SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 13, 1999
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Oak Industries Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-4474 36-1569000
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification
No.)
1000 Winter Street, Waltham, MA 02451
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 781.890.0400
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(Former name or former address, if changed since last report)
INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. OTHER EVENTS.
On November 13, 1999, Oak Industries Inc., a Delaware corporation, Corning
Incorporated ("Corning"), a New York corporation, and Riesling Acquisition
Corporation, a Delaware corporation and a wholly-owned subsidiary of
Corning, entered into an Agreement and Plan of Merger (the "Merger
Agreement").
The Merger Agreement is filed herewith as Exhibit 99 and is incorporated
herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
Exhibit 99 - Agreement and Plan of Merger dated as of
November 13, 1999 among Oak Industries Inc.,
a Delaware corporation, Corning Incorporated,
a New York corporation, and Riesling Acquisition
Corporation, a Delaware corporation and a
wholly-owned subsidiary of Corning.
SIGNATURES
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.
OAK INDUSTRIES INC.
By: /s/Pamela F. Lenehan
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Pamela F. Lenehan
Senior Vice President,
Corporate Development
and Treasurer
Dated: December 3, 1999
EXHIBIT INDEX
Exhibit No. Description
99 Agreement and Plan of Merger dated as of November 13, 1999
among Oak Industries Inc., a Delaware corporation, Corning
Incorporated, a New York corporation, and Riesling
Acquisition Corporation, a Delaware corporation and a
wholly-owned subsidiary of Corning.
EXHIBIT 99
AGREEMENT AND PLAN OF MERGER
Among
CORNING INCORPORATED
RIESLING ACQUISITION CORPORATION
and
OAK INDUSTRIES INC.
Dated as of November 13, 1999
TABLE OF CONTENTS
ARTICLE I
THE MERGER
SECTION 1.01. The Merger 1
SECTION 1.02. Closing; Effective Time 1
SECTION 1.03. Effect of the Merger 2
SECTION 1.04. Certificate of Incorporation; By-Laws 2
SECTION 1.05. Directors and Officers 2
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01. Conversion of Securities 3
SECTION 2.02. Exchange of Certificates 3
SECTION 2.03. Stock Transfer Books 7
SECTION 2.04. Company Stock Options 7
SECTION 2.05. Restricted Stock 9
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01. Organization and Qualification; Subsidiaries 9
SECTION 3.02. Certificate of Incorporation and By-Laws 10
SECTION 3.03. Capitalization 10
SECTION 3.04. Authority Relative to This Agreement 11
SECTION 3.05. No Conflict; Required Filings and Consents 11
SECTION 3.06. Permits; Compliance 12
SECTION 3.07. SEC Filings; Financial Statements 13
SECTION 3.08. Undisclosed Liabilities 14
SECTION 3.09. Absence of Certain Changes or Events 14
SECTION 3.10. Absence of Litigation 14
SECTION 3.11. Employee Benefit Matters 14
SECTION 3.12. Material Contracts 16
SECTION 3.13. Environmental Matters 17
SECTION 3.14. Title to Properties; Absence of Liens
and Encumbrances 18
SECTION 3.15. Intellectual Property 18
SECTION 3.16. [Intentionally Omitted] 19
SECTION 3.17. Taxes 19
SECTION 3.18. Accounting and Tax Matters 19
SECTION 3.19. Board Approval; Vote Required 20
SECTION 3.20. Insurance 20
SECTION 3.21. State Takeover Statutes; Stockholder Rights Plan 20
SECTION 3.22. Labor Matters 20
SECTION 3.23. Opinion of Financial Advisor 21
SECTION 3.24. Brokers 21
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
SECTION 4.01. Organization and Qualification; Subsidiaries 21
SECTION 4.02. Articles of Incorporation and By-Laws 21
SECTION 4.03. Capitalization 22
SECTION 4.04. Authority Relative to This Agreement 22
SECTION 4.05. No Conflict; Required Filings and Consents 23
SECTION 4.06. SEC Filings; Financial Statements 23
SECTION 4.07. Absence of Certain Changes or Events 24
SECTION 4.08. Absence of Litigation 24
SECTION 4.09. Accounting and Tax Matters 24
SECTION 4.10. Operations of Merger Sub 25
ARTICLE V
CONDUCT OF BUSINESSES PENDING THE MERGER
SECTION 5.01. Conduct of Business by the Company Pending
the Merger 25
SECTION 5.02. Conduct of Business by Parent Pending the Merger 28
SECTION 5.03. Notification of Certain Matters 28
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Registration Statement; Joint Proxy Statement 28
SECTION 6.02. Company Stockholders' Meeting 30
SECTION 6.03. Access to Information; Confidentiality 30
SECTION 6.04. No Solicitation of Transactions 31
SECTION 6.05. Directors' and Officers' Indemnification
and Insurance 32
SECTION 6.06. Obligations of Merger Sub 34
SECTION 6.07. Affiliates 34
SECTION 6.08. Pooling 34
SECTION 6.09. Further Action; Consents; Filings 35
SECTION 6.10. Plan of Reorganization 36
SECTION 6.11. Public Announcements 37
SECTION 6.12. Letters of Accountants 37
SECTION 6.13. NYSE Listing 37
SECTION 6.14 . Reasonable Best Efforts and Further Assurances 37
SECTION 6.15. Certain Employee Benefits Matters 38
SECTION 6.16. Supplemental Indenture 38
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. Conditions to the Obligations of Each Party 38
SECTION 7.02. Conditions to the Obligations of Parent
and Merger Sub 39
SECTION 7.03. Conditions to the Obligations of the Company 40
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination 41
SECTION 8.02. Effect of Termination 43
SECTION 8.03. Amendment 43
SECTION 8.04. Waiver 43
SECTION 8.05. Expenses 44
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non Survival of Representations, Warranties
and Agreements 46
SECTION 9.02. Notices 46
SECTION 9.03. Certain Definitions 47
SECTION 9.04. Severability 49
SECTION 9.05. Assignment; Binding Effect; Benefit 49
SECTION 9.06. Specific Performance 49
SECTION 9.07. Governing Law; Forum 49
SECTION 9.08. Headings 49
SECTION 9.09. Counterparts 49
SECTION 9.10. Entire Agreement 50
EXHIBITS
Exhibit 6.07(a) Form of Affiliate Letter for Affiliates of the Company
Exhibit 6.07(b) Form of Affiliate Letter for Affiliates of Parent
Glossary of Defined Terms
Location of
Defined Term Definition
Acquisition Proposal 6.04(b)
Acquisition Transaction 6.04(a)
Action 3.10
affiliate 9.03(a)
Affiliate 6.07(a)
Agreement Preamble
APB No. 16 6.08(b)
Blue Sky Laws 3.05(b)
Business Combination 8.05(b)
business day 9.03(b)
Certificate of Merger 1.02(b)
Certificates 2.02(b)
Closing 1.02(a)
Closing Date 1.02(a)
Code Recitals
Company Preamble
Company Balance Sheet 3.07(b)
Company Benefit Plans 3.11(a)
Company Board Approval 3.19(a)
Company Common Shares 2.01(a)(i)
Company Common Stock 2.01(a)(i)
Company Disclosure Schedule 3.03
Company Material Contracts 3.12(a)
Company Permits 3.06(a)
Company Preferred Stock 3.03
Company Rights Agreement 3.03
Company SEC Reports 3.07(a)
Company Significant Subsidiaries 3.01(b)
Company Stock Option Plans 2.04(a)
Company Stock Options 2.04(a)
Company Stockholders' Meeting 6.01(a)
Company Stockholders' Vote 3.04
Company Subsidiaries 3.01(a)
Company 10-K 3.01(b)
Confidentiality Agreement 6.03
control 9.03(c)
DGCL Recitals
DLJ 3.23
Effective Time 1.02(b)
Environmental Laws 9.03(d)
Environmental Permits 3.13
ERISA 3.11(a)
Excess Shares 2.02(e)(ii)
Exchange Act 3.01(b)
Exchange Agent 2.02(a)
Exchange Fund 2.02(a)
Exchange Ratio 2.01(a)(i)
Expenses 8.05(f)
Governmental Entity 3.05(b)
Hazardous Substances 9.03(e)
HSR Act 3.05(b)
Indemnified Parties 6.05(b)
Indenture 6.16
Intellectual Property 9.03(f)
IRS 3.11(d)
ISOs 2.04(a)
knowledge 9.03(g)
Law 3.05(a)
Liens 3.14
L Options 3.11(h)
Material Adverse Effect 9.03(h)
Merger Recitals
Merger Consideration 2.01(a)(i)
Merger Sub Preamble
Multiemployer Plan 3.11(b)
Multiple Employer Plan 3.11(b)
1999 L Plan 3.11(h)
NYSE 2.02(e)(ii)
Parent Preamble
Parent Balance Sheet 4.06(b)
Parent Common Shares 2.01(a)(i)
Parent Common Stock 2.01(a)(i)
Parent Preferred Shares 4.03(a)
Parent SEC Reports 4.06(a)
Parent Share Option Plans 4.03(a)
Parent Significant Subsidiaries 4.05(a)
Parent Subsidiaries 4.01
PBGC 3.11(e)
person 9.03(i)
Proxy Statement 6.01(a)
Registration Statement 6.01(a)
Representatives 6.03
Required Consents 3.05(b)
SEC 3.01(b)
Securities Act 3.05(b)
Significant Subsidiary 3.01(b)
subsidiary 9.03(j)
Substitute Option 2.04(a)
Superior Proposal 6.04(b)
Surviving Corporation 1.01
Taxes 3.17
U.S. GAAP Recitals
AGREEMENT AND PLAN OF MERGER dated as of November 13, 1999 (this
"Agreement") among CORNING INCORPORATED, a New York corporation ("Parent"),
RIESLING ACQUISITION CORPORATION, a Delaware corporation and a wholly owned
subsidiary of Parent ("Merger Sub"), and OAK INDUSTRIES INC., a Delaware
corporation (the "Company").
W I T N E S S E T H
WHEREAS, the respective Boards of Directors of Parent, Merger Sub and
the Company deem it advisable and in the best interests of each corporation
and its respective stockholders to combine their respective businesses;
WHEREAS, in furtherance of such combination, the respective Boards of
Directors of Parent, Merger Sub and the Company have each adopted
resolutions approving this Agreement and declaring its advisability and
approving the merger (the "Merger") of Merger Sub with and into the Company
in accordance with the Delaware General Corporation Law, as amended (the
"DGCL"), upon the terms and subject to the conditions set forth herein;
WHEREAS, for United States federal income tax purposes, the Merger is
intended to qualify as a reorganization under the provisions of section
368(a) of the United States Internal Revenue Code of 1986, as amended (the
"Code"); and
WHEREAS, for financial reporting purposes, the parties intend that
the Merger shall be accounted for as a "pooling-of-interests" under United
States generally accepted accounting principles ("U.S. GAAP");
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally
bound hereby, Parent, Merger Sub and the Company hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Upon the terms of this Agreement and
subject to the conditions set forth in Article VII, and in accordance with
the DGCL, at the Effective Time (as defined below), Merger Sub shall be
merged with and into the Company. As a result of the Merger, the separate
corporate existence of Merger Sub shall cease and the Company shall
continue as the surviving corporation of the Merger (the "Surviving
Corporation").
SECTION 1.02. Closing; Effective Time. (a) The closing of the
Merger (the "Closing") shall take place (i) at 10:00 a.m. (New York time)
at the offices of Shearman and Sterling, 599 Lexington Avenue, New York,
New York as soon as practicable, but in any event within three business
days after the day on which the last to be fulfilled or waived of the
conditions set forth in Article VII (other than those conditions that by
their nature are to be fulfilled at the Closing, but subject to the
fulfillment or waiver of such conditions) shall be fulfilled or waived in
accordance with this Agreement or (ii) at such other place and time or on
such other date as Parent and the Company may agree in writing (the
"Closing Date").
(b) At the Closing, the Company and Merger Sub shall cause a
certificate of merger (the "Certificate of Merger") to be executed and
filed with the Secretary of State of the State of Delaware and make all
other filings or recordings required by applicable law in connection with
the Merger. The Merger shall become effective at such time as the
Certificate of Merger is duly filed with the Secretary of State of the
State of Delaware or at such later time as is specified in the Certificate
of Merger in accordance with the DGCL (the "Effective Time").
SECTION 1.03. Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided in this Agreement, the
Certificate of Merger and the applicable provisions of the DGCL. Without
limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and franchises
of the Company and Merger Sub shall vest in the Surviving Corporation, and
all debts, liabilities and duties of the Company and Merger Sub shall
become the debts, liabilities and duties of the Surviving Corporation.
SECTION 1.04. Certificate of Incorporation; By-Laws. (a) At the
Effective Time, the Certificate of Incorporation of the Company shall be
amended to be identical to that of Merger Sub, as in effect immediately
prior to the Effective Time, except that Article I shall state that the
name of the Surviving Corporation is "Oak Industries Inc." Such
Certificate of Incorporation, as so amended, shall be the Certificate of
Incorporation of the Surviving Corporation, until thereafter amended
subject to Section 6.05(e), in accordance with the terms thereof and of the
DGCL.
(b) At the Effective Time, the By-Laws of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the By-Laws of the
Surviving Corporation until thereafter amended, subject to Section 6.05(a),
in accordance with the terms thereof, and of the Certificate of
Incorporation of the Surviving Corporation and of the DGCL.
SECTION 1.05. Directors and Officers. The directors of Merger Sub
immediately prior to the Effective Time shall be elected as the directors
of the Surviving Corporation, each to hold office in accordance with the
Certificate of Incorporation and By-Laws of the Surviving Corporation, and
the officers of the Company immediately prior to the Effective Time shall
be elected as the officers of the Surviving Corporation, in each case until
their respective successors are duly elected or appointed and qualified.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01. Conversion of Securities. (a) At the Effective Time,
by virtue of the Merger and without any action on the part of Parent,
Merger Sub, the Company or the holders of any of the following securities:
(i) each share of common stock, par value $0.01 per share ("Company
Common Stock"; shares of Company Common Stock being referred to
herein collectively as the "Company Common Shares") issued and
outstanding immediately prior to the Effective Time (other than
any shares of Company Common Stock to be canceled pursuant to
Section 2.01(ii)) shall be canceled and automatically converted,
subject to Section 2.02(e), into the right to receive 0.83 (the
"Exchange Ratio") shares of common stock, $0.50 par value per
share, of Parent ("Parent Common Stock"; shares of Parent Common
Stock being referred to herein collectively as the "Parent Common
Shares") (which, together with any cash in lieu of fractional
shares of Company Common Stock as specified in Section 2.02(e),
shall be referred to herein as the "Merger Consideration");
(ii) each Company Common Share owned by Parent or any direct or
indirect wholly owned subsidiary of Parent or held in treasury by
the Company or any Subsidiary of the Company immediately prior to
the Effective Time shall be canceled and extinguished without any
conversion thereof and no payment or distribution shall be made
with respect thereto; and
(iii) each share of common stock, $0.01 par value per share, of
Merger Sub issued and outstanding immediately prior to the Effective
Time shall be converted into and exchanged for one validly issued,
fully paid and nonassessable share of common stock, $0.01 par
value per share, of the Surviving Corporation.
(b) If at any time during the period between the date of this
Agreement and the Effective Time, the Company changes the number of Company
Common Shares, or Parent changes the number of Parent Common Shares, issued
and outstanding as a result of a stock split, reverse stock split, stock
dividend, recapitalization, redenomination of share capital or other
similar transactions, the Exchange Ratio and any other items dependent
thereon shall be appropriately adjusted.
SECTION 2.02. Exchange of Certificates. (a) Exchange Agent. Parent
shall deposit, or shall cause to be deposited, with Harris Trust and
Savings Bank or such other bank or trust company that may be designated by
Parent and is reasonably satisfactory to the Company (the "Exchange
Agent"), for the benefit of the holders of Company Common Shares, for
exchange in accordance with this Article II through the Exchange Agent,
certificates representing Parent Common Shares issuable pursuant to Section
2.01 as of the Effective Time, and cash, from time to time as required to
make payments in lieu of any fractional shares pursuant to Section 2.02(e)
(such cash and certificates for Parent Common Shares, together with any
dividends or distributions with respect thereto, being hereinafter referred
to as the "Exchange Fund"). The Exchange Agent shall, pursuant to
irrevocable instructions, deliver the Parent Common Shares contemplated to
be issued pursuant to Section 2.01, out of the Exchange Fund. Except as
contemplated by Section 2.02(f) hereof, the Exchange Fund shall not be used
for any other purpose.
(b) Exchange Procedures. As promptly as practicable after the
Effective Time (but in any event within five business days after the
Effective Time), Parent shall cause the Exchange Agent to mail to each
holder of record of a certificate or certificates which immediately prior
to the Effective Time represented outstanding Company Common Shares (the
"Certificates") (i) a letter of transmittal (which shall be in customary
form and shall specify that delivery shall be effected, and risk of loss
and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for certificates
representing Parent Common Shares and cash in lieu of any fractional
shares. Upon surrender to the Exchange Agent of a Certificate for
cancellation, together with such letter of transmittal, duly executed and
completed in accordance with the instructions thereto, and such other
documents as may be reasonably required pursuant to such instructions, the
holder of such Certificate shall be entitled to receive in exchange
therefor a certificate representing that number of whole Parent Common
Shares which such holder has the right to receive in respect of the Company
Common Shares formerly represented by such Certificate (after taking into
account all Company Common Shares then held by such holder), cash in lieu
of any fractional Parent Common Shares to which such holder is entitled
pursuant to Section 2.02(e) and any dividends or other distributions to
which such holder is entitled pursuant to Section 2.02(c), and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Company Common Shares which is not registered in
the transfer records of the Company, a certificate representing the proper
number of Parent Common Shares, cash in lieu of any fractional Parent
Common Shares to which such holder is entitled pursuant to Section 2.02(e)
and any dividends or other distributions to which such holder is entitled
pursuant to Section 2.02(c), may be issued to a transferee if the
Certificate representing such Company Common Shares is presented to the
Exchange Agent, accompanied by all documents required to evidence and
effect such transfer and by evidence satisfactory to the Surviving
Corporation that any applicable share transfer taxes have been paid. Until
surrendered as contemplated by this Section 2.02, each Certificate shall be
deemed at all times after the Effective Time to represent only the right to
receive upon such surrender the certificate representing Parent Common
Shares, cash in lieu of any fractional Parent Common Shares to which such
holder is entitled pursuant to Section 2.02(e) and any dividends or other
distributions to which such holder is entitled pursuant to Section 2.02(c).
(c) Distributions with Respect to Unexchanged Parent Common Shares.
No dividends or other distributions declared or made after the Effective
Time with respect to the Parent Common Shares with a record date after the
Effective Time shall be paid to the holder of any unsurrendered Certificate
with respect to the Parent Common Shares represented thereby, and no cash
payment in lieu of any fractional shares shall be paid to any such holder
pursuant to Section 2.02(e), until the holder of such Certificate shall
surrender such Certificate as provided in Section 2.02(b). Subject to the
effect of escheat, tax or other applicable Laws (as defined below),
following surrender of any such Certificate, there shall be paid to the
holder of the certificates representing whole Parent Common Shares issued
in exchange therefor, without interest, (i) promptly (but in any event
within five business days after such surrender), the amount of any cash
payable with respect to a fractional Parent Common Share to which such
holder is entitled pursuant to Section 2.02(e) and the amount of dividends
or other distributions with a record date after the Effective Time and
theretofore payable with respect to such whole Parent Common Shares, and
(ii) at the appropriate payment date, the amount of dividends or other
distributions, with a record date after the Effective Time but prior to
surrender and a payment date occurring after surrender, payable with
respect to such whole Parent Common Shares.
(d) No Further Rights in Company Common Stock. All Parent Common
Shares issued upon conversion of the Company Common Shares in accordance
with the terms hereof (including any cash paid pursuant to Section 2.02(c)
or (e)) shall be deemed to have been issued in full satisfaction of all
rights pertaining to such Company Common Shares.
(e) No Fractional Shares. (i) No certificates or scrip
representing fractional Parent Common Shares shall be issued upon the
surrender for exchange of Certificates, no dividend or distribution with
respect to Parent Common Shares shall be payable on or with respect to any
fractional share and such fractional share interests will not entitle the
owner thereof to any rights of a stockholder of Parent.
(ii) As promptly as practicable following the Effective Time, the
Exchange Agent shall determine the excess of (x) the number of full Parent
Common Shares delivered to the Exchange Agent by Parent over (y) the
aggregate number of full Parent Common Shares to be distributed to holders
of Company Common Stock (such excess being herein called the "Excess
Shares"). As soon after the Effective Time as practicable, the Exchange
Agent, as agent for such holders of Parent 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 clause (iii) of this
paragraph (e).
(iii) 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 any such sale or sales have been distributed to such
holders of Company Common Stock in lieu of fractional shares, the Exchange
Agent will hold such proceeds in trust for such holders of Company Common
Stock. Parent shall pay all commissions, transfer taxes and other
outofpocket transaction costs of the Exchange Agent incurred in connection
with such sale or sales of Excess Shares. In addition, Parent shall pay
the Exchange Agent's compensation and expenses in connection with such sale
or sales. The Exchange Agent shall determine the portion of such net
proceeds to which each holder of Company Common Stock shall be entitled, if
any, by multiplying the amount of the aggregate net proceeds by a fraction
the numerator of which is the amount of the fractional share interest to
which such holder of Company Common Stock is entitled (after taking into
account all shares of Company Common Stock then held by such holder) and
the denominator of which is the aggregate amount of fractional share
interests to which all holders of Certificates representing Company Common
Stock are entitled.
(iv) Notwithstanding the provisions of this Section 2.02, Parent
may elect, at its option exercised prior to the Effective Time and in lieu
of the issuance and sale of Excess Shares and the making of the payments
contemplated in such subsections, to pay to the Exchange Agent an amount in
cash sufficient for the Exchange Agent to pay each holder of Company Common
Stock an amount in cash equal to the product obtained by multiplying (x)
the fractional share interest to which such holder would otherwise be
entitled (after taking into account all shares of Company Common Stock held
at the Effective Time by such holder) by (y) the closing price for a Parent
Common Share on the NYSE 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
deemed to mean and refer to the payments calculated as set forth in this
Section 2.02(e).
(v) As soon as practicable after the determination of the amount of
cash, if any, to be paid to holders of Company Common Stock with respect to
any fractional share interests, the Exchange Agent shall promptly pay such
amounts to such holders of Company Common Stock.
(f) Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the holders of Company Common Shares for
twelve months after the Effective Time shall be delivered to Parent, upon
demand, and any holders of Company Common Shares who have not theretofore
complied with this Article II shall thereafter look only to Parent for the
Parent Common Shares, any cash in lieu of fractional Parent Common Shares
to which they are entitled pursuant to Section 2.02(e) and any dividends or
other distributions with respect to the Parent Common Shares to which they
are entitled pursuant to Section 2.02(c). Any portion of the Exchange Fund
remaining unclaimed by holders of Company Common Shares as of a date which
is immediately prior to such time as such amounts would otherwise escheat
to or become property of any government entity shall, to the extent
permitted by applicable Law, become the property of Parent free and clear
of any claims or interest of any person previously entitled thereto.
(g) No Liability. Neither Parent nor the Surviving Corporation
shall be liable to any holder of Company Common Shares for any such Company
Common Shares (or dividends or distributions with respect thereto) or cash
delivered to a public official pursuant to any abandoned property, escheat
or similar Law.
(h) Withholding Rights. Each of the Surviving Corporation, Parent
and the Exchange Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder of
Company Common Shares such amounts as it is required to deduct and withhold
with respect to the making of such payment under the Code, or any provision
of state, local or foreign tax Law. To the extent that amounts are so
withheld by the Surviving Corporation, Parent or the Exchange Agent, as the
case may be, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the holder of the Company Common
Shares in respect of which such deduction and withholding was made by the
Surviving Corporation, Parent or the Exchange Agent, as the case may be.
(i) Lost Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such person of a
bond, in such reasonable amount as the Surviving Corporation may direct, as
indemnity against any claim that may be made against it with respect to
such Certificate, the Exchange Agent will issue in exchange for such lost,
stolen or destroyed Certificate, the Parent Common Shares, any cash in lieu
of fractional Parent Common Shares to which the holders thereof are
entitled pursuant to Section 2.02(e) and any dividends or other
distributions to which the holders thereof are entitled pursuant to Section
2.02(c).
SECTION 2.03. Stock Transfer Books. At the Effective Time, the
stock transfer books of the Company shall be closed and there shall be no
further registration of transfers of Company Common Shares thereafter on
the records of the Company. From and after the Effective Time, the holders
of Certificates representing Company Common Shares outstanding immediately
prior to the Effective Time shall cease to have any rights with respect to
such Company Common Shares, except as otherwise provided in this Agreement
or by Law. On or after the Effective Time, any Certificates presented to
the Exchange Agent or Parent for any reason shall be converted into Parent
Common Shares, any cash in lieu of fractional Parent Common Shares to which
the holders thereof are entitled pursuant to Section 2.02(e) and any
dividends or other distributions to which the holders thereof are entitled
pursuant to Section 2.02(c).
SECTION 2.04. Company Stock Options. (a) All options (the "Company
Stock Options") outstanding, whether or not exercisable and whether or not
vested, at the Effective Time under the Company's 1986 Stock Option and
Restricted Stock Plan for Executive and Key Employees of the Company, 1992
Stock Option and Restricted Stock Plan, 1995 Stock Option and Restricted
Stock Plan, 1988 Stock Option Plan for Non-Employee Directors and Non-
Qualified Stock Option Plan, 1992 Non-Qualified Stock Option Plan,
Lasertron, Inc. 1982 Incentive Stock Option Plan, and Lasertron, Inc. 1992
Stock Option Plan (collectively, the "Company Stock Option Plans"), shall
remain outstanding following the Effective Time. At the Effective Time,
the Company Stock Options shall, by virtue of the Merger and without any
further action on the part of the Company or the holder thereof, be assumed
by Parent in such manner that Parent (i) is a corporation "assuming a stock
option in a transaction to which section 424(a) applies" within the meaning
of section 424 of the Code and the regulations thereunder or (ii) to the
extent that section 424 of the Code does not apply to any such Company
Stock Options, would be such a corporation were section 424 of the Code
applicable to such Company Stock Options. From and after the Effective
Time, all references to the Company in the Company Stock Option Plans and
the applicable stock option agreements issued thereunder shall be deemed to
refer to Parent, which shall have assumed the Company Stock Option Plans as
of the Effective Time by virtue of this Agreement and without any further
action. Each Company Stock Option assumed by Parent (each, a "Substitute
Option") shall be exercisable upon the same terms and conditions as under
the Company Stock Option Plans, the applicable option agreement issued
thereunder and any applicable agreement it is subject to, except that (A)
each such Substitute Option shall be exercisable for, and represent the
right to acquire, that whole number of Parent Common Shares (rounded to the
nearest whole share or, in the case of Company Stock Options intended to
qualify as incentive stock options under Section 422 of the Code ("ISOs"),
rounding down to the nearest whole share) equal to the number of Company
Common Shares subject to such Company Stock Option multiplied by the
Exchange Ratio; and (B) the option price per Parent Common Share shall be
an amount equal to the option price per Company Common Shares subject to
such Company Stock Option in effect immediately prior to the Effective Time
divided by the Exchange Ratio (the option price per share, as so
determined, being rounded to the nearest full cent or, in the case of ISOs,
rounded down to the nearest full cent). Such Substitute Option shall
otherwise be subject to the same terms and conditions as such Company Stock
Option as in effect as of the Effective Time pursuant to the applicable
Company Stock Option Plan.
(b) As soon as practicable after the Effective Time, Parent shall
deliver to each holder of an outstanding Company Stock Option an
appropriate notice setting forth such holder's rights pursuant thereto, and
such Company Stock Option shall continue in effect on the same terms and
conditions (including any antidilution provisions, and subject to the
adjustments required by this Section 2.04 after giving effect to the
Merger). Parent shall comply with the terms of all such Company Stock
Options and ensure, to the extent required by, and subject to the
provisions of, the Company Stock Option Plan, that Company Stock Options
which qualified as ISOs prior to the Effective Time continue to qualify as
ISOs after the Effective Time. Parent shall take all corporate action
necessary to reserve for issuance a sufficient number of Parent Common
Shares for delivery upon exercise of Substitute Options pursuant to the
terms set forth in this Section 2.04. As soon as practicable (but in any
event, within five business days) after the Effective Time, the Parent
Common Shares subject to Company Stock Options will be covered by an
effective registration statement on Form S-8 (or any successor form) or
another appropriate form, and Parent shall use its reasonable efforts to
maintain the effectiveness of such registration statement or registration
statements for as long as Substitute Options remain outstanding. In
addition, Parent shall use all reasonable efforts to cause the Parent
Common Shares subject to Company Stock Options to be listed on the NYSE and
such other exchanges as Parent shall determine.
SECTION 2.05. Restricted Stock. At the Effective Time, any unvested
shares of restricted stock, whether granted pursuant to the Company Stock
Option Plans or otherwise, shall be converted into restricted stock of
Parent pursuant to Section 2.01, and shall continue to be subject to the
same restrictions and terms and conditions as under the Company Stock
Option Plans and the applicable agreements issued thereunder and the
Company Severance Plan or Severance Agreement between any holder of
restricted stock and the Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Merger Sub
that:
SECTION 3.01. Organization and Qualification; Subsidiaries. (a)
Each of the Company and each subsidiary of the Company (collectively, the
"Company Subsidiaries") is a corporation or other legal entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation and has all requisite power
and authority and all necessary governmental approvals to own, lease and
operate its properties and to carry on its business as it is now being
conducted, except where the failure to be organized, existing, in good
standing or to have such power, authority or governmental approvals would
not reasonably be likely, individually or in the aggregate, to have, a
Material Adverse Effect. Each of the Company and the Company Subsidiaries
is duly qualified or licensed as a foreign corporation or organization to
do business, and is in good standing, in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature
of its business makes such qualification or licensing necessary, except for
such failures to be so qualified or licensed and in good standing that
would not reasonably be likely, individually or in the aggregate, to have a
Material Adverse Effect.
(b) Except as updated by Section 3.01(b) of the Company Disclosure
Schedule, Exhibit 21 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998, as amended ("Company 10-K"), is a list
of all the subsidiaries of the Company that as of the date of this
Agreement are "Significant Subsidiaries" as such term is defined in Rule
102 of Regulation SX promulgated by the United States Securities and
Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as
amended (together with the rules and regulations promulgated thereunder,
the "Exchange Act") (such Significant Subsidiaries of the Company for the
purpose of this Agreement to be the "Company Significant Subsidiaries").
Except as set forth in such Exhibit 21, as updated by Section 3.01(b) of
the Company Disclosure Schedule, neither the Company nor any Company
Significant Subsidiary directly or indirectly owns, or has outstanding
contractual obligations to acquire, any equity or similar interest in, or
any interest convertible into or exchangeable or exercisable for, any
corporation, partnership, joint venture or other business association or
entity.
SECTION 3.02. Certificate of Incorporation and By-Laws. The Company
has heretofore made available to Parent a complete and correct copy of the
Certificate of Incorporation and the By-Laws of the Company, each as
amended to date. Such Certificate of Incorporation and By-Laws are in full
force and effect. The Company is not in violation of any of the provisions
of its Certificate of Incorporation or By-Laws.
SECTION 3.03. Capitalization. The authorized capital stock of the
Company consists of (a) 50,000,000 shares of Company Common Stock and (b)
500,000 shares of junior preferred stock, no par value, of the Company (the
"Company Preferred Stock"). As of November 8, 1999, (a) 17,225,703 shares
of Company Common Stock and (b) no shares of Company Preferred Stock were
issued and outstanding. All of the issued and outstanding Company Common
Shares are validly issued, fully paid and nonassessable. 2,568,953 Company
Common Shares and no shares of Company Preferred Stock, are held in the
treasury of the Company or by any Company Subsidiary and 588,588 shares of
Company Common Stock have been duly reserved for future issuance pursuant
to the Company Stock Options. There are no issued or outstanding bonds,
debentures, notes, convertible notes (other than the notes referenced in
Section 6.16 hereto) or other indebtedness of the Company having the right
to vote on any matters on which stockholders of the Company may vote.
Except for the Company Stock Options granted pursuant to the Company Stock
Option Plans or pursuant to agreements or arrangements described in Section
3.03 of the Company Disclosure Schedule or Section 3.11(i) hereof and
except for the rights issued pursuant to the Rights Agreement dated
December 7, 1995 between the Company and Bank of Boston (the "Company
Rights Agreement"), there are no options, warrants or other rights,
agreements, arrangements or commitments of any character relating to the
issued or unissued stock of the Company or any Significant Company
Subsidiary or, to the knowledge of the Company, any other Company
Subsidiary, or conditionally or absolutely obligating the Company or any
Company Significant Subsidiary, or to the knowledge of the Company, any
other Company Subsidiary, to issue or sell any shares of stock of, or other
equity interests in, the Company or any Company Subsidiary. Section 3.03
of the disclosure schedule delivered by the Company to the Parent
concurrently with the execution of the Agreement (the "Company Disclosure
Schedule") sets forth the total number of outstanding Company Stock Options
and the weighted average exercise price thereof. The Company has provided
(or within ten days after execution of this Agreement will provide) Parent
with a Schedule of all of the Company Stock Options, including the relevant
vesting times and exercise periods. All shares of Company Common Stock
subject to issuance as aforesaid, upon issuance on the terms and conditions
specified in the instruments pursuant to which they are issuable, will be
duly authorized, validly issued, fully paid and nonassessable. There are
no outstanding obligations (whether conditional or absolute) of the Company
or any Company Significant Subsidiary or, to the knowledge of the Company,
any other Company Subsidiary to repurchase, redeem or otherwise acquire any
shares or other equity interests of Company Common Stock or any shares or
other equity interests of any Company Subsidiary. Each outstanding share
of stock or other equity interest of each Company Significant Subsidiary
and, to the knowledge of the Company, of each other Company Subsidiary is
duly authorized, validly issued, fully paid and nonassessable and, except
as described in Section 3.03 of the Company Disclosure Schedule, each such
share or other equity interest owned by the Company or another Company
Subsidiary is free and clear of all security interests, liens, claims,
pledges, options, rights of first refusal, agreements, limitations on the
Company's or such other Company Subsidiary's voting rights, charges and
other encumbrances of any nature whatsoever, except where failure to own
such shares free and clear would not reasonably be likely, individually or
in the aggregate, to have a Material Adverse Effect.
SECTION 3.04. Authority Relative to This Agreement. The Company has
all necessary corporate power and authority to execute and deliver this
Agreement, and, subject to obtaining the necessary approvals of the
Company's stockholders, to perform its obligations hereunder and to
consummate the Merger and the other transactions contemplated by this
Agreement. The execution and delivery of this Agreement by the Company and
the consummation by the Company of the Merger and the other transactions
contemplated by this Agreement, have been duly and validly authorized by
all necessary corporate action and no other corporate proceedings on the
part of the Company are necessary to authorize this Agreement or to
consummate the Merger and the other transactions contemplated by this
Agreement (other than with respect to the Merger, the approval and adoption
of this Agreement and the Merger by the affirmative vote of a majority of
the voting power of the then outstanding Company Common Shares entitled to
vote on the matter (the "Company Stockholders' Vote")), and the filing of
the Certificate of Merger with the Secretary of State of Delaware as
required by the DGCL). This Agreement has been duly and validly executed
and delivered by the Company and, assuming the due authorization, execution
and delivery by Parent and Merger Sub, constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms.
SECTION 3.05. No Conflict; Required Filings and Consents. (a) The
execution, delivery and performance of this Agreement by the Company will
not (i) conflict with or violate the Certificate of Incorporation or By-
Laws of the Company or any equivalent organizational documents of any
Company Significant Subsidiary, (ii) assuming that all consents, approvals,
authorizations and other actions described in Section 3.05(b) have been
obtained and all filings and obligations described in Section 3.05(b) have
been made, conflict with or violate any federal, national, state,
provincial, municipal or local law, statute, ordinance, rule, regulation,
order, injunction, judgment or decree, whether of the U.S., or another
jurisdiction ("Law"), applicable to the Company or any Company Subsidiary
or by which any property or asset of the Company or any Company Subsidiary
is bound or affected, or (iii) except as set forth in Section 3.05 of the
Company Disclosure Schedule, 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 right of termination,
amendment, acceleration or cancellation of, or result in the creation of a
lien or other encumbrance on any property or asset of the Company or any
Company Subsidiary pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument
or obligation, except, with respect to clauses (ii) and (iii) for any such
conflicts, violations, breaches, defaults or other occurrences that would
not reasonably be likely, individually or in the aggregate, to have a
Material Adverse Effect, or otherwise prevent or materially delay the
consummation of the transactions contemplated by this Agreement.
(b) The execution, delivery and performance of this Agreement will
not require any consent, approval, authorization or permit of, or filing
with or notification to, any federal, national, state, provincial,
municipal or local government, any instrumentality, subdivision, court,
administrative agency or commission or other authority thereof, or any
quasi-governmental or private body exercising any regulatory, taxing,
importing or any other governmental or quasi-governmental authority,
whether of the U.S., or another jurisdiction (a "Governmental Entity"),
except (i) for the applicable requirements of (A) the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act") and
comparable filings, if any, in foreign jurisdictions, (B) state securities
or "blue sky" laws (the "Blue Sky Laws"), the Securities Act of 1933, as
amended (together with the rules and regulations promulgated thereunder,
the "Securities Act") or the Exchange Act, (C) the DGCL with respect to the
filing of the Delaware Certificate of Merger, and (D) the rules and
regulations of the NYSE (the foregoing clauses (i)(A) through (D) being
referred to collectively as the "Required Consents") and (ii) where the
failure to obtain such consents, approvals, authorizations or permits, or
to make such filings or notifications would not reasonably be likely,
individually or in the aggregate, to have a Material Adverse Effect, or
otherwise prevent or materially delay the consummation of the transactions
contemplated by this Agreement.
SECTION 3.06. Permits; Compliance. (a) Except as disclosed in
Section 3.06(a) of the Company Disclosure Schedule, each of the Company and
the Company Subsidiaries is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exceptions,
consents, certificates, approvals and orders of any Governmental Entity
necessary for the Company or any Company Subsidiary to own, lease and
operate its properties or to carry on its business as it is now being
conducted (the "Company Permits"), except where the failure to have, or the
suspension or cancellation of, any of the Company Permits would not
reasonably be likely, individually or in the aggregate, to have a Material
Adverse Effect, and no suspension or cancellation of any of the Company
Permits is pending or, to the knowledge of the Company, threatened, except
where the failure to have, or the suspension or cancellation of, any of the
Company Permits would not reasonably be likely, individually or in the
aggregate, to have a Material Adverse Effect.
(b) Except as disclosed in Section 3.06(b) of the Company
Disclosure Schedule, neither the Company nor any Company Subsidiary is in
conflict with, or in default or violation of, (i) any Law applicable to the
Company or any Company Subsidiary or by which any property or asset of the
Company or any Company Subsidiary is bound or affected, (ii) any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company or any
Company Subsidiary is a party or by which the Company or any Company
Subsidiary or any property or asset of the Company or any Company
Subsidiary is bound or affected or (iii) any Company Permits, except in
each case for any such conflicts, defaults or violations that would not
reasonably be likely, individually or in the aggregate, to have a Material
Adverse Effect.
SECTION 3.07. SEC Filings; Financial Statements. (a) The Company
has filed all forms, reports and documents required to be filed by it with
the SEC since December 31, 1996 (collectively, the "Company SEC Reports").
Except as described in Section 3.07 of the Company Disclosure Schedule, as
of the respective dates they were filed, (i) the Company SEC Reports
complied in all material respects with the requirements of the Securities
Act, or the Exchange Act, as the case may be, and (ii) none of the Company
SEC Reports contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order
to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. No Company Subsidiary is
required to file any form, report or other document with the SEC.
(b) Except as described in Section 3.07 of the Company Disclosure
Schedule, each of the consolidated financial statements (including, in each
case, any notes thereto) contained in the Company SEC Reports was prepared
in accordance with U.S. GAAP applied on a consistent basis throughout the
periods indicated (except as may be indicated in the notes thereto or, in
the case of unaudited statements, as permitted by Form 10-Q under the
Exchange Act) and each presented or will present fairly, in all material
respects, the consolidated financial position, results of operations and
cash flows of the Company and the consolidated Company Subsidiaries as at
the respective dates thereof and for the respective periods indicated
therein, except as otherwise noted therein (subject, in the case of
unaudited statements, to normal and recurring year-end adjustments which
are not expected to be material, individually or in the aggregate). The
balance sheet of the Company contained in the Company SEC Reports as of
December 31, 1998 is hereinafter referred to as the "Company Balance
Sheet".
(c) The Company has heretofore furnished to Parent a complete and
correct copy of any amendments or modifications (which have not yet been
filed with the SEC but which are required to be filed) to agreements,
documents or other instruments which previously had been filed by the
Company with the SEC pursuant to the Securities Act or the Exchange Act.
SECTION 3.08. Undisclosed Liabilities. Except for those liabilities
that are fully reflected or reserved against on the Company Balance Sheet
(or in the notes thereto) or as set forth in Section 3.08 of the Company
Disclosure Schedule, neither the Company nor any Company Subsidiary has
outstanding any liability of any nature whatsoever (whether absolute,
accrued, contingent or otherwise and whether due or to become due), except
for liabilities and obligations, which have been incurred since the date of
the Company Balance Sheet in the ordinary course of business and which
would not reasonably be likely, individually or in the aggregate, to have a
Material Adverse Effect.
SECTION 3.09. Absence of Certain Changes or Events. From the date
of the Company Balance Sheet through the date hereof, except as set forth
in Section 3.09 of the Company Disclosure Schedule, (a) each of the Company
and the Company Subsidiaries has conducted its business only in the
ordinary course and in a manner consistent with past practice and (b) since
such date, there has not been any circumstance, event, occurrence, change
or effect that would reasonably be likely, individually or in the
aggregate, to have a Material Adverse Effect.
SECTION 3.10. Absence of Litigation. Except as specifically
disclosed in the Company SEC Reports filed prior to the date of this
Agreement or in Section 3.10 of the Company Disclosure Schedule, there is
no material litigation, suit, claim, action, proceeding or investigation
(an "Action") pending or, to the knowledge of the Company, threatened
against the Company or any Company Subsidiary, or any property or asset of
the Company or any Company Subsidiary, before any court, arbitrator or
Governmental Entity, domestic or foreign.
SECTION 3.11. Employee Benefit Matters. (a) Plans and Material
Documents. Section 3.11 (a) of the Company Disclosure Schedule lists (i)
all employee benefit plans (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) and all
bonus, stock option, stock purchase, restricted stock, long term incentive,
deferred compensation, retiree medical or life insurance, supplemental
retirement, severance or other benefit plans, programs or arrangements, and
all employment, change in control, and severance agreements, to which the
Company or any Company Subsidiary is a party, with respect to which the
Company or any Company Subsidiary has any obligation or which are
maintained, contributed to or sponsored by the Company or any Company
Subsidiary for the benefit of any current or former employee, officer or
director of the Company or any Company Subsidiary, (ii) each employee
benefit plan for which the Company or any Company Subsidiary could incur
liability under Section 4069 of ERISA in the event such plan has been or
were to be terminated, (iii) any plan in respect of which the Company or
any Company Subsidiary could incur liability under Section 4212(c) of ERISA
and (iv) any contracts, arrangements or understandings between the Company
or any Company Subsidiary or any of their affiliates and any employee of
the Company or Company Subsidiary including, without limitation, any
contracts, arrangements or understandings relating to a sale of the Company
or any Company Subsidiary (collectively, the "Company Benefit Plans"),
other than plans, programs, arrangements, agreements or understandings that
are not material. Copies or summaries of each material Company Benefit
Plan have been made available to Parent. Neither the Company nor any
Company Subsidiary has any express or implied commitment to create, adopt
or amend any material employee benefit plan, program, arrangement or
agreement, other than any immaterial modification or any modification or
change required by applicable law.
(b) Absence of Certain Types of Plans. None of the Company Benefit
Plans is a multiemployer plan (within the meaning of Section 3(37) or
4001(a)(3) of ERISA) (a "Multiemployer Plan") or a single employer pension
plan (within the meaning of Section 4001(a)(15) of ERISA) for which the
Company or any Company Subsidiary could incur liability under Section 4063
or 4064 of ERISA (a "Multiple Employer Plan").
(c) Compliance. Each Company Benefit Plan is now and always has
been operated in all respects in accordance with its terms and the
requirements of all applicable laws and regulations, including, without
limitation, ERISA and the Code, except where any non-compliance would not
reasonably be likely, individually or in the aggregate, to have a Material
Adverse Effect. No material action, claim or proceeding is pending or, to
the knowledge of the Company, threatened with respect to any Company
Benefit Plan (other than claims for benefits in the ordinary course) and,
to the knowledge of the Company, no fact or event exists that could give
rise to any such action, claim or proceeding.
(d) Qualification of Certain Plans. Each Company Benefit Plan that
is intended to be qualified under Section 401(a) of the Code or Section
401(k) of the Code has received a favorable determination letter from the
Internal Revenue Service (the "IRS") that the Company Benefit Plan is so
qualified and, to the knowledge of the Company, no fact or event has
occurred since the date of such determination letter or letters from the
IRS to adversely affect the qualified status of any such Company Benefit
Plan or the exempt status of any such trust.
(e) Absence of Certain Liabilities. Neither the Company nor any
Company Subsidiary has incurred any material liability to the Pension
Benefit Guaranty Corporation (the "PBGC") under Title IV of ERISA (other
than liability for premiums to the PBGC arising in the ordinary course),
and no fact or event exists that could reasonably be expected to result in
any material liability to the PBGC under Title IV of ERISA.
(f) Plan Contributions and Funding. All contributions, premiums or
payments required to be made with respect to any Company Benefit Plan have
been made on or before their due dates, and all contributions to the
Company Benefit Plans intended to be qualified pursuant to Section 401(a)
of the Code have been or will be fully deductible, except where failure to
do so would not have a Material Adverse Effect.
(g) Severance Payments. Except as disclosed in Section 3.11(g) of
the Company Disclosure Schedule, the consummation of the transactions
contemplated by this Agreement will not, either alone or in combination
with another event, (i) entitle any current or former employee, officer or
director of the Company or any Company Subsidiary to severance or any other
material payment from the Company or any Company Subsidiary, except as
expressly provided in this Agreement, or (ii) materially increase the
amount of base compensation due any such employee, officer or director.
(h) Lasertron, Inc. Stock Options. Lasertron Inc. has not granted
any options under its 1999 Restricted Stock and Option Plan (the "1999 L
Plan") other than the options set forth on a schedule provided by the
Company to the Parent (or, within five days after execution of this
Agreement which will be provided to Parent) (the "L Options"), and no
Company Subsidiary L stock options granted under any other plan are
outstanding. The L Options shall expire on December 31, 2000 without
having become exercisable if an "Acquisition" within the meaning of the
1999 L Plan has not occurred or a registration statement on Form S-1 under
the Securities Act of 1933, as amended, with respect to Lasertron, Inc.'s
common stock has not been declared effective by the SEC on or before such
date, except with respect to L Options which expire or have expired prior
to December 31, 2000 due to the termination of employment of the holder of
the L Option by Lasertron, Inc. or any Related Company (as such term is
defined in the holder's option agreement). Neither the execution of this
Agreement nor the transactions contemplated pursuant to this Agreement (or
shareholder approval of this Agreement or such transactions) shall
constitute an "Acquisition" for purposes of the 1999 L Plan.
SECTION 3.12. Material Contracts. (a) Subsections (i) through (iv)
of Section 3.12(a) of the Company Disclosure Schedule contain a list of the
following types of written contracts and agreements (including all
amendments thereto) to which the Company or a Company Significant
Subsidiary (which, for the purposes of this Section 3.12 shall be deemed to
refer only to Lasertron, Inc. and Gilbert Engineering Co., Inc.) is a
party, other than those contracts and agreements listed as exhibits in the
Company's Form 10-K for the fiscal year ended December 31, 1998 (such
contracts, agreements and arrangements as are required to be set forth in
Section 3.12(a) of the Company Disclosure Schedule, together with all
contracts, agreements and arrangements of the Company or any Company
Subsidiary required to be set forth in Section 3.11 of the Company
Disclosure Schedule or listed or required to be listed as exhibits in the
Company's Form 10-K for the fiscal year ended December 31, 1998, being the
"Company Material Contracts"):
(i) each contract and agreement which (A) is likely to involve
consideration of more than $1,000,000 in the aggregate, during the
fiscal years ending December 31, 1999 or December 31, 2000 or (B) is
likely to involve consideration of more than $1,000,000 in the
aggregate, over the remaining term of such contract, and which, in
either case, cannot be canceled by the Company or any Company
Significant Subsidiary without penalty or further payment and without
more than 60 days' notice;
(ii) all (A) management contracts (excluding contracts for
employment) and (B) contracts with consultants which involve
consideration of more than $1,000,000;
(iii) all contracts and agreements evidencing indebtedness of more
than $1,000,000 to unaffiliated third parties; and
(iv) all contracts and agreements that limit the ability of the
Company or any Company Significant Subsidiary to compete in any line of
business or with any person or entity or in any geographic area or
during any period of time, in each case, (A) with respect to any
business currently conducted by the Company or any Company Significant
Subsidiary and (B) other than distributor agreements entered into in the
ordinary course of business.
(b) Except as would not reasonably be likely, individually or in the
aggregate, to have a Material Adverse Effect, each Company Material
Contract is a legal, valid and binding agreement in full force and effect
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally, and general principals of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at
law, and in the case of any indemnity provisions contained therein, is
limited by public policy considerations) and neither the Company nor any
Company Significant Subsidiary is in default in any material respect, or
has received notice that is in default, under any Company Material Contract
and to the Company's knowledge no other party is in default in any material
respect under any Company Material Contract.
SECTION 3.13. Environmental Matters. Except as described in Section
3.13 of the Company Disclosure Schedule or as would not reasonably be
likely, individually or in the aggregate, to have a Material Adverse
Effect: (a) the Company and the Company Subsidiaries are not in violation
of any Environmental Law applicable to them; (b) none of the properties
currently or formerly owned, leased or operated by the Company and the
Company Subsidiaries (including, without limitation, soils and surfaces and
ground waters) are contaminated with any Hazardous Substance; (c) the
Company and the Company Subsidiaries are not liable for any off-site
contamination by Hazardous Substances; (d) the Company and the Company
Subsidiaries are not liable for any material violation under any
Environmental Law (including, without limitation, pending or threatened
liens); (e) the Company and the Company Subsidiaries have all material
permits, licenses and other authorizations required under any Environmental
Law ("Environmental Permits"); (f) the Company and the Company Subsidiaries
are in compliance in all material respects with their Environmental
Permits; and (g) neither the execution of this Agreement nor the
consummation of the transactions contemplated herein will require any
investigation, remediation or other action with respect to Hazardous
Substances, or any notice to or consent of Governmental Entities or third
parties, pursuant to any applicable Environmental Law or Environmental
Permit, including, without limitation, the Connecticut Transfer Act or the
New Jersey Industrial Site Recovery Act. None of the Company or the
Company Subsidiaries has received notice of a violation of any
Environmental Law (whether with respect to properties presently or
previously owned or used) except as would not reasonably be likely,
individually or in the aggregate, to have a Material Adverse Effect.
SECTION 3.14 Title to Properties; Absence of Liens and Encumbrances.
Except as described in Section 3.14 of the Company Disclosure Schedule,
each of the Company and the Company Subsidiaries has good and valid title
to, or, in the case of leased properties and assets, valid leasehold
interests in, all of its material tangible properties and assets, real,
personal and mixed, used or held for use in its business, free and clear of
any liens, pledges, charges, claims, security interests or other
encumbrances of any sort ("Liens") except (i) for liens imposed by Law in
respect of obligations not yet due which are owed in respect of taxes or
which otherwise are owed to materialmen, workmen, carriers,
warehousepersons or laborers not in excess of $100,000 in the aggregate,
(ii) as reflected in the financial statements contained in the Company SEC
Reports and (iii) for such Liens or other imperfections of title and
encumbrances, if any, which would not reasonably be likely, individually or
in the aggregate, to have a Material Adverse Effect.
SECTION 3.15 Intellectual Property. (a) Except with respect to the
items set forth in Section 3.15 of the Company Disclosure Schedule, the
Company and the Company Significant Subsidiaries own or possess adequate
licenses or other valid rights to use all Intellectual Property used or
held for use in connection with the business of the Company and the
Significant Subsidiaries as currently conducted or as contemplated to be
conducted, except where the failure to own or possess such would not be
reasonably likely to, individually or in the aggregate, have a Material
Adverse Effect.
(b) Except as set forth in Section 3.15 of the Company Disclosure
Schedule and except as would not reasonably be likely, individually or in
the aggregate, to have a Material Adverse Effect, the Company and the
Company Significant Subsidiaries have not received any written notice that,
and to the Company's knowledge no claim has been made or asserted that, any
process currently used or product currently sold, imported or offered for
sale by the Company and the Significant Subsidiaries infringe on or
otherwise violates the rights of any person, and such processes uses,
sales, importations and offers to sell are and have been in accordance, in
all material respects, with all applicable licenses.
(c) No Intellectual Property owned or licensed by the Company or the
Company Subsidiaries is being used or enforced in a manner that would
result in the abandonment, cancellation or unenforceability of such
Intellectual Property other than as would not reasonably be likely,
individually or in the aggregate, to have a Material Adverse Effect.
(d) The Company and the Significant Subsidiaries have taken
reasonable steps in accordance with normal industry practice to maintain
the confidentiality of their trade secrets and other confidential
Intellectual Property. To the knowledge of the Company (i) there has been
no misappropriation of any material trade secrets or other material
confidential Intellectual Property of the Company or any Company Subsidiary
by any person, (ii) no employee, independent contractor or agent of the
Company or any Company Subsidiary has misappropriated any material trade
secrets of any other person in the course of such performance as an
employee, independent contractor or agent and (iii) no employee,
independent contractor or agent of Company or any Company Subsidiary is in
material default or breach of any term of any employment agreement, non-
disclosure agreement, assignment of invention agreement or similar
agreement or contract relating in any way to the protection, ownership,
development, use or transfer of material Intellectual Property, in each
case, other than as would not reasonably be likely, individually or in the
aggregate, to have a Material Adverse Effect.
SECTION 3.16. [Intentionally Omitted]
SECTION 3.17. Taxes. Except as set forth in Section 3.17 of the
Company Disclosure Schedule, (a) the Company and each of the Company
Subsidiaries have timely filed or will timely file all returns and reports
required to be filed by them with any taxing authority with respect to
Taxes for any period ending on or before the Effective Time, taking into
account any extension of time to file granted to or obtained on behalf of
the Company and the Company Subsidiaries, (b) all Taxes that are due prior
to the Effective Time have been paid or will be paid or have been shown as
reserves on the Financial Statements in accordance with U.S. GAAP, (c) no
outstanding or pending deficiency for any material amount of Tax has been
asserted or assessed by a taxing authority against the Company or any of
the Company Subsidiaries, (d) the Company and each of the Company
Subsidiaries have provided adequate reserves in their financial statements
in accordance with U.S. GAAP for any Taxes that have not been paid, whether
or not shown as being due on any returns and (e) neither the Company nor
any of the Company Subsidiaries has a material amount of income reportable
for a Taxable period ending after the Effective Time that is attributable
to an activity or a transaction occurring in or a change in accounting
method made for a period ending on or prior to the Effective Time,
including without limitation, any adjustment pursuant to Section 481 of the
Code. As used in this Agreement, "Taxes" shall mean any and all taxes,
fees, levies, duties, tariffs, imports and other charges of any kind
(together with any and all interest, penalties, additions to tax and
additional amounts imposed with respect thereto) imposed by any government
or taxing authority, including, without limitation: taxes or other charges
on or with respect to income, franchises, windfall or other profits, gross
receipts, property, sales, use, stock, payroll, employment, social
security, workers' compensation, unemployment compensation or net worth;
taxes or other charges in the nature of excise, withholding, ad valorem,
stamp, transfer, value added or gains taxes; license, registration and
documentation fees; and customers' duties, tariffs and similar charges.
SECTION 3.18. Accounting and Tax Matters. To the knowledge of the
Company, neither the Company nor any of its affiliates has taken or agreed
to take any action that would prevent the Merger from being accounted for
under the pooling-of-interests accounting method or would prevent the
Merger from constituting a reorganization qualifying under section 368(a)
of the Code. The Company is not aware of any agreement, plan or other
circumstance that would prevent the Merger from qualifying as a
reorganization under section 368(a) of the Code.
SECTION 3.19. Board Approval; Vote Required. (a) On or prior to the
date of this Agreement, the Board of Directors of the Company, by
resolutions duly adopted by [unanimous] vote of those voting at a meeting
duly called and held and not subsequently rescinded or modified in any way
(the "Company Board Approval"), has duly (i) determined that this Agreement
and the Merger are fair to and in the best interests of the Company and its
stockholders, (ii) approved this Agreement and the Merger, and determined
that the execution, delivery and performance of the Merger Agreement is
advisable and (iii) recommended that the stockholders of the Company
approve the Merger and this Agreement and directed that this Agreement and
the transactions contemplated hereby be submitted for consideration by the
Company's stockholders at the Company Stockholders' Meeting.
(b) The only vote of the holders of any class or series of stock of
the Company necessary to approve the Merger, this Agreement and the other
transactions contemplated by this Agreement is the Company Stockholders'
Vote.
SECTION 3.20. Insurance. The Company and the Company Significant
Subsidiaries maintain insurance coverage with reputable insurers in such
amounts and covering such risks as are in accordance with normal industry
practice for companies engaged in businesses similar to that of the Company
and the Company Significant Subsidiaries.
SECTION 3.21. State Takeover Statutes; Stockholder Rights Plan. (a)
Except for Section 203 of the DGCL, no "fair price", "moratorium", "control
share acquisition" or other similar anti-takeover statute or regulation is
applicable, by reason of the Company's being a party to the Merger, this
Agreement or the transactions contemplated hereby. Except for the Company
Rights Agreement, neither the Company nor any of the Company Subsidiaries
is a party to any "stockholder rights" plan or any similar anti-takeover
plan or device.
(b) Prior to the time this Agreement was executed, the Board of
Directors of the Company has taken all action necessary, if any, to exempt
under or make not subject to Section 203 of the DGCL and to ensure no
stockholder of the Company will have any rights under the Shareholders'
Rights Agreement as a result of, (i) the execution of this Agreement, (ii)
the Merger and (iii) the other transactions contemplated hereby.
SECTION 3.22. Labor Matters. The Company and each Company
Subsidiary is in compliance with all applicable laws and regulations
governing labor and employment, except where the failure to be in such
compliance would not reasonably be likely, individually or in the
aggregate, to have a Material Adverse Effect and, to the knowledge of the
Company, no fact or event exists that could give rise to any material
liability under such laws and regulations.
SECTION 3.23. Opinion of Financial Advisor. The Company has
received the written opinion of Donaldson, Lufkin and Jenrette ("DLJ")
dated the date of this Agreement to the effect that, as of the date of this
Agreement, the Exchange Ratio is fair to the Company's stockholders from a
financial point of view, a copy of which opinion will be delivered to
Parent promptly after the date of this Agreement.
SECTION 3.24. Brokers. No broker, finder or investment banker
(other than DLJ) is entitled to any brokerage, finder's or other fee or
commission in connection with the Merger or the other transactions
contemplated by this Agreement based upon arrangements made by or on behalf
of the Company. The Company has heretofore made available to Parent a
complete (other than as to certain redacted confidential information) and
correct copy of all agreements between the Company and DLJ pursuant to
which such firm would be entitled to any payment relating to the Merger or
any other transactions.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby jointly and severally represent and
warrant to the Company that:
SECTION 4.01. Organization and Qualification; Subsidiaries. Each of
Parent and each subsidiary of Parent (collectively, the "Parent
Subsidiaries") is a corporation or other legal entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its incorporation or formation and has all requisite power and authority
and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted,
except where the failure to obtain such governmental approvals would not
prevent or materially delay the consummation of transactions contemplated
by this Agreement. Each of Parent and the Parent Subsidiaries is duly
qualified or licensed as a foreign corporation or organization to do
business, and is in good standing, in each jurisdiction where the character
of the properties owned, leased or operated by it or the nature of its
business makes such qualification or licensing necessary, except for such
failures to be so qualified or licensed and in good standing that would not
prevent or materially delay the consummation of transactions contemplated
by this Agreement.
SECTION 4.02. Articles of Incorporation and By-Laws. Parent has
heretofore made available to the Company a complete and correct copy of the
Articles of Incorporation and By-Laws, each as amended to date, of Parent
and the Certificate of Incorporation and By-Laws of Merger Sub, each as
amended to date. Such respective organizational documents are in full
force and effect and neither Parent nor Merger Sub is in violation of any
of the provisions of its respective organizational documents.
SECTION 4.03. Capitalization. (a) As of November 10, 1999, the
authorized capital stock of Parent consists of (i) 500,000,000 Parent
Common Shares and (ii) 10,000,000 preferred shares of Parent, $100 value
per share, issuable in series (the "Parent Preferred Shares"). As of
November 11, 1999, (i) 245,019,136 Parent Common Shares and (ii) 132,659
Parent Preferred shares were issued and outstanding. All of the issued and
outstanding shares of Parent Common Stock are validly issued, fully paid
and nonassessable. 24,925,256 shares of Parent Common Stock and no shares
of Parent Preferred Stock are held in the treasury of Parent or by any
Parent Subsidiary and 14,185,756 Parent Common Shares are either reserved
for future issuance pursuant to share options or restricted grants, or are
subject to outstanding options (whether presently exercisable or not).
Except for share options or restricted stock granted pursuant to employee
or director equity plans of Parent (the "Parent Share Option Plans") and
pursuant to this Agreement there are no options, warrants or other rights,
agreements, arrangements or commitments of any character relating to the
issued or unissued capital stock of Parent, or conditionally or absolutely
obligating Parent to issue or sell any shares of capital stock of, or other
equity interests in, Parent. All Parent Common Shares subject to issuance
as aforesaid, upon issuance on the terms and conditions (whether
conditional or absolute) specified in the instruments pursuant to which
they are issuable, will be duly authorized, validly issued, fully paid and
nonassessable. Each outstanding share of capital stock or other equity
interest of each Parent Subsidiary is duly authorized, validly issued,
fully paid and nonassessable, and each such share or other equity interest
owned by Parent or another Parent Subsidiary is free and clear of all
security interests, liens, claims, pledges, options, rights of first
refusal, agreements, limitations on Parent's or such other Parent
Subsidiary's voting rights, charges and other encumbrances of any nature
whatsoever, except where failure to own such shares free and clear would
not prevent or materially delay the consummation of the transactions
contemplated by this Agreement.
(b) The authorized stock of Merger Sub consists of 1,000 shares of
common stock, no par value, all of which are duly authorized, validly
issued, fully paid and nonassessable and free of any preemptive rights in
respect thereof, and all of which are owned by Parent. The Parent Common
Shares to be issued pursuant to the Merger in accordance with Section 2.01
(i) will be duly authorized, validly issued, fully paid and nonassessable
and not subject to preemptive or similar rights created by statute, the
Articles of Incorporation or By-Laws of Parent or any agreement to which
the Parent is a party or is bound and (ii) will, when issued, be registered
under the Securities Act and the Exchange Act and registered or exempt from
registration under applicable Blue Sky Laws.
SECTION 4.04. Authority Relative to This Agreement. Each of Parent
and Merger Sub has all necessary corporate power and authority to execute
and deliver this Agreement and to perform its obligations hereunder and to
consummate the Merger and the other transactions contemplated by this
Agreement. The execution and delivery of this Agreement by each of Parent
and Merger Sub and the consummation by each of Parent and Merger Sub of the
Merger and the other transactions contemplated by this Agreement have been
duly and validly authorized by all necessary corporate action, and no other
corporate proceedings on the part of Parent or Merger Sub are necessary to
authorize this Agreement or to consummate the Merger and the other
transactions contemplated by this Agreement (other than, with respect to
the Merger, the filing of the Certificate of Merger with the Secretary of
State of Delaware as required by the DGCL). This Agreement has been duly
and validly executed and delivered by each of Parent and Merger Sub and,
assuming the due authorization, execution and delivery by the Company,
constitutes a legal, valid and binding obligation of each of Parent and
Merger Sub, enforceable against each of Parent and Merger Sub in accordance
with its terms.
SECTION 4.05. No Conflict; Required Filings and Consents. (a) The
execution, delivery and performance of this Agreement by each of Parent and
Merger Sub will not (i) conflict with or violate the Articles of
Incorporation or By-Laws of Parent, the Certificate of Incorporation or
ByLaws of Merger Sub or any equivalent organizational documents of any
other Significant Subsidiary (as such term is defined in Rule 102 of
Regulation SX promulgated by the SEC under the Exchange Act) of the Parent
(such Significant Subsidiaries of the Parent for the purpose of this
Agreement to be the "Parent Significant Subsidiaries"), (ii) assuming that
all consents, approvals, authorizations and other actions described in
Section 4.05(b) have been obtained and all filings and obligations
described in Section 4.05(b) have been made, conflict with or violate any
Law applicable to Parent or any Parent Subsidiary or by which any property
or asset of Parent or any Parent Subsidiary is bound or affected or (iii)
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 right of termination, amendment, acceleration or cancellation
of, or result in the creation of a lien or other encumbrance on any
property or asset of Parent or any Parent Subsidiary pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation, except, with respect to
clauses (ii) and (iii), for any such conflicts, violations, breaches,
defaults or other occurrences that would not prevent or materially delay
the consummation of the transactions contemplated by this Agreement.
(b) The execution, delivery and performance of this Agreement by
each of Parent and Merger Sub will not require any consent, approval,
authorization or permit of, or filing with or notification to, any
Governmental Entity, except (i) for the Required Consents and (ii) where
the failure to obtain such consents, approvals, authorizations or permits,
or to make such filings or notifications would not prevent or materially
delay the consummation of the transactions contemplated by this Agreement.
SECTION 4.06. SEC Filings; Financial Statements. (a) Parent has
filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC since December 31, 1996
(collectively, including all exhibits thereto and any registration
statement filed since such date, the "Parent SEC Reports"). As of the
respective dates they were filed, (i) the Parent SEC Reports complied in
all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and (ii) none of the Parent SEC Reports
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading. No Parent Subsidiary is required to file
any form, report or other document with the SEC.
(b) Each of the consolidated financial statements (including, in
each case, any notes thereto) contained in the Parent SEC Reports was
prepared in accordance with U.S. GAAP applied on a consistent basis
throughout the periods indicated (except as may be indicated in the notes
thereto or, in the case of unaudited statements, as permitted by Form 10-Q
under the Exchange Act) and each presented or will present fairly, in all
material respects, the consolidated financial position, results of
operations and cash flows of Parent and the consolidated Parent
Subsidiaries as at the respective dates thereof and for the respective
periods indicated therein, except as otherwise noted therein (subject, in
the case of unaudited statements, to normal and recurring year-end
adjustments which are not expected to be material, individually or in the
aggregate). The balance sheet of Parent contained in the Parent Disclosure
Documents as of December 31, 1998 is hereinafter referred to as the "Parent
Balance Sheet".
(c) Parent has heretofore furnished to the Company a complete and
correct copy of any amendments or modifications (which have not yet been
filed with the SEC but which are required to be filed) to agreements,
documents or other instruments which previously had been filed by Parent
with the SEC pursuant to the Securities Act or the Exchange Act.
SECTION 4.07. Absence of Certain Changes or Events. Except as set
forth in SEC filings made by Parent subsequent to the Parent Balance Sheet
date, from the date of the Parent Balance Sheet through the date hereof,
each of Parent and the Parent Subsidiaries has conducted its businesses
only in the ordinary course and in a manner consistent with past practice
and, since the date of the Parent Balance Sheet, neither Parent or any
Parent Subsidiary has taken or permitted any action that if taken or
permitted after the date hereof would be a violation of clauses (a) through
(d) of Section 5.02 hereof.
SECTION 4.08. Absence of Litigation. Except as disclosed in the
Parent SEC Reports filed prior to the date of this Agreement, there is no
Action pending or, to the knowledge of Parent, threatened against Parent or
any Parent Subsidiary, or any property or asset of Parent or any Parent
Subsidiary, before any court, arbitrator or Governmental Entity, domestic
or foreign, which seeks to delay or prevent the consummation of the Merger
or any other material transaction contemplated by this Agreement.
SECTION 4.09. Accounting and Tax Matters. To the knowledge of
Parent, neither Parent nor any of its affiliates has taken or agreed to
take any action that would prevent the Merger from being accounted for
under the pooling-of-interests accounting method or would prevent the
Merger from constituting a transaction qualifying under section 368(a) of
the Code. Parent is not aware of any agreement, plan or other circumstance
that would prevent the Merger from qualifying under section 368(a) of the
Code.
SECTION 4.10. Operations of Merger Sub. Merger Sub is a direct,
wholly owned subsidiary of Parent, was formed solely for the purpose of
engaging in the transactions contemplated by this Agreement, has engaged in
no other business activities and has conducted its operations only as
contemplated by this Agreement.
ARTICLE V
CONDUCT OF BUSINESSES PENDING THE MERGER
SECTION 5.01. Conduct of Business by the Company Pending the Merger.
The Company agrees that, between the date of this Agreement and the
Effective Time, except as set forth in Section 5.01 of the Company
Disclosure Schedule or as specifically contemplated by any other provision
of this Agreement, unless Parent shall otherwise consent in writing:
(a) the businesses of the Company and the Company Subsidiaries shall
be conducted only in, and the Company and the Company Subsidiaries shall
not take any action except in, the ordinary course of business and in a
manner consistent with past practice; and
(b) the Company shall use its reasonable best efforts to preserve
substantially intact its business organization, to keep available the
services of the current officers, employees and consultants of the
Company and the Company Subsidiaries and to preserve the current
relationships of the Company and the Company Subsidiaries with
customers, suppliers, licensors, licensees and other persons with which
the Company or any Company Subsidiary has significant business
relations.
By way of amplification and not limitation, except (i) as contemplated by
this Agreement, (ii) for transfers of cash among the Company and the
Company Subsidiaries pursuant to the Company's cash management policies or
(iii) subject to Sections 6.08 and 6.10, as set forth in Section 5.01 of
the Company Disclosure Schedule, neither the Company nor any Company
Subsidiary shall, between the date of this Agreement and the Effective
Time, directly or indirectly, do, or propose to do, any of the following
without the prior written consent of Parent:
(a) amend or change its Certificate of Incorporation or ByLaws or
equivalent organizational documents;
(b) transfer, issue, sell, pledge, lease, license, dispose, grant,
encumber, or authorize for transfer, issuance, sale, pledge, lease,
license, disposition, grant or encumbrance (whether to a third party or
any Affiliate) (i) any shares of its stock of any class, or any options,
warrants, convertible securities or other rights of any kind to acquire
any shares of such stock, or any other ownership interest (including,
without limitation, any phantom interest), of the Company or any Company
Subsidiary (except (A) for the issuance of shares of Company Common
Stock pursuant to the Company Stock Options outstanding on the date of
this Agreement, (B) the issuance, from treasury, of shares of Company
Common Stock to the grantor trust established in connection with the
Company's Supplemental Retirement Income Plan in respect of matching
contributions under such plan, or (C) the grant of Company Stock Options
to newly-hired employees in the ordinary course of business consistent
with past practices in amounts not to exceed 2,000 shares per employee)
or (ii) other than sales of inventory and obsolete equipment in the
ordinary course of business, any material assets of the Company or any
Company Subsidiary;
(c) except with respect to trademarks in the ordinary course of
business and consistent with past practice, (i) grant any license in
respect of any Intellectual Property of the Company or any Company
Subsidiary, (ii) develop any Intellectual Property jointly with any
third party, or (iii) disclose any confidential Intellectual Property of
the Company or any Company Subsidiary unless such Intellectual Property
is subject to a confidentiality agreement protecting against any further
disclosure;
(d) authorize, declare or set aside any dividend payment or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its stock;
(e) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its stock;
(f) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any interest in any
corporation, partnership, other business organization or any division
thereof or any assets, other than acquisitions of assets in the ordinary
course of business consistent with past practice and which are not in
connection with the acquisition of all, or substantially all of a
business;
(g) incur any additional indebtedness for borrowed money or issue
any debt securities or assume, guarantee or endorse the obligations of
any person, or make any loans or advances, except for indebtedness under
the Company's existing Credit Agreement incurred in the ordinary course
of business and consistent with past practice and for other indebtedness
with a maturity of not more than one year in a principal amount not, in
the aggregate, in excess of $2,500,000;
(h) enter into any contracts or agreements requiring the payment, or
receipt of payment, of consideration in excess of $1,000,000, or modify,
amend or terminate any existing Company Material Contract other than
modifications, amendments or terminations in the ordinary course of
business consistent with past practices;
(i) make or authorize any capital expenditures, other than (A)
capital expenditures reflected in the capital expenditure budgets for the
fiscal years ending December 31, 1999, and December 31, 2000 previously
delivered by the Company to Parent and (B) as set forth in Section 5.01(i)
of the Company Disclosure Schedule;
(j) waive any stock repurchase or acceleration rights, amend or
change the terms of any options or restricted stock, or reprice options
granted under any Company Stock Option Plan or authorize cash payments in
exchange for any options granted under any such plans;
(k) increase the compensation payable or to become payable to its
officers or employees, except for increases in accordance with past
practices and consistent with current budgets, as disclosed in Section
5.01(k) of the Company Disclosure Schedule, in salaries or wages of
officers and employees of the Company or any Company Subsidiary, or grant
any rights to severance or termination pay to, or enter into any employment
or severance agreement with, any director, officer or other employee of the
Company (except, in the case of employees who are not officers or
directors, as consistent with existing policies of the Company or past
practices) or any Company Subsidiary, or establish, adopt, enter into or
amend any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any director, officer
or employee;
(l) settle any material Action other than any settlement which
involves only the payment of damages in an immaterial amount and does not
involve injunctive or other equitable relief;
(m) make or revoke any material Tax elections, adopt or change any
method of Tax accounting, settle any material Tax liabilities or take any
action with respect to the computation of Taxes or the preparation of Tax
returns that is inconsistent with past practice;
(n) take any action, other than as required by U.S. GAAP or by the
SEC, with respect to accounting principles or procedures, including,
without limitation, any revaluation of assets;
(o) agree in writing or otherwise to take any of the actions
described in clauses (a) through (n) above; or
(p) take any action to cause the Company's representations and
warranties set forth in Article III to be untrue in any material respect.
SECTION 5.02. Conduct of Business by Parent Pending the Merger.
Parent agrees that, between the date of this Agreement and the Effective
Time, except as contemplated by any other provision of this Agreement,
Parent shall not, between the date of this Agreement and the Effective
Time, directly or indirectly, do, or propose to do, any of the following
without the prior written consent of the Company:
(a) authorize, declare or set aside any dividend payments or other
distribution, payable in cash, stock, property or otherwise, with respect
to any of its capital stock, other than any regular quarterly dividends
declared and paid in accordance with past practice;
(b) reclassify, combine, split, or subdivide any of its capital
stock;
(c) take any action, other than as required by generally accepted
accounting principles or by the SEC, with respect to accounting principles
or procedures;
(d) agree in writing or otherwise to take any actions described in
clauses (a) through (c) above; or
(e) take any action to cause Parent's representations and warranties
set forth in Article IV to be untrue in any material respect.
SECTION 5.03. Notification of Certain Matters. Parent shall give
prompt notice to the Company, and the Company shall give prompt notice to
Parent, of (i) the occurrence or nonoccurrence of any event the occurrence
or nonoccurrence of which would be likely to cause (A) any representation
or warranty contained in this Agreement to be untrue or inaccurate or (B)
any covenant, condition or agreement contained in this Agreement not to be
complied with or satisfied and (ii) any failure of Parent or the Company,
as the case may be, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; provided,
however, that the delivery of any notice pursuant to this Section 5.03
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Registration Statement; Joint Proxy Statement. (a)
As promptly as practicable after the execution of this Agreement, (i)
Parent and the Company shall prepare and file with the SEC a joint proxy
statement (together with any amendments thereof or supplements thereto, the
"Proxy Statement") relating to the meetings of the Company's stockholders
(the "Company Stockholders' Meeting") to be held to consider approval of
this Agreement and the Merger and (ii) Parent shall prepare and file with
the SEC a registration statement on Form S-4 (together with all amendments
thereto, the "Registration Statement") in which the Proxy Statement shall
be included as a prospectus, in connection with the registration under the
Securities Act of the Parent Common Shares to be issued to the stockholders
of the Company pursuant to the Merger. Each of Parent and the Company
shall use its reasonable best efforts to cause the Registration Statement
to become effective as promptly as practicable, and prior to the effective
date of the Registration Statement, Parent shall take all or any action
required under any applicable federal or state securities laws in
connection with the issuance of Parent Common Shares pursuant to the
Merger. The Company shall furnish all information concerning the Company
as Parent may reasonably request in connection with such actions and the
preparation of the Registration Statement and Proxy Statement. As promptly
as practicable after the Registration Statement shall have become
effective, the Company shall mail the Proxy Statement to its stockholders.
(b) Subject to paragraph (c) of this Section 6.01, the Proxy
Statement shall include the Company Board Approval.
(c) Nothing in this Agreement shall prevent the Company's Board of
Directors from withholding, withdrawing, amending or modifying the Company
Board Approval if the Board of Directors of the Company determines in good
faith (after consultation with legal counsel) that the failure to take such
action would constitute a breach by the Board of Directors of the Company
of its fiduciary duties to the Company's shareholders under applicable law.
Unless this Agreement shall have been terminated in accordance with its
terms, nothing contained in this Section 6.01(c) shall limit the Company's
obligation to convene and hold the Company Stockholders' Meeting
(regardless of whether the Company Board Approval shall have been withheld,
withdrawn, amended or modified).
(d) No amendment or supplement to the Proxy Statement or the
Registration Statement will be made by Parent or the Company without the
approval of the other party (such approval not to be unreasonably withheld
or delayed). Each of Parent and the Company will advise the other,
promptly after it receives notice thereof, of the time at which the
Registration Statement has become effective or any supplement or amendment
has been filed, of the issuance of any stop order, of the suspension of the
qualification of the Parent Common Shares issuable in connection with the
Merger for offering or sale in any jurisdiction, or of any request by the
SEC for amendment of the Proxy Statement or the Registration Statement or
comments thereon and responses thereto or requests by the SEC for
additional information.
(e) The information supplied by Parent for inclusion in the
Registration Statement and the Proxy Statement shall not, at (i) the time
the Registration Statement is declared effective, (ii) the time the Proxy
Statement (or any amendment thereof or supplement thereto) is first mailed
to the stockholders of the Company, (iii) the time of Company's
Stockholders' Meetings and (iv) the Effective Time, contain any untrue
statement of a material fact or fail 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 were made, not misleading. If,
at any time prior to the Effective Time, any event or circumstance relating
to Parent or any Parent Subsidiary, or their respective officers or
directors, that should be set forth in an amendment or a supplement to the
Registration Statement or Proxy Statement should be discovered by Parent,
Parent shall promptly inform the Company thereof. All documents that
Parent is responsible for filing with the SEC in connection with the Merger
or the other transactions contemplated by this Agreement will comply as to
form and substance in all material respects with the applicable
requirements of the Securities Act and the rules and regulations thereunder
and the Exchange Act and the rules and regulations thereunder.
(f) The information supplied by the Company for inclusion in the
Registration Statement and the Proxy Statement shall not, at (i) the time
the Registration Statement is declared effective, (ii) the time the Proxy
Statement (or any amendment thereof or supplement thereto) is first mailed
to the stockholders of the Company, (iii) the time of Company's
Stockholders' Meetings and (iv) the Effective Time, contain any untrue
statement of a material fact or fail 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 were made, not misleading. If,
at any time prior to the Effective Time, any event or circumstance relating
to the Company or any Company Subsidiary, or their respective officers or
directors, that should be set forth in an amendment or a supplement to the
Registration Statement or Proxy Statement should be discovered by the
Company, the Company shall promptly inform Parent. All documents that the
Company is responsible for filing with the SEC in connection with the
Merger or the other transactions contemplated by this Agreement will comply
as to form and substance in all material respects with the applicable
requirements of the Securities Act and the rules and regulations thereunder
and the Exchange Act and the rules and regulations thereunder.
SECTION 6.02. Company Stockholders' Meeting. The Company shall
call and hold the Company Stockholders' Meeting as promptly as practicable
for the purpose of voting upon the approval of the Merger and this
Agreement and the Company shall use its reasonable best efforts to hold the
Stockholders' Meetings as soon as practicable after the date on which the
Registration Statement becomes effective. The Company shall (a) use its
reasonable best efforts to solicit from their shareholders proxies in favor
of the approval of the Merger and this Agreement and (b) shall take all
other action necessary or advisable to secure the vote or consent of
shareholders required by the rules of the NYSE to obtain such approvals.
SECTION 6.03. Access to Information; Confidentiality. Except as
required pursuant to any confidentiality agreement or similar agreement or
arrangement to which the Company or any of their subsidiaries is a party or
pursuant to applicable Law, from the date of this Agreement to the
Effective Time, the Company shall (and shall cause its subsidiaries to):
(i) provide to Parent (and its officers, directors, employees, accountants,
consultants, legal counsel, agents and other representatives collectively,
"Representatives") access at reasonable times during normal business hours
upon prior notice to the officers, employees, agents, properties, offices
and other facilities of the Company and the Company Significant
Subsidiaries and to the books and records thereof; and (ii) furnish
promptly such information concerning the business, properties, contracts,
assets, liabilities, personnel and other aspects of the other party and its
subsidiaries as the other party or its Representatives may reasonably
request; provided, however, that the parties shall use reasonable best
efforts to limit such access as provided in clauses (i) and (ii) in such a
way as to minimize disruption to the operations of the business of the
Company and its subsidiaries. Parent shall, and Parent shall cause its
Representatives to, keep such information confidential in accordance with
the terms of the Confidentiality Agreement, as supplemented, between Parent
and the Company (the "Confidentiality Agreement"). From and after the date
of this Agreement in the case of Lasertron, Inc. and after the printing and
mailing of the Proxy Statement in the case of the other Company Significant
Subsidiaries, the Company and Parent shall, and the Company shall cause the
Company Significant Subsidiaries to cooperate in order to provide for an
orderly transition as of the Effective Time.
SECTION 6.04. No Solicitation of Transactions. (a) After the date
hereof and prior to the Effective Time or earlier termination of this
Agreement, except as provided in clause (b) below, the Company shall not,
and shall not permit any of the Company Subsidiaries to, initiate, solicit,
negotiate, encourage or provide confidential information to facilitate, and
the Company shall, and shall use its reasonable best efforts to cause any
officer, director or employee of the Company, or any attorney, accountant,
investment banker, financial advisor or other agent retained by it or any
of the Company Subsidiaries, not to initiate, solicit, negotiate, encourage
or provide nonpublic or confidential information to facilitate, any
proposal or offer to acquire all or any substantial part of the business or
properties of the Company or any capital stock of the Company, whether by
merger, purchase of assets, tender offer or otherwise (other than a
transaction permitted pursuant to Section 5.01(b)) whether for cash,
securities or any other consideration or combination thereof (any such
transaction being referred to herein as an "Acquisition Transaction"). The
Company immediately shall cease and cause to be terminated all discussions
or negotiations with respect to any Acquisition Proposal as defined below.
(b) Notwithstanding the provisions of clause (a) above, the Board
of Directors of the Company may (A) furnish information to or engage in
discussions or negotiations with any Person in response to an unsolicited
written offer or proposal with respect to an Acquisition Transaction (an
"Acquisition Proposal"); or (B) recommend such an Acquisition Proposal to
the shareholders of the Company, if and only to the extent that (I) the
Board of Directors of the Company determines, in good faith and after
consultation with its independent financial advisor, that such Acquisition
Proposal would constitute a Superior Proposal (as hereinafter defined);
(II) the Board of Directors of the Company determined in good faith (after
consultation with legal counsel) that the failure to take such action would
constitute a breach by the Board of Directors of the Company of its
fiduciary duties to the Company's shareholders under applicable law; (III)
prior to furnishing such information to or entering into discussions or
negotiations with, such Person, the Company provides written notice to
Parent to the effect that it is furnishing such information to or entering
into discussions or negotiations with, such Person (which notice shall
identify the material terms of the proposal); and (IV) the Board of
Directors receives, prior to furnishing any such information or entering
into any discussions or negotiations with such Person, an executed
confidentiality agreement substantially similar to the Parent
Confidentiality Agreement. For purposes of this Agreement, "Superior
Proposal" shall mean a bona fide Acquisition Proposal (A) made by a third
party that the Board of Directors of the Company determines in its good
faith judgment (after consultation with its financial advisor) to be
significantly more favorable to the Company's shareholders from a financial
point of view than the Merger, (B) that involves all of the outstanding
Company Common Shares, (C) that is not subject to regulatory approvals that
give rise to a significant risk that the Acquisition Transaction will not
be consummated and (D) for which financing, to the extent required, is then
committed or which, in good faith judgment of the Board of Directors of the
Company, is reasonably capable of being obtained by such third party. The
Company's Board of Directors may take and disclose to the Company's
stockholders a position contemplated by Rule 14e2 under the Exchange Act.
It is understood and agreed that negotiations and other activities
conducted in accordance with this paragraph (b) shall not constitute a
violation of paragraph (a) of this Section 6.04.
(c) The Company shall promptly (but in any event within 48 hours)
notify Parent after receipt of any Acquisition Proposal, indication of
interest or request for nonpublic information relating to the Company or a
Company Subsidiary in connection with an Acquisition Proposal or for access
to the properties, books or records of the Company or any Company
Subsidiary by any person or other entity or group that informs the Board of
Directors of the Company or such Company Subsidiary that it is considering
making, or has made, an Acquisition Proposal. Such notice to Parent shall
be made orally and in writing and shall indicate in reasonable detail the
identity of the offeror and the terms and conditions of such proposal,
inquiry or contact.
SECTION 6.05. Directors' and Officers' Indemnification and
Insurance. (a) The By-Laws of the Surviving Corporation shall contain
the respective provisions that are set forth, as of the date of this
Agreement, in Article VII, Section 11 of the By-Laws of the Company, which
provisions shall not be amended, repealed or otherwise modified for a
period of six years from the Effective Time in any manner that would affect
adversely the rights thereunder of individuals who at or at any time prior
to the Effective Time were directors, officers, employees, fiduciaries or
agents of the Company.
(b) The Company shall, to the fullest extent permitted under
applicable Law and regardless of whether the Merger becomes effective,
indemnify and hold harmless, and, after the Effective Time, Parent and the
Surviving Corporation shall, to the fullest extent permitted under
applicable Law, indemnify and hold harmless, each present and former
director or officer of the Company and each Subsidiary of the Company and
each such person who served at the request of the Company or any Subsidiary
of the Company as a director, officer, trustee, partner, fiduciary,
employee or agent of another corporation, partnership, joint venture,
trust, pension or other employee benefit plan or enterprise (collectively,
the "Indemnified Parties") against all costs and expenses (including
reasonable attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and settlement amounts paid in connection with any claim,
action, suit, proceeding or investigation (whether arising before or after
the Effective Time), whether civil, administrative, criminal or
investigative, arising out of or pertaining to any action or omission in
their capacities as officers or directors, in each case occurring before
the Effective Time (including the transactions contemplated by this
Agreement, in each case, to the fullest extent permitted by Delaware Law or
any other applicable laws or to the fullest extent permitted under the
Company's certificate of incorporation and bylaws or any applicable
contract or agreement as in effect on the date hereof). Without limiting
the foregoing, in the event of any such claim, action, suit, proceeding or
investigation, (i) the Company or Parent and the Surviving Corporation, as
the case may be, shall pay the reasonable fees and expenses of counsel
selected by any Indemnified Party, which counsel shall be reasonably
satisfactory to the Company or to Parent and the Surviving Corporation, as
the case may be, promptly after statements therefor are received (unless
the Surviving Corporation shall elect to defend such action) and (ii) the
Company and Parent and the Surviving Corporation shall cooperate in the
defense of any such matter; provided, however, that neither the Company,
Parent nor the Surviving Corporation shall be liable for any settlement
effected without its written consent (which consent shall not be
unreasonably withheld or delayed). In the event that any claim or claims
for indemnification are asserted or made within such six-year period, all
rights to indemnification in respect of any such claim or claims shall
continue until the disposition of any and all such claims.
(c) For a period of six years after the Effective Time, Parent
shall cause to be maintained in effect the current directors' and officers'
liability insurance policies maintained by the Company (provided that
Parent may substitute therefor policies reasonably satisfactory to the
Indemnified Parties of at least the same coverage containing terms and
conditions that are no less advantageous) with respect to claims arising
from facts or events that occurred prior to the Effective Time; provided,
however, that in no event shall Parent be required to expend pursuant to
this Section 6.05(c) more than an amount per year equal to 200% of current
annual premiums paid by the Company for such insurance (which premiums the
Company represents and warrants to be approximately $200,000 per year in
the aggregate); provided, further, however, that if the premium for such
coverage exceeds such amount, Parent or the Surviving Corporation shall
purchase a policy with the greatest coverage available for such 200% of the
amount per annum spent by the Company for its fiscal year ending December
31, 1998.
(d) In the event the Company or the Surviving Corporation or any of
their respective successors or assigns (i) consolidates with or merges into
any other person and shall not be the continuing or surviving corporation
or entity in such consolidation or merger or (ii) transfers all or
substantially all of its properties and assets to any person, then, and in
each case, proper provision shall be made so that the successors and
assigns of the Company or the Surviving Corporation, as the case may be,
honor the indemnification obligations set forth in this Section 6.05.
(e) For a period of at least six years after the Effective Time,
Parent shall cause the certificate of incorporation of the Surviving
Corporation to continue to include a provision substantially similar to
Article Twelfth of the Certificate of Incorporation of the Company for the
benefit of all directors and officers of the Company prior to the Effective
Time.
SECTION 6.06. Obligations of Merger Sub. Parent shall take all
action necessary to cause Merger Sub to perform its obligations under this
Agreement and to consummate the Merger on the terms and subject to the
conditions set forth in this Agreement.
SECTION 6.07. Affiliates. (a) No later than 30 days after the date
of this Agreement, the Company shall deliver to Parent a list of names and
addresses of those persons who were, in the Company's reasonable judgment,
on such date, affiliates (within the meaning of Rule 145 of the rules and
regulations promulgated under the Securities Act or applicable SEC
accounting releases with respect to pooling-of-interests accounting
treatment (each such person being an "Affiliate")) of the Company. The
Company shall provide Parent with such information and documents as Parent
shall reasonably request for purposes of reviewing such list. The Company
shall use its reasonable best efforts to deliver or cause to be delivered
to Parent, no later than at least 30 days prior to the Effective Time, an
affiliate letter in the form attached hereto as Exhibit 6.07(a), executed
by each of the Affiliates of the Company identified in the foregoing list
and any person who shall, to the knowledge of the Company, have become an
Affiliate of the Company subsequent to the delivery of such list.
(b) No later than 30 days after the date of this Agreement, Parent
shall deliver to the Company a list of names and addresses of those persons
who were, in Parent's reasonable judgment, on such date, Affiliates of
Parent. Parent shall provide the Company such information and documents as
the Company shall reasonably request for purposes of reviewing such list.
Parent shall use its reasonable best efforts to deliver or cause to be
delivered to the Company, no later than at least 30 days prior to the
Effective Time, an affiliate letter in the form attached hereto as Exhibit
6.07(b), executed by each of the Affiliates of Parent identified in the
foregoing list and by any person who shall have become an Affiliate of
Parent subsequent to the delivery of such list.
SECTION 6.08. Pooling. (a) From and after the date of this
Agreement and until the Effective Time, neither Parent nor the Company, nor
any of their respective subsidiaries or other affiliates, shall knowingly
take any action, or knowingly fail to take any action, that is reasonably
likely to jeopardize the treatment of the Merger as a "pooling-of-
interests" for accounting purposes under U.S. GAAP. Between the date of
this Agreement and the Effective Time, Parent and the Company each shall
use its best efforts to cause the Merger to be characterized as a pooling-
of-interests for accounting purposes if such characterization were
jeopardized by action taken by Parent or the Company, respectively, prior
to the Effective Time.
(b) As of the date of this Agreement, the Company does not know of
any reason why it would not be able to obtain a letter, in form and
substance satisfactory to Parent, from PricewaterhouseCoopers, LLP, dated
the date of the Effective Time and, if requested by Parent, dated the date
of the Registration Statement, stating that PricewaterhouseCoopers, LLP
concurs with management's conclusion that the Merger will qualify as a
transaction to be accounted for by Parent in accordance with the pooling-
of-interests method of accounting under the requirements of Opinion No. 16
"Business Combinations" of the Accounting Principles Board of the American
Institute of Certified Public Accountants, as amended by applicable
pronouncements by the Financial Accounting Standards Board, and all related
published rules, regulations and policies of the SEC ("APB No. 16").
(c) As of the date of this Agreement, Parent does not know of any
reason why it would not be able to obtain a letter, in form and substance
satisfactory to the Company from PricewaterhouseCoopers, LLP, dated the
date of the Effective Time and, if requested by Parent, dated the date of
the Registration Statement, stating that PricewaterhouseCoopers, LLP
concurs with management's conclusion that the Merger will qualify as a
transaction to be accounted for by Parent in accordance with the pooling-
of-interests method of accounting under the requirements of APB No. 16.
SECTION 6.09. Further Action; Consents; Filings. (a) Upon the
terms and subject to the conditions hereof, each of the parties hereto
shall use its reasonable best efforts to (i) take, or cause to be taken,
all appropriate action and do, or cause to be done, all things necessary,
proper or advisable under applicable Law or otherwise to consummate and
make effective the Merger and the other transactions contemplated by this
Agreement, (ii) obtain from Governmental Entities any consents, licenses,
permits, waivers, approvals, authorizations or orders required to be
obtained or made by Parent or the Company or any of their subsidiaries in
connection with the authorization, execution and delivery of this Agreement
and the consummation of the Merger and the other transactions contemplated
by this Agreement and (iii) make all necessary filings, and thereafter make
any other required submissions, with respect to this Agreement, the Merger
and the other transactions contemplated by this Agreement that are
required under (A) the Exchange Act and the Securities Act and the rules
and regulations thereunder and any other applicable federal or state
securities laws, (B) the HSR Act, and any other antitrust regulations and
(C) any other applicable Law. The parties hereto shall cooperate with each
other in connection with the making of all such filings, including by
providing copies of all such documents to the nonfiling party and its
advisors prior to filing and, if requested, by accepting all reasonable
additions, deletions or changes suggested in connection therewith.
(b) Parent and the Company shall file as soon as practicable after
the date of this Agreement notifications under the HSR Act and shall
respond as promptly as practicable to all inquiries or requests that may be
made pursuant to the HSR Act for additional information or documentation
and shall respond as promptly as practicable to all inquiries and requests
received from any State Attorney General or other Governmental Entity in
connection with antitrust matters. The parties shall cooperate with each
other in connection with the making of all such filings or responses,
including providing copies of all such documents to the other party and its
advisors prior to filing or responding.
(c) The Company and Parent shall cooperate and use their reasonable
best efforts to resolve any Actions related to the Intellectual Property
used by the Company and the Company Subsidiaries.
SECTION 6.10. Plan of Reorganization. (a) This Agreement is
intended to constitute a "plan of reorganization" within the meaning of
section 1.368-2(g) of the income tax regulations promulgated under the
Code. From and after the date of this Agreement and until the Effective
Time, each party hereto shall use its reasonable best efforts to cause the
Merger to qualify, and will not knowingly take any action, cause any action
to be taken, fail to take any action or cause any action to fail to be
taken which action or failure to act could prevent the Merger from
qualifying as a reorganization under the provisions of section 368(a) of
the Code. Following the Effective Time, neither the Surviving Corporation,
Parent nor any of their affiliates shall knowingly take any action, cause
any action to be taken, fail to take any action or cause any action to fail
to be taken, which action or failure to act could cause the Merger to fail
to qualify as a reorganization under section 368(a) of the Code.
(b) As of the date of this Agreement, the Company does not know of
any reason (i) for which it would not be able to deliver to Shearman and
Sterling and Ropes and Gray, at the date of the legal opinions referred to
below, certificates substantially in compliance with IRS published advance
ruling guidelines, with customary exceptions and modifications thereto, to
enable such firms to deliver the legal opinions contemplated by Sections
7.02(f) and 7.03(c), and the Company hereby agrees to deliver such
certificates effective as of the date of such opinions so long as the
statements therein are true as of such time or (ii) for which Shearman and
Sterling and Ropes and Gray would not be able to deliver the opinions
required by Sections 7.02(f) and 7.03(c).
(c) As of the date of this Agreement, Parent does not know of any
reason (i) for which it would not be able to deliver to Ropes and Gray and
Shearman and Sterling, at the date of the legal opinions referred to below,
certificates substantially in compliance with published IRS advance ruling
guidelines, with customary exceptions and modifications thereto, to enable
such firms to deliver the legal opinions contemplated by Sections 7.02(f)
and 7.03(c), and Parent hereby agrees to deliver such certificates
effective as of the date of such opinions so long as the statements therein
are true as of such time or (ii) for which Shearman and Sterling and Ropes
and Gray would not be able to deliver the opinions required by Sections
7.02(f) and 7.03(c).
SECTION 6.11. Public Announcements. The initial press release
relating to this Agreement shall be a joint press release the text of which
has been agreed to by each of Parent and the Company. Thereafter, unless
otherwise required by applicable Law or the requirements of the Exchanges,
each of Parent and the Company shall use its reasonable best efforts to
consult with the other before issuing any press release or otherwise making
any public statements with respect to this Agreement, the Merger or any of
the other transactions contemplated by this Agreement.
SECTION 6.12. Letters of Accountants. (a) Parent shall use its
reasonable best efforts to cause to be delivered to the Company "comfort"
letters of PricewaterhouseCoopers, LLP, Parent's independent auditors,
dated and delivered the date on which the Registration Statement shall
become effective and as of the Effective Time, and addressed to the
Company, in form and substance reasonably satisfactory to the Company and
reasonably customary in scope and substance for letters delivered by
independent public accountants in connection with transactions such as
those contemplated by this Agreement.
(b) The Company shall use its reasonable best efforts to cause to
be delivered to Parent "comfort" letters of PricewaterhouseCoopers, LLP,
the Company's independent accountants, dated and delivered the date on
which the Registration Statement shall become effective and as of the
Effective Time, and addressed to Parent, in form and substance reasonably
satisfactory to Parent and reasonably customary in scope and substance for
letters delivered by independent public accountants in connection with
transactions such as those contemplated by this Agreement.
SECTION 6.13. NYSE Listing. Parent shall promptly prepare and
submit to the NYSE a listing application covering the Parent Common Shares
to be issued in the Merger and pursuant to Substitute Options, and shall
use its reasonable efforts to obtain, prior to the Effective Time, approval
for the listing of such Parent Common Shares, subject to official notice of
issuance, and the Company shall cooperate with Parent with respect to such
listing, which cooperation shall include, but not be limited to, taking all
necessary actions to delist the Company's Common Stock from the NYSE.
SECTION 6.14. Reasonable Best Efforts and Further Assurances.
Subject to the terms and conditions hereof, each of the parties to this
Agreement shall use reasonable best efforts to effect the transactions
contemplated hereby and to fulfill and cause to be fulfilled the conditions
to the Merger under this Agreement. Subject to the terms and conditions
hereof, each party hereto, at the reasonable request of another party
hereto, shall execute and deliver such other instruments and do and perform
such other acts and things as may be necessary or desirable for effecting
completely the consummation of this Agreement and the transactions
contemplated hereby.
SECTION 6.15. Certain Employee Benefits Matters. For a period of
two years following the Effective Time and effective upon the Merger,
Parent shall, or shall cause the Surviving Company to, provide medical,
401(k), life and disability benefits, cash compensation and other benefits
to Surviving Company employees that, in the aggregate, are comparable to
the medical, 401(k), life and disability benefits cash compensation and
other benefits that were provided to such Surviving Company employees under
the employee benefit plans, programs, contracts and arrangements of the
Company and each of its subsidiaries as in effect immediately prior to the
Effective Time and that have been disclosed or made available to Parent,
other than employee benefit plans, programs, contracts or arrangements
providing for stock options, stock purchase rights, restricted stock,
phantom stock or other stock-based compensation. Parent covenants and
agrees that it shall cause the Surviving Corporation to satisfy all
severance obligations arising in connection with the transactions
contemplated by the Merger and this Agreement pursuant to any Company
Benefit Plan.
SECTION 6.16. Supplemental Indenture. Prior to the Effective Time,
the Company shall enter into, with the trustee under such indenture, a
supplemental indenture, in respect of that certain indenture (the
"Indenture") dated February 25, 1998 between the Company and State Street
Bank and Trust Company, governing $100,000,000 principal amount of 47/8%
Convertible Notes due 2008 (the "Notes"), such supplemental indenture to
provide, among other things, that (a) the Merger does not constitute a
"change of control" as defined in the Indenture; and (b) as of the
Effective Time, the Notes shall be convertible only into Parent Common
Shares.
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. Conditions to the Obligations of Each Party. The
obligations of the Company, Parent and Merger Sub to consummate the Merger
are subject to the satisfaction or waiver (where permissible) of the
following conditions:
(a) Registration Statement Effective. The Registration Statement
shall have been declared effective by the SEC under the Securities Act and
no stop order suspending the effectiveness of the Registration Statement
shall have been issued by the SEC and no proceeding for that purpose shall
have been initiated by the SEC.
(b) Company Stockholder Approval. The Company Stockholder Approval
shall have been obtained.
(c) No Order. No Governmental Entity or court of competent
jurisdiction shall have enacted, threatened, issued, promulgated, enforced
or entered any law, rule, regulation, judgment, decree, injunction,
executive order or award (an "Order") that is then in effect, pending or
threatened and has, or would have, the effect of making the Merger illegal
or otherwise prohibiting consummation of the Merger.
(d) Antitrust Waiting Periods. Any waiting period (and any
extension thereof) applicable to the consummation of the Merger under the
HSR Act shall have expired or been terminated or obtained.
(e) NYSE Listing. The Parent Common Shares to be issued in the
Merger shall have been authorized for listing on the NYSE, subject to
official notice of issuance.
SECTION 7.02. Conditions to the Obligations of Parent and Merger
Sub. The obligations of Parent and Merger Sub to consummate the Merger are
subject to the satisfaction or waiver (where permissible) of the following
additional conditions:
(a) Representations and Warranties. Each of the representations
and warranties of the Company contained in this Agreement shall be true and
correct in all material respects as of the Effective Time, as though made
at and as of the Effective Time, except that those representations and
warranties that address matters only as of a particular date shall remain
true and correct in all material respects as of such date (provided that
any representation or warranty that is qualified by materiality (including,
without limitation, by reference to a Material Adverse Effect) shall be
true in all respects as of the Effective Time, or as of such particular
date, as the case may be), and Parent shall have received a certificate of
the Chief Executive Officer or Chief Financial Officer of the Company to
that effect.
(b) Agreements and Covenants. The Company shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or
prior to the Effective Time (provided that any agreement or covenant that
is qualified by materiality (including without limitation, by reference to
a Material Adverse Effect) shall have been performed or complied with in
all respects on or prior to the Effective Time), and Parent shall have
received a certificate of the Chief Executive Officer or Chief Financial
Officer of the Company to that effect.
(c) Consents. All material consents, approvals and authorizations
(including, without limitation, the Required Consents) legally required to
be obtained to consummate the Merger shall have been obtained from and made
with all Governmental Entities and all consents from third parties under
any Company Material Contract or other material agreement, contract,
license, lease or other instrument to which the Company or any Company
Subsidiary is a party or by which it is bound required as a result of the
transactions contemplated by this Agreement or the Merger shall have been
obtained.
(d) Material Adverse Effect. There shall have been no
circumstance, event, occurrence, change or effect that would reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect since the date of this Agreement.
(e) Actions. No Action shall have been brought and remain pending
by any Governmental Entity or other person, entity or group that (i) seeks
to prevent or delay the consummation of the transactions contemplated by
this Agreement or (ii) would reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
(f) Tax Opinions. Parent shall have received the opinion of
Shearman and Sterling, counsel to Parent, based upon representations of
Parent, Merger Sub and the Company and customary assumptions as set forth
or referred to in such opinion, to the effect that the Merger will be
treated for federal income tax purposes as a reorganization qualifying
under the provisions of section 368(a) of the Code and that each of Parent,
Merger Sub and the Company will be a party to the reorganization within the
meaning of section 368(b) of the Code, which opinion shall not have been
withdrawn or modified in any material respect. The issuance of such
opinion shall be conditioned on receipt by Shearman and Sterling of
representation letters from each of Parent (on behalf of itself and Merger
Sub) and Company as contemplated in Section 6.10 of this Agreement. Each
such representation letter shall be dated on or before the date of such
opinion and shall not have been withdrawn or modified in any material
respect as of the Effective Time.
(g) Retirement. All members of the Board of Directors of the
Company shall have retired effective as of the Effective Time.
(h) Pooling Opinions. Parent shall have received from
PricewaterhouseCoopers, LLP, independent auditors of Parent and of the
Company, an opinion addressed to it and dated the date the Registration
Statement shall have become effective and confirmed in writing as of the
Effective Time to the effect that the Merger will be treated as a "pooling-
of-interests" under applicable accounting standards.
SECTION 7.03. Conditions to the Obligations of the Company. The
obligations of the Company to consummate the Merger are subject to the
satisfaction or waiver (where permissible) of the following additional
conditions:
(a) Representations and Warranties. Each of the representations
and warranties of Parent and Merger Sub contained in this Agreement shall
be true and correct in all material respects as of the Effective Time, as
though made on and as of the Effective Time, except that those
representations and warranties that address matters only as of a particular
date shall remain true and correct in all material respects as of such date
(provided that any representation or warranty that is qualified by
materiality shall be true in all respects as of the Effective Time, or as
of such particular date, as the case may be), and the Company shall have
received a certificate of the Chief Executive Officer or Chief Financial
Officer of Parent to that effect.
(b) Agreements and Covenants. Parent and Merger Sub shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by it
on or prior to the Effective Time (provided that any agreement or covenant
that is qualified by materiality shall have been performed or complied with
in all respects on or prior to the Effective Time) and the Company shall
have received a certificate of the Chief Executive Officer or Chief
Financial Officer of Parent to that effect.
(c) Tax Opinion. The Company shall have received the opinion of
Ropes and Gray, counsel to the Company, based upon representations of
Parent, Merger Sub and the Company, and customary assumptions as set forth
or referred to in such opinion, to the effect that the Merger will be
treated for federal income tax purposes as a reorganization qualifying
under the provisions of section 368(a) of the Code and that each of Parent,
Merger Sub and the Company will be a party to the reorganization within the
meaning of section 368(b) of the Code, which opinion shall not have been
withdrawn or modified in any material respect. The issuance of such
opinion shall be conditioned on receipt by Ropes and Gray of representation
letters from each of Parent (on behalf of itself and Merger Sub) and
Company as contemplated in Section 6.10 of this Agreement. Each such
representation letter shall be dated on or before the date of such opinion
and shall not have been withdrawn or modified in any material respect as of
the Effective Time.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated and the
Merger and the other transactions contemplated by this Agreement may be
abandoned at any time prior to the Effective Time, notwithstanding any
requisite approval and adoption of this Agreement and the transactions
contemplated by this Agreement, as follows:
(a) by mutual written consent duly authorized by the Boards of
Directors of each of Parent and the Company;
(b) by either Parent or the Company, if the Effective Time shall
not have occurred on or before May 1, 2000; provided, however, that the
right to terminate this Agreement under this Section 8.01(b) shall not be
available to any party whose improper action or failure to act has caused
the failure of the Merger to occur on or before such date;
(c) by either Parent or the Company, if there shall be any Order of
a Governmental Authority which is final and nonappealable preventing the
consummation of the Merger; provided that the provisions of this Section
8.01(c) shall not be available to any party whose failure to fulfill its
obligations hereunder shall have been the cause of, or shall have resulted
in, such Order;
(d) by Parent if (i) the Board of Directors of the Company
withholds, withdraws, modifies or changes the Company Board Approval in a
manner adverse to Parent or shall have resolved to do so, (ii) the Board of
Directors of the Company shall have recommended to the stockholders of the
Company a Superior Proposal or shall have resolved to do so or shall have
entered into any letter of intent or similar document or any agreement,
contract or commitment accepting any Superior Proposal, (iii) the Company
shall have failed to include in the Proxy Statement the Company Board
Approval, (iv) the Company's Board of Directors fails to reaffirm its
recommendation in favor of the approval of the Merger and this Agreement
within five business days after Parent requests in writing that such
recommendation be reaffirmed, (v) the Company shall have breached its
obligations under Section 6.04 or (vi) a tender offer or exchange offer for
20% or more of the outstanding shares of stock of the Company is commenced,
and the Board of Directors of the Company fails to recommend against
acceptance of such tender offer or exchange offer by its stockholders
(including by taking no position with respect to the acceptance of such
tender offer or exchange offer by its stockholders);
(e) by either Parent or the Company if this Agreement shall fail to
receive the requisite vote for approval at the Company Stockholders'
Meeting;
(f) by Parent upon a breach of any representation, warranty,
covenant or agreement (subject to the materiality threshold, if any,
expressed in such representation, warranty, covenant or agreement) on the
part of the Company set forth in this Agreement, or if any representation
or warranty of the Company shall have become untrue, in either case such
that the conditions set forth either in Section 7.02(a) or (b) would not be
satisfied; provided, however, that if such breach is curable by the
Company through the exercise of its best efforts and for as long as the
Company continues to exercise such best efforts, Parent may not terminate
this Agreement under this Section 8.01(f); or
(g) by the Company upon a breach of any representation, warranty,
covenant or agreement (subject to the materiality threshold, if any,
expressed in such representation, warranty, covenant or agreement) on the
part of Parent and Merger Sub set forth in this Agreement, or if any
representation or warranty of Parent and Merger Sub shall have become
untrue, in either case such that the conditions set forth either in Section
7.03(a) or (b) would not be satisfied; provided, however, that if such
breach is curable by Parent and Merger Sub through the exercise of their
respective best efforts and for as long as Parent and Merger Sub continue
to exercise such best efforts, the Company may not terminate this Agreement
under this Section 8.01(g).
(h) (A) by the Company if the Board of Directors of the Company
shall have authorized the Company, subject to complying with the terms of
this Agreement, to enter into a definitive agreement with respect to a
Superior Proposal and the Company shall have notified the Parent in writing
that it intends to enter into such an agreement (which notification shall
include a summary of the material terms of such Superior Proposal), and (B)
Parent shall not have made, within five business days of receipt of the
Company's written notification of its intention to enter into a definitive
agreement with respect to a Superior Proposal, and offer that the Board of
Directors of the Company determines, in good faith after consultation with
its financial advisors, is at least as favorable, from a financial point of
view, to the stockholders of the Company as the Superior Proposal;
provided, however, that such termination pursuant to this clause (h) shall
not be effective unless and until the Company shall have paid to Parent the
fee described in Section 8.05(b) hereof and shall have complied with
Section 6.04 hereof.
SECTION 8.02. Effect of Termination. Except as provided in Section
9.01, in the event of termination of this Agreement pursuant to Section
8.01, this Agreement shall forthwith become void, there shall be no
liability under this Agreement on the part of Parent, Merger Sub or the
Company or any of their respective officers or directors, and all rights
and obligations of each party hereto shall cease, subject to the remedies
of the parties set forth in Section 8.05; provided, however, that nothing
herein shall relieve any party from liability for the willful breach of any
of its representations, warranties, covenants or agreements set forth in
this Agreement.
SECTION 8.03. Amendment. This Agreement may be amended by the
parties hereto by action taken by or on behalf of their respective Boards
of Directors at any time prior to the Effective Time; provided, however,
that, after the approval of the Merger and this Agreement by the
stockholders of the Company, no amendment may be made that would reduce the
amount or change the type of consideration into which each Share shall be
converted upon consummation of the Merger. This Agreement may not be
amended, except by an instrument in writing signed by the parties hereto.
SECTION 8.04. Waiver. At any time prior to the Effective Time, any
party hereto may (a) extend the time for the performance of any obligation
or other act of any other party hereto, (b) waive any inaccuracy in the
representations and warranties contained herein or in any document
delivered pursuant hereto, and (c) waive compliance with any agreement or
condition contained herein. Any such extension or waiver shall be valid if
set forth in an instrument in writing signed by the party or parties to be
bound thereby.
SECTION 8.05. Expenses. (a) Except as set forth in this Section
8.05, all Expenses (as defined below) incurred in connection with this
Agreement and the transactions contemplated by this Agreement shall be paid
by the party incurring such expenses, whether or not the Merger or any
other transaction is consummated. "Expenses" as used in this Agreement
shall include all reasonable out of pocket expenses (including, without
limitation, all fees and expenses of counsel, accountants, investment
bankers, experts and consultants to a party hereto and its affiliates)
incurred by a party or on its behalf in connection with or related to the
authorization, preparation, negotiation, execution and performance of this
Agreement, the preparation, printing, filing and mailing of the
Registration Statement and the Proxy Statement, the solicitation of
shareholder approvals, the filing of any required notices under the HSR Act
or other similar regulations and all other matters related to the closing
of the Merger and the other transactions contemplated by this Agreement.
(b) The Company agrees to pay to Parent (such payment to be made
prior to the occurrence of any event described in subclause (x) or (y) of
clause (ii) below in the case of termination by the Company or Parent
pursuant to such clause (ii) or by the Company pursuant to clause (iii)
below or within two business days of a request from Parent in the case of
termination by Parent pursuant to clause (i) below) a fee equal to
$50,000,000 if:
(i) Parent terminates this Agreement pursuant to Section 8.01(d);
provided, however, that such fee shall not be payable pursuant to
this clause (i) if all of the following clauses (A) through (C) are
satisfied: (A) the Company has fully complied with Section 6.04, (B)
the Company has not, directly or indirectly, engaged in discussions
or negotiations with, or provided any confidential information to,
any Person in respect of any Acquisition Proposal, and (C) the Board
of Directors of the Company withholds, withdraws, modifies or changes
the Company Board Approval in a manner adverse to Parent or shall
have resolved to do so, solely because the failure to do so would
constitute a breach of the Board's fiduciary duties to the Company's
shareholders under applicable law based upon an event or circumstance
not involving, directly or indirectly, in whole or in part, an
Acquisition Proposal or a proposed Business Combination;
(ii) (A) Parent or the Company terminates this Agreement pursuant
to Section 8.01(e); (B) prior to the time of such termination an
Acquisition Proposal had been made known to the Company's
shareholders generally or any person shall have publicly announced
its intention (whether or not conditional) to make an Acquisition
Proposal; and (C) on or prior to the first anniversary of the
termination of this Agreement, the Company or any of its subsidiaries
or affiliates (x) enters into an agreement or letter of intent (or if
the Company's Board of Directors resolves or announces an intention
to do so) with respect to any Business Combination with any person,
entity or group or (y) consummates any Business Combination with any
person, entity or group; or
(iii) The Company terminates this Agreement pursuant to Section
8.01(h);
For purposes of this Section 8.05, "Business Combination" means (i) a
merger, consolidation, share exchange, business combination or similar
transaction involving the Company as a result of which the Company
stockholders prior to such transaction in the aggregate cease to own at
least 80% of the voting securities of the entity surviving or resulting
from such transaction (or the ultimate parent entity thereof), (ii) a sale,
lease, exchange, transfer, public offering in respect of, or other
disposition of (A) a material portion of the assets of Lasertron, Inc. or
(B) more than 20% of the assets of the Company and the Company
Subsidiaries, taken as a whole, in either case, in a single transaction or
a series of related transactions, or (iii) the acquisition, by a person
(other than Parent or any affiliate thereof), group or entity of beneficial
ownership (as defined in Rule 13d3 under the Exchange Act) of (A) any of
the capital stock of Lasertron, Inc. or (B) more than 20% of the Company
Common Stock, in either case, whether by tender or exchange offer or
otherwise.
(c) In the event of the termination of this Agreement under Section
8.01(f) then the Company shall pay to Parent or Parent's designee,
contemporaneously with the termination of this Agreement such amount, not
to exceed $5,000,000 as may be required to reimburse Parent and its
affiliates for all reasonable Expenses. The Company and Parent expressly
agree that any such payment is not intended as, and shall not be considered
to be liquidated damages and the payment of such expense reimbursement
shall be in addition to any other rights the party receiving such payment
may have under this Agreement and applicable law.
(d) In the event of the termination of this Agreement under Section
8.01(g) then Parent shall pay to the Company or the Company's designee,
contemporaneously with the termination of this Agreement such amount, not
to exceed $5,000,000, as may be required to reimburse the Company and its
affiliates for all reasonable Expenses. The Company and Parent expressly
agree that any such payment is not intended as, and shall not be considered
to be liquidated damages and the payment of such expense reimbursement
shall be in addition to any other rights the party receiving such payment
may have under this Agreement and applicable law.
(e) In the event of the termination of this Agreement because of
the failure to satisfy the condition set forth in Section 7.02(h) other
than because of any action by or circumstance related to the Company, then
Parent shall pay to the Company or the Company's designee,
contemporaneously with the termination of this Agreement such amount, not
to exceed $5,000,000, as may be required to reimburse the Company and its
affiliates for all reasonable Expenses. The Company and Parent expressly
agree that any such payment is not intended as, and shall not be considered
to be liquidated damages and the payment of such expense reimbursement
shall be in addition to any other rights the party receiving such payment
may have under this Agreement and applicable law.
(f) In the event that Parent or the Company shall fail to pay any
Expenses when due, the term "Expenses" shall be deemed to include the costs
and expenses actually incurred or accrued by Parent or the Company as the
case may be, (including, without limitation, fees and expenses of counsel)
in connection with the collection under and enforcement of this Section
8.05, together with interest on such unpaid Expenses, commencing on the
date that such Expenses became due, at a rate equal to the rate of interest
publicly announced by Citibank, N.A., from time to time, in The City of New
York, as such bank's Prime Rate plus 1.00%.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this
Agreement and in any certificate delivered pursuant hereto shall terminate
at the Effective Time or upon the termination of this Agreement pursuant to
Section 8.01, as the case may be, except that the agreements set forth in
Articles I and II and Sections 6.03 (with respect to confidentiality),
6.05, 6.08, 6.10 and this Article IX shall survive the Effective Time and
those set forth in Sections 6.03(b), 8.02 and 8.05 and this Article IX
shall survive termination.
SECTION 9.02. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in
person, by facsimile or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be specified in a
notice given in accordance with this Section 9.02):
if to Parent or Merger Sub:
Corning Incorporated
One Riverfront Plaza
Corning, NY 14831
Facsimile No.: 607-974-8656
Attention: William D. Eggers, Esq.
with a copy to:
Shearman and Sterling
599 Lexington Avenue
New York, NY 10022
Facsimile No.: (212) 848-7179
Attention: John J. Madden, Esq.
if to the Company:
Oak Industries Inc.
1000 Winter Street
Waltham, MA 02451
Facsimile No.: 781-890-6116
Attention: Pamela F. Lenehan
with a copy to:
Ropes and Gray
One International Place
Boston, MA 02110
Facsimile No.: 615-951-7050
Attention: David C. Chapin, Esq.
SECTION 9.03. Certain Definitions. For purposes of this Agreement,
the term:
(a) "affiliate" of a specified person means a person who directly
or indirectly through one or more intermediaries controls, is controlled
by, or is under common control with such specified person;
(b) "business day" means any day on which both the principal
offices of the SEC in Washington, D.C. are open to accept filings, or, in
the case of determining a date when any payment is due, any day (other than
a Saturday or a Sunday) on which banks are not required or authorized to
close in The City of New York;
(c) "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly or as
trustee or executor, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting securities, as trustee or executor, by contract or credit
arrangement or otherwise;
(d) "Environmental Laws" means any federal, state, local or foreign
laws relating to (A) releases or threatened releases of Hazardous
Substances or materials containing Hazardous Substances; (B) the
manufacture, handling, transport, use, treatment, storage or disposal of
Hazardous Substances or materials containing Hazardous Substances; or (C)
otherwise relating to pollution or protection of the environment, health,
safety or natural resources;
(e) "Hazardous Substances" means (i) those substances defined in or
regulated under the following federal statutes and their state counterparts
and all regulations thereunder: the Hazardous Materials Transportation
Act, the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the Clean Water
Act, the Safe Drinking Water Act, the Atomic Energy Act, the Federal
Insecticide, Fungicide, and Rodenticide Act and the Clean Air Act; (ii)
petroleum and petroleum products, including crude oil and any fractions
thereof; (iii) natural gas, synthetic gas, and any mixtures thereof; (iv)
polychlorinated biphenyls, asbestos and radon; (v) any other contaminant;
and (vi) any substance, material or waste regulated by any federal, state,
local or foreign Governmental Entity pursuant to any Environmental Law;
(f) "Intellectual Property" means all trademarks, trademark rights,
trade name, trade name rights, trade dress and other indications of origin,
brand names, certification rights, service marks, applications for
trademarks and for service marks, proprietary know-how and other
proprietary rights and information; inventions and discoveries, whether
patentable or not, in any jurisdiction; patents, patent rights and trade
secrets; writings and other works, whether copyrightable or not, in any
jurisdiction; and any similar intellectual property or proprietary rights.
(g) "knowledge" means, with respect to the Company, the actual
knowledge of any executive officer (determined in accordance with Rule 16a-
1(f) under the Exchange Act) of the Company and with respect to Parent or
Merger Sub, the actual knowledge of any executive officer (determined in
accordance with Rule 16a-1(f) under the Exchange Act) of Parent or Merger
Sub, as the case may be.
(h) "Material Adverse Effect" means any circumstance, event,
occurrence, change or effect that materially and adversely affects the
business, operations, condition (financial or otherwise), assets (tangible
or intangible) or results of operations of the Company and the Company
Subsidiaries taken as a whole.
(i) "person" means an individual, corporation, partnership, limited
partnership, syndicate, person (including, without limitation, a "person"
as defined in section 13(d)(3) of the Exchange Act), trust, association or
entity or government, political subdivision, agency or instrumentality of a
government; and
(j) "subsidiary" or "subsidiaries" of any person means any
corporation, partnership, joint venture or other legal entity of which such
person (either alone or through or together with any other subsidiary)
owns, directly or indirectly, 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.
SECTION 9.04. 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 as long as the economic
or legal substance of the transactions contemplated by this Agreement is
not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order
that the transactions contemplated by this Agreement be consummated as
originally contemplated to the fullest extent possible.
SECTION 9.05. Assignment; Binding Effect; Benefit. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties. Subject
to the preceding sentence, this Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors
and assigns. Notwithstanding anything contained in this Agreement to the
contrary, nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations or liabilities
under or by reason of this Agreement.
SECTION 9.06. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties
shall be entitled to specific performance of the terms hereof, in addition
to any other remedy at law or in equity.
SECTION 9.07. Governing Law; Forum. 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 in that
state and without regard to any applicable conflicts of law principles.
SECTION 9.08. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
SECTION 9.09. Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed and delivered shall be deemed to be an original
but all of which taken together shall constitute one and the same
agreement.
SECTION 9.10. Entire Agreement. This Agreement (including the
Exhibits, the Company Disclosure Schedule and the Parent Disclosure
Schedule) and the Confidentiality Agreement constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede
all prior agreements and understandings among the parties with respect
thereto. No addition to or modification of any provision of this Agreement
shall be binding upon any party hereto unless made in writing and signed by
all parties hereto.
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
CORNING INCORPORATED
By: /s/ James B. Flaws
-------------------------------
Name: James B. Flaws
Title: Senior Vice President,
Chief Financial Officer
and Treasurer
RIESLING ACQUISITION CORPORATION
By: /s/ A. John Peck, Jr.
-------------------------------
Name: A. John Peck, Jr.
Title: Vice President
OAK INDUSTRIES INC.
By: /s/ Coleman S. Hicks
-------------------------------
Name: Coleman S. Hicks
Title: Senior Vice President and
Chief Financial Officer
EXHIBIT 6.07(a)
FORM OF AFFILIATE LETTER FOR
AFFILIATES OF THE COMPANY
[ ] [ ], 1999
[PARENT]
[ ]
[ ]
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be
deemed to be an "affiliate" of [the Company], a Delaware corporation (the
"Company"), as the term "affiliate" is (i) defined for purposes of
paragraphs (c) and (d) of Rule 145 of the rules and regulations (the "Rules
and Regulations") of the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"),
and/or (ii) used in and for purposes of Accounting Series Releases 130 and
135, as amended, of the Commission. Pursuant to the terms of the Agreement
and Plan of Merger and Reorganization dated as of November [ ], 1999 (the
"Merger Agreement") among [Parent], a Delaware corporation ("Parent"),
[Merger Sub], a Delaware corporation ("Merger Sub"), and the Company,
Merger Sub will be merged with and into the Company (the "Merger").
Capitalized terms used in this letter agreement without definition shall
have the meanings assigned to them in the Merger Agreement.
As a result of the Merger, I may receive common shares, par value
$[0.01] per share, of Parent (the "Parent Shares"). I would receive such
Parent Shares in exchange for shares owned by me of common stock, par value
$0.01 per share, of the Company (the "Company Shares").
1. I represent, warrant and covenant to Parent that in the event
that I receive any Parent Shares as a result of the Merger:
A. I shall not make any sale, transfer or other disposition of the
Parent Shares in violation of the Act or the Rules and Regulations.
B. I have carefully read this letter and the Merger Agreement and
discussed, to the extent I felt necessary, with my counsel or counsel
for the Company the requirements of such documents and other
applicable limitations upon my ability to sell, transfer or otherwise
dispose of the Parent Shares.
C. I have been advised that the issuance to me of the Parent Shares
pursuant to the Merger has been registered with the Commission under
the Act on a Registration Statement on Form S-4. However, I have
also been advised that, because at the time the Merger is submitted
for a vote of the stockholders of the Company, (a) I may be deemed to
be an affiliate of the Company and (b) the distribution by me of the
Parent Shares has not been registered under the Act, I may not sell,
transfer or otherwise dispose of the Parent Shares issued to me in
the Merger unless (i) such sale, transfer or other disposition is
made in conformity with the volume and other limitations of Rule 145
promulgated by the Commission under the Act, (ii) such sale, transfer
or other disposition has been registered under the Act or (iii) in
the opinion of counsel reasonably acceptable to Parent, such sale,
transfer or other disposition is otherwise exempt from registration
under the Act.
D. I understand that Parent is under no obligation to register the
sale, transfer or other disposition of the Parent Shares by me or on
my behalf under the Act or, except as provided in paragraph 2(A)
below, to take any other action necessary in order to make compliance
with an exemption from such registration available.
E. I understand that there will be placed on the certificates for
the Parent Shares issued to me, or any substitutions therefor, a
legend stating in substance:
THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, APPLIES. THE SHARES REPRESENTED BY
THIS CERTIFICATE MAY ONLY BE TRANSFERRED IN ACCORDANCE WITH THE
TERMS OF AN AGREEMENT DATED [ ] [ ], 1999
BETWEEN THE REGISTERED HOLDER HEREOF AND BUYER, A COPY OF WHICH
AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES OF BUYER.
F. I understand that unless a sale or transfer is made in
conformity with the provisions of Rule 145, or pursuant to a
registration statement, Parent reserves the right to put the
following legend on the certificates issued to my transferee:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND WERE ACQUIRED FROM A PERSON WHO RECEIVED SUCH SHARES
IN A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE ACT
APPLIES. THE SHARES HAVE BEEN ACQUIRED BY THE HOLDER NOT WITH A
VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION
THEREOF WITHIN THE MEANING OF THE ACT AND MAY NOT BE SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT.
G. I further represent to, and covenant with, Parent that I will
not, during the 30 days prior to the Effective Time, sell, transfer
or otherwise dispose of or reduce my risk (as contemplated by
Accounting Series Release No. 135, as amended, of the Commission
("Rule No. 135")) with respect to the Company Shares or shares of the
capital stock of Parent that I may hold and, furthermore, that I will
not sell, transfer or otherwise dispose of or reduce my risk (as
contemplated by Release No. 135) with respect to the Parent Shares
received by me in the Merger or any other shares of the capital stock
of Parent until after such time as results covering at least 30 days
of combined operations of the Company and Parent have been published
by Parent, in the form of a quarterly earnings report, an effective
registration statement filed with the Commission, a report to the
Commission on Form 10-K, 10-Q or 8K, or any other public filing or
announcement that includes the combined results of operations (the
"Pooling Period"). Parent shall notify the "affiliates" of the
publication of such results. Notwithstanding the foregoing, I
understand that during the Pooling Period, subject to providing
written notice to Parent, I will not be prohibited from selling up to
10% of the Parent Shares (the "10% Shares") received by me or the
Company Shares owned by me or making charitable contributions or bona
fide gifts of the Parent Shares received by me or the Company Shares
owned by me, subject to the same restrictions. The 10% Shares shall
be calculated in accordance with Release No. 135, as amended by Staff
Accounting Bulletin No. 76.
H. Execution of this letter should not be considered an admission
on my part that I am an "affiliate" of the Company as described in
the first paragraph of this letter, or as a waiver of any rights that
I may have to object to any claim that I am such an affiliate on or
after the date of this letter.
2. By Parent's acceptance of this letter, Parent hereby agrees with
me as follows:
A. For so long as and to the extent necessary to permit me to sell
the Parent Shares pursuant to Rule 145 and, to the extent applicable,
Rule 144 under the Act, Parent shall (a) use its reasonable efforts
to (i) file, on a timely basis, all reports and data required to be
filed with the Commission by it pursuant to Section 13 of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and
(ii) furnish to me upon request a written statement as to whether or
not Parent has complied with such reporting requirements during the
12 months preceding any proposed sale of the Parent Shares by me
pursuant to Rule 145, and (b) otherwise use its reasonable efforts to
permit such sales pursuant to Rule 145 and Rule 144. Parent hereby
represents to me that it has filed all reports required to be filed
with the Commission under Section 13 of the 1934 Act during the
preceding 12 months.
B. It is understood and agreed that certificates with the legends
set forth in paragraphs 1(E) and 1(F) above will be substituted by
delivery of certificates without such legends if (i) one year shall
have elapsed from the date the undersigned acquired the Parent Shares
received in the Merger and the provisions of Rule 145(d)(2) are then
available to the undersigned, (ii) two years shall have elapsed from
the date the undersigned acquired the Parent Shares received in the
Merger and the provisions of Rule 145(d)(3) are then applicable to
the undersigned, or (iii) Parent has received either an opinion of
counsel, which opinion and counsel shall be reasonably satisfactory
to Parent, or a "no action" letter obtained by the undersigned from
the staff of the Commission, to the effect that the restrictions
imposed by Rule 145 under the Act no longer apply to the undersigned.
Very truly yours,
Name:
Agreed and accepted this [ ] day
of [ ] [ ], 1999, by
[Parent]
By:
Name:
Title:
EXHIBIT 6.07(b)
FORM OF AFFILIATE LETTER FOR
AFFILIATES OF PARENT
[ ] [ ], 1999
[The Company]
[ ]
[ ]
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be
deemed to be an "affiliate" of [Parent], a Delaware corporation ("Parent"),
as the term "affiliate" is defined for purposes of Accounting Series
Releases 130 and 135, as amended, of the Securities and Exchange Commission
(the "Commission"). Pursuant to the terms of the Agreement and Plan of
Merger and Reorganization dated as of November [ ], 1999 (the "Merger
Agreement") among Parent, [Merger Sub], a Delaware corporation ("Merger
Sub"), and [The Company], a Delaware corporation (the "Company"), Merger
Sub will be merged with and into the Company (the "Merger"). Capitalized
terms used in this letter agreement without definition shall have the
meanings assigned to them in the Merger Agreement.
I represent to, and covenant with, the Company that I will not,
during the period beginning 30 days prior to the Effective Time (as defined
in the Merger Agreement) until after such time as results covering at least
30 days of combined operations of the Company and Parent have been
published by Parent, in the form of a quarterly earnings report, an
effective registration statement filed with the Commission, a report to the
Commission on Form 10-K, 10-Q or 8-K, or any other public filing or
announcement which includes the combined results of operations, sell,
transfer or otherwise dispose of or reduce my risk with respect to any
shares of the capital stock of Parent ("Parent Shares") or the Company that
I may hold. I understand that Parent shall notify the "affiliates" of the
publication of such results. Notwithstanding the foregoing, I understand
that subject to providing written notice to the Company and subject to SEC
Accounting Series Release No. 135 as amended by Staff Accounting Bulletin
No. 76, during the aforementioned period I will not be prohibited from
selling up to 10% of the Parent Shares that I hold or from making
charitable contributions or bona fide gifts of the Parent Shares that I
hold, subject to the same restriction.
Execution of this letter should not be considered an admission on my
part that I am an "affiliate" of Parent as described in the first paragraph
of this letter, or as a waiver of any rights that I may have to object to
any claim that I am such an affiliate on or after the date of this letter.
Very truly yours,
Name:
Agreed and accepted this [ ] day
of [ ] [ ], 1999, by
[The Company]
By:
Name:
Title:
