent or its Affiliates in connection with the transactions contemplated by
this Agreement in accordance with the terms of the Confidentiality Agreement.
SECTION 7.02. Obligations of Merger Subsidiary. Parent will take all
action necessary to cause Merger Subsidiary to perform its obligations under
this Agreement and to consummate the Merger on the terms and conditions set
forth in this Agreement.
SECTION 7.03. Director and Officer Liability. Parent shall cause the
Surviving Corporation, and the Surviving Corporation hereby agrees, to do the
following:
(a) For six years after the Effective Time, the Surviving Corporation
shall indemnify and hold harmless each present and former officer and director
of the Company (each an "Indemnified Person") in respect of acts or omissions
occurring at or prior to the Effective Time to the fullest extent permitted by
Delaware Law or any other applicable laws or provided under the Company's
certificate of incorporation and bylaws in effect on the date hereof, provided
that such indemnification shall be subject to any limitation imposed from time
to time under applicable law.
(b) The Surviving Corporation shall pay all expenses, including reasonable
fees and expenses of counsel, that an Indemnified Person may incur in enforcing
the indemnity and other obligations provided for in this Section 7.03. The
Surviving Corporation shall be entitled to assume the defense of any action,
suit, investigation or proceeding and the Surviving Corporation shall not be
liable to any Indemnified Person for any legal expenses of separate counsel or
any other expenses subsequently incurred by such Indemnified Person in
connection with the defense thereof, except that if the Surviving Corporation
elects not to assume such defense or counsel for the Indemnified Person advises
that there are issues that raise conflicts of interest between the Surviving
Corporation and the Indemnified Person, the Indemnified Person may retain
counsel reasonably satisfactory to the Surviving Corporation, and the Surviving
Corporation shall pay all reasonable fees and expenses of such counsel for the
Indemnified Person promptly as statements therefor are received; provided that
the Surviving Corporation shall not be liable for the fees of more than one
counsel for all Indemnified Persons, other than local counsel, unless a conflict
of interest shall be caused thereby, and provided further that the Surviving
Corporation shall not be liable for any settlement effected without its written
consent (which consent shall not be unreasonably withheld).
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(c) For six years after the Effective Time, the Surviving Corporation
shall provide officers' and directors' liability insurance in respect of acts or
omissions occurring prior to the Effective Time covering each such Indemnified
Person currently covered by the Company's officers' and directors' liability
insurance policy on terms with respect to coverage and amount no less favorable
than those of such policy in effect on the date hereof; provided if the
aggregate annual premiums for such insurance at any time during such period
shall exceed 200% of the per annum rate of premium paid by the Company and its
Subsidiaries as of the date hereof for such insurance, then Parent shall, or
shall cause its Subsidiaries to, provide only such coverage as shall then be
available at an annual premium equal to 200% of such rate.
(d) If the Surviving Corporation or any of its successors or assigns (i)
consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger,
or (ii) transfers or conveys all or substantially all of its properties and
assets to any Person, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of the
Surviving Corporation, as the case may be, shall assume the obligations set
forth in this Section 7.03.
(e) The rights of each Indemnified Person under this Section 7.03 shall be
in addition to any rights such Person may have under the certificate of
incorporation or bylaws of the Company or any of its Subsidiaries, under
Delaware Law or any other applicable laws or under any agreement of any
Indemnified Person with the Company or any of its Subsidiaries. These rights
shall survive consummation of the Merger and are intended to benefit, and shall
be enforceable by, each Indemnified Person.
SECTION 7.04. Employee Matters. (a) For a period of two years after the
Effective Time, the Surviving Corporation will provide employee compensation and
benefits for the benefit of current and former employees of the Company and its
Subsidiaries, other than employees represented by collective bargaining units
and employees with which the Company or NGH have entered into employment
agreements (the compensation and benefits for which such employees shall be in
accordance with their respective collective bargaining agreement or employment
agreement), ("Company Employees") that are in the aggregate not less favorable
to such employees than the Employee Arrangements. The foregoing notwithstanding,
in the event the employment of any Company Employee is terminated other than for
cause during the two-year period beginning at the Effective Time, such employee
shall receive severance or separation benefits in an aggregate amount at least
equal to the severance or separation benefits such employee would have received
under such circumstances under the Employee Arrangements listed in the Company
Disclosure Schedule.
(b) The Surviving Corporation shall give Company Employees full credit for
purposes of eligibility, vesting and, for purposes of vacation and severance
benefits only, benefit accrual under any such plans or arrangements maintained
by the Surviving Corporation pursuant to Section 7.04(a) for such employees'
service recognized for such purposes under the Employee
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Arrangements.
(c) As soon as practicable after the date of this Agreement, the Company
shall take all steps necessary or appropriate to (i) delete from the Company's
Deferred Compensation Plan and all other Employee Arrangements (other than
Employee Plans that are qualified under Section 401(a) of the Code and contracts
currently in effect with individual employees with respect to benefits accrued
as of the date of this Agreement) providing any supplemental or excess
retirement benefits or other deferred compensation (whether elective or
nonelective) any and all provisions limiting or eliminating the ability to amend
or terminate such plans after a "change of control" or similar events, except
for such limitations that merely prevent the reduction or elimination of rights
and benefits that have already vested or accrued thereunder, and (ii) ensure
that the provision for employer matching contributions under the Company's
Deferred Compensation Plan does not apply to amounts deferred under that plan
that are payable as a result of a "change of control" or otherwise in connection
with the consummation of the transactions contemplated hereby, and to eliminate
such provision effective not later than the Effective Time.
(d) Nothing contained in this Agreement shall be construed to prevent the
termination of employment of any Company Employee or the amendment or
termination of any particular Employee Arrangement to the extent permitted by
its terms as in effect immediately before the Effective Time.
ARTICLE 8
COVENANTS OF PARENT AND THE COMPANY
The parties hereto agree that:
SECTION 8.01. Reasonable Best Efforts. Subject to the terms and conditions
of this Agreement, Company and Parent will use their reasonable best efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement. In furtherance and
not in limitation of the foregoing, each of Parent and Company agrees (i) to
make an appropriate filing of a Notification and Report Form pursuant to the HSR
Act (and to make such other filings as are required under laws, rules and
regulations in foreign jurisdictions governing antitrust or merger control
matters) with respect to the transactions contemplated hereby as promptly as
practicable after the date hereof and to supply as promptly as practicable any
additional information and documentary material that may be requested pursuant
to the HSR Act (or pursuant to such foreign laws, rules or regulations) and (ii)
to take all other actions necessary to cause the expiration or termination of
the applicable waiting periods under the HSR Act (and to obtain the necessary
approvals under such foreign laws, rules or regulations) as soon as practicable,
including, in the case of Parent, entering into any required settlement,
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undertaking, consent decree or stipulation with any Governmental Entity or
implementing any required divestiture, hold separate or similar transaction with
respect to any assets; provided, that, Parent shall not be required to agree,
and the Company shall not agree without Parent's consent, to waive any
substantial rights or to accept any substantial limitation on its operations or
to dispose of any significant assets in connection with obtaining any such
consent or authorization unless such waiver, limitation or disposition would not
reasonably be expected to have a Material Adverse Effect on the Company, Parent
or Parent's food business, and provided, further, that at Parent's written
request, the Company shall agree to any such waiver, limitation or disposal,
which agreement may, at the Company's option, be conditioned upon and effective
only as of the Effective Time.
SECTION 8.02. Certain Filings. The Company and Parent shall cooperate with
one another and use their best efforts (i) in connection with the preparation of
the Company Information Statement, (ii) in determining whether any action by or
in respect of, or filing with, any governmental body, agency, official, or
authority is required, or any actions, consents, approvals or waivers are
required to be obtained from parties to any material contracts, in connection
with the consummation of the transactions contemplated by this Agreement and
(iii) in taking such actions or making any such filings, furnishing information
required in connection therewith or with the Company Information Statement and
seeking timely to obtain any such actions, consents, approvals or waivers.
SECTION 8.03. Public Announcements. Parent and the Company will consult
with each other before issuing any press release or making any public statement
with respect to this Agreement or the transactions contemplated hereby and,
except as may be required by applicable law or any listing agreement with any
national securities exchange, will not issue any such press release or make any
such public statement prior to such consultation.
SECTION 8.04. Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or Merger
Subsidiary, any deeds, bills of sale, assignments or assurances and to take and
do, in the name and on behalf of the Company or Merger Subsidiary, any other
actions and things to vest, perfect or confirm of record or otherwise in the
Surviving Corporation any and all right, title and interest in, to and under any
of the rights, properties or assets of the Company acquired or to be acquired by
the Surviving Corporation as a result of, or in connection with, the Merger.
SECTION 8.05. Notices of Certain Events. Each of the Company and Parent
shall promptly notify the other of:
(a) any notice or other communication from any Person alleging that the
consent of such Person is or may be required in connection with the transactions
contemplated by this Agreement;
(b) any notice or other communication from any Governmental Entity in
connection
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with the transactions contemplated by this Agreement; and
(c) any actions, suits, claims, investigations or proceedings commenced
or, to its knowledge, threatened against, relating to or involving or otherwise
affecting the Company, Parent or any of their respective Subsidiaries that
relate to the consummation of the transactions contemplated by this Agreement.
ARTICLE 9
CONDITIONS TO THE MERGER
SECTION 9.01. Conditions to Obligations of Each Party. The obligations of
the Company, Parent and Merger Subsidiary to consummate the Merger are subject
to the satisfaction of the following conditions:
(a) this Agreement shall have been approved and adopted by the
stockholders of the Company in accordance with Delaware Law;
(b) no provision of any applicable law or regulation and no judgment,
temporary restraining order, preliminary or permanent injunction, order, decree
or other legal restraint or prohibition shall prohibit the consummation of the
Merger;
(c) any applicable waiting period under the HSR Act relating to the Merger
shall have expired or been terminated; and
(d) Parent and the Company shall have received in respect of the Merger
and any matters arising therefrom confirmation by way of a decision from the
Commission of the European Communities under Regulation No. 4064/89 (with or
without the initiation of proceedings under Article 6(1)(c) thereof) that the
Merger and any matters arising therefrom are compatible with the common market.
SECTION 9.02. Conditions to the Obligations of Parent and Merger
Subsidiary. The obligations of Parent and Merger Subsidiary to consummate the
Merger are subject to the satisfaction of the following further conditions:
(a) the Company shall have performed in all material respects all of its
obligations hereunder required to be performed by it at or prior to the
Effective Time;
(b) except with respect to the representations and warranties of the
Company contained in Section 4.10(a) of this Agreement, the representations and
warranties of the Company contained in this Agreement and in any certificate or
other writing delivered by the Company pursuant hereto, disregarding all
qualifications and exceptions contained therein relating to
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materiality or Material Adverse Effect or any similar standard or qualification,
shall be true in all material respects at and as of the Effective Time as if
made at and as of such time (or, if given as of a specific date, at and as of
such date) with only such exceptions as would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on the
Company;
(c) the representations and warranties of the Company contained in Section
4.10(a) of this Agreement shall be true at and as of the Effective Time as if
made at and as of such time;
(d) Parent shall have received a certificate signed by an executive of the
Company to the foregoing effect; and
(e) all consents or approvals of any Governmental Entity required in
connection with the consummation of the transactions contemplated hereby shall
have been obtained, except for such consents or approvals which, if not
obtained, would not, individually or in the aggregate, have a Material Adverse
Effect on the Company;
SECTION 9.03. Conditions to the Obligations of the Company. The
obligations of the Company to consummate the Merger are subject to the
satisfaction of the following further conditions:
(a) each of Parent and Merger Subsidiary shall have performed in all
material respects all of its obligations hereunder required to be performed by
it at or prior to the Effective Time;
(b) the representations and warranties of Parent and Merger Subsidiary
contained in this Agreement and in any certificate or other writing delivered by
Parent or Merger Subsidiary pursuant hereto, disregarding all qualifications and
exceptions contained therein relating to materiality or Material Adverse Effect
or any similar standard or qualification, shall be true in all material respects
at and as of the Effective Time as if made at and as of such time (or, if given
as of a specific date, at and as of such date) with only such exceptions as
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on Parent; and
(c) the Company shall have received a certificate signed by an executive
officer of Parent to the foregoing effect.
ARTICLE 10
TERMINATION
SECTION 10.01. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time (notwithstanding
any approval of this Agreement by the stockholders of the Company):
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(a) by mutual written agreement of the Company and Parent;
(b) by either the Company or Parent, if:
(i) the Merger has not been consummated on or before April 30, 2001,
provided that the right to terminate this Agreement pursuant to this
Section 10.01(b)(i) shall not be available to any party whose breach of
any provision of this Agreement results in the failure of the Merger to be
consummated by such time;
(ii) there shall be any law or regulation that makes consummation of
the Merger illegal or otherwise prohibited or any judgment, injunction,
order or decree of any Governmental Entity enjoining Company or Parent
from consummating the Merger is entered and such judgment, injunction,
decree or order shall have become final and nonappealable;
(iii) this Agreement shall not have been approved and adopted in
accordance with Delaware Law by the Company's stockholders by reason of
the failure to obtain the required vote of NGH's stockholders for approval
of the sale of NGH's Shares pursuant this Agreement at a duly held meeting
(including any adjournments thereof) of NGH's stockholders (the "NGH
Stockholder Meeting"); or
(iv) the NGH Voting Agreement shall have terminated pursuant to
Section 7(b) or 7(c) thereof;
(c) by Parent, if
(i) the Board of Directors of the Company shall have failed to
recommend or shall have withdrawn, or modified in a manner adverse to
Parent, its approval or recommendation of this Agreement or the Merger,
shall have approved or recommended a Superior Proposal, or shall have
resolved to do any of the foregoing,
(ii) the Company shall have entered into, or publicly announced its
intention to enter into, a definitive agreement or an agreement in
principle with respect to a Superior Proposal; or
(iii) the Company shall have (1) failed to perform in any material
respect any material obligation or to comply in any material respect with
any material agreement or covenant of the Company to be performed or
complied with by it under this Agreement or (2) breached any of its
representations or warranties such that the condition set forth in Section
9.02(b) or 9.02(c) cannot be satisfied, which failure under clause (1) or
(2) shall not be cured within 15 Business Days of notice from Parent (or
such longer period during which the Company exercises reasonable best
efforts to cure);
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(d) by the Company, if the Board of Directors of the Company authorizes
the Company, subject to complying with the terms of this Agreement, to enter
into a written agreement concerning a Superior Proposal, provided however that
(i) the Company shall have complied with Section 6.04, (ii) the Company shall
have given Parent at least three Business Days written prior notice of its
intention to terminate the Agreement, attaching a description of all material
terms and conditions of the Superior Proposal to such notice, (iii) during such
three Business Days or greater period, the Company engages in good faith
negotiations with Parent with respect to such changes as Parent may propose to
the terms of the Merger and this Agreement, (iv) Parent does not make prior to
such termination of this Agreement a definitive, binding offer which the Board
of Directors of the Company determines, in good faith after consultation with
its financial advisors, is at least as favorable to the stockholders of the
Company as the Superior Proposal, and (v) the Company prior to such termination
pursuant to this Section 10.01(d) pays to Parent in immediately available funds
the fee required to be paid pursuant to Section 11.04(b). The Company agrees to
notify Parent promptly if its intention to enter into a written agreement
referred to in its notification shall change at any time after giving such
notification;
(e) by the Company, if Parent or Merger Subsidiary shall have (i) failed
to perform in any material respect any material obligation or to comply in any
material respect with any material agreement or covenant of Parent or Merger
Subsidiary to be performed or complied with by it under this Agreement or (ii)
breached any of such party's representations or warranties contained in this
Agreement such that the condition set forth in Section 9.03(b) cannot be
satisfied, which failure or breach described in such clause (i) or (ii) shall
not be cured within 15 Business Days of notice from the Company (or such longer
period during which Parent or Merger Subsidiary exercises reasonable best
efforts to cure); or
(f) by either the Company or Parent, if since the date of this Agreement,
there has been a change in the Code, final or temporary Treasury Regulations
promulgated under Section 355(e) or Section 358(g), published pronouncements of
the Internal Revenue Service having the same force and effect as final or
temporary Treasury Regulations promulgated under Section 355(e) or Section
358(g), case law applying Section 355(e) or Section 358(g), or other relevant
binding legal authority relating to Section 355(e) or Section 358(g)
(collectively "Change in Tax Law"), that (i) would apply to a transaction
consummated subsequent to such Change in Tax Law notwithstanding the existence
of a binding written agreement with respect to such transaction, and (ii) would
reasonably be expected to result in (A) the imposition of tax on gain realized
with respect to the stock of the Company arising out of the distribution on May
18, 1999 by R.J. Reynolds Tobacco Holdings, Inc. ("RJR") to NGH of all of the
outstanding Class B Shares or on gain realized with respect to the stock of RJR
arising out of the distribution on June 14, 1999 by NGH to the holders of its
common stock of all of the outstanding common stock of RJR, or (B) a material
increase in the tax liability of NGH resulting from the Merger as compared to
the tax liability that would have arisen in the absence of such Change in Tax
Law.
The party desiring to terminate this Agreement pursuant to this Section 10.01
(other than
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pursuant to Section 10.01(a)) shall give notice of such termination to the other
party.
SECTION 10.02. Effect of Termination. If this Agreement is terminated
pursuant to Section 10.01, this Agreement shall become void and of no effect
with no liability on the part of any party (or any stockholder, director,
officer, employee, agent, consultant or representative of such party) to the
other party hereto, provided that, if such termination shall result from the
willful (i) failure of either party to fulfill a condition to the performance of
the obligations of the other party or (ii) failure of either party to perform a
covenant hereof, such party shall be fully liable for any and all liabilities
and damages incurred or suffered by the other party as a result of such failure.
The provisions of Sections 7.01, 11.04, 11.06, 11.07 and 11.08 shall survive any
termination hereof pursuant to Section 10.01.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile transmission) and
shall be given,
if to Parent or Merger Subsidiary, to:
Philip Morris Companies Inc.
120 Park Avenue
New York, New York 10017
Attention: Charles R. Wall
Fax: (917) 663-5817
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Martin Lipton
Andrew J. Nussbaum
Fax: (212) 403-2000
and
Hunton & Williams
200 Park Avenue
New York, New York 10166
Attention: Jerry E. Whitson
Fax: (212) 309-1100
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if to the Company, to:
Nabisco Holdings Corp.
7 Campus Drive
Parsippany, New Jersey 07054
Attention: James A. Kirkman III
Fax: (973) 539-9150
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: William L. Rosoff
Fax: (212) 450-4800
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5 p.m. in the place of
receipt and such day is a Business Day in the place of receipt. Otherwise, any
such notice, request or communication shall be deemed not to have been received
until the next succeeding Business Day in the place of receipt.
SECTION 11.02. Non-Survival of Representations and Warranties. The
representations and warranties contained herein and in any certificate or other
writing delivered pursuant hereto shall not survive the Effective Time or the
termination of this Agreement.
SECTION 11.03. Amendments; No Waivers. (a) Any provision of this Agreement
may be amended or waived prior to the Effective Time if, but only if, such
amendment or waiver is in writing and is signed, in the case of an amendment, by
each party to this Agreement or, in the case of a waiver, by each party against
whom the waiver is to be effective, provided that, after the adoption of this
Agreement by the stockholders of the Company and without their further approval,
no such amendment or waiver shall reduce the amount or change the kind of
consideration to be received in exchange for the Shares.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 11.04. Expenses. (a) Except as otherwise provided in this Section,
all costs and expenses incurred in connection with this Agreement shall be paid
by the party incurring such
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cost or expense.
(b) If:
(i) the Company shall terminate this Agreement pursuant to Section
10.01(d);
(ii) Parent shall terminate this Agreement (A) pursuant to Section
10.01(c)(i) or 10.01(c)(ii), or (B) pursuant to Section 10.01(c)(iii)
(other than as a result of a breach of representation not caused by action
(including breach of a covenant contained herein) of the Company after the
date hereof and not capable of being cured using reasonable best efforts)
if, in the case of this clause (B), at such time a third party shall have
made an Acquisition Proposal and within nine months after termination of
this Agreement the Company enters into a definitive agreement in respect
of any Acquisition Proposal or such a transaction is consummated; or
(iii) either the Company or Parent shall terminate this Agreement
pursuant to Section 10.01(b)(iii) or 10.01(b)(iv) and (A) prior to the NGH
Stockholder Meeting a third party or the Company shall have publicly
announced an Acquisition Proposal and (B) within nine months after
termination of this Agreement the Company enters into a definitive
agreement in respect of any Acquisition Proposal or such a transaction is
consummated;
then in any case as described in clause (i), (ii) or (iii), the Company shall
pay to Parent (by wire transfer of immediately available funds not later than
the date of termination of this Agreement or, in the case of clauses (ii)(B) and
(iii), the earlier of the date of such definitive agreement or consummation of
such a transaction) an amount equal to $445 million, less any amounts previously
paid pursuant to Section 11.04(c); provided however that such amount shall be
reduced by the amount of any fee paid by NGH to Parent pursuant to Section 8(b)
of the NGH Voting Agreement. The Company shall be entitled to deduct and
withhold from any payments made to Parent under this Section 11.04(b) such
amounts as may be required to be deducted or withheld therefrom under the Code
or under any applicable provisions of state or local tax law. To the extent such
amounts are so deducted or withheld, such amounts shall be treated for purposes
of this Section 11.04(b) as having been paid to Parent.
(c) If:
(i) Parent shall terminate this Agreement pursuant to Section
10.01(c)(iii) and at such time a third party shall have made an
Acquisition Proposal; or
(ii) the Company or Parent shall terminate this Agreement pursuant
to Section 10.01(b)(iii);
then the Company shall within five Business Days pay to Parent in immediately
available funds up to $30 million as reimbursement for documented expenses
incurred in connection with the
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negotiation and execution of this Agreement.
(d) If the Company shall terminate this Agreement pursuant to Section
10.01(e), then Parent shall within five Business Days pay to the Company in
immediately available funds up to $30 million as reimbursement for documented
expenses incurred in connection with the negotiation and execution of this
Agreement.
SECTION 11.05. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto, except that Parent or Merger
Subsidiary may transfer or assign, in whole or from time to time in part, to one
or more of its Affiliates, the right to enter into the transactions contemplated
by this Agreement, but no such transfer or assignment will relieve Parent or
Merger Subsidiary of its obligations hereunder.
SECTION 11.06. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of Delaware, without regard to
the conflicts of law rules of such state.
SECTION 11.07. Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby may be brought in
any federal court located in the State of Delaware or any Delaware state court,
and each of the parties hereby consents to the jurisdiction of such courts (and
of the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
form. Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing, each party agrees that service of process
on such party as provided in Section 11.01 shall be deemed effective service of
process on such party.
SECTION 11.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 11.09. Counterparts; Effectiveness; Benefit. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
Except as provided in Section 7.03, no provision of this Agreement is intended
to confer any rights, benefits, remedies, obligations, or liabilities hereunder
upon any
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Person other than the parties hereto and their respective successors and
assigns.
SECTION 11.10. Entire Agreement. This Agreement and the Confidentiality
Agreement constitute the entire agreement between the parties with respect to
the subject matter of this Agreement and supersedes all prior agreements and
understandings, both oral and written, between the parties with respect to the
subject matter of this Agreement.
SECTION 11.11. Captions. The captions herein are included for convenience
of reference only and shall be ignored in the construction or interpretation
hereof.
SECTION 11.12. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
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 such
a determination, 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 in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent possible.
SECTION 11.13. Specific Performance. The parties hereto agree that
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled, without posting a bond or similar indemnity, to an injunction or
injunctions to prevent breaches of this Agreement or to enforce specifically the
performance of the terms and provisions hereof in any federal court located in
the State of Delaware or any Delaware state court, in addition to any other
remedy to which they are entitled at law or in equity.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
NABISCO HOLDINGS CORP.
By: /s/ James M. Kilts
----------------------------------------
Name: James M. Kilts
Title: President and Chief Executive
Officer
PHILIP MORRIS COMPANIES INC.
By: /s/ Louis Camilleri
----------------------------------------
Name: Louis Camilleri
Title: Senior Vice President and Chief
Financial Officer
STRIKE ACQUISITION CORP.
By: /s/ Nancy DeLisi
----------------------------------------
Name: Nancy DeLisi
Title: President
43
