SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of Earliest Event Reported): July 2, 1996
NYNEX CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation)
1-8608 13-3180909
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(Commission File Number) (I.R.S. Employer
Identification No.)
1095 Avenue of the Americas
New York, New York 10036
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(Address of Principal Executive Offices) (Zip Code)
(212) 395-2121
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
NYNEX Corporation entered into an Amended and Restated
Agreement and Plan of Merger ("Merger Agreement"), dated as
of April 21, 1996, as amended and restated as of July 2,
1996, by and between NYNEX Corporation, a Delaware
corporation ("NYNEX"), and Bell Atlantic Corporation, a
Delaware corporation ("Bell Atlantic"). Reference is made
to the Merger Agreement, which is attached as Exhibit 2 and
is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
2 Amended and Restated Agreement and Plan of Merger, dated as
of April 21, 1996, as amended and restated as of July 2,
1996, by and between NYNEX Corporation and Bell Atlantic
Corporation.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
NYNEX Corporation
Date: July 3, 1996 /s/ Frederic V. Salerno
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By: Frederic V. Salerno
Vice Chairman and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
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2 Amended and Restated Agreement and Plan of
Merger, dated as of April 21, 1996, as
amended and restated as of July 2, 1996, by
and between NYNEX Corporation and Bell
Atlantic Corporation.
NYFS10...:\86\65886\0015\2475\FRM7026L.380
AMENDED AND RESTATED
AGREEMENT AND PLAN
OF MERGER
DATED AS OF
APRIL 21, 1996
BY AND BETWEEN
NYNEX CORPORATION
AND
BELL ATLANTIC CORPORATION
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TABLE OF CONTENTS
Page
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ARTICLE I - THE MERGER..................................................... 1
SECTION 1.1 - Formation of Merger Subsidiary......................... 1
SECTION 1.2 - The Merger............................................. 2
SECTION 1.3 - Effective Time......................................... 2
SECTION 1.4 - Effect of the Merger................................... 2
SECTION 1.5 - Subsequent Actions..................................... 2
SECTION 1.6 - Certificate of Incorporation; Bylaws; Directors and
Officers of Surviving Corporation..................... 3
ARTICLE II - EFFECT ON STOCK OF THE SURVIVING
CORPORATION AND THE MERGED CORPORATION..................................... 3
SECTION 2.1 - Conversion of Securities............................... 3
SECTION 2.2 - Conversion of Shares................................... 3
SECTION 2.3 - Cancellation of Treasury Shares........................ 4
SECTION 2.4 - Conversion of Common Stock of the Merged Corporation into
Common Stock of the Surviving Corporation............. 4
SECTION 2.5 - Exchange of Shares Other Than Treasury Shares.......... 4
SECTION 2.6 - Transfer Books......................................... 5
SECTION 2.7 - No Fractional Share Certificates....................... 6
SECTION 2.8 - Options to Purchase NYNEX Common Stock................. 7
SECTION 2.9 - Restricted Stock....................................... 8
SECTION 2.10 - Certain Adjustments................................... 8
ARTICLE III - CERTAIN MATTERS RELATED TO BELL ATLANTIC..................... 8
SECTION 3.1 - Certificate of Incorporation and Bylaws of Bell Atlantic 8
SECTION 3.2 - Dividends.............................................. 8
SECTION 3.3 - Headquarters........................................... 9
SECTION 3.4 - Corporate Identity..................................... 9
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF NYNEX....................... 9
SECTION 4.1 - Organization and Qualification; Subsidiaries........... 9
SECTION 4.2 - Certificate of Incorporation and Bylaws................ 9
SECTION 4.3 - Capitalization......................................... 9
SECTION 4.4 - Authority Relative to this Agreement................... 11
SECTION 4.5 - No Conflict; Required Filings and Consents............. 11
SECTION 4.6 - SEC Filings; Financial Statements...................... 12
SECTION 4.7 - Absence of Certain Changes or Events................... 12
SECTION 4.8 - Litigation............................................. 13
SECTION 4.9 - No Violation of Law.................................... 13
SECTION 4.10 - Joint Proxy Statement................................. 14
SECTION 4.11 - Employee Matters; ERISA............................... 14
SECTION 4.12 - Labor Matters......................................... 16
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SECTION 4.13 - Environmental Matters................................. 17
SECTION 4.14 - Board Action; Vote Required; Amendment of Rights
Agreement; Applicability of Section 203.............. 20
SECTION 4.15 - Opinion of Financial Advisor.......................... 20
SECTION 4.16 - Brokers............................................... 21
SECTION 4.17 - Tax Matters........................................... 21
SECTION 4.18 - Intellectual Property................................. 22
SECTION 4.19 - Insurance............................................. 22
SECTION 4.20 - Ownership of Securities............................... 22
SECTION 4.21 - Certain Contracts..................................... 22
SECTION 4.22 - Certain Regulatory Matters............................ 23
SECTION 4.23 - SFAS 106 Matters...................................... 23
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF BELL ATLANTIC................ 24
SECTION 5.1 - Organization and Qualification; Subsidiaries........... 24
SECTION 5.2 - Certificate of Incorporation and Bylaws................ 24
SECTION 5.3 - Capitalization......................................... 24
SECTION 5.4 - Authority Relative to this Agreement................... 25
SECTION 5.5 - No Conflict; Required Filings and Consents............. 26
SECTION 5.6 - SEC Filings; Financial Statements...................... 27
SECTION 5.7 - Absence of Certain Changes or Events................... 27
SECTION 5.8 - Litigation............................................. 27
SECTION 5.9 - No Violation of Law.................................... 28
SECTION 5.10 - Joint Proxy Statement................................. 28
SECTION 5.11 - Employee Matters; ERISA............................... 29
SECTION 5.12 - Labor Matters......................................... 31
SECTION 5.13 - Environmental Matters................................. 31
SECTION 5.14 - Board Action; Vote Required; Redemption of Rights;
Applicability of Section 203......................... 33
SECTION 5.15 - Opinion of Financial Advisor.......................... 34
SECTION 5.16 - Brokers............................................... 34
SECTION 5.17 - Tax Matters........................................... 34
SECTION 5.18 - Intellectual Property................................. 35
SECTION 5.19 - Insurance............................................. 35
SECTION 5.20 - Ownership of Securities............................... 35
SECTION 5.21 - Certain Contracts..................................... 36
SECTION 5.22 - Certain Regulatory Matters............................ 36
ARTICLE VI - CONDUCT OF INDEPENDENT BUSINESSES PENDING THE MERGER.......... 37
SECTION 6.1 - Transition Planning.................................... 37
SECTION 6.2 - Conduct of Business in the Ordinary Course............. 37
SECTION 6.3 - No Solicitation........................................ 41
SECTION 6.4 - Subsequent Financial Statements........................ 42
SECTION 6.5 - Control of Operations.................................. 42
ARTICLE VII - ADDITIONAL AGREEMENTS........................................ 42
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SECTION 7.1 - Joint Proxy Statement and the Registration Statement... 42
SECTION 7.2 - NYNEX and Bell Atlantic Stockholders' Meetings and
Consummation of the Merger............................ 43
SECTION 7.3 - Additional Agreements.................................. 44
SECTION 7.4 - Notification of Certain Matters........................ 45
SECTION 7.5 - Access to Information.................................. 45
SECTION 7.6 - Public Announcements................................... 45
SECTION 7.7 - Cooperation............................................ 45
SECTION 7.8 - Indemnification, Directors' and Officers' Insurance.... 46
SECTION 7.9 - Employee Benefit Plans................................. 46
SECTION 7.10 - Employment Arrangements............................... 47
SECTION 7.11 - Stock Exchange Listing................................ 48
SECTION 7.12 - Post-Merger Bell Atlantic Board of Directors.......... 48
SECTION 7.13 - No Shelf Registration................................. 49
SECTION 7.14 - Affiliates............................................ 49
SECTION 7.15 - Blue Sky.............................................. 50
SECTION 7.16 - Pooling of Interests.................................. 50
SECTION 7.17 - Tax-Free Reorganization............................... 50
ARTICLE VIII - CONDITIONS TO MERGER........................................ 50
SECTION 8.1 - Conditions to Obligations of Each Party to Effect the
Merger................................................ 50
SECTION 8.2 - Additional Conditions to Obligations of NYNEX.......... 52
SECTION 8.3 - Additional Conditions to Obligations of Bell Atlantic.. 53
ARTICLE IX - TERMINATION, AMENDMENT AND WAIVER............................. 54
SECTION 9.1 - Termination............................................ 54
SECTION 9.2 - Effect of Termination.................................. 56
SECTION 9.3 - Amendment.............................................. 57
SECTION 9.4 - Waiver................................................. 58
ARTICLE X - GENERAL PROVISIONS............................................. 58
SECTION 10.1 - Non-Survival of Representations, Warranties and
Agreements........................................... 58
SECTION 10.2 - Notices............................................... 58
SECTION 10.3 - Expenses.............................................. 59
SECTION 10.4 - Certain Definitions................................... 60
SECTION 10.5 - Headings.............................................. 62
SECTION 10.6 - Severability.......................................... 62
SECTION 10.7 - Entire Agreement; No Third-Party Beneficiaries........ 62
SECTION 10.8 - Assignment............................................ 62
SECTION 10.9 - Governing Law......................................... 62
SECTION 10.10 - Counterparts......................................... 62
APPENDIX I-A Form of Bell Atlantic Certificate of Incorporation
APPENDIX I-B Form of Bell Atlantic Bylaws
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AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER,dated as of April
21, 1996, ("the date hereof"), as amended and restated by the parties as of July
2, 1996 (this "Agreement"), between NYNEX Corporation, a Delaware corporation
("NYNEX"), and Bell Atlantic Corporation, a Delaware corporation ("Bell
Atlantic").
W I T N E S S E T H
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WHEREAS, the Boards of Directors of NYNEX and Bell Atlantic have
each determined that it is in the best interests of their respective
stockholders that NYNEX and Bell Atlantic enter into a business combination
under which a subsidiary of Bell Atlantic will merge with and into NYNEX
pursuant to the Merger (as defined in Section 1.1 hereof) and Bell Atlantic and
NYNEX desire to enter into the "merger of equals" transaction contemplated
hereby, and, in connection therewith, to make certain representations,
warranties and agreements in connection with the Merger;
WHEREAS, the Boards of Directors of NYNEX and Bell Atlantic have
each determined that the Merger and the other transactions contemplated hereby
are consistent with, and in furtherance of, their respective business strategies
and goals and have each approved the Merger upon the terms and conditions set
forth herein;
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall constitute a tax-free reorganization under Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, for accounting purposes, it is intended that the Merger
shall be accounted for as a pooling of interests under United States generally
accepted accounting principles ("GAAP");
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE I - THE MERGER
SECTION 1.1 - Formation of Merger Subsidiary. Bell Atlantic will
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form under the Delaware General Corporation Law ("Delaware Law") a wholly-owned
subsidiary (the "Merger Subsidiary") to be merged into NYNEX (the "Merger") as
set forth in Section 1.2 hereof. The Merger Subsidiary will be formed solely to
facilitate the Merger and will conduct no business or activity other than in
connection with the Merger. Bell Atlantic will (i) cause the Merger Subsidiary
to execute and deliver a joinder to this Agreement pursuant to Section 251 of
Delaware Law, and (ii) execute a formal written consent under Section 228 of
Delaware Law as the sole stockholder of the Merger Subsidiary, approving the
execution, delivery and performance of this Agreement by the Merger Subsidiary.
<PAGE>
SECTION 1.2 - The Merger. At the Effective Time (as defined in
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Section 1.3 hereof) and subject to and upon the terms and conditions of this
Agreement and Delaware Law, the Merger shall be consummated, whereby the Merger
Subsidiary shall be merged with and into NYNEX, the separate corporate existence
of the Merger Subsidiary shall cease, and NYNEX shall continue as the surviving
corporation which shall be a wholly owned subsidiary of Bell Atlantic. NYNEX as
the surviving corporation after the Merger is herein sometimes referred to as
the "Surviving Corporation" and the Merger Subsidiary as the non-surviving
corporation after the Merger is herein sometimes referred to as the "Merged
Corporation." NYNEX, Bell Atlantic, and, after entering into a joinder to this
Agreement, the Merger Subsidiary, are herein referred to collectively as the
"Parties" and each individually as a "Party."
SECTION 1.3 - Effective Time. As promptly as practicable after the
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satisfaction or waiver of the conditions set forth in Article VIII hereof and
the consummation of the Closing referred to in Section 7.2(b) hereof, the
Parties shall cause the Merger to be consummated by filing a Certificate of
Merger with the Secretary of State of the State of Delaware with respect to the
Merger, in such form as required by, and executed in accordance with, the
relevant provisions of Delaware Law (the time of such filing being the
"Effective Time").
SECTION 1.4 - Effect of the Merger. At the Effective Time, the
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effect of the Merger shall be as provided in the applicable provisions of
Delaware Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all the property, rights, privileges, powers and
franchises of NYNEX and the Merger Subsidiary shall continue with, or vest in,
as the case may be, NYNEX as the Surviving Corporation, and all debts,
liabilities and duties of NYNEX and the Merger Subsidiary shall continue to be,
or become, as the case may be, the debts, liabilities and duties of NYNEX as the
Surviving Corporation. As of the Effective Time, the Surviving Corporation shall
be a direct wholly owned subsidiary of Bell Atlantic.
SECTION 1.5 - Subsequent Actions. If, at any time after the
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Effective Time, the Surviving Corporation shall consider or be advised that any
deeds, bills of sale, assignments, assurances or any other actions or things are
necessary or desirable to continue in, vest, perfect or confirm of record or
otherwise in the Surviving Corporation its right, title or interest in, to or
under any of the rights, properties, privileges, franchises or assets of either
of its constituent corporations acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Merger or otherwise to
carry out this Agreement, the officers and directors of the Surviving
Corporation shall be directed and authorized to execute and deliver, in the name
and on behalf of either of such constituent corporations, all such deeds, bills
of sale, assignments and assurances and to take and do, in the name and on
behalf of each of such corporations or otherwise, all such other actions and
things as may be necessary or desirable to vest, perfect or confirm any and all
right, title and interest in, to and under such rights, properties, privileges,
franchises or assets in the Surviving Corporation or otherwise to carry out this
Agreement.
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SECTION 1.6 - Certificate of Incorporation; Bylaws; Directors and
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Officers of Surviving Corporation. Unless otherwise agreed by NYNEX and Bell
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Atlantic before the Effective Time, at the Effective Time:
(a) the Certificate of Incorporation of NYNEX as the Surviving
Corporation shall be the Certificate of Incorporation of NYNEX as in effect
immediately prior to the Effective Time, until thereafter amended as provided by
law and such Certificate of Incorporation, except that Section 4.1 of the
Certificate of Incorporation of NYNEX shall be amended pursuant hereto, from and
after the Effective Time, to provide for a par value of $0.01 per share for each
share of Common Stock of NYNEX. The text of such section as the same shall be
amended hereby is set forth on Schedule 1.6(a) hereto;
(b) the Bylaws of NYNEX as the Surviving Corporation shall be the
Bylaws of NYNEX immediately prior to the Effective Time, until thereafter
amended as provided by law and the Certificate of Incorporation and the Bylaws
of such Surviving Corporation; and
(c) the directors and officers of NYNEX immediately prior to the
Effective Time shall continue to serve in their respective offices of the
Surviving Corporation from and after the Effective Time, in each case until
their successors are elected or appointed and qualified or until their
resignation or removal. If, at the Effective Time, a vacancy shall exist on the
Board of Directors or in any office of the Surviving Corporation, such vacancy
may thereafter be filled in the manner provided by law and the Bylaws of the
Surviving Corporation.
ARTICLE II - EFFECT ON STOCK OF THE SURVIVING
CORPORATION AND THE MERGED CORPORATION
SECTION 2.1 - Conversion of Securities. The manner and basis of
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converting the shares of common stock of the Surviving Corporation and of the
Merged Corporation at the Effective Time, by virtue of the Merger and without
any action on the part of any of the Parties or the holder of any of such
securities, shall be as hereinafter set forth in this Article II.
SECTION 2.2 - Conversion of Shares. (a) Each share of common stock,
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par value $1.00 per share, of NYNEX ("NYNEX Common Stock") issued and
outstanding immediately before the Effective Time (excluding those held in the
treasury of NYNEX and those owned by Bell Atlantic) and all rights in respect
thereof, shall at the Effective Time, without any action on the part of any
holder thereof, forthwith cease to exist and be converted into and become
exchangeable for 0.768 shares of common stock, par value $0.10 per share (after
giving effect to the Certificate Amendment described herein; "Bell Atlantic
Common Stock," as used herein, means the common stock, par value $1.00 per
share, of Bell Atlantic prior to the effectiveness of the Certificate Amendment,
and the common stock, par value $0.10 per share, of Bell Atlantic upon and after
such effectiveness). Such ratio of NYNEX Common Stock to Bell Atlantic Common
Stock is herein referred to as the "Exchange Ratio".
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(b) Commencing immediately after the Effective Time, each
certificate which, immediately prior to the Effective Time, represented issued
and outstanding shares of NYNEX Common Stock ("NYNEX Shares"), shall evidence
ownership of Bell Atlantic Common Stock on the basis hereinbefore set forth, but
subject to the limitations set forth in Sections 2.3, 2.5, 2.7, 2.8, 2.9 and
2.10 hereof.
(c) For all purposes of this Agreement, unless otherwise specified,
the Mandalay Shares (as defined in Section 10.4 hereof) and all shares held by
employee stock ownership plans of NYNEX (i) shall be deemed to be issued and
outstanding, (ii) shall not be deemed to be held in the treasury of NYNEX and
(iii) shall be converted into shares of Bell Atlantic Common Stock in accordance
with the Exchange Ratio.
SECTION 2.3 - Cancellation of Treasury Shares. At the Effective
-------------------------------
Time, each share of NYNEX Common Stock held in the treasury of NYNEX or owned by
Bell Atlantic immediately prior to the Effective Time shall be canceled and
retired and no shares of stock or other securities of Bell Atlantic or the
Surviving Corporation shall be issuable, and no payment or other consideration
shall be made, with respect thereto.
SECTION 2.4 - Conversion of Common Stock of the Merged Corporation
----------------------------------------------------
into Common Stock of the Surviving Corporation. At the Effective Time, each
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share of common stock, par value $0.01 per share, of the Merger Subsidiary
issued and outstanding immediately prior to the Effective Time, and all rights
in respect thereof, shall, without any action on the part of Bell Atlantic,
forthwith cease to exist and be converted into 1,000 validly issued, fully paid
and nonassessable shares of common stock of NYNEX, par value $0.01 per share, as
the Surviving Corporation (the "New NYNEX Common Stock"). Immediately after the
Effective Time and upon surrender by Bell Atlantic of the certificate
representing the shares of the common stock of the Merger Subsidiary, NYNEX as
the Surviving Corporation shall deliver to Bell Atlantic an appropriate
certificate or certificates representing the New NYNEX Common Stock created by
conversion of the common stock of the Merger Subsidiary owned by Bell Atlantic.
SECTION 2.5 - Exchange of Shares Other Than Treasury Shares. (a)
---------------------------------------------
Subject to the terms and conditions hereof, at or prior to the Effective Time,
Bell Atlantic and NYNEX shall jointly appoint an exchange agent to effect the
exchange of NYNEX Shares for Bell Atlantic Common Stock in accordance with the
provisions of this Article II (the "Exchange Agent"). From time to time after
the Effective Time, Bell Atlantic shall deposit, or cause to be deposited, with
the Exchange Agent certificates representing Bell Atlantic Common Stock for
conversion of NYNEX Shares in accordance with the provisions of Section 2.2
hereof (such certificates, together with any dividends or distributions with
respect thereto, being herein referred to as the "Exchange Fund"). Commencing
immediately after the Effective Time and until the appointment of the Exchange
Agent shall be terminated, each holder of a certificate or certificates
theretofore representing NYNEX Shares may surrender the same to the Exchange
Agent, and, after the appointment of the Exchange Agent shall be terminated, any
such holder may surrender any such certificate to Bell Atlantic. Such holder
shall be entitled upon such surrender to receive in exchange therefor a
certificate or certificates representing the number of full shares of Bell
Atlantic Common Stock into which the NYNEX Shares theretofore represented by the
certificate or certificates so surrendered
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shall have been converted in accordance with the provisions of Section 2.2
hereof, together with a cash payment in lieu of fractional shares, if any, in
accordance with Section 2.7 hereof, and all such shares of Bell Atlantic Common
Stock shall be deemed to have been issued at the Effective Time. Until so
surrendered and exchanged, each outstanding certificate which, prior to the
Effective Time, represented issued and outstanding NYNEX Shares shall be deemed
for all corporate purposes of Bell Atlantic, other than the payment of dividends
and other distributions, if any, to evidence ownership of the number of full
shares of Bell Atlantic Common Stock into which the NYNEX Shares theretofore
represented thereby shall have been converted at the Effective Time. Unless and
until any such certificate theretofore representing NYNEX Shares is so
surrendered, no dividend or other distribution, if any, payable to the holders
of record of Bell Atlantic Common Stock as of any date subsequent to the
Effective Time shall be paid to the holder of such certificate in respect
thereof. Except as otherwise provided in Section 2.6 hereof, upon the surrender
of any such certificate theretofore representing NYNEX Shares, however, the
record holder of the certificate or certificates representing shares of Bell
Atlantic Common Stock issued in exchange therefor shall receive from the
Exchange Agent or from Bell Atlantic, as the case may be, payment of the amount
of dividends and other distributions, if any, which as of any date subsequent to
the Effective Time and until such surrender shall have become payable with
respect to such number of shares of Bell Atlantic Common Stock ("Pre-Surrender
Dividends"). No interest shall be payable with respect to the payment of
Pre-Surrender Dividends upon the surrender of certificates theretofore
representing NYNEX Shares. After the appointment of the Exchange Agent shall
have been terminated, any holders of certificates representing NYNEX Shares
which have not received payment of Pre-Surrender Dividends shall look only to
Bell Atlantic for payment thereof. Notwithstanding the foregoing provisions of
this Section 2.5(a), neither the Exchange Agent nor any Party shall be liable to
a holder of NYNEX Shares for any Bell Atlantic Common Stock, any dividends or
distributions thereon or any cash payment for fractional shares as contemplated
by Section 2.7, delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law or to a transferee pursuant to
Section 2.6 hereof.
(b) Notwithstanding anything herein to the contrary, certificates
surrendered for exchange by any "affiliate" of NYNEX shall not be exchanged
until Bell Atlantic shall have received a signed agreement from such "affiliate"
as provided in Section 7.14 hereof.
SECTION 2.6 - Transfer Books. The stock transfer books of NYNEX
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shall be closed at the Effective Time and no transfer of any NYNEX Shares will
thereafter be recorded on any of such stock transfer books. In the event of a
transfer of ownership of NYNEX Shares that is not registered in the stock
transfer records of NYNEX at the Effective Time, a certificate or certificates
representing the number of full shares of Bell Atlantic Common Stock into which
such NYNEX Shares shall have been converted shall be issued to the transferee
together with a cash payment in lieu of fractional shares, if any, in accordance
with Section 2.7 hereof, and a cash payment in the amount of Pre-Surrender
Dividends, if any, in accordance with Section 2.5(a) hereof, if the certificate
or certificates representing such NYNEX Shares is or are surrendered as provided
in Section 2.5 hereof, accompanied by all documents required to evidence and
effect such transfer and by evidence of payment of any applicable stock transfer
tax.
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SECTION 2.7 - No Fractional Share Certificates. (a) No scrip or
--------------------------------
fractional share certificate for Bell Atlantic Common Stock will be issued upon
the surrender for exchange of certificates evidencing NYNEX Shares, and an
outstanding fractional share interest will not entitle the owner thereof to
vote, to receive dividends or to any rights of a stockholder of Bell Atlantic or
of the Surviving Corporation with respect to such fractional share interest.
(b) As promptly as practicable following the Effective Time, the
Exchange Agent shall determine the excess of (i) the number of full shares of
Bell Atlantic Common Stock to be issued and delivered to the Exchange Agent
pursuant to Section 2.5 hereof over (ii) the aggregate number of full shares of
Bell Atlantic Common Stock to be distributed to holders of NYNEX Common Stock
pursuant to Section 2.5 hereof (such excess being herein called the "Excess
Shares"). Following the Effective Time, the Exchange Agent, as agent for the
holders of NYNEX Common Stock, shall sell the Excess Shares at then prevailing
prices on the New York Stock Exchange, Inc. (the "NYSE"), all in the manner
provided in subsection (c) of this Section 2.7.
(c) The sale of the Excess Shares by the Exchange Agent shall be
executed on the NYSE through one or more member firms of the NYSE and shall be
executed in round lots to the extent practicable. The Exchange Agent shall use
all reasonable efforts to complete the sale of the Excess Shares as promptly
following the Effective Time as, in the Exchange Agent's reasonable judgment, is
practicable consistent with obtaining the best execution of such sales in light
of prevailing market conditions. Until the net proceeds of such sale or sales
have been distributed to the holders of NYNEX Common Stock, the Exchange Agent
will hold such proceeds in trust for the holders of NYNEX Common Stock (the
"Common Shares Trust"). Bell Atlantic shall pay all commissions, transfer taxes
and other out-of-pocket transaction costs, including the expenses and
compensation of the Exchange Agent, incurred in connection with such sale of the
Excess Shares. The Exchange Agent shall determine the portion of the Common
Shares Trust to which each holder of NYNEX Common Stock shall be entitled, if
any, by multiplying the amount of the aggregate net proceeds comprising the
Common Shares Trust by a fraction the numerator of which is the amount of
fractional share interests to which such holder of NYNEX Common Stock is
entitled (after taking into account all shares of NYNEX Common Stock held at the
Effective Time by such holder) and the denominator of which is the aggregate
amount of fractional share interests to which all holders of NYNEX Common Stock
are entitled.
(d) Notwithstanding the provisions of subsections (b) and (c) of
this Section 2.7, NYNEX and Bell Atlantic may agree at their option, exercised
prior to the Effective Time, in lieu of the issuance and sale of Excess Shares
and the making of the payments contemplated in such subsections, that Bell
Atlantic shall pay to the Exchange Agent an amount sufficient for the Exchange
Agent to pay each holder of NYNEX Common Stock an amount in cash equal to the
product obtained by multiplying (i) the fractional share interest to which such
holder would otherwise be entitled (after taking into account all shares of
NYNEX Common Stock held at the Effective Time by such holder) by (ii) the
closing price for a share of Bell Atlantic Common Stock on the NYSE Composite
Transaction Tape on the first business day immediately following the Effective
Time, and, in such case, all references herein to the cash proceeds of the sale
of the Excess Shares and similar references shall be
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deemed to mean and refer to the payments calculated as set forth in this
subsection (d). In such event, Excess Shares shall not be issued or otherwise
transferred to the Exchange Agent pursuant to Section 2.5(a) hereof.
(e) As soon as practicable after the determination of the amount of
cash, if any, to be paid to holders of NYNEX Common Stock with respect to any
fractional share interests, the Exchange Agent shall make available such
amounts, net of any required withholding, to such holders of NYNEX Common Stock,
subject to and in accordance with the terms of Section 2.5 hereof.
(f) Any portion of the Exchange Fund and the Common Shares Trust
which remains undistributed for six months after the Effective Time shall be
delivered to Bell Atlantic, upon demand, and any holders of NYNEX Common Stock
who have not theretofore complied with the provisions of this Article II shall
thereafter look only to Bell Atlantic for satisfaction of their claims for Bell
Atlantic Common Stock, any cash in lieu of fractional shares of Bell Atlantic
Common Stock and any Pre-Surrender Dividends.
SECTION 2.8 - Options to Purchase NYNEX Common Stock. (a) At the
--------------------------------------
Effective Time, each option or warrant granted by NYNEX to purchase shares of
NYNEX Common Stock which is outstanding and unexercised immediately prior to the
Effective Time shall be assumed by Bell Atlantic and converted into an option or
warrant to purchase shares of Bell Atlantic Common Stock in such amount and at
such exercise price as provided below and otherwise having the same terms and
conditions as are in effect immediately prior to the Effective Time (except to
the extent that such terms, conditions and restrictions may be altered in
accordance with their terms as a result of the transactions contemplated
hereby):
(i) the number of shares of Bell Atlantic Common Stock to be
subject to the new option or warrant shall be equal to the product of (x) the
number of shares of NYNEX Common Stock subject to the original option or warrant
and (y) the Exchange Ratio;
(ii) the exercise price per share of Bell Atlantic Common
Stock under the new option or warrant shall be equal to (x) the exercise price
per share of the NYNEX Common Stock under the original option or warrant divided
by (y) the Exchange Ratio; and
(iii) upon each exercise of options or warrants by a holder
thereof, the aggregate number of shares of Bell Atlantic Common Stock
deliverable upon such exercise shall be rounded down, if necessary, to the
nearest whole share and the aggregate exercise price shall be rounded up, if
necessary, to the nearest cent.
The adjustments provided herein with respect to any options which are "incentive
stock options" (as defined in Section 422 of the Code) shall be effected in a
manner consistent with Section 424(a) of the Code.
(b) At the Effective Time, each stock appreciation right ("SAR")
with respect to NYNEX Common Stock which is outstanding and unexercised
immediately before the Effective Time shall be converted into an SAR with
respect to shares of Bell Atlantic
7
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Common Stock on the same terms and conditions as are in effect immediately prior
to the Effective Time, with the adjustments set forth in subsection (a) of this
Section 2.8.
SECTION 2.9 - Restricted Stock. At the Effective Time, any shares of
----------------
NYNEX Common Stock awarded pursuant to any plan, arrangement or transaction,
including, without limitation, the NYNEX 1987 Restricted Stock Award Plan, and
outstanding immediately prior to the Effective Time shall be converted into
shares of Bell Atlantic Common Stock in accordance with Section 2.2 hereof,
subject to the same terms, conditions and restrictions as in effect immediately
prior to the Effective Time, except to the extent that such terms, conditions
and restrictions may be altered in accordance with their terms as a result of
the transactions contemplated hereby.
SECTION 2.10 - Certain Adjustments. If between the date hereof and
-------------------
the Effective Time, the outstanding shares of NYNEX Common Stock or of Bell
Atlantic Common Stock shall be changed into a different number of shares by
reason of any reclassification, recapitalization, split-up, combination or
exchange of shares, or any dividend payable in stock or other securities shall
be declared thereon with a record date within such period, the Exchange Ratio
shall be adjusted accordingly to provide to the holders of NYNEX Common Stock
and Bell Atlantic Common Stock the same economic effect as contemplated by this
Agreement prior to such reclassification, recapitalization, split-up,
combination, exchange or dividend.
ARTICLE III - CERTAIN MATTERS RELATED TO BELL ATLANTIC
SECTION 3.1 - Certificate of Incorporation and Bylaws of Bell
-----------------------------------------------
Atlantic. At the Effective Time and subject to and upon the terms and conditions
- --------
of this Agreement and Delaware Law, Bell Atlantic shall cause the Certificate of
Incorporation of Bell Atlantic and the Bylaws of Bell Atlantic to be amended and
restated to read as set forth in Appendices I-A and I-B hereto, respectively.
Such amendment and restatement of the Bell Atlantic Certificate of Incorporation
and amendment and restatement of the Bell Atlantic Bylaws are referred to herein
as the "Certificate Amendment" and the "Bylaws Amendment", respectively.
SECTION 3.2 - Dividends. (a) Each of NYNEX and Bell Atlantic shall
---------
coordinate with the other the declaration of, and the setting of record dates
and payment dates for, dividends on NYNEX Common Stock and Bell Atlantic Common
Stock so that holders of NYNEX Shares (i) do not receive dividends on both NYNEX
Shares and Bell Atlantic Common Stock received in connection with the Merger in
respect of any calendar quarter or (ii) fail to receive a dividend on either
NYNEX Shares or Bell Atlantic Common Stock received in connection with the
Merger in respect of any calendar quarter.
(b) It is the intention of the Parties that, after the Effective
Time, the initial quarterly dividend per share of Bell Atlantic Common Stock
shall be at least equal to $0.77, being the quotient of the dividend paid on
each share of NYNEX Common Stock for the last full fiscal quarter immediately
preceding the date hereof, divided by the Exchange Ratio, subject to approval
and declaration thereof by the Board of Directors of Bell Atlantic.
8
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SECTION 3.3 - Headquarters. NYNEX and Bell Atlantic agree that
------------
commencing at the Effective Time the headquarters of Bell Atlantic shall be
located in New York, New York.
SECTION 3.4 - Corporate Identity. NYNEX and Bell Atlantic agree that
------------------
at the Effective Time, the corporate name of Bell Atlantic shall remain "Bell
Atlantic Corporation".
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF NYNEX
NYNEX hereby represents and warrants as of the date hereof to Bell
Atlantic as follows:
SECTION 4.1 - Organization and Qualification; Subsidiaries. Each of
--------------------------------------------
NYNEX and each of its Significant Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization. Each of the NYNEX Subsidiaries which is not a
Significant Subsidiary is duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization, except for
such failure which, when taken together with all other such failures, would not
reasonably be expected to have a Material Adverse Effect on NYNEX. Each of NYNEX
and its Subsidiaries has the requisite corporate power and authority and any
necessary governmental authority, franchise, license or permit to own, operate
or lease the properties that it purports to own, operate or lease and to carry
on its business as it is now being conducted, and is duly qualified as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of its properties owned, operated or leased or the nature of its
activities makes such qualification necessary, except for such failure which,
when taken together with all other such failures, would not reasonably be
expected to have a Material Adverse Effect on NYNEX. The NYNEX Subsidiaries are
listed on Schedule 4.1 hereto.
SECTION 4.2 - Certificate of Incorporation and Bylaws. NYNEX has
---------------------------------------
heretofore furnished, or otherwise made available, to Bell Atlantic a complete
and correct copy of the Certificate of Incorporation and the Bylaws, each as
amended to the date hereof, of NYNEX and each of its Significant Subsidiaries.
Such Certificates of Incorporation and Bylaws are in full force and effect.
Neither NYNEX nor any of its Significant Subsidiaries is in violation of any of
the provisions of its respective Certificate of Incorporation or, in any
material respect, its Bylaws.
SECTION 4.3 - Capitalization. (a) The authorized capital stock of
--------------
NYNEX consists of (i) 70,000,000 shares of preferred stock, par value $1.00 per
share, none of which are outstanding and none of which are reserved for
issuance, (ii) 5,000,000 shares of Series A Junior Participating Preferred
Stock, par value $1.00 per share, none of which are outstanding and 3,000,000 of
which are reserved for issuance, and (iii) 750,000,000 shares of NYNEX Common
Stock, of which, as of March 31, 1996, 449,831,510 shares were issued and
outstanding, 695,305 shares were held in the treasury of NYNEX and 45,585,277
shares were issuable upon the exercise of options outstanding under the NYNEX
option plans listed on Schedule 4.3 hereto. Except as set forth on Schedule 4.3
or, after the date hereof, as permitted by Section 6.2 hereof, (i) since March
31, 1996, no shares of NYNEX Common
9
<PAGE>
Stock have been issued, except upon the exercise of options described in the
immediately preceding sentence, and (ii) there are no outstanding NYNEX Equity
Rights. For purposes of this Agreement, NYNEX Equity Rights shall mean
subscriptions, options, warrants, calls, commitments, agreements, conversion
rights or other rights of any character (contingent or otherwise) to purchase or
otherwise acquire from NYNEX or any of NYNEX's Subsidiaries at any time, or upon
the happening of any stated event, any shares of the capital stock of NYNEX
("NYNEX Equity Rights"), except for rights granted under the Rights Agreement,
dated as of October 19, 1989 (the "NYNEX Rights Agreement"), between NYNEX and
the Rights Agent (as defined therein). Schedule 4.3 hereto sets forth a complete
and accurate list of certain information with respect to all outstanding NYNEX
Equity Rights as of March 31, 1996. Since March 31, 1996, no NYNEX Equity Rights
have been issued except as set forth on Schedule 4.3, or, after the date hereof,
as permitted by Section 6.2 hereof.
(b) Except as set forth on Schedule 4.3, or, after the date hereof,
as permitted by Section 6.2 hereof, there are no outstanding obligations of
NYNEX or any of NYNEX's Subsidiaries to repurchase, redeem or otherwise acquire
any shares of capital stock of NYNEX.
(c) All of the issued and outstanding shares of NYNEX Common Stock
are validly issued, fully paid and nonassessable.
(d) Except as disclosed on Schedule 4.1 hereto, all the outstanding
capital stock of each of NYNEX's Subsidiaries is duly authorized, validly
issued, fully paid and nonassessable, and is owned by NYNEX free and clear of
any liens, security interests, pledges, agreements, claims, charges or
encumbrances. Except as set forth on Schedule 4.3 or hereafter issued or entered
into in accordance with Section 6.2 hereof, there are no existing subscriptions,
options, warrants, calls, commitments, agreements, conversion rights or other
rights of any character (contingent or otherwise) to purchase or otherwise
acquire from NYNEX or any of NYNEX's Subsidiaries at any time, or upon the
happening of any stated event, any shares of the capital stock of any NYNEX
Subsidiary, whether or not presently issued or outstanding (except for rights of
first refusal to purchase interests in Subsidiaries which are not wholly owned
by NYNEX), and there are no outstanding obligations of NYNEX or any of NYNEX's
Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital
stock of any of NYNEX's Subsidiaries. Except for (i) its Subsidiaries and
Material Investments, (ii) immaterial amounts of equity securities acquired in
the capacity of creditor in bankruptcy proceedings, (iii) equity interests held
by Material Investments and Jointly Held Persons, (iv) investments of persons in
which NYNEX has less than a 10% interest and (v) equity interests disclosed on
Schedule 4.3 hereto or hereafter acquired as permitted under Section 6.2 hereof,
NYNEX does not directly or indirectly own any equity interest in any other
person.
(e) As to each of the NYNEX Material Investments, Cellco Partnership
and Bell Atlantic NYNEX Mobile, Inc., NYNEX owns the equity interest set forth
on Schedule 4.3, free and clear of any liens, security interests, pledges,
claims, charges or encumbrances except as disclosed on Schedule 4.3. Except as
disclosed on Schedule 4.3, and excluding any rights of first refusal, there are
no existing subscriptions, options, warrants, calls, commitments, agreements,
conversion rights or other rights of any character (contingent or
10
<PAGE>
otherwise) to purchase or otherwise acquire any of such equity interests,
directly or indirectly, by NYNEX.
SECTION 4.4 - Authority Relative to this Agreement. NYNEX has the
------------------------------------
necessary corporate power and authority to enter into this Agreement and,
subject to obtaining any necessary stockholder approval of the Merger Agreement,
to carry out its obligations hereunder. The execution and delivery of this
Agreement by NYNEX and the consummation by NYNEX of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of NYNEX, subject to the approval of this Agreement by NYNEX's
stockholders required by Delaware Law. This Agreement has been duly executed and
delivered by NYNEX and, assuming the due authorization, execution and delivery
thereof by the other Parties, constitutes a legal, valid and binding obligation
of NYNEX, enforceable against it in accordance with its terms.
SECTION 4.5 - No Conflict; Required Filings and Consents. (a) Except
------------------------------------------
as listed on Schedule 4.5 hereto or as described in subsection (b) below, the
execution and delivery of this Agreement by NYNEX do not, and the performance of
this Agreement by NYNEX will not, (i) violate or conflict with the Certificate
of Incorporation or Bylaws of NYNEX, (ii) conflict with or violate any law,
regulation, court order, judgment or decree applicable to NYNEX or any of its
Subsidiaries or by which any of their respective property is bound or affected,
(iii) violate or conflict with the Certificate of Incorporation or Bylaws of any
of NYNEX's Subsidiaries, (iv) result in any breach of or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination or cancellation of, or result
in the creation of a lien or encumbrance on any of the properties or assets of
NYNEX or any of its Subsidiaries pursuant to, result in the loss of any material
benefit under, or require the consent of any other party to, any contract,
instrument, permit, license or franchise to which NYNEX or any of its
Subsidiaries is a party or by which NYNEX, any of such Subsidiaries or any of
their respective property is bound or affected, (v) to NYNEX's knowledge,
conflict with or violate any law, regulation, court order, judgment or decree
applicable to any of its Material Investments or by which such Material
Investments' property is bound or affected, (vi) to NYNEX's knowledge, violate
or conflict with the Certificate of Incorporation or Bylaws of any of its
Material Investments, or (vii) to NYNEX's knowledge, result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination or
cancellation of, or result in the creation of a lien or encumbrance on any of
the properties or assets of any of its Material Investments pursuant to, or
result in the loss of any material benefit under, or require the consent of any
other party to, any permit, license or franchise to which any of its Material
Investments is a party or by which any of such Material Investments or any of
their respective property is bound or affected, except, in the case of clauses
(ii), (iii), (iv), (v), (vi) or (vii) above, for conflicts, violations,
breaches, defaults, results or consents which, individually or in the aggregate,
would not have a Material Adverse Effect on NYNEX.
(b) Except as listed on Schedule 4.5 and except for applicable
requirements, if any, of state or foreign regulatory laws and commissions, the
Federal Communications Commission, the Exchange Act, the premerger notification
requirements of the HSR Act, filing and recordation of appropriate merger or
other documents as required by Delaware Law
11
<PAGE>
and any filings required pursuant to any state securities or "blue sky" laws or
the rules of any applicable stock exchanges, neither NYNEX nor any of its
Significant Subsidiaries is required to submit any notice, report or other
filing with any governmental authority, domestic or foreign, in connection with
the execution, delivery or performance of this Agreement. Except as set forth in
the immediately preceding sentence, no waiver, consent, approval or
authorization of any governmental or regulatory authority, domestic or foreign,
is required to be obtained by NYNEX or any of its Significant Subsidiaries in
connection with its execution, delivery or performance of this Agreement.
SECTION 4.6 - SEC Filings; Financial Statements. (a) NYNEX has filed
---------------------------------
all forms, reports and documents required to be filed with the Securities and
Exchange Commission ("SEC") since January 1, 1993, and has heretofore delivered
or made available to Bell Atlantic, in the form filed with the SEC, together
with any amendments thereto, its (i) Annual Reports on Form 10-K for the fiscal
years ended December 31, 1993, 1994 and 1995, (ii) all proxy statements relating
to NYNEX's meetings of stockholders (whether annual or special) held since
January 1, 1993, (iii) Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31, June 30, and September 30, 1995, and (iv) all other reports or
registration statements filed by NYNEX with the SEC since January 1, 1993,
including without limitation all Annual Reports on Form 11-K filed with respect
to the NYNEX Benefit Plans (collectively, the "NYNEX SEC Reports"). The NYNEX
SEC Reports (i) were prepared substantially in accordance with the requirements
of the 1933 Act or the Exchange Act (as defined in Section 10.4 hereof), as the
case may be, and the rules and regulations promulgated under each of such
respective acts, and (ii) did not at the time they were filed contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(b) The financial statements, including all related notes and
schedules, contained in the NYNEX SEC Reports (or incorporated by reference
therein) fairly present the consolidated financial position of NYNEX and its
Subsidiaries as at the respective dates thereof and the consolidated results of
operations and cash flows of NYNEX and its Subsidiaries for the periods
indicated in accordance with GAAP applied on a consistent basis throughout the
periods involved (except for changes in accounting principles disclosed in the
notes thereto) and subject in the case of interim financial statements to normal
year-end adjustments.
SECTION 4.7 - Absence of Certain Changes or Events. Except as
------------------------------------
disclosed in the NYNEX SEC Reports filed prior to the date hereof and on
Schedule 4.7, since December 31, 1995, NYNEX and its Subsidiaries have not
incurred any material liability, except in the ordinary course of their
businesses consistent with their past practices, and there has not been any
change, or any event involving a prospective change, in the business, financial
condition or results of operations of NYNEX or any of its Subsidiaries which has
had, or is reasonably likely to have, a Material Adverse Effect on NYNEX, and
NYNEX and its Subsidiaries have conducted their respective businesses in the
ordinary course consistent with their past practices.
12
<PAGE>
SECTION 4.8 - Litigation. There are no claims, actions, suits,
----------
proceedings or investigations pending or, to NYNEX's knowledge, threatened
against NYNEX or any of its Subsidiaries, or any properties or rights of NYNEX
or any of its Subsidiaries, before any court, administrative, governmental,
arbitral, mediation or regulatory authority or body, domestic or foreign, as to
which there is more than a remote possibility of an adverse judgment or
determination against NYNEX or any of its Subsidiaries or any properties or
rights of NYNEX or any of its Subsidiaries in excess of $2 million (net of
insurance and net of accruals reflected in the financial statements incorporated
by reference in NYNEX SEC Reports), except (a) as disclosed on Schedule 4.8
hereto, (b) as disclosed on Schedules 4.9, 4.12, 4.13 or 4.22 hereto, (c) such
claims, actions, suits, proceedings or investigations which are pending or
threatened against Jointly Held Persons (as defined in Section 10.4 hereof),
Bell Atlantic or any of its Subsidiaries, and (d) cases in which neither NYNEX
nor any of its Subsidiaries is a named defendant, but as to which NYNEX or any
of its Subsidiaries may be liable for an allocable share of any judgment
rendered pursuant to the POR (as defined in Section 10.4 hereof). With respect
to tax matters, litigation shall not be deemed threatened unless a tax authority
has delivered a written notice of deficiency to NYNEX or any of its
Subsidiaries.
SECTION 4.9 - No Violation of Law. The business of NYNEX and its
-------------------
Subsidiaries is not being conducted in violation of any statute, law, ordinance,
regulation, judgment, order or decree of any domestic or foreign governmental or
judicial entity (including any stock exchange or other self-regulatory body)
("Legal Requirements"), or in violation of any permits, franchises, licenses,
authorizations or consents that are granted by any domestic or foreign
government or judicial entity (including any stock exchange or other
self-regulatory body) ("Permits"), except for possible violations none of which,
individually or in the aggregate, may reasonably be expected to have a Material
Adverse Effect on NYNEX. Except as disclosed in NYNEX SEC Reports and as set
forth on Schedule 4.9 hereto, no investigation or review by any domestic or
foreign governmental or regulatory entity (including any stock exchange or other
self-regulatory body) with respect to NYNEX or its Subsidiaries in relation to
any alleged violation of law or regulation is pending or, to NYNEX's knowledge,
threatened, nor has any governmental or regulatory entity (including any stock
exchange or other self-regulatory body) indicated an intention to conduct the
same, except for such investigations which, if they resulted in adverse
findings, would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on NYNEX. Except as set forth on Schedule
4.9 hereto, neither NYNEX nor any of its Subsidiaries is subject to any cease
and desist or other order, judgment, injunction or decree issued by, or is a
party to any written agreement, consent agreement or memorandum of understanding
with, or is a party to any commitment letter or similar undertaking to, or is
subject to any order or directive by, or has adopted any board resolutions at
the request of, any court, governmental entity or regulatory agency that
materially restricts the conduct of its business or which may reasonably be
expected to have a Material Adverse Effect on NYNEX, nor has NYNEX or any of its
Subsidiaries been advised that any court, governmental entity or regulatory
agency is considering issuing or requesting any of the foregoing. None of the
representations and warranties made in this Section 4.9 are being made with
respect to Environmental Laws.
13
<PAGE>
SECTION 4.10 - Joint Proxy Statement. None of the information
---------------------
supplied or to be supplied by or on behalf of NYNEX for inclusion or
incorporation by reference in the registration statement to be filed with the
SEC by Bell Atlantic in connection with the issuance of shares of Bell Atlantic
Common Stock in the Merger (the "Registration Statement") will, at the time the
Registration Statement becomes effective under the 1933 Act, 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, in light of the
circumstances under which they were made, not misleading. None of the
information supplied or to be supplied by or on behalf of NYNEX for inclusion or
incorporation by reference in the joint proxy statement, in definitive form,
relating to the meetings of NYNEX and Bell Atlantic stockholders to be held in
connection with the Merger, or in the related proxy and notice of meeting, or
soliciting material used in connection therewith (referred to herein
collectively as the "Joint Proxy Statement") will, at the dates mailed to
stockholders and at the times of the NYNEX stockholders' meeting and the Bell
Atlantic stockholders' meeting, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. The Registration Statement and the Joint Proxy
Statement (except for information relating solely to Bell Atlantic) will comply
as to form in all material respects with the provisions of the 1933 Act and the
Exchange Act and the rules and regulations promulgated thereunder.
SECTION 4.11 - Employee Matters; ERISA. Except as previously
-----------------------
disclosed in writing by NYNEX's outside counsel to Bell Atlantic's outside
counsel with specific reference to this Section 4.11:
(a) Set forth on Schedule 4.11 hereto is a true and complete list of
all employee benefit plans covering present and former employees or directors of
NYNEX and of each of its Subsidiaries or their beneficiaries, or providing
benefits to such persons in respect of services provided to any such entity,
including, but not limited to, any employee benefit plans within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), any deferred compensation bonuses, stock options, restricted stock
plans, incentive compensation, severance or change in control agreements and any
other material benefit arrangements or payroll practices (collectively, the
"NYNEX Benefit Plans").
(b) All contributions and other payments required to be made by
NYNEX or any of its Subsidiaries to or under any NYNEX Benefit Plan (or to any
person pursuant to the terms thereof) have been made or the amount of such
payment or contribution obligation has been reflected in the NYNEX Financial
Statements.
(c) Each of the NYNEX Benefit Plans intended to be "qualified"
within the meaning of Section 401(a) of the Code has been determined by the
Internal Revenue Service (the "IRS") to be so qualified, and, to NYNEX's
knowledge, no circumstances exist that could reasonably be expected by NYNEX to
result in the revocation of any such determination. NYNEX is in compliance in
all material respects with, and each of the NYNEX Benefit Plans is and has been
operated in all material respects in compliance with, all applicable Legal
Requirements governing such plan, including, without limitation, ERISA and the
Code. Each NYNEX Benefit Plan intended to provide for the deferral of income or
the reduction of salary
14
<PAGE>
or other compensation, or to afford other income tax benefits, complies in all
material respects with the requirements of the applicable provisions of the Code
and other Legal Requirements to the extent required to provide such income tax
benefits.
(d) With respect to the NYNEX Benefit Plans, individually and in the
aggregate, no event has occurred and, to NYNEX's knowledge, there does not now
exist any condition or set of circumstances, that could subject NYNEX or any of
its Subsidiaries to any material liability arising under the Code, ERISA or any
other applicable Legal Requirements (including, without limitation, any
liability to any such plan or the Pension Benefit Guaranty Corporation (the
"PBGC")), or under any indemnity agreement to which NYNEX or any of its
Subsidiaries is a party, excluding liability for benefit claims and funding
obligations payable in the ordinary course.
(e) Except as set forth on Schedule 4.11 hereto, none of the NYNEX
Benefit Plans that are "welfare plans" within the meaning of Section 3(1) of
ERISA provides for any retiree benefits other than continuation coverage
required to be provided under Section 4980B of the Code or Part 6 of Title I of
ERISA.
(f) NYNEX has made available to Bell Atlantic a true and correct
copy of each current or last, in the case where there is no current, expired
collective bargaining agreement to which NYNEX or any of its Subsidiaries is a
party or under which NYNEX or any of its Subsidiaries has obligations and, with
respect to each NYNEX Benefit Plan, where applicable, (i) such plan (but only to
the extent such plan is intended to be covered by Section 401 of the Code) and
summary plan description, (ii) the most recent annual report filed with the IRS,
(iii) each related trust agreement (including all material amendments to each
such trust agreement), (iv) the most recent determination of the IRS with
respect to the qualified status of such NYNEX Benefit Plan, and (v) the most
recent actuarial report or valuation.
(g) Except as set forth on Schedule 4.11 hereto, (i) the
consummation or announcement of any transaction contemplated by this Agreement
will not (either alone or upon the occurrence of any additional or further acts
or events) result in any (A) payment (whether of severance pay or otherwise)
becoming due from NYNEX or any of its Subsidiaries to any officer, employee,
former employee or director thereof or to the trustee under any "rabbi trust" or
similar arrangement, or (B) benefit under any NYNEX Benefit Plan being
established or becoming accelerated, vested or payable and (ii) neither NYNEX
nor any of its Subsidiaries is a party to (A) any management, employment,
deferred compensation, severance (including any payment, right or benefit
resulting from a change in control), bonus or other contract for personal
services with any current or former officer, director or employee (whether or
not characterized as a plan for purposes of ERISA), (B) any consulting contract
with any person who prior to entering into such contract was a director or
officer of NYNEX or any of its Subsidiaries, or (C) any plan, agreement,
arrangement or understanding similar to any of the items described in clause
(ii)(A) or (B) of this sentence.
(h) The consummation or announcement of any transaction contemplated
by this Agreement will not (either alone or upon the occurrence of any
additional or further acts or events) result in the disqualification of any of
the NYNEX Benefit Plans intended to be
15
<PAGE>
qualified under, result in a prohibited transaction or breach of fiduciary duty
under, or otherwise violate, ERISA or the Code.
(i) Neither NYNEX nor any of its Subsidiaries nor any of their
directors, officers, employees or agents, nor any "party in interest" or
"disqualified person", as such terms are defined in Section 3 of ERISA and
Section 4975 of the Code has, with respect to any NYNEX Benefit Plan, engaged in
or been a party to any "prohibited transaction", as such term is defined in
Section 4975 of the Code or Section 406 of ERISA which is not otherwise exempt,
which could result in the imposition of either a penalty assessed pursuant to
Section 502(i) of ERISA or a tax imposed by Section 4975 of the Code or which
could constitute a breach of fiduciary duty, in each case applicable to NYNEX or
any NYNEX Benefit Plan and which would result in a Material Adverse Effect on
NYNEX.
(j) No NYNEX Benefit Plan subject to Section 412 of the Code has
incurred any now existing "accumulated funding deficiency" (as defined in
ERISA), whether or not waived. Neither NYNEX nor any of its Subsidiaries has
incurred, and none of such entities reasonably expects to incur, any material
liability to the PBGC with respect to any NYNEX Benefit Plan. Neither NYNEX nor
any of its Subsidiaries is a party to, and neither has incurred or reasonably
expects to incur, any withdrawal liability with respect to any "multiemployer
plan" (as defined in Section 3(37) of ERISA) for which there is any outstanding
liability.
SECTION 4.12 - Labor Matters. Except as disclosed on Schedule 4.12
-------------
hereto, neither NYNEX nor any of its Subsidiaries is party to any collective
bargaining agreement or other labor agreement with any union or labor
organization and no union or labor organization has been recognized by NYNEX or
any of its Subsidiaries as an exclusive bargaining representative for employees
of NYNEX or any of its Subsidiaries. Except as disclosed on Schedule 4.12
hereto, to NYNEX's knowledge, there is no current union representation question
involving employees of NYNEX or any of its Subsidiaries, nor does NYNEX have
knowledge of any significant activity or proceeding of any labor organization
(or representative thereof) or employee group to organize any such employees.
Neither NYNEX nor any of its Subsidiaries has made any commitment not in
collective bargaining agreements listed on Schedule 4.12 hereto that would
require the application of the terms of any collective bargaining agreements
entered into by NYNEX or any of its Subsidiaries to Bell Atlantic, to any joint
venture of Bell Atlantic, or to any Subsidiary of Bell Atlantic (other than
NYNEX or its Subsidiaries). Except as disclosed on Schedule 4.12 hereto, (i)
there is no material active arbitration under any collective bargaining
agreement involving NYNEX or any of its Subsidiaries, (ii) there is no material
unfair labor practice, grievance, employment discrimination or other labor or
employment related charge, complaint or claim against NYNEX or any of its
Subsidiaries pending before any court, arbitrator, mediator or governmental
agency or tribunal, or, to NYNEX's knowledge, threatened, (iii) there is no
material strike, picketing or work stoppage by, or any lockout of, employees of
NYNEX or any of its Subsidiaries pending or, to NYNEX's knowledge, threatened,
against or involving NYNEX or any of its Subsidiaries, (iv) there is no
significant active arbitration under any collective bargaining agreement
involving NYNEX or any of its Subsidiaries regarding the employer's right to
move work from one location or entity to another, or to consolidate work
locations, or involving other similar restrictions on business operations, (v)
there is no
16
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arbitration, administrative agency proceeding, suit or claim pending, or, to
NYNEX's knowledge, threatened, involving the "New Businesses", "Neutrality
Letter", and "Old Business Letter" provisions contained in any collective
bargaining agreement to which NYNEX or any of its Subsidiaries is a party, and
(vi) there is no material proceeding, claim, suit, action or governmental
investigation pending or, to NYNEX's knowledge, threatened, in respect of which
any director, officer, employee or agent of NYNEX or any of its Subsidiaries is
or may be entitled to claim indemnification from NYNEX or such NYNEX Subsidiary
pursuant to their respective charters or bylaws or as provided in the
indemnification agreements, if any, listed on Schedule 4.12 hereto. For purposes
of this Section 4.12, "material" refers to any liability which could reasonably
be expected to exceed $1 million.
SECTION 4.13 - Environmental Matters. Except as set forth on
---------------------
Schedule 4.13 hereto or in the NYNEX SEC Reports filed prior to the date hereof:
(a) To NYNEX's knowledge, NYNEX and each of its Subsidiaries is in
compliance with all applicable Environmental Laws (as defined below) and neither
NYNEX nor any of its Subsidiaries has received any written or oral communication
from any person or governmental authority that alleges that NYNEX or any of its
Subsidiaries is not in compliance with applicable Environmental Laws where such
non-compliance could reasonably be expected to result in a Material Adverse
Effect on NYNEX.
(b) To NYNEX's knowledge, NYNEX and each of its Subsidiaries has
obtained or has applied for all material environmental, health and safety
permits, licenses, variances, approvals and authorizations (collectively, the
"Environmental Permits") necessary for the construction of their facilities or
the conduct of their operations, and all such material Environmental Permits are
effective or, where applicable, a renewal application has been timely filed and
is pending agency approval, and NYNEX and its Subsidiaries are in material
compliance with all terms and conditions of such Environmental Permits. To
NYNEX's knowledge, there are no past or present events, conditions,
circumstances, activities, practices, incidents, actions or plans that may
interfere with, or prevent, future continued material compliance on the part of
NYNEX or any of its Subsidiaries with such Environmental Permits. Neither NYNEX
nor any of its Subsidiaries has knowledge of matters or conditions that would
preclude reissuance or transfer of any such Environmental Permit, including
amendment of such instrument, to Bell Atlantic or one of its Subsidiaries, where
such action is necessary to maintain compliance with Environmental Laws in all
material respects.
(c) To NYNEX's knowledge, there is no currently existing requirement
to be imposed in the future by any Environmental Law or Environmental Permit
which could reasonably be expected to result in the incurrence of a material
cost by NYNEX or any of its Subsidiaries.
(d) To NYNEX's knowledge, there is no material Environmental Claim
(as defined below) pending or threatened (i) against NYNEX or any of its
Subsidiaries, (ii) against any person whose liability for any Environmental
Claim NYNEX or any of its Subsidiaries has or may have retained or assumed
either contractually or by operation of law,
17
<PAGE>
or (iii) against any real or personal property or operations which NYNEX or any
of its Subsidiaries owns, leases or manages, in whole or in part.
(e) To NYNEX's knowledge, there have been no Releases (as defined
below) of any Hazardous Material (as defined below) that would be reasonably
likely to form the basis of any material Environmental Claim against NYNEX or
any of its Subsidiaries, or against any person whose liability for any material
Environmental Claim NYNEX or any of its Subsidiaries has or may have retained or
assumed either contractually or by operation of law.
(f) To NYNEX's knowledge, with respect to any predecessor of NYNEX
or any of its Subsidiaries, there is no material Environmental Claim pending or
threatened, or any Release of Hazardous Materials that would be reasonably
likely to form the basis of any material Environmental Claim against NYNEX or
any of its Subsidiaries.
(g) To NYNEX's knowledge, NYNEX has disclosed to Bell Atlantic all
material facts which NYNEX reasonably believes form the basis of a material
current or future cost relating to any environmental matter affecting NYNEX and
its Subsidiaries which NYNEX believes will or is reasonably likely to result in
a Material Adverse Effect on NYNEX.
(h) To NYNEX's knowledge, neither NYNEX nor any of its Subsidiaries,
nor any owner of premises leased or operated by NYNEX or any of its
Subsidiaries, has filed any notice with respect to such premises under federal,
state, local or foreign law indicating past or present treatment, storage or
disposal of Hazardous Materials, as regulated under 40 C.F.R. Parts 264-267 or
any state, local or foreign equivalent or is engaging or has engaged in business
operations involving the generation, transportation, treatment, recycle or
disposal of any waste (excluding low level radioactive tubes from central office
equipment or typical smoke and fire alarm components) regulated under
Environmental Laws pertaining to radioactive materials or the nuclear power
industry, including, without limitation, requirements of Volume 10 of the Code
of Federal Regulations.
(i) To NYNEX's knowledge, none of the properties owned, leased or
operated by NYNEX, its Subsidiaries or any predecessor thereof are now, or were
in the past, listed on the National Priorities List of Superfund Sites (the
"NPL"), the Comprehensive Environmental Response, Compensation and Liability
Information System ("CERCLIS"), or any other comparable state or local
environmental database (excluding easements that transgress such Superfund or
CERCLIS sites).
(j) To NYNEX's knowledge, the Merger will not require any
governmental approvals under the Environmental Laws, including those that are
triggered by sales or transfers of businesses or real property.
For purposes of this Section 4.13 and Section 5.13 hereof:
(i) "Environmental Claim" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, investigations,
18
<PAGE>
proceedings or notices of noncompliance or violation (written or oral) by any
person (including any federal, state, local or foreign governmental authority)
alleging potential liability (including, without limitation, potential
responsibility for or liability for enforcement, investigatory costs, cleanup
costs, governmental response costs, removal costs, remedial costs, natural
resources damages, property damages, personal injuries or penalties) arising out
of, based on or resulting from (A) the presence, or Release or threatened
Release into the environment, of any Hazardous Materials at any location,
whether or not owned, operated, leased or managed by NYNEX or any of its
Subsidiaries (for purposes of this Section 4.13) or by Bell Atlantic or any of
its Subsidiaries (for purposes of Section 5.13 hereof) (including but not
limited to obligations to clean up contamination resulting from leaking
underground storage tanks); or (B) circumstances forming the basis of any
violation or alleged violation of any Environmental Law; or (C) any and all
claims by any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from the presence or
Release of any Hazardous Materials.
(ii) "Environmental Laws" means all applicable foreign,
federal, state and local laws (including the common law), rules, requirements
and regulations relating to pollution, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or protection of human health as it relates to the environment
including, without limitation, laws and regulations relating to Releases of
Hazardous Materials, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials or relating to management of asbestos in buildings.
(iii) "Hazardous Materials" means (A) any petroleum or any
by-products or fractions thereof, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, any form of natural gas, explosives,
and polychlorinated biphenyls ("PCBs"); (B) any chemicals, materials or
substances, whether waste materials, raw materials or finished products, which
are now defined as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous materials," "extremely hazardous substances,"
"restricted hazardous wastes," "toxic substances," "toxic pollutants,"
"pollutants," "contaminants," or words of similar import under any Environmental
Law; and (C) any other chemical, material or substance, whether waste materials,
raw materials or finished products, regulated or forming the basis of liability
under any Environmental Law.
(iv) "Release" means any release, spill, emission, leaking,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the environment (including without limitation ambient air, atmosphere, soil,
surface water, groundwater or property).
(v) Any matter which NYNEX reasonably believes does not
present a significant likelihood of requiring expenditures by, or causing the
incurrence of liabilities by, NYNEX and its Subsidiaries of more than $2 million
or, in the case of repetitive facility upgrades, will not in the aggregate cause
expenditures or liabilities of more than $12 million over a six-year period, are
excluded from the coverage of any representations made hereunder.
(vi) No representation is made by NYNEX in this Section 4.13
as to Environmental Claims for which neither NYNEX nor any of its Subsidiaries
is (or would be,
19
<PAGE>
if a claim were brought in a formal proceeding) a named defendant, but as to
which NYNEX or any of its Subsidiaries may be liable for an allocable share of
any judgment rendered pursuant to the POR. No representation is made by NYNEX in
subsection (i) of this Section 4.13 as to properties owned, leased or operated
by AT&T or any of its Subsidiaries except for such properties which are, or at
any time since November 1, 1983 were, owned, leased or operated by NYNEX or any
of its Subsidiaries.
SECTION 4.14 - Board Action; Vote Required; Amendment of Rights
------------------------------------------------
Agreement; Applicability of Section 203. (a) The Board of Directors of NYNEX has
- ---------------------------------------
unanimously determined that the transactions contemplated by this Agreement are
in the best interests of NYNEX and its stockholders and has resolved to
recommend to such stockholders that they vote in favor thereof.
(b) The approval of the Merger Agreement by a majority of the votes
entitled to be cast by all holders of NYNEX Common Stock is the only vote of the
holders of any class or series of the capital stock of NYNEX required to approve
this Agreement, the Merger and the other transactions contemplated hereby. The
provisions of Section 10.1 of the Certificate of Incorporation of NYNEX will not
apply to the transactions contemplated by this Agreement.
(c) The NYNEX Rights Agreement has been amended as of July 2, 1996
so as to provide that (i) no "Distribution Date," "Stock Acquisition Date," or
"Trigger Event" thereunder shall be deemed to have occurred, (ii) none of Bell
Atlantic or any of its subsidiaries will be an "Acquiring Person" thereunder,
and (iii) no holder of rights issued thereunder shall be entitled to exercise
such rights under, or be entitled to any rights or benefits pursuant to, the
NYNEX Rights Agreement solely by reason of the approval, execution and delivery
of this Agreement or the consummation of the transactions contemplated hereby.
(d) The provisions of Section 203 of the Delaware Law will not,
assuming the accuracy of the representations contained in Section 5.20 hereof
(without giving effect to the knowledge qualification therein), apply to this
Agreement or any of the transactions contemplated hereby.
SECTION 4.15 - Opinion of Financial Advisor. NYNEX has received the
----------------------------
opinions of Bear, Stearns & Co. Inc. ("Bear Stearns") and Morgan Stanley & Co.
Incorporated ("Morgan Stanley"), each dated April 21, 1996, to the effect that,
as of such date, the NYNEX Exchange Ratio (as defined in the Agreement and Plan
of Merger dated as of April 21, 1996 among Seaboard Merger Company, NYNEX and
Bell Atlantic, referred to herein as the "Original Agreement") was fair from a
financial point of view to the holders of NYNEX Common Stock, and has received
the confirming letters of Bear Stearns and Morgan Stanley, each dated July 2,
1996, to the effect that if, as of April 21, 1996, their respective analyses and
review had been conducted in connection with this Agreement, instead of in
connection with the Original Agreement, such opining party would have concluded,
as of April 21, 1996, that the Exchange Ratio was fair from a financial point of
view to the holders of NYNEX Common Stock.
20
<PAGE>
SECTION 4.16 - Brokers. Except for Bear Stearns and Morgan Stanley,
-------
the arrangements with which have been disclosed to Bell Atlantic prior to the
date hereof, who have been engaged by NYNEX, no broker, finder or investment
banker is entitled to any brokerage, finder's, investment banking or other fee
or commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of NYNEX or any of its
Subsidiaries.
SECTION 4.17 - Tax Matters. Except as set forth on Schedule 4.17
-----------
hereto:
(a) All material federal and foreign tax returns and tax reports
required to be filed by NYNEX or its Subsidiaries on or prior to the Effective
Time or with respect to taxable periods ending on or prior to the Effective Time
have been or will be filed with the appropriate governmental authorities on or
prior to the Effective Time or by the due date thereof including extensions;
(b) All material state and local tax returns and tax reports
required to be filed by NYNEX or its Subsidiaries on or prior to the Effective
Time or with respect to taxable periods ending on or prior to the Effective Time
which relate to income, profits, franchise, property, sales, use or other taxes,
have been or will be filed with the appropriate governmental authorities on or
prior to the Effective Time or by the due date thereof including extensions;
(c) The tax returns and tax reports referred to in subparts (a) and
(b) of this Section 4.17 correctly reflect (and as to returns not filed as of
the date hereof, will correctly reflect) all material tax liabilities of NYNEX
and its Subsidiaries required to be shown thereon;
(d) All material federal, state, local and foreign income, profits,
franchise, property, sales, use and other taxes (including interest and
penalties) shown as due on those tax returns and tax reports referred to in
subparts (a) and (b) of this Section 4.17 which have been or will be filed by
the Effective Time, as well as any material foreign withholding taxes imposed on
or in respect of any amounts paid to or by NYNEX or any of its Subsidiaries,
whether or not such amounts or withholding taxes are referred to or shown on any
tax returns or tax reports referred to in Section 4.17(a) or (b) hereof, have
been or will be fully paid or adequately reflected as a liability on NYNEX's or
its Subsidiaries' books and records on or prior to the Closing Date;
(e) With respect to any period for which tax returns and tax reports
have not yet been filed, or for which taxes are not yet due or owing, NYNEX and
its Subsidiaries have made due and sufficient accruals for such taxes in their
respective books and records and financial statements;
(f) The representations and warranties contained in the NYNEX
Officer's Certificate attached hereto as Schedule 4.17(f) are true and correct;
and
(g) Neither NYNEX nor any of its affiliates has taken or agreed to
take any action that would (a) prevent or impede the Merger from qualifying as a
tax-free
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reorganization under Section 368 of the Code, or (b) make untrue any
representation or warranty contained in the Officer's Certificate referred to in
Section 4.17(f) hereof.
SECTION 4.18 - Intellectual Property. To NYNEX's knowledge, neither
---------------------
NYNEX nor any of its Subsidiaries utilizes or has utilized any patent,
trademark, tradename, service mark, copyright, software, trade secret or
know-how, except for those which are owned, possessed or lawfully used by NYNEX
or its Subsidiaries in their operations, and, to the knowledge of NYNEX, neither
NYNEX nor any of its Subsidiaries infringes upon or unlawfully or wrongfully
uses any patent, trademark, tradename, service mark, copyright or trade secret
owned or validly claimed by another.
SECTION 4.19 - Insurance. Except as set forth on Schedule 4.19
---------
hereto, each of NYNEX and each of its Significant Subsidiaries is, and has been
continuously since January 1, 1985 (or such later date as such Significant
Subsidiary was organized or acquired by NYNEX), insured with financially
responsible insurers in such amounts and against such risks and losses as are
customary for companies conducting the business as conducted by NYNEX and its
Subsidiaries during such time period. Except as set forth on such Schedule 4.19,
since January 1, 1993, neither NYNEX nor any of its Subsidiaries has received
notice of cancellation or termination with respect to any material insurance
policy of NYNEX or its Subsidiaries. The insurance policies of NYNEX and its
Subsidiaries are valid and enforceable policies.
SECTION 4.20 - Ownership of Securities. As of the date hereof,
-----------------------
neither NYNEX nor, to NYNEX's knowledge, any of its affiliates or associates (as
such terms are defined under the Exchange Act), (a)(i) beneficially owns,
directly or indirectly, or (ii) is party to any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of, in
each case, shares of capital stock of Bell Atlantic, which in the aggregate
represent 10% or more of the outstanding shares of Bell Atlantic Common Stock
(other than shares held by NYNEX Benefit Plans), nor (b) is an "interested
stockholder" of Bell Atlantic within the meaning of Section 203 of the Delaware
Law. Except as set forth on Schedule 4.20 hereto, NYNEX owns no shares of Bell
Atlantic Common Stock described in the parenthetical clause of Section 2.2(b)
hereof which would be canceled and retired without consideration pursuant to
Section 2.3(a) hereof.
SECTION 4.21 - Certain Contracts. (a) All contracts described in
-----------------
Item 601(b)(10) of Regulation S-K to which NYNEX or its Subsidiaries is a party
or may be bound ("NYNEX Contracts") have been filed as exhibits to, or
incorporated by reference in, NYNEX's Annual Report on Form 10-K for the year
ended December 31, 1995. All NYNEX Contracts are valid and in full force and
effect on the date hereof except to the extent they have previously expired in
accordance with their terms, and neither NYNEX nor any of its Subsidiaries has
violated any provision of, or committed or failed to perform any act which with
or without notice, lapse of time or both would constitute a default under the
provisions of, any NYNEX Contract, except for defaults which, individually and
in the aggregate, would not reasonably be expected to result in a Material
Adverse Effect on NYNEX. True and complete copies of all NYNEX Contracts have
been delivered to Bell Atlantic or made available for inspection.
22
<PAGE>
(b) Set forth on Schedule 4.21 hereto is a list of each contract,
agreement or arrangement to which NYNEX or any of its Subsidiaries is a party or
may be bound and (i) under the terms of which any of the rights or obligations
of a party thereto will be modified or altered as a result of the transactions
contemplated hereby in a manner which, individually or in the aggregate with all
such other contracts, agreements or arrangements would reasonably be expected to
result in a Material Adverse Effect on NYNEX; (ii) is an arrangement limiting or
restraining Bell Atlantic, NYNEX, any Bell Atlantic or NYNEX Subsidiary or any
successor thereto from engaging or competing in any business which has, or could
reasonably be expected to have in the foreseeable future, a Material Adverse
Effect on NYNEX; or (iii) to NYNEX's knowledge, is an arrangement limiting or
restraining Bell Atlantic, NYNEX or any of their respective Subsidiaries or
their respective affiliates or any successor thereto from engaging or competing
in any business.
SECTION 4.22 - Certain Regulatory Matters. (a) Except as disclosed
--------------------------
on Schedule 4.22 hereto and except for billing disputes with customers arising
in the ordinary course of business that in the aggregate involve immaterial
amounts, there are no proceedings or investigations pending or, to NYNEX's
knowledge, threatened, before any domestic or foreign court, administrative,
governmental or regulatory body in which any of the following matters are being
considered, nor has NYNEX or any of its Subsidiaries received written notice or
inquiry from any such body, government official, consumer advocacy or similar
organization or any private party, indicating that any of such matters should be
considered or may become the object of consideration or investigation: (i)
reduction of rates charged to customers; (ii) reduction of earnings; (iii)
refunds of amounts previously charged to customers; or (iv) failure to meet any
expense, infrastructure, service quality or other commitments previously made to
or imposed by any administrative, governmental or regulatory body.
(b) Except as disclosed on Schedule 4.22 hereto, neither NYNEX nor
any of its Subsidiaries has any outstanding commitments (and no such obligations
have been imposed upon NYNEX and remain outstanding) regarding (i) reduction of
rates charged to customers; (ii) reduction of earnings; (iii) refunds of amounts
previously charged to customers or (iv) expenses, infrastructure expenditures,
service quality or other regulatory requirements, to or by any domestic or
foreign court, administrative, governmental or regulatory body, government
official, consumer advocacy or similar organization.
SECTION 4.23 - SFAS 106 Matters. To NYNEX's knowledge, the accrual
----------------
by NYNEX at the Effective Time of the portion of its remaining transition
obligation under Statement of Financial Accounting Standards No. 106 which it is
required to accrue at such time will not adversely affect the ability of NYNEX
to declare and pay annual dividends to Bell Atlantic after the Effective Time in
the same amounts as NYNEX paid to its stockholders on an annual basis prior to
the Effective Time.
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<PAGE>
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF BELL ATLANTIC
Bell Atlantic hereby represents and warrants as of the date hereof
to NYNEX as follows:
SECTION 5.1 - Organization and Qualification; Subsidiaries. Each of
--------------------------------------------
Bell Atlantic and each of its Significant Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization. Each of the Bell Atlantic
Subsidiaries which is not a Significant Subsidiary is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization, except for such failure which, when taken
together with all other such failures, would not reasonably be expected to have
a Material Adverse Effect on Bell Atlantic. Each of Bell Atlantic and its
Subsidiaries has the requisite corporate power and authority and any necessary
governmental authority, franchise, license or permit to own, operate or lease
the properties that it purports to own, operate or lease and to carry on its
business as it is now being conducted, and is duly qualified as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of its properties owned, operated or leased or the nature of its
activities makes such qualification necessary, except for such failure which,
when taken together with all other such failures, would not reasonably be
expected to have a Material Adverse Effect on Bell Atlantic. The Bell Atlantic
Subsidiaries are listed on Schedule 5.1 hereto.
SECTION 5.2 - Certificate of Incorporation and Bylaws. Bell Atlantic
---------------------------------------
has heretofore furnished, or otherwise made available, to NYNEX a complete and
correct copy of the Certificate of Incorporation and the Bylaws, each as amended
to the date hereof, of Bell Atlantic and each of its Significant Subsidiaries.
Such Certificates of Incorporation and Bylaws are in full force and effect.
Neither Bell Atlantic nor any of its Significant Subsidiaries is in violation of
any of the provisions of its respective Certificate of Incorporation or, in any
material respect, its Bylaws.
SECTION 5.3 - Capitalization. (a) The authorized capital stock of
--------------
Bell Atlantic consists of (i) 12,500,000 shares of Series Preferred Stock, par
value $1.00 per share, none of which are outstanding and none of which are
reserved for issuance, (ii) 12,500,000 shares of Series Preference Stock, par
value $1.00 per share, none of which are outstanding and 10,000,000 of which are
reserved for issuance, and (iii) 1,500,000,000 shares of Bell Atlantic Common
Stock, of which, as of March 31, 1996, 437,816,267 shares were issued and
outstanding, 139,551 shares were held in the treasury of Bell Atlantic and
14,137,572 shares were issuable upon the exercise of options outstanding under
the Bell Atlantic option plans listed on Schedule 5.3 hereto. Except as set
forth on Schedule 5.3, after the date hereof or, as permitted by Section 6.2
hereof, (i) since March 31, 1996, no shares of Bell Atlantic Common Stock have
been issued, except upon the exercise of options and rights described in the
immediately preceding sentence, and (ii) there are no outstanding Bell Atlantic
Equity Rights. For purposes of this Agreement, Bell Atlantic Equity Rights shall
mean subscriptions, options, warrants, calls, commitments, agreements,
conversion rights or other rights of any character (contingent or otherwise) to
purchase or otherwise acquire from Bell Atlantic or any of Bell Atlantic's
Subsidiaries at any time, or upon the happening of any stated event, any shares
of the capital stock of Bell Atlantic ("Bell Atlantic Equity Rights"). Schedule
5.3 hereto sets
24
<PAGE>
forth a complete and accurate list of certain information with respect to all
outstanding Bell Atlantic Equity Rights as of March 31, 1996. Since March 31,
1996, no Bell Atlantic Equity Rights have been issued except as set forth on
Schedule 5.3, or, after the date hereof, as permitted by Section 6.2 hereof.
(b) Except as set forth on Schedule 5.3(b), or, after the date
hereof, as permitted by Section 6.2 hereof, there are no outstanding obligations
of Bell Atlantic or any of Bell Atlantic's Subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock of Bell Atlantic.
(c) All of the issued and outstanding shares of Bell Atlantic Common
Stock are validly issued, fully paid and nonassessable.
(d) Except as disclosed on Schedule 5.1 hereto, all the outstanding
capital stock of each of Bell Atlantic's Subsidiaries is duly authorized,
validly issued, fully paid and nonassessable, and is owned by Bell Atlantic free
and clear of any liens, security interests, pledges, agreements, claims, charges
or encumbrances. Except as set forth on Schedule 5.3, or hereafter issued or
entered into in accordance with Section 6.2 hereof, there are no existing
subscriptions, options, warrants, calls, commitments, agreements, conversion
rights or other rights of any character (contingent or otherwise) to purchase or
otherwise acquire from Bell Atlantic or any of Bell Atlantic's Subsidiaries at
any time, or upon the happening of any stated event, any shares of the capital
stock of any Bell Atlantic Subsidiary, whether or not presently issued or
outstanding (except for rights of first refusal to purchase interests in
Subsidiaries which are not wholly owned by Bell Atlantic), and there are no
outstanding obligations of Bell Atlantic or any of Bell Atlantic's Subsidiaries
to repurchase, redeem or otherwise acquire any shares of capital stock of any of
Bell Atlantic's Subsidiaries. Except for (i) its Subsidiaries and Material
Investments, (ii) immaterial amounts of equity securities acquired, in the
capacity of creditor, in bankruptcy proceedings, (iii) equity interests held by
Material Investments and Jointly Held Persons, (iv) investments of persons in
which Bell Atlantic has less than a 10% interest and (v) equity interests
disclosed on Schedule 5.3 hereto or hereafter acquired as permitted under
Section 6.2 hereof, Bell Atlantic does not directly or indirectly own any equity
interest in any other person.
(e) As to each of the Bell Atlantic Material Investments, Cellco
Partnership and Bell Atlantic NYNEX Mobile, Inc., Bell Atlantic owns the equity
interests set forth on Schedule 5.3, free and clear of any liens, security
interests, pledges, claims, charges or encumbrances, except as disclosed on
Schedule 5.3. Except as disclosed on Schedule 5.3, and excluding any rights of
first refusal, there are no existing subscriptions, options, warrants, calls,
commitments, agreements, conversion rights or other rights of any character
(contingent or otherwise) to purchase or otherwise acquire any of such equity
interests, directly or indirectly, by Bell Atlantic.
SECTION 5.4 - Authority Relative to this Agreement. Bell Atlantic
------------------------------------
has the necessary corporate power and authority to enter into this Agreement
and, subject to obtaining any necessary stockholder approval of the Merger
Agreement, the issuance of Bell Atlantic Common Stock pursuant to the Merger
Agreement and the Certificate Amendment, to carry out its obligations hereunder.
The execution and delivery of this Agreement by Bell Atlantic
25
<PAGE>
and the consummation by Bell Atlantic of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of Bell
Atlantic, subject to the approval of this Agreement and the issuance of Bell
Atlantic Common Stock in accordance herewith by Bell Atlantic's stockholders
required by the rules of the NYSE and the approval of the Certificate Amendment
required by Delaware Law. This Agreement has been duly executed and delivered by
Bell Atlantic and, assuming the due authorization, execution and delivery
thereof by the other Parties, constitutes a legal, valid and binding obligation
of Bell Atlantic, enforceable against it in accordance with its terms.
SECTION 5.5 - No Conflict; Required Filings and Consents. (a) Except
------------------------------------------
as listed on Schedule 5.5 hereto or as described in subsection (b) below, the
execution and delivery of this Agreement by Bell Atlantic do not, and the
performance of this Agreement by Bell Atlantic will not, (i) violate or conflict
with the Certificate of Incorporation or Bylaws of Bell Atlantic, (ii) conflict
with or violate any law, regulation, court order, judgment or decree applicable
to Bell Atlantic or any of its Subsidiaries or by which any of their respective
property is bound or affected, (iii) violate or conflict with the Certificate of
Incorporation or Bylaws of any of Bell Atlantic's Subsidiaries, or (iv) result
in any breach of or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination or cancellation of, or result in the creation of a lien or
encumbrance on any of the properties or assets of Bell Atlantic or any of its
Subsidiaries pursuant to, result in the loss of any material benefit under, or
require the consent of any other party to, any contract, instrument, permit,
license or franchise to which Bell Atlantic or any of its Subsidiaries is a
party or by which Bell Atlantic, any of such Subsidiaries or any of their
respective property is bound or affected, (v) to Bell Atlantic's knowledge,
conflict with or violate any law, regulation, court order, judgment or decree
applicable to any of its Material Investments or by which such Material
Investments' property is bound or affected, (vi) to Bell Atlantic's knowledge,
violate or conflict with the Certificate of Incorporation or Bylaws of any of
its Material Investments, or (vii) to Bell Atlantic's knowledge, result in any
breach of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination or cancellation of, or result in the creation of a lien or
encumbrance on any of the properties or assets of any of its Material
Investments pursuant to, or result in the loss of any material benefit under, or
require the consent of any other party to, any permit, license or franchise to
which any of its Material Investments is a party or by which any of such
Material Investments or any of their respective property is bound or affected,
except, in the case of clauses (ii), (iii), (iv), (v), (vi) or (vii) above, for
conflicts, violations, breaches, defaults, results or consents which,
individually or in the aggregate, would not have a Material Adverse Effect on
Bell Atlantic.
(b) Except as listed on Schedule 5.5 and except for applicable
requirements, if any, of state, District of Columbia or foreign regulatory laws
and commissions, the Federal Communications Commission, the Exchange Act, the
premerger notification requirements of the HSR Act, filing and recordation of
appropriate merger or other documents as required by Delaware Law and any
filings required pursuant to any state securities or "blue sky" laws or the
rules of any applicable stock exchanges, neither Bell Atlantic nor any of its
Significant Subsidiaries is required to submit any notice, report or other
filing with any governmental authority, domestic or foreign, in connection with
the execution, delivery or performance of
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this Agreement. Except as set forth in the immediately preceding sentence, no
waiver, consent, approval or authorization of any governmental or regulatory
authority, domestic or foreign, is required to be obtained by Bell Atlantic or
any of its Significant Subsidiaries in connection with its execution, delivery
or performance of this Agreement.
SECTION 5.6 - SEC Filings; Financial Statements. (a) Bell Atlantic
---------------------------------
has filed all forms, reports and documents required to be filed with the SEC
since January 1, 1993, and has heretofore delivered or made available to NYNEX,
in the form filed with the SEC, together with any amendments thereto, its (i)
Annual Reports on Form 10-K for the fiscal years ended December 31, 1993, 1994
and 1995, (ii) all proxy statements relating to Bell Atlantic's meetings of
stockholders (whether annual or special) held since January 1, 1993, (iii)
Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, June 30,
and September 30, 1995, and (iv) all other reports or registration statements
filed by Bell Atlantic with the SEC since January 1, 1993, including without
limitation all Annual Reports on Form 11-K filed with respect to the Bell
Atlantic Benefit Plans (collectively, the "Bell Atlantic SEC Reports"). The Bell
Atlantic SEC Reports (i) were prepared substantially in accordance with the
requirements of the 1933 Act or the Exchange Act, as the case may be, and the
rules and regulations promulgated under each of such respective acts, and (ii)
did not at the time they were filed contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(b) The financial statements, including all related notes and
schedules, contained in the Bell Atlantic SEC Reports (or incorporated by
reference therein) fairly present the consolidated financial position of Bell
Atlantic and its Subsidiaries as at the respective dates thereof and the
consolidated results of operations and cash flows of Bell Atlantic and its
Subsidiaries for the periods indicated in accordance with GAAP applied on a
consistent basis throughout the periods involved (except for changes in
accounting principles disclosed in the notes thereto) and subject in the case of
interim financial statements to normal year-end adjustments.
SECTION 5.7 - Absence of Certain Changes or Events. Except as
------------------------------------
disclosed in the Bell Atlantic SEC Reports filed prior to the date hereof and on
Schedule 5.7, since December 31, 1995, Bell Atlantic and its Subsidiaries have
not incurred any material liability, except in the ordinary course of their
businesses consistent with their past practices, and there has not been any
change, or any event involving a prospective change, in the business, financial
condition or results of operations of Bell Atlantic or any of its Subsidiaries
which has had, or is reasonably likely to have, a Material Adverse Effect on
Bell Atlantic, and Bell Atlantic and its Subsidiaries have conducted their
respective businesses in the ordinary course consistent with their past
practices.
SECTION 5.8 - Litigation. There are no claims, actions, suits,
----------
proceedings or investigations pending or, to Bell Atlantic's knowledge,
threatened against Bell Atlantic or any of its Subsidiaries, or any properties
or rights of Bell Atlantic or any of its Subsidiaries, before any court,
administrative, governmental, arbitral, mediation or regulatory authority or
body, domestic or foreign, as to which there is more than a remote possibility
of an adverse judgment or determination against Bell Atlantic or any of its
Subsidiaries or any properties or
27
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rights of Bell Atlantic or any of its Subsidiaries in excess of $2 million (net
of insurance and net of accruals reflected in the financial statements
incorporated by reference in Bell Atlantic SEC Reports), except (a) as disclosed
on Schedule 5.8 hereto, (b) as disclosed on Schedules 5.9, 5.12, 5.13 or 5.22
hereto, (c) such claims, actions, suits, proceedings or investigations which are
pending or threatened against Jointly Held Persons, NYNEX or any of its
Subsidiaries, and (d) cases in which neither Bell Atlantic nor any of its
Subsidiaries is a named defendant, but as to which Bell Atlantic or any of its
Subsidiaries may be liable for an allocable share of any judgment rendered
pursuant to the POR. With respect to tax matters, litigation shall not be deemed
threatened unless a tax authority has delivered a written notice of deficiency
to Bell Atlantic or any of its Subsidiaries.
SECTION 5.9 - No Violation of Law. The business of Bell Atlantic and
-------------------
its Subsidiaries is not being conducted in violation of any Legal Requirements
or in violation of any Permits, except for possible violations none of which,
individually or in the aggregate, may reasonably be expected to have a Material
Adverse Effect on Bell Atlantic. Except as disclosed in Bell Atlantic SEC
Reports and as set forth on Schedule 5.9 hereto, no investigation or review by
any domestic or foreign governmental or regulatory entity (including any stock
exchange or other self-regulatory body) with respect to Bell Atlantic or its
Subsidiaries in relation to any alleged violation of law or regulation is
pending or, to Bell Atlantic's knowledge, threatened, nor has any governmental
or regulatory entity (including any stock exchange or other self-regulatory
body) indicated an intention to conduct the same, except for such investigations
which, if they resulted in adverse findings, would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on Bell
Atlantic. Except as set forth on Schedule 5.9 hereto, neither Bell Atlantic nor
any of its Subsidiaries is subject to any cease and desist or other order,
judgment, injunction or decree issued by, or is a party to any written
agreement, consent agreement or memorandum of understanding with, or is a party
to any commitment letter or similar undertaking to, or is subject to any order
or directive by, or has adopted any board resolutions at the request of, any
court, governmental entity or regulatory agency that materially restricts the
conduct of its business or which may reasonably be expected to have a Material
Adverse Effect on Bell Atlantic, nor has Bell Atlantic or any of its
Subsidiaries been advised that any court, governmental entity or regulatory
agency is considering issuing or requesting any of the foregoing. None of the
representations and warranties made in this Section 5.9 are being made with
respect to Environmental Laws.
SECTION 5.10 - Joint Proxy Statement. None of the information
---------------------
supplied or to be supplied by or on behalf of Bell Atlantic for inclusion or
incorporation by reference in the Registration Statement will, at the time the
Registration Statement becomes effective under the 1933 Act, 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, in light of the
circumstances under which they were made, not misleading. None of the
information supplied or to be supplied by or on behalf of Bell Atlantic for
inclusion or incorporation by reference in the Joint Proxy Statement will, at
the dates mailed to stockholders and at the times of the NYNEX stockholders'
meeting and the Bell Atlantic stockholders' meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The Registration
Statement and
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the Joint Proxy Statement (except for information relating solely to NYNEX) will
comply as to form in all material respects with the provisions of the 1933 Act
and the Exchange Act and the rules and regulations promulgated thereunder.
SECTION 5.11 - Employee Matters; ERISA. Except as previously
-----------------------
disclosed in writing by Bell Atlantic's outside counsel to NYNEX's outside
counsel with specific reference to this Section 5.11:
(a) Set forth on Schedule 5.11 hereto is a true and complete list of
all employee benefit plans covering present and former employees or directors of
Bell Atlantic and of each of its Subsidiaries or their beneficiaries, or
providing benefits to such persons in respect of services provided to any such
entity, including, but not limited to, any employee benefit plans within the
meaning of Section 3(3) of ERISA, any deferred compensation bonuses, stock
options, restricted stock plans, incentive compensation, severance or change in
control agreements and any other material benefit arrangements or payroll
practices (collectively, the "Bell Atlantic Benefit Plans").
(b) All contributions and other payments required to be made by Bell
Atlantic or any of its Subsidiaries to or under any Bell Atlantic Benefit Plan
(or to any person pursuant to the terms thereof) have been made or the amount of
such payment or contribution obligation has been reflected in the Bell Atlantic
Financial Statements.
(c) Each of the Bell Atlantic Benefit Plans intended to be
"qualified" within the meaning of Section 401(a) of the Code has been determined
by the IRS to be so qualified, and, to Bell Atlantic's knowledge, no
circumstances exist that could reasonably be expected by Bell Atlantic to result
in the revocation of any such determination. Bell Atlantic is in compliance in
all material respects with, and each of the Bell Atlantic Benefit Plans is and
has been operated in all material respects in compliance with, all applicable
Legal Requirements governing such plan, including, without limitation, ERISA and
the Code. Each Bell Atlantic Benefit Plan intended to provide for the deferral
of income or the reduction of salary or other compensation, or to afford other
income tax benefits, complies in all material respects with the requirements of
the applicable provisions of the Code and other Legal Requirements to the extent
required to provide such income tax benefits.
(d) With respect to the Bell Atlantic Benefit Plans, individually
and in the aggregate, no event has occurred and, to Bell Atlantic's knowledge,
there does not now exist any condition or set of circumstances, that could
subject Bell Atlantic or any of its Subsidiaries to any material liability
arising under the Code, ERISA or any other applicable Legal Requirements
(including, without limitation, any liability to any such plan or the PBGC), or
under any indemnity agreement to which Bell Atlantic or any of its Subsidiaries
is a party, excluding liability for benefit claims and funding obligations
payable in the ordinary course.
(e) Except as set forth on Schedule 5.11 hereto, none of the Bell
Atlantic Benefit Plans that are "welfare plans" within the meaning of Section
3(1) of ERISA provides for any retiree benefits other than continuation coverage
required to be provided under Section 4980B of the Code or Part 6 of Title I of
ERISA.
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(f) Bell Atlantic has made available to NYNEX a true and correct
copy of each current or last, in the case where there is no current, expired
collective bargaining agreement to which Bell Atlantic or any of its
Subsidiaries is a party or under which Bell Atlantic or any of its Subsidiaries
has obligations and, with respect to each Bell Atlantic Benefit Plan, where
applicable, (i) such plan (but only to the extent such plan is intended to be
covered by Section 401 of the Code) and summary plan description, (ii) the most
recent annual report filed with the IRS, (iii) each related trust agreement
(including all material amendments to each such trust agreement), (iv) the most
recent determination of the IRS with respect to the qualified status of such
Bell Atlantic Benefit Plan, and (v) the most recent actuarial report or
valuation.
(g) Except as set forth on Schedule 5.11 hereto, (i) the
consummation or announcement of any transaction contemplated by this Agreement
will not (either alone or upon the occurrence of any additional or further acts
or events) result in any (A) payment (whether of severance pay or otherwise)
becoming due from Bell Atlantic or any of its Subsidiaries to any officer,
employee, former employee or director thereof or to the trustee under any "rabbi
trust" or similar arrangement, or (B) benefit under any Bell Atlantic Benefit
Plan being established or becoming accelerated, vested or payable and (ii)
neither Bell Atlantic nor any of its Subsidiaries is a party to (A) any
management, employment, deferred compensation, severance (including any payment,
right or benefit resulting from a change in control), bonus or other contract
for personal services with any current or former officer, director or employee
(whether or not characterized as a plan for purposes of ERISA), (B) any
consulting contract with any person who prior to entering into such contract was
a director or officer of Bell Atlantic or any of its Subsidiaries, or (C) any
plan, agreement, arrangement or understanding similar to any of the items
described in clause (ii)(A) or (B) of this sentence.
(h) The consummation or announcement of any transaction contemplated
by this Agreement will not (either alone or upon the occurrence of any
additional or further acts or events) result in the disqualification of any of
the Bell Atlantic Benefit Plans intended to be qualified under, result in a
prohibited transaction or breach of fiduciary duty under, or otherwise violate,
ERISA or the Code.
(i) Neither Bell Atlantic nor any of its Subsidiaries nor any of
their directors, officers, employees or agents, nor any "party in interest" or
"disqualified person", as such terms are defined in Section 3 of ERISA and
Section 4975 of the Code has, with respect to any Bell Atlantic Benefit Plan,
engaged in or been a party to any "prohibited transaction", as such term is
defined in Section 4975 of the Code or Section 406 of ERISA, which is not
otherwise exempt, which could result in the imposition of either a penalty
assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of
the Code or which could constitute a breach of fiduciary duty, in each case
applicable to Bell Atlantic or any Bell Atlantic Benefit Plan and which would
result in a Material Adverse Effect on Bell Atlantic.
(j) No Bell Atlantic Benefit Plan subject to Section 412 of the Code
has incurred any now existing "accumulated funding deficiency" (as defined in
ERISA), whether or not waived. Neither Bell Atlantic nor any of its Subsidiaries
has incurred, and none of such entities reasonably expects to incur, any
material liability to the PBGC with respect to any Bell Atlantic Benefit Plan.
Neither Bell Atlantic nor any of its Subsidiaries is a party to,
30
<PAGE>
and neither has incurred or reasonably expects to incur, any withdrawal
liability with respect to, any "multiemployer plan" (as defined in Section 3(37)
of ERISA) for which there is any outstanding liability.
SECTION 5.12 - Labor Matters. Except as disclosed on Schedule 5.12
-------------
hereto, neither Bell Atlantic nor any of its Subsidiaries is party to any
collective bargaining agreement or other labor agreement with any union or labor
organization and no union or labor organization has been recognized by Bell
Atlantic or any of its Subsidiaries as an exclusive bargaining representative
for employees of Bell Atlantic or any of its Subsidiaries. Except as disclosed
on Schedule 5.12 hereto, to Bell Atlantic's knowledge, there is no current union
representation question involving employees of Bell Atlantic or any of its
Subsidiaries, nor does Bell Atlantic have knowledge of any significant activity
or proceeding of any labor organization (or representative thereof) or employee
group to organize any such employees. Neither Bell Atlantic nor any of its
Subsidiaries has made any commitment not in collective bargaining agreements
listed on Schedule 5.12 hereto that would require the application of the terms
of any collective bargaining agreements entered into by Bell Atlantic or any of
its Subsidiaries to NYNEX, or to any joint venture of NYNEX or to any Subsidiary
of NYNEX. Except as disclosed on Schedule 5.12 hereto, (i) there is no material
active arbitration under any collective bargaining agreement involving Bell
Atlantic or any of its Subsidiaries, (ii) there is no material unfair labor
practice, grievance, employment discrimination or other labor or employment
related charge, complaint or claim against Bell Atlantic or any of its
Subsidiaries pending before any court, arbitrator, mediator or governmental
agency or tribunal, or, to Bell Atlantic's knowledge, threatened, (iii) there is
no material strike, picketing or work stoppage by, or any lockout of, employees
of Bell Atlantic or any of its Subsidiaries pending or, to Bell Atlantic's
knowledge, threatened, against or involving Bell Atlantic or any of its
Subsidiaries, (iv) there is no significant active arbitration under any
collective bargaining agreement involving Bell Atlantic or any of its
Subsidiaries regarding the employer's right to move work from one location or
entity to another, or to consolidate work locations, or involving other similar
restrictions on business operations, and (v) there is no material proceeding,
claim, suit, action or governmental investigation pending or, to Bell Atlantic's
knowledge, threatened, in respect of which any director, officer, employee or
agent of Bell Atlantic or any of its Subsidiaries is or may be entitled to claim
indemnification from Bell Atlantic or such Bell Atlantic Subsidiary pursuant to
their respective charters or bylaws or as provided in the indemnification
agreements, if any, listed on Schedule 5.12 hereto. For purposes of this Section
5.12, "material" refers to any liability which could reasonably be expected to
exceed $1 million.
SECTION 5.13 - Environmental Matters. Except as set forth on
---------------------
Schedule 5.13 hereto or in the Bell Atlantic SEC Reports filed prior to the date
hereof:
(a) To Bell Atlantic's knowledge, Bell Atlantic and each of the Bell
Atlantic Subsidiaries is in compliance with all applicable Environmental Laws
and neither Bell Atlantic nor any of its Subsidiaries has received any written
or oral communication from any person or governmental authority that alleges
that Bell Atlantic or any of its Subsidiaries is not in compliance with
applicable Environmental Laws where such non-compliance could reasonably be
expected to result in a Material Adverse Effect on Bell Atlantic.
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(b) To Bell Atlantic's knowledge, Bell Atlantic and each of its
Subsidiaries has obtained or has applied for all material Environmental Permits
necessary for the construction of their facilities or the conduct of their
operations, and all such material Environmental Permits are effective or, where
applicable, a renewal application has been timely filed and is pending agency
approval, and Bell Atlantic and its Subsidiaries are in material compliance with
all terms and conditions of such Environmental Permits. To Bell Atlantic's
knowledge, there are no past or present events, conditions, circumstances,
activities, practices, incidents, actions or plans that may interfere with, or
prevent, future continued material compliance on the part of Bell Atlantic or
any of its Subsidiaries with such Environmental Permits.
(c) To Bell Atlantic's knowledge, there is no currently existing
requirement to be imposed in the future by any Environmental Law or
Environmental Permit which could reasonably be expected to result in the
incurrence of a material cost by NYNEX or any of its Subsidiaries.
(d) To Bell Atlantic's knowledge, there is no material Environmental
Claim pending or threatened (i) against Bell Atlantic or any of its
Subsidiaries, (ii) against any person whose liability for any Environmental
Claim Bell Atlantic or any of its Subsidiaries has or may have retained or
assumed either contractually or by operation of law, or (iii) against any real
or personal property or operations which Bell Atlantic or any of its
Subsidiaries owns, leases or manages, in whole or in part.
(e) To Bell Atlantic's knowledge, there have been no Releases of any
Hazardous Material that would be reasonably likely to form the basis of any
material Environmental Claim against Bell Atlantic or any of its Subsidiaries,
or against any person whose liability for any material Environmental Claim Bell
Atlantic or any of its Subsidiaries has or may have retained or assumed either
contractually or by operation of law.
(f) To Bell Atlantic's knowledge, with respect to any predecessor of
Bell Atlantic or any of its Subsidiaries, there is no material Environmental
Claim pending or threatened, or any Release of Hazardous Materials that would be
reasonably likely to form the basis of any material Environmental Claim against
Bell Atlantic or any of its Subsidiaries.
(g) To Bell Atlantic's knowledge, Bell Atlantic has disclosed to
NYNEX all material facts which Bell Atlantic reasonably believes form the basis
of a material current or future cost relating to any environmental matter
affecting Bell Atlantic and its Subsidiaries which Bell Atlantic believes will
or is reasonably likely to result in a Material Adverse Effect on Bell Atlantic.
(h) To Bell Atlantic's knowledge, neither Bell Atlantic nor any of
its Subsidiaries, nor any owner of premises leased or operated by Bell Atlantic
or any of its Subsidiaries has filed any notice with respect to such premises
under federal, state, local or foreign law indicating past or present treatment,
storage or disposal of Hazardous Materials, as regulated under 40 C.F.R. Parts
264-267 or any state, local or foreign equivalent or is engaging or has engaged
in business operations involving the generation, transportation, treatment,
recycle or disposal of any waste (excluding low level radioactive tubes from
central
32
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office equipment or typical smoke and fire alarm components) regulated under
Environmental Laws pertaining to radioactive materials or the nuclear power
industry, including, without limitation, requirements of Volume 10 of the Code
of Federal Regulations.
(i) To Bell Atlantic's knowledge, none of the properties owned,
leased or operated by Bell Atlantic, its Subsidiaries or any predecessor thereof
are now, or were in the past, listed on the NPL, CERCLIS or any other comparable
state or local environmental database (excluding easements that transgress such
Superfund Sites listed on the NPL or CERCLIS sites).
(j) To Bell Atlantic's knowledge, the Merger will not require any
governmental approvals under the Environmental Laws, including those that are
triggered by sales or transfers of businesses or real property.
(k) Any matter which Bell Atlantic reasonably believes does not
present a significant likelihood of requiring expenditures by, or causing the
incurrence of liabilities by, Bell Atlantic and its Subsidiaries of more than $2
million or, in the case of repetitive facility upgrades, will not in the
aggregate cause expenditures or liabilities of more than $12 million over a
six-year period, are excluded from the coverage of any representations made
hereunder.
(l) No representation is made by Bell Atlantic in this Section 5.13
as to Environmental Claims for which neither Bell Atlantic nor any of its
Subsidiaries is (or would be, if a claim were brought in a formal proceeding) a
named defendant, but as to which Bell Atlantic or any of its Subsidiaries may be
liable for an allocable share of any judgment rendered pursuant to the POR. No
representation is made by Bell Atlantic in subsection (i) of this Section 5.13
as to properties owned, leased or operated by AT&T or any of its Subsidiaries
except for such properties which are, or at any time since November 1, 1983
were, owned, leased or operated by Bell Atlantic or any of its Subsidiaries.
SECTION 5.14 - Board Action; Vote Required; Redemption of Rights;
--------------------------------------------------
Applicability of Section 203. (a) The Board of Directors of Bell Atlantic has
- ----------------------------
unanimously determined that the transactions contemplated by this Agreement are
in the best interests of Bell Atlantic and its stockholders and has resolved to
recommend to such stockholders that they vote in favor thereof.
(b) The approval of the Certificate Amendment by a majority of the
votes entitled to be cast by all holders of Bell Atlantic Common Stock and the
approval of the Merger Agreement and the issuance of Bell Atlantic Common Stock
pursuant thereto by a majority of the votes cast thereon, provided that the
total votes cast thereon represents over 50% in interest of all securities of
Bell Atlantic entitled to vote thereon, is the only vote of the holders of any
class or series of the capital stock of Bell Atlantic required to approve this
Agreement, the Merger, the Certificate Amendment and the other transactions
contemplated hereby.
(c) By resolution adopted January 23, 1996, the Board of Directors
of Bell Atlantic ordered the redemption of the rights issued pursuant to the
Shareholder Rights Plan adopted by the Board of Bell Atlantic on March 28, 1989
and the related Rights Agreement,
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at a redemption price of $.01 per right. Bell Atlantic has not adopted any other
shareholder rights plan.
(d) The provisions of Section 203 of the Delaware Law will not,
assuming the accuracy of the representations contained in Section 4.20 hereof
(without giving effect to the knowledge qualification therein), apply to this
Agreement or any of the transactions contemplated hereby.
SECTION 5.15 - Opinion of Financial Advisor. Bell Atlantic has
----------------------------
received the opinion of Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), dated April 21, 1996, to the effect that, as of such date,
the Bell Atlantic Exchange Ratio (as defined in the Original Agreement), taking
into account the NYNEX Exchange Ratio (as defined in the Original Agreement),
was fair from a financial point of view to the holders of Bell Atlantic Common
Stock, and has received the letter of Merrill Lynch dated July 2, 1996, to the
effect that if, as of April 21, 1996, its analyses and review had been conducted
in connection with this Agreement, instead of in connection with the Original
Agreement, Merrill Lynch would have concluded, as of April 21, 1996, that the
Exchange Ratio was fair from a financial point of view to Bell Atlantic and,
accordingly, to the holders of Bell Atlantic Common Stock.
SECTION 5.16 - Brokers. Except for Merrill Lynch, the arrangements
-------
with which have been disclosed to NYNEX prior to the date hereof, who has been
engaged by Bell Atlantic, no broker, finder or investment banker is entitled to
any brokerage, finder's, investment banking or other fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Bell Atlantic or any of its Subsidiaries.
SECTION 5.17 - Tax Matters. Except as set forth on Schedule 5.17
-----------
hereto:
(a) All material federal and foreign tax returns and tax reports
required to be filed by Bell Atlantic or its Subsidiaries on or prior to the
Effective Time or with respect to taxable periods ending on or prior to the
Effective Time have been or will be filed with the appropriate governmental
authorities on or prior to the Effective Time or by the due date thereof
including extensions;
(b) All material state and local tax returns and tax reports
required to be filed by Bell Atlantic or its Subsidiaries on or prior to the
Effective Time or with respect to taxable periods ending on or prior to the
Effective Time which relate to income, profits, franchise, property, sales, use
or other taxes, have been or will be filed with the appropriate governmental
authorities on or prior to the Effective Time or by the due date thereof
including extensions;
(c) The tax returns and tax reports referred to in subparts (a) and
(b) of this Section 5.17 correctly reflect (and as to returns not filed as of
the date hereof, will correctly reflect) all material tax liabilities of Bell
Atlantic and its Subsidiaries required to be shown thereon;
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(d) All material federal, state, local and foreign income, profits,
franchise, property, sales, use and other taxes (including interest and
penalties) shown as due on those tax returns and tax reports referred to in
subparts (a) and (b) of this Section 5.17 which have been or will be filed by
the Effective Time, as well as any material foreign withholding taxes imposed on
or in respect of any amounts paid to or by Bell Atlantic or any of its
Subsidiaries, whether or not such amounts or withholding taxes are referred to
or shown on any tax returns or tax reports referred to in Section 5.17(a) or (b)
hereof, have been or will be fully paid or adequately reflected as a liability
on Bell Atlantic's or its Subsidiaries' books and records on or prior to the
Closing Date;
(e) With respect to any period for which tax returns and tax reports
have not yet been filed, or for which taxes are not yet due or owing, Bell
Atlantic and its Subsidiaries have made due and sufficient accruals for such
taxes in their respective books and records and financial statements;
(f) The representations and warranties contained in the Bell
Atlantic Officer's Certificate attached hereto as Schedule 5.17(f) are true and
correct; and
(g) Neither Bell Atlantic nor any of its affiliates has taken or
agreed to take any action that would (a) prevent or impede the Merger from
qualifying as a tax-free reorganization under Section 368 of the Code, or (b)
make untrue any representation or warranty contained in the Officer's
Certificate referred to in Section 5.17(f) hereof.
SECTION 5.18 - Intellectual Property. To Bell Atlantic's knowledge,
---------------------
neither Bell Atlantic nor any of its Subsidiaries utilizes or has utilized any
patent, trademark, tradename, service mark, copyright, software, trade secret or
know-how, except for those which are owned, possessed or lawfully used by Bell
Atlantic or its Subsidiaries in their operations, and, to the knowledge of Bell
Atlantic, neither Bell Atlantic nor any of its Subsidiaries infringes upon or
unlawfully or wrongfully uses any patent, trademark, tradename, service mark,
copyright or trade secret owned or validly claimed by another.
SECTION 5.19 - Insurance. Except as set forth on Schedule 5.19
---------
hereto, each of Bell Atlantic and each of its Significant Subsidiaries is, and
has been continuously since January 1, 1985 (or such later date as such
Significant Subsidiary was organized or acquired by Bell Atlantic), insured with
financially responsible insurers in such amounts and against such risks and
losses as are customary for companies conducting the business as conducted by
Bell Atlantic and its Subsidiaries during such time period. Except as set forth
on such Schedule 5.19, since January 1, 1993, neither Bell Atlantic nor any of
its Subsidiaries has received notice of cancellation or termination with respect
to any material insurance policy of Bell Atlantic or its Subsidiaries. The
insurance policies of Bell Atlantic and its Subsidiaries are valid and
enforceable policies.
SECTION 5.20 - Ownership of Securities. As of the date hereof,
-----------------------
neither Bell Atlantic nor, to Bell Atlantic's knowledge, any of its affiliates
or associates (as such terms are defined under the Exchange Act), (a)(i)
beneficially owns, directly or indirectly, or (ii) is party to any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting or
disposing of, in each case, shares of capital stock of NYNEX, which in the
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aggregate represent 10% or more of the outstanding shares of NYNEX Common Stock
(other than shares held by Bell Atlantic Benefit Plans), nor (b) is an
"interested stockholder" of NYNEX within the meaning of Section 203 of the
Delaware Law. Except as set forth on Schedule 5.20 hereto, Bell Atlantic owns no
shares of NYNEX Common Stock described in the parenthetical clause of Section
2.2(a) hereof which would be canceled and retired without consideration pursuant
to Section 2.3(a) hereof.
SECTION 5.21 - Certain Contracts. (a) All contracts described in
-----------------
Item 601(b)(10) of Regulation S-K to which Bell Atlantic or its Subsidiaries is
a party or may be bound ("Bell Atlantic Contracts") have been filed as exhibits
to, or incorporated by reference in, Bell Atlantic's Annual Report on Form 10-K
for the year ended December 31, 1995. All Bell Atlantic Contracts are valid and
in full force and effect on the date hereof except to the extent they have
previously expired in accordance with their terms, and neither Bell Atlantic nor
any of its Subsidiaries has violated any provision of, or committed or failed to
perform any act which with or without notice, lapse of time or both would
constitute a default under the provisions of, any Bell Atlantic Contract, except
for defaults which, individually and in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect on Bell Atlantic. True and
complete copies of all Bell Atlantic Contracts have been delivered to NYNEX or
made available for inspection.
(b) Set forth on Schedule 5.21 hereto is a list of each contract,
agreement or arrangement to which Bell Atlantic or any of its Subsidiaries is a
party or may be bound and (i) under the terms of which any of the rights or
obligations of a party thereto will be modified or altered as a result of the
transactions contemplated hereby in a manner which, individually or in the
aggregate with all such other contracts, agreements or arrangements would
reasonably be expected to result in a Material Adverse Effect on Bell Atlantic;
(ii) is an arrangement limiting or restraining Bell Atlantic, NYNEX, any Bell
Atlantic or NYNEX Subsidiary or any successor thereto from engaging or competing
in any business which has, or could reasonably be expected to have in the
foreseeable future, a Material Adverse Effect on Bell Atlantic; or (iii) to Bell
Atlantic's knowledge, is an arrangement limiting or restraining Bell Atlantic,
NYNEX or any of their respective Subsidiaries or affiliates or any successor
thereto from engaging or competing in any business.
SECTION 5.22 - Certain Regulatory Matters. (a) Except as disclosed
--------------------------
on Schedule 5.22 hereto and except for billing disputes with customers arising
in the ordinary course of business that in the aggregate involve immaterial
amounts, there are no proceedings or investigations pending or, to Bell
Atlantic's knowledge, threatened, before any domestic or foreign court,
administrative, governmental or regulatory body in which any of the following
matters are being considered, nor has Bell Atlantic or any of its Subsidiaries
received written notice or inquiry from any such body, government official,
consumer advocacy or similar organization or any private party, indicating that
any of such matters should be considered or may become the object of
consideration or investigation: (i) reduction of rates charged to customers;
(ii) reduction of earnings; (iii) refunds of amounts previously charged to
customers; or (iv) failure to meet any expense, infrastructure, service quality
or other commitments previously made to or imposed by any administrative,
governmental or regulatory body.
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(b) Except as disclosed on Schedule 5.22 hereto, neither Bell
Atlantic nor any of its Subsidiaries has any outstanding commitments (and no
such obligations have been imposed upon Bell Atlantic and remain outstanding)
regarding (i) reduction of rates charged to customers; (ii) reduction of
earnings; (iii) refunds of amounts previously charged to customers or (iv)
expenses, infrastructure expenditures, service quality or other regulatory
requirements to or by any domestic or foreign court, administrative,
governmental or regulatory body, government official, consumer advocacy or
similar organization.
ARTICLE VI - CONDUCT OF INDEPENDENT
BUSINESSES PENDING THE MERGER
SECTION 6.1 - Transition Planning. Raymond W. Smith and Ivan G.
-------------------
Seidenberg, as Chairmen of Bell Atlantic and NYNEX, respectively, jointly shall
be responsible for coordinating all aspects of transition planning and
implementation relating to the Merger and the other transactions contemplated
hereby. If either such person ceases to be Chairman of his respective company
for any reason, such person's successor as Chairman shall assume his
predecessor's responsibilities under this Section 6.1. During the period between
the date hereof and the Effective Time, Messrs. Smith and Seidenberg jointly
shall (i) examine various alternatives regarding the manner in which to best
organize and manage the businesses of Bell Atlantic and NYNEX after the
Effective Time, and (ii) coordinate policies and strategies with respect to
regulatory authorities and bodies, in all cases subject to applicable law.
SECTION 6.2 - Conduct of Business in the Ordinary Course. Each of
------------------------------------------
NYNEX and Bell Atlantic covenants and agrees that, subject to the provisions of
Section 7.16 hereof, between the date hereof and the Effective Time, unless the
other shall otherwise consent in writing, and except as described on Schedule
6.2 hereto or as otherwise expressly contemplated hereby, the business of such
Party and its Subsidiaries shall be conducted only in, and such entities shall
not take any action except in, the ordinary course of business and in a manner
consistent with past practice; and each of NYNEX and Bell Atlantic and their
respective Subsidiaries will use their commercially reasonable efforts to
preserve substantially intact their business organizations, to keep available
the services of those of their present officers, employees and consultants who
are integral to the operation of their businesses as presently conducted and to
preserve their present relationships with significant customers and suppliers
and with other persons with whom they have significant business relations. By
way of amplification and not limitation, except as set forth on Schedule 6.2
hereto or as otherwise expressly contemplated by this Agreement, each of NYNEX
and Bell Atlantic agrees on behalf of itself and its Subsidiaries that they will
not, between the date hereof and the Effective Time, directly or indirectly, do
any of the following without the prior written consent of the other:
(a) (i) except for (A) the issuance of shares of NYNEX Common Stock
and Bell Atlantic Common Stock in amounts not exceeding the amounts set forth in
Schedule 6.2 in order to satisfy obligations under employee benefit plans
disclosed in Schedule 4.3 or 5.3 and Equity Rights issued thereunder and under
existing dividend reinvestment plans; (B) grants of stock options with respect
to NYNEX Common Stock or Bell Atlantic Common
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Stock to employees in the ordinary course of business and in amounts and in a
manner consistent with past practice, which shall not exceed the respective
amounts of options for NYNEX or Bell Atlantic, as the case may be, set forth on
Schedule 6.2 hereto; and (C) the issuance of securities by a Subsidiary to any
person which is directly or indirectly wholly owned by NYNEX or Bell Atlantic
(as the case may be): issue, sell, pledge, dispose of, encumber, authorize, or
propose the issuance, sale, pledge, disposition, encumbrance or authorization of
any shares of capital stock of any class, or any options, warrants, convertible
securities or other rights of any kind to acquire any shares of capital stock
of, or any other ownership interest in, such Party or any of its Subsidiaries;
(ii) amend or propose to amend the Certificate of Incorporation or Bylaws of
such Party or any of its Subsidiaries or adopt, amend or propose to amend any
shareholder rights plan or related rights agreement; (iii) split, combine or
reclassify any outstanding shares of NYNEX Common Stock and Bell Atlantic Common
Stock, or declare, set aside or pay any dividend or distribution payable in
cash, stock, property or otherwise with respect to shares of NYNEX Common Stock
and Bell Atlantic Common Stock, except for cash dividends to stockholders of
NYNEX and Bell Atlantic declared in the ordinary course of business and
consistent with past practice payable to stockholders of record on the record
dates consistently used in prior periods, which dividends shall not exceed the
per share amounts for NYNEX or Bell Atlantic, as the case may be, set forth on
Schedule 6.2 hereto, and the redemption of rights contemplated by Section
5.14(c) hereof, as long as such payments do not impair, and could not reasonably
be expected to impair, the ability to meet the condition set forth in Section
8.1(h) hereof; (iv) redeem, purchase or otherwise acquire or offer to redeem,
purchase or otherwise acquire any shares of its capital stock, except that each
of NYNEX and Bell Atlantic shall be permitted to acquire shares of NYNEX Common
Stock or Bell Atlantic Common Stock, as the case may be, from time to time in
open market transactions, consistent with past practice and in compliance with
applicable law and the provisions of any applicable employee benefit plan,
program or arrangement, for issuance upon the exercise of options and other
rights granted, and the lapsing of restrictions, under such Party's respective
employee benefit plans, programs and arrangements and dividend reinvestment
plans; or (v) authorize or propose or enter into any contract, agreement,
commitment or arrangement with respect to any of the matters prohibited by this
Section 6.2(a);
(b) (i) acquire (by merger, consolidation, or acquisition of stock
or assets) any corporation, partnership or other business organization or
division thereof or make any investment in another entity other than an entity
which is a wholly owned Subsidiary of such Party as of the date hereof, except
for investments which do not exceed $100,000,000 for any single investment or
series of related investments, or $300,000,000 in the aggregate for all such
investments in any 12-month period; (ii) except in the ordinary course of
business and in a manner consistent with past practice, sell, pledge, dispose
of, or encumber or authorize or propose the sale, pledge, disposition or
encumbrance of any assets of such Party or any of its Subsidiaries, except for
transactions which do not exceed $100,000,000 individually or $200,000,000 in
the aggregate in any 12-month period; (iii) authorize or make capital
expenditures which are in excess of the amounts shown in Schedule 6.2 hereto;
(iv) enter into any agreement, contract or commitment which involves an amount
in excess of $50,000,000 individually or as part of a series of related
transactions, except for (A) agreements, contracts and commitments of a type
referred to in another clause of this subsection (b) and not prohibited thereby
because of the amount of such contract and (B) agreements, contracts and
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commitments entered into (I) in the ordinary course of business of operating the
wireline, directory publishing or cellular business of NYNEX or Bell Atlantic,
as the case may be, or (II) in accordance with the then current business plan
for any of the other existing businesses of NYNEX or Bell Atlantic, as the case
may be; or (v) authorize, enter into or amend any contract, agreement,
commitment or arrangement with respect to any of the matters prohibited by this
Section 6.2(b);
(c) incur indebtedness or increase minority interest (from that
shown on its balance sheet as at December 31, 1995) except as permitted by
Schedule 6.2 hereto, and provided further that neither shall incur indebtedness,
increase minority interest, or take any other action if, following the taking of
such action, (i) it is reasonably anticipated that such Party's or any of its
Subsidiaries' outstanding senior indebtedness would be rated BBB or lower by
Standard & Poor's, or (ii) the amount of such Party's floating rate debt on a
consolidated basis would exceed 35% of total indebtedness for money borrowed on
the last day of the calendar quarter in which the action would be taken, or on
the Closing Date (where floating rate debt means indebtedness for money borrowed
as to which the interest rate is adjusted more often than annually);
(d) enter into (i) leveraged derivative contracts (defined as
contracts that use a factor to multiply the underlying index exposure), or (ii)
other derivative contracts except for the purpose of hedging known interest rate
and foreign exchange exposures or otherwise reducing such Party's cost of
financing;
(e) take any action with respect to the grant of any severance or
termination pay, or stay, bonus, or other incentive arrangements (otherwise than
pursuant to Benefit Plans and policies of such Party in effect on the date
hereof) or with respect to any increase in benefits payable under its severance
or termination pay policies, or stay, bonus or other incentive arrangements in
effect on the date hereof.
(f) make any payments (except in the ordinary course of business and
in amounts and in a manner consistent with past practice or as otherwise
required by Legal Requirements or the provisions of any NYNEX Benefit Plan or
Bell Atlantic Benefit Plan, as the case may be) under any NYNEX Benefit Plan or
any Bell Atlantic Benefit Plan, as the case may be, to any director or employee
of, or independent contractor or consultant to, such Party or any of its
Subsidiaries, adopt or otherwise materially amend (except for amendments
required or made advisable by Legal Requirements) any NYNEX Benefit Plan or Bell
Atlantic Benefit Plan, as the case may be, or enter into or amend any employment
or consulting agreement of the type which would be required to be disclosed
hereunder pursuant to Section 4.11 hereof with respect to NYNEX or Section 5.11
hereof with respect to Bell Atlantic, or grant or establish any new awards under
any such existing NYNEX Benefit Plan or Bell Atlantic Benefit Plan or agreement
(except in the ordinary course of business and in amounts and in a manner
consistent with past practice);
(g) change in any material respect its accounting policies, methods
or procedures except as required by GAAP;
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(h) do any act or omit to do any act which would cause a breach of
any contract, commitment or obligation if the result would, individually or in
the aggregate, have a Material Adverse Effect;
(i) take any action which could reasonably be expected to adversely
affect or delay the ability of any of the Parties to obtain any approval of any
governmental or regulatory body required to consummate the transactions
contemplated hereby;
(j) take any action that would (i) prevent or impede the Merger from
qualifying as a tax-free reorganization under Section 368 of the Code; (ii) make
untrue any representation or warranty contained, in the case of NYNEX and its
Subsidiaries, in the Officer's Certificate set forth on Schedule 4.17(f) and, in
the case of Bell Atlantic and its Subsidiaries, in the Officer's Certificate set
forth on Schedule 5.17(f); or (iii) prevent or impede the Merger from qualifying
as a pooling of interests for accounting purposes;
(k) take any action other than in the ordinary course of business
and in a manner consistent with past practice with respect to increases in
employee compensation;
(l) other than pursuant to this Agreement, take any action to cause
the shares of their respective Common Stock to cease to be quoted on any of the
stock exchanges on which such shares are now quoted;
(m) (i) issue SARs, new performance shares, restricted stock, or
similar equity based rights; (ii) materially modify (with materiality to be
determined with respect to the Benefit Plan in question) any actuarial cost
method, assumption or practice used in determining benefit obligations, annual
expense and funding for any Benefit Plan, except to the extent required by GAAP;
(iii) materially modify (with materiality to be determined with respect to the
Benefit Plan trust in question) the investment philosophy of the Benefit Plan
trusts or maintain an asset allocation which is not consistent with such
philosophy, subject to any ERISA fiduciary obligation; (iv) subject to any ERISA
fiduciary obligation, enter into any outsourcing agreement, or any other
material contract relating to the Benefit Plans or management of the Benefit
Plan trusts, provided that Bell Atlantic and NYNEX may enter into any such
contracts that may be terminated within two years; (v) offer any new or extend
any existing retirement incentive, "window" or similar benefit program; (vi)
grant any ad hoc pension increase; (vii) establish any new or fund any existing
"rabbi" or similar trust (except in accordance with the current terms of such
trust), or enter into any other arrangement for the purpose of securing
non-qualified benefits or deferred compensation; (viii) adopt or implement any
corporate owned life insurance; or (ix) adopt, implement or maintain any "split
dollar" life insurance program; or
(n) take any action which would cause its representations and
warranties contained herein to become inaccurate in any material respect.
NYNEX and Bell Atlantic agree that any written approval obtained under this
Section 6.2 may be relied upon by the other Party if signed by the Chief
Executive Officer or any other executive officer of the Party providing such
written approval.
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SECTION 6.3 - No Solicitation. From and after the date hereof, NYNEX
and Bell Atlantic, without the prior written consent of the other, will not, and
will not authorize or permit any of their respective Party Representatives (as
defined in Section 7.5 hereof) to, directly or indirectly, solicit, initiate or
encourage (including by way of furnishing information) or take any other action
to facilitate knowingly any inquiries or the making of any proposal which
constitutes or may reasonably be expected to lead to an Acquisition Proposal (as
defined below) from any person, or engage in any discussion or negotiations
relating thereto or accept any Acquisition Proposal; provided, however, that
notwithstanding any other provision hereof, the respective Party may (i) at any
time prior to the time the respective Party's stockholders shall have voted to
approve this Agreement, engage in discussions or negotiations with a third party
who (without any solicitation, initiation, encouragement, discussion or
negotiation, directly or indirectly, by or with the Party or its Party
Representatives after the date hereof) seeks to initiate such discussions or
negotiations and may furnish such third party information concerning the Party
and its business, properties and assets if, and only to the extent that, (A)(x)
the third party has first made an Acquisition Proposal that is financially
superior to the transactions contemplated by this Agreement and has demonstrated
that the funds necessary for the Acquisition Proposal are reasonably likely to
be available (as determined in good faith in each case by the Party's Board of
Directors after consultation with its financial advisors) and (y) the Party's
Board of Directors shall conclude in good faith, after considering applicable
provisions of state law, on the basis of oral or written advice of outside
counsel, that such action is necessary for the Board of Directors to act in a
manner consistent with its fiduciary duties under applicable law and (B) prior
to furnishing such information to or entering into discussions or negotiations
with such person, such Party (x) provides prompt notice to the other Party to
the effect that it is furnishing information to or entering into discussions or
negotiations with such person or entity and (y) receives from such person or
entity an executed confidentiality agreement in reasonably customary form on
terms not in the aggregate materially more favorable to such person or entity
than the terms contained in the Confidentiality Agreement (as defined in Section
7.5 hereof), (ii) comply with Rule 14e-2 promulgated under the Exchange Act with
regard to a tender or exchange offer, and/or (iii) provided such Party
terminates this Agreement pursuant to Section 9.1(h) hereof, accept an
Acquisition Proposal from a third party. Each Party shall immediately cease and
terminate any existing solicitation, initiation, encouragement, activity,
discussion or negotiation with any persons conducted heretofore by the Party or
its Representatives with respect to the foregoing. Each of NYNEX and Bell
Atlantic agrees not to release any third party from, or waive any provision of,
any standstill agreement to which it is a party or any confidentiality agreement
between it and another person who has made, or who may reasonably be considered
likely to make, an Acquisition Proposal, unless its Board of Directors shall
conclude in good faith, after considering applicable provisions of state law, on
the basis of oral or written advice of outside counsel, that such action is
necessary for the Board of Directors to act in a manner consistent with its
fiduciary duties. Each of NYNEX and Bell Atlantic shall notify the other Party
orally and in writing of any such inquiries, offers or proposals (including,
without limitation, the terms and conditions of any such proposal and the
identity of the person making it), within 24 hours of the receipt thereof, shall
keep the other Party informed of the status and details of any such inquiry,
offer or proposal, and shall give the other Party five days' advance notice of
any agreement to be entered into with, or any information to be supplied to, any
person making such inquiry, offer or proposal. As used herein, "Acquisition
Proposal" shall mean a proposal
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or offer (other than by another Party) for a tender or exchange offer, merger,
consolidation or other business combination involving NYNEX, Bell Atlantic or
any Significant Subsidiary of, or telephone company owned by, such Party or any
proposal to acquire in any manner a substantial equity interest in, or all or
substantially all of the assets of, such Party or any Significant Subsidiary of,
or telephone company owned by, such Party; provided, however, that any proposal
or offer involving the acquisition by NYNEX or Bell Atlantic of an equity
interest in or assets of any Person, whether by tender or exchange offer,
merger, consolidation or otherwise, which does not involve, directly or
indirectly the issuance of more than 15% of the outstanding common stock as of
the date hereof of NYNEX or Bell Atlantic, as the case may be, shall not
constitute an Acquisition Proposal, provided that any such transaction in any
event shall be subject to Section 6.2.
SECTION 6.4 - Subsequent Financial Statements. Prior to the
-------------------------------
Effective Time, each of NYNEX and Bell Atlantic (a) will consult with the other
prior to making publicly available its financial results for any period and (b)
will consult with the other prior to the filing of, and will timely file with
the SEC, each Annual Report on Form 10-K, Quarterly Report on Form 10-Q and
Current Report on Form 8-K required to be filed by such Party under the Exchange
Act and the rules and regulations promulgated thereunder and will promptly
deliver to the other copies of each such report filed with the SEC. As of their
respective dates, none of such reports shall contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The respective audited financial
statements and unaudited interim financial statements of each of NYNEX and Bell
Atlantic, as the case may be, included in such reports will fairly present the
financial position of such Party and its Subsidiaries as at the dates thereof
and the results of their operations and cash flows for the periods then ended in
accordance with GAAP applied on a consistent basis and, subject, in the case of
unaudited interim financial statements, to normal year-end adjustments and any
other adjustments described therein.
SECTION 6.5 - Control of Operations. Nothing contained in this
---------------------
Agreement shall give Bell Atlantic, directly or indirectly, the right to control
or direct NYNEX's operations prior to the Effective Time. Nothing contained in
this Agreement shall give NYNEX, directly or indirectly, the right to control or
direct Bell Atlantic's operations prior to the Effective Time. Prior to the
Effective Time, each of Bell Atlantic and NYNEX shall exercise, consistent with
the terms and conditions of this Agreement, complete control and supervision
over its respective operations.
ARTICLE VII - ADDITIONAL AGREEMENTS
SECTION 7.1 - Joint Proxy Statement and the Registration Statement.
----------------------------------------------------
(a) As promptly as practicable after the execution and delivery of this
Agreement, the Parties shall prepare and file with the SEC, and shall use all
reasonable efforts to have cleared by the SEC, and promptly thereafter shall
mail to the holders of record of shares of Bell Atlantic Common Stock and NYNEX
Common Stock, the Joint Proxy Statement, provided, however, that NYNEX and Bell
Atlantic shall not mail or otherwise furnish the Joint Proxy Statement to their
respective stockholders unless and until:
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(i) they have received notice from the SEC that the
Registration Statement is effective under the 1933 Act;
(ii) NYNEX shall have received a letter from Coopers & Lybrand
L.L.P., dated the effective date of the Registration Statement, to the effect
set forth in Section 8.1(h) hereof and a letter from each of Bear Stearns and
Morgan Stanley, dated within two business days of the date of the first mailing
of the Joint Proxy Statement, to the effect that, as of the date of such
opinion, the Exchange Ratio is fair from a financial point of view to the
holders of NYNEX Common Stock;
(iii) Bell Atlantic shall have received a letter from Coopers
& Lybrand L.L.P., dated the effective date of the Registration Statement, to the
effect set forth in Section 8.1(h) hereof and a letter from Merrill Lynch, dated
within two business days of the date of the first mailing of the Joint Proxy
Statement, to the effect that, as of the date of such opinion, the Exchange
Ratio is fair from a financial point of view to Bell Atlantic and, accordingly,
to the holders of Bell Atlantic Common Stock;
(iv) NYNEX shall have received a letter of Coopers & Lybrand
L.L.P., dated a date within two business days prior to the date of the first
mailing of the Joint Proxy Statement, and addressed to NYNEX, in form and
substance reasonably satisfactory to NYNEX and customary in scope and substance
for "cold comfort" letters delivered by independent public accountants in
connection with registration statements on Form S-4 with respect to the
financial statements of Bell Atlantic included in the Joint Proxy Statement and
the Registration Statement; and
(v) Bell Atlantic shall have received a letter of Coopers &
Lybrand L.L.P., dated a date within two business days prior to the date of the
first mailing of the Joint Proxy Statement, and addressed to Bell Atlantic, in
form and substance reasonably satisfactory to Bell Atlantic and customary in
scope and substance for "cold comfort" letters delivered by independent public
accountants in connection with registration statements on Form S-4 with respect
to the financial statements of NYNEX included in the Joint Proxy Statement and
the Registration Statement.
(b) The Parties will cooperate in the preparation of the Joint Proxy
Statement and the Registration Statement and in having the Registration
Statement declared effective as soon as practicable.
SECTION 7.2 - NYNEX and Bell Atlantic Stockholders' Meetings and
--------------------------------------------------
Consummation of the Merger. (a) At the earliest reasonably practicable time
- --------------------------
following the execution and delivery of this Agreement, each of NYNEX and Bell
Atlantic shall promptly take all action necessary in accordance with Delaware
Law and its Certificate of Incorporation and Bylaws to convene a Stockholders'
Meeting. The stockholder vote or consent required for approval of the Merger
Agreement, and, in the case of Bell Atlantic, the issuance of Bell Atlantic
Common Stock pursuant to the Merger Agreement and the Certificate Amendment,
will be no greater than that contemplated by Sections 4.14(b) and 5.14(b)
hereof; provided however that Bell Atlantic may submit to its shareholders a
single proposal encompassing approval of the Merger Agreement, the issuance of
Bell Atlantic Common Stock pursuant to
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the Merger Agreement and the Certificate Amendment, which proposal shall be
approved if it receives the affirmative vote of a majority of the votes entitled
to be cast by all holders of Bell Atlantic Common Stock. Each of NYNEX and Bell
Atlantic shall use all commercially reasonable efforts to solicit from its
respective stockholders proxies to be voted at its Stockholders Meeting in favor
of this Agreement pursuant to the Joint Proxy Statement and, subject to the
fiduciary duties of its Board of Directors, each of NYNEX and Bell Atlantic
shall include in the Joint Proxy Statement the recommendation of its Board of
Directors in favor of this Agreement and the Merger and, in the case of Bell
Atlantic, the Certificate Amendment. Each of the Parties shall take all other
action necessary or, in the opinion of the other Parties, advisable to promptly
and expeditiously secure any vote or consent of stockholders required by
Delaware Law, the applicable requirements of any securities exchange, and such
Party's Certificate of Incorporation and Bylaws to effect the Merger and, in the
case of Bell Atlantic, the Certificate Amendment and the Bylaws Amendment.
(b) Upon the terms and subject to the conditions hereof and as soon
as practicable after the conditions set forth in Article VIII hereof have been
fulfilled or waived, each of the Parties shall execute in the manner required by
Delaware Law and deliver to and file with the Secretary of State of the State of
Delaware such instruments and agreements as may be required by Delaware Law and
the Parties shall take all such other and further actions as may be required by
law to make the Merger effective, and Bell Atlantic shall take all such other
and further actions as may be required by law to make the Certificate Amendment
and the Bylaws Amendment effective. Prior to the filings referred to in this
Section 7.2(b), a closing (the "Closing") will be held at the offices of NYNEX
(or such other place as the Parties may agree) for the purpose of confirming all
the foregoing. The Closing will take place upon the fulfillment or waiver of all
of the conditions to closing set forth in Article VIII of this Agreement, or as
soon thereafter as practicable (the date of the Closing being herein referred to
as the "Closing Date").
SECTION 7.3 - Additional Agreements. (a) Each of the Parties will
---------------------
comply in all material respects with all applicable laws and with all applicable
rules and regulations of any governmental authority in connection with its
execution, delivery and performance of this Agreement and the transactions
contemplated hereby. Each of the Parties agrees to use all commercially
reasonable efforts to obtain in a timely manner all necessary waivers, consents
and approvals and to effect all necessary registrations and filings, and to use
all commercially reasonable efforts to take, or cause to be taken, all other
actions and to do, or cause to be done, all other things necessary, proper or
advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement. Without limiting the generality of
the foregoing, each of NYNEX and Bell Atlantic shall promptly prepare and file a
Premerger Notification in accordance with the HSR Act, shall promptly comply
with any requests for additional information, and shall use its commercially
reasonable efforts to obtain termination of the waiting period thereunder as
promptly as practicable.
(b) The Parties agree that NYNEX shall pay on behalf of those
persons who are NYNEX stockholders immediately prior to the Effective Time any
New York State and New York City real estate transfer taxes and New York State
real property transfer gains tax payable in connection with the Merger.
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SECTION 7.4 - Notification of Certain Matters. Each of NYNEX and
-------------------------------
Bell Atlantic shall give prompt notice to the other of the following:
(a) the occurrence or nonoccurrence of any event whose occurrence or
nonoccurrence would be likely to cause either (i) any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect
at any time from the date hereof to the Effective Time, or (ii) directly or
indirectly, any Material Adverse Effect on such Party;
(b) any material failure of such Party, or any officer, director,
employee or agent of any thereof, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder; and
(c) any facts relating to such Party which would make it necessary
or advisable to amend the Joint Proxy Statement or the Registration Statement in
order to make the statements therein not misleading or to comply with applicable
law; provided, however, that the delivery of any notice pursuant to this Section
7.4 shall not limit or otherwise affect the remedies available hereunder to the
Party receiving such notice.
SECTION 7.5 - Access to Information. (a) From the date hereof to the
---------------------
Effective Time, each of NYNEX and Bell Atlantic shall, and shall cause its
respective Subsidiaries, and its and their officers, directors, employees,
auditors, counsel and agents to afford the officers, employees, auditors,
counsel and agents of the other Party complete access at all reasonable times to
such Party's and its Subsidiaries' officers, employees, auditors, counsel
agents, properties, offices and other facilities and to all of their respective
books and records, and shall furnish the other with all financial, operating and
other data and information as such other Party may reasonably request.
(b) Each of NYNEX and Bell Atlantic agrees that all information so
received from the other Party shall be deemed received pursuant to the
confidentiality agreement, dated as of June 14, 1996 between NYNEX and Bell
Atlantic (the "Confidentiality Agreement") and such Party shall, and shall cause
its Subsidiaries and each of its and their respective officers, directors,
employees, financial advisors and agents ("Party Representatives"), to comply
with the provisions of the Confidentiality Agreement with respect to such
information and the provisions of the Confidentiality Agreement are hereby
incorporated herein by reference with the same effect as if fully set forth
herein.
SECTION 7.6 - Public Announcements. NYNEX and Bell Atlantic shall
--------------------
use all reasonable efforts to develop a joint communications plan and each Party
shall use all reasonable efforts to ensure that all press releases and other
public statements with respect to the transactions contemplated hereby shall be
consistent with such joint communications plan or, to the extent inconsistent
therewith, shall have received the prior written approval of the other.
SECTION 7.7 - Cooperation. (a) Upon the terms and subject to the
-----------
conditions hereof, each of the Parties agrees to use its commercially reasonable
efforts to take or cause to be taken all actions and to do or cause to be done
all things necessary, proper or advisable to
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consummate the transactions contemplated by this Agreement and shall use its
commercially reasonable efforts to obtain all necessary waivers, consents and
approvals, and to effect all necessary filings under the 1933 Act, the Exchange
Act and the HSR Act. The Parties shall cooperate in responding to inquiries
from, and making presentations to, regulatory authorities.
(b) Each of NYNEX and Bell Atlantic agree to use its commercially
reasonable efforts to comply promptly with all requirements of the New Jersey
and Connecticut Property Transfer Statutes, to the extent applicable to the
transactions contemplated hereby, and to take all actions necessary to cause the
transactions contemplated hereby to be effected in compliance with the New
Jersey and Connecticut Property Transfer Statutes. NYNEX and Bell Atlantic agree
that they will consult with each other to determine what, if any, actions must
be taken prior to or after the Effective Time to ensure compliance with such
statutes. Each of NYNEX and Bell Atlantic agrees to provide the other with any
documents to be submitted to the relevant state agencies prior to submission and
agrees not to take any action to comply with the New Jersey and Connecticut
Property Transfer Statutes without the other's prior consent, which consent
shall not be unreasonably withheld. Each Party shall bear its respective costs
and expenses incurred in connection with compliance with the New Jersey and
Connecticut Property Transfer Statutes. For purposes of this section, the New
Jersey and Connecticut Property Transfer Statutes means the New Jersey
Industrial Site Recovery Act, 1993 N.J. Laws 139, and the Connecticut Transfer
Act, Conn. Gen. Stat. Ann.
ss. 22a-134(b).
SECTION 7.8 - Indemnification, Directors' and Officers' Insurance.
---------------------------------------------------
For a period of six years after the Effective Time, (a) Bell Atlantic shall
cause NYNEX to maintain in effect the current provisions regarding
indemnification of officers and directors contained in the charter and bylaws of
NYNEX and each of its Subsidiaries and any directors, officers or employees
indemnification agreements of NYNEX and its respective Subsidiaries, (b) Bell
Atlantic shall cause NYNEX to, and Bell Atlantic shall, maintain in effect the
current policies of directors' and officers' liability insurance and fiduciary
liability insurance maintained by NYNEX and Bell Atlantic, respectively,
(provided that Bell Atlantic may substitute therefor policies of at least the
same coverage and amounts containing terms and conditions which are, in the
aggregate, no less advantageous to the insured in any material respect) with
respect to claims arising from facts or events which occurred on or before the
Effective Time, and (c) Bell Atlantic shall cause NYNEX to, and Bell Atlantic
shall, indemnify the directors and officers of NYNEX and Bell Atlantic,
respectively, to the fullest extent to which NYNEX and Bell Atlantic are
permitted to indemnify such officers and directors under their respective
charters and bylaws and applicable law. Bell Atlantic hereby unconditionally and
irrevocably guarantees for the benefit of such directors, officers and employees
the obligations of NYNEX under the foregoing indemnification arrangements.
SECTION 7.9 - Employee Benefit Plans. (a) Except as otherwise
----------------------
provided herein or set forth on Schedule 6.2, NYNEX and Bell Atlantic agree
that, unless otherwise mutually determined, the NYNEX Benefit Plans and the Bell
Atlantic Benefit Plans in effect at the date hereof shall remain in effect after
the Effective Time with respect to classes of employees covered by such plans
immediately prior to the Effective Time.
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(b) Except as otherwise set forth on Schedule 6.2, in the case of
the NYNEX Benefit Plans under which the employees' interests are based upon
NYNEX Common Stock, or the respective market prices thereof (but which interests
do not constitute stock options), NYNEX and Bell Atlantic agree that such
interests shall, from and after the Effective Time, be based on Bell Atlantic
Common Stock in accordance with the Exchange Ratio.
(c) With respect to all NYNEX Benefit Plans which have entitlement
or vesting terms that are based upon the market price or value per share of
NYNEX Common Stock, NYNEX and Bell Atlantic agree that from and after the
Effective Time, such market price or value per share shall be adjusted by
multiplying it by the inverse of the Exchange Ratio.
(d) With respect to any NYNEX Benefit Plans maintained or
contributed to outside the United States for the benefit of non-United States
citizens or residents, the principles set forth in this Section 7.9 and on
Schedule 6.2 shall apply to the extent the application of such principles does
not violate applicable foreign law.
(e) Without limiting the applicability of Sections 2.8 and 2.9
hereof, each of the Parties shall take all actions as are necessary to ensure
that NYNEX will not at the Effective Time be bound by any options, SARs,
warrants or other rights or agreements which would entitle any person, other
than Bell Atlantic, to own any capital stock of the Surviving Corporation or to
receive any payment in respect thereof, and all NYNEX Benefit Plans conferring
any rights with respect to NYNEX Common Stock or other capital stock of NYNEX
shall be deemed hereby to be amended to be in conformity with this Section 7.9.
SECTION 7.10 - Employment Arrangements. (a) At the Effective Time,
-----------------------
pursuant to the terms of the employment contracts referred to in Section 7.10(b)
hereof and subject to Section 5.11 of the Bylaws of Bell Atlantic reflecting the
Bylaws Amendment (the "Amended Bylaws") (i) Raymond W. Smith shall hold the
position of Chairman and Chief Executive Officer of Bell Atlantic, and (ii) Ivan
G. Seidenberg shall hold the position of Vice Chairman, President and Chief
Operating Officer of Bell Atlantic. Pursuant to the terms of the employment
contracts referred to in Section 7.10(b) hereof and subject to Section 5.11 of
the Amended Bylaws, Ivan G. Seidenberg shall succeed Raymond W. Smith in the
positions of Chief Executive Officer and Chairman. If either of such persons is
unable or unwilling to hold such offices as set forth above, his successor shall
be selected by the Board of Directors of Bell Atlantic in accordance with the
Amended Bylaws. The authority, duties and responsibilities of the Chairman, the
Vice Chairman, the Chief Executive Officer, the President and the Chief
Operating Officer shall be set forth in the employment contracts entered into
pursuant to Section 7.10(b) hereof, which employment contracts shall also set
forth in their entirety the rights and remedies of Raymond W. Smith and Ivan G.
Seidenberg with respect to employment by Bell Atlantic. Neither Raymond W. Smith
nor Ivan G. Seidenberg shall have any right, remedy or cause of action under
this Section 7.10, nor shall they be third party beneficiaries of this Section
7.10.
(b) At the Closing, Bell Atlantic shall enter into employment
agreements with Messrs. Raymond W. Smith and Ivan G. Seidenberg in substantially
the forms previously agreed to by NYNEX and Bell Atlantic.
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SECTION 7.11 - Stock Exchange Listing. Each of the Parties shall use
----------------------
its best efforts to obtain, prior to the Effective Time, the approval for
listing on the NYSE, effective upon official notice of issuance, of the shares
of Bell Atlantic Common Stock into which the NYNEX Shares will be converted
pursuant to Article II hereof and which will be issuable upon exercise of
options pursuant to Section 2.8 hereof.
SECTION 7.12 - Post-Merger Bell Atlantic Board of Directors. At the
--------------------------------------------
Effective Time, the total number of persons serving on the Board of Directors of
Bell Atlantic shall be twenty-two (unless otherwise agreed in writing by NYNEX
and Bell Atlantic prior to the Effective Time), half of whom shall be NYNEX
Directors and half of whom shall be Bell Atlantic Directors (as such terms are
defined below). No more than six of the twenty-two initial Directors of Bell
Atlantic shall be employees of NYNEX or Bell Atlantic; half of the employee
directors shall be NYNEX Directors and half shall be Bell Atlantic Directors (as
such terms are defined below). The persons to serve initially on the Board of
Directors of Bell Atlantic at the Effective Time who are NYNEX Directors shall
be selected solely by and at the absolute discretion of the Board of Directors
of NYNEX prior to the Effective Time; and the persons to serve on the Board of
Directors of Bell Atlantic at the Effective Time who are Bell Atlantic Directors
shall be selected solely by and at the absolute discretion of the Board of
Directors of Bell Atlantic prior to the Effective Time. In the event that, prior
to the Effective Time, any person so selected to serve on the Board of Directors
of Bell Atlantic after the Effective Time is unable or unwilling to serve in
such position, the Board of Directors which selected such person shall designate
another of its members to serve in such person's stead in accordance with the
provisions of the immediately preceding sentence. From and after the Effective
Time and until Raymond W. Smith ceases to be the Chairman of Bell Atlantic, the
Board of Directors of Bell Atlantic and each Committee of the Board of Directors
of Bell Atlantic as constituted following each election of Directors shall
consist of an equal number of NYNEX Directors and Bell Atlantic Directors. If,
at any time during the period referred to in the immediately preceding sentence,
the number of NYNEX Directors and Bell Atlantic Directors serving, or that would
be serving following the next stockholders' meeting at which Directors are to be
elected, as Directors of Bell Atlantic or as members of any Committee of the
Board of Directors of Bell Atlantic, would not be equal, then, subject to the
fiduciary duties of the Directors of Bell Atlantic, the Board of Directors and
the Nominating Committee thereof shall nominate for election at the next
stockholders' meeting at which Directors are to be elected, such person or
persons as may be requested by the remaining NYNEX Directors (if the number of
NYNEX Directors is, or would otherwise become, less than the number of Bell
Atlantic Directors) or by the remaining Bell Atlantic Directors (if the number
of Bell Atlantic Directors is, or would otherwise become, less than the number
of NYNEX Directors) to ensure that there shall be an equal number of NYNEX
Directors and Bell Atlantic Directors. The provisions of the preceding sentence
shall not apply in respect of any stockholders' meeting which takes place after
the date on which Raymond W. Smith ceases to be Chairman of Bell Atlantic, and
prior to such date, vacancies in the Board of Directors of Bell Atlantic shall
be filled only by vote of the stockholders. The term "NYNEX Director" means (i)
any person serving as a Director of NYNEX or of a NYNEX telephone company on the
date hereof who becomes a Director of Bell Atlantic at the Effective Time and
(ii) any person who becomes a Director of Bell Atlantic pursuant to the second
preceding sentence and who is designated by the NYNEX Directors; and the term
"Bell Atlantic Director" means (i) any person serving as a Director of Bell
Atlantic on the
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date hereof who continues as a Director of Bell Atlantic at the Effective Time
and (ii) any person who becomes a Director of Bell Atlantic pursuant to the
second preceding sentence and who is designated by the Bell Atlantic Directors.
Each of NYNEX and Bell Atlantic shall take such action as shall
reasonably be deemed by either thereof to be advisable to give effect to the
provisions set forth in this section, including but not limited to incorporating
such provisions in the Bylaws of Bell Atlantic in effect at the Effective Time.
SECTION 7.13 - No Shelf Registration. Bell Atlantic shall not be
---------------------
required to amend or maintain the effectiveness of the Registration Statement
for the purpose of permitting resale of the shares of Bell Atlantic Common Stock
received pursuant hereto by the persons who may be deemed to be "affiliates" of
NYNEX or Bell Atlantic within the meaning of Rule 145 promulgated under the 1933
Act. The shares of Bell Atlantic Common Stock issuable upon exercise of options
pursuant to Section 2.8 hereof shall be registered under the 1933 Act and such
registration shall be effective at the time of issuance.
SECTION 7.14 - Affiliates. (a) Each of NYNEX and Bell Atlantic (i)
----------
has disclosed to the other on Schedule 7.14 hereof all persons who are, or may
be, as of the date hereof its "affiliates" for purposes of Rule 145 under the
Securities Act or SEC Accounting Series Release 135, and (ii) shall use all
reasonable efforts to cause each person who is identified as an "affiliate" of
it on Schedule 7.14 to deliver to the other as promptly as practicable but in no
event later than the Closing Date, a signed agreement substantially in the form
previously agreed to by NYNEX and Bell Atlantic. NYNEX and Bell Atlantic shall
notify each other from time to time of any other persons who then are, or may
be, such an "affiliate" and use all reasonable efforts to cause each additional
person who is identified as an "affiliate" to execute a signed agreement as set
forth in this Section 7.14(a).
(b) If the transactions contemplated by this Agreement would
otherwise qualify for pooling of interests accounting treatment, shares of NYNEX
Common Stock and shares of Bell Atlantic Common Stock held by such "affiliates"
of NYNEX or Bell Atlantic, as the case may be, shall not be transferable during
the 30 day period prior to the Effective Time, and shares of Bell Atlantic
Common Stock issued to, or as of the Effective Time held by, such "affiliates"
of NYNEX and Bell Atlantic shall not be transferable until such time as
financial results covering at least 30 days of combined operations of NYNEX and
Bell Atlantic have been published within the meaning of Section 201.01 of the
SEC's Codification of Financial Reporting Policies, regardless of whether each
such "affiliate" has provided the signed agreement referred to in Section
7.14(a), except to the extent permitted by, and in accordance with, SEC
Accounting Series Release 135 and SEC Staff Accounting Bulletins 65 and 76. Any
Bell Atlantic Common Stock held by any such "affiliate" shall not be
transferable, regardless of whether such "affiliate" has provided the applicable
signed agreement referred to in Section 7.14(a), if such transfer, either alone
or in the aggregate with other transfers by "affiliates", would preclude the
ability of the Parties to account for the transactions contemplated by this
Agreement as a pooling of interests. Bell Atlantic shall not register the
transfer of any shares of Bell Atlantic Common Stock unless such transfer is
made in compliance with the foregoing.
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SECTION 7.15 - Blue Sky. NYNEX and Bell Atlantic will use their best
--------
efforts to obtain prior to the Effective Time all necessary blue sky permits and
approvals required to permit the distribution of the shares of Bell Atlantic
Common Stock to be issued in accordance with the provisions of this Agreement.
SECTION 7.16 - Pooling of Interests. Each of the Parties will use
--------------------
its best efforts to cause the transactions contemplated by this Agreement to be
accounted for as a pooling of interests in accordance with GAAP, and such
accounting treatment to be accepted by Bell Atlantic's independent certified
public accountants, by the NYSE and by the SEC, respectively, and each of the
Parties agrees that it will take no action that would cause such accounting
treatment not to be obtained.
SECTION 7.17 - Tax-Free Reorganization. Each of the Parties will use
-----------------------
its best efforts to cause the Merger to qualify as a tax-free reorganization
under Section 368 of the Code.
ARTICLE VIII - CONDITIONS TO MERGER
SECTION 8.1 - Conditions to Obligations of Each Party to Effect the
-----------------------------------------------------
Merger. The respective obligations of each Party to effect the Merger shall be
- ------
subject to the following conditions:
(a) Stockholder Approval. The Merger and this Agreement shall have
been approved and adopted by the requisite vote of the stockholders of each of
NYNEX and Bell Atlantic and the Certificate Amendment and the issuance of Bell
Atlantic Common Stock pursuant to the Merger shall have been approved by the
requisite vote of the stockholders of Bell Atlantic, in each case in accordance
with Delaware Law and the rules of the NYSE, as applicable;
(b) Legality. No federal, state or foreign statute, rule,
regulation, executive order, decree or injunction shall have been enacted,
entered, promulgated or enforced by any court or governmental authority which is
in effect and has the effect of (i) making the Merger illegal or otherwise
prohibiting the consummation of the Merger or (ii) creating a Material Adverse
Effect on NYNEX or Bell Atlantic, with or without including its ownership of
NYNEX and its Subsidiaries after the Merger;
(c) HSR Act. Any waiting period applicable to the consummation of
the Merger under the HSR Act shall have expired or been terminated;
(d) Regulatory Matters. All authorizations, consents, orders or
approvals of, or declarations or filings with, and all expirations of waiting
periods imposed by, any governmental body, agency or official (all of the
foregoing, "Consents") which are necessary for the consummation of the
transactions contemplated hereby, other than immaterial Consents the failure to
obtain which would have no material adverse effect on the consummation of the
transactions contemplated hereby and no Material Adverse Effect on Bell
Atlantic, with or without including its ownership of NYNEX and its Subsidiaries
after the Merger, or NYNEX,
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shall have been filed, have occurred or have been obtained (all such permits,
approvals, filings and consents and the lapse of all such waiting periods being
referred to as the "Requisite Regulatory Approvals") and all such Requisite
Regulatory Approvals shall be in full force and effect, provided, however, that
a Requisite Regulatory Approval shall not be deemed to have been obtained if in
connection with the grant thereof there shall have been an imposition by any
state or federal governmental body, agency or official of any condition,
requirement, restriction or change of regulation, or any other action directly
or indirectly related to such grant taken by such governmental body, which would
reasonably be expected to either (i) have a Material Adverse Effect on any of
(A) NYNEX, (B) Bell Atlantic (either with or without including its ownership of
NYNEX and its Subsidiaries after the Merger), (C) New York Telephone Company,
(D) New England Telephone and Telegraph Company, (E) Bell Atlantic -
Pennsylvania, Inc., Bell Atlantic - Delaware, Inc. or Bell Atlantic - New
Jersey, Inc., considered in the aggregate ("Bell Atlantic North"), or (F) Bell
Atlantic - Maryland, Inc., Bell Atlantic - Washington, D.C., Inc., Bell Atlantic
- - Virginia, Inc. or Bell Atlantic - West Virginia, Inc., considered in the
aggregate ("Bell Atlantic South"), or (ii) prevent the Parties from realizing in
all material respects the economic benefits of the transactions contemplated by
this Agreement that such Parties currently anticipate receiving therefrom;
(e) Registration Statement Effective. The Registration Statement
shall have become effective prior to the mailing by each of NYNEX and Bell
Atlantic of the Joint Proxy Statement to its respective stockholders, no stop
order suspending the effectiveness of the Registration Statement shall then be
in effect, and no proceedings for that purpose shall then be threatened by the
SEC or shall have been initiated by the SEC and not concluded or withdrawn;
(f) Blue Sky. All state securities or blue sky permits or approvals
required to carry out the transactions contemplated hereby shall have been
received;
(g) Stock Exchange Listing. The shares of Bell Atlantic Common Stock
into which the NYNEX Shares will be converted pursuant to Article II hereof and
the shares of Bell Atlantic Common Stock issuable upon the exercise of options
pursuant to Section 2.8 hereof shall have been duly approved for listing on the
NYSE, subject to official notice of issuance;
(h) Pooling. Each of NYNEX and Bell Atlantic shall have received a
letter from Coopers & Lybrand L.L.P., dated as of the Closing Date, to the
effect that the transactions contemplated hereby will qualify for pooling of
interests accounting treatment;
(i) Consents Under NYNEX Agreements. NYNEX shall have obtained the
consent or approval of any person whose consent or approval shall be required
under any agreement or instrument in order to permit the consummation of the
transactions contemplated hereby except those which the failure to obtain would
not, individually or in the aggregate, have a Material Adverse Effect on Bell
Atlantic, with or without including its ownership of NYNEX and its Subsidiaries
after the Merger, or NYNEX; and
(j) Consents Under Bell Atlantic Agreements. Bell Atlantic shall
have obtained the consent or approval of any person whose consent or approval
shall be required
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under any agreement or instrument in order to permit the consummation of the
transactions contemplated hereby except those which the failure to obtain would
not, individually or in the aggregate, have a Material Adverse Effect on Bell
Atlantic, with or without including its ownership of NYNEX and its Subsidiaries
after the Merger, or NYNEX.
SECTION 8.2 - Additional Conditions to Obligations of NYNEX. The
---------------------------------------------
obligations of NYNEX to effect the Merger are also subject to the fulfillment of
the following conditions:
(a) Representations and Warranties. The representations and
warranties of Bell Atlantic contained in this Agreement shall be true and
correct on the date hereof and (except to the extent such representations and
warranties speak as of a date earlier than the date hereof) shall also be true
and correct on and as of the Closing Date, except for changes permitted under
Section 6.2 hereof or otherwise contemplated by this Agreement, with the same
force and effect as if made on and as of the Closing Date, provided, however,
that for purposes of this Section 8.2(a) only, such representations and
warranties shall be deemed to be true and correct unless the failure or failures
of such representations and warranties to be so true and correct (without regard
to materiality qualifiers contained therein), individually or in the aggregate,
results or would reasonably be expected to result in a Material Adverse Effect
on Bell Atlantic, either with or without including its ownership of NYNEX and
its Subsidiaries after the Merger;
(b) Agreements, Conditions and Covenants. Bell Atlantic shall have
performed or complied in all material respects with all agreements, conditions
and covenants required by this Agreement to be performed or complied with by
them on or before the Effective Time;
(c) Certificates. NYNEX shall have received a certificate of an
executive officer of Bell Atlantic to the effect set forth in paragraphs (a) and
(b) above;
(d) Bell Atlantic Rights Agreement. The rights issued pursuant to
the Bell Atlantic Rights Agreement shall have been redeemed and no new
shareholder rights plan shall have been adopted by Bell Atlantic;
(e) Tax Opinion. (i) NYNEX shall have received an opinion of Weil,
Gotshal & Manges LLP, special counsel to NYNEX, dated as of the Closing Date, in
form and substance reasonably satisfactory to NYNEX, substantially to the effect
that, on the basis of the facts, representations and assumptions set forth in
such opinion, the Merger, including the Certificate Amendment, constitutes a
tax-free reorganization under Section 368 of the Code and therefore: (A) no gain
or loss will be recognized for federal income tax purposes by Bell Atlantic,
NYNEX or the Merger Subsidiary as a result of the formation of the Merger
Subsidiary and the Merger, including the Certificate Amendment; and (B) no gain
or loss will be recognized for federal income tax purposes by the stockholders
of NYNEX upon their exchange of NYNEX Common Stock solely for Bell Atlantic
Common Stock pursuant to the Merger (except with respect to cash received in
lieu of a fractional share interest in Bell Atlantic Common Stock or the payment
of any real property transfer or gains taxes on behalf of the stockholders of
NYNEX). In rendering such opinion, Weil, Gotshal and Manges LLP
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may require and rely upon representations and covenants including those
contained in certificates of officers of NYNEX and Bell Atlantic and others; and
(ii) Bell Atlantic shall have received the opinion described
in Section 8.3(e)(i) hereof, in form and substance reasonably satisfactory to
NYNEX.
(f) Affiliate Agreements. NYNEX shall have received the agreements
required by Section 7.14 hereof to be delivered by the Bell Atlantic
"affiliates," duly executed by each "affiliate" of Bell Atlantic.
(g) Certificate Amendment, Bylaws Amendment, Board of Directors.
Bell Atlantic shall have taken all such actions as shall be necessary so that
(i) the Certificate Amendment and the Bylaws Amendment shall become effective
not later than the Effective Time; and (ii) at the Effective Time, the
composition of Bell Atlantic's Board shall comply with Section 7.12 hereof
(assuming NYNEX has designated the NYNEX Directors as contemplated by Section
7.12 hereof).
SECTION 8.3 - Additional Conditions to Obligations of Bell Atlantic.
-----------------------------------------------------
The obligations of Bell Atlantic to effect the Merger are also subject to the
fulfillment of the following conditions:
(a) Representations and Warranties. The representations and
warranties of NYNEX contained in this Agreement shall be true and correct on the
date hereof and (except to the extent such representations and warranties speak
as of a date earlier than the date hereof) shall also be true and correct on and
as of the Closing Date, except for changes permitted under Section 6.2 hereof or
otherwise contemplated by this Agreement, with the same force and effect as if
made on and as of the Closing Date, provided, however, that for purposes of this
Section 8.3(a) only, such representations and warranties shall be deemed to be
true and correct unless the failure or failures of such representations and
warranties to be so true and correct (without regard to materiality qualifiers
contained therein), individually or in the aggregate, results or would
reasonably be expected to result in a Material Adverse Effect on NYNEX or Bell
Atlantic (only after including its ownership of NYNEX and its Subsidiaries after
the Merger);
(b) Agreements, Conditions and Covenants. NYNEX shall have performed
or complied in all material respects with all agreements, conditions and
covenants required by this Agreement to be performed or complied with by them on
or before the Effective Time;
(c) Certificates. Bell Atlantic shall have received a certificate of
an executive officer of NYNEX to the effect set forth in paragraphs (a) and (b)
above;
(d) NYNEX Rights Agreement. The rights issued pursuant to the NYNEX
Rights Agreement shall not have become non-redeemable, exercisable, distributed
or triggered pursuant to the terms of such agreement and would not become so
upon consummation of the transactions contemplated hereby;
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(e) Tax Opinion. (i) Bell Atlantic shall have received an opinion of
Morgan, Lewis & Bockius LLP, special counsel to Bell Atlantic, dated as of the
Effective Time, in form and substance reasonably satisfactory to Bell Atlantic,
substantially to the effect that, on the basis of the facts, representations and
assumptions set forth in such opinion, the Merger, including the Certificate
Amendment, constitutes a tax-free reorganization under Section 368 of the Code
and therefore: (A) no gain or loss will be recognized for federal income tax
purposes by Bell Atlantic, NYNEX or the Merger Subsidiary as a result of the
formation of the Merger Subsidiary and the Merger, including the Certificate
Amendment; and (B) no gain or loss will be recognized for federal income tax
purposes by the stockholders of Bell Atlantic as a result of the Merger,
including the Certificate Amendment. In rendering such opinion, Morgan, Lewis &
Bockius LLP may require and rely upon representations and covenants including
those contained in certificates of officers of Bell Atlantic and NYNEX and
others; and
(ii) NYNEX shall have received the opinion described in
Section 8.2(e)(i) hereof, in form and substance reasonably satisfactory to Bell
Atlantic.
(f) Affiliate Agreements. Bell Atlantic shall have received the
agreements required by Section 7.14 hereof to be delivered by the NYNEX
"affiliates," duly executed by each "affiliate" of NYNEX.
ARTICLE IX - TERMINATION, AMENDMENT AND WAIVER
SECTION 9.1 - Termination. This Agreement may be terminated at any
-----------
time before the Effective Time, in each case as authorized by the respective
Board of Directors of NYNEX or Bell Atlantic:
(a) By mutual written consent of each of NYNEX and Bell Atlantic;
(b) By either NYNEX or Bell Atlantic if the Merger shall not have
been consummated on or before April 21, 1997 (the "Termination Date"); provided,
however, that the right to terminate this Agreement under this Section 9.1(b)
shall not be available to any Party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the failure of the
Effective Time to occur on or before the Termination Date; and provided,
further, that if on the Termination Date the conditions to the Closing set forth
in Sections 8.1(c) or (d) shall not have been fulfilled, but all other
conditions to the Closing shall be fulfilled or shall be capable of being
fulfilled, then the Termination Date shall be extended to September 30, 1997.
The Parties agree that any amendment of this Agreement to extend the Termination
Date beyond September 30, 1997 shall be made without any amendment to or
renegotiation of any other material provisions of this Agreement;
(c) By either NYNEX or Bell Atlantic if a court of competent
jurisdiction or governmental, regulatory or administrative agency or commission
shall have issued an order, decree or ruling or taken any other action (which
order, decree or ruling the Parties shall use their commercially reasonable
efforts to lift), in each case permanently restraining, enjoining
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or otherwise prohibiting the transactions contemplated by this Agreement, and
such order, decree, ruling or other action shall have become final and
nonappealable;
(d) By either NYNEX or Bell Atlantic if the other shall have
breached, or failed to comply with, in any material respect any of its
obligations under this Agreement or any representation or warranty made by such
other Party shall have been incorrect in any material respect when made or shall
have since ceased to be true and correct in any material respect, and such
breach, failure or misrepresentation is not cured within 30 days after notice
thereof and such breaches, failures or misrepresentations, individually or in
the aggregate and without regard to materiality qualifiers contained therein,
results or would reasonably be expected to result in a Material Adverse Effect
on NYNEX or Bell Atlantic, with or without including its ownership of NYNEX and
its Subsidiaries after the Merger;
(e) By either NYNEX or Bell Atlantic upon the occurrence of (i) a
Material Adverse Effect or an event which could reasonably be expected to result
in a Material Adverse Effect on Bell Atlantic (either with or without including
its ownership of NYNEX and its Subsidiaries after the Merger), Bell Atlantic
North, Bell Atlantic South, NYNEX, New England Telephone and Telegraph Company
or New York Telephone Company under Section 8.1(d) hereof arising from an action
by a state or federal governmental body, agency or official which has become
final and nonappealable, or (ii) any other Material Adverse Effect, or an event
which could reasonably be expected to result in a Material Adverse Effect on the
other (which in the case of Bell Atlantic shall not include its ownership of
NYNEX and its Subsidiaries after the Merger), or, after the Effective Time, Bell
Atlantic, including its ownership of NYNEX and its Subsidiaries;
(f) By either NYNEX or Bell Atlantic if the Board of Directors of
the other or any committee of the Board of Directors of the other (i) shall
withdraw or modify in any adverse manner its approval or recommendation of this
Agreement or the Merger or, in the case of the Board of Directors or any
committee of the Board of Directors of Bell Atlantic, the Certificate Amendment
or the issuance of Bell Atlantic Common Stock pursuant to the Merger Agreement,
(ii) shall fail to reaffirm such approval or recommendation upon such Party's
request, (iii) shall approve or recommend any acquisition of the other or a
material portion of its assets or any tender offer for shares of its capital
stock, in each case, other than by a Party or an affiliate thereof, or (iv)
shall resolve to take any of the actions specified in clause (i) above;
(g) By either NYNEX or Bell Atlantic if any of the required
approvals of the stockholders of NYNEX or of Bell Atlantic shall fail to have
been obtained at a duly held stockholders meeting of either of such companies,
including any adjournments thereof; or
(h) By either NYNEX or Bell Atlantic, prior to the approval of this
Agreement by the stockholders of such Party, upon five days' prior notice to the
other, if, as a result of an Acquisition Proposal (as defined in Section 6.3
hereof) received by such Party from a person other than a Party to this
Agreement or any of its affiliates, the Board of Directors of such Party
determines in good faith that their fiduciary obligations under applicable law
require that such Acquisition Proposal be accepted; provided, however, that (i)
the Board of Directors of such Party shall have concluded in good faith, after
considering applicable
55
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provisions of state law and after giving effect to all concessions which may be
offered by the other Party pursuant to clause (ii) below, on the basis of oral
or written advice of outside counsel, that such action is necessary for the
Board of Directors to act in a manner consistent with its fiduciary duties under
applicable law and (ii) prior to any such termination, such Party shall, and
shall cause its respective financial and legal advisors to, negotiate with the
other Party to this Agreement to make such adjustments in the terms and
conditions of this Agreement as would enable such Party to proceed with the
transactions contemplated hereby;
provided, however, that no termination shall be effective pursuant to Sections
9.1(f), (g) or (h) under circumstances in which an Initial NYNEX Termination Fee
or an Initial Bell Atlantic Termination Fee is payable by the terminating Party
under Section 9.2(b) or (c), as the case may be, unless concurrently with such
termination, such termination fee is paid in full by the terminating Party in
accordance with the provisions of Sections 9.2(b) or (c), as the case may be.
SECTION 9.2 - Effect of Termination. (a) In the event of termination
---------------------
of this Agreement as provided in Section 9.1 hereof, and subject to the
provisions of Section 10.1 hereof, this Agreement shall forthwith become void
and there shall be no liability on the part of any of the Parties, except (i) as
set forth in this Section 9.2 and in Sections 4.10, 4.16, 5.10, 5.16 and 10.3
hereof, and (ii) nothing herein shall relieve any Party from liability for any
willful breach hereof.
(b) If (i) this Agreement (A) is terminated by Bell Atlantic
pursuant to Section 9.1(f) hereof or by NYNEX or Bell Atlantic pursuant to
Section 9.1(g) hereof because of the failure to obtain the required approval
from the NYNEX stockholders or by NYNEX pursuant to Section 9.1(h) hereof, or
(B) is terminated as a result of NYNEX's material breach of Section 7.2 hereof
which is not cured within 30 days after notice thereof to NYNEX, and (ii) at the
time of such termination or prior to the meeting of NYNEX's stockholders there
shall have been an Acquisition Proposal (as defined in Section 6.3 hereof)
involving NYNEX or any of its Significant Subsidiaries (whether or not such
offer shall have been rejected or shall have been withdrawn prior to the time of
such termination or of the meeting), NYNEX shall pay to Bell Atlantic a
termination fee of $200 million (the "Initial NYNEX Termination Fee"). In
addition, if, within one and one-half years of any such termination described in
clause (i) of the immediately preceding sentence that gave rise to the
obligation to pay the Initial NYNEX Termination Fee, NYNEX, or the Significant
Subsidiary of NYNEX which was the subject of such Acquisition Proposal (the
"NYNEX Target Party"), becomes a subsidiary (as defined below) of the person
which made (or the affiliate of which made) an Acquisition Proposal described in
clause (ii) of the immediately preceding sentence or of any Offering Person (as
defined below) or accepts a written offer to consummate or consummates an
Acquisition Proposal with such person or any Offering Person, then, upon the
signing of a definitive agreement relating to any such Acquisition Proposal, or,
if no such agreement is signed then at the closing (and as a condition to the
closing) of such NYNEX Target Party becoming such a subsidiary or of any such
Acquisition Proposal, NYNEX shall pay to Bell Atlantic an additional termination
fee equal to $350 million.
(c) If (i) this Agreement (A) is terminated by NYNEX pursuant to
Sections 9.1(f) hereof or NYNEX or Bell Atlantic pursuant to Section 9.1(g)
hereof because
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of the failure to obtain the required approval from the Bell Atlantic
stockholders or by Bell Atlantic pursuant to Section 9.1(h) hereof, or (B) is
terminated as a result of Bell Atlantic's material breach of Section 7.2 hereof
which is not cured within 30 days after notice thereof to Bell Atlantic, and
(ii) at the time of such termination or prior to the meeting of Bell Atlantic's
stockholders there shall have been an Acquisition Proposal (as defined in
Section 6.3 hereof) involving Bell Atlantic or any of its Significant
Subsidiaries (whether or not such offer shall have been rejected or shall have
been withdrawn prior to the time of such termination or of the meeting), Bell
Atlantic shall pay to NYNEX a termination fee of $200 million (the "Initial Bell
Atlantic Termination Fee"). In addition, if, within one and one-half years of
any such termination described in clause (i) of the immediately preceding
sentence that gave rise to the obligation to pay the Initial Bell Atlantic
Termination Fee, Bell Atlantic, or the Significant Subsidiary of Bell Atlantic
which was the subject of such Acquisition Proposal (the "Bell Atlantic Target
Party"), becomes a subsidiary of the person which made (or the affiliate of
which made) an Acquisition Proposal described in clause (ii) of the immediately
preceding sentence or of any Offering Person or accepts a written offer to
consummate or consummates an Acquisition Proposal with such person or any
Offering Person, then, upon the signing of a definitive agreement relating to
any such Acquisition Proposal, or, if no such agreement is signed then at the
closing (and as a condition to the closing) of such Bell Atlantic Target Party
becoming such a subsidiary or of any such Acquisition Proposal, Bell Atlantic
shall pay to NYNEX an additional termination fee equal to $350 million.
(d) Each termination fee payable under Sections 9.2(b) and (c) above
shall be payable in cash. For purposes of this Section 9.2, an "Offering Person"
shall be any offeror who makes an Acquisition Proposal to NYNEX, the NYNEX
Target Party or their respective Representatives, or Bell Atlantic, the Bell
Atlantic Target Party or their respective Representatives, as the case may be,
before or within one hundred twenty days after any termination described in
Section 9.2(b)(i) or 9.2(c)(i) and "subsidiary" shall mean with respect to any
person, any corporation or other legal entity of which such person owns,
directly or indirectly, more than 50% of the stock or other equity interests the
holders of which are generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other legal entity.
(e) NYNEX and Bell Atlantic agree that the agreements contained in
Sections 9.2(b) and (c) above are an integral part of the transactions
contemplated by this Agreement and constitute liquidated damages and not a
penalty. If one Party fails to promptly pay to the other any fee due under such
Sections 9.2(b) and (c), the defaulting Party shall pay the costs and expenses
(including legal fees and expenses) in connection with any action, including the
filing of any lawsuit or other legal action, taken to collect payment, together
with interest on the amount of any unpaid fee at the publicly announced prime
rate of Citibank, N.A. from the date such fee was required to be paid.
SECTION 9.3 - Amendment. This Agreement may be amended by the
---------
Parties pursuant to a writing adopted by action taken by all of the Parties at
any time before the Effective Time; provided, however, that, after approval of
the Merger Agreement by the stockholders of NYNEX or Bell Atlantic, whichever
shall occur first, no amendment may be made which would (a) alter or change the
amount or kinds of consideration to be received by the holders of NYNEX Shares
upon consummation of the Merger, (b) alter or change any
57
<PAGE>
term of the Certificate of Incorporation of NYNEX or the Certificate of
Incorporation of Bell Atlantic (except for the implementation at the Effective
Time of the Certificate Amendment), or (c) alter or change any of the terms and
conditions of this Agreement if such alteration or change would adversely affect
the holders of any class or series of securities of NYNEX or Bell Atlantic. This
Agreement may not be amended except by an instrument in writing signed by the
Parties.
SECTION 9.4 - Waiver. At any time before the Effective Time, any
------
Party may (a) extend the time for the performance of any of the obligations or
other acts of the other Parties, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a Party to any such
extension or waiver shall be valid only as against such Party and only if set
forth in an instrument in writing signed by such Party.
ARTICLE X - GENERAL PROVISIONS
SECTION 10.1 - Non-Survival of Representations, Warranties and
-----------------------------------------------
Agreements. The representations, warranties and agreements in this Agreement
- ----------
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 9.1 hereof, as the case may be, except that (a) the
agreements set forth in Article I and Sections 2.4, 2.5, 2.6, 2.7, 7.8, 7.9 and
7.12 hereof shall survive the Effective Time indefinitely, (b) the agreements
and representations set forth in Sections 4.10, 4.16, 5.10, 5.16, 7.5(b), 9.2
and 10.3 hereof shall survive termination indefinitely and (c) nothing contained
herein shall limit any covenant or agreement of the Parties which by its terms
contemplates performance after the Effective Time.
SECTION 10.2 - Notices. All notices and other communications given
-------
or made pursuant hereto shall be in writing and shall be deemed to have been
duly given or made as of the date of receipt and shall be delivered personally
or mailed by registered or certified mail (postage prepaid, return receipt
requested), sent by overnight courier or sent by telecopy, to the Parties at the
following addresses or telecopy numbers (or at such other address or telecopy
number for a Party as shall be specified by like notice):
(a) if to NYNEX:
NYNEX Corporation
1095 Avenue of the Americas
New York, New York 10036
Attention: Executive Vice President and
General Counsel
Telecopy No.: (212) 597-2560
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with a copy to:
NYNEX Corporation
1095 Avenue of the Americas
New York, New York 10036
Attention: Vice President - Law
Telecopy No.: (212) 597-2558
and
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Stephen E. Jacobs, Esq.
Telecopy No.: (212) 310-8007
(b) if to Bell Atlantic:
Bell Atlantic Corporation
1310 North Court House Road, 11th floor
Arlington, Virginia 22201
Attention: Vice President and General
Counsel
Telecopy No.: (703) 974-1951
with a copy to:
Bell Atlantic Corporation
1717 Arch Street, 48th floor
Philadelphia, Pennsylvania 19103
Attention: Vice President Mergers
and Acquisitions and Associate
General Counsel
Telecopy No.: (215) 963-9195
and
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, Pennsylvania 19103
Attention: N. Jeffrey Klauder, Esq.
Telecopy No.: (215) 963-5299
SECTION 10.3 - Expenses. Except as otherwise provided herein, all
--------
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the Party incurring such costs
and expenses, except that those expenses incurred in connection with the
printing of the Joint Proxy Statement and the Registration
59
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Statement, as well as the filing fees related thereto and any filing fee
required in connection with the filing of Premerger Notifications under the HSR
Act, shall be shared equally by NYNEX and Bell Atlantic.
SECTION 10.4 - Certain Definitions. For purposes of this Agreement,
-------------------
the following terms shall have the following meanings:
(a) "1933 Act" means the Securities Act of 1933, as the same may be
amended from time to time, and "Exchange Act" means the Securities Exchange Act
of 1934, as the same may be amended from time to time.
(b) "affiliate" of a person means a person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the first mentioned person.
(c) "control" (including the terms "controlled by" and "under common
control with") means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a person, whether
through the ownership of stock, as trustee or executor, by contract or credit
arrangement or otherwise.
(d) "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as the same may be amended from time to time.
(e) "knowledge" of any Party shall mean the actual knowledge of the
executive officers of such Party.
(f) "Jointly Held Person" means each of Bell Communications
Research, Inc., New York SMSA Limited Partnership, Cellco Partnership, Tomcom
L.P., PCSCO Partnership, Tele-TV, Tele-TV Media Partners, L.P., Tele-TV Systems
Partners, L.P., BANX Partnership, PCS Primeco, Bell Atlantic NYNEX Mobile, Inc.,
CAI Wireless Systems, Inc., and any other person in which each of NYNEX and Bell
Atlantic individually hold, directly or indirectly, 5% or more of the stock of,
or other equity interests in, such entity, and their respective subsidiaries
(which term shall have the same meaning as is ascribed thereto in Section 9.2(d)
hereof).
(g) "Mandalay Shares" means any shares of common stock of NYNEX sold
or hereafter issuable pursuant to (i) the Amended and Restated Stock Purchase
and Registration Agreement dated as of March 29, 1996 between NYNEX and Kipling
Associates L.L.C., a Delaware limited liability company ("KALLC") (or the
Original Agreement referred to therein), and (ii) the Amended and Restated Stock
Purchase and Registration Agreement dated as of March 29, 1996 between NYNEX and
Weatherly Holdings L.L.C., a Delaware limited liability company ("WHLLC") (or
the Original Agreement referred to therein), including (without limitation)
14,065,013 shares of common stock of NYNEX registered in the name of Cede & Co.
as nominee for Depository Trust Company on behalf of State Street Bank and Trust
Company, DTC Participant 987, Institution 93548, Agent 93547 for Account No.
HT2789 (WHLLC) and Account No. HT2791 (KALLC).
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(h) "Material Adverse Effect" means any change in or effect on the
business of the referenced corporation or any of its Subsidiaries that is or
will be materially adverse to the business, operations (including the income
statement), properties (including intangible properties), condition (financial
or otherwise), assets, liabilities or regulatory status of such referenced
corporation and its Subsidiaries taken as a whole, but shall not include the
effects of changes that are generally applicable in (A) the telecommunications
industry, (B) the United States economy or (C) the United States securities
markets if, in any of (A), (B) or (C), the effect on NYNEX or Bell Atlantic,
determined without including its ownership of NYNEX after the Merger, (as the
case may be) and its respective Subsidiaries, taken as a whole, is not
disproportionate relative to the effect on the other and its Subsidiaries, taken
as a whole. All references to Material Adverse Effect on Bell Atlantic or its
Subsidiaries contained in Article IV, V or VI of this Agreement shall be deemed
to refer solely to Bell Atlantic and its Subsidiaries without including its
ownership of NYNEX and its Subsidiaries after the Merger.
(i) "Material Investment" means (a) as to NYNEX, each of FLAG
Limited, Orient Telecom and Technology Holdings Limited, PT Excelcomindo
Pratama, Telecom Asia Corporation Public Company Limited and any other person
which NYNEX directly or indirectly holds the stock of, or other equity interest
in, provided the lesser of the fair market value or book value of such interest
exceeds $100 million, excluding, however, any person which is a Subsidiary of
NYNEX or a Jointly Held Person; and (b) as to Bell Atlantic, each of Grupo
Iusacell, S.A. de C.V., Telecom Corporation of New Zealand Limited, Omnitel, and
any other person which Bell Atlantic directly or indirectly holds the stock of,
or other equity interest in, provided the lesser of the fair market value or
book value of such interest exceeds $100 million, excluding, however, any Person
which is a Subsidiary of Bell Atlantic or a Jointly Held Person.
(j) "person" means an individual, corporation, partnership,
association, trust, unincorporated organization, entity or group (as defined in
the Exchange Act).
(k) "POR" means the Plan of Reorganization approved by the United
States Court for the District of Columbia on August 5, 1983 and the Agreement
Concerning Contingent Liabilities, Tax Matters and Termination of Certain
Agreements dated as of November 1, 1983, as amended and supplemented.
(l) "Significant Subsidiary" with respect to NYNEX means any
Subsidiary which on the date of determination is a "significant subsidiary"
within the meaning of Rule 1-02(w) of Regulation S-X promulgated under the
Exchange Act and, with respect to Bell Atlantic means any Subsidiary which on
the date of determination is a "significant subsidiary" within the meaning of
Rule 1-02(w) of Regulation S-X promulgated under the Exchange Act, excluding,
however, Jointly Held Persons.
(m) "Subsidiary", "NYNEX Subsidiary", or "Bell Atlantic Subsidiary"
means any corporation or other legal entity of which NYNEX or Bell Atlantic, as
the case may be (either alone or through or together with any other Subsidiary
or Subsidiaries), owns, directly or indirectly, more than 50% of the stock or
other equity interests the holders of which are
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generally entitled to vote for the election of the board of directors or other
governing body of such corporation or other legal entity, excluding, however,
Jointly Held Persons.
SECTION 10.5 - Headings. The headings contained in this Agreement
--------
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 10.6 - Severability. If any term or other provision of this
------------
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any Party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the Parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the Parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the maximum extent possible.
SECTION 10.7 - Entire Agreement; No Third-Party Beneficiaries. This
----------------------------------------------
Agreement constitutes the entire agreement and, except as expressly set forth
herein, supersedes any and all other prior agreements and undertakings, both
written and oral, among the Parties, or any of them, with respect to the subject
matter hereof and, except for Section 7.8 (Indemnification, Directors' and
Officers' Insurance) and Section 7.12 (Post-Merger Bell Atlantic Board of
Directors), is not intended to confer upon any person other than NYNEX, Bell
Atlantic, and the Merger Subsidiary and, after the Effective Time, their
respective stockholders, any rights or remedies hereunder.
SECTION 10.8 - Assignment. This Agreement shall not be assigned by
----------
operation of law or otherwise.
SECTION 10.9 - Governing Law. This Agreement shall be governed by,
-------------
and construed in accordance with, the laws of the State of Delaware applicable
to contracts executed in and to be performed entirely within that State, without
regard to the conflicts of laws provisions thereof.
SECTION 10.10 - Counterparts. This Agreement may be executed in one
------------
or more counterparts, and by the different Parties in separate counterparts,
each of which when executed shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
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IN WITNESS WHEREOF, NYNEX and Bell Atlantic have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
NYNEX CORPORATION
By: /s/ Ivan G. Seidenberg
--------------------------
Name: Ivan G. Seidenberg
Title:Chairman and Chief Executive
Officer
BELL ATLANTIC CORPORATION
By: /s/ Raymond W. Smith
--------------------------
Name: Raymond W. Smith
Title:Chairman and Chief Executive
Officer
63
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INDEX OF DEFINED TERMS
DEFINED TERM PAGE NO.
- ------------ --------
1933 Act................................................................... 60
Acquisition Proposal....................................................... 41
affiliate.................................................................. 60
Agreement.................................................................. 1
Amended Bylaws............................................................. 47
Bear Stearns............................................................... 20
Bell Atlantic.............................................................. 1
Bell Atlantic Equity Rights................................................ 24
Bell Atlantic SEC Reports.................................................. 27
Bell Atlantic Benefit Plans................................................ 29
Bell Atlantic Common Stock,................................................ 3
Bell Atlantic Contracts.................................................... 36
Bell Atlantic Director..................................................... 48
Bell Atlantic North........................................................ 51
Bell Atlantic South........................................................ 51
Bell Atlantic Target Party................................................. 57
Bell Atlantic Subsidiary................................................... 61
Bylaws Amendment........................................................... 8
CERCLIS.................................................................... 18
Certificate Amendment...................................................... 8
Closing.................................................................... 44
Closing Date............................................................... 44
Code ..................................................................... 1
Common Shares Trust........................................................ 6
Confidentiality Agreement.................................................. 45
Consents................................................................... 50
control.................................................................... 60
Delaware Law............................................................... 1
Effective Time............................................................. 2
Environmental Permits...................................................... 17
Environmental Claim........................................................ 18
Environmental Laws......................................................... 19
ERISA ..................................................................... 14
Excess Shares.............................................................. 6
Exchange Ratio............................................................. 3
Exchange Fund.............................................................. 4
Exchange Agent............................................................. 4
Exchange Act............................................................... 60
GAAP ..................................................................... 1
Hazardous Materials........................................................ 19
64
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HSR Act.................................................................... 60
Initial NYNEX Termination Fee.............................................. 56
Initial Bell Atlantic Termination Fee...................................... 57
IRS ..................................................................... 14
Joint Proxy Statement...................................................... 14
Jointly Held Person........................................................ 60
KALLC ..................................................................... 60
knowledge.................................................................. 60
Legal Requirements......................................................... 13
Mandalay Shares............................................................ 60
Material Investment........................................................ 61
Material Adverse Effect.................................................... 61
Merged Corporation......................................................... 2
Merger..................................................................... 1
Merger Subsidiary.......................................................... 1
Merrill Lynch.............................................................. 34
Morgan Stanley............................................................. 20
New NYNEX Common Stock..................................................... 4
NPL ..................................................................... 18
NYNEX ..................................................................... 1
NYNEX Equity Rights........................................................ 10
NYNEX Rights Agreement..................................................... 10
NYNEX SEC Reports.......................................................... 12
NYNEX Benefit Plans........................................................ 14
NYNEX Contracts............................................................ 22
NYNEX Common Stock......................................................... 3
NYNEX Shares............................................................... 4
NYNEX Director............................................................. 48
NYNEX Target Party......................................................... 56
NYNEX Subsidiary........................................................... 61
NYSE ..................................................................... 6
Offering Person............................................................ 57
Original Agreement......................................................... 20
Parties.................................................................... 2
Party ..................................................................... 2
Party Representatives...................................................... 45
PBGC ..................................................................... 15
PCBs ..................................................................... 19
Permits.................................................................... 13
person..................................................................... 61
POR ..................................................................... 61
Pre-Surrender Dividends.................................................... 5
Registration Statement..................................................... 14
65
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Release.................................................................... 19
Requisite Regulatory Approvals............................................. 51
SAR ..................................................................... 7
SEC ..................................................................... 12
Significant Subsidiary..................................................... 61
subsidiary................................................................. 57
Subsidiary................................................................. 61
Surviving Corporation...................................................... 2
Termination Date........................................................... 54
the date hereof............................................................ 1
WHLLC ..................................................................... 60
66
